ADB says Cambodia needs skills upgrade to sustain growth, diversify economy

The Asian Development Bank (ADB) said Thursday that tackling skills gap and mismatch and boosting productivity of the labor force are key challenges facing Cambodia if it is to maintain its impressive growth.

In its employment diagnostic study, Cambodia- Addressing the Skills Gap, the ADB said closing the skills gap will help cement the gains in poverty reduction seen over the past years, and increase the country's competitiveness within the ASEAN Economic Community.

"Most of the country's labor force is young but often not equipped with skills that match business needs, so the challenge for policymakers is to address this gap and mismatch," ADB Chief Economist Shang-Jin Wei said in a press conference here.

"Developing a more educated, employable, and productive workforce is essential for Cambodia to broaden its economy beyond the current four mainstays of garment manufacturing, tourism, construction and agriculture and to sustain high growth," he said.

Tackling the skills gap and mismatch requires action on many fronts including increasing access to quality education and mid-level skills vocational training, and upgrading competencies of teachers, the report said, adding that better information about labor market needs and trends is also needed.

Policymakers also need to take steps to provide better income earning opportunities for rural residents, to expand social safety nets and to improve work conditions in the informal sector to create a more inclusive economy, it said, adding that support for those micro, small and medium-sized enterprises that are dynamic and competitive can also increase productive employment.

The study also highlights the gains the economy could reap by providing incentives to informal businesses and workers to join the formal economy, which would also boost to tax revenues. Endit