H.E. Dr. Santo Darmosumarto, Ambassador of Indonesia to Cambodia, spoke to B2B Cambodia about the growing business ties between Indonesia and Cambodia, with many more investment opportunities lying on the horizon.
He stressed the importance of increasing exposure between the two countries to allow businesses from Indonesia and Cambodia to connect with one another, as well as to let investors become familiar with either country’s business environments.
Cambodia-Indonesia Business And Trade Relations 2024
Currently, the major business dealings between Indonesia and Cambodia is in trade, which exceeded USD 1 billion in 2023, making Indonesia Cambodia’s sixth largest trading partner. Ambassador Santo added that as of October 2024, bilateral trade between the two countries reached USD 904 million, so he is hopeful that by the end of the year, the trade numbers will be able to supersede what was achieved in 2023.
“The products are quite varied at the moment; Indonesia's main exports to Cambodia include coal, automobile parts, cigarettes and food & beverage as well,” said Ambassador Santo. “A lot of Cambodians now are seeing more and more Indonesian products hitting the supermarket shelves, and hopefully that would introduce Cambodians to other types of Indonesian products that may be available.”
Regarding what products Indonesia imports from Cambodia, the Ambassador highlighted rice, and the opportunity to import a number of other agricultural products. He said:
I'm very happy that last year, finally, after we signed an MOU more than a decade ago, Indonesia started importing rice from Cambodia. We had our first shipment of rice in the month of October, 2023, and this year we've continued with more imports. Of course, our hope is that the numbers will continue to grow and that we get more than just rice. We could also see the possibility of importing other agricultural products from Cambodia as well, like cashew nuts, pepper, or any other things.
Reflections On Cambodia Since Becoming Ambassador In 2023
Ambassador Santo is fairly new to Cambodia, having been officially appointed as the new Indonesian Ambassador in late 2023. However, 2023 was not the first time he had visited the country, and he shared that he had much different expectations to what Cambodia would be like in the present day.
“First and foremost, I am very, very delighted to be here,” he began. “I visited Cambodia more than a decade ago, and then I came back in 2023 expecting one thing, but actually got far more than what I was expecting.”
Being here has been very enjoyable, particularly in trying to generate interactions between Indonesians and Cambodians. I think for a long time, we have always looked at each other as brothers, sisters, partners, but never really looked at ourselves as potential economic partners, in that sense. So I think the door is wide open for interactions between businesses in Indonesia and Cambodia, and that's what we're trying to do here at the Embassy of Indonesia in Phnom Penh.
He added that his time as Indonesian ambassador has been particularly interesting since he arrived in Cambodia at a time when the two countries marked the 65th anniversary of their diplomatic relations, meaning a particularly fruitful period of activities being pushed by the embassy.
“We’re trying to push as many activities to be carried out between our two countries, particularly here in Cambodia, not only related to businesses, but predominantly related to businesses, but also in other fields like education, people-to-people connections, and also military cooperation,” said Ambassador Santo. “But yes, the focus of the Embassy of the Republic of Indonesia is on economic cooperation, and also attending to the number of Indonesians, which is growing by the day.”
The latest numbers provided to the Indonesian embassy by the Cambodian government indicate around 89,000 Indonesians currently reside in Cambodia holding visas of six months or above. Counting shorter term visas as well, the Ambassador estimates Cambodia probably has more than 100,000 Indonesians living in the country.
Cambodian Consumer Interest In Indonesian Products – Key Takeaways From ‘Sousdey Indonesia’ 2024
One of the main activity highlights from 2024 for the Indonesian embassy was the Sousdey Indonesia exhibition held from September 13-14, 2024 at the Diamond Island Convention and Exhibition Centre in Phnom Penh.
The exhibition featured more than 100 booths, with the majority being businesses from Indonesia showcasing their products to the Cambodian market.
“In total, I think the results of the trade show was around USD 2.3 million in potential, as well as realised, purchases, and in total, we had more than 4,000 visitors coming to that particular event, which was held for only two days… Of course, there's always room for improvement, and a lot of things that we learned about from this year's exhibition, we'll try to implement next year,” shared Ambassador Santo.
One of the main takeaways the Ambassador had from the trade show was that there is a notable interest for Indonesian brands and Indonesian products in Cambodia. In addition to consumers, many importers and aspiring distributors of Indonesian products also attended the expo, and they displayed a lot of interest in the products being showcased by Indonesian companies.
“A lot of Indonesian companies who were here for the first time managed to actually make some connections as well, that hopefully will set up some new ties and bridges between Indonesia and Cambodia as well,” he said.
In particular, the Ambassador found that interest in Indonesian food and beverage (F&B) products is very high.
I think for Cambodian consumers, there's a desire to have a diversity of products… Now they also see the possibility of what they can get from Indonesia to diversify the market. This is something, which is very good for us, because it means that Indonesia has an opportunity to take advantage of the Cambodian market.
Fostering Connections Between Cambodian And Indonesian SMEs
A number of booths showcasing their products at the expo were Indonesian small and medium-sized enterprises (SMEs) who had flown into Phnom Penh to take part in the expo. Ambassador Santo stressed that he believes Cambodia, with its relatively small population of 17 million people, provides a very suitable market for Indonesian SMEs who come from a highly competitive and densely populated domestic market (over 277 million people as of 2023).
“We call it ‘SMEs Go International’; this is a mandate by the Indonesian government to support SMEs whenever they want to go abroad. A lot of them need courage to go out and venture and try to sell their products abroad,” he shared.
With Cambodia, I think it's very suitable. Why? Because the Cambodian market is actually not that big. The problem with SMEs, including in Indonesia, is that they are unable to produce massively… therefore, if they want to penetrate markets like China, it becomes impossible, because the Chinese would say [they’re] not producing enough for the demand. But for Cambodia, I think the demand is very manageable for a lot of these SMEs.
The big challenge that remains for Indonesian SMEs coming to Cambodia, however, is logistics and payments, the Ambassador added.
Logistics is one of the biggest challenges because that actually causes the costs of the product to go up. So Indonesia might have a good product that, in actuality, has a price that is quite competitive when compared to, for example, Thai, Vietnamese or Malaysian products. But because shipment from Indonesia is very expensive, that pushes the price of the product slightly above compared to the others.
He acknowledged that while some Cambodian consumers won’t mind paying extra to add more diversity to their purchases, for others, even a five cent difference is likely reason enough to choose another product instead.
Future Areas Of Cooperation Between Indonesia And Cambodia
Trade and business relations continue to grow between Cambodia and Indonesia, but certain challenges still persist that prevent the speed of growth. One of the biggest challenges the Ambassador noted was the lack of exposure Indonesian and Cambodian businesses and investors have to one another.
“I think Cambodians don't see Indonesia's potential the way it should be seen, and Indonesians don't see the potential, or the gains that can be made, in the potential Cambodia holds, the way other businesses, like, for example, from Thailand, Malaysia or Vietnam, see it,” said Ambassador Santo. “I think there needs to be more interactions among businesses, so events like Sousdey Indonesia, in addition to Indonesian businesses coming here to sell their products, are also an opportunity for them to come and have a look at Phnom Penh, have a look at cities like Sihanoukville, Siem Reap, Battambang, Poipet… Kampot and Kep, to see what are the opportunities, what are some of the things that may be of interest to Cambodian consumers.”
In the future, some areas of cooperation that Indonesia might try to push with Cambodia encompass not only trade, but other industries like infrastructure, renewable energy, circular economy, and food security.
For example, there are a lot of Indonesian infrastructure or construction companies that have developed projects in places like Africa or South Asia, and I think there's a potential for these companies to also be involved in projects that are happening here in Cambodia… so we'd like to see more, more Indonesian state-owned enterprises, particularly, in the construction field.
“Of course, you know, anything related to new and renewable energy is very sexy, but it's such areas that we need to look at if we want to look at the future of our economic cooperation, and there's plenty of possibilities in [for example] electronic vehicles, because Indonesia is developing the EV battery industry as well. There's tremendous potential for this,” added Ambassador Santo.
In regards to food security, the ambassador emphasised that he would love to see Indonesian companies look into the agricultural potential of Cambodia and reiterated that beginning to import rice from the Kingdom has been a step in the right direction.
“Like I said, last year, we imported Cambodian rice for the first time, but there's a lot of things that can be developed here in Cambodia, and there's a lot of ways for Indonesian companies to come here to also work together with Cambodian companies to increase the productivity of Cambodia's agricultural output, not only in rice, but also in in durian, coconut, coffee, rubber, a lot of these products can be developed,” he said.
Indonesia, we are a country of 280 million people. We have so many mouths to feed, so it would be naive for us to think that we could grow all the food needed by the entire population. We need to work with neighbouring countries, particularly those neighbouring countries that always have a surplus in their agriculture production. Cambodia is definitely one of those countries that continually has a surplus in rice production, surplus in cashew nut production, surplus in various other agricultural products as well. So this is an area that I think Indonesia could come in with potential investments as well.
Vision For Future Cambodia-Indonesia Relations
On his broad vision for what he wants to achieve during his posting in Cambodia, Ambassador Santo reiterated his focus on concretising economic cooperation between the two countries.
“I want to convert the historical ties and historical linkages that we have into concrete economic cooperation. It's still a lot of work in progress, but I believe that this is the right path that we need to pursue,” he said.
At the same time, one of the other things that we need to do is to enhance the connections between young people. Older people, like me, know Cambodia, and Cambodians my age know Indonesia because of Indonesia's involvement in the peace process here in Cambodia. But the younger generations, the ones who are born 2000 and above, who were born in a period of peace here in Cambodia, they are not fully aware of what Indonesia's potential is, and Indonesians born in the 2000s and above also don't know the potential of Cambodia.
"Both generations of Indonesian the Cambodian youths prefer to look at the West, Japan, China, Korea, and all these places. So I think there needs to be more interactions here.
“Hopefully next year, I will try to push for more interactions among the youths. This [mission] began when I visited the National University of Battambang and introduced Indonesia to 500 students at the university. Hopefully next year, I'll be able to do that more and try to, once again, bring the entire Indonesian and Cambodian populations to see one another more often,” concluded Ambassador Santo.
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