Cambodia Must Address Skills Gap, Productivity, Study Says

Cambodia’s skills gap and low labor force productivity continue to pose risks to economic growth in the country, according to a study released on Thursday by the Asian Development Bank (ADB) and International Labor Organization.

“Most of the country’s labor force is young but often not equipped with skills that match business needs,” ADB Chief Economist Shang-Jin Wei said in a statement accompanying the report. “So, the challenge for policymakers is to address this gap and mismatch.”

Officials acknowledged the report’s findings on Thursday, but called for more time to allow existing policies to permeate.

The study shows that more than 50 percent of professionals, technicians and associate professionals lacked the necessary level of education, while an overwhelming bulk of the population is working in the informal sector—where they are vulnerable to poor working con­ditions, have few legal protections, and generally carry out menial jobs far below their potential.

According to the 2011 Economic Census of Cambodia, 99.8 percent of business establishments and 73 percent of employment in Cambodia was accounted for by micro-, small- and medium-sized enterprises.

“Cambodia has good job crea­tion, but what matters is the job people do and whether the country can do better,” Mr. Wei said at the study’s launch in Phnom Penh on Thursday. “A move to more skill-intensive and formal jobs will create a better future. This means improvements to the schooling system and the provision of technical and vocational education and training.”

Labor Ministry spokesman Heng Sour said the government was well aware of the challenges and had put forth a raft of relevant policies, but that more time was necessary before ministries could be judged on their actions.

“We plan to register 80 percent of informal business into formal commercial operations by 2025,” Mr. Sour said. “And we’re encouraging ministries to change the mindset of youth to study something useful…and not just to sit in an office.”

“But we need time, at least till 2025 to integrate our policies.”

Last year, the government launched the Industrial Development Policy and National Employment Policy, which are designed to promote job growth in more complex industries—beyond the farming and garment sectors—partly through higher-level education and training.

And while the government may have some external support for its programs—with the ADB on Thursday estimating it would allocate about $500 million to Cambodia’s human capital development over the next two years—some remain unconvinced of the government’s ability to actually implement its policies.

“The government needs to take more of a lead, but internally, there are not adequate facilities, legal frameworks, money and human resources,” said Srey Chanthy, an independent economist.

“The quality of the policies and pace of implementation depends on strong leadership and also strong­er teams below the ministry level.”

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