To unlock its growth potential, Cambodia must focus on structural reforms and diversification, and must prioritise improving education and infrastructure, economists say.
The recommendations were made yesterday during a conference organised by the International Monetary Fund and the National Bank of Cambodia held under the theme ‘A Compass to Diversification and Structural Transformation: The Next Steps of Cambodia Development’.
Yong Sarah Zhou, IMF’s resident representative in Cambodia, said that low-income economies like Cambodia should consider structural transformation and diversification a fundamental component of their development strategy because doing so will help enhance growth and reduce volatility.
Ms Zhou said that cross-country evidence shows that horizontal policies such as improving education and infrastructure coupled with structural reforms have proved successful in facilitating diversification.
Kruy Narin, deputy director of the Department of Macroeconomic and Fiscal Policy in the Ministry of Economy and Finance, said that to increase competitiveness, the government is working on improving trade facilitation, reducing the cost of electricity and logistics and developing the skills of the country’s labour force.
To achieve its goals, the government is emphasising the implementation of its Technical and Vocational Education and Training (TVET) strategy, has created a skills development fund, and will soon launch a bank geared towards the needs of small and medium-sized enterprises (SMEs), among other initiatives to support the SME sector.
“To diversify the economy, the government is focusing on adding value to the garment sector and identifying potential new growth drivers.
“The government will focus on connectivity in three key areas: transportation, energy, and the digital economy. We are also developing new sources of financing for infrastructure development through reforms in the financial sector, both in banking and non-banking industries, including the capital market, the bond market, and the money market,” she added.