The $1.6-billion Untac mission of the early 1990s injected a huge amount of money into Cambodia’s economy. Now, the U.N. wants to pump millions more into the country—this time by buying up the offerings of local businesses.
At a seminar at the Commerce Ministry on Thursday, U.N. representatives briefed some 30 Cambodian business owners on how they could potentially make millions of dollars by selling their products or services to U.N. agencies in Cambodia and around the world.
“The overall size of the United Nations’ market is between $16 billion and $17 billion worldwide every year,” said Dmitri Dovgopoly, director of the U.N.’s procurement division.
Despite the potential for huge profits through selling to the U.N., Mr. Dovgopoly said that in 2013, Cambodian businesses sold just $24.6 million worth of goods and services to the U.N. That same year, Afghanistan—which has a gross domestic product that is 25 percent larger than Cambodia’s, according to the World Bank—made $700.9 million from U.N. contracts.
“We do very little business in Cambodia because of a lack of knowledge among local business communities about the business opportunities that we can offer,” Mr. Dovgopoly said.
According to the U.N.’s 2013 procurement report, Cambodia sells dozens of different products to the U.N., ranging from medical equipment and motorbikes to office supplies and uniforms. It also offers a number of services, including real-estate agents and commercial printing.
Mr. Dovgopoly added that while there were only about 100 Cambodian companies selling to the U.N., he believed local firms had much to offer it, not only by providing products but services as well. “I think Cambodia has a lot of potential,” he said.
One of the attendees of Thursday’s seminar, Nuon Ratana, a board member of RDL Logistics, said his company had never done business with the U.N. simply because it did not know how.
“We don’t have brokers who let us present our products to the U.N. and I think this is the first time that this big organization has offered us the opportunity to understand how to do business with it,” Mr. Ratana said.
Mao Thora, a secretary of state at the Commerce Ministry who helped organize the seminar, said the biggest challenge for Cambodian firms would be winning the U.N. bids.
“For example, there are good companies that are not corrupt, but they cannot win bids due to various factors, such as the quantity of demand, or because the timeframe is beyond the ability of the supplier,” he said.
Speaking after the seminar, Mr. Dovgopoly said that one of the most important aspects of doing business with the U.N. is abiding by its Global Compact Initiative, which requires businesses to refrain from engaging in corruption, discrimination and labor abuses. Companies found violating the compact, he said, could be sanctioned for years, even blacklisted.
“Each and every vendor must self-certify that they are not corrupt,” he said, adding that companies are also screened against various databases.
“Of course, it doesn’t give you a 100 percent guarantee, but we catch most,” he said.
Marta Escorihuela, a procurement officer for the U.N.-backed Khmer Rouge tribunal, which spends between $1 million to $1.5 million on Cambodian goods and services each year, admitted that corruption among local companies is an issue.
“That’s the reason why our soliciting process in Cambodia may take a bit longer,” she said.
Preap Kol, director of Transparency International Cambodia, said in email that getting companies to follow the U.N.’s rules would encourage businesses to stamp out corruption, but said such an arrangement would be hard for the U.N. to enforce.
“For many businesses in Cambodia, corruption and tea money are inescapable realities, and it is hard to see how this can all be monitored and penalized,” he said.