High-level panel highlights development opportunities offered by the digital economy

High-level panel highlights development opportunities offered by the digital economy

At a high-level panel on “Harnessing the benefits of digital trade” on 27 June at the Aid for Trade Global Review, speakers discussed the potential of digital trade to support growth and innovation in developing economies. They highlighted the rapid expansion of digitally delivered services and the importance of building the necessary infrastructure to help countries participate in the digital economy.

The challenges and opportunities for developing economies, particularly African countries, in exploiting their digital trade potential were also discussed. Speakers underlined the need for improved digital connectivity, a supportive regulatory environment and trade capacity building.

In her opening remarks, WTO Director-General Ngozi Okonjo-Iweala said: “The digital economy presents immense opportunities for growth, innovation, development and inclusivity. Trade in digitally delivered services is the fastest growing segment of global trade, growing at an average of 8% per year since 2005 and quadrupling in value to reach $4.25 trillion last year. This growth is faster than growth for trade in goods and even for other services. It’s particularly promising in Africa, and it’s promising in other developing parts of the world.”

Ambassador Hung Seng Tan of Singapore provided some insights into what developing economies can do to achieve greater integration into the digital economy.

He said that it is important for developing economies to fully embrace digital trade because it is becoming the engine of economic growth. He also encouraged developing economies to participate in the formulation of digital trade rules in the WTO and develop their digital infrastructure. This encompasses issues such as digital identity, authorisation and consent, e-payment interoperability, and data exchange.

Mr David Yardley, of the Australian Department of Foreign Affairs and Trade provided an update on the e-commerce negotiations taking place at the WTO under the joint statement initiative.

He said that digital trade rules can optimize the benefits of the digital economy. Digital trade rules can promote the interests of consumers and support inclusion, helping to bridge the digital divide. While rulemaking plays a role in helping create coherence, it needs to be looked at through the Aid for Trade lens to ensure that the potential created by having consistent rules is realized, he noted.

Ambassador Usha Dwarka-Canabady of Mauritius said that in order to bridge the digital divide in Africa, there is a need to reduce the cost of internet access and ensure a robust digital infrastructure. It is also important to implement effective regulatory frameworks and enhance the digital capabilities of small and medium-sized enterprises to fully harness the potential of digital trade, she added.

Victoria Kwakwa, Vice President, Eastern and Southern Africa, at the World Bank, outlined the Bank’s work on the digital agenda, including a programme up to 2030 which will prepare countries for participating more fully in the digital economy. The programme addresses issues such as the digital divide and the lack of hard and soft infrastructure among other things.

Ms Kwakwa said that the joint work of the WTO and World Bank on the Digital Trade in Africa initiative aims to bring greater analysis to the digital trade policy question. So far, work has been finalized for Benin, Côte d’Ivoire, Ghana, Nigeria and Rwanda.

She said: “What we realize is that we need globally to work more in partnerships. The challenges are huge, and working in partnerships gives the opportunity to make the whole bigger than the sum of its parts. And this is what we’re doing with the WTO.”

Deputy Director-General Johanna Hill emphasized the importance of digital transformation, highlighting its impact across various sectors, such as agriculture, services and manufacturing. Digital technologies are seen as key drivers of economic development and inclusivity, with significant growth opportunities, especially in Africa. She pointed out specific examples of digital export growth in developing countries such as Pakistan and Bangladesh, and the success of India and the Philippines for example in the computer services trade and business process outsourcing.

DDG Hill also stressed the importance of partnerships with institutions such as the World Bank and other multilateral organizations to improve digital connectivity and regulatory environments.

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