Cambodia’s growth largely depends on a labor-intensive economy in agriculture, garment factories, and goods and services.
Due to lower wages and poor incentives, there is a large outflow of Cambodian workers to Thailand, Malaysia, South Korea and China, and that, in the long run, could cause a serious workforce deficit and affect the country’s growth, experts say.
An estimated 800,000 workers migrated to Thailand in search of jobs this year alone. Many face dangerous exploitation or trafficking, but they take the risk for higher wages than they can earn in Cambodia. The monthly minimum wage since 2014 is $128, a slight increase from $80 in 2013. The Labor Union representatives continue to demand a wage of $160 a month.
But those low wages are a key driver of migration, said Lim Siv Hong, senior program officer at the Asia Foundation. “Over 60 percent of the population is under 30 years old, meaning that each year more than 250,000 people need a job,” she said. “Cambodia is still struggling to produce adequate employment for them.”
Some experts worry that the massive outflow of workers, particularly to Thailand, could hurt the country’s agricultural productivity.
“If such a large number of workers continue to seek work abroad, and in the face of Asian economic integration later this year, Cambodia would face a workforce deficit in agricultural productivity that largely contributes to growth,” said Ya Navuth, head of the Caram organization, which helps migrant workers improve their quality of life.
The Cambodian government should negotiate a better agreement with Thailand, which has established “one-stop service” for workers in 77 sites across the border, he said.
This systemization verifies nationalities of workers from Cambodia, Laos and Myanmar—Asean’s poorest countries makes it easier for workers to cross the border, but so far few have used it. The process runs from early April to June, but among 700,000 workers last year to have registered for work permits, only 10,000 went through the service. The process requires health reports and health insurance, and, because it can be meticulous and somewhat expensive, could in fact encourage illegal migration, rather than deter it.
“It is like a process of collecting money from workers,” Ya Navuth said, including insurance, application forms and the visa process. “Those who have health complications but still want to work, they may seek to migrate illegally to Thailand,” he said.
Chum Phally, labor trafficking technical adviser for Winrok International in Cambodia, said Thailand has decided to extend the process another three months. “This can have a negative effect for Cambodia.”
Some believe the process will do more to legally protect workers, despite the costs.
Those who go through the process “are happy about it,” Lim Siv Hong said. “They believe that it provides job security and legal protection and allows them to get access to healthcare in Thailand.”
There are jobs available in the country, particularly in construction and goods and service industries, but lack of information is a problem, even though the government has set up job centers across the country to inform local people regarding job opportunity.
“When I visited local communities and asked the people if they knew that there are job openings in the province, not many said that they got the information from the job centers or learn about job openings in their community,” Lim Siv Hong said.
To prevent workforce deficit and generate growth, Cambodia has to provide a competitive minimum wage, create more innovations in agriculture and more jobs, and enhance skilled labor, the experts said.
“I also think it’s time for Cambodia to tax land that is not put into use, and more importantly to provide economic land concessions to those who are in acute poverty so that they can contribute to agricultural productivity,” Ya Navuth said.
“I think the government should work to enhance and produce skilled labor and attract more foreign investment to consume Cambodia’s striving labor force, rather than bringing skilled labor from abroad into the country,” Chum Phally said.
