Ms. Than Kennaroit, Deputy Director General of the General Secretariat for the National Social Protection Council 
Mr. Oktav Pasaribu, Officer-in-Charge of ILO Country Office for Thailand, Cambodia and Laos PDR

Excellencies, ladies and gentlemen,

It is my great pleasure to welcome you all to the Workshop on Integrated Formalization for Social Protection. Please allow me to begin by expressing my gratitude to our partners, the General Secretariat for the National Social Protection Council, the Australian Department of Foreign Affairs and Trade, the European Union, and our UN sister agency the International Labour Organization. This partnership reflects our shared commitment to supporting Cambodia in its efforts to build an inclusive economy and ensure social protection for all.

I am delighted to represent UNDP in this important event that aims to support the newly adopted National Strategy for Informal Economic Development 2023-2028 and explore the optimal pathway for promoting formalization for economic resilience, creation of decent jobs, access to social protection and finance.  

Excellencies, ladies and gentlemen,

About 88% of employment is still in the informal sector. This is relatively high compared to other countries in the region. It underscores the urgency of exploring feasible options to facilitate transition to the formal economy. Global experience shows that greater uptake in formal economy will bring about numerous benefits, for workers and businesses in terms of increased productivity, decent work, and social protection. For the state, it is a crucial step towards mobilising domestic resources and expanding fiscal space to fund comprehensive social protection policies.

Taking this opportunity, I would also like to commend the Royal Government of Cambodia for its strong commitment to addressing the informal economy. In October this year, the RGC launched the National Strategy for Informal Economic Development 2023-2028. This strategic framework aims to promote protection, capacity building, efficiency, and resilience of the informal economy, facilitating its gradual transition to the formal economy, and providing more comprehensive incentives to formal enterprises. It also recognises the importance of extending social protection coverage to workers in the informal economy and alleviating the burden of vulnerable workers and their families. Other important progress includes the extension of the Health Equity Fund to at-risk population. Now over 300,000 additional households or 1 million people have accessed to free health care at public hospitals, extending basic social protection coverage from poor to near-poor population. Second is the establishment of the National Social Security Fund (NSSF) for the self-employed, mostly those engaging in the informal economy allowing them to contribute to NSSF, contributing as such to closing the coverage gap towards a Universal Health Coverage.

Excellencies, ladies and gentlemen,

The next two days will be a valuable opportunity to engage in discussions, and exchange knowledge, best practices, and innovative approaches to support informal workers and businesses to transition to formal economy. By fostering dialogue and collaboration, we hope to inform policies and strategies that will lead to tangible improvements in the lives of workers, businesses, and the society as a whole.

Today, we will launch the report entitled “Understanding the Paths to Formalization in Cambodia: An Integrated Vision”. The report provides key recommendations for addressing informality in a comprehensive manner through improved coordination among relevant actors and stakeholders, and the identification and removal of barriers for formalization by adopting enabling measures such as reducing fees, simplifying registration procedures, eliminating minimum capital requirements, and implementing automated licensing or registration processes, among others. The possibility of introducing tax and non-tax incentives to encourage businesses to formalise their operations is also explored and recommended. This report is the result of cooperation with several government counterparts, development partners and civil society organisations who were consulted during the process.

Tomorrow, we will learn from the experience of countries that have made significant progress from Latin America (namely, Ecuador, Chile and Colombia) and from the region (Nepal). Their insights will provide valuable lessons for Cambodia as it navigates, and hopefully leapfrog, towards a more inclusive and sustainable economy. I would strongly encourage your active participation in this two-day workshop.

Excellencies, ladies and gentlemen,

Your presence here today demonstrates your commitment to human-centred development by advancing formalization and social protection in Cambodia. Your expertise and insights will undoubtedly be valuable for accelerating the implementation of the informal economy development policy and corresponding frameworks.

Let us seize this opportunity to learn from each other, to build networks, and to identify practical solutions that will accelerate formalization and enhance social protection in Cambodia, leaving no one behind.

To end, I wish you all productive deliberations and a successful workshop.

Thank you/ Saum Orkun.