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Cambodia: New reports outline policy framework for higher growth and more and better jobs

Two major reports that lay out the challenges and opportunities for sustainable business development in Cambodia were launched on Wednesday 12 March 2014 in Phnom Penh. 

Cambodia’s Minister of Labour and Vocational Training, H.E. Ith Sam Heng, launched two major reports that lay out the challenges and opportunities for higher growth and more and better jobs in Cambodia.

The reports are the product of an 18-month partnership between the ILO and CAMFEBA, and utilize new and innovative ILO methodologies that combined a nationwide and cross-sectorial survey of both Cambodian firms and workers with a comprehensive analysis of existing reports and data. This innovative approach of combining primary and secondary data, worker and firm-level perspectives, along with international benchmarks has helped generate a comprehensive and consolidated review of the key challenges facing the Cambodian economy today, along with practical and actionable recommendations.

The ILO report, “The Enabling Environment for Sustainable Enterprises (EESE) in Cambodia” analyses Cambodia’s performance in 17 areas necessary for sustainable enterprise development and productive, decent employment. These include social dialogue, education and training, legal and regulatory reform, governance, trade, and integration.

The CAMFEBA report, “Pathways to Prosperity: Policy priorities to create an enabling environment for sustainable enterprise development & creation in Cambodia” is predicated on the analysis from the EESE report and focuses on policy recommendations in four key areas; workplace relations, skills, governance, and the legal and regulatory environment.

Speaking at the launch, Mr Van Souieng, President of CAMFEBA, said; “to translate opportunities into businesses, products and jobs, our national policies must support private sector development and encourage economic expansion. The CAMFEBA report “Pathways to Prosperity” outlines the areas business sees as critical for immediate policy focus. We have not been abstract or unrealistic in our recommendations and strongly believe that with collective action from all stakeholders, we can create the environment to grow and diversify the economy, create quality jobs and improve the livelihoods of all Cambodian citizens. Ultimately that is the yardstick our efforts we will be measured by”.

The research that underpins the reports is revealing. In terms of skill, more than half of Cambodian firms feel that vocational education and training programmes do not yet meet the needs of the business community. Employers included a shortage of skilled labour and a lack of quality human resources among the greatest challenges facing the Cambodian economy. Surveyed firms noted that, while the quality of education and training providers currently available in the market is good, there are not enough providers.

A number of recommendations are subsequently outlined that, inter alia, call for improvements to the general education system, such as incorporating practical training, learning, entrepreneurship and innovation into curriculum design, along with measures to improve dialogue, cooperation and information exchange between business, unions, educators, trainers and policy makers.

Notwithstanding progress in recent years, in particular through the work of the Anti-Corruption Unit, it is clear from the research that corruption remains a major obstacle to business. Most firms in Cambodia, when dealing with Ministries, still feel they need to pay unofficial facilitation fees to secure services. 70 per cent of firms surveyed that had refused to pay such fees reported experiencing a delay in service or failure to receive the service at all. A key recommendation emanating from the two reports is the need to raise national awareness of the Anti-Corruption Law through the media in all provinces. In addition, it needs to become easier to make a legitimate complaint, particularly for SME’s.

Both reports note that major efforts are needed to improve the quality of workplace relations. The CAMFEBA report notes that “full and genuine social dialogue based on responsible cooperation rather than confrontation is an important tool in sustainable enterprises. Developing a positive, collaborative working environment can help improve productivity and innovation, while greater workplace stability benefits employers and workers alike”.

Addressing the launch Mr Maurizio Bussi, ILO Country Director, Cambodia, alluded to the importance of effective social dialogue and sound workplace relations. He noted that “Cambodia has witnessed a period of uncertainty coupled with some disturbances over the last 12 months. We have seen strikes that have resulted sadly in violence and in loss of life. The workplace environment has been anything but stable. This has led to what is an uncertain investment climate in the country. That’s bad for business and bad for workers. The work that we are launching today is focused on creating the policy setting for an “enabling environment for sustainable enterprises” – that means “stability” and “certainty” which can translate into jobs, growth, better livelihoods and a more prosperous Cambodia. That is a vision all tripartite partners can agree on”.