GLOBAL WORKSHOP ON PUBLIC-PRIVATE DIALOGUE VIENNA, AUSTRIA April 2009 Presented by: Van Sou Ieng Chairman 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 Cambodia II- About GMAC and the Cambodian Garment Industry III- GMAC and G-PSF IV- GMAC Experiences - Some Success Stories V- Challenges and Ways Forward

I- About Cambodia Area: 181, 035 sq km Population: 14 Million Religion: 95% are Buddhist Government: Constitutional monarchy Borders: Laos, Thailand & VN Region: ASEAN Main sectors: agriculture, garments, tourism and construction 24 provinces and municipalities, Phnom Penh is the capital Sea 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 Industry Established 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. 7

III- GMAC and G-PSF The 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 7 th Working Group, on Export Processing and Trade Facilitation. 8

III- GMAC and G-PSF GMAC also actively participates in other relevant working groups; Thanks to assistance from IFC, as the secretariat, the 7 th 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 Stories Two 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;