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Overview

The Cambodian government is starting to acknowledge the potential of the digital economy for Cambodia and has begun the setting out the necessary building blocks to realize this potential beginning with an emphasis on ‘building a digital foundation’, as captured in its 15-year Digital Economy and Social Policy Framework of Cambodia 2021-2035. Not only is embracing digital transformation seen as a new driver of economic growth for Cambodia, it is also seen to help increase productivity and enhance economic efficiency in the wake of the disruptions from the Covid-19 pandemic.

Cambodia’s young demographic with a median age of 25 and high mobile penetration use and 4G coverage is leading the charge where digital start-ups, especially those involved in financial services have been early movers in the market.[1] As of 2019, there were 5.22 million e-wallet accounts, which had grown 64% from the year before, and the number is expected to have surged further with the government promoting more contactless payments as a result of the pandemic. Similarly, the e-commerce sector, which is believed to be worth USD222m in 2021, is also anticipated to grow to USD313m by 2025, expanding at a rate of 8.98% CAGR.[2]

At the same time, these developments have been focused within urban centres, and have also been slower to permeate to other parts of the economy, such as manufacturing and agriculture. Furthermore, the regulatory framework in Cambodia in other parts of digital economy related aspects such as personal data protection and cybersecurity are also lagging behind and are currently inadequate in supporting and sustaining the growth of the digital economy and digital trade.

As this report will highlight, there is still significant scope to further increase and accelerate overall trade, as well as digital-enabled trade, through harnessing national digitalisation efforts, and leveraging international standards. Greater use of new and emerging technologies has the potential to not only create trade opportunities in digital goods and services, but also increase the trade in physical goods and services that can be delivered digitally or otherwise enhanced through digital enablers.

Adoption of international standards has the potential to accelerate digital trade. For instance, by enabling businesses and governments to digitise using systems that can interoperate and interconnect with one another, seamless cross-border trade is facilitated. Standards, therefore, play the role that regulation has traditionally played: facilitating inclusive market access and participation, ensuring competition, reducing compliance costs, benchmarking universal access to digital systems, information and technology, and boosting productivity.

Digital technologies can significantly lower barriers to trade, improve trade efficiencies and open access to markets, creating new trade possibilities. For Cambodia, this report estimates that—at a minimum—digital trade could increase to a total projected AUD8.28 billion by 2030. This suggests that the economic value of digital trade has the potential to increase 200% for Cambodia.

In this context—particularly noting the impacts and challenges of COVID-19—it is useful to examine the ways in which digital trade is taking shape in Cambodia and the ways in which international standards can be leveraged to maximize its growth potential.

In order to scale this potential growth, this report will:

  • Examine digital trade and break down its components;
  • Estimate the economic value of Cambodia’s digital trade;
  • Identify digital trade areas currently being prioritised by Cambodia;
  • Propose priority areas to be focused upon by Cambodia;
  • Identify key international standards for each prioritised area to focus on; and
  • Map out a suggested way forward in order to accelerate digital trade growth.

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