A few weekends ago, I went on two trips to Takeo and Kandal, both provinces south of Phnom Penh. The Takeo trip was with Savon, my co-worker at the ILO, and with the purpose of visiting her rural home and her parents. The Kandal trip, with two Hong Kong missionaries Miu-Ling and Piano, was to visit a children sponsorship centre and a village church set up by the Asia Pacific Free Methodist Association (APFMMA).
It was especially interesting to count the number of road-side food stalls along the way. For example, while on the back of Savon’s motorbike for the three-hour trip, I counted 35 stalls selling grilled beef on one five-minute stretch. About half an hour later, we saw a line of 19 stalls selling melons right next to each other. After a while, yet another 10 stalls sold grapefruits next to each other. There were similar scenes on my trip to Kandal. There was a line of stalls selling lemons and ten-plus stalls selling preserved vegetables. But… how can these stalls make money when they all sell the SAME THING? I became very puzzled by this foolish business strategy (which seems to be quite prevalent).
When I posed this question to Miu-Ling, a missionary here for six years already, she noted that the locals have a “t’wer dam k’nia” attitude. The phrase literally means “to do and follow together.” In other words, when some business seems to work, then all neighbours would imitate. Imitation is not only acceptable but encouraged; in fact, in extreme cases, people doing something different (such as selling fresh vegetables when everybody else sells preserved ones) would be despised upon. In my opinion, the resilience of this deep-seated attitude is indicative of the lack of entrepreneurship development, i.e. the lack of training and economic opportunities.
Let’s go back to the 35 grilled beef stalls and the 19 melons stalls. Why would a seller decide to sell identical products as their neighbours? One reason is poor sourcing. Located in remote area and often operating in small-scale, it is difficult to source products from big wholesalers or at cheap prices. In effect, all neighbours may source from the same middlemen and end up getting products of the same type and quality. Another reason would be poor market information. Since the provincial government, communes and local communities lack resources to access information about market supply and demand, sellers have no idea what products they should sell and at what prices, as well as where they can best source their products. Thirdly, there is poor access to markets. On the one hand, rural producers do not know where they can sell at good prices; on the other hand, they have no money and facility to help store their products or transport them to larger cities, such as Phnom Penh. In the end, they begin to sell on the side of national roads with minimal, if any, profits.
Nonetheless, more fundamental problems leading to poor entrepreneurship skills include poor capital base, which in turn relates to the lack of income generation opportunities, productivity-enhancing skills, vocational training and adequate infrastructure. A recent report released by the International Finance Corporation (IFC), the private sector arm of the World Bank, and the Asia Foundation highlighted limited job creation despite overall economic growth in Cambodia. Surveying 65,507 businesses operating within three kilometres from all 24 provincial capitals, researchers found that 97% of businesses fall under the category of “micro-enterprises,” hiring less than 10 workers. More specifically, 68.8% of businesses responded that they are sole proprietors (hiring no workers). Many of these surveyed businesses are also “young” – 41.5% have been in operation for two years or less. An additional 21.8% have been open for three to five years. This trend could be indicative of the growth of entrepreneurship, but may also imply an unstable business environment. This detailed study also shed light on the types of businesses most operators engage in. In Phnom Penh, for example, 12.3% businesses are small “neighbourhood stores” and 14.5% are “street stalls” (different from “restaurants”), while most types of professional services each occupy just between one and three percent of all businesses. The overall picture generated by these statistics suggests that there are limited opportunities for productive wage employment in urban areas, let alone rural areas. In effect, most rural families and even urban workers earn low wages as low-skilled workers and in the informal economy. They would not have the savings for setting up profitable businesses or have access to credit lines necessary to finance business operations.
This lack of productive employment complements other problems of income generation. Travelling to rural areas of Takeo and Kandal, I was struck by the fact that ALL (not an exaggeration) households grow rice. Most families might grow other subsistence crops, such as green onions, for their own consumption. Since paddy-growing requires much irrigation, fields near the river may get two crops each year; but those located further away may only harvest one crop. This stubborn specialization in rice-growing can be partly attributed to cultural perceptions. Farmers fear criticisms from neighbours for doing something different (again, “t’wer dam k’nia”). Therefore, even though growing cash crops, such as vegetables, fruits and mushrooms, require less water and can yield more crops each year, farmers appear reluctant to change on their own. In effect, the whole rural community must be educated in order for change to occur.
Bigger obstacles for diversification, though, probably include the lack of skills and infrastructure. For instance, fish can usually sell for good prices in the market. However, fish-farming is more than just digging a pond. Farmers must know how to feed the fish, how to pump oxygen into the ponds and when to harvest the fish for sale. Other soft-skills, such as basic numeracy and book-keeping skills, are also necessary to account for profits and expenditures. In other words, training in basic and technical skills is necessary for income generation. To add to improved knowledge among rural households, external infrastructure constructed by provincial or communal authorities is necessary to expedite income growth. The construction of water pumps and roads are examples of basic infrastructures to facilitate growth.
To end my long arguments about entrepreneurship development in Cambodia, I feel that the “t’wer dam knia” attitude must be casted off through community-based training, peer-learning and collective brainstorming for new income-generation ideas. As I relax amidst the endless paddy fields, an idea came to mind. Is ecotourism a feasible for the economic development of these rural areas? With some hospitality training and accommodation facility, the community can set up some home-stay programmes for those travellers interested in experiencing the rural lifestyle – local food, local work, local hospitability. Or, there can be photography trips to the rural areas and workshops to teach tourists how to capture vivid pictures of the seemingly trivial but deeply cultural aspects of Cambodian life. Indeed, the poor people in rural Cambodia need to imagine and they also need the means to put to action their imagination.
References
“The Provincial Business Environment Scorecard in Cambodia: A Measure of Economic Governance and Regulatory Policy,” April 2009
“Listing of Business Establishments in Cambodia’s Provincial Towns and Selected Urban Areas,” March 2009
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