Recently, a select group of experts were gathered by the United Nations Development Programme (UNDP) in a panel to discuss building prosperous and resilient SMEs in emerging economies. This panel sought to tackle the issue of growth in SMEs and brought international case studies to the forefront to see what lessons can be applied to Cambodia.
“Use what you have” became the mantra of the day courtesy of one Yuen Yuen Ang – an associate professor of political science and a China specialist at the University of Michigan.
“The poverty trap is best explained as the understanding that countries are poor because they’re weak and weak because they are poor,” said Ms Ang, adding that these are mutually reinforcing and create a vicious cycle that leaves governments and their developmental partners at odds over which issue to address first.
Ms Ang used China as an example. She argues that the nation’s rapid development was achieved by making use of its strengths: an abundance of bureaucrats and the capacity for strong mass mobilisation.
“Local governments, particularly along the coastal regions, enlisted their civil servants – who had a limited amount of education – to recruit investors using personal relations and then in return would receive a cut of the investments made,” explained Ms Ang.
While she agreed that this was not a permanent strategy, she explained that it fostered economic growth that altered the resources available and changed the development goals.
As such, Ms Ang suggests that Cambodia could apply this model of development to itself. The country already has an abundance of talent, resources, and cultural practices; all of which could be utilised to kick-start the economy.
From there, it is up to modernised institutions to support and sustain the market, Ms Ang said, before adding that this model of development seen in China is not unique – many Western powers evolved similarly.
Following her presentation, Chheang Vanarith, deputy secretary-general of the Ministry of Economy and Finance’s Committee on Economic and Financial Policy praised the business society of Cambodia for their versatility and dynamism and claimed he wants to see a focus on developing a healthy ecosystem. He also stated that he was aiming t see how the lessons from China would work within the context of Cambodian SME.