Cambodia Industrial Development Policy 2015 – 2025.

The long-term Vision for Cambodia for 2030 and the Rectangular Strategy, Phase III have pointed out to the structural transformation of Cambodian economy in reaching a middle-income country status and have considered the industrial sector as a key driver of its economic growth. To this end, the Royal Government (RG) has prepared and adopted this Industrial Development Policy (IDP) as a guide for driving the development of the industrial sector in the country, which can contribute toward maintaining a sustainable and inclusive high economic growth. Moreover, the policy will become the “New Economic Growth Strategy” which stresses importantly on economic diversification, competitiveness strengthening, and productivity enhancement in line with the structural transformation of the domestic economy and the evolving global and regional economic architecture in as much as the utilization of national resources to its fullest potential.
The RG envisages a transformation and modernization of Cambodia's industrial structure from a labor-intensive industry to a skill-based industry by 2025, linking with global value chain, integrating into regional production networks and developing clusters, while strengthening competitiveness and improving productivity of domestic industries, and marching toward developing a modern technology and knowledge based industry. The realization of this vision will contribute to national economic development, sustainable and inclusive high economic growth, employment creation, increased valued added to the economy and increased income. In line with the vision, the RG will pay close attention to driving structural change in three important phases: In the first phase, continuing to promote its industrial potentials and diversifying its labor intensive industry such as manufacturing and agro-industry; In the second phase, initiating a comprehensive industrial restructuring through diversification of production; and last, undertaking further change by way of specialization based on sciences and technology development and innovation. Throughout each phase, the RG will focus on developing new industrial bases by attracting both domestic and foreign investments, and promotion of export through the modernization and productivity enhancement of industrial enterprises.
The objective of the National Vision 2025 is to transform the predominantly agricultural economy to a semi-industrialised one. The Small and Medium Enterprise (SME) sector has a significant role to contribute towards attaining this goal. It is on this basis that the Sustainable Industrial Development Policy identified specific strategies targeting at stimulating the SME sector to be able to play this crucial role. The vision of the SME Development Policy is to have a vibrant and dynamic SME sector that ensures effective utilisation of available resources to attain accelerated and sustainable growth. The Policy Statement is: The Government will facilitate acquisition and adaptation of technologies as well as enhance networking between R&D Institutions and SMEs in a bid to upgrade technologies so as to raise the productivity and competitiveness of the sector.
Objectives and Targets This IDP is aimed to provide a vision and policy and implementation frameworks including needed institutional arrangement to promote industrial development in Cambodia. The core objective of this policy is to address structural challenges and to invest in key industrial infrastructure, both hard and soft, to be in line with the potentials, competitive advantage and development of the Cambodian industry. The IDP is aimed as well at defining various interconnected measures at the macro and sectoral level and at specific interventions in response to actual needs. The policy spans the period from 2015 to 2025 and must be updated every 5 years. To realize the vision and achieve above stated objectives, the RG has set three targets, namely: transforming and strengthening the industrial structure in the national economy; increasing and diversifying export products; and strengthening and promoting of SMEs. These targets are reflected through structural transformation and important performance indicators as follows: 1. Transforming and strengthening the industrial structure in the national economy by increasing the GDP share of industrial sector. 2. Increasing and diversifying export products.
3. Strengthening of the management mechanism and development of SMEs by promoting their official registration including large enterprises and promoting good corporate governance with proper accounts and balance sheets.