Industry 4.0: How Cambodia plans to deal with technological shifts
ASEAN member states although share a region bound by similarities, many have had different rates and stories of growth. Entering in the 21st century many countries like Singapore and Malaysia and the largest economy in the region, Indonesia experienced booming economies driven by access to foreign markets and the presence of comparatively cheap domestic labor markets. This while countries like Cambodia and Vietnam dealt with internal conflicts to slowly develop and strengthen their respective economies many of which are showcased a strong performance in recent times.
Today countries like Cambodia are marked with a growing working population. It finds itself as a part of many member states that today have a slowly surging economy but boasts significantly large working population. So much so that the domestic economy is often unable to generate enough jobs for them and many as a result have to venture into neighboring countries to look for employment. This has been a prevalent trend among the ASEAN member states. Many countries like Singapore, Malaysia, and Thailand often have portions of their regional workforce consisting of such migrant workers. In Cambodia’s case, Thailand and Malaysia often are the ones where many Cambodians head to looking for employment, often losing out on a significant portion of its workforce to work and contribute to domestic growth.
Some of the primary reasons for driving Cambodians towards jobs in Thailand are the presence of better-paying jobs and stranger currency in the form of Thai Baht. But a further look into Cambodia’s economy also highlights several domestic issues that force such a migration. For starters, most of Cambodia still remains an agricultural nation with many still involved in the profession. As is the case with many emerging economies, the agricultural or the primary sector of the economy often have low productivity and therefore doesn’t really help the country’s growing working population. In addition to a major chunk of the population dependent upon agriculture, many labor market experts point out that one the major reason for such an annual exodus is that Cambodia’s the economy still has a limited number of industries that can offer any proper jobs to their citizen. As result, one labor and human right activist noticed how villages in the country are now mostly “just grandparents and children.”
Most of the working populace of the country is located near its major cities, the chief being the capital Phnom Penh. But most of the jobs being created in the city offer little security, and in addition to being few in number are also often seasonal and temporary offering very little pay in return. In such condition migrating to neighboring countries in search for jobs often seems like the logical step for many Cambodians. Although the Thai government has repeatedly put policies in place to get such migrant workers registered and often attempting to stop excessive inflow into the country, today almost a million Cambodians work in the country alone.
Although beneficial in the short run to bring in foreign reserves into the country and has helped Cambodian workers earn higher wages, if such trends remain unattended, could prove majorly catastrophic for the country. Not just because much of the nations productive workforce is directed in other countries but also because of the looming threat that Industry 4.0 brings with itself.
Of the current working population of the country, more than 40 percent of it is dependent on agriculture of its sustenance. The rest is mostly engaged in low to medium skilled jobs as a major part of the manufacturing sector still remains based around the production of light products garments. Is such cases the impact of advanced technologies like automation, AI, and robotics in the country would further disrupt the labor markets. Although the wide application of such low skilled labor displacing technologies still remains in the future, many Cambodian policymakers are aware of the problems and have highlighted how taking the right steps now would be necessary to avoid the pitfalls of blindly adopting to newer technologies.
The Undersecretary of State at the Ministry of Labour and Vocational Training, Pheng Sokham in a recent seminar added that “Industry 4.0 requires Cambodia to set up new policies and strategies to cope with challenges and take advantage of current technological developments.” Highlighting the need to develop the country’s human resource to raise productivity levels and working closely with businesses to increase jobs he added that such initiatives were necessary if Cambodia wanted to leverage the opportunities that such technological shift creates. The presence of a high percentage of a young population that is increasingly fitting into the category of being ‘digitally savvy’ have a lot riding on them. With AI, digitization, and automation requiring workforces to update their skillsets, being familiar with increasing use of such technologies would help the country develop is talent more effectively.
Cambodia’s economy in recent times has also been affected by developments in other parts of the world. While some parts of the labor-intensive economy have gotten a boost owing to the US-China trade war and increasing wages in China, the country has also faced sanctions in recent times from parts of the Western world due as result of a stranger stance on human rights issues. Given such external volatility of conditions and with the onset of Industry 4.0 in many parts of SE Asia, it becomes highly relevant for the current government to address its workforce issues to ensure many more can contribute towards the growth of the nation.