Informal workers – such as street vendors, tuk-tuk drivers, construction workers and small-scale farmers – often work without contracts, fixed hours or stable income. Post Staff
Cambodia’s informal workforce, comprising more than 80 per cent of the country’s labourers, including street vendors, construction workers and cyclo drivers, forms a substantial segment of the country’s economy.
Yet, despite their contributions, these workers often lack essential protections that ensure job security, healthcare and social support, leaving them vulnerable in times of crisis.
Recognising this need, the government has recently stepped up efforts to bridge this gap, providing a lifeline for many who have faced years of economic precarity.
“The Royal Government has issued a policy aimed at improving the wellbeing of those in the informal economy by providing social protection assistance,” said Katta Orn, spokesman for the Ministry of Labour and Vocational Training.
He said the initiative is designed to support economic recovery and enhance the standard of living, especially in light of the Covid-19 pandemic.
The government’s strategy includes the registration of self-employed individuals in the informal sector under the National Social Security Fund (NSSF).
“As of November, 408,668 self-employed workers have been enrolled for the [NSSF], a significant step toward creating a social safety net for these workers,” Orn told The Post.
The initiative seeks not only to mitigate the vulnerabilities faced by unregistered workers but also to build resilience within the country’s economy as it navigates recovery and future growth challenges.
The backbone of Cambodia’s economy
Millions of workers are confined to the informal sector, highlighting a pronounced digital divide – Asia and the Pacific Region is home to approximately two-thirds of this global workforce, around 1.3 billion people.
In South Asia, 87 per cent of the workforce is engaged in the informal sector, while in East Asia, the figure stands at 50 per cent. At the country level, the range varies significantly, from Tonga at 97 per cent to South Korea at 27 per cent.
“In Cambodia, the percentage of informal employment as of 2019 is 88 per cent,” according to 2024 Regional Human Development Report titled, “Making Our Future: New Directions for Human Development in Asia and the Pacific, Cambodia Focus”.
A March 2024 ILO report showed that 88.3 per cent of Cambodia's workforce – around 6.9 million of the 7.9 million total workforces – were informally employed and not contributing to the NSSF, a slight decrease from 93 per cent in 2012.
Street vendors, tuk tuk drivers, construction workers and small-scale farmers often work without contracts, fixed hours or predictable income.
For these individuals, the concept of a “regular workday” is often a luxury; they rely heavily on daily earnings, which were hit hard by the pandemic and subsequent economic downturn.
As outlined in the UN Development Programme’s (UNDP) report, informal workers in Asia and the Pacific – including Cambodia – face systemic barriers to social protection and economic security.
The country’s informal workers, who play a crucial role in maintaining economic vitality, often lack health benefits, pension plans or formal protections that would provide a safety net during illness or retirement.
However, there are promising initiatives to tackle these challenges. The ministry has been actively enrolling self-employed workers into the NSSF.
The effort aligns with regional trends toward mainstreaming human development and recalibrating growth strategies, as suggested in the UNDP report.
The report highlights the need to protect informal workers as part of a broader strategy to support long-term economic resilience and social equality across the region.
Social protection gains among Cyclo drivers
Among the groups seeing tangible benefits from these recent policy changes are Phnom Penh’s cyclo drivers, a profession traditionally associated with older men who depend on tourism.
More than 300 cyclo riders, mostly elderly men, rely on transporting foreign tourists and receive government assistance through equity cards, with over 80 per cent having been issued these cards for special services. Hong Raksmey
Im Sambath, director of the Cyclo Conservation and Careers Association (CCCA), remarked that the majority of cyclo drivers in the association have received social protection benefits from the government.
He said more than 300 cyclo operators, most of them elderly men, rely on transporting foreign tourists and have access to the government assistance, noting that they receive special services through equity cards.
"Over 80 per cent of [the drivers] have been issued equity cards by the government," Sambath told The Post.
These equity cards provide critical access to healthcare and other basic services, a small but essential step toward securing drivers, who have long been part of the cultural fabric of the country’s cities.
For elderly drivers, these benefits offer a measure of security, allowing them to access healthcare services they might not have otherwise afforded.
Addressing long-standing vulnerabilities
Despite these advances, many informal workers still face significant challenges. The lack of a structured framework means that a large proportion remains excluded from formal safety nets.
For instance, while progress has been made in registering self-employed individuals under the NSSF, the majority of informal workers continue to operate without any official registration or social security benefits.
“As Cambodia seeks to address this gap, lessons can be drawn from neighbouring countries that have adopted innovative solutions to extend protections to informal workers,” according to the UNDP report.
It said Indonesia and the Philippines, for example, have pioneered mobile platforms that allow workers to access financial services, healthcare and pension funds.
“The integration of technology and mobile banking services could be particularly effective in Cambodia, where mobile penetration is high and digital payments are becoming more common,” the report explained.
In October last year, the government launched the National Strategy for Informal Economic Development 2023-2028, aiming to enhance the protection, productivity and resilience of the informal economy. Post staff
A pathway to inclusive growth
Cambodia’s move to incorporate informal workers into its social protection schemes represents a step toward inclusive growth.
By securing the wellbeing of the informal workforce, the government not only safeguards a crucial part of the economy but also helps foster a more equitable society.
The UNDP report emphasises that inclusive growth strategies – those that prioritise people and expand access to social services – are essential for sustainable development in the region.
Additionally, extending protections to informal workers can have far-reaching economic benefits.
“Providing healthcare and income support … reduces the likelihood of workers falling into poverty due to illness or economic downturns, contributing to a more resilient economy,” said the report.
In the long run, these initiatives may also support productivity and economic stability by creating a healthier, more financially secure workforce.
In October last year, the government launched the National Strategy for Informal Economic Development 2023-2028, aiming to strengthen the protection, productivity and stability of the informal economy.
The initiative seeks to encourage and expedite the integration of informal workers into the formal economy, aligning with the vision of fully developing the sector and facilitating its formalisation.
Prime Minister Hun Manet stated at the strategy launch that the goal is to encourage individuals in the informal economy to register for the formal sector. He explained that this will enable the government to manage data clearly and implement timely and effective interventions.
The government’s strategy outlines a roadmap with four principal goals to transition the country’s informal economy into the formal system.
The first goal aims to facilitate access to formal economic development by establishing a transitional system that allows informal economic actors to gradually integrate into the formal economy.
This approach, known as "Into the System", seeks to create a supportive entry point for informal workers and businesses.
The second goal centres on providing sustained benefits for those who have already transitioned, ensuring that they remain in the formal system and are not compelled to revert to informality, even if full integration presents challenges for some participants.
The third goal is to support and nurture individuals and businesses already in the formal system, promoting their growth so they can fully participate in the structured economy. This measure underscores long-term development and capacity-building to sustain economic progress.
Lastly, the strategy aims to raise public awareness about the government’s policies and strategies, emphasising the advantages of participating in the formal economy.
The goal includes promoting collaboration among all stakeholders to ensure comprehensive support and understanding of the pathway to economic formalisation.
