A Change of Guard

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Thursday, 28 April 2016

To shape future, gov’t must take advantage of changing demographics

To shape future, gov’t must take advantage of changing demographics
Wed, 27 April 2016 ppp
Yesenia Amaro

Cambodia is poised to see a 25 per cent spike in its working-age population by 2030, but the Kingdom will need to make sweeping preparations if it hopes to use that demographic shift as a springboard to prosperity, according to a UN report released yesterday.

The UN Development Programme report – dubbed Shaping the Future: How Changing Demographics Can Power Human Development – says that demographic change in Asia and in the Pacific is happening at a rate never seen before.

The Asia-Pacific region as a whole is well-poised, with more working-age people and fewer dependents than any point in history, the report found. But if countries don’t start planning for the change now, they will “miss out on a unique opportunity to boost growth and investments for the future”.

With its disproportionately young population, Cambodia could also stand to reap big benefits from the trend, but in order for it to diversify its economy away from its heavy reliance on low-skilled industries – such as garment manufacturing – policymakers will need to reform the education system from top to bottom, analysts, government officials and businesspeople said yesterday.

“The time to act is now,” said Tasneem Mirza, an economist and one of the authors of the report. “The government has to have a strategy. They have to ensure more jobs.”

If Cambodia fails to act, however, it risks facing future budget challenges: If there are fewer people working, there are fewer people paying taxes, said Mirza.

Miguel Chanco, lead ASEAN analyst for the Economist Intelligence Unit, said yesterday that education would be key, and that “the government should redirect more of its resources to this vital area, while simultaneously clamping down on corruption in schools”.

“Without an effective education system, the country’s skills gap will remain large and the economy will struggle to move up the value chain,” he added.

The Ministry of Education has indeed taken a strong stance against corruption, particularly with regards to mandatory grade 12 exams, and spokesman Ros Salin said yesterday that other reforms intended to capitalise on Cambodia’s demographic opportunity, such as introducing English in grade 4, are already taking place in some schools.

However, Cambodia is still among the countries making the least investment in education, the UN report found – although increases to the education budget have been seen in recent years.

The lack of skilled workers has already prevented companies from coming into the country, maintained Son Chhay, a Cambodia National Rescue Party lawmaker who also pointed to the need for improvements in education and vocational training to attract investors.

Sandra D’Amico – managing director of HR Inc Cambodia and vice president of the employers’ association CAMFEBA – also said the lack of skilled workers was an issue, especially in fields such as engineering. Skilled people are needed to fill even low-level engineering jobs in plumbing and construction.

Firms that lose business to competitors because of a lack of workers can’t innovate, she said. They are consumed by “what they have to do, instead of what they could do”.

“Human capital and development needs to be a government priority in the coming decade for Cambodia to continue to prosper,” she said.

Mey Kalyan, senior adviser to the Supreme National Economic Council, said the students coming out of Cambodia’s universities were poorly matched to the needs of its economy, with many students going into social science and accounting, but not many in engineering.

But Kalyan maintained there are a few initiatives to help change that, including a committee he heads at the Royal University of Phnom Penh, where members of the private sector advise the group on what can be done to create a workforce that meets demands.

But it is not only about having an adequate workforce – companies also need to be interested in coming to Cambodia to make jobs available.

“The absence of good-paying, high-skilled jobs in Cambodia amid a boom in its working-age population risks the likelihood of significant brain drain,” the Economist Intelligence Unit’s Chanco said via email.

“This is a problem the Philippines’ has long struggled with, for instance, millions of Filipinos have permanently gone abroad to seek better employment.”

The CNRP’s Chhay, for his part, said he believes the government hasn’t taken the issue seriously enough, and remains sceptical of change.

“I’ve been waiting for 40 years, but I haven’t seen change,” he said.

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