The Ministry of Industry, Science, Technology and Innovation (MISTI) weighed the challenges of launching a digital platform for the informal economy recently. The Coordinating Committee for Developing the Informal Economy presented a progress update on the strategy during the meeting held at the MISTI headquarters in Phnom Penh.
The Digital Economy and Business Committee discussed the details of the digital platform. The platform would help the informal economy to register their businesses to be web accessible for their partner agents like financial institutions, business associations and the National Social Security Fund (NSSF). During a demonstration, it was shown that the entire registration process would take not more than ten minutes in total.
Registration on the platform would, however, be entirely voluntary, said Hem Vanndy, Minister of MISTI. He described it as a critical step for members of the informal economy to acquire valuable insights into policy formulation for the necessary government intervention for future steps for formal business registration.
During the meeting, participants hailed the development of the platform and stressed on the crucial role of extensive campaigns to encourage registration on the platform. The meeting viewed the platform as a vital step for all concerned in ensuring that the informal economy is made formal in each of their concerned sectors.
In the course of the meeting, the committee also reached the decision to secure government approval for launching the registration platform as well as a country-wide campaign to promote it.
Minister Vanndy sought the support of ministries, institutions and provincial administrations to provide timely updates for each sector. This would be vital for monitoring and evaluating as per the government policy, in order that the secretariat could come up with an overall progress report for the government.
“Most countries have excluded the informal economy from their GDP calculations due to the challenges in accurately measuring it. However, there has been a growing recognition of informal economy significance, leading some countries to incorporate estimates of informal activity into their GDP figures,” Sergei Zubkov, Daun Penh Data Center told Khmer Times.
Italy is a notable example, having included informal activity in its GDP calculations since 1987, he said, adding, that the digital platform in Cambodia will help to get more trustable estimate numbers for the informal economy volume. For Cambodia informal economy figures are quite high. Accounting for it in GDP reports will increase Cambodia’s position, he said.
The integration of digital technologies into the informal economy emerges as a strategic imperative to revolutionise livelihoods, stimulate economic productivity, and foster financial inclusion, said Leong Moon Fei, Chief Business Officer, Panda Commercial Bank.
The government’s proactive stance on digital transformation, exemplified by its support for initiatives like Bakong, a pioneering digital payment system, is a critical catalyst for this economic metamorphosis, he added.
“The biggest payoffs of a digital platform would be increased efficiency, better financial inclusion through mobile payments, and expanded market access for informal workers and businesses,” said Alva Chew, CEO of AeroChat AI Chat System. It could also provide valuable data to improve policymaking and business strategies.
