NVDB005_-_CH_4.001._The_Global_Gateway_Initiative_-_Vichny-4

73 — DP Vol. 05

Regional Security Dilemma: Trends, Directions, and Illusion

On a related point, another fundamental obstacle on the path to digital development in the Kingdom is represented by the financial sector’s lagging pace of change. Technologies that have become vital in this field elsewhere around the world are yet to gain a foothold on Cambodian soil. For instance, the RGC’s Digital Economy and Society Policy Framework for 2021 emphasized that the absence of a common payment platform to underpin the Cambodian market on the whole is a major hurdle in the context of both public and private enterprises. While it cannot be denied that some tentative efforts to remedy the situation have already been made (such as the launch of the Bakong digital currency, which currently has over 200,000 users) , their scope has thus far been limited. Constrained material and human resources are said to have made it impossible for numerous financial institutions in the country to even consider a genuine digital transition, thereby failing to keep up with their counterparts across borders. Fortunately, investment in digital markets and the innovations that enable them are also among the pledges made in the EU’s grand project. Considering the EU’s long-standing position as a leader in the provision of stable and secure financial services via increasingly progressive technologies, Cambodia has much to learn and gain by partnering up with the bloc in this regard.

A further issue of central significance meriting attention is the lack of Cambodian experts in the digital field. According to government statistics, only 27.1% of all students enrolled in higher education institutions in the country are engaging in the fields of science, technology, engineering and mathematics (STEM). As a result, the needs of the market for more specialized labor in digital ventures are consistently not met - in 2017 for example, 55.2% of the Kingdom’s firms claimed that their staff’s level of preparedness for a more digitalized economy was low 7. Education is identified as the primary tool in a future endeavor to reverse this trend, but once again, more capital will be required to see this aspiration materialize. The authors of the GGI emphasize that they will financially and administratively seek to provide opportunities for long-term technology-oriented learning that is open and inclusive across society. As part of this provision, the initiative envisions training exchanges between the EU and partner countries to further facilitate the development of more sustainable foreign education systems. Already established European platforms for studying abroad (such as the Erasmus+ programme) can be instrumental in this regard, particularly given recent substantial increases to their funding. For the

7 https://www.kas.de/documents/264850/264899/Preparing +Cambodia%C2%B4s+Workforce+for+a+Digital+Economy.pdf

period between 2021 and 2027 alone, Brussels has set aside 2.2 billion euros for educational projects aiming to foster skill-building among young people on a transcontinental scale. In Cambodia’s case, this will be crucial when it comes to increasing the basic digital literacy rate within the population, which is currently at only around 30% 8.

While the points of interest outlined above are notable in themselves, they do not provide a full list of the sectors that could greatly benefit from the GGI’s promised digital rejuvenation. If the initiative’s initial scope is any indication, vital policy fields such as healthcare, energy and environmental protection also fall within the purview of the project’s technology-cen- tered aspirations. Only time will tell just how much of Cambodia’s unrealized digital potential can be tapped into by partnering up with the European bloc via the GGI 9.

Policy Challenges for Cambodia in Relation to the GGI and Recommenda- tions on Tackling Them

The information laid out in the previous section is a testament to the numerous opportunities the GGI provides in terms of the digital leap forward that the Kingdom aspires towards. Nevertheless, it must be noted that there are in fact also two main issues to take into account when considering its application on Cambodian territory.

The first among them is a point of contention that has been stalling cooperative proceedings between Brussels and Phnom Penh for some time - the latter’s governmental approach and the former’s response to it. Two clearly opposing views are found within this long-standing debate. From the perspective of the EU, serious human and labor rights violations can be attributed to the Kingdom’s authorities as part of an effort to stifle democracy. In response, the European bloc partially withdrew its preferential trade arrangement with Cambodia (the so-called “Everything But Arms” (EBA) scheme) in 2020, a move that had been unprecedented in the organization’s foreign policy up until this point 10. On Phnom Penh’s side, accusations of double standard tactics have been leveled against the EU. In other words, some in Cambodia are of the opinion that the rescission was unjustly singling out the Southeast Asian state considering that graver

8 https://mef.gov.kh/download-counter?post=7116

9 https://ec.europa.eu/info/sites/default/files/ joint_ communication_global_gateway.pdf

10 https://www.kas.de/documents/264850/8651571/ Chapter+5. pdf/e27236ff-8726-0f3d-2ade-85d4e6b12410?version=1.2&t=1591609834392