Economists: Focus on added value needed
Economists: Focus on added value needed
Economists have stressed that Cambodia needs to focus on developing skills and diversifying its exports to enhance value addition, in line with the government’s efforts to train human resources amidst the advent of the fourth industrial revolution, or Industry 4.0.
The perspective was shared at a roundtable discussion on the “2024 Economic and Real Estate Situation”, organised by the Club of Cambodian Journalists (CCJ) on March 11.
Ky Sereyvath, an economics researcher at the Royal Academy of Cambodia, stated at the forum that in the digital era, the country needs to intensively develop its workforce to attract high-tech factories and enterprises.
He said this strategy is crucial for achieving greater added value, especially considering that for the nearly 30 years since 1996, the country’s industrial sector has predominantly relied on textile exports.
Sereyvath noted that with socio-economic progress, it is imperative for the nation to upgrade its industrial capabilities.
He suggested a shift from industries with low value addition to those offering high added value.
As an example, he noted that if Cambodia imports fabrics for $5 billion and processes them for resale at $10-12 billion, the added value is more than doubled. However, he argued that for industries yielding even higher value addition, such as electronics and auto parts, the country must be proactive in their development.
“In vocational training, particularly electronic skills, we might purchase equipment or materials for $100 and sell them for $500. This results in a five-fold increase in value. In comparison, the garment sector only achieves a two-fold increase. Therefore, knowledge and skills are instrumental in creating high added value,” he explained.
Nevertheless, Sereyvath acknowledged the country’s current shortage of human resources capable of extracting and processing locally sourced raw materials for integration into the finished production chain.
He argued that capacity building needs to start from the primary level and extend to college education or specialised fields.
According to Sereyvath, the enhancement of quality human resources will also increase the chances of attracting factories that produce finished products.
Te Taingpor, president of the Federation of Associations for Small and Medium Enterprises of Cambodia (FASMEC), stressed the significance of knowledge and technology in promoting and enhancing local production capacity.
He noted that as domestic production escalates and quality improves, the market for these products also expands.
He mentioned that although progress can be swift, it requires collective support for local products, combined with marketing and promotion abroad to further boost exports.
In 2023, the government, through the Ministry of Labour and Vocational Training, initiated a training programme aimed at approximately 1.5 million youth from impoverished or vulnerable households nationwide.
The initiative is designed to increase productivity and efficiency in the workplace and to prepare participants for new job opportunities that may arise in the future.
Human resource development is one of the five key priorities of the first phase of the government’s Pentagonal Strategy, which focuses on people, roads, water, electricity and technology.
The initiative is intended to transform individuals who rely solely on manual labour into skilled workers. Those who receive specific skills training through the programme are expected to secure better employment opportunities and consequently earn higher salaries, as per the ministry.
