Full-fledged digital economy not likely in the next decade: Minister

Digital technologies will give Cambodia the opportunity to leapfrog traditional stages of development, but it will take the country at least 10 years to complete the transition into a full-fledged digital economy, the minister of economy and finance said yesterday.

Speaking during a two-day national consultation workshop on Cambodia’s digital economy, Minister Aun Pornmoniroth said the country’s digital economy has been taking shape gradually, with new businesses joining the digital payment, online entertainment and e-commerce sectors every year.

The workshop, being held at Phnom Penh Hotel, started yesterday and will continue today, with participants from the World Bank, Alibaba Group and King & Wood Mallesons, among others.

Mr Pornmoniroth also pointed out that Cambodians are quickly familiarising themselves with new technologies, and added that to reap the most benefits out of the current digital transformation countries must have the ability to quickly adapt to change.

“For developing countries like Cambodia, new technologies provide an opportunity to leapfrog, bypassing traditional phases of development,” the minister said.

“In the context of globalisation and global integration, Cambodia certainly cannot avoid the impact of the Industrial Revolution 4.0, and that requires the government to focus on seizing opportunities as well as managing risks,” he said.

However, he said the country’s digital capabilities are still at a nascent stage. “Cambodia may need to spend the next five years building the pillars of a digital economy, and will probably spend another five to ten years growing that digital economy and aiming for a technology-driven market,” he said.

“In this regard, it is worth clarifying that Cambodia has no intention to create a Silicon Valley or a unicorn startup company. Our vision is to create a robust digital environment that allows both small and large firms in the country to connect to global value chains,” he added.

Mr Pornmoniroth said the government will need time to build the necessary soft and hard infrastructure and the regulatory environment, promote digital literacy, and enhance e-government capabilities.

“The government has to be prepared for the digital age and to create a supportive ecosystem that can foster the transformation of the economy.

“To this end, the government will develop and implement a long-term strategic framework, serving as a guide and overall framework for the development of the digital economy,” he added.

Vongsey Vissoth, chairman of the digital economy policy working group and secretary of state at the Ministry of Economy and Finance, said, “Today’s gathering represents an invaluable opportunity to exchange dialogue and perspectives on some key issues, share experiences, and gather inputs, all of which would be useful and relevant for Cambodia to prepare a long-term digital development framework to sustain the success of Cambodia’s socio-economic development.”

Ellen Goldstein, World Bank country director, issued a set of recommendations to the Cambodian government.

First, she said, Cambodia needs to find new drivers of growth, as the country will not be able to rely exclusively on traditional sectors in the future.

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