Cambodia needs to capitalize on demographic dividend

01 Jul 2015

 Ms. Vin Rattana, middle, supervises her colleagues at a car garage she manages in Siem Reap province. More skilled workers are needed for the country to grow faster and to compete with other nations, especially when ASEAN economic integration is coming soon.

But, what is demographic dividend?

A demographic dividend or bonus is a condition where greater proportion of the population is in the working-age against a diminishing total dependency ratio. It is a potential opportunity for countries to accelerate their economic growth through investment in education, health and economic opportunities as more and more resources are now freed due to lower dependency ration.

How does it happen?

Demographic window of opportunity begins with declining fertility and mortality rates. Eventually, population age structure changes, that brings more people into the working-age than the dependents. Then, the demographic dividend is opened up. In other words, more net producers than net consumers are in an economy freeing more resources for investment in education, health, and other wellbeing. 

What are the benefits of demographic dividend?

When birth rates decline, families start having fewer dependent children. This increase in the ratio of the working age population relative to the dependent population (child and elderly) can give the country an impetus for accelerated economic growth. With more people working, they produce more as a country. With more workers who now invest more in their children’s health and education without necessarily increasing family budgets – as they have fewer children than their ancestors  –  more money is saved for investments in the future.

For a country to take advantage of this new change in age-structure, it must ensure that the larger labor force is well-educated, skilled and gainfully employed. The country must simultaneously make the right investments in education, health, job creation and governance in order to realize accelerated economic growth.

Can Cambodia reap the benefits of demographic dividend?

It highly depends on how fast the country responds to the demographic dividend enablers. However, the good news is that Cambodia’s labor force is growing faster than its population growth (2.71% against 1.63%) which is a relief provided workers are skilled and the economy supports them to have good jobs. Cambodia now is in the middle of its demographic dividend and this window will continue for the next 30 or less years. 

Thus, in order to reap the benefits of the demographic dividend the Royal Government of Cambodia need to create conducive environment for domestic and foreign direct investment, and upscaling its investment in education, public health and good governance. National campaign is also important for parents to keep children in school and healthy by investing on their children’s well-being while government keeps on providing quality public services in education and health. 

UNDP Around the world

You are at UNDP Cambodia 
Go to UNDP Global