CamEd Business School  |   March 2025

EXECUTIVE SUMMARY

This report provides the finding and current practice of the roles, operations and reporting of State-Owned Enterprises (SOEs) and Public Administration Establishments (PAEs) in Cambodia, and puts forward observations related to incorporation of SOEs and PAEs into the Government of Cambodia’s Public Financial Management Reform Program (PFMRP).

As in virtually all countries, SOEs and PAEs in Cambodia provide core public services which can both generate revenue and provide public services. SOEs in Cambodia are established. In the sectors of utilities, finance, trade and transportation and telecommunication sectors, and are also represented in the publishing, construction, and waste management sectors. PAEs are established in the capacity building, health, arts, culture and heritage, social protection, and scientific and research sectors.

SOEs and PAEs have a significant role in public infrastructure investment, including electricity supply, water management, hospitals, universities and schools. SOEs and PAEs also provide a social as well as commercial purpose, directly benefitting the wellbeing of citizens. Some SOEs are net contributors to the governmental budget and some require governmental budget. SOEs are revenue generating and have a commercial as well as a social purpose, whilst PAEs tend to focus on social purpose, such as the provision of education and health. PAEs also have a role in public investment, through public service provision.

The incorporation of SOEs and PAEs into the PFMRP is recognition of the important role of financial planning and appropriation of public sector funds. The purpose of the 2023 study was provide a basis to assess how SOEs and PAEs can be incorporated into the PFMRP. This required an assessment of how SOEs and PAEs operate and report to the Royal Government of Cambodia (RGC). The study firstly examined the role of SOEs and PAEs set out in the legislation, their establishment, mandate and operation under the law of Cambodia. The study then assessed how SOEs and PAEs are governed, and how they report to the Government both in terms of strategic direction and activities, and financial reporting. A questionnaire survey provided an indication of how SOEs and PAEs see their role and how they comply with governmental reporting requirements. The questionnaire survey was followed by in-depth interviews with four SOEs, two PAEs and the two General Departments (GDs) of the MEF, the Financial Guardian (FG) to which the SOEs and PAEs report.

This report presents the results of the review of the legislative framework, the responses to the questionnaire survey and in-depth interviews with managers of SOEs and PAEs and the GDs of the MEF. The study also identifies issues raised by the SOEs and PAEs, related to their mandate, activities and reporting. Also presented are a series of observations aimed at incorporating SOEs and PAEs into the PFMRP, and more widely to maximize or improve the competitive position of SOEs and PAEs in Cambodia. In addition, a chapter is devoted to examples of international practice and identify where possible best international practice. These provide ideas and concepts for the future direction of SOE and PAE management in Cambodia. The main focus (beyond that of incorporation into the PFMRP) has been to put forward observations to improve the performance and accountability of SOEs and PAEs which can be completed within the existing legal framework. This report provides a summary of the findings and observations drawn on the basis of the questionnaire survey and the interviews undertaken during 2023.

Charman, K., P., Barnett, C., Ma’aji, M. M., Kong, C. & Thun, S. (2025, March). Public financial management reform in Cambodia: SOEs and PAEs 2023 study. CamEd Business School. https://cam-ed.edu.kh/public-financial-management-reform-in-cambodia-soes-and-paes-2023-study/