Covid-19 News

The pandemic’s impact on digital transformations and how e-commerce and associated digital technologies can contribute to the recovery are in focus during the UNCTAD eCommerce Week 2022 from 25 to 29 April.

New UNCTAD figures show that the significant uptick in consumer e-commerce activity fuelled by the COVID-19 pandemic was sustained in 2021, with online sales increasing markedly in value, despite the easing of restrictions in many countries.

The average share of internet users who made purchases online increased from 53% before the pandemic (2019) to 60% following the onset of the pandemic (2020/21), across 66 countries with statistics available.

But the situation prior to the pandemic and the extent of the boost to online shopping experienced vary between countries. Many developed countries already had relatively high levels of online shopping (above 50% of internet users) before the pandemic while most developing countries had a lower uptake of consumer e-commerce (Figure 1).

Figure 1. Online shopping before and during the COVID-19 pandemic
Percentage of Internet users who made purchases online, 2019 (x-axis) and 2020/21 (y-axis)

Source: UNCTAD based Eurostat Digital Economy and Society Statistics database, OECD ICT Access and Usage by Households and Individuals database, ITU World Telecommunication/ICT Indicators database), Argentina CACE, Australia Post, China Network Information Center, DANE Colombia, IMDA Singapore.

Notes: For most European/OECD countries, data relate to individuals aged 16-74 years who used the internet/shopped online in the 12 months prior to survey. For other countries, wider age ranges and different recall periods may apply. 2021 figures used when available (y-axis) but for a significant minority of countries (29 of 66 countries presented), and especially for developing countries (17 of 19 countries), the latest data relate to 2020.

Greatest rises in developing countries

The greatest rises occurred in several developing countries. In the United Arab Emirates, the share of internet users who shopped online more than doubled, from 27% in 2019 to 63% in 2020. In Bahrain the share tripled, reaching 45% in 2020, and in Uzbekistan it rose from 4% in 2018 to 11% in 2020.

In Thailand, which already had a relatively high uptake prior to the pandemic, a 16-percentage-point increase meant that for the first time more than half of internet users (56%) shopped online in 2020.

Among developed countries, the greatest increases were seen in Greece (up 18 percentage points), Ireland, Hungary and Romania (each 15 percentage points).

Of the 66 countries covered, online shopping remains the lowest in El Salvador (1% of internet users), Azerbaijan (5%), Uzbekistan (11%) and Colombia (17%).

One reason for such differences is that countries differ greatly in their extent of digitalization and therefore in their ability to turn swiftly to digital technologies to mitigate economic disruption. Least developed countries (LDCs) are especially in need of support to take up e-commerce but are not represented in this analysis due to a lack of data on internet usage.

Online retail sales particularly boosted by the pandemic

Official statistics, available for seven countries that together comprise around half of global GDP (including the United States and China), indicate that online retail sales increased substantially in these countries from around $2 trillion in 2019, immediately prior to the pandemic, to around $2.5 trillion in 2020 (not shown) and $2.9 trillion in 2021 [Figure 2, panel a].  China accounts for over half of the online retail sales across these countries and the United States for a further 30%.

The pre-existing upward trend accelerated in many of these countries [panel b]; especially those where a relatively low share of retail sales take place online. In Singapore, online retail sales in 2021 were approaching triple the 2018 level. Canada and Australia also experienced especially large increases over the same period.

Looking across all these countries, although the disruption and economic uncertainty wrought by the pandemic suppressed overall retail sales into 2020 (only Australia and the United States saw retail sales increase from 2019 to 2020), online retail sales grew strongly as people took to shopping online and as offline sales declined [panel c].

This led to a marked increase in the share of online sales in total retail sales – from 16% in 2019 to 19% in 2020 [panel d]. That level was sustained into 2021 despite offline sales picking up strongly. Online sales comprise a much greater share of total retail sales in China (around a quarter in 2021) than in the United States (around one eighth). As a result of steep increases following the onset of the pandemic, the United Kingdom joined Korea (Rep.) in having the highest overall online retail share in 2021, at 28%.

Figure 2. Online retail sales, seven countries, 2018-2021
Value (US$ billions, current prices), Indices (2018=100) and percentage of retail sales

Online retail sales, seven countries, 2018-2021

Source: UNCTAD based statistics published by Australian Bureau of Statistics, Statistics Canada, China Ministry of Commerce, Kostat, SingStat, the UK Office for National Statistics, and the US Census Bureau.

Notes: There may be some differences in the coverage of retail trade statistics across countries. Indexes calculated based on US$ values in current prices.

The biggest online platforms benefit the most

The 13 top consumer-focused e-commerce businesses increased their revenues sharply during the pandemic [Figure 3].

In 2019, these companies made sales worth $2.4 trillion. Following the onset of the COVID-19 pandemic in 2020, this rose sharply to $2.9 trillion (not shown), and a further one-third increase followed in 2021, taking total sales to $3.9 trillion (in current prices).

The shift towards online shopping has further entrenched the already strong market concentration of online retail and marketplace businesses.

Alibaba, Amazon, JD.com and Pinduoduo increased their revenues by 70% between 2019 and 2021 and their share of total sales through all these 13 platforms rose from around 75% in 2018 and 2019 to over 80% in 2020 and 2021.

Expedia, Booking Holdings and AirBnB saw gross bookings decline by up to two thirds in 2020 as movement controls reduced demand for travel and accommodation services, though growth returned in 2021 as restrictions were eased.

Figure 3. Sales by major consumer-focused e-commerce businesses before and during the pandemic
$ billions, current prices

Sales by major consumer-focused e-commerce businesses

Source: UNCTAD based on company reports. Notes: These figures reflect the gross value of goods and services sold by/through these companies; only a portion of this accrues to the e-commerce business and goes toward profits. These businesses are primarily focussed on sales to consumers. However, businesses and other organisations may also make purchases from them, and these sales may not be excluded. Rakuten refers to “domestic e-commerce” only. 2021 figure for Amazon estimated. 2020 figure for WalMart estimated.

Better statistics are needed

These statistics only provide a partial perspective on the evolution of e-commerce during the pandemic.

There is a pressing need for more inclusive statistics on online retail sales, business-to-consumer and business-to-business e-commerce and cross-border digital trade that can provide insights covering a wider range of countries, especially developing nations.

UNCTAD and its partners are collaborating on establishing the foundations for international statistics that can bring about a better understanding of the links between e-commerce, trade and development and compiling the second edition of the Handbook on Measuring Digital Trade.

As I review the latest activities and results of the International Telecommunication Union (ITU), I am pleased to reflect on what our organization has achieved amid the COVID-19 pandemic.

Successful recent conferences – namely the latest World Telecommunication Standardization Assembly (WTSA) and the sixth World Telecommunication/ICT Policy Forum (WTPF-21) – attest to ITU’s resilience in challenging times.

ICTs for peace

Our world, however, is now also concerned with what is happening in Ukraine. This moment calls for global cooperation. On the opening day of WTSA three weeks ago, I called for all participants to be united in doing their best to stop this war. Unfortunately, it has not come to an end yet.

I am saddened by the loss of civilian life and suffering, including from our own community of telecom experts and engineers. I echo the call of the United Nations Secretary-General António Guterres and my UN counterparts for an immediate peaceful resolution.

I am also concerned by the mounting damage being caused to telecommunication infrastructure, which provides a vital lifeline for people and economies everywhere. I called on the ITU Council to promote information and communication technologies (ICTs) for peace.

Addressing inequalities

In the draft 2024-2027 ITU Strategic Plan, two clear goals have been identified – universal connectivity and sustainable digital transformation. This document comes at a time when 2.9 billion people are still unconnected around the world, most of them living in developing countries.

The COVID-19 pandemic has shown that equitable access to digital technologies is not just a moral responsibility.

It is also about recovery, growth, and sustainability. None of this will be possible if the ability to connect is as profoundly unequal as it is now.

Ongoing adaptation

The challenges of COVID – 19 have helped to prepare us. Despite working largely virtually for two years, we have ensured business continuity and delivered on all our core competencies.

WTPF-21, hosted online from 16 to 18 December 2021, adopted a set of Opinions in areas ranging from inclusive connectivity and digital skills to fostering an effective enabling environment. Apart from confirming how effective ITU can be in holding virtual and hybrid meetings, this timely forum sent a powerful message – one that aligns ICTs and emerging digital technologies with global priorities for sustainable development.

In a welcome signal of normality, WTSA and the associated Global Standards Symposium brought around 1,000 delegates from 120 countries together in Geneva, Switzerland, and was further enhanced by strong remote participation.

These conferences have underlined the fundamental importance of international cooperation – and the need to accelerate digital transformation for all. I hope we keep thinking about how we can best provide equitable opportunities for participation by all administrations going forward.

What’s ahead

This year is important in the plan to refit ITU for a dynamic future, as we prepare to dismantle one of our existing buildings and clear the site for our new, purpose-built sustainable headquarters. What we have learned about teleworking will be key to successfully managing the transition phase. In addition, some ITU Member States have expressed their interest in hosting our meetings during this period, and I encourage others to come forward.

The World Summit on the Information Society (WSIS) Forum 2022 has now started, bringing together wider networks of public and private stakeholders to advance ICT development.

In May, ministerial roundtable sessions will address key WSIS challenges and calls for action. As we mark this year’s World Telecommunication and Information Society Day on 17 May, we will highlight the benefits of digital technologies for older persons and healthy ageing.

The World Telecommunication Development Conference – taking place in Kigali, Rwanda, in June, preceded immediately by the Generation Connect Global Youth Summit – offers an opportunity to re-energize the global development agenda and accelerate progress on the UN Sustainable Development Goals.

Finally, the preparations are well underway for ITU’s upcoming Plenipotentiary Conference (PP-22) in Bucharest, Romania, from 26 September to 14 October.

When the pandemic first hit, we had to act quickly and efficiently – to keep up ITU’s regular engagement and address a succession of pressing issues. It was not always easy, but we forged ahead together.

That is what it means to be part of the ITU family, and it has never been more important. We have learned some important lessons, which will be invaluable as we navigate one of the busiest and most important years in ITU’s recent memory.

Based on Houlin Zhao’s State of the Union Address to the ITU Council on 21 March 2022.

See the full speech transcript.

Report financed by African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) initiative

A new guide for, and by, African women entrepreneurs provides first-hand tips on how to kick start and implement a digital transformation roadmap to build business resilience to Covid-19 and other shocks.

The Digital Transformation Playbook for Africa’s Women Entrepreneurs is the first in a series of digital tools for Africa’s women entrepreneurs, produced by the Lionesses of Africa Public Benefit Corporation, with the support of the African Development Bank through its Affirmative Finance Action for Women in Africa initiative, also known as AFAWA. The playbook features 24 leading African women entrepreneurs who share their personal digital transformation “playbooks”.

“Digital transformation can be a game changer for women-led enterprises. It may even help accelerate access to finance, markets, knowledge and innovation for a segment that until now has been largely unserved,” said Esther Marieme Dassanou, the Bank’s Manager for AFAWA.

“Digital transformation may also lift unconscious biases that added to the barriers women faced pre-Covid,” Dassanou added.

The Playbook provides seven key business dimensions for women to assess in their businesses from a digital transformation perspective: leadership & strategy, technology, cybersecurity, business processes, people, marketing & sales, and financial transactions.

The 100 Lionesses Playbook series provides practical business advice and insights delivered directly by leading African women entrepreneurs selected from the organization’s 100 Lionesses network. Experienced entrepreneurs share their proven hacks, tactics and strategies for getting things done in business. The knowledge is shared in an easy-to-read format for women entrepreneurs to apply in their own businesses.

“Women-owned businesses need to build resilience during disruptive and turbulent times, and digital transformation is key to successfully navigating these challenges. Having essential digital infrastructure in place means having the ability to stay agile, to react quickly to both opportunities and threats,” said Melanie Hawken, Lionesses of Africa Founder and CEO.

“Digital-enabled activity can drive efficiency and productivity levels and reduce operating costs whilst at the same time create tools to tap into new market opportunities,” she added.

The Digital Transformation Playbook for Africa’s Women Entrepreneurs can be downloaded here.

The fifth regular informal South and South-East Asia Forum meeting of the project “Business & Trade Connexion” – being undertaken with funding support from AustralianAid – took place virtually on a Zoom platform (due to related-COVID19 restrictions) on Friday 21st of January 2022.

 

The meeting started with some introductory remarks by Rashid S. Kaukab, CUTS International Geneva, Executive Director who welcomed the delegates, thanked them for their participation despite their busy schedules, and briefly outlined the main objectives of the meeting. He opened the floor to delegates to share their views on their priorities for the WTO this year. Delegates mentioned food security and agriculture, MC12 organization (format and timing still remain uncertain), COVID19 impacts (including on supply chains) and immediate responses, LDC graduation related issues, effective implementation of SSM, functional dispute settlement mechanism… keeping in mind LLDCs priorities in all domains.

Kyle de Klerk, Fellow, CUTS International Geneva presented a summary of the main findings of the note “The Services Sector, COVID-19, and Digitalization: Implications for Select South & South-East Asian Countries”. First, Kyle provided a brief overview of general trends of services sectors with examples from specific countries. Services contribute an average of 51.4% of GDP, and is the largest sector of SSEA countries covered under the project. Smallest contribution is in Cambodia where it is worth 38.6% of GDP, and largest in Sri Lanka where it contributes 63.3% of GDP. Other than GDP, services are also extremely important source of employment. Most recent data available shows that sector generally contracted in 2020 as a result of COVID-19 containment measures. Sector contracted an average of 3.5% other than in Bangladesh and Vietnam, where it grew by 5.2% and 0.9% respectively. Centrality of tourism for many concerned countries cannot be overstated. Particularly for Sri Lanka, Nepal, Lao, and Cambodia, where tourism contributes an average of around 70% to total services exports. Unfortunately, the tourism sector was decimated by COVID-19. Tourism arrivals in 2020 declined by around 80% and the sector lost half of its value; causing services trade deficits to widen substantially.

Then, he described recent changes to the services economy in light of the impact of COVID-19. COVID19 has accelerated the adoption and proliferation of digital services as physical service supply became impossible due to various lockdown measures and travel restrictions. Within Pakistan, 42% of services businesses reported an at-least partial transition to online platforms, while in Vietnam public E-service provision increased by 10-fold. Overall, it is estimated that COVID-19 has accelerated the digitalisation of services in Asia and the Pacific by around10 years. This growth in digital services has been fuelled by the rise of what has been termed the ‘platform economy’. However, for benefits to occur in this new economy requires that the population has access to and utilises the internet. This requires the provision of physical ICT infrastructure, something which is a major constraint to digital services development for many SS&EA countries. Cambodia and Vietnam are the only countries in this note where more than 60% of the population uses the internet. Average of 25% of population uses the internet for other countries, with clear implications for development of digital services sector. Finally, Kyle highlighted some actions which delegates can take at WTO towards overcoming these constraints and developing their domestic services sectors. First, recently ratified domestic services regulation plurilateral offers opportunity for delegates to examine its future impact, as none of the countries in this forum are signatories. Delegates could study the agreement and evaluate its impact on key services exports for similar economies. They could also monitor how implementing countries integrate agreement into their GATS schedules to ascertain what best practices may be implemented at the domestic level without joining the plurilateral. Second, ongoing E-commerce JSI negotiations could be monitored to forecast what potential impact its ratification by other members may have on domestic services, particularly relating to market access for domestic digital services exports of S&SEA countries.

The floor was then opened for discussion and feedback from participating delegates. Delegates wished a happy and healthy new year to all participants. They thanked Kyle for an elaborative and useful note as well as presentation. It was made clear that tourism sector has been badly impacted by the pandemic with substantial of economic losses. However, some services sectors seem to be recovering better than others. There is hope with the vaccination, that countries will be able to receive more tourists in the months to come. It was also mentioned that at the core of tourism is physical movement, which means that services to actually take place need physical movement. It also depends on external factors: country of origin COVID requirements + travel ease. How international cooperation may support those two factors should be explored at the multilateral level. One of the main challenges mentioned by the delegates wasthe digital divide between rural and urban areas. There is also the challenge presented by big platforms entering national markets’ actors, coupled with lack of modernized communication systems, and difficult access to Internet, which made the rise of national actors against global competitors almost impossible. Governments need to put in place competition and taxation rules to benefit from this digitalization in any case. Some important questions should be resolved: In that platform economy how LLDCs can benefit? How to ensure fair competition by those platforms? Need to have propre regulation and resolve the Issue of trust in e commerce and platforms (consumers rights for instance).

Another issue concerns the personal data consolidation, especially with tracking of COVID cases for instance. Large numbers of data are being collected, but there is uncertainty about how to convert the data and protect it. This could be discussed to analyse the impacts. They could also look at the GDPR experience of the EU.

Delegates also discussed a lack of data and study on the risks and benefits of joining the E-commerce JSI and emphasised the need for deep and comprehensive national studies in this regard. How to move to industry 4.0 taking into account digitalization and COVID, and policy actions to support how trade in services can be more digitalized were topics that were also brought up in the discussions.

In the WTO functioning there is a multilateral work programme on e-commerce, which is not mentioned in the paper by CUTS clearly enough for some participants. There is a need to work at multilateral level to revive the work programme on e-commerce and make it more effective to bridge the digital divide in the current context.

In conclusion, Rashid S. Kaukab thanked the delegates for their participation and positive feedback, and expressed his appreciation at their continued collaboration. He informed participants that the next meeting will probably be organized in early March, and more information will be communicated soon on that regard. In the meanwhile, CUTS Geneva staff will remain in touch with them bilaterally.

Cross-border e-commerce initially contracted in Uruguay because of the pandemic but started to show a pronounced recovery in mid-2020. Data on all credit and debit card purchases made abroad in the framework of the country’s franchise regime revealed that it decreased significantly between January and May 2020.[1] The aggregate annualized value of these purchases from Uruguay dropped 5.9% over this period. However, in June 2020, online purchases abroad grew around 37% relative to June 2019.

What happened with cross-border e-commerce in Uruguay in the most recent 15 months? Using the same, updated detailed data, we found that (i) the recovery has continued, driven by an increase in the number of transactions made by a larger number of buyers; (ii) there has been a shift in the geographical origins towards the United States and away from China; and (iii) there has been a stronger trend to substitute electronics for apparel.

Cross-Border e-commerce grew significantly in terms of values, shipments, and buyers

Uruguay’s cross-border e-commerce has expanded substantially since mid-2020. Annual online purchases abroad grew about 42% between May 2020 and September 2021 to reach US$ 82 million. In terms of weight, the growth was around 40% over the same period and the total topped almost 1.5 million kilos. These annual values were already 33% larger than those registered in February 2020, the month before the onset of the pandemic (Figure 1—left panel), and more than 200% larger than those prevailing at the end of 2014, the first full year of the regime. As a reference, standard annual imports increased 17.6% from May 2020 to September 2021.

This expansion can be primarily traced back to an increase in the annual number of transactions, whichexceeded 600,000 in all months from May to September 2021. This growth, in turn, was mainly driven by significant enlargement of the buyer base, which grew 16% since May 2020. Consequently, in September 2021, the number of buyers in Uruguay that bought online abroad in the previous 12 months was almost 350,000, which amounted to more than 12% of the country’s adult population. On average, these buyers made more purchases over one year. Although to a lesser extent, the increased average transaction size also contributed to the growth of cross-border e-commerce. The annual average shipment value rose roughly 14% between May 2020 and September 2021.[2]

Figure 1

Uruguay, January 2018-September 2021

Source: Authors’ calculations based on Uruguay’s National Customs Directorate (DNA) data.  

The left panel shows the total annual online cross-border purchase values (in 100 US$), the total annual number of cross-border transactions (purchases) (both on the primary y-axis), and the total number of cross-border online buyers (secondary y-axis). The right panel presents the average online cross-border purchase per buyer (primary y-axis) and the total annual number of cross-border online buyers (secondary y-axis).

Changes in source countries and sourced products

The increase in the average purchase value per buyer was associated with a shift in e-commerce geographical patterns. The percentage share of the United States as a source country increased 2.3 percentage points in terms of value and 11 percentage points in terms of the number of transactions since May 2020 to account for 97.5% and 95% of the respective totals in September 2021. In contrast, the percentage shares of China decreased by 1.5 and 7.7 percentage points over the same period, respectively. As a result, this country was responsible for only 0.1% and 0.5% of the annual total value and number of transactions in September 2021, down from 2.4% and 12.0% in 2019 (Figure 2).

Figure 2

Uruguay, Annual Online Purchases, by Main Country of Origin, January 2018-September 2021

Source: Authors’ calculations based on Uruguay’s National Customs Directorate (DNA) data.

 

The figure shows the percentage share of annual total online cross-border purchase values (left panel) and the number of transactions (right panel) accounted for by the United States (primary y-axis) and China and other origins (secondary y-axis).

Consistently, already ongoing changes in sectoral patterns became more pronounced. Machines, appliances, electrical material, and their parts became relatively more important. In contrast, the opposite holds for textiles and wearing apparel, thus reinforcing the trend observed before the beginning of the pandemic. The percentage share of the former set of products reached 17.0% in terms of value and 16.6% in terms of the number of transactions in September 2021, from 15.3% and 13.8% in May 2020, respectively.[3] Conversely, textiles and wearing apparel contracted relatively, with their share falling 2.3 percentage points in terms of value and 3.1 percentage points in terms of the number of transactions, after being 22.8% and 22.9% in May 2020, respectively (Figure 3).[4]

Figure 3

Uruguay, Annual Online Purchases, by Main Product Category, January 2018-September 2021

Source: Authors’ calculations based on Uruguay’s National Customs Directorate (DNA) data.

 

The figure shows the percentage share of annual total online cross-border purchase values (left panel) and the number of transactions (right panel) accounted for by electronics, toys, and footwear (primary y-axis) and textiles and other products (secondary y-axis).

Looking ahead

Cross-border e-commerce recovered from the sharp decline experienced in the first semester of 2020. As explained, the trend to substitute electronics for apparel is likely to reflect both supply and demand factors. These are related to production and distribution constraints and to consumer behavior changes consisting of switching from more apparel-intensive business office activities to more electronics-intensive in-home activities derived from lockdowns, respectively.

This recovery was substantially faster than that of total standard imports. Thus, while both annualized total cross-border e-commerce and import values behaved similarly in the months before the pandemic, the former exceeded the respective pre-pandemic levels already in August 2020, compared to May 2021 for the latter. Interestingly, the share between the two indices, which initially increased, started to consistently decrease since May 2021 as online purchases abroad showed signs of deacceleration, and standard imports continued to expand vigorously (Figure 4). These developments naturally lead to the question of whether cross-border e-commerce can react in a more agile manner than regular trade to shocks and can be a leading indicator for the latter.

Figure 4

Uruguay, Standard Imports and Annual Online Purchases, October 2019-September 2021

Source: Authors’ calculations based on Uruguay’s National Customs Directorate (DNA) data.

 

The figure shows the evolution of annualized standard imports (black) and annualized online cross-border purchase values (red) using indices that take the value of 100 in October 2019 for both series (primary y-axis) and the share between the two indices (gray) (secondary y-axis).

In this sense, and in addition to improving contextual conditions and addressing explicit barriers to digital trade, countries in Latin America and the Caribbean (LAC) should develop and implement accurate and internationally consistent measurement strategies. They should also ensure the safe and expeditious processing of shipments through standardization of procedures, the electronic interconnection between customs and postal and logistic operators to enable advanced cargo information, and the integration of new technologies such as artificial intelligence and machine learning to allow for automation of risk management. The Inter-American Development Bank, through its Integration and Trade Sector, is providing support to LAC countries in these areas through loans, technical cooperation, and dedicated policy research projects.


[1] First established in 2012, this regime allows all adult Uruguayans (older than 18 years) to buy non-commercial merchandise abroad up to three times in a year for up US$ 200 (and 20 kilograms) each, without paying customs duties or taxes.

[2]  Given the existence of restrictions in the use of the system at the individual level, it could be expected that expansions of total cross-border e-commerce values take place primarily along the buyer extensive margin—i.e., the number of buyers. Note, however, that average annual values were below the respective thresholds, which would indicate that those restrictions were not generally binding. Still, the percentage share of individuals whose online purchases abroad reached (or exceeded) US$ 200 or 20kg within a given month increased from less than 20% in January 2018 to around 30% in September 2021.

[3] The shares were, on average, 12.7% and 11.3% during 2019, respectively.

[4] These shares were, on average, 27.3% and 27.9% over 2019.

An overview of recent Aid for Trade activities was given by WTO members, international financial institutions and observer organisations at a session of the Committee on Trade and Development on 8 February dedicated to the Aid for Trade initiative. A workshop organized by the Committee on 7 February explored how the COVID-19 pandemic has accelerated the shift towards the digital economy and the constraints that developing countries face.

 

The WTO Secretariat updated the Committee on the ongoing Aid for Trade monitoring and evaluation exercise that will underpin this year’s Aid for Trade Global Review(1).

The WTO-led Aid for Trade Initiative encourages developing country governments and donors to recognize the role that trade can play in meeting countries’ development objectives. The initiative also encourages action to address the trade-related constraints identified by developing and least-developed countries (LDCs).

China provided an update on its technical assistance and investment cooperation activities, highlighting that it has distributed close to 2 billion doses of COVID-19 vaccines globally. It is currently assisting 20 countries build domestic vaccine production capacity. Members’ attention was also drawn to the Tenth China Roundtable, held virtually in January 2022.

The Republic of Korea gave a rundown of its programmes to build trade-related capacities in developing countries. These include the country’s collaboration on the latest phase of the NTF V programme aimed at helping African micro, small and medium-sized enterprises (MSMEs) in the field of digital technology and agribusiness nurture business opportunities. It also announced a scaling up of its contributions to several trust funds, including the WTO Chairs Programme.

Russia underlined the funding it provided through United Nations bodies to help developing countries meet their development objectives. In particular, it drew attention to the second Russia-Africa Summit — scheduled for October-November 2022 in Addis Ababa, Ethiopia — which aims to increase trade flows between Russia and the African continent.

The United States highlighted the PROSPER Africa Initiative, which seeks to leverage private capital, promote trade between the US and African businesses, and support implementation of the African Continental Free Trade Area. Since 2019, it has established over 60 partnerships, administered over USD 62 million in grants, and facilitated over USD 600 million worth of exports.

Tajikistan outlined its efforts to expand exports and facilitate trade and investment, notably through the implementation of the WTO’s Trade Facilitation Agreement. In April 2019, Tajikistan launched a national Trade Portal in connection with the Global Trade Help Desk to provide a single-entry point for information on trade flows and tariff regulatory requirements.

International financial institutions provided reports on resource mobilisation and Aid-for-Trade related activities.

The Asian Development Bank (ADB) noted that trade was picking up in Asia, amidst a scaling up of the COVID-19 vaccine roll-out. Developing Asian countries are expected to sustain their rebound, with regional projections of growth of 7 per cent in 2021 and 5.3 per cent in 2022. ADB provides loans, grants and technical assistance to its developing country members, including for the roll-out of COVID-19 vaccination campaigns.

The Enhanced Integrated Framework presented an overview of projects aimed at addressing the trade priorities in LDCs. In Timor Leste, a project is currently underway to support tourism, economic recovery and women’s economic empowerment. A technology needs assessment was started in Lao PDR and Senegal to maximise the impact of technology and foster structural transformations.

The Organisation for Economic Co-operation and Development (OECD) highlighted its “Peer Learning event on Aid for Trade” held in December 2021. The event highlighted the importance of reinforcing Aid-for-Trade capacity-building projects to help developing countries tap into the opportunities for sustainable growth that the economic recovery brings.

The Islamic Trade Finance Corporation (ITFC) presented its initiatives to increase trade opportunities for its member countries. It highlighted that an ITFC programme to harmonize standards for pharmaceutical and medical devices in Africa was recently launched under the aegis of the “Arab-Africa Foreign Trade Bridge”. The Bank also noted its involvement in the SheTrades initiative of the International Trade Centre.

The Standards and Trade Development Facility (STDF) provided an overview of its “Guide of Good Regulatory Practices” launched in November 2021. The Guide seeks to ensure that sanitary and phytosanitary measures are fit for purpose and do not create unnecessary trade barriers. A project is underway to assess virtual food inspection and audits in collaboration with the United Nations Industrial Development Organization, as well as a gender assessment aimed at making recommendations on gender equality and women’s empowerment in developing countries.

The World Bank‘s latest Global Economic Prospects outlined some of the challenges that developing countries face in their economic recovery from the COVID-19 pandemic. The report noted that these challenges could be mitigated through policies targeting rapid and equitable COVID-19 vaccine distribution, climate change mitigation and the strengthening of global cooperation — including on trade governance.

The International Trade Centre presented its Strategic Plan 2022–2025, which outlined how it will support developing countries in making their economies more inclusive, sustainable and prosperous through trade. The focus will be on enhancing the competitiveness of MSMEs.

Find out more about the Aid for Trade initiative here.

The workshop on “Digital Connectivity and Economic Diversification” explored the trade opportunities that digitalization brings to the information and communications technologies (ICT) sector, as well as for goods and services, and parcel trade in particular. OECD research suggests that a 10 per cent increase in digital connectivity comes with a 4 per cent increase in parcel trade.

While the COVID-19 pandemic spurred growth in the global trade of ICT goods — which grew 4 per cent year on year between 2019 and 2020 to reach USD 2.3 trillion — UNCTAD research suggests it favoured existing developing Asian exporters. Growth in digitally deliverable services was more balanced across countries, although measurement issues continue to pose problems to accurately track trade flows.

The affordability of digital connectivity is a major obstacle identified by the World Bank. Digital systems are also an integral part of clean energy transition and underlined in the nationally determined priorities of many countries.

E-government services and social media have helped drive Madagascar‘s digital connectivity, with support from donors, particularly in the area of ICT skills. Madagascar’s economy was hit hard by the tropical storm Ana and the tropical cyclone Batsirai, in addition to the COVID-19 pandemic, while the government was already looking to address shortcomings in access to energy and to update regulatory frameworks for digital trade.

The European Union noted that support for digital connectivity has become more prominent in its Aid-for-Trade programming and would be further strengthened through the roll out of the Digital for Development (D4D) Hub. Supporting digital connectivity is also a key objective of the ADB future programming up to 2030, and a focus area for ADB’s knowledge products.

Copies of all presentations and a recording of the workshop can be found here.

  1. The dates of the Aid for Trade Global Review are under consideration. back to text

When COVID-19 hit, governments rushed to provide financial relief to citizens, often using digital channels to do so. At the same time, social distancing forced people to find alternatives to cash and face-to-face shopping. These shifts fueled speculation that the pandemic would create an overall rise in digital financial inclusion.

A new study by the World Bank measures how the pandemic changed the way people make merchant payments in Latin America and the Caribbean (LAC). We estimate that 11% of adults in LAC – roughly 50 million people – took up digital in-store merchant payments during the pandemic’s first year , with the share of new digital adopters ranging from about 15 % of adults in Argentina and Costa Rica to about half as many in El Salvador and Jamaica (Figure 1).

Figure 1: In LAC, 50 million adults adopted digital merchant payments for the first time during COVID-19

Share of adults who used a card, mobile phone, or the internet in a store for the first time in 2020

Share of adults who used a card, mobile phone, or the internet in a store for the first time in 2020

 

Our estimates are based on nationally-representative surveys with 14,000 adults conducted in 14 LAC economies in 2020. In Mexico and Argentina, we were able to gather more detailed data on a broader range of digital payment use cases – these results will be discussed further in a forthcoming blog post. The surveys were administered by Gallup, Inc in association with the Gallup World Poll survey and in coordination with the Global Findex team.

We provide fresh numbers on how many adults overall use digital merchant payments—whether in-store or online. We define digital merchant payments as using a card, mobile phone, or the internet to make a purchase online or in-store. The data suggests that about 4 in 10 adults regionally use such payments. The use of digital merchant payments varies from fewer than 20 % of adults in Nicaragua and El Salvador to more than 45 % in Argentina, Brazil, Costa Rica and Venezuela (Figure 2). The results also show inequalities, with higher use of digital merchant payments among men and the wealthy compared to women and the poor. 

Figure 2: Use of digital merchant payments varies across LAC region

Share of adults who made an online or in-store digital payment in 2020

Share of adults who made an online or in-store digital payment in 2020

The spread of digital financial services during the pandemic is welcome news. Digital financial systems help alleviate poverty by increasing the speed, security, and transparency of transactions.  They create space for development of sustainable financial products that can cater to low-income and vulnerable groups by removing barriers such as lack of identification, formal income, and geographical distance.

Of course, the rapid spread of digital financial services also increases the risks of fraud and abuse. Consumer protections—and effective product design—are vital as previously unbanked adults join the formal financial system for the first time. 

But the recent move toward digital payments may turn out to be temporary. Research finds that epidemics increase the likelihood of individuals transacting via the internet, mobile bank accounts, and ATMs—but these shifts tend to be short-term rather than persistent over time, and digital uptake tends to be highest among young, relatively wealthy earners. And our own survey shows that about 1 in 2 digital merchant payments users would rather transact in cash (Figure 3).

Figure 3: About half of new digital adopters want to return to cash

Share of adults who used a card, mobile phone, or the internet to make a payment in a store for the first time in 2020

Share of adults who used a card, mobile phone, or the internet to make a payment in a store for the first time in 2020

It’s too early to make sweeping statements about how the pandemic has impacted digital financial services. For now, we only have data on Latin America and the Caribbean and Europe and Central Asia. We will publish in June the next Global Findex database, which will have a more extensive set of questions, and cover all developing regions. Plus see more detailed analysis from Argentina and Mexico in our upcoming blog post. Click here to see the new data and read our policy note.

 

International cooperation on the science, technology and innovation frontiers can fast-track sustainable development progress after the COVID-19 crisis, experts say.

The coronavirus pandemic has compelled leaders, policymakers and everyday people to think carefully about what makes healthy and resilient communities.

At the same time, it has prompted a rethink of how to address other pre-pandemic catastrophes, such as climate change, food insecurity and social inequality.

To address these challenges, the UN Commission on Science and Technology for Development (CSTD) will examine how to make science and technology work for all, at its inter-sessional panel for 2020-2021, slated for 18 to 22 January.

During the event, experts will examine two key issues. The first focuses on health and how science, technology and innovation can be used to close the gap on SDG3 for health and wellbeing. The second explores the prospects of blockchain for sustainable development.

International collaboration 

Since the outbreak of COVID-19, scientists in many countries have largely collaborated under the principle of ‘open science’ – where knowledge, methods, data and evidence are made freely available and accessible to everyone.

Collaborative arrangements of open science, especially the mapping of the virus’s genome, helped in the development of the COVID-19 vaccines being administered in various countries.

“In the same way that the development of the vaccines greatly benefited from scientists collaborating in unity for a common cause, governments must also unite in solidarity to ensure that everyone, especially the poorest, gain access to the vaccines,” said Shamika N. Sirimanne, UNCTAD’s director of technology and logistics.

Ms. Sirimanne, who also heads the CSTD secretariat, said international collaboration in scientific research can play a critical role in improving health, equity and sustainable development.

She said the need for countries to come together and share their experiences and lessons learned is no less critical in dealing with emerging issues in the digital age.

“Just as the pandemic sees no borders, digital technologies also transcend national jurisdictions,” she added, emphasizing the importance of the CSTD sessions in helping share lessons in scientific approaches and policy thinking.

The UN and the international community have an important role in shaping global norms and frameworks on frontier technologies.

“It’s important for the international community to better understand the risk-reward tradeoffs,” Ms. Sirimanne said, whether this is for the implementation of blockchain technology in consumer services, or using artificial intelligence, gene editing, and other new and emerging innovations in healthcare.

Avoiding unintended consequences

Digital technologies in health can generate several unplanned risks, with implications for the resilience of social, cultural and political institutions.

These need to be tempered and controlled for as far as possible, according to experts.

For example, “infodemics”, the overabundance of inaccurate health information online, can make it difficult to access trustworthy and reliable guidance on the COVID-19 pandemic.

An area where there is increasing risk is in digital technologies such as blockchain. A widely known application of blockchain technology is cryptocurrency – Bitcoin being the most prominent.

The value of Bitcoin reached an all-time high, by topping the $40,000 mark, during the first week of 2021, only to plummet by more than 20% the following week.

While cryptocurrency has remarkable potential to ensure financial inclusion for marginalized people, there is a growing need to prevent systemic risk from speculative activities that create asset bubbles.

For example, if investors accumulate debt to purchase large sums of cryptocurrency using fiat money (i.e. the US dollar or euro), and there is a devaluation in the exchange rate – as is currently evident – this could lead to payment defaults in the respective fiat currency, potentially leading to personal financial ruin.

“Yet the absence of an international effort for regulating blockchain in financial markets is a serious concern, given the transnational nature of both global finance and digital technologies,” Ms. Sirimanne said. “We need to leverage benefits, but guard against negative impacts.”

The CSTD offers member States a platform to explore ways of strengthening the science-policy interface at the national and global levels and better coordinate STI-focused international cooperation in the spirit of multilateralism.

The CSTD inter-sessional panel will also review progress made in the implementation of and follow-up to the outcomes of the World Summit on the Information Society (WSIS) at the regional and international levels.

These deliberations by experts will then be taken up at the ministerial level during the annual session of the CSTD, scheduled for 17 to 21 May 2021.

Today’s ASEAN Insight episode with Dr Lurong Chen, Senior Economist at ERIA, focuses on Digitalisation in ASEAN and the important role it plays in the region’s economic recovery after the pandemic, especially in terms of supply chains and global value chains. Dr Chen discusses both the risks and benefits of the digital economy for the region including what ASEAN can do to accelerate digitalisation.

Listen to the Podcast on Spotify

Listen to the Podcast on Apple Podcasts

Related Links

1. Dr Lurong Chen’s policy brief ‘Digital Asia: Facing Challenges from GVCs Digitalisation, US—China Decoupling, and the COVID-19 Pandemic

2. Dr Lurong Chen speaks in RIETI’s webinar ‘How will East Asia’s Digital Transformation Change the Global Value Chain?

3. ‘Digital Asia: Responding to Challenges from GVCs Digitalization, US-China Decoupling & the Covid-19 Pandemic‘ by Dr Lurong Chen in Japan Economic Foundation’s Japan SPOTLIGHT.

Some 2.9 billion people still have never used the internet, and 96 per cent live in developing countries, a new UN report has found. According to the International Telecommunication Union (ITU), the estimated number of people who have gone online this year actually went up, to 4.9 billion, partially because of a “COVID connectivity boost”.

This is good news for global development, but ITU said that people’s ability to connect remains profoundly unequal – as many hundreds of millions might only go online infrequently, using shared devices or facing connection speeds that hamper their internet use.

“While almost two-thirds of the world’s population is now online, there is a lot more to do to get everyone connected to the Internet,” Houlin Zhao, ITU Secretary-General said.

“ITU will work with all parties to make sure that the building blocks are in place to connect the remaining 2.9 billion. We are determined to ensure no one will be left behind.”

‘Connectivity boost’

The UN agency’s report found that the unusually sharp rise in the number of people online suggests that measures taken during the pandemic contributed to the “COVID connectivity boost.”

There were an estimated 782 million additional people who went online since 2019, an increase of 17 per cent due to measures such as lockdowns, school closures and the need to access services like remote banking.

Uneven growth 

According to the document, users globally grew by more than 10 per cent in the first year of the COVID crisis, which was the largest annual increase in a decade. But it pointed out that growth has been uneven.

Internet access is often unaffordable in poorer nations and almost three-quarters of people have never been online in the 46 least-developed countries.

A ‘connectivity Grand Canyon’

Speaking in Geneva, Doreen Bogdan-Martin, Director of the ITU said: “The internet divide runs deep between developed and developing countries. Only a third of the population in Africa is using the internet.

“In Europe, the shares are almost 90 per cent, which is the gap between those two regions of almost 60 percentage points. And there is what the UN Secretary-General António Guterres, has called in his Common Agenda blueprint for the future, “a connectivity Grand Canyon”.

‘Digitally excluded’

The report found that younger people, men and urban dwellers are more likely to use the Internet than older adults, women and those in rural areas, with the gender gap more pronounced in developing nations.

Poverty, illiteracy, limited electricity access and a lack of digital skills continued to hinder “digitally excluded” communities, ITU noted.

Subscribe to our Newsletter

Contact Us