GLOBAL WORKSHOPON

PUBLIC-PRIVATE DIALOGUEVIENNA, AUSTRIA - 27-30 April 2009

Presented by: Van Sou IengChairman of the Cambodia Garment Manufacturers Association

Chairman of the Cambodia Federation of Employers and Business Associations

Co-Chair of G-PSF Working Group on Export Processing and Trade Facilitation

CAMBODIA EXPERIENCES

CONTENT OF THE PRESENTATION

I- About CambodiaII- About GMAC and the Cambodian Garment

IndustryIII- GMAC and G-PSFIV- GMAC Experiences - Some Success StoriesV- Challenges and Ways Forward

I- About Cambodia Area: 181, 035 sq kmPopulation: 14 MillionReligion: 95% are BuddhistGovernment: Constitutional

monarchyBorders: Laos, Thailand & VNRegion: ASEANMain sectors: agriculture, garments,

tourism and construction24 provinces and municipalities,

Phnom Penh is the capitalSea port: Sihanoukville

I- About Cambodia

Source: Ministry of Economy and Finance

I- About Cambodia (Inflation)

Source: Ministry of Economy and Finance

I- About Cambodia: Tourist Arrivals

Source: Ministry of Tourism

II-About GMAC and the Cambodian Garment IndustryEstablished in 1996, GMAC, which

represents the garment industry, has become the largest exporters' trade association in Cambodia;

The Cambodian garment industry with over 300 factories, employs around 350,000 workers, most of whom are females from rural provinces;

It is estimated that close to 2 million people are directly and indirectly supported by the industry;

The industry accounts for 80% of Cambodia's total exports and contributes 17% of the country's GDP.

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III- GMAC and G-PSFThe Cambodian G-PSF, and 8 Working

Groups, improve the business environment, build trust, and encourage private investment;

The WGs are chaired by Ministers from related ministries and co-chaired by private sector representatives;

The Forum is a unique platform which enables the Cambodian private sector to identify business environment problems and seek solutions with Government counterparts;

Given its importance in international trade, GMAC provides the Co-Chair for the 7th Working Group, on Export Processing and Trade Facilitation.

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III- GMAC and G-PSFGMAC also actively participates in other

relevant working groups;Thanks to assistance from IFC, as the

secretariat, the 7th WG is able to convene regular meetings with the private sector and the Government;

It is planned that in a year's time, business membership organizations such as GMAC will serve as secretariats for the WGs under the umbrella of the Cambodian Chamber of Commerce.

IV- GMAC’s Experience - Some Success StoriesTwo reductions of Export Management Fee

has saved GMAC members USD 2,2 millions (2008)

Reduction of bureaucracy and documentation required for import-export procedures;

Certificate of Origin now issued within 48 hrs, with reduced cost and documentation (2 GMAC staff are positioned at MoC to assist factories in C/O applications);

Introduction of the ASYCUDA system which has automated export documentation, saving time and money;

Creation of a handbook on export procedures Suspension of Advanced Profit Tax (1%) until

2012

The above improvements reduce business costs and time

IV- CAMFEBA’s Experience - Some Success Stories

A platform to discuss with labor unions (+1000 unions for 300 factories) and to provide direct information to Government on issues faced by employers

Credibility : CAMFEBA is a full member of all tripartite bodies; the NSSF, the National Training Board.

The above improvements reduce business costs and improve labor relations

• Reduced the employers’ contribution to the National Social Security Fund from 1.8% to 0.8%

• Established a Task Force on amendments to the Labor Law

• Reduced night shift rate from 200% to 130%

V- Challenges and Ways Forward The Government’s strong commitment to private sector

development is the starting point;Strengthen inter-ministerial cooperation in order to

provide solutions which require commitment from more than one ministry;

Increase active participation of private sector in presenting issues as well as recommending the appropriate solutions;