A grocery shop vendor helps a customer pay money through digital payment. Youtap Indonesia
Exploring potential collaboration in the fields of science, technology, innovation (STI) and support for Micro, Small and Medium Enterprises (MSMEs) was at the top of the agenda when Cambodia’s Minister of Industry, Science, Technology & Innovation (MISTI) Hem Vanndy received a delegation from the Indonesian Embassy led by Ambassador Santo Darmosumarto at the ministry office in June this year.
The Indonesian delegation was in Cambodia to participate in the 20th ASEAN Ministerial Meeting on Science, Technology, and Innovation (AMMSTI-20) held in Siem Reap, led by that country’s Chairman of the National Research and Innovation Agency.
Ambassador Darmosumarto expressed his willingness to formally introduce himself to MISTI and work toward enhancing the relationship between the two countries.
Outlining the four main objectives for his tenure – enhancing bilateral cooperation, fostering people-to-people connections with a focus on youth and STI, promoting regional cooperation through ASEAN, and ensuring the protection of Indonesians working in Cambodia – Ambassador Darmosumarto proposed signing a Memorandum of Understanding (MoU) focusing on digital transformation and technology support for MSME development, vocational education for industry, and laboratory cooperation to ensure products meet market standards in both countries.
Vanndy expressed readiness to sign the MoU. He emphasised the vital contribution of MSMEs to Cambodia’s economy, highlighting the government’s launch of the National Strategy for Developing the Informal Economy to assist MSMEs in their formalisation, enabling them to access essential benefits like social protections and opportunities for capacity development.
It might be recalled that in his forward to ‘Cambodia’s Science, Technology & Innovation Roadmap 2030’, then Prime Minister Hun Sen wrote, “Strengthening national technological capabilities and improving innovation performance will be critical to achieving the ambitious vision of the Royal Government of Cambodia to become an upper-middle economy by 2030 and a high-income economy by 2050. Science, technology and innovation (STI) will be a pivotal driver to shift the economic development pathway from a focus on traditional growth to support for inclusive and sustainable growth.”
Mr Hun Sen further wrote, “STI will enable and accelerate the structural transformations required to increase national prosperity, peace, safety and socio-economic development and to improve quality of life.”
“Cambodia’s STI Roadmap 2030 targets five main pillars – education, research and development, collaboration and enabling ecosystem. These pillars are aligned with other national policies and master strategic plans, such as the National Rectangular Strategy Phase IV, the National Strategic Development Plan 2019-2023, the National Policy of STI 2020-2030, the Industrial Development Plan 2015-2025 and others. I am confident that the SIT Roadmap 2030 will be a stepping stone for the successful implementation of these national strategic plans,” Mr Hun Sen underlined.
While the Kingdom has around 750,000 MSMEs compared to Indonesia’s 65 million, it would be a learning opportunity for Cambodia from Indonesia’s vast experience.
In the field of STI, Vanndy told the Indonesian delegation about Cambodia’s aspiration to leapfrog in technological advancements, citing that Cambodia and Indonesia are co-creators of the ASEAN Technology Transfer Hub, so there is room to collaborate in this area.
The minister said MISTI is also transforming its National Laboratory of Science, Technology, and Innovation into a public administration institution to better support the private sector. He also emphasised the importance of enhancing lab capacities in line with the 2025 ASEAN harmonised standards and proposed the establishment of a laboratory alliance between Cambodian and Indonesian labs.
This initiative aims to facilitate mutual recognition of testing and lab results across ASEAN countries.
Responding to Indonesian interest in Cambodia’s startup ecosystem, Vanndy, who also chairs Khmer Enterprise’s
Board of Trustees, mentioned the government’s efforts to develop the SME ecosystem and startups through initiatives like Khmer Enterprise, Decho Startup Center and other funding mechanisms.
Highlighting Indonesia as Cambodia’s sixth-largest trading partner, with trade volumes exceeding $1 billion in 2023, Vanndy encouraged Indonesian investors to consider investing and establishing factories in Cambodia.
It should be noted that in Indonesia, MSMEs provide a significant contribution to its national economy through gross domestic product formation and labour absorption. MSMEs are also economically resilient supporting financial system and economic stability.
Indonesian President Joko “Jokowi” Widodo wants SMEs to join the digital revolution. Inaugurating the Indonesian Digital Economy and Finance Festival on August 1, he said that more than 64 million small and medium enterprises in Indonesia that could significantly propel the country’s economic growth once they are connected to digital payment platforms.
“Digital transformation must be just and inclusive. People on the margins, low-income people, micro, small and medium enterprises [MSMEs] must get equal access and treatment,” the President said.
Jokowi also called on Bank Indonesia and the Financial Services Authority (OJK) to provide more protection for digital payment services used by SMEs in the country. In his speech, the President said he expected digital payments to more than double by 2030 to US$760 billion.
Indonesia had grown into a digital economy powerhouse in ASEAN, jumping 11 spots in the World Digital Competitiveness Ranking last year.
According to Coordinating Economic Minister Airlangga Hartarto, Indonesia has become the second most important destination for investment in the digital economy in ASEAN. “E-commerce in Indonesia makes up 40 percent of the market size of ASEAN, and in 2023 the value of transactions reached $77 billion,” Airlangga said.
In recent years, Indonesia has taken the lead in digitalizing payments, as well as the greater use of local currencies in the region. With Indonesia in such a lead position, Cambodia could gain a lot in taking its MSMEs to its desired goals.
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