Cambodia lacks the skilled labor force necessary to advance the economy and the government must find ways to create more valuable work as it faces fierce regional and international competition, according to a new report released Thursday by the World Bank.
The report, “East Asia Pacific at Work: Employment, Enterprise and Well-Being,” touches on Cambodia’s ease of doing business, agrarian economy and minimum wage, but says the lack of education and training among the population remains among the most significant drags on economic improvement.
“Many economies, including Cambodia, Indonesia, Lao PDR, and the Philippines, need to find ways to create and sustain productive work,” the report says. “Countries can ill afford to ignore what appear to be increasingly restrictive business environments.”
It adds that in Cambodia, China, Mongolia and Vietnam “the demand for skills is rising sharply and outstripping the available supply of skills in the workforce.”
“Economic growth in the region is moderating. Labor’s share of gross national output has declined in some countries. Further productivity gains have been handicapped by shortages in basic skills in Cambodia…and several Pacific island countries, as well as gaps in advanced skills across the region’s labor force,” the report says.
While the average number of years of schooling received by Cambodians aged 15 years and older has improved since 2005, it still averaged at about six-and-a-half years in 2010, the report notes.
About 10 percent of upper secondary students are enrolled in technical and vocational schools, while about two percent of tertiary school students are enrolled in technical schooling.
Among colleges, there is a small fraction of Cambodian students enrolling in programs such as engineering and natural sciences, the report states.
“In Cambodia, for example, the high share of social science graduates is creating concern that the skills needed to fuel Cambodia’s economic growth—namely, natural sciences—are not being created,” it says.
The report adds that employers are even calling into question the skills of graduates.
“In a recent survey of employers regarding the education and skills of their staff and the workforce overall, 76 percent of Cambodian employers claimed that new graduates are not equipped with the right set of skills,” the report says.
The World Bank’s report came the same day as a new quarterly Cambodian business confidence survey by ANZ Royal Bank, which showed that while overall confidence in the country’s business sector the past year and next year is “very high,” large businesses might have difficulty finding skilled workers in the future.
The survey asked a total of 40 CEOs and financial officers from the country’s service, agricultural and industry sectors how confident they feel about the prospects of their business over the next 12 months in terms of revenue, profitability, headcount and capital expenditure.
Every area witnessed an increase or stayed the same except for headcount, which saw a small drop in confidence by large businesses over the next 12 months. It decreased six percentage points from 75 to 69.
Grant Knuckey, CEO of ANZ Royal, said the drop could be read as concern over a lack of skilled workers needed to fill future jobs.
“You can draw a conclusion that this is partly a function of shortage in skilled personnel and, over time, it could have an impact. But we will continue to monitor each quarter,” he said.
Labor Ministry officials could not be reached for comment.
(Additional reporting by Phorn Bopha)