Company and business owners in Cambodia now have an additional resource to help them maximise the benefits of the Asean Economic Community (AEC) with the publication of the Asean Economic Community: Guide for Businesses in Cambodia; Practical Guide for Employers.
Published by the Cambodian Federation of Employer and Business Associations (Camfeba) with financial support from the Norwegian government, the guidebook – written in both Khmer and English languages – also provides a snapshot of AEC preparedness and comprehension among Cambodia companies and business owners.
Representing some 2,000 Cambodia companies business enterprises, Camfeba surveyed 23 to gauge their understanding of the AEC and the opportunities it provides, as well as how, or if, those organisations plan to modify their business models to take advantage of the AEC.
Of the 23 enterprises surveyed 65 per cent are in the services sector, 31 industrial, and one percent in agriculture. Nine of the respondents are Cambodian-owned, eight are foreign-owned, three are joint ventures, one is a public limited company and two are sole proprietorships. Only about 13 per cent are involved in trading activities.
Few Cambodia Companies Incorporating AEC In Strategy
While only a small sampling, the survey revealed interesting results with the most concerning being that only 8.7 per cent of respondents said they are currently incorporating the AEC in their strategic planning, though 18.2 per cent said they planned to adjust their product or service offerings to cater to the AEC.
While almost 74 per cent of respondents saw the AEC as resenting opportunities, 56 per cent saw the AEC as presenting threats, with almost 74 per cent of all respondents expecting to see increased competition and market intensity as other Asean firms enter the Cambodia market.
Although 38 per cent of respondents said they fully understood the opportunities available from the AEC and 40 per cent said they knew how to harness those opportunities, only 33.3 per cent of respondents said they knew which institution to contact in order to get advice and information.
Almost 61 per cent of respondents expected the AEC to deliver a wider range of products and services in Cambodia, with an identical number expecting to see greater mobility in the skilled labour market. More than 63 per cent of firms said they were either considering, planing, or had already invested in international staff in order to maximise benefits from the AEC.
Energy Costs, Skills, Corruption & Red Tape Cause Concern
Heading the list of measures the Cambodia government should take to assist companies become more competitive in the AEC was reduced electricity tariffs, followed by improving skills training, creating a better labour relations environment, simplifying business registration, licence and permit procedures, and reducing corruption.
The majority of respondents also said the government should establish AEC help desks at key institutions to make gaining information about the AEC more accessible, as well as organise forums where foreign investors can meet with Cambodia entrepreneurs to explore potential partnerships.
Mathew Rendall, deputy secretary general of Camfeba said the guidebook was produced in response to businesses in Cambodia and across the region voicing the need to better understand the implications of the AEC, particularly in the areas of human resources, labour mobility, enterprise development, and business competitiveness.
The book briefly explains each of the five main areas of liberalisation that came into effect with the AEC at the beginning of the year – Free flow of goods; Free flow of services; Free flow of skilled labour; Free flow of investment; Free flow of capital – at what stage these liberalisations are at, and provides tips on how in Cambodia companies and businesses can take advantage of them.
While acknowledging increased competition, the guidebook points out that the challenges the competition will bring are an opportune time for Cambodia companies and businesses to ‘change paradigms… to strengthen their internal processes’.
Citing Dr Sok Siphana, principal of law firm Sok Siphana & Associates and an advisor to the Cambodia government, the guidebook says: ‘SMEs should get their books in order; they should think about good corporate governance; they should pay proper taxes; and they should learn more English, which is the working language of the AEC.’
CAMFEBA launches an ASEAN guidebook (The Phnom Penh Post)