Digital economy needs 10 years
Cambodia's digital economy remains at a nascent stage and will need at least 10 years to grow and aim for a technology-driven economy, said Minister of Economy and Finance Aun Pornmoniroth.
Speaking at the national consultation workshop on Policy and Direction of Cambodia’s Digital Economy on Tuesday, Pornmoniroth said the Kingdom’s digital economy has been gradually taking shape and creating new business activities in digital payment, online entertainment and e-commerce while increasing the number of users who adapt themselves to such technologies.
He said Cambodia may need to spend the first five years to set all of the fundamental elements in place and achieve digital readiness. It will then spend another five or 10 years growing its digital economy to a technology-driven economy.
“The countries that can benefit from the digital economy are those that have access to the digital world and in a timely fashion, adapt themselves to these changes."
“In this regard, for a developing country like Cambodia, new technologies provide an opportunity to leapfrog, bypassing traditional phases of development,” he said.
Pornmoniroth said the government will develop and implement a long-term strategic framework, serving as an overall guide to developing a digital economy. Cambodia, he said, has no intention to create a Silicon Valley or aim to create unicorn companies – start-ups valued at more than $1 billion.
The strategic direction is to create a robust digital environment that allows both small and large firms in the Kingdom to connect to the global digital economy value chain.
Though Cambodia is a developing country, Pornmoniroth said it is a dynamic country with a high potential to seize the opportunities arising from Industrial Revolution 4.0 and base its digital economy on four main factors.
These are a demographic dividend with an increasing number of educated youth who are fast absorbing digital technology, a rapid increase in the use of cell phones and smart devices, fast technological spillovers from foreign direct investment inflow, and a fast digitalisation of all key economic sectors.
The World Bank country director for Cambodia, Myanmar and Laos, Ellen Goldstein, said during the Tuesday workshop that while Cambodia can maintain rapid and sustainable growth, the Kingdom faces challenges such as rising wages.
This, she said, makes it increasingly difficult to continue exporting low-value goods like unprocessed rice and low-end garments. In addition, she said Cambodia is receiving less generous donor financing and its preferential trade treatment is expected to phase out eventually.
“Cambodia will need to find new drivers of growth, as the country will not be able to rely exclusively on those drivers which have proven successful in the past,” she said.
She said the Kingdom’s economic outlook remains positive and would benefit from exploring new drivers of growth that will create jobs and boost prosperity over the next 20 years.
“Digital platforms are expected to play a key role in enabling local entrepreneurs to participate in global value chains more effectively. Financial technology can provide expanded access to finance for both enterprises and individuals as well as facilitate the growth of e-commerce.”
Canadia Bank Plc executive vice-president Charles Vann on Tuesday said the time is right for Cambodia to start preparing its strategy and policy to digitalise the economy, as it is the global and regional trend, and the neighbouring countries are also adjusting to it.
“Once our economy is growing and going along, having prepared now [the policies] to seize the benefits of the digital [era] would be most proper and practical,” he said.