C AMBODIA will face big problems for the future development of its fragile economy

if it fails to address the issue of unemployment among a growing but poorly educated

work force, the International Labour Organisation (ILO) has warned.

Vali Jamal, a labour market and human resources expert for the U.N. agency, said

the Cambodian economy faced "terrible problems"due to unemployment while

the task was made more complicated as the educational level of the work force was

very low.

"The poverty problem here is very serious and the poverty situation could

worsen if unemployment is not taken care of.

"This economy is at a very initial stage of development vulnerable to any

outside influence. What is needed is training and credit, these are the two most

important inputs to enable people to work productively,"Jamal told the Phnom

Penh Post.

According to a "Socio-economic Survey" released by ILO last October

Cambodia's work force will by the year 2000 have increased by 1.5 million to six

million people while out of some 120,000 new workers estimated to entering the labour

market every year about 27,000 will due to migration come to the capital for work.

"The employment situation in Cambodia is thus grave. To the 120,000 jobs

that have to be created yearly has to be added the backlog of open unemployment of

90,000 workers and expected retrenchments from government service and the military.

"There are also large numbers of handicapped persons.

Currently every productive worker in Cambodia has to support 1.5 others - a dependency

ratio not found elsewhere in the world,"said the report, of which a copy was

seen by the Post.

The report also revealed "a weak skills profile of the labour force"

while noting that women would have to be "specially targetted", as women

are heading one-fifth of households due to the legacy of war in Cambodia.

"Only 20 percent of the population had education beyond primary level. Illiteracy

affected 35 percent of the adult population with the rate approaching 50 percent

among women.

"Poverty measured on even a most meager poverty line is estimated at 27 percent

in Phnom Penh and 42 percent in rural areas," said the report.

Most of Cambodia's workforce is employed in rural activities as this Southeast

Asian nation, home to an estimated population of 10.5 million people, is struggling

to rebuild after decades of civil war that shattered the local economy.

According to the report "wage employment in the private sector affected less

than 10 percent" and private and foreign investments were "even under the

most optimistic assumptions" not expected to create more than 10,000 jobs out

of the 27,000 urban jobs needed.

Jamal said that to avoid "economic disaster" it was therefore important

that informal sectors be developed to create more job options.

"In the short run there are 90,000 unemployed. Just in the urban sector 27,000

new jobs have to be created and wage employment in the government is declining.

"Outside investment will not be sufficient to create the number of jobs needed.

They could never possibly create 27,000 jobs and they (migrates) will have to be

absorbed into the small scale business in the informal sector," he said.

Jamal, an economist by training, warned that retrenchment of government jobs and

privatisation of social and educational sectors should be done carefully.

"If it happens to fast in a poor country you could have a situation where

you can face economic disaster. Privatisation should not be taken to the extreme

in the social and educational fields, the health and education (budgetary) situation

should not be reduced," he said.

Daniel Duysens, Director of ILO's Bangkok Area Office, said ILO since starting

employment generation programmes in Cambodia 400 km of roads have been rehabilitated

and 1,200 km of roads have been maintained, generating 1.5 million workdays.

"Small business loans amounting to 1.5 million dollars have been disbursed

to 8,000 clients, 90 percent of these are women and 3,600 people have received vocational

skill training, 50 percent of whom were women.

"Our current programmes deal with generation of employment through road building

in rural areas, vocational training and small-business promotion. Within the programmes

we are designing... we have found that it's extremely important to make sure that

women have access to training, have access to skills,"said Duysens.

He said that "in order to create your private sector the real small enterprises,

skill development will be important" andstressed the importance of development

of the informal job sector,while acknowledging it was a difficult task.

In that regard he praised the local non governmental organisation ACLEDA for its

rural credit programmes, describing their programmes as the example of how more jobs

had been created.

"They (ACLEDA) started from scratch where there was nothing. Today it's helping

in the rural development. It's a grass-root project which has given mini-scale investments.

They (rural people) will remain poor, but less poor.

"The transition to a market economy is not just an economic feature. It requires

from the society as a whole to readapt all its structures, its priorities, budget

allocation - and it's extremely difficult," Duysens said.

Suy Sem, secretary of state for the Ministry of Social Affairs, Labour and Veterans

Affairs, said at a recent ILO-seminar held in Phnom Penh that the ministry was committed

to "accomplish its assignment according to the objectives and international

standard of labour".

Suy Sem said the ministry had "determined three important objectives"

to be focused on generating employment and "to reduce paucity of the people",

human resource development and to strengthen the labour institution.

"Fighting for employment here in Cambodia is fighting against time... what

the project has shown here gives the demonstration that something can be done."