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ASEAN Open Innovation and Entrepreneurship Forum
Industrial Development Policy 2015-2025 (IDP) in Cambodia
Sok Chea (Mr.)Deputy Director, Department of Techniques, Science and TechnologyGeneral Department of IndustryMinistry of Industry and Handicraft (MIH), CambodiaTel: (855) 15 764 910Email: sokcheamih@gmail.com
Cambodia's economic structure and sector contribution to growth
0
5
10
15
20
25
30
35
40
45% of GDP
(a) Economic structure: value added (% of GDP)
Agriculture Construction, Mining & Utilities
Services Manufacturing
-2
0
2
4
6
8
10
12
14
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
(b) Sector contribution to growth (% points)
Agriculture Mining & utilities
Garments¹ Other manuf.
Construction Tourism¹
Real Estate¹
Other services
Real Value Added
% points
Source: Estimates based on World Development Indicators and National Institute of Statistics of Cambodia Note: (¹) Garments includes textiles and footwear; Real Estate includes business activities and Tourism refers to hotels & restaurants
Source: Annual Report, 2016 Ministry of Industry and Handicraft
Components of growth in Cambodia and selected peers
6.2 6.9 9.8 5.6 7.9 4.9 3.8 5.4 6.2 3.3 6.1
-20
-15
-10
-5
0
5
10
15
20
25
30
B. Cambodia and peers: components of growth, 2005-2015
% points
Real GDP Growth
-30
-20
-10
0
10
20
30
A. Cambodia: components of growth, 2001-2015
% points
Household consumption Government consumption Gross capital formation
Exports Imports Real GDP
Source: Estimates based on World Bank Development Indicators
Cambodia's performance in the ASEAN SME Policy Index
Source: ASEAN SME Policy Index 2014
Challenges & opportunities to enhance competitiveness(private sector perspective)
o Skills development/productivity
o Environment-cleaner production
o Electricity cost & supply reliability
o Quality, safety & cost of products
o Producers-SME linkage
o Private sector-academia linkage
o Access to finance & technology for SMEs
o SMEs clustering
o Public-private partnerships
o Logistics…
Industrial Development Policy
Drive for change and modernize the country's industrial make-up from a
labor-intensive industry to a skills driven industry by 2025 by:• Way of linkages with global value
chain integration into regional production net works
• Developing clusters of interconnected manufacturing production
• Strengthening the competitiveness and productivity of domestic industries
• Moving toward modernizing technology and knowledge based industries.
Vision“ASEAN with free movement of goods, services, investment, skilled labor & freer flow of capital”
ASEAN 2016:
628.9 Million
USD 2.4 Trillion
USD 2,269.9 Billion
USD 119,974.8 Million
Industrial Development Policy
The IDP is designed to provide :
• A vision along with a policy framework
• An implementation coordinating framework
• An institutional arrangement to promote industrial
sector development in Cambodia so as to
achieve the aforesaid vision.
Goal
The IDP is aimed at:
• Defining various interconnected measures at
the macro and sectorial level and at specific
interventions in response to actual needs.
• Spans the period from 2015 to 2025 and must
be updated every 5 years.
The main objective of this policy is:
• Address structural challenges and investment
in key industrial infrastructure, both hard and
soft
• To be in line with the potentials, competitive
advantage and development of the
Cambodian industry.
Objective
Three targets include:
• Transforming and
strengthening the industrial
structure in the national
economy
• Increasing and diversifying
export products
• Strengthening and
promoting of SMEs.
2013
Industrial Development Policy
Key Indicators
1) Transforming & strengthening the industrial structure in the economy
2) Increasing & diversifying export
products by increasing the export of manufacturing products as well as new products
3) Strengthening management mechanism & development of SMEs by promoting their official registration including large enterprises & promoting good governance with proper accounts & balance sheets.
GDP Share of
Industrial
Sector
GDP Share of
Manufacturing
Sector
2025 2013 2025
15.5% 20%24.1% 30%
Non-textile
products of all
export
products
By 2025
15%
Processed agricultural
products of all export
products
By 2025
12%
80% to 95% 50% to 70%
Officially
registered SMEs
targeted by
2025
Out of which have
accurate accounts &
balance sheets
Industrial Development Policy
Key Strategic
Frameworks
First, attracting FDI and mobilizing domestic private investment for industrial development, export market development and expansion, and promotion of technology development and transfer;
Second, developing and modernizing SMEs by way of expanding and strengthening the manufacturing base, modernizing and officially registering enterprises, promoting technology development and transfer and strengthening industrial linkages between domestic and foreign enterprises specifically in the agro-industrial sector
Third, improving the legal environment to enhance competitiveness by way of improving the investment climate and promoting trade facilitation, providing market information and reducing business transactional fees; and
Fourth, coordinating supporting policies such as human resource development, skills training and industrial relations improvement, implementation of land management, urbanization and land use plan in line with the Land Policy and the National Policy on Land Management together with infrastructure development
1
2
3
4
Industrial Development Policy
Priorities
1) First, new industries or manufacturing ventures with the capability of breaking into new markets, with high value-added products, creative and highly competitive that focuses not only on consumer products but also production equipment such as machinery assembly, mechanic/electronic/electric equipment assembly, means of transport assembly and natural resource processing;
2) Second, SMEs involved in drugs and medical equipment production, industrial or handicraft construction materials, packaging equipment for export, furniture manufacturing and industrial equipment, etc.;
3) Third, agro-industrial production for export and domestic markets;
4) Fourth, various types of supporting industries for the agriculture, tourism and textile sectors as well as for industries serving regional production chains linked with either global markets or global value chains in the form of forward linkages and for industries linked with the provision of raw materials supply network in the form of backward linkages, especially for the garment sector, for production of spare parts and assembling of other semi-finished products;
5) Fifth, industries serving regional production lines and those of future strategic importance such as in information technology and telecommunication (ICT), energy, heavy industries, cultural/historical/traditional handicraft, and green technology.
Industrial Development Policy
Policy Measures/ Action
Plan
1) To ensure the success of the IDP
implementation, there are 116 key
action plans have been set in
which many institutions/ministries
are involved in the
implementation. Part of that there
are 24 action plans have to be
implemented by MIH and other 25
action plans have to be
implemented by participating with
other ministries.
2) There are 99 project action
plans have been set by MIH to
implement the related policy
measures.
3) To ensure the efficiency of
policy implementation MIH has
established work team for policy
implementation, secretariat for
facilitating of policy
implementation team and task
force group for implementation
and monitoring of each action
plans by appointing the sectorial
department to implement the
project action plans.
Monitoring &
Evaluation Mechanism
• A tri-annual and annual
reporting system, and in
particular a quarterly report to
the meeting of the Council of
Ministers on the progress and
challenges
• Objective and national
strategies for implement the
IDP
• A Trouble Shooting
Mechanism
• An evaluation of the progress
and achievements on the
implementation of the four
IDP key action plans to be
achieved compare to the
indicated indicators
• GDP Growth as the result of
IDP implementation and
• Other indicators as necessary
indicated
Main Supporting Activities
“The Concept” of enhancing theindustral development:
z
Supporting Activities៖• One-Stop-Services of MIH • Enhance Productivity• Industrial Property• Technical and Technology
Support• Industrial Standard & Laboratory• Metrology• Acreditation• Potable Water Supply
Priority Supporting Activities
Main Supporting Activities
Open for SMEs registration and
other services
.mih.gov.kh
National Productivity Center of
Cambodia (NPCC)
• Business Diagnose services
• Consultancy services for
business excellence
• Training services
• Business recognition and
awards
One-Stop-Services of MIH
-APO & UNIDO
Enhance Productivity
Industrial PropertyTechnical and Technology
Support Services
• New invention is valid for 20
years
• Utility model is valid for 7 years
• Industrial design is valid for 15
years
• Layout design of integrated
circuit is valid for 10 years
• Breeder is valid for 20 years to
25 years
• Inspect on factory’s master
plan and machine layout
• Inspect and evaluate
environmental safety,
occupational safety, raw
materials, machinery and
equipment management
• Provide technical consultation
to SMEs
• Training on industrial safety
management
• Promote R&D on STI
IP is protected :
Main Supporting Activities
-WIPO, Paris convention for IP, Hague Agreement & PCT, UPOV- IPOS, JPO,EPO, EUIPO & SIPO
Industrial Standard &
Laboratory
Institute of Standard of Cambodia
(ISC):
• Bio & chemical testing
• Research & consultancy on Product
quality
• improvement and standards testing
40 parameters
ILCC Internationally Recognition:
ISO/IEC 17025
National Metrology Center (NMC)
Accurate measurement improves
productivity and quality; it underpins
consumer confidence and trade.
NMC undertakes research to
improve its measurement capability
and shares this expertise with public
organizations, private sectors and
society to enhance economic
performance, and the quality of life.
NMC have provided 8 services in
the fields of dimensional metrology,
mechanical metrology,
thermometry, electrical metrology :
1.Calibration Service
2. Verification Service
3. Pattern Approval Services
4. License Issued Services
5. Certificate Issued Services
6. Trainings, Workshops & Seminars
7. Consulting Services
8. Information Services
Main Supporting Activities
• 881 standards were adopted
• 369 standards on food
• Product quality certification
and
Management system : ISO 9001,
ISO14001
ISO 22000, GMP &GHP
ILCC Services:
-UNIDO, GIZ & MOST China
Metrology
-UNIDO, GIZ & NIM-China
Accreditation
MIH is the Govt. Institution
responsible for setting up Policy
and National Strategic Plan for
Potable Water Supply of Urban
area in the country.
Cambodian Accreditation National
Council (CANC)
Main Supporting Activities
Department of Accreditation
NAFP -CANC (DA)
Accreditation Cervices on Conformity Assessment Body
of Product Standards (Certifation Body)
Accreditation Services on Conformity Assessment Body
of Management System Standards ( Laboratory &
Inspection Body)
Accreditation Services on Conformity Assessment Body
of National & International
Standards
Technical
Committee
General Department of Industry
Ministry of Industry &
Handicraft
Cambodian Accreditation
National Council (CANC)
National &
Internationl
Assesor
pool.
Ad hoc Committee
Permanent Committee
-JICA, AFD, ADB,WB,WSP, UN-HABITAT
& WHO
-PTB (ASEAN-GIZ) & GIZ
Portable Water Supply
Statistic of Registered
Manufacturing Industry
Main Supporting Activities
Statistic of registered SME
Main Supporting Activities
Food and beverages
Textile, Garment and Shoes
Paper and Printing
Basic metal
Mineral and Non-metal Industry
Chemical, Rubber and Plastic
Processed Metal
Furniture
Other industries
Current Main Challenges
Main Supporting Activities
• Failed to
achieve some
action plans
under IDP
• Some existing
laws and
regulations need
to be amended
and it takes time
• Lack of
technical skill
workers for
supporting the
diversification of
new merging
sophisticated
industry
• SME Clustering
• SME linkage
• SME registration
under one roof
services is not
feasible for
practical
implementation
• Lack of financial
supports for
capacity
building and
SME promotion
• Lack of testing
equipment for
supporting
laboratory both
for NMC and
ISC
• Public-Private
Partnership
Proposed
Supporting Activities
1) Agro-Industry
• Fisheries value chain food safety
• Enhancing value addition and
addressing quality and post-harvest
issues in the rice sector
• Agro-Mechanization in the rural
agricultural sector
• Bamboo sector value addition and skills
development
2) Export-Oriented Industry
• Strengthening the National Quality
Infrastructure for Trade
• Strengthening the Standards and
Conformity Regime for Regional Trade
and Consumer Protection
• Strengthening the Testing Capability of
Rubber Research Institute of Cambodia
• Pilot Certification Supports to SMEs (ISO
9001, ISO 14001; HACCP)
• Improve the innovativeness and
competitiveness of the Cambodian
Garment Industry
3) Pro-Poor and Inclusive SME Development
• Supporting SME cluster and Value
Chain development in Mango and Silk
• Creative Industries support for
Handicraft sector
• Industrial Statistics Capacity Building
• Entrepreneurship Training
4) Ensuring Sustainable Industrial Development
• Promotion of Waste to Energy
Technologies in the Rice Milling Sector
• Promotion of Investments in
Renewable Energy Technologies in
Augment Rural Electrification
• Supporting Efficient Rice Processing
and Resilience for Climate Change
• Promotion of Waste to Energy
Technologies in the Rice milling Sector
in Cambodia for Access to Energy for
Productive Activities
• Resource Efficient Cleaner Production
(RECP)
• Sustainable Chemicals Management Source: General Department of Industry, Ministry of Industry & Handicraft
Priorities
o Skills development
o SMEs competitiveness
o Value Chains development
o Investment promotion/FDI for SEZs/industrial diversification
o Food quality & safety
o Environmental sustainability
o Tourism, agro-value chains, non-traditional exports
Thank You
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