The Ministry of Commerce declared on Saturday that it will solve market issues hindering the development of Cambodia’s small- and medium-sized enterprises (SME). But the announcement was met with scepticism by business owners in the Kingdom.

Minister of Commerce Pan Sorasak, who was present at the 7th Sea Festival in Koh Kong last week, declared via Facebook that he is committed to solving the challenges and issues faced by SMEs to make them the engine of economic growth.

While Sorasak did not unveil an exact plan to help the SMEs, he encouraged businesses, producers, and traders to offer comments and suggestion on how to improve market conditions so that the ministry can tackle problems.

SPS requirements

On Sunday, ministry spokesperson Seang Thay expanded on potential initiatives to encourage SME growth.

These included the reduction of overly-complicated business processes as well as the re-negotiation of Sanitary and Phytosanitary certificate (SPS) requirements with foreign nations in order to boost the competitiveness of the Kingdom’s SMEs internationally.

“The problems faced by Cambodian businesses in international trade are no longer trade tariffs, but strict hygiene restrictions on goods as defined by SPS requirements,” Thay said.

He said many markets use SPS requirements as a barrier to restrict foreign imports, making the standards impossibly strict for many Cambodian companies.

“We are negotiating with many countries to reduce the issue of SPS and it will benefit Cambodian SMEs,” he said.

Several other challenges remain in Cambodian SME development, including low productivity, high costs for doing business, a large inflow of finished goods from abroad, all of which limit growth.

Federation of Association for Small and Medium Enterprises of Cambodia president Te Taingpor said on Sunday he has little hope over the Ministry’s promises, saying he had heard them many times before.

“These are words the minister has repeated many times, but the same issues still remain. The policy from the prime minister is good enough, but it has not been activated properly,” Taingpor said, referring to the Cambodia Industrial Development Policy 2015-2025 which outlines ways in which to help SME growth.

Taingpor, whose association has over 300 members and 25 offices across the Kingdom, said the ministry is still allowing finished products from neighbouring countries to flood into Cambodia tariff fee, seriously harming the development of local SMEs.

“I suggest that the minister looks at the government policy approved by the prime minister to reduce finished products entering Cambodia from neighbouring countries, as well as push local production as outlined in the Industrial Development Policy 2015-2025,” he said.