World Bank pushes Cambodia to tackle informal economy, boost productivity for Vision 2050

PHNOM PENH, Jan 12, 2026 (KPT) – The World Bank on Monday urged Cambodia to step up reforms to strengthen its informal economy and raise productivity, warning that sustained growth is critical if Phnom Penh is to achieve its goal of becoming a high-income country by 2050.

Presenting new analysis to the Ministry of Industry, Science, Technology and Innovation, the Bank said Cambodia must lift productivity growth from 0.8 percent to more than 2 percent annually for the next 25 years – a feat previously achieved only by South Korea.

World Bank Country Manager Tania Meyer said the institution would support the government’s reform agenda, stressing the need to improve the business environment and help informal firms transition into the formal sector. Senior economist Faya Hayati added that evidence-based reforms were essential, calling productivity growth “critical” to Cambodia’s long-term ambitions.

The Bank’s survey found 41 percent of informal firms were survivalist enterprises, 44 percent potentially viable and 15 percent high performers. Officials said reforms must combine social protection for vulnerable groups with streamlined registration and stronger incentives for viable firms.

Industry Minister Hem Vanndy said Cambodia would integrate the Bank’s findings into its draft MSME Development Strategy and invited the Bank to prepare concrete policy recommendations aligned with the government’s next Development Policy Operation.