Karishma Banga and Dirk Willem te Velde, July 2020
Cambodia has one of the lowest numbers of coronavirus cases in the world, but it is facing amongst the world’s highest economic losses in the wake of the COVID-19 crisis. The IMF expects incomes to contract by 1.6% in 2020 in the baseline scenario due to major disruptions in tourism, garments and construction. Some sectors are expected to fare better, such as the information and communication technology and e-commerce, but these industries need to be nurtured more actively and the opportunities need to be made more inclusive if they are to be a significant base for a prosperous and more inclusive recovery.
The Royal Government of Cambodia is preparing a long-term policy framework for the digital economy. Over the past year, ODI and CDRI have supported this process using analysis, case studies, interviews and a set of round tables including with the Governments’ digital economy task force. The current study argues that policy framework needs to harness the digital economy and also target closing the digital divide by boosting an inclusive digital transformation in the wake of economic losses from COVID-19. To leverage digital industries in the COVID-19 recovery, we lay out a seven-point plan for inclusive digital transformation:
- Radically transform innovation in the manufacturing sector;
- Provide appropriate and quality skills for the future;
- Nurture the digital start-up economy for an inclusive economy;
- Protect and enable the most vulnerable groups to take part in the digital economy
- Ensure a public sector that leads by example;
- Digitalise trade facilitation and boost e-commerce; and
- Revise and extend social protection mechanisms to vulnerable groups.
Photo: A telecommunications tower in the Kandal province, Cambodia. AChhor Sokunthea / World Bank. Licence: (CC BY-NC-ND 2.0)