PHNOM PENH (Bernama): Cambodia is embarking on one of its most ambitious economic transformations in decades, turning to high-tech industries and artificial intelligence (AI) to shape its next wave of growth.
The move marks a departure from the country's traditional growth engines of garment manufacturing, tourism, and agriculture, as Phnom Penh gears up to attract higher-value investments, create skilled jobs, and build an economy driven by AI, automation, and advanced manufacturing.
Speaking at the World Artificial Intelligence Cooperation Organisation in Shanghai, Prime Minister Hun Manet signalled Cambodia's determination to reposition the kingdom for the digital era.
He said AI must deliver tangible localised outcomes and strengthen digital infrastructure, in addition to supporting specialised human capital and local innovation ecosystems, and allowing opportunities for economic growth.
"Cambodia will soon adopt an AI strategy to optimise productivity in foundational sectors, improve quality of life, and foster inclusive (growth),” Manet said in his speech on July 17.
The move comes in the face of slowing growth, softening tourism, trade uncertainty, and mounting pressure to create jobs fit for its young population.
The International Monetary Fund (IMF) on July 8 lowered Cambodia's 2026 growth forecast to three per cent, citing weaker domestic demand, global trade uncertainty, and higher energy prices, and warned of rising inflation averaging 5.6 per cent.
Higher energy prices, trade policy uncertainty, weak tourism, softer external demand and domestic scam activities have tarnished the kingdom’s image, said the IMF.
Since the Cambodia-Thai military conflict in July last year, the resulting economic headwinds have brought cross-border trade to a halt and clipped economic growth.
Tourist arrivals shrank by 47.8 per cent in the first five months of this year compared to the same period last year, to just 1.54 million arrivals, while ticket sales at Angkor Archaeological Park fell nearly 30 per cent in the same period.
With Cambodia's population projected to reach 24 million by 2050, the government sees technology-driven industries as vital for creating skilled employment for a young workforce.
Manet, in his World Population Day message on July 11, said: "If we fail to provide opportunities and support to the young population today, we will face challenges in the future, such as not achieving the second demographic dividend, a shortage of skilled labour, and an increasing economic and social burden due to an ageing population.”
The transition is also critical as Cambodia prepares to graduate from the United Nations' Least Developed Country category in 2029. The government expects to achieve this by December that year, and in doing so, Cambodia is expected to lose preferential trade benefits that have helped fuel its export-led growth for decades.
The government also aims to turn Cambodia into an upper-middle-income country by 2030 and a high-income nation by 2050.
During his visit to China from July 15 to 17, the prime minister courted at least nine high-profile Chinese conglomerates to invest in Cambodia, from railway, tablet producers, renewable energy, transportation, and digital companies.
At the same time on Friday (July 17), the Cambodia Industrial Development Conference and Industrial Expo 2026 kicked off in Phnom Penh. The two-day event attracted more than 160 Chinese companies from the automation, electric vehicles, digital infrastructure, and advanced manufacturing equipment sectors. -- BERNAMA
