April 19, 2019 at 7:00 am

Digital technology essential for economic growth, says World Bank


Cambodia’s economic growth in recent years has been rapid, with the Kingdom benefitting from preferential trade treatment and an abundance of low-skilled labour. But the country will need to look to new technologies and greater digital adoption across different sectors to continue enjoying that prosperity, according to a World Bank report

Only about one quarter of Cambodians consistently use the internet, according to the World Bank report

The report, “Benefitting from the Digital Economy,” was released on Wednesday and highlights the importance of Cambodia’s adoption of digital processes as a primary catalyst for future growth.

According to Ellen Goldstein, World Bank Country Director for Cambodia, Laos and Myanmar, the Kingdom cannot rely on donor financing or preferential trade treatment for much longer, as these drivers of growth are likely to soon be phased out.

“Rising wages are making it increasingly difficult for Cambodia to keep exporting unprocessed rice and low-end garments,” she wrote in her introduction to the report. “Meanwhile, around the globe, automation is displacing jobs, and digital technologies are transforming certain sectors.”

The Kingdom’s authorities seem to realise the importance of digitising the economy, as recent years have seen new policies enacted in support of digital developments. At the top of the Kingdom’s to-do list is the digitisation of governmental procedures, expansion of technology infrastructure, and development of local talent in the tech industry, which it has outlined in two separate multi-year development plans. But Cambodia still has a long way to go in terms of digital adoption and technological readiness.

Businesses & government

Cambodia’s businesses and government rank among the lowest in the region for their limited adoption of new technologies thus far. The government offers few online services, taxes must still be filed in person, and there is no centralised payment platform through which citizens or businesses can digitally pay their electric and water bills.

Cambodia’s firms are slower to adopt new tech than other countries in the region, as under a quarter had any web presence as of 2017 – far below the world average of 46%.

Internet penetration

Even as digital adoption surges among the Cambodian people, with mobile penetration and subscriptions reaching new heights, internet penetration is still low across the country. Only about one-quarter of Cambodians consistently use the internet, and for those who are online, the report notes “anecdotal evidence suggests that many users navigate exclusively through Facebook and are unlikely to fully exploit the potential of the World Wide Web”.

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There is little known about Cambodia’s e-commerce landscape: while e-commerce platforms, digital wallets, and local payment apps exist, it is assumed that there has been a limited uptake of digital financial services among Cambodian people, which does not bode well for the future of the Kingdom’s digital economy.

To address these issues, the World Bank report offers several policy options, chief among them the need for further investment in infrastructure and digital education.

“Thanks to rapid and sustained growth, Cambodia has become one of the world’s leaders in poverty reduction and shared prosperity, Goldstein added. “While the country’s economic outlook remains positive, Cambodia could begin to explore new drivers of growth that will create jobs and boost prosperity over the next 20 years.”