News

ITU

The latest Global Cybersecurity Index (GCI) from the International Telecommunication Union (ITU) shows a growing commitment around the world to tackle and reduce cybersecurity threats.

Countries are working to improve their cyber safety despite the challenges of COVID-19 and the rapid shift of everyday activities and socio-economic services into the digital sphere, the newly released 2020 index confirms.

According to GCI 2020, around half of countries globally say they have formed a national computer incident response team (CIRT), indicating an 11 per cent increase since 2018. Rapid uptake of information and communication technologies (ICTs) during the COVID-19 pandemic has put cybersecurity at the forefront.

“In these challenging times, the unprecedented reliance on ICTs to drive society, economy and industry, makes it more important than ever before to secure cyberspace and build confidence among users,” affirmed ITU Secretary General Houlin Zhao. “Governments and industry need to work together to make ICTs consistently safe and trustworthy for all. The Global Cybersecurity Index is a key element, offering a snapshot of the opportunities and gaps that can be addressed to strengthen every country’s digital ecosystem.”

Some 64 per cent of countries had adopted a national cybersecurity strategy (NCS) by year-end, while more than 70 per cent conducted cybersecurity awareness campaigns in 2020, compared to 58 per cent and 66 per cent, respectively, in 2018.

Yet despite notable improvements, gaps in cyber capacity persist.

Addressing the cyber gap

Many countries and regions lag in key areas. These include:

Growing reliance on digital solutions necessitates ever stronger, yet also accessible and user-friendly, data protection measures.

GCI 2020, the index’s fourth iteration, measures the cybersecurity commitments of 193 ITU Member States and the State of Palestine [1]. It aims to identify gaps, serve as a roadmap to guide national strategies, inform legal frameworks, build capacity, highlight good practices, strengthen international standards, and foster a culture of cybersecurity.

Amid interconnected commerce and communication, cybersecurity risks are increasingly borderless, with no single entity or stakeholder able to guarantee the security of the global cyber ecosystem.

Countries with high cyber capabilities may therefore need to support others, such as Least Developed Countries (LDCs), Small Island Developing States (SIDS), and Landlocked Developing Countries (LLDCs).

“This snapshot of the world’s commitment to cybersecurity is just a starting point for further discussions, interventions, and strides towards achieving global, regional and national cyber safety,” noted Doreen Bogdan-Martin, Director of the ITU’s Telecommunication Development Bureau. “I invite all ITU Member States to continue updating us on their progress on cybersecurity-related commitments, so that we can effectively share experiences, research, and solutions to create a trusted cyberspace for all.”

Measuring the evolving cybersecurity landscape

About one billion people worldwide became Internet users for the first time between 2015 (when the first GCI was released) and 2019, according to ITU data. With global losses due to cybercrime expected to reach USD 6 trillion this year, according to third-party data, ​citizens count on governments to enhance cybersecurity norms and protect increasingly exposed personal and financial data.

ITU has produced four GCI editions to date, providing periodic global snapshots of a rapidly evolving industry. With each iteration, the methodology has been adapted to shed more light on countries’ cybersecurity commitments.

Each country’s level of development or engagement is assessed based on five pillars of the ITU Global Cybersecurity Agenda – legal measures, technical measures, organizational measures, capacity development, and cooperation.

GCI 2020 features data from more countries than any previous edition, with ITU receiving 150 updated questionnaire responses despite the constraints imposed by COVID-19. For the other 44 countries included, data was collected and validated through desk research.

Country commitment was assessed through online surveys for each pillar, which further facilitated the collection of supporting evidence. Survey questions were weighted in consultation with expert groups to reach composite index scores. ITU also undertook independent verification to ensure accurate and reliable results.

ICAO

The growth of digital aviation infrastructures and services have significantly helped to increase capacities and optimizing global airspace, but this growth has presented a number of challenges in terms of interoperability and cyber resilience. Aviation is a safety-critical business. With the continuous growth of air traffic and the emergence of “new entrants” with significantly different operational characteristics and needs, the air navigation system is becoming more complex.

To manage this complexity and improve the safety and efficiency of flight operations, the air navigation system must transform, as reflected in ICAO’s Global Air Navigation Plan, and build upon the use of emerging technologies, connectivity and digital information exchange to increase integration, automation and cost-effectiveness.

Cyber threats are a growing global concern. To protect the safety of flight operations from these threats and ensure business continuity, the more integrated and automated air navigation system should continue to provide for trusted information exchanges on a global basis. This means that in a digital environment, communication parties should be able to identify themselves mutually and the information exchanged should not be able to be modified by unauthorized parties.

To assist the Secretariat in the development of a globally harmonized international aviation trust framework for exchanging information in a digitally connected environment, ICAO established the Trust Framework Study Group (TFSG) in 2019 to develop the work through three working groups: operations, digital identity, and network. Since then, the working groups have progressed the development of policy and guidance material for a global and interoperable aviation trust framework that will enable trusted ground-ground, air-ground, and air-air exchange of information among all current and prospective aviation stakeholders. In particular, the groups are reviewing the concept of operations, defining use cases, developing a digital certificate policy, and identifying the security and access control requirements to a global resilient aviation interoperable network.

Recently the ICAO Council held a briefing that provided an overview of the threats associated with an emerging global cyber context, its implications for the international civil aviation sector, and the development of a credible framework to ensure that aviation-related data is stored, protected, and exchanged in as secure a manner as possible. We are sharing the recording of this briefing here.

WIPO

The World Intellectual Property Organization (WIPO) is committed to providing high quality intellectual property services, knowledge and data that deliver value to users around the world. For the purpose of continuously improving the delivery of our online services, we are releasing a new version of the WIPO IP Portal.

The WIPO IP Portal provides all WIPO stakeholders with easy access to our full range of online intellectual property (IP) services, particularly those relating to the international registration of patents, trademarks, designs and geographical indications. Through a new design and recently added functionalities, the new version helps you to navigate the WIPO IP Portal pages easier and faster!

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The landing page has been redesigned to provide innovators and creators with a single entry point for WIPO IP services at every stage of their activities from concept to commercialization.

The support pages (FAQs & About), located under HELP, feature a new design and additional content to support you while you use the platform and its functionalities.

The dashboard, available to logged in users, has been redesigned in order to simplify the way you customize your personal dashboard and manage (add/remove) your widgets.

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We would appreciate your feedback on these latest improvements and any other changes that you would like to see in the WIPO IP Portal!

Take our 30-second survey now!

ITC | WTO
WTO, ITC and ICC

 

By bringing more small businesses into the digital economy, we help them grow, trade, and become resilient.

And this is where you can step in!

Are you an organization that supports small businesses? Are you a non-governmental organization that empowers small businesses and entrepreneurs through your development work?

Become a digital champion for small businesses!

We call for your prize-winning idea that helps small, exporting businesses in going digital.

We invite proposals from industry associations, chambers of commerce and non-governmental organizations that are experienced in MSME and digitalization issues.

The winning proposals will be announced at the WTO’s 12th Ministerial Conference held in Geneva from 30 November to 3 December 2021.

With this competition, your ideas will not only raise awareness of the difficulties small businesses are facing when wanting to trade digitally but will also promote best practices in digital trade. Proposals on how to help micro, small and medium-sized enterprises address the difficulties they face with digital trade should be submitted by 15 September 2021.

Ultimately, the initiative will help small businesses go digital and increase their participation in international trade.

On 25 June, the Digital Champions for Small Business initiative was launched at a joint event hosted by the World Trade Organization’s Informal Working Group on Micro, Small and Medium-sized Enterprises (MSMEs), the International Trade Centre (ITC) and the International Chamber of Commerce (ICC).

WTO Director-General Ngozi Okonjo-Iweala, ICC Secretary General John Denton, ITC Secretary General Pamela Coke-Hamilton and Ambassador Jose-Luis Cancela, Coordinator of the Informal Working Group on MSMEs, announced this innovative call for proposals.

THE FINE PRINT

What should the proposal entail?

• Proposals can focus on awareness-raising campaigns, competitions, capacity building, training and mentoring programmes.

• Proposals should be designed to be delivered by the entity submitting the proposal and should not focus on WTO negotiations, or proposed changes to WTO rules.

How do you submit your proposal?

• Proposals should include details on the concept, aims, timelines and other information as appropriate.

• Proposals should be no longer than three pages and should be sent to the following address in Word or PDF format: Digitalchampions@wto.org

Deadline for the call for proposals is 15 September 2021.

Awards

Awards will be tailored to the winning proposals. The number of awards will be determined based on the proposals received. The private-sector sponsors are Google and Zoom.

Zoom will provide technology training virtually (live) and recordings.

Background

The COVID-19 pandemic has underscored the importance of the digital economy for businesses of all sizes throughout the world. MSMEs have historically struggled to enter the digital economy, due to lack of awareness, resources or technological know-how. The aim of the competition is to bring more MSMEs into the digital economy to help them grow, trade and become resilient.

Find more details here:

https://www.wto.org/english/tratop_e/msmesandtra_e/msmesandtra_e.htm

and

https://www.wto.org/english/tratop_e/msmesandtra_e/dcsm_callforproposals.pdf

ICAO

Addressing the Board of Directors meeting of the Aerospace Industries Association last week, ICAO Council President Salvatore Sciacchitano commented that the UN aviation agency’s Secretariat and governing Council “are acutely aware today of how important innovation will be to aviation recovery and sustainability in the pandemic’s aftermath.”

“This is why we’ve made the acceleration of effective standardization and regulation the highest priority for the coming years,” he emphasized, “so that the benefits of the numerous innovations on manufacturer drawing boards can be realized as quickly as prudent and possible for civil society and industry.”

President Sciacchitano expressed ICAO’s appreciation to the aerospace sector for the important contributions it has been making to the outcomes of the ICAO Council’s Aviation Recovery Task Force, or ‘CART’, providing details on the latest CART Phase III recommendations and amendments which were issued in March.

The Council President noted that the latest ICAO Economic Impact Analysis has revealed that international air transport is back to 2003 levels in terms of global seat capacity, and that while ICAO expects improvement in the global picture from the third quarter of 2021, it will be heavily dependent on the effectiveness of pandemic management and vaccination rollout.

“Some encouraging signs of recovery for international traffic have begun to emerge more recently, including via air travel corridors such as Australia and New Zealand have established,” he commented, “but admittedly these attempts are still being hampered at times by the unpredictable health factors which remain in play.”

President Sciacchitano updated the Board Members on the upcoming ICAO High-Level Conference on COVID-19, scheduled for this October, noting that the countries cooperating through ICAO clearly recognize that the COVID-19 pandemic is not only a health crisis – but also an economic and financial crisis, and one which presents governments with very difficult trade-offs in terms of the health, economic, and social priorities concerned.

“The High-Level Conference this October will address economic recovery priorities, seek to formalize new and stronger national commitments to assure that recovery, and feature specialized Safety streams where your community’s views will be appreciated,” he stated.

“We should recall in this respect that while the aerospace sector typically engages with national civil aviation authorities, the pandemic has now factored national health authorities into this framework as well. Your community will have a critical near-term role to play in assuring the more health-centric and disease-preventative cabin environment that governments, operators and passengers will be striving to assure for the post-pandemic air travel experience.”

The ICAO Council President further appreciated the many innovations which the aerospace sector is already helping to realize in renewable energy sources and new types of airframes and propulsion, noting that these will play a key role “in helping our sector meet the increasingly low-emission expectations of the post-pandemic passengers which airlines will be competing to attract.”

He underscored that he expected governments to arrive at the 42nd ICAO Assembly next year with clear expectations on what these health and environmental sustainability innovations will need to deliver, and on how the ICAO work programme will need to be tailored to aid that delivery.

 

WBG

Challenge

The Government of Malaysia recognized the opportunity, and challenge, provided by the digital economy to serve as a new driver of growth for the economy as well as a new source of fiscal revenue. The Bank Group was asked to provide independent analysis as to how Malaysia could best meet this challenge.

By leveraging the internet, smartphones, big data, the internet of things, artificial intelligence, and other technologies, Malaysia can increase productivity, spur innovation, and improve livelihoods. Digital technologies can drive economic growth in Malaysia through three channels. First, they can promote inclusion by enabling existing firms and entrepreneurs to serve markets that are currently underserved. Second, they can lower costs and increase efficiency for existing firms and entrepreneurs to make them more competitive. And third, they can encourage innovation and scale economies, allowing entirely new forms of business and entrepreneurship to emerge.

Approach

The analysis began with an assessment of digital adoption using the framework from the World Development Report, with an emphasis on how businesses are using—but failing to fully exploit—digital technologies to communicate with customers, market goods, and meet other core business functions. A discussion of the ICT infrastructure on which the digital economy is built, including persistent challenges related to the affordability and quality of fixed broadband internet access that arise from high prices, market concentration, and an underperforming regulatory regime followed. The program also looked at the promise and challenges of digital entrepreneurship in Malaysia, highlighting the central role of government initiatives to date and what is required to fully empower the private sector. The final piece explored options for taxing the digital economy, including the impact of recent reforms to international standards.

The program covered an important set of policy issues that Malaysia faces with respect to digital technologies. The program also involved the production and organization of a wide-range of activities over a two year period from original research, to analyses of trends in digital adoption, connectivity, entrepreneurship and taxation; to numerous knowledge-sharing events including conferences, training workshops and policy impact challenge events.

Finally, the task team was twice invited to brief the Prime Minister and Cabinet on findings and policy recommendations for action.

Results

As a result of Bank Group advice, Malaysia’s Government is already making major reforms in these areas and starting to see results in terms of improved market outcomes and changes in consumer behavior. The program has helped lay not just the foundations for sustainable growth in Malaysia, but also provided valuable lessons and insights for policymakers in other countries around the world—an important agenda for the World Bank Group Malaysia Hub.

Reforms implemented to the regulatory regime for telecoms have seen the costs of fixed broadband halve and speeds double since end 2018. Most visibly, they have caused a shift in consumer demand towards faster internet connections with the number of ultra-fast (>100Mbps) broadband connections increasing eight-fold during 2019 as a result of increased competition in the previously under-performing fixed broadband sector.

Malaysia is among the first developing countries to extend indirect taxation to imported digital services provided by non-resident suppliers (collecting an estimated US$100 million in new revenues during 2020), pushing the development frontier not just in Malaysia but in other countries helping to balance growth of the digital economy while safeguarding public sector revenues.

Further, in 2020 the State of Penang adopted another key policy recommendation of the report, legislating that broadband internet should be treated as a utility in the same way that water and electricity is treated for new infrastructure development.

Bank Group Contribution

The activity was financed by the Government of Malaysia under the Reimbursable Advisory Services program.

Partners

The Malaysia Digital Economy Project was championed by the Malaysian Ministry of Finance,. Other key partners included the Economic Planning Unit, Malaysia’s Central Bank, the Malaysia Digital Economy Corporation and the Malaysian Communications and Multimedia Commission. Significant outreach and policy dialogue also took place at the local/state level.

Moving Forward

Lessons from the Malaysia Digital Economy report, which was among the first country-level digital economy diagnostic analyses in the Bank, have been replicated and shared in many other regions. The overall approach has been emulated in a number of other country studies in Philippines and Thailand, to name a few, and the approach piloted on taxing the digital economy was later extended into a standard Bank guidance note that has now been applied in a significant number of other country contexts.

Beneficiaries

Policy dialogue related to this report contributed to the achievement of economy-wide reforms that have impacted 32 million Malaysians, through faster and lower cost broadband internet, and through the safeguarding of public sector revenue collection.


RELATED
WTO

At a meeting of the Informal Working Group on Micro, Small and Medium-sized Enterprises (MSMEs), held on 24 June, WTO members discussed a draft ministerial declaration, a key element in the Group’s preparations for the WTO’s 12th Ministerial Conference (MC12). They also looked at implementation of the package of declarations and recommendations for MSMEs adopted in December 2020.

 

The draft declaration reaffirms the Group’s commitment to address challenges facing MSMEs seeking to trade internationally. In addition, it recognizes the negative impact of COVID-19 on small business and the need for a global coordinated response to help MSMEs bounce back. It also takes stock of the Group’s work since it was established at the 11th WTO Ministerial Conference in Buenos Aires in December 2017.

The Group aims to produce a final draft by its next meeting at the end of July and to use the period leading up to MC12 at the end of the year to reach out to other WTO members to join the declaration. The aim of the Group is to adopt the declaration at MC12.

On the implementation of the package of recommendations for MSMEs, Côte d’Ivoire updated the Group on its proposal to help MSMEs gain access to trade finance, which was first discussed at the Working Group on Trade, Debt and Finance in May this year. The proposal responds to the Group’s recommendation to highlight MSME issues at other WTO committees where relevant.

Canada updated the Group on its procedure for automatic transmission of tariff and trade data to the WTO’s Integrated Data Base (IDB). Keeping the IDB fully up to date was one of the package’s recommendations so that MSMEs can have access to reliable and comprehensive information on tariffs and other market access data.

Mexico updated the Group on the development of the Trade4MSMEs platform, which will bring together trade-related information useful for small business and policy makers. The Group is aiming to launch this platform at MC12.

Ecuador updated members on its proposal on MSMEs and innovation policies. The proposal is to collect, via a questionnaire among the members of the Group, best practices that help address barriers to innovation faced by MSMEs.

Brazil updated members on its proposals on rural MSMEs, with a special focus on agritech.  Brazil proposed that the Group exchange best practices on policies related to rural MSMEs, which make up a significant percentage of the economic operators in developing economies, and to hold a dialogue on trade facilitation and rural MSMEs. This would be in line with one of the recommendations adopted by the Group, which calls for full implementation of the Trade Facilitation Agreement and the exchange of best practices to ease the difficulties faced by MSMEs.

A representative from the United Nations Commission for International Trade Law (UNCITRAL) gave a presentation to the Group on the importance of its Model Law on Electronic Transferable Records (MLETR) for facilitating MSMEs’ participation in digital trade. The International Chamber of Commerce — United Kingdom presented the findings of their report on the same topic, which highlights the economic benefits of digitalising trade documentation and aligning to the UNCITRAL Model Law on Electronic Transferable Records for MSMEs in the United Kingdom.

A representative from Bahrain’s Economic Development Board gave a presentation on Bahrain’s experience with enacting the MLETR over the past two years.

The WTO Secretariat gave a presentation on MSME provisions in regional trade agreements and on the MSMEs RTA database available on the WTO website.

Abu Dhabi Global Markets (ADGM) explained how its digital lab is helping small business access finance. The digital lab connects start-ups, financial institutions and ADGM’s Financial Services Regulatory Authorities to the latest technologies and partnership opportunities in the financial markets.

The International Chamber of Commerce Council of MSMEs in Argentina gave a presentation on the recently established High Level SMEs Council and its activities in relation to the Sustainable Development Goals.

UNCDF

The study calls for the establishment of new global governance for BigFintech to contribute to the SDGs in developing countries.

 

Developing economies do not have enough established mechanisms to mitigate the negative impacts of BigFintechs, nor to seize opportunities brought by BigFintechs, according to a new UNDP/UNCDF study BigFintechs and sustainability, the necessary convergence. A new generation of regulatory policies, based on five proposed principles, is needed to create a foundation that will balance BigFintechs’ commercial interests with sustainable development and public interests, particularly in developing countries, as well as the rest of the world, the study stresses.

Negative outcomes resulting from BigFintech activity in developing countries range from tax base erosion to crowding out of local SMEs, worsening working conditions for digital workers, environmental impacts, widening inequalities, impacts on macroeconomic and monetary policies. One of the main challenges in addressing them is that existing policy approaches to BigFintechs have remained fragmented and disconnected from the broader SDG/ESG debate.

Another issue is that the governing arrangements of such platforms have rarely involved developing economies, where their impacts are often strongest, and the potential for transformation is greatest. Many sub-contractors of BigFintechs operate in developing economies while regulated headquarters are in the USA. Amazon for instance has 1.6 million active sellers worldwide, 300,000+ are in developing economies, 850,000 online resellers rely on this BigFintech as their sole source of income. Current reporting standards are not able to capture the impacts of these complex ecosystems whose potential for both positive and negative impact is huge.

“Developing countries often find themselves at the receiving end of the rapid development of regulatory domains, yet digital economies will increasingly become central to sustainable development. The Dialogue on Global Digital Finance Governance is helping them to understand the impact of BigFintechs on their sustainable development agenda by looking at BigFintech financial services offerings, core businesses and extended ecosystems. There are as many opportunities as risks. This conversation is particularly relevant at a time when many countries are advancing action to mitigate BigFintech impacts. We are not short of tools but we need to drive a convergence of solutions that are relevant to today’s challenges, more inclusive of developing nations, considerate of the SDG choices and sometimes tradeoffs” noted Achim Steiner UNDP Administrator.

In some markets, regulators have adopted measures in response to the new challenges brought by BigFintechs including antitrust actions and new data regulations. For instance, the United Kingdom’s new code of conduct aims to govern dominant tech platforms, the Unites States (US) Department of Justice filled an antitrust lawsuit against Google on internet search and advertising markets, the US Federal Trade Commission conducted a recent antitrust action against Facebook, and China is taking a tougher stance on BigFintech platforms triggered by their systemic relevance, establishing new financial holding and capital regulations.

Current regulations, from financial and data governance to competition regulations, are limited to addressing BigFintech’s impacts on access, monopoly, price discrimination and privacy. They fail to address the SDGs, particularly at the global level, argues the study. The study stresses the need for a broader and more systematic consideration of the impacts of BigFintechs beyond financial regulatory and data governance considerations across social, economic, and environmental domains, particularly in developing economies.

“BigFintechs can have many positive impacts, from financial inclusion to gender equality and new livelihood opportunities. But navigating SDG trade-offs brought by BigFintechs is complex, and our current regulatory toolkit lacks more robust references to sustainability, which does not enable enough developing countries to seize opportunities to leapfrog towards sustainable development. The Dialogue is broadening the lens to bring BigFintechs into the SDG arena and into the international governance space. We need all the collective vision, leadership and ambition to reposition sustainable development for the least developed at the very center of BigFintech governance so digital economies can emerge as SDG aligned.” Added Preeti Sinha, Executive Secretary, UNCDF.

Background:

The Dialogue on Global Digital Finance Governance established to explore these topics, produced a series of Technical Papers that bring new, complementary perspectives on the nexus of BigFintechs, sustainable development and governance.

BSI

BSI joins United Nations Conference on Trade and Development (UNCTAD) e-Trade for all initiative

BSI, in its role as the UK National Standards Body, joins the UNCTAD led international eTrade for all initiative to help build trust in the digital economies of developing countries by promoting awareness, development and use of international standards.

Work has started with UNCTAD to integrate  standards into their eTrade readiness assessment exercise, which measures the barriers to e-commerce and digitalization. This is being piloted in Kenya and BSI will be working with the Kenya Bureau of Standards to ensure that the role of standards and standards bodies is properly reflected in the policy workshops that form a key part of the exercise.

This work follows the publication of BSI’s latest whitepaper on the role of standards in supporting the transition to a digital economy and facilitating digital trade. At a time when society is becoming increasingly digitalized, developing countries are investing in digital technology at half the rate of their developed counterparts (1.5% vs 3% of GDP[1]). The paper identifies that an important barrier to uptake is the lack of trust in digital technology: the key role that standards play in the UK to promote digitalization, and tackle concerns about cyber security, interoperability and privacy, contrasts with the lack of uptake in developing countries.  This suggests that international standards, which build trust in innovative applications of new technology and open-up global value chains, are the missing keystone in the bridge to a digital economy.

The paper recommends a standards-based toolkit to provide a comprehensive guide for developing countries, to help steer them through the digital transformation process. Such a toolkit would provide guidance on embedding international standards in national digital strategy, transformation of value chains and business processes.

Scott Steedman, Director-General, Standards at BSI said: “We are very pleased to join the UNCTAD eTrade for all initiative. The work that has been started in Kenya is an important first step towards building trust in the digital economies of developing countries. In our role as a leading National Standards Body we are committed to promoting awareness, development and use of international standards. Working with this network of 34 members we hope to accelerate the uptake of digital technology in developing countries, which is fundamental to achieving Sustainable Development Goals.”

“With BSI joining the eTrade for all initiative, the area of standards will be better reflected in our common efforts at enabling more developing countries to engage in and benefit from e-commerce”, said Torbjörn Fredriksson, who leads UNCTAD’s work on e-commerce and the digital economy.

Download the whitepaper here.

[1] https://www.huawei.com/minisite/gci/en/digital-spillover/files/gci_digital_spillover.pdf

AfDB

A June 2021 African Development Bank White Paper, Entrepreneurship and Free Trade: Africa’s Catalysts for a New Era of Economic Prosperity, states that entrepreneurship must be at the heart of efforts to transform Africa’s economic prospects.

The paper posits the Covid-19 crisis has triggered shifts that open up prospects for enhancing resilience and economic growth. As African economies begin rebounding from the crisis, the continent stands at an inflection point. The report also notes a number of trends that could bring about more inclusive economic growth are beginning to take hold—including digitalization and the emergence of business opportunities linked to greening economies.

The right interventions could open the door for the continent’s young and dynamic entrepreneurs and help build linkages with the large firms that are the key drivers of supply chains to create jobs and revenues to help scale up businesses.

According to Dr. Khaled Sherif, AfDB’s  Vice-President for Regional Development, Integration and Business Delivery,  “the White Paper aims to reframe the narrative around Africa’s private sector and, going forward, guide initiatives promoting entrepreneurship on the continent to capitalize on new opportunities.”

The release of the paper follows the May 2021 launch of the Alliance for Entrepreneurship in Africa, in which the African Development Bank will play an important role. The Alliance will mobilize financial and technical resources from partners to develop Africa’s private sector, with a focus on micro, small and medium enterprises.

The Alliance also aligns with the Bank’s concept of coordinating more effective financial and non-financial support to young entrepreneurs through African youth entrepreneurship investment banks.  The paper argues that the intelligence, creativity, knowledge and technological skills of young entrepreneurs will be central to harnessing the Fourth Industrial Revolution in and for Africa for the first time to meet the continent’s development objectives of a sustainable and more equal future.

On the supply side of investment in entrepreneurial activity across Africa, the paper notes that Africa’s nearly 650 tech hubs include “accelerators, incubators, university-linked start-up support labs, maker parks, and even co-working sites. “Egypt, Nigeria, Kenya and South Africa account for more than a third of these, but most countries and regions have tech hubs in one form or another.” While this represents great progress, a more robust ecosystem and network must evolve to reach smaller, less developed economies.

On the demand side, the paper advises that both entrepreneurs and investors may need to scale back expectations in terms of financing and revenue. “By adjusting expectations, there is a better chance of increasing the roll-out of ecosystem development and for more start-ups to be able to access financing through stages that would have been inconceivable before 2015.”  Change will be transformative, but will not occur overnight. Innovation and digital apps alone will not lead Africans to wealth and stability; and systems, digital connectivity and infrastructure, together with improved human capital and access to services, will be critical for success and sustainability.

Ecosystems to support African entrepreneurs—particularly small and medium firms—must be tailored to the African context. To achieve this, the paper recommends that stakeholders work with entrepreneurs along the entire growth path, rather than through a fragmented approach.

Trade can be another catalyst for entrepreneurship, particularly given that the African Continental Free Trade Area (AfCFTA) became operational in early 2021.

Entrepreneurs will make the AfCFTA work by forging new value chains and exploiting opportunities to scale up via increased trade in regional markets. While the final terms of the agreement will be negotiated over the coming decade, the paper offers recommendations to advance intra-African trade and private sector involvement.  These include accelerated support for innovation hubs; partnerships with business associations to support trade-enabling information platforms; and automated one-stop border processing. They all underscore the importance of integration, connectivity, information dissemination, and scale.

Frederik Teufel, Advisor to the Vice-President and task manager of the White Paper, argues that ”entrepreneurship has been a driver of economic growth throughout the world and Africa should be no different. There is already a highly entrepreneurial culture in place. With the right policies and conditions, the private sector can act as an engine for inclusive prosperity across the continent.”

Click here to read the White Paper

EIF

The COVID-19 pandemic transformed the trade ecosystem for women in the developing world

When COVID-19 lockdowns started and borders closed in March 2020, Euphrosine saw her sales of avocado oil plummet in Rwanda. So she created an online shop on her company’s website to continue selling her products.

The impacts of the COVID-19 pandemic on livelihoods, businesses and trade in least developed countries (LDCs) have been particularly pronounced. According to a WTO report, LDCs saw a 10.3% decline in exports in 2020 compared to 2019, and a 10.5% decline in imports, which led to a significant loss of income. Established and burgeoning tourism industries were brought to a halt, and economic activity suffered with international tourist arrivals collapsing by 67% in LDCs. Business ties were also severed by a lack of connectivity.

This picture of gloom has manifested even more gravely for women entrepreneurs in these countries, as they suffer more acutely from any distortions in the trade ecosystem, and this has been especially evident during the COVID-19 pandemic.

Women, trade and COVID-19

Business and trade rely on a vast ecosystem with various stakeholders. For women traders and entrepreneurs in LDCs, this includes participants along the value chain such as suppliers of raw materials, cooperatives, transporters, warehouse managers and airlines, to mention a few. Elements such as clear customs procedures, established banking systems and good internet connectivity are equally vital.

The COVID-19 pandemic disrupted these systems and stakeholders. Women entrepreneurs had to creatively devise means to continue doing business while navigating the complexities that arose from closed borders and lockdown orders. Traditional models of doing business involving physical movement of persons to facilitate transactions were no longer viable, and e-commerce and digital trade were catapulted to the fore as the most viable means of trade. Euphrosine reacted by partnering with other businesses to share the shipping costs of the bottles she needs to sell her oil.

Digital literacy remains low in LDCs, especially among women, and the general ignorance about benefits accrued from digital trade is high. Internet connectivity is very expensive and IT infrastructure are not well distributed. Studies confirm that internet penetration rates globally are 48% for women, compared to 58% for men. But even with more people in developing countries starting to use the internet, the digital gender gap is actually growing. In LDCs, only 14% of women use the internet, compared to 24% of men.

When the pandemic hit, women in LDCs lacked means of digital connectivity. Many women who had been using their mobile phones for everyday communications were not using the internet for business purposes. Important gaps existed in skills such as online marketing.

The pandemic as an impetus to go digital

Women are resilient, adaptable and quick learners. Small-scale traders at fruit and vegetable markets in Kampala, Uganda, illustrate just that. Prior to the COVID-19 pandemic, sales via digital and online platforms were almost non-existent. Following the start of pandemic and noting that business had ground to a halt in markets due to restrictions on movement, the Jumia e-commerce platform and UNDP partnered to connect women vendors to online consumers. This initiative was launched in conjunction with the Ministry of Trade, a key partner of the Enhanced Integrated Framework (EIF) in supporting Uganda’s efforts to integrate into the global trading economy.

Many of the women vendors had little formal education and limited, if any, exposure to online platforms for business transactions. The initiative started by introducing the e-commerce platform to vendors in five markets, but within three weeks two more markets joined. Each market includes over 700 women across the agricultural value chain, from producers to wholesalers, retailers and exporters. The impact of introducing Jumia was powerful, and allowed women to continue earning incomes even during the lockdown.

Initiatives such as the above offer opportunities, but uptake has its challenges. Not all the women who could have benefitted have a smartphone. According to the 2020 Mobile Gender Gap Report, women across low- and middle-income countries are 8% less likely than men to own a mobile phone, which translates into 165 million fewer women than men owning a mobile phone.

The challenges are further compounded by societal and cultural expectations that women should attend to domestic chores after they return from their businesses. It’s not always possible for women to juggle their caretaking and business roles.

Leveraging the local to go digital

Creative and innovative approaches are required to quickly address some of the challenges faced by women entrepreneurs in LDCs who want to enjoy the benefits of digital trade and e-commerce.

Simple solutions such as ensuring that digital platforms embrace the use of local languages provide a level of trust for women to gain interest in connectivity. Almost all women traders in LDCs subscribe to an association or business membership group. The members of these groups will usually possess varying levels of exposure to information technology, with younger women more proficient compared to older groups. Those with higher levels of exposure can be urged to support their peers through mentorship trainings, so they provide simple explanations and where possible transact on their peers’ behalf as part of on-the-job training to help them gain confidence.

Hybrid strategies combining new digital approaches with traditional approaches should be harnessed and escalated by governments and development partners to address present day challenges, particularly for women. The EIF in collaboration with the International Telecommunications Union (ITU) has launched a programme called Tech as a Driver of Women’s Economic Opportunities in Burundi, Ethiopia and Haiti targeted at building digital skills for women and closing the digital gender gap. More of these interventions are needed, especially in LDCs, to help increase the number of women in business and trade, while deepening their understanding of the complexities around sustaining a successful business. These efforts will help pave the way for the women already in trade to break into regional and international markets.

A better future can be developed by building digital skills capacity, supporting gender specific digital policies that enhance women’s economic empowerment and enabling business mentorship programmes . Then the pandemic could, having wreaked havoc on business and trade, also worked as an enabler of digitalization – with women as its main benefiters.

As for Euphrosine, after a steep digital learning curve establishing the online shop for her business, she has also joined other e-commerce platforms in Rwanda to help drive sales of her avocado oil business.

UNCTAD

The British Standards Institution and the Economic Research Institute for ASEAN and East-Asia have joined the eTrade for all initiative.

 

The UNCTAD-led eTrade for all initiative is going from strength to strength. Two new members – the Economic Research Institute for Association of Southeast Asian Nations (ASEAN) and East-Asia (ERIA) and the British Standards Institution (BSI) – have joined the initiative, raising its membership to 34.

The new members will bring new substantive areas of focus and strengthen the initiative’s efforts to leverage partnerships across the digital economy’s global landscape in supporting developing countries, particularly least developed ones, to use and benefit from e-commerce.

UNCTAD Acting Secretary-General Isabelle Durant welcomed the two organizations and said: “The eTrade for all initiative only exists because of the collective engagement of its partners. We connect the dots among organizations with various expertise and interests and we offer a neutral platform for an inclusive dialogue on how to ensure that the digital economy brings benefits to all.”

Ms. Durant said the initiative would continue to advocate for a more inclusive digital economy and broaden its areas of work with the active involvement of its two new partners.

About the new members

ERIA, an international organization established by 16 East Asia Summit countries, conducts research, policy analysis and advice and capacity-building to support economic integration across the ASEAN and East Asia and wider regional community building.

ERIA investigates, among others, issues related to innovation and technology in development, such as e-commerce, digital marketplace, ICT advancements, renewable energy, the circular economy, cyber security, and interactive learning.

“ERIA is honoured to join eTrade for all. We look forward to strengthening our collaborations with UNCTAD and other eTrade for all partners and contributing to various areas and activities by building on our longstanding work on digital trade and e-commerce across ASEAN and East Asia,” said the organization’s president, Hidetoshi Nishimura.

ERIA has conducted analysis and provided policy support and capacity-building on trade, including digital trade and e-commerce, across ASEAN and East Asia for over a decade. It’s also committed to playing an active role in the upcoming Asia eCommerce Week (17-21 October), one of the key events for eTrade for all partners.

BSI represents the United Kingdom’s interests in standards development across global standards organizations. It helps improve the quality and safety of products, services and systems by enabling the creation of standards and encouraging their use across all sectors.

In a world of rapid technological change, BSI’s collaborative and consensus-based approach with industry experts, government bodies, businesses of all sizes and consumers ensures trust in and speed of adoption of new technologies.

It has been particularly active in developing standards for digital technologies, including artificial intelligence, digital ID, blockchain, cyber security and more, which facilitate international trade and enable market access.

“We are pleased to join the UNCTAD-led eTrade for all initiative, and look forward to working with the network to build trust in the digital economies of developing countries by promoting awareness, development and use of international standards,” said Scott Steedman, director-general of standards at BSI.

BSI recently released a whitepaper, “The Role of Standards in Supporting the Transition to a Digital Economy and Facilitating Digital Trade – Transforming Systems using Standards”, which is focused on the needs of LDCs.

The paper highlights the role that international standards can play in building national digital resilience and promoting trust in e-commerce.

It recommends the development of a standards-based toolkit to help sectors and companies in LDCs prioritize the adoption of standards in key areas such as digital ID, network security, interoperability, data sharing and the provenance and tracking of products in a global value chain.

COVID-19 has led to a surge in e-commerce

E-commerce is playing a growing role in the global economy in the wake of the COVID-19 pandemic. Its expansion impacts the UN Sustainable Development Goals, bringing both new opportunities and challenges.

As social distancing and restrictions on movement have become the new normal to contain the pandemic, businesses and consumers have increasingly “gone digital”, providing and purchasing more goods and services online.

The share of e-commerce of global retail trade is estimated to have surged from 16% in 2019 to about 19% in 2020.  And the accelerated shift to e-commerce is expected to be sustained during recovery from the pandemic.

Initiative more relevant than ever

Against this background, the eTrade for all initiative – launched in 2016 – is more relevant than ever.

Since its inception, it has served as a global helpdesk for developing countries to bridge the knowledge gap on e-commerce information and resources – through its dedicated platform etradeforall.org – and as a catalyser of partnerships.

Positive spill-over effects have also emerged, such as the eTrade readiness assessments and the eTrade for Women initiative.

The most recent example of a collaborative effort was the global review of the impact of COVID-19 on e-commerce and digital trade. In this first research-oriented project of the initiative, a group of partners joined forces and collectively produced a global report and four regional reports.

The research resulted in a snapshot of the pre-pandemic situation, identified early mitigation strategies adopted by governments and businesses in the first stages of the pandemic, and highlighted policy recommendations on how to cope with the fallout from the crisis in the area of e-commerce.

eTrade for all funding partners

The partnership and its spin-off activities have been funded by Australia, Estonia, Finland, Germany, the Republic of Korea, the Netherlands, Sweden, the Enhanced Integrated Framework, and the International Islamic Trade Finance Corporation.

More information about the partnership’s impact and activities can be found at etradeforall.org, as well as a repository of useful resources dedicated to the impacts of COVID-19 relating to e-commerce and the digital economy.

 

eTrade Readiness Assessments (eT Readies) provide a snapshot of the e-commerce ecosystem in developing and least developed countries and regions for each of the seven pillars of the eTrade for all initiative, which are key to embrace their digital transformation: e-commerce assessments, ICT infrastructure, payment solutions, trade facilitation and logistics, legal and regulatory frameworks, skills development and access to finance. They also address challenges related to gender equality and measuring e-commerce and the digital economy.

WTO

At a meeting on e-commerce negotiations held on 21 June, participating members discussed progress in bridging differences and the options available for them to integrate any future outcome of the negotiations into the WTO legal framework. The co-convenors (Australia, Japan, Singapore) noted that several legally viable pathways exist and recognised the different approaches needed to accommodate them. They encouraged members to keep up the momentum and work intensely to achieve the key milestones before the summer break.

The co-convenors underlined that any future outcome should encompass three main objectives: (i) it should fit within the WTO architecture; (ii) it should allow for a sufficient level of ambition, with a high standard of commitments on key topics such as data-related disciplines; (iii) it should be subject to the WTO dispute settlement system to the greatest extent possible.

Ambassador Hung Seng Tan (Singapore), co-convenor of the initiative, urged members to remain open minded and avoid pre-judging outcomes regarding the legal architecture. He reiterated that the absence of an easy solution is an opportunity for the participating members to challenge themselves to devise innovative and relevant responses. He noted that the Trade Facilitation Agreement is a good model, where WTO members found an innovative way to address members’ specific needs, using transition periods and allowing implementation upon receipt of capacity building. He said that this agreement could be a model worth emulating to ensure high standards and inclusive participation in the e-commerce initiative.

The facilitators of small group discussions shared updates on progress made in the work to bridge the differences on text proposals in areas such as open government data, online consumer protection, paperless trading, open internet access, source code, electronic contracts, customs duties on electronic transmissions and transparency. Ambassador George Mina (Australia), who chaired the meeting, called for more flexibility, momentum and creativity as members aim to achieve a clean text on several topics before the summer break.

In his concluding remarks, Ambassador Kazuyuki Yamazaki (Japan), co-convenor of the initiative, urged participants to deepen the discussion on the legal issue while taking all the possible options into consideration. He emphasised the significance of the development aspect of these negotiations for members to achieve balanced and inclusive outcomes. He underscored the need to listen to the concerns of developing and least developed countries and take a targeted approach in addressing their specific development concerns.

WBG

On April 9, Kazakhstanis received disappointing news that one of their favorite chess players, the national and world champion Dinara Saduakassova, had to withdraw from an online chess tournament due to poor internet connectivity. In a video posted online, Dinara lamented that, during the game, she was more worried about the connection than the match.

Although chess may not seem like a life or death concern, there are a myriad of other, more critical opportunities that tens of millions of people across Central Asia are missing out on because of poor internet connectivity. These include jobs, education, collaboration, innovation, and civic participation, among others.

Meaningful digital connectivity, that is, connectivity that is available, accessible, relevant, affordable, safe, trusted, and user-empowering, is a necessity in today’s world —and increasingly, a human right.

Studies show that countries with robust connectivity infrastructure can mitigate up to 50 percent of the negative economic impacts resulting from pandemics. Moreover, just a 10 percent increase in broadband connectivity can add at least 1 percent to economic growth, and a 1 percent increase in internet connectivity can boost exports by 4.3 percent.

Unfortunately, Central Asia still has a long way to go to ensuring good connectivity and enabling economies and people to benefit from digital development.

Nearly half the population in Central Asia is not digitally connected, and many of the unconnected live in rural and remote areas. In fact, three out of the five countries in Central Asia are below the global average in terms of the number of individuals using the internet.


Percentage of Individuals Using the Internet

Fixed Broadband Subscriptions per 100 Inhabitants

Kazakhstan

79% 13.44

Uzbekistan

55% 12.7

Kyrgyz Republic

38% 5.64

Tajikistan

22% 0.07

Turkmenistan

21% 0.09

Global average

54% 13.26
Source: UN E-Government Survey 2020.

But lack of access is not the only problem. An internet connection in Central Asia is expensive, and of poor quality. The low quality of connectivity is a problem even in Kazakhstan, as Dinara Saduakassova can attest, even though it has the highest internet penetration in the region.

All of the Central Asian countries are near the bottom of the global ranking on the average time taken to download a 5GB film or a three-hour full HD (1080p) educational lecture on YouTube. Among Central Asian countries, the Kyrgyz Republic scored highest and yet reached only 146th place globally, 12 minutes ahead of Kazakhstan.


Average download speeds by country


Governments in Central Asia have demonstrated that they can move fast when necessary. For example, Uzbekistan almost doubled its fiber-optic infrastructure from 36,600 kilometers in 2019 to 68,600 km in 2020, and simplified permits for the construction and launch of cell towers, thus enabling an accelerated rollout of mobile networks.

And there are many more examples across the region, from improving access to digital government services to setting up call centers and hotlines and launching channels and information platforms—all of these changes prompted by the need to swiftly respond to the recent pandemic.

Nevertheless, the governments of Central Asia still need to address the root causes of the region’s poor connectivity.

To connect the remaining half of its population to the internet by 2030, it is estimated that countries need to invest at least $6 billion. This will require unwavering political will and an unprecedented multi-stakeholder effort, including a massive influx of private investment for infrastructure deployment and public sector efforts in digital skills development and policy reforms.

So how do we get to meaningful connectivity for all?

First, Central Asian countries need to develop open and competitive telecom markets. They can do this by modernizing the institutional, legal, and regulatory frameworks, bringing them all up to international best practice standards. In this context, it is equally important that the countries remove restrictions on access to all wholesale and retail internet services (including to international gateways) and simplify the burdensome licensing procedures.

Second, the telecom sector needs to be transformed from a state-dominated model to one driven by the private sector: the region must attract private investments to cover the infrastructure needs, particularly in rural and remote areas. Those areas are often commercially unprofitable for private operators. What can be done in such cases is to encourage infrastructure sharing, apply state-aid mechanisms (e.g., award competitive subsidies), and design public-private partnership models.

It is also essential to strengthen the regulatory authority of the telecom sector by granting it the necessary authority to ensure a level playing field among market participants. In addition, the incumbent telecom state-owned enterprises could be “unbundled” to focus on the wholesale infrastructure markets and reach every corner of the country, while stepping out of the retail markets to let the private sector deploy the “last mile” connectivity and focus on customer service innovations.

Third, governments in Central Asia need to develop a digital ecosystem. This includes investments in increasing access to digital devices, enhancing local content, and developing the digital skills of the population. To reap the full spectrum of benefits offered by the digital world, Central Asian countries will need to build capacities for remote work and boost cybersecurity and data protection for citizens and businesses alike.

The World Bank will continue to support Central Asian governments in these efforts, including through our ongoing Digital Central Asia-South Asia program (Digital CASA), which is helping to bring reliable and affordable internet services to the region, link small and medium-sized businesses as well as workers to the regional and global digital economy, create more and better jobs, and catalyze innovations in the delivery of public and private services.

Central Asian countries could seize the moment to ensure inclusive and meaningful digital access for all. This will do a lot more than just help Dinara’s chess game, as it will help speed up economic recovery, create jobs, and promote much-needed growth throughout the region.

IDB

The Inter-American Development Bank will host Miami-LAC 2021 , the first business forum to strengthen connections between Miami, the private sector, and the countries of Latin America and the Caribbean (LAC), on June 22-24, 2021. The forum will promote digital trade and investment opportunities between South Florida and the IDB’s 26 borrowing member countries.

Miami-LAC 2021 serves to promote Vision 2025 , the IDB’s roadmap for a sustainable recovery that includes the important role of the private sector.

Miami-LAC 2021 will also offer one-on-one business matchmaking opportunities for companies in Miami and Latin America and the Caribbean seeking to invest, acquire or supply digital services. On June 22, IDB Invest, the Bank’s private-sector arm, will host a seminar on how technology can be leveraged to promote new tourism opportunities.

The forum will feature panel discussions and presentations that explore success stories in high-value-added groups from entrepreneurs, investors, and corporate leaders from Miami and the LAC region. The hybrid event, to be held at The LAB Miami, will feature a limited in-person audience of prominent local executives and more than 2,000 virtual participants from 68 countries.

Topics will include financing the region’s private sector, empowering the LAC digital trade ecosystem, digital transformation for women entrepreneurs, technology and tourism, financial inclusion through digital services, e-commerce for small and medium enterprises, the role of higher education in the digital economy, tourism, and the growth of augmented reality and virtual reality.

Members of the media are invited to a virtual Roundtable conversation about the forum with IDB President Mauricio Claver-Carone on June 22 at 11:30am ET. Reporters can register for the meeting by clicking on this link .

Miami-LAC 2021 speakers include:  Adrienne Arsht, founder, Adrienne Arsht Latin America Center at the Atlantic Council; Manuel “Manny” Medina, founder and managing partner of Medina Capital; María Paula Arregui, COO of MercadoPago; Thomas “Tigre” Wenrich, CEO of LAB Miami Ventures; Mariana Castro, vice president, sales, marketing and operations, of Microsoft Latin America; and Sylvia Constaín, vice president, government relations, of Visa Latin America, among many others. From the IDB: Mauricio Claver-Carone, president; Jessica Bedoya, chief of staff; James Scriven, CEO of IDB Invest; and Irene Arias Hofman, CEO of IDB Lab, among others.

Miami-LAC 2021 also serves as a special tenth-anniversary edition of the IDB’s flagship event for the global digital services sector, Outsource2LAC, which has facilitated more than 12,000 B2B meetings resulting in more than $310 million in projected business deals.

Media can register to cover the virtual sessions at Miami-LAC.com .

Join the conversation on social media using #MiamiLAC.

 

Members of the media are invited to a Roundtable conversation with IDB President Mauricio Claver-Carone on June 22 at 11:30am ET

WTO

At a meeting on e-commerce negotiations held on 21 June, participating members discussed progress in bridging differences and the options available for them to integrate any future outcome of the negotiations into the WTO legal framework. The co-convenors (Australia, Japan, Singapore) noted that several legally viable pathways exist and recognised the different approaches needed to accommodate them. They encouraged members to keep up the momentum and work intensely to achieve the key milestones before the summer break.

The co-convenors underlined that any future outcome should encompass three main objectives: (i) it should fit within the WTO architecture; (ii) it should allow for a sufficient level of ambition, with a high standard of commitments on key topics such as data-related disciplines; (iii) it should be subject to the WTO dispute settlement system to the greatest extent possible.

Ambassador Hung Seng Tan (Singapore), co-convenor of the initiative, urged members to remain open minded and avoid pre-judging outcomes regarding the legal architecture. He reiterated that the absence of an easy solution is an opportunity for the participating members to challenge themselves to devise innovative and relevant responses. He noted that the Trade Facilitation Agreement is a good model, where WTO members found an innovative way to address members’ specific needs, using transition periods and allowing implementation upon receipt of capacity building. He said that this agreement could be a model worth emulating to ensure high standards and inclusive participation in the e-commerce initiative.

The facilitators of small group discussions shared updates on progress made in the work to bridge the differences on text proposals in areas such as open government data, online consumer protection, paperless trading, open internet access, source code, electronic contracts, customs duties on electronic transmissions and transparency. Ambassador George Mina (Australia), who chaired the meeting, called for more flexibility, momentum and creativity as members aim to achieve a clean text on several topics before the summer break.

In his concluding remarks, Ambassador Kazuyuki Yamazaki (Japan), co-convenor of the initiative, urged participants to deepen the discussion on the legal issue while taking all the possible options into consideration. He emphasised the significance of the development aspect of these negotiations for members to achieve balanced and inclusive outcomes. He underscored the need to listen to the concerns of developing and least developed countries and take a targeted approach in addressing their specific development concerns.

ITU

Globally, over a billion people are unable to prove their identity, barring their access to crucial services like healthcare and education, as well as to job opportunities in the formal economy.

The gap relates not just to identification – but also authentication.

While most people possess some form of ID, some 3.4 billion people are still unable to make use of it online, due to an inability to verify or authenticate their credentials, the World Bank Group estimates.

These key financial exclusion factors have attracted the attention of financial and digital experts in Latin America – a large region where emerging economies tread a fine line between rapidly advancing infrastructure and endemic poverty.

Regulatory calibration

In Mexico, the central bank is working with government agencies to make sure all citizens have some form of ID, whether digital or physical. While these initiatives are progressing fast, “we cannot guarantee a physical ID to all Mexicans,” says Antonio Casada, Vice President of Regulatory Policy at the National Securities and Banking Commission.

This realization, however, paved the way for digital ID solutions. In 2017, the Mexican government issued a regulation enabling banks to perform biometric authentication. Other banks now want to extend to facial recognition and other, more sophisticated proofs of life.

Another challenge for Mexico is dealing with the identification challenges of north-bound migrants from across Latin America.

“Different banks took different approaches, making it difficult for migrants to receive funds from international aid organizations during their time in Mexico,” explains Casada. “We had to amend our regulations to allow banks to use national passports issued by different countries.”

Regulatory calibration is the way forward, he added, pointing out how modifications to accept foreign passports in the country has allowed Mexican citizens to do digital onboarding to use financial services abroad, too.

Seeking synergies

In Brazil, central bank official Adriano Sekita estimates nearly 85 per cent of the population has an identity document. While this might sound like a positive statistic, it means no less than 2 million Brazilians still lack ID of any kind, leaving them without access to any financial service or social assistance, he said.

Still, Sekita notes an uptick in Brazil’s offering of digital financial services lately.

“The number of digital banks and fintechs (financial technology companies) authorized by the central bank has increased overall,” he observes. This makes e-KYC (“know your customer”) and other digital onboarding services increasingly essential at local banks and financial service establishments.

The latest regulations enable new types of institutions to engage fully the in financial sector. Stiffer competition and more diverse financial products translate into greater financial inclusion, Sekita says.

Stronger links are needed between regulators and the public and private sectors, while the central bank must further improve its governance framework, he adds. “We have not yet fully engaged in partnerships to build new solutions in a collaborative way, and have not benefitted yet from potential synergies.”

Private-sector insights

Jorge Arbesu-Cardona, Senior VP of Cyber and Intelligence Solutions at Mastercard Latin America, takes a broader view, raising the question of how to standardize a global, reusable digital ID. Standardized data inputs are just like the information fields found in a physical passport, Arbesu-Cardona suggests.

Smartphone data could form another part of the answer – assuming users will agree to share and validate their information through biometric rather than physical authentication.

But how can financial providers keep personal data safe? Companies experienced in encryption are pivotal in making the exchange of data secure. But being entrusted with customers’ data is not entirely new. Major credit-card brands perform billions of such transactions daily, Arbesu-Cardona notes.

The government of Panama, for instance, has partnered with Mastercard to align technology acquisition with key digital priorities, from disbursement of social programmes to anti-money-laundering (AML) and financial crime intelligence. Digital ID relates to all these components for the country of nearly 4.5 million people.

Despite this relatively small population, Panama forms a major hub for international trade, travel and migration. Just like in Mexico, digital ID will be pivotal to ensure financial inclusion for incoming migrants, Arbesu-Cardona says.

Balancing integrity and inclusion

Ease of access must always be weighed carefully against complex procedural requirements to protect the banking and financial system as a whole.

“Balancing the needs of integrity and inclusion is a key question,” says Fredes Montes, Senior Financial Specialist at the World Bank Group. While these two considerations are not mutually exclusive, one can come at the cost of the other.

The digital ID toolkit found in the G20 Digital Identity Onboarding report, coordinated by the World Bank, should help not only to design inclusive national policies, but also to implement them in practical ways, with sufficient consumer protection and financial risk mitigation, says Montes.

In Casada’s view, the toolkit will help authorities across Latin America identify key policy aspects necessary to scale up digital ID use, becoming a “valuable guideline to strike the right balance.”

Whichever way countries decide to use the toolkit, adds Arbesu-Cardona adds, “the bridge between digital [uptake] and financial inclusion will be some sort of digital identification.”

Based on a panel discussion during the 2021 Financial Inclusion Global Initiative (FIGI) Symposium.

The FIGI programme is a partnership of 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.

The World Bank leads FIGI’s working groups on Digital ID and Electronic Payment Acceptance. ITU leads FIGI’s working group on Security, Infrastructure and Trust.

FIGI findings and reports are available on the FIGI resources webpage.

ESCWA

The United Nations Economic and Social Commission for Western Asia (ESCWA), in partnership with the World Summit Awards (WSA), has virtually launched the call for applications of the first Digital Arabic Content (DAC) Award for sustainable development.

Participants can submit their applications by 30 September 2021 on this link.

The DAC Award, which will be delivered annually, aims to bridge the digital divide, and enable various segments of society to access the Internet and digital services in Arabic. It will also help promote digital technologies and recognize the efforts exerted in this regard to accelerate development in the region.

In her opening statement, Nibal Idlebi, Chief of the Innovation Section at ESCWA, said that digital Arabic content ranks 11th among global languages, while Arabic ranks 4th in terms of the number of Internet users. “The use of Internet and digital content was heavy during COVID-19 pandemic, especially in the countries with good infrastructure where people were able to continue working in an acceptable manner despite the lockdown,” she added.

Applications are open to two categories: (1) public and non-governmental institutions as well as academia; and (2) young entrepreneurs from Arab countries from formal startups, teams of young people, or individuals younger than 35 who have created digital Arabic content applications or products that have a clear impact on society.

Idlebi also stressed the importance of enriching Arabic digital content to preserve the Arabic language on the Internet and increase its shareability.

The Award winners will have their products and experiences introduced at the regional and international levels. Young entrepreneurs will also benefit from the WSA network, lectures, and workshops related to business, technology and sustainable development.

For his part, Peter A. Bruck, WSA Chairman, pointed out that the Arab region has proven over the last years to be a gem in terms of content richness, digital creativity, and forward thinking. “With the ESCWA DAC Award, we have set another step in the mission to foster connection and exchange in the region, supporting local entrepreneurship for sustainable development. It is an important step of a transformative journey towards digital sovereignty and local impact through local content, highlighting the unique power of the region,” he added.

The rules and conditions for participation were set by a joint ESCWA-WSA steering committee, and submissions will be evaluated by a jury of experts, leading to the selection of winners and announcement of their awards at the Arab Forum for Sustainable Development 2022.

ESCWA Executive Secretary Rola Dashti had announced the initiation of this Award last March at the Arab Forum for Sustainable Development (AFSD), to support institutions and young entrepreneurs from Arab countries in their development of innovative digital Arabic content applications and products.

Submit your projects: https://escwa.icnm.net/Signup/ESCWA-DAC/2021

ECA

The overarching objective of this course, as a deliverable under the “Global initiative towards post-Covid-19 MSME sector” project, is to build awareness and capacities of entrepreneurs, businesses and policy makers in Africa on the role that technology and innovation can play in assisting businesses address the impacts of economic shocks such as Covid-19 and build resilience against future shocks.

The course is intended to be practical rather than academic in content and to make use of case examples to highlight how technology-based and innovative applications can help firms in Africa survive, grow and remain competitive in times of crisis and be better prepared at addressing the impacts of future economic shocks. The course will endeavor to showcase best practices from other regions that can have useful applications for African businesses. Challenges that firms can face to access technology and engage in innovation will be discussed, while recognizing that technology and innovation on their own are not panaceas to addressing firms’ problems in times of crisis and should be complemented by other policy tools. The structure of the course is as follows:

  • Module 1 (1st week – whole or partial): Introduction to Technology & Innovation and Concepts of  Relevance for SMEs, including Entrepreneurship;
  • Module 2 (1st week – whole or partial): COVID-19 and its implications on MSMEs with a focus on Africa;
  • Module 3 (2nd week – whole or partial): The State of Technology and Innovation in the World;
  • Module 4 (3rd week – whole or partial): Technology and Innovation to Mitigate the Impacts of Covid-19 on African MSMEs;
  • Module 5 (4th week – whole or partial): Barriers to Access to Technology and Innovation in Africa and Policy Recommendations for Improving Access of African MSMEs to Technology and Innovation
Type : Online Course Self-paced Course
Programme Area :  Technology and Innovation
Beginning of the course :  July 12 – 12 August 2021
Duration : 4 Weeks
Language : English
Location : Web Based E-Learning
Fee : No Fee
Application Deadline :  June 25th, 2021
Specific target audience : No
Website : https://services.unidep.org/e-idep
Applications : https://www.unidep.org/?apply
UNCTAD

Substantial progress has been made on World Summit on the Information Society (WSIS) goals since 2005. Most visibly, along with the notable growth in subsea optical fiber networks linking the continents in a web of glass, the arrival of smartphones in 2007 and the rapid growth of 4G mobile networks has provided Internet and World Wide Web access to billions. Significant MEO and now LEO satellite capability is either operational or on the horizon.

Millions of smartphone applications have been developed and downloaded into billions of mobile phones. We can also cite progress in electronic funds transfer capabilities, even without considering so-called cryptocurrencies that remain somewhat problematic in terms of stability.  “Internet of Things” is becoming a rapidly growing business with supporting devices and online services emerging persistently and their utility is increasingly apparent.

A popular development in digital technology is the concept of open source. A number of open-source libraries have allowed rapid development of new applications by saving developers the trouble of inventing new operating systems and offering them pre-fabricated building blocks out of which to develop myriad new applications.

In this same period, we have seen the creation and spread of several so-called social media. Some have thrived and some have come and gone. Streaming media for audio and video are very popular where Internet access has adequate capacity. During the COVID-19 pandemic, heavier than ever use of the Internet has emerged in support of remote work, education and healthcare, especially interactive video-conferencing.

However, we have discovered that reduced barriers to access to online services has downside risks. Increased dependence on online products and services means cascading and potentially negative side effects when they are inaccessible or fail to operate. Malware is widespread as are “phishing” attacks, denial-of-service attacks and the propagation of misinformation and disinformation with  potential social and economic harms.

These concerns have heightened interest in protecting users through training, technology and law enforcement actions and raise important interest in international cooperation. The UN Secretary-General’s Digital Cooperation Roadmap has given considerable impetus to cross-border collaboration.

Concern for citizen safety has driven some nations to seek to limit transborder data flow under the rubric of “data sovereignty.” While often well-intended, such measures could have significant negative side-effects for the resilience of cloud computing services and resistance to data loss, harming public, private and civil society interests.

I have little doubt, however, that more cooperation among governments and private sector entities is needed to protect citizen interests. All sectors regularly using the Internet need improved tools for safety, security and privacy as well as strong authentication and use of public key cryptography.

The remaining years of the 2020s will provide serious opportunities to improve the safety, security, privacy, sustainability and reliability of digital technologies, allowing us to harvest their beneficial power while limiting their potential hazards.

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