Cambodia says it’s ‘not ready’ for AEC

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ASEAN flags PPCambodia is not ready to join the Asean Economic Community (AEC) at the end of 2015, a senior official has admitted. Given its low level of economic development, Cambodia would likely benefit less than most other ASEAN members from the formation of the single market, said Chuop Narath, deputy director of the department of employment and manpower at the Ministry of Labour.

Free trade within ASEAN is already a reality, with tariffs reduced or eliminated on 97 per cent of goods traded, but the AEC would eliminate more barriers and also promote free movement of labour.

“If you talk about the short term: Yes, we are not ready,” Narath told the Cambodia Daily on the sidelines of a forum held to discuss the AEC and labour rights.

“For the long term, we have to learn how to compete,” he added.

Asked whether Cambodia should ask ASEAN to defer the creation of the AEC, he said: “This is up to our leader to decide. Maybe the Ministry of Foreign Affairs or some other top leaders can see if [it can be delayed].”

According to an internal scorecard prepared by Asean bureaucrats, the implementation rate of targets that need to be achieved to create the AEC slowed to 72 per cent in December from 79 per cent in August last year.

The AEC originally was supposed to take effect on January 1, 2015 but the date was changed to December 31, 2015. The change was mainly intended to save face in light of years of talk about “AEC 2015”. Big development gaps between the region’s richest and poorest countries represent hurdles to forging a single economy.

ASEAN’s richest country, Singapore, is third in the world in GDP per capita while Thailand ranks 92nd, Cambodia is 147th and Laos is 141st, according to the World Bank.

Ideally, allowing skilled and unskilled workers to freely move from one AEC member state to another would benefit the whole region. It would allow the exchange of experience and skills. For Cambodia, mainly skilled youth would benefit by having the opportunity to gather work experience abroad, Narath said. But he cautioned his audience, largely of students, not to rely on getting jobs abroad.

Other than that, he said, it was unlikely that Cambodia would see positive impacts in terms of labour movement.

“It’s demand and supply,” he said. “Professionals from other countries will come to Cambodia only if they get the same as in other countries.

“If you need them, you have to pay them the same… dentists, accountants, if you don’t give them the same salary as Singapore or Malaysia, you cannot get good professionals.”

The private sector has to start increasing wages, he said, adding that it was not the government’s obligation to set a minimum wage, “only to help negotiate,” between unions and companies.

Ya Navuth, executive director of Coordination of Action Research on AIDS and Mobility, said the free flow of labour held more dangers than opportunities for Cambodia. He predicted that Cambodia would experience a big outflow of farmers and other unskilled labourers, as well as educated professionals.

“Malaysia and Singapore have a minimum wage,” Navuth said. “If the [Cambodian] private sector doesn’t increase wages, there will be a flow to countries where [wages] are better – both skilled and unskilled labour.”

About 400,000 Cambodians, mostly farmers without education, currently work in Thailand, where wages are higher, he said.

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Reading Time: 2 minutes

Cambodia is not ready to join the Asean Economic Community (AEC) at the end of 2015, a senior official has admitted. Given its low level of economic development, Cambodia would likely benefit less than most other ASEAN members from the formation of the single market, said Chuop Narath, deputy director of the department of employment and manpower at the Ministry of Labour.

Reading Time: 2 minutes

ASEAN flags PPCambodia is not ready to join the Asean Economic Community (AEC) at the end of 2015, a senior official has admitted. Given its low level of economic development, Cambodia would likely benefit less than most other ASEAN members from the formation of the single market, said Chuop Narath, deputy director of the department of employment and manpower at the Ministry of Labour.

Free trade within ASEAN is already a reality, with tariffs reduced or eliminated on 97 per cent of goods traded, but the AEC would eliminate more barriers and also promote free movement of labour.

“If you talk about the short term: Yes, we are not ready,” Narath told the Cambodia Daily on the sidelines of a forum held to discuss the AEC and labour rights.

“For the long term, we have to learn how to compete,” he added.

Asked whether Cambodia should ask ASEAN to defer the creation of the AEC, he said: “This is up to our leader to decide. Maybe the Ministry of Foreign Affairs or some other top leaders can see if [it can be delayed].”

According to an internal scorecard prepared by Asean bureaucrats, the implementation rate of targets that need to be achieved to create the AEC slowed to 72 per cent in December from 79 per cent in August last year.

The AEC originally was supposed to take effect on January 1, 2015 but the date was changed to December 31, 2015. The change was mainly intended to save face in light of years of talk about “AEC 2015”. Big development gaps between the region’s richest and poorest countries represent hurdles to forging a single economy.

ASEAN’s richest country, Singapore, is third in the world in GDP per capita while Thailand ranks 92nd, Cambodia is 147th and Laos is 141st, according to the World Bank.

Ideally, allowing skilled and unskilled workers to freely move from one AEC member state to another would benefit the whole region. It would allow the exchange of experience and skills. For Cambodia, mainly skilled youth would benefit by having the opportunity to gather work experience abroad, Narath said. But he cautioned his audience, largely of students, not to rely on getting jobs abroad.

Other than that, he said, it was unlikely that Cambodia would see positive impacts in terms of labour movement.

“It’s demand and supply,” he said. “Professionals from other countries will come to Cambodia only if they get the same as in other countries.

“If you need them, you have to pay them the same… dentists, accountants, if you don’t give them the same salary as Singapore or Malaysia, you cannot get good professionals.”

The private sector has to start increasing wages, he said, adding that it was not the government’s obligation to set a minimum wage, “only to help negotiate,” between unions and companies.

Ya Navuth, executive director of Coordination of Action Research on AIDS and Mobility, said the free flow of labour held more dangers than opportunities for Cambodia. He predicted that Cambodia would experience a big outflow of farmers and other unskilled labourers, as well as educated professionals.

“Malaysia and Singapore have a minimum wage,” Navuth said. “If the [Cambodian] private sector doesn’t increase wages, there will be a flow to countries where [wages] are better – both skilled and unskilled labour.”

About 400,000 Cambodians, mostly farmers without education, currently work in Thailand, where wages are higher, he said.

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