$100 Million ADB Loan to Boost Labor Force Competitiveness in Cambodia

MANILA — The Asian Development Bank (ADB) has approved a $100 million loan to help boost the caliber of Cambodia’s labor force by addressing skills gaps and shortages. This will be done through reforms and investments in technical and vocational education and training (TVET) combined with private sector participation.

The first subprogram of the Skills for Future Economy Sector Development Program will help transform Cambodia into a technology-driven, knowledge-based industrial economy by strengthening its human capital resources, with a focus on enhancing the country’s skills development environment, providing industry-led inclusive training, and mobilizing additional funds for demand-driven skills development.

“Reshaping Cambodia’s labor force and modernizing its economy requires the continual reform of the TVET system through comprehensive strategies and well-timed, successive investments,” said ADB Country Director for Cambodia Jyotsana Varma. “These structural and institutional reforms in TVET are crucial in designing training programs that meet market demand, upgrade training facilities and equipment, and expand the Skills Development Fund (SDF).”

The SDF was piloted by the government under the ADB-financed Skills for Competitiveness Project, which was approved in 2019 to boost the skills and competitiveness of Cambodia’s growing labor force. The SDF pilot has been responding to industry skills development training needs through cofinancing partnerships with government institutions, industries, training providers, and development partners.

Three key challenges contribute to the broader constraints facing Cambodia’s TVET system: the lack of a focused and comprehensive skills development program for the fourth industrial revolution, limited private sector roles in skills development and the transformational vision of industries, and inadequate financing and partnerships in skills development. Combined, these challenges limit the employability and productivity of current and future labor forces and may prevent post-pandemic Cambodia from diversifying and transforming into a knowledge-based economy. The Skills for Future Economy Program will help address these challenges.

An estimated 9 million workers make up Cambodia’s labor market, with women accounting for 49% of the workforce. As of 2021, 54% of Cambodia’s population was under 30 years old, presenting a unique opportunity for the country to increase investment in human capital development and enhance the skills of new entrants to the labor market, while also upgrading the skills of existing workers to match industry demand.

The program is a key component of ADB’s support for the government to strengthen human resources and develop the private sector and jobs market. It is also aligned with the government’s overall development plan and strategy as well as ADB’s country partnership strategy for Cambodia, 2019–2023.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

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