In a bid to strengthen the economy and to boost exports to access the international market, the World Bank funded “Export Market Access Fund (EMAF)” US$ 1.6 million in grant, which is run by the ministry of commerce, in an attempt to help Cambodia-based companies and business associations over the 16 months.
The creation of the Export Market Access Fund’s project aims to match grant fund that exporters can use to cover half of the cost of developing new export markets, and particularly on achieving market standards required to export.
So far, there are registered 17 companies to request up to $300,000 in matching grant funds. It is expected that the first grants will be doled out in mid-to late February after the ministry of commerce approves application. All companies must have a viable export product and a realistic plan to be considered for the project, according to the Cambodia Daily.
Cham Prasith, Senior Minister and Minister of Commerce, said that Cambodia has an historic opportunity to take advantage of the opportunities offered by the WTO and the ASEAN Free Trade Area, adding that that “This project provides a platform for reducing the obstacles our businesses face in converting enhanced market access into enhanced trade, employment growth, and ultimately, greater poverty reduction. By reducing the cost of importing and exporting, the project will help our garment industry weather the storm of international competition, and lay a foundation for increased exports from all sectors.”
Kem Sithan, Secretary of State for the ministry of commerce said that “The ministry expects that 50 to 60 companies can benefit from the fund,” adding that “three companies have already been shortlisted for grants and 10 others are being considered,” according to the Phnom Penh Post.
It is because that many barriers, mainly financial ones prevent businesses from making contacts with foreign customers or reaching their markets. In addition, many companies have not financial resources to go and explore other markets. EMAF is crucial for private companies to get grants to conduct market research, to make visit, to sponsor buyer’s trips and to improve their promotional materials.
According to data from the Commerce Ministry, in 2008, 2,744 new businesses registered with the ministry, compared to 2,826 new companies in 2007 and 1,670 new openings in 2006. Overall in the period from 1988 to January 30, 2009, 18,910 businesses opened and 1,561 closed, the Cambodia Daily reported.
In the first month of 2009, only 159 new businesses registered with the ministry, which puts Cambodia on pace to register only about 1,850 new businesses this year, nearly 30 percent fewer than last year.
Clean Business Initiative (CBI) was established under funding supports from the USAID through Pact-Cambodia in an attempt to strengthen the Cambodian economy by helping the government to improve the business-enabling environment.
Kak Key said at the launch of the Clean Business Initiative (CBI) on September 25, 2008 that “Successful businesses are built on ‘hit and run’ system or model without any long-term perspective of development. In long run, this groundless and deplorable system will end up leaving cracks in the very fabric of society which will lead to the inevitable destruction of harmony and happiness of all Cambodians.”
According to report “Doing Business in 2009” on September 10, 2008 published by IFC and the World Bank, Cambodia has moved up 15 places that compared the ease of doing business around the world. Cambodia’s significantly higher standing is the result of reforms that make it easier for businesses to get credit and to close a business. While much progress remains to be done in several areas, the report names Cambodia as the world’s top reformer in easing access to credit.
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