The Cambodian Council of Ministers reviewed and approved a new industrial policy on Friday, which aims to increase the sector’s contribution from 24.1 per cent of gross domestic product in 2013 to 30 per cent by 2025.
The long-awaited policy will look to diversify Cambodia’s economy away from heavy reliance on traditional sectors, like garments and agriculture, to increased industrial activity in light manufacturing, such as electronics and food processing.
Phay Siphan, spokesman for the Council of Ministers, posted on Facebook that the target would be achieved by increasing the manufacturing sector’s share of the GDP to 20 per cent by 2025 from the current 15.5 per cent. In a bid to diversify exports, non-textile manufacturing products should increase to 15 per cent of total exports by 2025 and processed agricultural products to 12 per cent.
“To achieve the above mentioned, the government bases it on four main pillars of attracting FDI to boost industrial development in the domestic private sector; modernising SMEs and linking them to multinationals; a regulatory framework that aims to enhance competitiveness; and policy creation on human resource development coupled with infrastructure and services improvements,” read Siphan’s post on his Facebook page.
In order to improve compliance and accounting practices, the government aims to register 80 per cent of small enterprises and 94 per cent of medium-sized businesses. Fifty per cent of small firms and 70 per cent of medium businesses will incorporate sound accounting techniques and maintain balance sheets, according to the policy.
ANZ Royal Bank CEO Grant Knuckey on Friday said the new policy will serve as a critical platform and guideline to attract more domestic and foreign investment into the Kingdom.
“Its existence is a very positive step in transitioning Cambodia to a state where the government is playing a role in making and directing choices about how industrialisation will take place. It is a key paradigm shift and a welcome one,” he said.
Hun Sen on Thursday, while speaking at a conference on AEC integration, said that implementation of the policy will require firm leadership, effective coordination and active participation from all stakeholders.
“The government will lay out measures to implement in-depth institutional reforms by providing the full authority to the Council for Development of Cambodia, in terms of policy decision, preparation and implement[ation] of an action plan and measures to address challenges faced by the industrial sector,” he said.