Unemployment in Cambodia

Thursday, March 2013
by Maria Sandberg

The unemployment rate in Cambodia is, in comparison to the rest of the world, very low. The official unemployment rate decreased to 0.20 % in 2011. The Cambodian average recorded unemployment rate is 1.4% according to the Asian Development Bank.

The reason for the low number of unemployed according to the ILO (The International Labour Organisation), is that the majority, over 80%, is employed in the informal sector. Wages in the informal sector are often unregistered, unregulated and low paid. A typical example is agricultural or household-based work and small scale industrial and handicraft enterprises.

Having one of the youngest populations of the world, with 32% under the age of 15, youth employment has become an urgent priority for Cambodia. The number of people entering the labor market every year is 300,000-400,000.

Literacy rates are good indicators for access to employment and higher incomes. According to UNESCO, only 1.6% of Cambodia’s GDP is spent on education – ranking around 170th in the world. Education statistics are improving but still low according to world standards.

The World Economic Forum’s Global Agenda Council is working together with SIDA (the Swedish International Development Cooperation Agency) to address the issue. In February 2012 the Cambodia Annual Outlook Conference took place and the Prime Minister emphasized the need to address the issue of youth unemployment and the skills mismatch. One of the key principles identified was the need for a genuine joint effort between the private sector and the government, focusing on strategic long term development goals – owned, designed and managed by Cambodian stakeholders. Further discussions are planned in order to generate innovative ideas as the demands of the labor market continues to grow.

One of the National Employment Agency’s strategies to tackle the problem is to set up more Job Centers. There are currently 5 Job Centers in the country. Since the Job Centers were established in 2009, over 2000 people have registered and 300 have found jobs. In Battambang companies are invited to advertise job openings free of charge. The Job Centers also assist with screening applicants and matching the skills with companies’ needs.

At PEPY we are aware of the challenges facing students – especially those from rural areas – in making the jump from education to employment. We are currently considering how we can expand our Dream Manager classes and develop new project offerings to prepare students for future career opportunities.