លីងទៅកាន់ព័ត៌មានដើម

Heng Sour, Minister of Labour and Vocational Training, stated yesterday that Cambodia requires appropriate response policies and a comprehensive strategy to facilitate its graduation from the group of Least Developed Countries (LDCs).

Presiding over the 2024 National Conference on Labour Economics—held on December 11, 2024, under the theme “Economic and Labour Recovery and the Path Toward Graduation from the Least Developed Countries”—Heng Sour remarked: “To successfully graduate from the group of Least Developed Countries, Cambodia must develop longer production chains. This involves taking raw materials and various components and assembling them into finished products for export—aiming for a value-added share of at least 60%—rather than relying solely on the labour costs (wages) of workers.”

The two-day conference brought together experts from the fields of labor, social security, and vocational training from various institutions to share insights on emerging trends and provide feedback aimed at strengthening Cambodia’s labor market, while also addressing the implications of Cambodia’s graduation from the Least Developed Countries (LDC) category.

He added that, based on past achievements, Cambodia has met the criteria for graduation from the LDC category on two occasions—first in 2021, and again in 2024. He added, “As a result, Cambodia is set to graduate from the group of Least Developed Countries (LDCs) in 2029, pending an official announcement by the United Nations General Assembly. In the lead-up to this graduation, Cambodia will encounter both challenges and opportunities, necessitating well-considered policy responses and a comprehensive strategy.”

He further noted that some of the challenges arising from this transition include the loss of preferential tariff treatment in key export markets—such as the European Union and the United States—where such preferences currently cover approximately 90 percent of trade.

Furthermore, Cambodia is currently required to meet “rules of origin” criteria, which mandate that at least 30 percent of raw materials and inputs must originate from within Cambodia. However, upon graduating from LDC status, this requirement will increase to 60 percent—a shift that presents a significant challenge. Graduating from the category of Least Developed Countries (LDCs) presents an opportunity for all stakeholders to redouble their efforts toward industrial diversification and the strengthening of economic capacity. This includes increasing value-added in the industrial and agro-industrial sectors, expanding export markets, boosting domestic consumption and investment, developing high-quality infrastructure, and adopting digital technologies.

Furthermore, exiting the LDC category allows Cambodia to focus on strengthening human resources, developing domestic models to improve the business environment, and building local industrial linkages through integration.

He further noted that employment growth in the industrial and service sectors shows a highly optimistic outlook, with the total number of jobs projected to rise from 9.8 million in 2023 to 10.1 million in 2025.

Alissar Chaker, Resident Representative of the UNDP in Cambodia, stated that this discussion is both timely and significant for Cambodia as the government prepares for a smooth graduation from the LDC category. Furthermore, the upcoming graduation from the Least Developed Countries (LDC) category will mark significant progress since Cambodia was first included in the list in 1991.

She noted that, with economic growth averaging around 7 percent annually over the two decades prior to COVID-19—alongside investments in human capital—Cambodia has been able to substantially improve its socio-economic indicators. For instance, before the pandemic, Cambodia reduced its poverty rate from 47.8 percent in 2007 to 17.8 percent in 2019.

She added, “As we gather today, it is important to reflect on the journey the country has taken thus far. Cambodia’s progress over the past several decades has been remarkable. However, it must also be recognized that the transition ahead will bring both challenges and the potential to seize new opportunities.” She stated that a key challenge facing Cambodia is ensuring that the labor market is structured to support national growth and meet the demands of a rapidly evolving global economy.

Oktavianto Pasaribu, Deputy Director and representative of the ILO, remarked that graduating from the group of Least Developed Countries by 2029 is a highly demanding undertaking, “because what you aim to achieve must be accomplished in less than five years.” He stated, “The ILO is proud to support this conference, and our ongoing initiatives in Cambodia will continue to promote labor policies, social protection, and training.

We are committed to working closely with our UN partners and other development partners—in close collaboration with the Royal Government of Cambodia and other stakeholders—to achieve the objectives of this conference.

We are committed to collaborating with our UN partners and other development partners—working closely with the Royal Government of Cambodia and other stakeholders—to achieve the objectives of this conference.”

He added that this conference represents a significant step in shaping Cambodia’s labor market policies and preparing the country for the conditions associated with its graduation from the category of Least Developed Countries (LDCs).