PowerPoint-presentatie - Cambodia Research Group

Entrepreneurship in Phnom
Penh: Results from Preliminary
Michiel Verver
Phnom Penh, 25 March 2011
Presentation outline
• Background of the research
• Interview topics
• Preliminary findings
• Patterns throughout the interviews
• Examples
• Business in a historical context
• Questions for discussion
Background of the research
•Why studying entrepreneurship?
•The theoretical debate: Ethnic Chinese
entrepreneurship in Southeast Asia
• Family business…
• Networking arrangement…
• Locally grounded…
• Notions of ‘Chineseness’…
The Interviews
Who are the interviewees?
• Cambodian-Chinese entrepreneurs (2nd or 3rd generation).
• Companies of differing size (from business groups to market
• Companies in different sectors (real estate, construction,
hotel and restaurant, telecom, production, trade and retail)
What are research themes?
• The company (activities, sector, relationships to government,
management, family business, partner firms etc.)
• History of the business, and of the entrepreneur and family
• Chinese background, language and business
Family business: strategies
The family seems very important for CambodianChinese business success in Phnom Penh. Family
relationships are deployed in different ways:
• Managing the company (example: construction company)
• Education abroad (example: hotels)
• Import and retail (example: market vendors)
• Property and investment (example: coffee shop)
Family business: generational change
• Within family businesses, there seems a large gap between the
older and the younger generation in how they want to set up the
family’s company.
• Older generation: insecure environment, start from scratch,
practical experience.
• Younger generation: security, relative wealth, educated (often
• This results in different preferences in doing business and organizing
the company:
• Older generation: informal practices, keeping control and
finances within the family, trust-based relationships (no
contracts), hard working
• Younger generation: Formalize processes and structure the
company administratively, hiring outsiders, spending money
where desirable, stress on human resources.
Generational change in a production company
“The problem is that my parents don't want to discuss the
situation with anyone that is an outsider, they don’t want to
spend money, and they keep doing everything themselves.
Seriously, if you don't consider the physical tiredness of
running that business, we're very efficient. We run the whole
factory with just three people [himself, his father, and brother
in law], up to micromanagement, every day. We have no
structure whatsoever. They've been doing it for 20 years, it's
entrenched in their way of business. I have all these ideas in
my head on how to structure the company, but they think I
need more practical experience. They used to wake up at 5
o’clock every morning and they want me to do the same thing.
But I just don't think it's efficient, and besides, it's stupid if
you earn so much money to wake up at 5 o'clock…
Generational change in a production company
… I am now working on a system to keep track of everything;
the prices of our products, what we sell to different retailers
and customers, whether we get the correct amount when
supplies come in, see if people are not cheating us. Before, my
parents had no clue. They paid for the same thing twice and
they would never even know. But it’s sort of working now. My
parents now start to ask me; ‘how much do I own this person?’
or ‘how much does this material cost?’ I am becoming a
computer on which they can click and then the information
comes out. It's getting better, they're more receptive because
they've seen some results.”
Ethnic networking arrangements
• Many of the thriving business families that exist today started
in the 1980s and early 90s by importing all sorts of products
from Singapore, Bangkok, Southern China etc. Within these
trade networks, trust derived from common ethnic
background, and sometimes language (Teochew dialect) were
still important according to interviewees.
• Today however, shared ethnicity is hardly ever a ground for
doing business. Where people still do business with co-ethnics
in the region or with mainland China, these are newly
established and opportunistic relationships rather than based
on shared ethnic background or language.
• Revitalization of Chinese language and business in Phnom
Penh, but not necessarily linked to Chinese roots of its
Ethnic networking? An example
Prominent Cambodian-Chinese business woman who is in
trade, real estate, hotels, and infrastructure development. Was
a child during the Khmer Rouge, and although she learned
some Teochew from her mother, she was never able to study
Chinese properly. In the mid 1980s, she started importing
goods in cooperation with a Singaporean-Chinese. She has
since done business with Japanese, Malaysians and Europeans.
Whereas her Teochew background was still relevant in regional
trade during the 1980s and early 90s, since Cambodia started
to open up she has done business with Westerners and other
Asian countries.
She is now starting to learn Mandarin so she can better get
along with business people from mainland China that come to
invest in Cambodia.
Locally grounded or transnational practices?
• In general, business success is dependent on having ‘good
connections’ within Cambodia, especially where it concerns
large companies and projects.
• Relationships with investors and funding agencies from
abroad are important, but state actors mostly stand in
between such investments and the local business community,
it seems.
• State actors are involved when it concerns certain business
activities, such as:
• real estate and construction contracts
• land concessions
• import and service monopolies
• customs, licenses
Good connections
Arguably, different stakeholders put very different pressures on
business people, especially when it concerns large-scale
business projects:
• Business people have to be accountable towards foreign
investors and development partners, or to agencies such as
the WB and ADB.
• And they need to maneuver within the personalized businesscum-state structure to be able to realize their business
In interviews, business people often talk about transparency,
accountability and business ethics, but also about how ‘good
connections’ are an inevitable component of the Cambodian
business climate.
Notions of ‘Chineseness’ 1
• Ethnic boundaries are very ambiguous in terms of ethnic
descent, language and identification.
“80% of the population in Phnom Penh is mixed CambodianChinese. You can't really find a ‘real’ Cambodian anymore.”
• ‘Chinese’ business practices (family business, trust
relationships, financial independence etc.) are recognizable,
but nestled in the Cambodian economy and not always
identified by interviewees as a Chinese legacy.
When one interviewee was asked what he thought was typical
about Cambodian-Chinese businesses, he replied: “I don’t
know, I can’t really think of another way of doing business in
Phnom Penh”
Notions of ‘Chineseness’ 2
• People identify themselves mostly as Khmer (or Khmer-Chin),
but do generally think that their inclination to do business has
to do with their Chinese background.
“Chinese are very hard-working and don’t spend a lot of money but
save it for later. We think about the future of our family so that they
will have money or a business. Business is in our blood.”
Same person:
“I feel Khmer, but everybody calls me Chinese. I speak some Teochew
dialect, but I cannot read or write, and I don’t speak Mandarin. I’ve
been in China, but only for holiday. My mother and father are from
Cambodia, I am from Cambodia, so how can someone call me
Chinese right? I know I have Chinese blood, but people in the
government have Chinese blood also, but they are called Khmer. If
you do business, you are Chinese, if you work for the government,
you are Khmer.”
Notions of ‘Chineseness’ 3
• ‘Chineseness’ in Phnom Penh is very much linked to
entrepreneurship and business success.
Business woman:
“Chinese culture has changed minds, changed the way to do
business in Cambodia. They had nothing and then tried to
make it by working hard and saving money. In Chinese culture
we say that if we try hard, we can do it, not in the next life,
but in this life.”
Tuk tuk driver:
“I wish I had someone Chinese in my family. I come from a
poor farmers village, just like most of my friends. But some
people in their family married to a Khmer-Chin, so now they
have money.”
Business in the context of Cambodian history 1
The preliminary findings presented above should be seen
in light of Cambodia’s history. During the 1970s (and
1980s) business life was completely uprooted, as were any
connections to the outside world. Most businesses had to
be built from the ground up in the early 1990s, without
much financial resources, and in a weak institutional and
financial environment. This situation has shaped business
• In a lot of cases, the family was the only stable
foundation for financing, setting up and consolidating
business. Although preferences of business conduct among
the younger generation are changing, financial resources,
management, and control are still in the hands of family
members in most businesses.
Business in the context of Cambodian history 2
• Outside the (extended) family, ethnic networking
seems hardly present in Phnom Penh today. Mostly, during
the 80s and 90s, existing networks were cut off, and
people lost their ability to speak Chinese because the
language was outlawed. Ethnic Chinese have been
prominent in trade and business for centuries, and so one
may argue that ‘Chinese ways’ have nestled in the
Cambodian economy. Existing networks are not ethnically
defined however.
• Businesses are grounded in Cambodian politicoeconomic life. The consolidation of state institutions, and
the formulation and enforcement of law, is ongoing but
incomplete. Rather than on bureaucratic procedures,
business people rely on personalized relationships between
the private sector and the state.
Business in the context of Cambodian history 3
• During the French protectorate and the Sihanouk period,
‘Chineseness’ in Cambodia was more or less delineated.
The Chinese communities were organized socially and
administratively, and filled certain economic niches.
However, because of the repression of Chinese business,
language and culture during the Khmer Rouge and
Vietnamese, because of complex migratory processes, and
because of ongoing intermarriage and generational
change, ‘the ethnic Chinese’ has become a highly
ambiguous category. Chinese business practices and
identification have become an integral part of Cambodian
society and economy, but are no longer clear
characteristics of people.
Questions for discussion
• Do you agree that family strategies and ‘good
connections’ are the two main paths towards
entrepreneurial success in Phnom Penh?
• Do you know examples from your own
environment that support or contradict the
presented findings?
• For entrepreneurship to take root, what do you
think are encouraging or discouraging aspects of the
Cambodian economy and society?
• Do you agree with the statement that Chinese
identity is closely associated with doing business in
Phnom Penh?
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