Promoting the Transition to Formalization through Integrated Approaches in Cambodia

Objectives

The formalization of jobs and enterprises is integral for Cambodia’s long-term socioeconomic development. Informality is complex and lacks a single key driver. In fact, 88 per cent of workers are in informal employment and 93 per cent of workers work in informal economic units. This project aims to support the formalization of jobs and enterprises in Cambodia. The intervention targets workers and enterprises in the informal economy, particularly female workers, and micro and small sized enterprises in some selected sectors. 

Strategic focus

The ILO provides technical assistance to the Cambodian government on applying an integrated approach combining the formalization of enterprises and the extension of social protection, on developing evidence-based and gender-responsive measures and actions to formalize enterprises and workers in selected priority sectors, and on further integrating government systems to simplify formalization processes, including registration and compliance mechanisms using digital platforms.

Activities focus

• Combining formalization of enterprises and extension of social protection. The plan includes activities such as: (i) the potential role of Employer and Business Membership Organizations (EBMOs) in supporting enterprises transition to formality; (ii) the potential shape of incentive mechanisms to enterprises to transition to formality; (iii) the capacity development of MSEs entrepreneurs in transitioning to the formal economy.
• Support the implementation of sectoral approaches to formalization. The plan includes carrying out sectoral diagnostic studies of informality. The studies aim at gathering the necessary evidence to support tripartite dialogue process towards the development of concrete measures and actions within each sector.

Expected results

The expected result of this project is to strengthen the capacity of the tripartite constituents in Cambodia to promote a transition of workers and enterprises towards formalization. The results will be reported against P&B Output 7.4 (7.4.2), 8.1 (8.1.1) and 4.3 (4.3.1). This will also support the country’s efforts towards SDG target 8.3. Specifically, the expected results of this intervention include:

• Introduction of revised and integrated national policies to facilitate the transition to formality
• Development and implementation of gender-responsive and inclusive sectoral approaches to formalization
• Simplification and integration of government systems to facilitate transitions to formalization; and 
• Enhancement of constituents’ capacity and improvement of access to services and incentives to formalization, including through digital technologies, communication and social dialogue.

Target groups 

Women workers and entrepreneurs in the informal economy. Construction, agriculture, and tourism industries’ women and men workers, and enterprises. Micro and small Enterprises.

Geographical focus 

National focus. Sectoral analyses with regional coverage.

Main partners 

General Secretariat of the Committee on Economic and Financial Policy(GS-CEFP); General Secretariat of the National Social Protection Council (GS-NSPC); Ministry of Land Management, Urban Planning and Construction (MLMUPC); Ministry of Science, Technology, and Innovation (MISTI); Ministry of Economy and Finance (MEF); Ministry of Labour and Vocational Training (MoLVT); National Social Security Fund (NSSF); Cambodian Federation of Employers’ Associations (CAMFEBA) and sectorial associations; sectoral trade unions.
 

For further information please contact:

Mr Giulio Bordon
Technical Officer
Promoting the Transition to Formalization through Integrated Approaches in Cambodia
Email: bordon@ilo.org