Nearly $1.3 billion in financing has been provided to support the implementation of the Cambodia Industrial Development Policy (IDP), which aims to help the Kingdom diversify its manufacturing industries, according to latest figures from the Cambodia Cooperative Financing Database.
The data showed that development partners provided $1.287 billion in financing to support the implementation of IDP between 2015 and 2020.
Four primary measures supported by development partners include lowering electricity prices, the preparation of the master plan for the development of transport and logistics systems, strengthening the labour market, and detailing the master plan to transform Preah Sihanouk province into a Model Multi-Purpose Special Economic Zone, the latter of which received the most support at $938.5 million.
At a discussion on the mid-term review report for the policy’s implementation, Ministry of Economy and Finance undersecretary of state Huot Pum said that the government has begun delegating assessments on trends and changes in regional and global architecture in the socio-economic and political spheres. This was necessary to revise the vision, goals and objectives of the IDP policy accurately, he said.
“The Supreme National Economic Council has been working diligently, with the participation of many stakeholders, to revise the IDP policy,” Pum, who is also a senior official in the council, said.
UN Industrial Development Organisation (UNIDO) representative Sok Narin said that the Council for the Development of Cambodia has been working closely with the UNIDO working group on the development of a Monitoring and Evaluation (M&E) framework and the mid-term review of the IDP.
He said that UNIDO has also been providing technical support and capacity building through the project “Support to the Royal Government of Cambodia in its Effective Implementation of Major Development Strategy and Policy through Institutional Capacity Building” in collaboration with South Korea within the framework of the Programme for Country Partnership (PCP) Cambodia.
“It is very important to have a proper M&E system and a mid-term review of the IDP so that the relevant ministries can measure progress, identify challenges and resource gaps, and make adjustments when necessary to make further progress and achieve the goals and priorities of the IDP,” he said.
Royal Academy of Cambodia economics researcher Ky Sereyvath said that the contribution of development partners to the IDP is very important for Cambodia’s economic growth.
But he said more could be done within the policy outline to spur innovation in the sector as there was significant overlap within the policy foci.
Analysis of the outcomes of the IDP policy shows that the industrial sector’s share of the gross domestic product (GDP) increased from 27.7 per cent in 2015 to 34.2 per cent in 2019, which is 30 per cent higher than the target set for 2025.
The manufacturing sector’s share of the GDP, on the other hand, grew slower than expected, rising from 16 per cent in 2015 to 16.3 per cent in 2019, with a target of 20 per cent for 2022.
Exports of medium- and high-tech products as a share of the GDP also increased only slightly, from 8.9 per cent in 2015 to nine per cent in 2019, indicating that Cambodia still faces an uphill battle in its quest to transition to industries that are focused on modern skills and technology by 2025.