Covid-19 News

ICAO

The numbers that are shared in the article below reflect the numbers in August 2021. The analysis of the economic and aviation indicators we share here reflect the continuing impact of COVID-19 on this industry.

 

The air transport industry is not only a vital engine of global socio-economic growth, but it is also of vital importance as a catalyst for economic development. Not only does the industry create direct and indirect employment and support tourism and local businesses, but it also stimulates foreign investment and international trade.

Informed decision-making is the foundation upon which successful businesses are built. In a fast-growing industry like aviation, planners and investors require the most comprehensive, up-to-date, and reliable data. ICAO’s aviation data/statistics programme provides accurate, reliable and consistent aviation data so that States, international organizations, the aviation industry, tourism and other stakeholders can:

  • make better projections;
  • control costs and risks;
  • improve business valuations; and
  • benchmark performance.

The UN recognized ICAO as the central agency responsible for the collection, analysis, publication, standardization, improvement and dissemination of statistics pertaining to civil aviation. Because of its status as a UN specialized agency, ICAO remains independent from outside influences and is committed to consistently offering comprehensive and objective data. Every month ICAO produces this Air Transport Monitor, a monthly snapshot and analysis of the economic and aviation indicators.


ECONOMIC DEVELOPMENT – October 2021

World Results and Analyses for August 2021

Total Scheduled Services (Domestic and International)

Passenger traffic

Revenue Passenger-Kilometres   –   RPK

World passenger traffic fell by -56.0% in August 2021 (compared to 2019), -2.9 percentage points down from the decline in the previous month. This deterioration was mainly attributed to the weakening in domestic markets, and particularly Chinese domestic travel, which plunged dramatically due to the new outbreaks and the more stringent travel restrictions. Some other major domestic markets also worsened. International travel, however, continued to improve in most of the regions, except for Asia/Pacific, where restrictions remain stricter than others.


International Traffic vs. Tourist Arrivals

International passenger numbers fell by -63.6% in August 2021 (compared to 2019), +4.2 percentage points up from the decline in the previous month. Easing travel restrictions and progress with vaccinations has supported the continued improvements in international travel. The significant rebound was recorded by intra-European travel.

The international tourist arrivals also picked up and followed a similar trend as international passenger traffic.


Capacity

Available Seat-Kilometres   –   ASK

Capacity worldwide fell by -46.2% in August 2021 (compared to 2019), down -1.0 percentage points from the decline in the previous month (-45.2%). With signs of travel rebound towards the end of August, capacity is expected to increase moderately in September 2021 to -43.2% down from the 2019 levels.


Load Factor  

The passenger load factor reached 70.0% in August 2021, -3.1 percentage points lower than the previous month. Worsened domestic travel also resulted in a lower domestic load factor. As the recovery of capacity was faster than travel demand recovery, the August LF remained significantly below 2019 levels at -15.7 percentage points lower.


Freight Traffic

Freight Tonne-Kilometres  – FTK

World freight traffic reported a growth of +7.7% in August 2021 (compared to 2019)-0.9 percentage points lower than the growth in the previous month. The softening in air cargo growth reflected the slower expansion in export and manufacturing production. Nevertheless, the global demand for goods is expected to be supportive for air cargo growth in the coming months. Africa continued to outperform other regions, surpassing the 2019 levels at over +30%, albeit with the smallest share of world cargo traffic. North America and Middle East also rose double-digitally, while growth for Europe and Asia/Pacific airlines remained moderate. Latin America/Caribbean, the region with the second smallest share of world air cargo traffic, continued to be the only region posting contraction from 2019 levels.


Top 15 Airports (Ranked by aircraft departures, passengers, and volume of freight)

Note: Figures include total scheduled and non-scheduled services

July 2021:  -11.9%, -28.0%, and +12.4% (vs. 2019) in terms of aircraft departures, passengers and freight for the Top 15

In terms of aircraft departures, the Top 15 airports reported a combined fall of -11.9%, compared to 2019. The Top 15 list remained dominated by US airports. Three airports, PhoenixAnchorage and Salt Lake city, posted increases compared to 2019, albeit at a modest rate. Chicago remained 1st with a decline of -16.8%. Amsterdam and Istanbul also ranked within the Top 15.

In terms of passengers, the Top 15 airports posted a total fall of -28.0%, compared to 2019. Unlike the previous months, the list is dominated by US and European airports. For the first time, both Istanbul and Antalya in Turkey ranked within Top 15. AmsterdamParis and Frankfurt, also re-appeared in Top 15 after over a year. Atlanta remained at 1st with a decline of -23.5%.

In terms of freight, the Top 15 airports reported an increase of +12.4%, compared to 2019. Hong Kong retained the 1st position with a solid growth of +12.6%. Several airports grew double-digitally, with Anchorage and Taipei recording the strongest increase by +41.8% and +31.1%, respectively. Dubai continued to post the largest contraction at -6.4%.


Top 15 Airline Groups (Ranked by RPK)

August 2021: 47.0% (vs. 2019) in terms of RPK for the Top 15

In terms of RPK, the Top 15 airline groups accounted for 53.4% of the world’s total RPK in August 2021 and declined by –47.0% compared to 2019This decline was 6.1 percentage points smaller than the fall in world’s average RPK.

Two major factors affected significantly the August rankings. On one side, the Chinese domestic travel fell drastically impacted by the renewed outbreaks; on the other side, international travel in Europe picked up rapidly.

US airlines retained the Top 4 positions wit American ranked 1st followed by DeltaUnited and SouthwestJetblue Airways also ranked in the Top 15 supported by solid domestic demand. Among all Top 15 airlines, Southwest posted the smallest decline compared to 2019 levels.

Chinese domestic travel demand worsened again with far worse deterioration than the previous ones, and all Chinese airlines experienced a drastic fall in traffic. As a result, only China Southern and Air China ranked within Top15, at merely 12th and 15th.

Supported by the pick up of intra-European travel, airlines in Europe moved up their rankings after the US airlines from 5th to 10th. Lufthansa and AF-KLM improved 4 and 2 positions to 5th and 6th, respectively.

Qatar Airways and Emirates ranked 11th and 14th, with the latter recording the largest contraction from 2019 levels.


Worldwide capacity contracted by -46.2% in August 2021, compared to 2019This indicated a slight deterioration from July, due to the capacity cut in Asia/Pacific, mainly in the Chinese domestic market. All other regions posted a smaller fall in capacity, with the strongest improvements in Europe the Middle East, mostly owing to the expansion in international capacity.


Acronyms: ACI: Airports Council International; ASK: Available Seat-Kilometres; IATA: International Air Transport Association; FTK: Freight Tonne-Kilometres; LF: Passenger Load Factor; OAG: Official Airline Guide; RPK: Revenue Passenger-Kilometres; UNWTO: World Tourism Organization; YoY: Year-on-year; YTD: Year-to-date.

ERIA

The Digital Creative Economy offers significant economic growth opportunities for ASEAN. The creative economy is related to a broad range of industries: from culture to food, entertainment, textiles and crafts, fashion and beauty or tourism. These sectors were already growing pre-pandemic, thanks to a booming digital economy and growing generations of millennials and generation Z consumers who value experiences. Especially in countries such as Indonesia, the Philippines, Thailand, Malaysia, or Singapore were governments developed dedicated strategies or national agencies to support the creative economy. A famous example in Asia of a country that has successfully developed its creative economy is the Republic of Korea (ROK), where the so-called ‘Korea wave’, now an established global phenomenon, is estimated to have contributed to the economy by over 10 billion USD between 2004 and 2015. Investments and partnership in the production of creative digital content between ROK and ASEAN are emerging, and these can contribute further to the development on the ASEAN creative economy.

The ASEAN Creative Economy Business Forum (ACEBF) was organised in Bali on the 17-18 of November 2021 by the Indonesian Ministry of Foreign Affairs in collaboration with the Ministry of Tourism and Creative Economy. The forum had the goal to bring together stakeholders of the creative economy, to exchange views on the possible contribution to build an inclusive creative economy ecosystem that can support the post-pandemic recovery, as mentioned by H. E. Sidharto Suryodipuro, Director General for ASEAN Cooperation, Indonesian Ministry of Foreign Affairs in his introduction.

The event was opened by Minister of Tourism and the Creative Economy, Sandiaga Salahuddin Uno, who highlighted the potential for the creative economy to grow and flourish in Indonesia and ASEAN.

During the panel discussion H. E. Satvinder Singh, Deputy Secretary-General of ASEAN discussed the contribution that the digital and creative economy can make to the post-pandemic recovery. He highlighted the great cultural richness of ASEAN and the fact that a large share of women is employed by the creative economy sector, which can be a driver of a more inclusive recovery.

Dr Giulia Ajmone Marsa, ERIA Director for Strategy and Partnership, explained the link between the digital and creative economy and the emergence of innovation ecosystems across ASEAN. She discussed the importance to couple STEM (science, technology, engineering, and mathematics) skills with continuous learning, team-working, inter-disciplinarity to develop a workforce that can thrive in the digital economy. She also mentioned emerging trends that are likely to shape innovation ecosystem across ASEAN in the years to come, including growing cross-border entrepreneurship, sustainability-driven innovation, and a growing number of social enterprises (those companies that not only want to be profitable but also find solutions to social problems).

Mr Ruben Hattari, Netflix Southeast Asia Director of Public Policy, described recent initiatives of the company and the great potential of investing in ASEAN. Recently Asian creative content has been successful globally and increasingly productions from individual ASEAN countries are becoming hits across the region. Netflix also works and collaborates with local governments and policy makers to support the tourism industry, heavily hit by the pandemic, by developing ad hoc content that can make touristic locations visible to a broader audience.

UNCTAD

ICT services grew to almost 14% of total services’ exports worldwide in 2020, while the long-term upward trend in digitally deliverable services trade rapidly accelerated.

COVID-19 has provided a strong impetus for businesses and individuals to adopt digital tools, helping to drive a 6% increase in worldwide exports of ICT services, according to an UNCTAD technical note on the pandemic’s impact on trade in the digital economy, published on 21 October.

The value of ICT services’ exports worldwide reached $676 billion in 2020 as the usage of communications services, computer services and software were boosted by the lockdown restrictions implemented in many economies.

This took digitally deliverable services to nearly 64% of total services exports, as they contracted relatively little against the backdrop of an unprecedented decline in total services trade.

However, while these shares increased across all regions, the pandemic-related acceleration in digitalization risks further exacerbating digital divides, with least developed countries (LDCs) being left further behind.

“Low levels of digitalization and eTrade readiness are hampering the ability of LDCs to engage in digital trade at a moment when it has suddenly become even more important,” said Shamika N. Sirimanne, UNCTAD director of technology and logistics. “It underscores the need to boost the capabilities of those trailing in digital readiness to catch up in the digital economy.”

UNCTAD offers a range of technical assistance and capacity-building to support countries in engaging with and measuring their performance related to e‑commerce and the digital economy.

Digital delivery gains traction

Meanwhile, exports of the wider category of digitally deliverable services – those that can be delivered remotely over ICT networks such as the internet – fell by $58 billion to a value of $3.17 trillion worldwide.

Nevertheless, digital technologies appear to have played an important role in supporting broader international trade and economic activity in 2020.

While total services exports declined by 20% (an unprecedented drop since records began in 1990), worldwide exports of digitally deliverable services fell by only 1.8%. This reflects an increasing reliance on digital delivery to continue services’ trade despite restrictions on movement implemented due to the pandemic.

With ICT services exports increasing and digitally deliverable services exports holding relatively steady in 2020, their share in the greatly reduced overall services exports increased significantly across all regions.

Worldwide, digitally deliverable services went from below 52% of services exports in 2019 to almost 64% in 2020, while ICT services grew from 10% to almost 14%, a marked acceleration of the long-term trend (as shown in the chart below).

Regions fared differently within this overarching picture, however. While the export share of digitally deliverable services increased in all regions and there was a 14-percentage point increase across developing regions, the increase was only 10 percentage points in Africa and 6 percentage points in LDCs.

ICT services’ export share increased markedly less in LDCs compared to other regions – rising just 0.74 percentage points compared to 3.3 percentage points globally.

Global ICT and digitally deliverable services exports, 2005-2020 and 2019-2020 As a percentage of total services exports

Global ICT and digitally deliverable services exports

Source: UNCTAD based on UNCTAD digital economy statistics (unctadstat.unctad.org).
Note: ICT services unavailable for “Developing regions (M49)” and “Asia and Oceania”.

WCO

In many countries, statistics show a strong uptake of online sales and a big increase in the market share of online as opposed to offline retail since the start of the pandemic. In COVID-19 and e-commerce: a global review, the United Nations Conference on Trade and Development reported that Latin America’s online marketplace Mercado Libre, for example, sold twice as many items per day in the second quarter of 2020 as during the same period in the previous year; African e-commerce platform Jumia reported a 50% jump in transactions during the first six months of 2020.

The three members of the Global Express Association (DHL, FedEx and UPS) have also seen a massive increase in the volumes of non-document shipments they carry.  During the first wave of the pandemic – February to June 2020 – their volumes grew by 50%. Part of this increase was medical equipment (PPEs, masks, etc.), but a substantial proportion was made up of other types of items.

Consumers went online – many millions of them for the first time – because they could not go out to the shop round the corner. Some observers believe that many will return to the shops when they re-open, but many will continue to shop online. In other words, the volumes of shipments of goods purchased online will stay strong during the recovery from the pandemic.

It is more difficult to find data on international online sales, but here as well, volumes are reported to be increasing. When the COVID-19 outbreak became global early in 2020, initial uncertainty and transport disruption caused a dip in international online sales, but according to cross-border e-commerce solution provider eShopWorld, they rebounded in April 2020 and then rose to unprecedented levels throughout the course of 2020.

It has in fact been pointed out that facilitating cross-border e-commerce could help with the economic recovery, provided there is due emphasis on the need to ensure that the smallest traders can avail themselves of the export opportunities this brings.

Many countries have established thresholds below which no duties and taxes are levied and only minimal information is required to be provided when a consignment enters a country. While the value of this threshold varies a lot, in most countries the exponential increase in the sale of physical products online translates into an increasing number of “low-value” shipments crossing a border. Controlling this particular flow of goods to prevent the movement of prohibited and restricted goods, and identify consignments which have been split and/or undervalued to evade duties and taxes, presents a number of challenges.

The pressing issue is how to manage this time-sensitive flow of goods without placing a strain on control operations and on the capacity of logistics service providers, and without creating complex procedures and a heavy workload for small businesses and individuals who have limited capacity to meet complex trade regulations.

WCO STANDARDS AND GUIDANCE MATERIAL

To address this issue, WCO Members have been working through a multi-stakeholder Working Group on E-Commerce (WGEC)[1] on the development of international norms and guidance material, which have been brought together in an E-Commerce Package including not only a Framework of Standards on cross-border e-commerce (E-Commerce FoS), but also many tools to support its implementation.

The Framework provides 15 baseline global standards with a focus on the exchange of advance electronic data (AED) for effective risk management. It also encourages the use of the Authorized Economic Operator (AEO) concept, non-intrusive inspection (NII) equipment, data analytics, and other cutting-edge technologies to support safe, secure and sustainable cross-border e-commerce.

Now is the time for implementation, and a broad capacity building action plan which will guide the WCO Secretariat’s activities in the coming months has recently been added to the Package, along with key performance indicators (KPIs) which will make it possible to monitor the implementation of the WCO standards and identify capacity building needs.

In January 2021, the Secretariat started rolling out regional workshops to ensure that all WCO Members had a good knowledge of the Package; these workshops included representatives of the Universal Postal Union (UPU), the Organisation for Economic Co-operation and Development (OECD), the Global Express Association (GEA) and e-commerce stakeholders.

As a next step, in 2022 national workshops will be planned for administrations that have notified their intention to implement the E-Commerce FoS, completed an assessment using the WCO KPIs and made an official request to the Secretariat. The Secretariat has already accredited 11 Technical and Operational Advisers on E-Commerce so it can respond positively to such requests for assistance.

MAIN CHALLENGES AND TOPICS DISCUSSED

Areas posing specific challenges were identified during the regional workshops. They include the collection of electronic advance information on e-commerce shipments, the improvement of compliance and data quality, the simplification of duty and tax payment procedures which are often too complex, and the strengthening of risk analysis capacities. The topics discussed included expanding the concept of Authorized Economic Operator (AEO) to include e-commerce stakeholders, the use of advanced technologies, and cooperation with stakeholders such as marketplaces, fulfilment centers and free zones/warehouses.

GOVERNMENTS AND BUSINESS NEED TO MEET THIS CHALLENGE TOGETHER

In the same spirit as the regional workshops, on 28 and 29 June 2021 the Secretariat held its Second Global Conference on Cross-Border E-Commerce, thanks to the financial support of the Customs Cooperation Fund of Japan. Some speakers highlighted the tremendous degree of dynamism and also the variety observed in countries nowadays in the area of cross-border e-commerce approaches, legislation and capacity; for example, the ability to analyse data for risk assessment purposes varies a lot between national agencies and countries. Moreover, while the underlying technology enabling data exchange may be similar in terms of its fundamental logic, the requirements differ from one administration to another.

One of the objectives of the workshops and the Conferences has been to enable Customs to share processes and procedures, as well as to better understand the e-commerce “ecosystem” and its business models. Other forums also exist at the national level, with more and more Customs administrations creating working groups with e-commerce stakeholders as they review their legal and operational frameworks. At a higher level, companies have started building their own cooperation frameworks with some governments in order to explore new policies and rules in support of trade.

DOSSIER CONTENTS

For the “Dossier” in this Edition, we have invited several administrations to share information on the initiatives they are taking to enhance their capacity to control the compliance of “low value” shipments.

We start with an article by Argentina Customs, explaining how the Administration is reviewing its legal, policy and operational framework to ensure it is aligned with the WCO E-Commerce FoS and other WCO guidance material. The article does not describe the procedures in place to process the flows of goods generated by online sales in Argentina, but interested readers can consult the WCO Compendium of Case Studies on E-Commerce to which Argentina Customs contributed. Instead, the article focuses on the various steps of the review process.

This is followed by an article by United States Customs and Border Protection about two test programmes it recently conducted to assess the possibility of collecting certain advance data related to shipments potentially eligible for release under its de minimis entry process, and to implement a new entry process for such shipments.

Next, the use of three types of technology to enhance targeting capacities is described in an article by the Korea Customs Service. These technologies are blockchain, artificial intelligence and big data. The Administration also shares some interesting lessons, highlighting the fact that successful technology-focused projects aim to find solutions to actual issues faced by operational officers, and that teamwork between ICT and Customs experts is critical.

The last article introduces Peru Customs’ new clearance process for express shipments, as well as the web platform and mobile application it has developed to enable importers to track the status of their shipments and pay duties and taxes at authorized banking institutions. Not only has the new process enabled the Administration to improve its risk management procedures, it has also significantly reduced the time required for the release of goods.

Even if every country’s situation is unique, I believe that it is still important to ensure experiences are shared and initiatives explained. More and more Customs administrations are looking at how to review or enhance their legal and operational frameworks in line with WCO standards and guidance tools. I warmly encourage them to contact us should they wish to communicate on their eff

[1] The Working Group comprised representatives from governments, the private sector, international organizations, E-Commerce stakeholders, and academia.

UNCDF

As the pandemic underlines our vital use of technology, the UNCDF Inclusive Digital Economy Scorecard (IDES) allows decision makers to set priorities for the digital transformation of their economies. Eight countries across the world have already started using this scorecard as way to identify gaps and opportunities. These insights feed the agenda setting and reveal pathways that can lead to the enhancement of digital economies. During today’s United Nations Capital Development Fund (UNCDF) side-event at the UN General Assembly, representatives of Burkina Faso, Nepal, Solomon Islands and Uganda explain how the scorecard helps in recognizing national priorities to ensure an inclusive digital transformation.

Data collected on how countries score on the building blocks of a digital economy are now made available through an interactive map. This map, that showcases the digital inclusiveness scores of 25 countries, allows users to deep-dive into country specific data and explore results on policy and regulations already in place, the status of mobile and digital payment infrastructure, the development of the innovation ecosystem and the participation of the public and private sector in digital and financial skills development.

IDES as a tool to safeguard narrowing digital divide
As the pandemic has fundamentally reshaped the role of technology in our day to day lives, there is a growing concern that the world’s 46 least developed countries (LDCs) might be left behind. During the COVID-19 response, many LDCs were not able to pivot their economies and education systems online and marginalized populations like women, youth, migrants, people with disabilities and smallholder farmers suffered and are still suffering the most. The IDES provides policy makers with a tool ensuring this digital divide decreases.

Preeti Sinha, Executive Secretary, UNCDF, puts forward that;
“We need tools that will ensure no one is excluded from the fourth industrial revolution, in the process supporting and advancing digital economies that are truly inclusive.

The IDES is an essential tool to understand where the financing gaps might be so that governments can funnel the right financing for the digital transformation, particularly when it comes to the infrastructure and the need for innovative and inclusive solutions.

I hope you will find the IDES inspiring and helpful in developing digital economies that leave no one behind.”

Visit the interactive map at ides.uncdf.org

IFC | WBG

The chaotic streets of Dhaka had gone strangely quiet. The government had imposed a national lockdown on March 26, 2020—Bangladesh’s Independence Day—ordering residents to stay indoors and shutting down public transportation. Hunkered down at a hotel with his management team, Waseem Alim was in a bind.

Alim’s business, Chaldal, had made impressive inroads delivering groceries through a web and mobile phone application. The people of Bangladesh were used to shopping at small stores and produce stalls, but they’d been warming to the idea of having fresh mangoes and other goods delivered to their door with a few swipes of their mobile phones. Flush with new financing, Chaldal had been looking to expand. Now, amid the worst pandemic in a century, nearly a third of its employees were unable to come to work because of lockdown restrictions. As firms around the country put their operations on hold, Alim was facing pressure inside the company to shut down the business.

But he couldn’t ignore a simple fact: orders for Chaldal deliveries were spiking. In fact, demand was so strong for some products that Chaldal had to ration essentials such as rice and cleaning supplies. Alim took a chance in keeping the business running, securing a permit from the government so the company’s bicycles, minivans, and motorbikes could continue making deliveries.

Chaldal’s sourcing warehouse in Dhaka.
Chaldal’s sourcing warehouse in Dhaka. Photo courtesy: Chaldal

Today, more than 18 months into the pandemic, Chaldal has more than doubled its revenues, expanding its staff from 900 to 2,600 people. Alim is considering other business lines where Chaldal can expand, such as the delivery of medicines and other necessities.

Around the world, companies like Chaldal are looking to surf a wave of accelerated digital technology adoption that business leaders and policymakers hope could transform emerging markets and developing countries. A company called Fawry is helping Egyptian shopkeepers and their customers simplify the shopping experience through electronic payments. TradeDepot is supplying tens of thousands of small-scale retailers in Africa through its digital platform. And in Argentina, a company called Affluenta is expanding its peer-to-peer lending network.

By cutting out middlemen and allowing consumers to use mobile technology, Chaldal believes it has a competitive advantage in the fragmented retail supply landscape of Bangladesh, a country of 165 million people that’s celebrating its 50th birthday this year and aspires to be an upper-middle income country in the next decade.

Chaldal staff monitor the company’s logistics system at its facility in Dhaka.
Chaldal staff monitor the company’s logistics system at its facility in Dhaka. Photo courtesy: Chaldal

“We think we can play a very big role in consolidating the customer supply chain, providing more variety and quality to our customers,” said Alim, the company’s co-founder and CEO.

Globally, as countries imposed lockdowns and companies asked their employees to work from home, internet bandwidth usage around the world grew 38 percent, according to the International Telecommunications Union. McKinsey has described the acceleration in digital adoption by companies as a “quantum leap.” The average share of customer interactions that are digital, for example, jumped to 58 percent globally in July 2020, compared with 36 percent in December 2019, according to a survey by the consulting firm. The digital drive is impacting companies in a variety of ways, from pushing assets into the cloud to exploring ways to “reshore” production, replacing factories spread around the globe with domestic plants using robotics and automation.

An inflection point for emerging economies?

In developing countries, the challenge will be to ride the technology wave in a way that helps them emerge from the pandemic stronger. In the 1990s and early 2000s, emerging markets and developing economies had been the engine of global growth. But even before the pandemic, labor productivity was slowing.

Then came COVID-19. Firms that didn’t shut down were forced into semi-hibernation, sometimes propped up by government stimulus, loose monetary policy, and financing from international financial institutions. Investment took a major hit, plunging by 10.6 percent in emerging markets and developing economies (if China is excluded)—a much deeper hole than during the Great Recession. School disruptions have interrupted learning, undermining the accumulation of human capital. Economists expect the scars of the pandemic will run deep. Now, even as some advanced economies reopen, many developing countries are being battered by fresh waves of COVID-19 cases.

Emerging markets and developing economies are expected to grow 6 percent in 2021, according to a World Bank Group forecast issued in June, but the growth forecast is notably uneven across the developing world. In updated forecasts released in July, the International Monetary Fund warned that the outlook for emerging markets is darkening compared with advanced economies, with vaccine access acting as the main fault line.

But emerging markets and developing countries could re-establish themselves as dynamic forces in the global economy—if a technological virtual circle takes hold that boosts productivity. That optimistic scenario, according to World Bank Group economists, would require vaccination campaigns to proceed smoothly and policymakers to implement business-friendly reforms, including diversifying their economies away from over-reliance on commodities and tourism, and allowing resources to be shifted to more productive parts of the economy.

The digital surge could turn out to be a major inflection point in the history of development, said William Sonneborn, senior director of disruptive technologies at IFC. The growth of remote working, for example, could open opportunities for workers in developing countries to fill the needs of companies in advanced economies, stemming the “brain drain” that has often plagued poorer nations and helping them adopt a new development model based on skilled talent, he said.

The key, he believes, will be for governments to create a regulatory and tax environment that allows entrepreneurs to flourish. “It’s really about ease of setting up businesses and creating a risk-taking culture,” said Sonneborn. “What we need is for countries to avoid the tendency to tax at the early stage, when these businesses are losing money. If they’re patient and let the business become successful, then they can institute the right policies to recoup revenues for the government.”

Prioritizing digital connectivity

Policymakers in developing countries must balance the benefits of investing in digital connectivity with urgent needs in areas such as water, electricity, and health care, said Bogolo Kenewendo, Managing Director of Kenewendo Advisory and former minister of investment, trade, and industry in Botswana. Given the fiscal constraints many governments are facing, they will likely have to use public-private partnerships and other vehicles to crowd in private capital to invest in IT infrastructure, she said.

“Just two years ago, very few major businesses and governments wanted to engage in this conversation of digitization, mainly because it wasn’t seen as a priority,” said Kenewendo, referring to countries in Africa. “COVID has given everyone a kick to transform.”

In a country like Bangladesh, ongoing development of its digital infrastructure—and the skills of its people—will be key to the country’s fortunes. Buoyed by the strength of its ready-made garment sector, Bangladesh has been a development success story in recent decades. The rate of extreme poverty, defined as an income of less than $1.90 per day, fell from 43.5 percent in 1991 to 14.3 percent in 2016. Child mortality rates are falling, life expectancy is rising, and high-school enrollment for girls is on the rise.

But COVID-19 has hit hard in the garment sector, the nation’s biggest source of foreign exchange. Nearly half the population remains vulnerable to falling back into poverty. According to a Country Private Sector Diagnostic report released by IFC and the World Bank in June, the recovery will force a reimagining of the country’s development model, which previously relied on the relatively low labor costs. It will be critical for the government to introduce a new round of reforms to strengthen and modernize the private sector, which in recent years had become increasingly concentrated and inward looking, according to the report.

More investments in digital infrastructure will be important to Bangladesh’s efforts to build a more open, competitive private sector. Large capital investments are needed to build up high-quality digital infrastructure, including fiber-optic backbone, 4G capacity and telecom towers, the report said.

Digital banking grows quickly

A digital push could spawn more successes like bKash Ltd., which has been offering mobile payment services to its customers since 2014. The service quickly proved popular in Bangladesh’s traditionally cash-based economy. Mobile money has been a key driver of financial inclusion in the country, expanding the share of the population with access to financial accounts. Initially, when opening a bKash account, new customers would visit a bKash agent who checked their identification and set up an electronic wallet. Now customers can just scan their national ID and enroll from the app directly. They can also add money to their e-wallets by depositing cash at an agent, through remittances and other payments, or by transferring money from their bank account.

Since the pandemic, accounts have only continued to grow, reaching 54 million accounts as of July 2021. The service has literally become a lifeline during the crisis. The government has been using bKash and Nagad, another mobile financial services company, to distribute social safety-net allowances. bKash, a subsidiary of BRAC Bank Ltd., launched in 2010 and received a $10 million investment from IFC in 2013. Other investors include the Bill & Melinda Gates Foundation and Ant Financial.

“It was fundamentally designed for the unbanked,” said Kamal Quadir, CEO of bKash. “Today it’s become a universal platform.”

New forms of banking are also gaining traction in the Philippines. BPI Direct BanKo is the financial inclusion arm of Bank of the Philippine Islands, the country’s oldest bank. Since 2016, BanKo has been making microfinance loans to entrepreneurs, many of whom were previously borrowing from informal lenders. From an initial pilot of four branches, the service expanded to 307 branches. The pandemic has persuaded the company to further modernize its credit scoring model and develop new products under which the lending process would be mostly digitized, said Jerome Minglana, President of BPI Direct BanKo Inc. Under an advisory deal with IFC, the company is working to achieve those goals.

A client of Banko, Ms. Joan Laguardia at her business.
A client of BanKo, Ms. Joan Laguardia at her business. Photo by: Abeson Argosino/BanKo

“What the pandemic has done is it’s now challenging us to look for alternative ways to serve the customers without necessarily putting up brick and mortar branches,” said Minglana.

The digital wave is also hitting other parts of the developing world, including Latin America. Venture capital is plowing into the region at a rate outpacing the global average, according to data provided by Mountain Nazca, a venture-capital firm based in Mexico City that invests in early-stage startups in Latin America. The region is likely still early in its digital transformation, with promising opportunities in sectors such as fintech, e-commerce and clean tech, said Jaime Zunzunegui, managing partner at Mountain Nazca.

“The transformation is happening now and you have to be a part of it,” Zunzunegui said, echoing many of his peers from other parts of the world.

ITU

The COVID-19 pandemic has highlighted the key role of digital infrastructure and the need to keep investing in our global technological future. Everyone, everywhere, must share in the benefits of digital transformation.

Digital channels – now the main point of access to the formal financial system – have given vulnerable people worldwide an economic lifeline amid the pandemic.

But along with being available and accessible, digital financial services must meaningfully address people’s needs. Cybersecurity, trust, and access to reliable information are nothing less than matters of public safety.

The importance of FIGI

This experience of the pandemic also underlines the importance of the Financial Inclusion Global Initiative (FIGI) – an open framework for collaboration led by the International Telecommunication Union (ITU), the World Bank Group, and the Committee on Payments and Market Infrastructures (CPMI), with support from the Bill & Melinda Gates Foundation.

Expanding financial inclusion

While financial services have always been a networked industry, we have entered a new frontier in recent years, with mobile phones enabling millions of people around the world to make use of life-changing financial services for the very first time.

Great optimism surrounds the ability of digital channels to expand financial inclusion, and with good reason. Some 1.7 billion adults worldwide do not have a bank account. Among them, however, more than two-thirds have a mobile phone.

FIGI is the successor to the ITU Focus Group on Digital Financial Services active from 2014 to 2016. That was the first initiative to bring together everyone who was working to expand financial inclusion. And it came at exactly the right time.

We saw excellent case studies emerging, as developing countries pioneered the use of digital channels to extend finance to the unbanked. Innovators were finding their feet, assembling the business case for digital financial inclusion and gaining an understanding of new business dynamics. The digital technology and financial service sectors were moving into a new shared space, with resulting convergences in the responsibilities of different regulatory authorities.

Since then, we have come a long way together. We have built a strong understanding of the components of the digital finance ecosystem. We have clarified our respective roles in nurturing the growth of this ecosystem. And we have supported the emergence of a global community where complementary strengths allow us all to advance together.

ITU is dedicated to the pursuit of the Sustainable Development Goals (SDGs) adopted by the United Nations for 2030.

Digital financial services can make a defining contribution to the achievement of the SDGs.

ITU’s standards − improving digital finance

Standardization has been central to ITU work since the organization’s inception in 1865. We work at the cutting-edge of innovation. Technology is always evolving, and ITU’s work and membership evolves in line. But our basic value proposition remains unchanged: building a global community, building trust, and enabling technological advances on a global scale.

Successful standards development calls for inclusive dialogue. By bringing different industry sectors together, ITU helps to define new directions for innovation and create the partnerships required to propel this innovation.

ITU standards for digital finance serve to improve the quality of services, as well as to safeguard security and build trust. By hosting the new FIGI Security Lab for Digital Financial Services, we help regulators and the industry to build on firm technical foundations.

FIGI collaboration

Collaboration through FIGI demonstrates exactly the sort of cohesive action the world will need to fulfil the SDGs.

The initiative has supported national policy reforms to stimulate financial inclusion, working with China, Egypt and Mexico to provide valuable case studies for other countries around the world.

Through FIGI’s three working groups, we have produced a viable basis for digital ID systems to grant citizens access to formal systems of all kinds. We have studied how to incentivize electronic payment as the norm for very low-value transactions. We have also looked at how to boost users’ confidence that their money and digital identities are safe.

After earlier gatherings in Bangalore (2017) and Cairo (2019), this year’s FIGI Symposium welcomed over 1700 participants from 149 countries in an entirely online format, to discuss topics ranging from fintech for inclusion and gender equity to cybersecurity, digital ID and consumer protection. We also heard different experiences with reaching underserved and vulnerable populations during the pandemic. We approached these discussions from every possible perspective, thanks to the diversity of the FIGI community.

I would like to express my deepest gratitude to all FIGI contributors. We can all be very proud of what we have achieved together.

Although this third edition brings the initiative to completion, we have created a culture of collaboration that will sustain discussions for many years to come. The findings of FIGI’s working groups will remain, and we look forward to breaking new ground with you in our Security Lab.

Digital technologies are the unifying force at the centre of our interconnected world, even as COVID-19 raises new questions about how to live together harmoniously, both in times of crisis and times of prosperity.

I look forward to our continued work together to build a better digital future for all.

See the full FIGI video playlist.

Learn more about the ITU Telecommunication Standardization Sector here.

ICAO

The numbers that are shared in the article below reflect the numbers in May 2021. The analysis of the economic and aviation indicators we share here reflect the continuing impact of COVID-19 on this industry.

The air transport industry is not only a vital engine of global socio-economic growth, but it is also of vital importance as a catalyst for economic development. Not only does the industry create direct and indirect employment and support tourism and local businesses, but it also stimulates foreign investment and international trade.

Informed decision-making is the foundation upon which successful businesses are built. In a fast-growing industry like aviation, planners and investors require the most comprehensive, up-to-date, and reliable data. ICAO’s aviation data/statistics programme provides accurate, reliable and consistent aviation data so that States, international organizations, aviation industry, tourism and other stakeholders can:

  • make better projections;
  • control costs and risks;
  • improve business valuations; and
  • benchmark performance.

The UN recognized ICAO as the central agency responsible for the collection, analysis, publication, standardization, improvement and dissemination of statistics pertaining to civil aviation. Because of its status as a UN specialized agency, ICAO remains independent from outside influences and is committed to consistently offering comprehensive and objective data. Every month ICAO produces this Air Transport Monitor, a monthly snapshot and analysis of the economic and aviation indicators.


World Results and Analyses for May 2021

Total Scheduled Services (Domestic and International)

Passenger traffic

Revenue Passenger-Kilometres   –   RPK

World passenger traffic fell by -62.70% in May 2021 (compared to 2019), +2.7 percentage points up from the decline in the previous month. Air travel demand has been recovering moderately as the total number of new COVID-19 cases stabilized. Nevertheless, the growing spread of the Delta variant has hit many countries and raises major concerns in relaxing travel restrictions. Domestic air travel demand remained the driving force for travel recovery. Both domestic traffic of China and the Russian Federation has recovered to pre-pandemic levels.

International Traffic vs. Tourist Arrivals

International passenger numbers fell by -84.5% in May 2021 (compared to 2019), +2.3 percentage points up from the decline in the previous month. International travel is much more affected by new virus variants and travel restrictions. Asia/Pacific was the slowest recovering region, followed by Europe and the Middle East. The international tourist arrivals also remained stagnant and followed a similar trend as international passenger traffic.

Capacity

Available Seat-Kilometres   –   ASK

Capacity worldwide fell by -53.7% in May 2021 (compared to 2019), +0.8 percentage point up from the decline in the previous month (-54.5%). With the modest improvements in travel demand, capacity is expected to increase in June 2021 to -51.4% down from the 2019 level.

Load Factor  

The passenger Load Factor reached 65.8% in May 2021, +2.5 percentage points higher than the previous month. Improvement in domestic load factor is more noticeable and returned to over 75%.  As the recovery of capacity was faster than travel demand recovery, the May LF was -15.7 percentage points lower than the rate in the same period of 2019.

Freight Traffic

Freight Tonne-Kilometres  – FTK

World freight traffic reported a growth of +9.4% in May 2021 (compared to 2019)-2.6 percentage points lower than the growth in the previous month. Despite the fluctuation in growth pace from month to month, the performance of air cargo remained strong overall and the global economic recovery together with the roaring e-commerce activities continued to be supportive. All regions recorded slight moderation in air cargo growth, except for Latin America/Caribbean which saw a significant rebound, however, remained as the only region showing contraction from the pre-pandemic levels. North America contributed the most to the positive global traffic growth and expanded remarkably at over +20%.

Top 15 Airports (Ranked by aircraft departures, passengers, and volume of freight)

Note: Figures include total scheduled and non-scheduled services

May 2021  –16.3%, -24.9%, and +13.9% (vs. 2019) in terms of aircraft departures, passengers and freight for the Top 15

In terms of aircraft departures, the Top 15 airports reported a combined fall of -16.3%, compared to 2019. The Top 15 list consists of eleven (11) US and four (4) Chinese airports. Atlanta remained 1st with a decline of -22.4%Chengdu and Guangzhou were the only two airports posting increases, +4.5% and +1.8%, respectively.

In terms of passengers, the Top 15 airports posted a total fall of -24.9%, compared to 2019. Only US (9) and Chinese (6) airports ranked within Top 15. Atlanta and Dallas/Fort Worth took over Guangzhou and became 1st and 2nd, albeit with -30.8% and -16.9% decline, respectively. Chengdu was the only airport posting increase at +5.0%. On the contrary, Beijing recorded the largest fall at -48.6%.

In terms of freight, the Top 15 airports reported an increase of +13.9%, compared to 2019. Dubai continued to be the only airport posting decline (-3.7%). With an increase of +1.6%Hong Kong surpassed Memphis at +0.1%, and regained the 1st. For the fourth consecutive month, Chicago recorded the strongest increase at +42.4%.

Top 15 Airline Groups (Ranked by RPK)

May 2021:   -50.0% (vs. 2019) in terms of RPK for the Top 15

In terms of RPK, the Top 15 airline groups accounted for 58.0% of the world’s total RPK in May 2021 and declined by –50.0% compared to 2019This decline was 12.7 percentage points smaller than the fall in world’s average RPK. Airlines with large domestic markets continued to lead the growth chart.

US airlines have been recovering steadily. American regained the 1st position with a decline of -40.2%, compared to 2019. Both Delta and United improved two positions to 3rd and 4th, while remained at over 50% below the 2019 RPK levels. Southwest stayed at 7th, and for the first time, JetBlue also ranked within Top15 at 13th.

Chinese airlines demonstrated relatively faster recovery, nevertheless with a light slowdown in pace. China Southern ranked 2nd with RPKs at -20.3% below 2019 levels. China Eastern and Air China moved 1 position and 3 positions down to 5th and 6th, respectively. Spring Airlines continued to be the only airline posting positive growth and grew solidly at +8.0%.

Recovery of airlines in Europe remained the weakest. Lufthansa and AF-KLM recorded the largest contractions from 2019 levels. Aeroflot and Turkish Airlines showed relatively better performance at -39.9% and -61.9%, respectively.

Qatar, the only Top15 airline from the Middle East region, improved slightly but ranked 1 position down to 14th with -68.8%.

Worldwide capacity contracted by -53.7% in May 2021, compared to 2019All regions saw improvements in capacity compared to the previous month, except for Asia/Pacific. Capacity offered in North America showed the fastest recovery to 66% of 2019 levels, followed by Asia/Pacific at close to 50%. Europe continued to record the slowest capacity recovery.

WIPO

The following package outlines WIPO’s suite of support measures to assist Member States in addressing the COVID-19 pandemic, as well as laying the foundations for post COVID economic recovery efforts. It comprises five main areas: policy and legislative assistance; technical assistance and capacity building; innovation support and technology transfer; IP dispute resolution; and knowledge resources

Member States seeking more information or wishing to tap on these forms of unilateral support should contact Mr. Sherif Saadallah, Executive Director of the WIPO Academy and Focal Point on WIPO’s Package of COVID-19 support.

Member States seeking more information on the WIPO-WTO-WHO Trilateral Cooperation relating to COVID-19 should contact Ms. Amy Dietterich, Director of the Global Challenges Division.


Policy and Legislative Assistance

Legislative and Policy Advice relating to IP, innovation and creativity

WIPO has decades of experience in providing advice to Member States on the drafting of IP laws as well as in the building of innovation and creative ecosystems. We will draw on this to provide advice to Member States on specific or systemic measures that will help them to address the pandemic, as well as build back better. Some examples of assistance in the past include the implementation of flexibilities contained in the international treaties. Other examples include the building of tech transfer and/or IP licensing capabilities.

Such advisory support is strictly bilateral and confidential, and will be tailor made to suit each Member State’s unique circumstances and needs.


Technical Assistance and Capacity-Building

WIPO Academy

WIPO National IP Training Institutions (IPTIs) will scale up COVID-related training and education programs. Areas of focus include: IP and Access to Medicines, IP and Medical Innovation (with focus on COVID-related medical innovation) and IP as an open collaboration tool to address COVID.  The Academy will assist the IPTIs to provide training courses focused on post-COVID economic recovery through innovation and creativity.

WIPO’s Distance Learning and Professional Development Courses provide an accessible way for Member States, communities and individuals, to build their IP knowledge and skills.  Customized versions of the courses also offer country specific IP learning.  WIPO’s professional development courses focus on building IP skills for government officials to support innovation and creativity. Distance learning courses of particular relevance include:

WIPO – WHO – WTO Intensified Cooperation

As part of our enhanced cooperation to support Member States in tackling the COVID-19 pandemic, the WIPO, WHO and WTO will jointly offer a series of practical, capacity-building workshops. These have two overarching objectives: to enhance the flow of information as the pandemic evolves and to strengthen the capacity of Member States to address the pandemic via equitable access to COVID-19 health technologies.  The first workshop on technology transfer and licensing is planned to take place in the second half of September 2021.

The Trilateral Cooperation is also discussing how to step up efforts for tripartite technical assistance to Member States, through the provision of a one-stop shop that will make available the full expertise on access, IP and trade matters of all three agencies. More details will be provided in due course.

IP and Health/Life Sciences

  • Executive Course on Promoting Access to Medical Technologies and Innovation
  • Executive Course on Intellectual Property and Genetic Resources in the Life Sciences
  • Leadership Course on Intellectual Property and the Life Sciences for Participants in the L’Oréal-UNESCO for Women in Science Program

Patents

  • Specialization Course on the Essentials of Patents
  • eTutorial on Using Patent Information
  • Advanced Course on Patent Information Search

Innovation Support and Technology Transfer

WIPO Technology and Innovation Support Centers (TISC)

Member States can tap on our expertise in building over 1,200 Technology and Innovation Support Centers in over 80 countries. These Centers provide innovators and researchers in developing countries with access to locally based, high quality technology information and related services that will help them better understand and use IP in the R&D and technology contexts.  WIPO also provides a series of programs and training resources, including WIPO Distance Learning courses, to support the building of IP expertise and capabilities within these TISCs.


IP Dispute Resolution

WIPO Arbitration and Mediation Center (WIPO AMC)

Some 15% of mediation and arbitration cases filed with the WIPO Arbitration and Mediation Center(WIPO AMC) are connected to the biosciences, medical devices and chemical industries. These disputes do not just involve large companies, but also SMEs and start-ups. The WIPO AMC has just announced that it will reduce its fees by 25% when any enterprise with less than 250 employees is involved in a dispute, so that start-ups and SMEs can have better access to such services.

In addition, the AMC is preparing to launch two new services in the last quarter of the year:

  • Tailored WIPO Mediation Agreements:  to facilitate contract negotiation or the resolution of contract performance disputes.
  • WIPO Dispute Resolution Board: to determine contract performance disputes as they arise in long-term life science collaborations.

Further information on WIPO ADR in the life sciences sector


Knowledge Resources

Covid-19 IP Policy Tracker

WIPO tracks and provides information on measures adopted by IP offices in response to the COVID-19 pandemic, including information connected to deadlines, legislative responses and other regulatory measures.

Database on Flexibilities in the Intellectual Property (IP) System

The Database on Flexibilities in the IP System contains data drawn from WIPO documents on Patent Related Flexibilities in the Multilateral Legal Framework and their Legislative Implementation at the National and Regional Levels.  It allows searches for implementation of flexibilities in national IP laws in selected jurisdictions.

Pat-INFORMED

The Patent Information Initiative for Medicines (Pat-INFORMED) provides easy access to medicine patent information to the global health community, particularly those involved in procurement of medicines. As of June 2021, the database contained 236 International Non Proprietary Name (INN) sets, and 21,029 patents in 653 patent families.

Patent Landscape Reports (PLR) and Analytics

Patent Landscape Reports are a way of using patent information and data to gather and share insights on technology developments. WIPO has supported the WHO and local vaccine manufacturing discussions with its PLR on vaccines; licensing and public procurement discussions; and decisions of the Medicines Patent Pool related to antirotrevirals (ritonavir and Atazanavir).  WIPO is currently preparing a PLR relating to vaccines and therapeutic agents specifically targeting COVID-19 and hopes to release it just ahead of this year’s General Assemblies. WIPO has also collected publicly available PLRs and has put together a searchable compilation.

dashboard_845

Online dashboard to monitor WIPO operations

Download July 29, 2021 update

Download June 7, 2021 update


Meetings and webinars

We have increased our offerings of virtual meetings and webinars to accommodate for COVID-19 restrictions and them more accessible worldwide.

(PHOTO: WIPO/BERROD)

WIPO virtual and hybrid meetings

Delegates can participate remotely and interactively in our formal meetings, thanks to a multi-lingual, cloud-based, virtual conferencing platform.

WIPO webinars

We organize free webinars for the latest information and training on WIPO services, databases and program activities.

ITU

With the COVID-19 pandemic restricting the movement of people and goods, modes of transaction have shifted dramatically.

Growing use of digital financial services has turned crisis into opportunity, enabling previously unbanked people and small firms to join the financial system.

Regulations have evolved to keep up with technology, but specific policies are needed to make sure no one gets left behind.

“While digital financial inclusion was a development priority before the COVID-19 pandemic, it’s really become indispensable now – both for short-term relief in terms of putting money in the hands of those who need it, but also as a central element of broad-based sustainable recovery efforts,” said Mahesh Uttamchandani, Practice Manager for Finance, Competitiveness and Innovation Global Practice at the World Bank Group.

COVID-19 has had a profound impact on people’s payment habits, with 60 per cent of financial authorities reporting an increase in digital transactions.

Simultaneously, the number of people receiving payments from governments quadrupled in the first half of 2020 as the global pandemic took hold.

Close to 70 per cent of financial regulators around the world identify financial technology, or fintech, as a high priority, aligning measures against COVID-19 with efforts to strengthen financial inclusion.

Digital cash transfers

Already a priority before COVID-19, digital financial inclusion has become more urgent as a policy goal, Uttamchandani said at this year’s Financial Inclusion Global Initiative (FIGI) symposium.

The World Bank is working on around 170 COVID-related projects across 110 countries, including new or expanded COVID-19 cash transfer projects in over 55 countries, he added.

Key goals include digitizing cash transfers and payments, establishing faster payment systems, enabling digital identification and electronic ‘Know Your Customer’ (KYC) technologies, and protecting consumers from heightened risks.

Quick response

Countries and markets that were already investing in digital financial services were better placed to respond to the COVID-19 crisis, said Gregory Chen, Policy Lead at Consultative Group to Assist the Poor (CGAP).

Togo, for example, quickly rolled out its Novissi social assistance programme using machine learning and mobile money to deliver contactless emergency cash transfers. Pre-existing digital infrastructure made this possible for the West African country, Chen said.

Another key factor was regulators’ pragmatic response to the pandemic.

“Very early on, a lot of the regulators realized that the banking system remained vital for economic activity,” said Chen, adding that, by deeming it an essential service, “they figured out ways to keep the banking system and payment systems going.”

Chen offered an example of this pragmatic action from regulators in the Philippines, where regulators enabled a cash transfer programme managed by one public-sector bank to be opened up to multiple providers of payment services, including mobile money operators.

KYC technologies

World Bank financial inclusion projects have helped to simplify due diligence and KYC provisions in markets as diverse as the Democratic Republic of Congo, Morocco and Nepal, as well as to implement fast-payment systems in Georgia, Madagascar and Indonesia, Uttamchandani said.

The World Bank’s G2Px government-to-person payment initiative has also provided technical assistance for digitizing social benefit transfers in 35 countries.

Instruments for inclusion

In developed markets, accelerated digitization amid the pandemic has spawned new payment, loan and insurance products. European markets have seen a surge in contactless transactions, said Magda Bianco, Managing Director of the Bank of Italy, the country’s central bank.

Instruments provided by intermediaries have also made credit scoring easier.

“This allows small companies, which typically do not have a credit history, to get into the market to get loans,” Bianco explained.

Digital tools are also helping individuals enter the financial system for the first time, she added. “In some countries, new digital saving accounts have been introduced with no or very low fees.”

Deepening digital divide

Access to digital services remains extremely uneven. Experts suggest that digital exclusion may partly correlate with income losses in the pandemic, with a disproportionate impact seen on low- and medium-skilled workers, the self-employed, and women.

GSMA – the GSM Association representing mobile network operators – says women are seven per cent less likely than men to own a mobile phone and 15 per cent less likely to use mobile Internet.

“Women make up 39 per cent of global employment but 54 per cent of overall job losses,” Uttamchandani observed.

Gender disaggregated data could help to inform targeted policies and initiatives for financial inclusion, he added.

Cybersecurity risks

Digital uptake has, in parallel, increased people’s vulnerability to identity fraud, online scams and other cybersecurity threats. Digital microcredit applications have also seen rising fraud in recent months. This is especially risky for new and unskilled users.

“Understanding risks are really important for vulnerable groups disproportionately hit by the pandemic, such as women, youth, the elderly people and migrants,” Bianco said.

Promoting digital and financial literacy

Efforts to improve digital financial inclusion must include measures to protect consumers while providing the widest possible access. Digital financial education is equally vital to make the system accessible to individuals, vulnerable groups, and micro and small enterprises, Bianco said.

Despite the pandemic, governments and institutions need to persist in collating updated information on financial inclusion, she added.

Comprehensive surveys have been difficult to perform during the pandemic. However, the G20’s Global Partnership for Financial Inclusion (GPFI) platform – launched in 2010 during the G20 Summit in Seoul, Republic of Korea – is now compiling case studies and analyzing best practices from various countries.

Not leaving anyone out

Unless industry keeps expanding and improving its digital financial service offerings, it “may unintentionally help to victimize some of the most marginal groups,” Uttamchandani said.

Rapid growth in the use of digital financial services, when combined with low financial awareness, can lead to problems such as over-indebtedness. To avert such problems, service offerings must be tailored to each local market, he said.

Although access is improving, in every country there are people unreachable by digital finance.

“We still need to be able to respond to those populations and recognize both the power and the limits of digital finance,” Chen cautioned.

“In doing so, we will have a much stronger response to the COVID pandemic and an opportunity to accelerate some of the positive parts of digital finance.”

FIGI is a partnership of the International Telecommunication Union (ITU), the World Bank Group, and the Committee on Payments and Market Infrastructures (CPMI), supported by the Bill & Melinda Gates Foundation.

Revisit the discussions of the 2021 FIGI Symposium for unique insights on how how governments and industry are working together to overcome COVID-19 and connect everyone with life-changing digital financial services.

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