Country Director's speech at the roundtable meeting on Higher Education and Skills Frameworks for Industrial Transition

24 Jun 2013

His Excellency Ung Luyna, Deputy Secretary General of the Supreme National Economic Council
Excellencies,
Ladies and Gentlemen,

I am very pleased to welcome you to this round table discussion on the preliminary results and key ideas of the Higher Education and Skills Framework for Industrial Transition study that UNDP is working on in collaboration with SNEC. I am pleased to see such a diverse group of distinguished participants from the government, development partners, academia, and UN agencies.

With us today is Professor Shandre Thangavelu, who teaches at the National University of Singapore and is an advisor to the Ministry of Manpower in Singapore. Professor Thangavelu has been leading this study aimed at providing technical analysis and policy inputs into the Industrial Development Policy for 2014-2018 being drafted by SNEC, and due for completion by the end of 2013. The study looks at industrial policy from a human capital perspective, and as such, it is our hope that it will help strengthen the alignment of higher education and skills development with Cambodia’s industrial development.

Background

Very briefly, I’d like to provide a little background on this initiative.  Rapid global technological changes have resulted in an increase in the demand for workers with higher levels of education. This trend is not only observable among OECD members, but also in most emerging countries in Asia.  In response to the increasing competition from booming economies like China and India, many Asian countries will need to restructure to produce more skill- and capital-intensive goods. This shift is increasing the demand for skilled labor and thereby highlighting significant skills shortages and mismatches in countries like Cambodia.

The Cambodian economy suffered along with many other economies, from the global financial crisis in 2009. Despite successful recovery, the crisis emphasized Cambodia’s vulnerability to exogenous shocks due to its high reliance on a few traditional sources of growth, namely the garment, tourism and construction industries. The Royal Government of Cambodia is aware of the need to diversify the country’s economic base, and to seize the important opportunities emerging from the global and regional value chain, foreign direct investments, and strengthening local entrepreneurship.

The National Strategic Development Plan and the dialogue that took place during the 4th Cambodia Economic Forum in 2011, laid out a development agenda to add more value to existing core sectors; nurture emerging industries that have growth potential; and to identify areas of latent comparative advantage. In broad terms, ‘industrial diversification’ in Cambodia means shifting focus from low value-added manufacturing to industrial production and developing higher value added agriculture products. This inevitably requires a turning of attention to producing a pool of skilled and competent workers.

Higher Education/Skills Development and the HC Gap
Since the Cambodia Economic Forum in 2011, UNDP and SNEC have been working together to address Cambodia’s human capital needs. In August of that year we jointly produced the report, Human Capital Implications of Future Economic Growth in Cambodia: Elements of a Suggested Roadmap, and in 2012 we hosted a brainstorming workshop on Industrial Policy and the Human Capital Roadmap. The UNDP established a Human Capital Taskforce with development partners from a variety of sectors. UNDP has also been working to support export diversification through a trade project, and will focus on human capital in the 2014 National Human Development Report to be finalized mid next year.  

The study we will discuss today is a continuation of these efforts, highlighting the fact that industrial development and education policies must complement each other. Successful experiences from other countries like Korea, Vietnam and Malaysia show that such complementing policies can stimulate the structural transformation necessary for sustainable economic growth. As Professor Thangavelu will demonstrate in his presentation, higher education and skills development in Cambodia face crucial challenges that require strong leadership and good coordination among line ministries to overcome. The creation of a human capital base is not only key for attaining sustained economic growth, but is also part of the foundation for a resilient, equitable and inclusive society.

As Cambodia moves toward ASEAN integration and its aspiration of achieving Middle-Income Country status by 2020, the speed and nature of its transition from a largely agrarian to industrial economy will determine the sustainability of its success. Cambodia has entered into a demographic bonus period during which a significant young labor force will offer an opportunity to invest in the future, by equipping the next generation with the education and skills needed to ensure Cambodia moves toward improved equality and wealth. The quality of the young people who will join the labor force will determine whether Cambodia can take advantage of the demographic bonus period, a one-time opportunity for development in Cambodia.
Today’s round table discussion is another small step toward achieving these goals. Our hope for this session is to gain valuable feedback on the preliminary results and key ideas of the Higher Education and Skills Framework for Industrial Transition study that can be taken forward by SNEC in preparation of the 2014-2018 Industrial Development Policy. The UNDP remains committed to supporting SNEC and line ministries in the realization of an Industrial Policy that will build on Cambodia’s strengths and foster a sustainable transition into the next chapter of this country’s economic development.  

I am looking forward to hearing your contributions to today’s discussions.  I will now invite His Excellency Ung Luyna, Deputy Secretary General of SNEC, for his opening remarks.