A Study on the impacts of corruption on MSME setor in Cambodia

Abstract

Micro, Small, and Medium Enterprise (MSME) has been an important sector that enhanced economic development in Cambodia in the last decade. MSME encompasses nearly 96% of total firms and 40-50% of the labor force in Cambodia. However, corruption has been found to be a major obstacle in the development of MSME. It is reported that MSME lost 330 million US Dollars, which is equal to about 6% of Cambodian GDP in 2005, due to corruption. This researc investigates the causes and possible remedies for corruption that are specific for Cambodia. Based on many national and international reports and surveys, I find that slow adaptation of anticorruption law, inertia of Cambodian people to corruption, and the lack of accountability of public employees are the main causes of corruption. Therefore, I propose the following remedies for the Royal Government of Cambodia to combat corruption: i) Create better anti-corruption tools such as anti-corruption court, anti-corruption plan, corruption media, and accounting and auditing standard; ii) Enhance public support and participation to raise the awareness and facilitate reporting complaints of corruption; iii) Improve its internal laws and regulations. I also discuss possible implementation methods.