UN Resident Coordinator's Speech at the launching event of Cambodia Trade Integration Strategy 2014-2018

18 Feb 2014

Enhanced Integrated Framework in Cambodia

Cambodia Trade Integration Strategy 2014-2018

Launching Event

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Statement by Ms. Claire Van der Vaeren, United Nations Resident Coordinator and UNDP Resident Representative in the Kingdom of Cambodia

Government Peace Palace, February 18, 2014

H.E Sun Chanthol, Senior Minister, Minister of Commerce; Royal Government of Cambodia

H.E Pan Sorasak, Secretary of State, Ministry of Commerce

Other Senior Representatives of Royal Government of Cambodia

Dr. Ratnakar Adhikari, Executive Director, Enhanced Integrated Framework (EIF) Executive Secretariat,

Mr. Eric Sidgwick, Director of Asian Development Bank in Cambodia and EIF Donor Facilitator for Cambodia,

Excellencies, Lauk Chum Teav, Other distinguished Participants, Ladies and Gentlemen,

INTRODUCTION

The occasion for which we are gathered here today is a testimony of the Royal Government of Cambodia’s commitment to mainstreaming trade into national development, and to using trade as leverage for accelerating poverty reduction and human development. I would like to take this opportunity to commend the Government’s attention to sustainable human development in the national trade strategy, including the new challenges of environmental impact.  The United Nations system in Cambodia is therefore pleased to participate in the launch of the Cambodia Trade Integration Strategy for 2014-2018, and its accompanying Roadmap.

TRADE AND CAMBODIA

Many developing countries today are seeking to strengthen their competitiveness, advance regional integration, and diversify their exports. Cambodia is no exception. Mainstreaming trade into national development plans is crucial to advancing these aspirations.

The progress Cambodia has made toward global economic integration is a positive and successful step toward linking the country to global value chains. At the same time, the environment surrounding Cambodia is changing fast; the ASEAN Economic Community by 2015 will bring additional opportunities and challenges to Cambodia.  Two thirds of the middle class are expected to reside in the Asia and Pacific region by 2030. Their income, values and expectations will drive future global growth. As the CTIS highlights, this trend is already observed in Cambodia’s changing share of export partners and the composition of tourists to Cambodia in the recent past. Building on the success achieved, it is increasingly important to seize the new opportunities that present themselves in the regional space by investing in the value-additions and participating in the new value chains.

While Cambodia has progressed commendably with trade integration, efforts need to be amplified if the country is to meet its economic goals, with commensurate social benefits. As national development policies and strategies, institutional arrangements and development partnerships increasingly include strategic trade considerations. We believe Cambodia’s Trade Integration Strategy and its accompanying Roadmap will enable Cambodia to benefit more fully from economic linkages.

THE UN SYSTEM ROLE IN TRADE / UNDAF / CPAP

The UN family has been an active partner of Cambodia’s quest for sustainable, diversified and inclusive economic development through trade. More people living in Cambodia benefit from, and participate in, increasingly equitable, green and diversified economic growth, including women, who suffer most during economic fluctuations, and benefit most when equality is prioritized.

The UN has, and continues to mobilize support for trade in Cambodia in numerous ways: ranging from providing technical expertise for policy formulation, to capacity building, brokering partnerships and developing systems and strategies that build bridges between Cambodians and the global marketplace. To give some examples, for instance before being commissioned by the Ministry of Commerce to help formulate for the CTIS update, the UNDP provided policy and technical support for the formulation of the Trade Sector Wide Approach (Trade SWAp), and to strengthen the supply capacity of specific sectors. UNIDO supports the development of the fisheries sector, and provides support for improving standards, metrology, testing and quality. The International Trade Centre (ITC) delivers assistance to vulnerable communities to improve the quality of Cambodia’s silk production as part of the trade diversification effort. The United Nations Conference on Trade and Development, or UNCTAD, supported the implementation and deployment of the Advance Systems for Customs Data together with the General Department of Customs and Excise, as well as provided technical cooperation for the country’s pre and post-World Trade Organization accession. UNCTAD was instrumental in helping Cambodia benefit from the Generalized Systems of Preferences, as well as in modernizing its Rules of Origins mechanisms. As a new pilot endeavour, the UNDP is currently supporting the cassava sector through trilateral cooperation partnership involving with the EIF programme and the Ministry of Commerce of the People’s Republic of China.

These efforts have been and will continue to be undertaken with the UN Country Team’s core commitment in mind: “…to support the efforts of the Royal Government and the people of Cambodia to improve the life of all people living in Cambodia, especially those most excluded and vulnerable.”  

Allow me now to highlight the important linkages that have been made between trade and human development in Cambodia, and hence the importance of equality, sustainability and inclusiveness in trade-related growth. The CTIS provides excellent strategic guidance in this regard; however, more research and efforts are needed to better understand how priority trade sectors can lift people out of poverty. Within these sectors, it has been demonstrated that employment and income do not necessarily lead to sustainable human development if they are precarious. Plus, more policy attention is needed to transform an excellent trade strategy into results that can sustainably benefit the most excluded and vulnerable. It is encouraging to see ongoing reforms undertaken by the Royal Government through the Ministry of Commerce to simplify export procedures and to create an environment that enhances trade facilitation. The UN stands ready to continue providing support to the RGC in such endeavours.

Excellencies, Ladies and Gentlemen,

In concluding, allow me to emphasize the key theme of the Cambodia Trade Integration Strategy 2014-2018, one which is a priority for the Royal Government and the UN system alike: i.e gaps in skills development. With 300,000 to 400,000 youth entering the labour market each year, Cambodia is facing three major imperatives.  First, the economy needs to continue growing vigorously, in a way that is inclusive, to create enough decent jobs.  Second, young people need to have the skills required for these new jobs.  Third, conditions that support young people in their professional development need to be in place, including providing opportunities for up-skilling through the education system, vocational training programmes, as well as in the workplace.

Thus, of all the priorities in the CTIS, the human capital agenda is particularly important. To this end, the CTIS sets out some specific targets for instance, establishing Training Centers in all Special Economic Zones, promoting models for Private-Public Partnerships in Technical and Vocational Education and Training (TVET), and significantly expanding the number of engineering graduates. With this in mind, possible avenues of implementation could be explored in collaboration with the UN, along the following lines:

First,  explore how a system of progressive technical and vocational education, or TVE, might be established,  bringing the proposed training centres  together as part of a larger system, including publicly and privately run centres., n.

Second, consider the introduction of dual track Technical and Vocational Education programmes, combining vocational training and other forms of apprenticeship, where students of appropriate age would be given the opportunity to work and study at the same time. A dual track TVET could help reinforce the linkages between training and jobs, and further support students who have to earn a living while they study.

Third, the establishment of mechanisms for Collective Bargaining Agreements (CBAs). The Cambodia Trade Integration Strategy also notes the need to explore mechanisms for such agreement, to ensure alignment of wages and productivity, while also facilitating industrial peace. This could create economic incentive for workers to invest in skills improvement, while ensuring that businesses remain profitable.

The UN system along with members of the DP community is committed to continue working proactively with the Royal Government of Cambodia towards maintaining a strong, positive link between trade and human development. We aim to do this in partnership with other development partners and stakeholders.

CONCLUSION

In conclusion, I would like to thank the Royal Government of Cambodia, and the Ministry of Commerce in particular for their strong leadership in the formulation and implementation of Cambodia’s Trade Integration Strategy 2014-2018. I look forward to the years ahead as we partner together to transform this excellent trade strategy into results that offer sustainable and inclusive benefits for all Cambodians.

Thank you. Okun Charan