LocationsOp-ed by: Alissar Chaker, UNDP Resident Representative, and Rada Khoy, UNDP Economist
Photo: UN Cambodia / Ratha Soy
Cambodia is set to graduate from the Least Developed Country (LDC) category on 19 December 2029 (UN General Assembly Resolution, December 2024). This milestone marks a significant achievement in Cambodia’s development journey as it testifies to the Kingdom’s increased wealth (Gross National Income per capita), progress on human capital development, and increased economic and environmental resilience. Nevertheless, the graduation will also imply a gradual withdrawal of international support measures, such as preferential trade agreements, grants and concessional funding, which would require structural socioeconomic and environmental transformations and adjustments.
What are the implications for women?
LDC graduation is a whole-of-society endeavor that will bring about challenges and opportunities requiring collective action by the Royal Government, its development partners, the private sector, and civil society to mitigate potential risks and harness opportunities. Challenges would include employment precarity and an increase in poverty levels, deprivations and inequalities. On the other hand, opportunities can bring improved creditworthiness, economic diversification, higher-value exports, and the ability to attract more diverse investments. Without an effective transition strategy, retrocession on development gains and lost opportunities could derail the growth path of the Kingdom.
The anticipated change associated with the transition from the LDC status, namely structural transformations, the loss of trade preferences, and changing labor market dynamics, will affect the most vulnerable social groups. If we take women workers as an example, they will find themselves at a critical juncture. A recent policy brief jointly published by UNDP and the Ministry of Planning on Cambodia’s preparedness and potential economic and social impacts of LDC graduation on key economic sectors found that women, particularly those working in the garment sector, will be disproportionately affected, leading to a potential backslide on the progress achieved so far in gender equality and women’s economic empowerment.
The rapid economic growth in Cambodia is underpinned by the export-oriented GTF sector, which has been leveraging the benefits of preferential international trade measures under preferential trade schemes like the European Union’s Everything-But-Arms and Canada’s Least Developed Country Tariff. Upon graduation, these trade privileges will gradually be removed, and more stringent requirements on the Rules of Origin and double transformation will apply to Cambodian exports on par with other middle and high-income countries. This would require different or higher skillsets and technology, higher productivity, and a more competitive production cost. In 2024, the garment, textiles and footwear (GTF) sector is employing around 1 million workers, of whom over 75 percent are women. They contribute to the national economy and provide vital support to their families, indirectly benefiting around 3 million persons. Many workers, particularly women, may be forced into lower-paying and/or informal jobs with fewer social protections or crowded out of the labor market if timely measures are not applied. The study estimates that around 165,000 jobs may be lost in the garment sector alone, primarily among women.
Informality is another pressing concern. It prompted the Royal Government to launch its 2023-2028 strategy for developing the informal sector. Currently, 88.3 percent of all workers are engaged in informal employment, of whom 87.6 per cent are women (ILO, 2024). Cambodia faces gender disparities in education and skills development, which hinder women’s access to opportunities in higher-value and better-paying sectors. Their workload, compounded by caregiving responsibilities, contributes to limiting their educational and professional prospects. A significant occupational segregation by gender can be observed. Prevalent gender norms lead to some occupations being considered more appropriate for women. Women work in informal sectors such as street vending, domestic work, food processing, and subsistence agriculture, characterized by low skillsets, modest wages, scarce benefits, and limited legal protections. As Cambodia transitions to a more modern economy, the demand for a more qualified and productive workforce and productive sectors’ value chains and their alignment with responsible business conduct will increase. But are Cambodians, and particularly Cambodian women, prepared for the requirements of a highly competitive global economy?
What has been done?
The Royal Government of Cambodia recently adopted the latest update of the framework policy Neary Rattanak VI (2024-2028), which aims to mainstream gender equality and women's empowerment in public institutions, sectoral policies and programs. It mainly prioritizes promoting women’s participation in the labor market, improving access to financial services, and encouraging entrepreneurship.
This agenda is further supported by the National Strategy for Informal Economic Development 2023-2028, which aims to support informal businesses and workers, particularly women, in gradually transitioning to the formal economy. Two key reforms included in this national strategy that will benefit women in the informal sector are the introduction of a voluntary contributory social security scheme for self-employed individuals and the establishment of the onboarding platform to facilitate the registration of informal businesses, allowing them to access a range of benefits, including finance.
UNDP Cambodia has been actively supporting gender-responsive policies through initiatives that improve women’s access to finance (The Women Guarantee Scheme of the Credit Guarantee Corporation of Cambodia), capacity-building for women entrepreneurs, e-Commerce, formalization, decent jobs and social protection (Support to the National Roadmap for Accelerating Decent Jobs and social Protection). UNDP also advocates for Gender Responsive budgeting, the facilitation and maximization of remittance flow for Cambodian migrant workers (40% of migrant workers in Thailand are women), the adoption of family support policies and the development of the care economy for affordable care services for children, the elderly, and persons with disabilities to unlock the potential of women allowing them to balance between their family and their growth prospects.
What strategies should Cambodia focus on to sustain women in the workforce?
To ensure a smooth, sustainable, and just transition for LDC graduation, it is crucial to chart the way forward through the adoption of a comprehensive Smooth Transition Strategy. This all-of-government and all-of-society strategy should go beyond trade, placing people, including women, their wellbeing and prosperity at the heart of economic transformations and remove barriers that perpetuate exclusion. It will have to mainstream environmental and climate change considerations for economic/ trade, health, food and human security considerations, among others. Prioritizing just transitions and environmental sustainability are ‘smart’ derisking strategies.
Closing the gender gap in higher education and vocational training is essential to equip women with the skills needed to participate in Cambodia’s future sectors of growth. This can be done through targeted scholarships and incentives to encourage more women to pursue studies in higher education and technical fields, creating a supportive learning environment and promoting family-supportive policies and care services. Partnership with the private sector will accelerate change and help innovation and the alignment of education and skills with the job market needs.
Finally, promoting women's entrepreneurship through financial literacy, skills development, and access to finance will accelerate the transition given the high level of women's participation in the labor force—Cambodia consistently reported the highest participation in the ASEAN region, with 78.9 percent in 2023.
