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RCEP E-Commerce Provisions and What They Mean for Cambodia

With the Regional Comprehensive Economic Partnership (RCEP) set to come into force in January 2022, the agreement’s e-commerce provisions will play a crucial role in facilitating trade digitalisation and cross-border trade, of particular importance for Cambodian MSMEs. These themes were addressed during the first Public-Private Dialogue in the new Unpacking the RCEP Agreement series. Focusing on ‘The RCEP E-commerce Provisions and What They Mean for Cambodia’, it was organised by ERIA’s Capacity Building Programme and co-hosted by Cambodia’s Ministry of Commerce. With over 100 participants, this Dialogue was an opportunity to discuss the benefits and challenges of the e-commerce provisions with the private sector, alongside government and trade experts.

In his opening comments, HE SIM Sokheng, Secretary of State, Ministry of Commerce, highlighted the importance of this Dialogue as a platform to share insights between the public and private sectors. He noted that RCEP will be a foundation for trade and investment in the region and has the potential to foster employment in Cambodia. He also highlighted the establishment of the Cambodia trade e-market platform which supports MSMEs to increase cross-border business opportunities through e-commerce.

Mr Andreas Zurbrugg, Deputy Ambassador of the Australian Embassy in Cambodia, in his welcoming comments, noted the benefits of RCEP including the harmonisation of rules of origin through a single set of rules and procedures for traders whilst promoting a robust regional supply chain. He noted that RCEP will contribute to a safer and robust digital economy. Australia’s commitment to the region can be seen through its new regional trade development initiative, valued at USD 24 million, which assists eligible ASEAN Member States (AMS) to implement RCEP, in addition to its new flagship bilateral economic programme for Cambodia to promote economic diversification and economic resilience.

The Public-Private Dialogue was divided into three sessions:

Session 1: Setting the Scene: The RCEP E-commerce Agreement and Cambodia’s Work Plan for Its Implementation

HE SOK Siphana, Senior Advisor to the Royal Government of Cambodia, stated that in the Cambodian context, the RCEP e-commerce provisions are suitable especially for young entrepreneurs. However, he added that it will take time for the benefits to be seen as the domestic regulatory framework needs to align with RCEP. He also noted that although the e-commerce chapter needs further elaboration on data protection, the agreement will promote new opportunities and investment.

Dr Deborah Elms, Executive Director of the Asian Trade Centre, highlighted three issues that need to be developed further: data information flows, data localisation and the customs moratorium. However, trade in goods e-commerce will still benefit from tariff cuts. In her opinion, RCEP can create new business opportunities, but the full benefits will be delayed as not all AMS have yet ratified the agreement.

Ms SRENG Nearirath, Deputy Head of Banking and Finance Practice Group, DFDL Mekong, Cambodia, focused on the regulatory environment. She spotlighted fintech and payment getaway as the services in demand, but noted weaknesses around data protection for robust e-commerce development. She went on to discuss actions needed to apply for the mandatory e-commerce licenses and permits, adding that the e-commerce regulations adopted in 2019 is still generally aligned with RCEP.

Session 2: Private Sector Perspectives on Opportunities for Cambodia in RCEP

CHEA Langda, Founder and Chief Executive Officer of BookMe Bus observed the growth in digitalisation in Cambodia, especially during the COVID-19 pandemic. With the recently established travel bubble and plans to unlock tourism in Cambodia, there are good opportunities for MSMEs in Cambodia to tap into the growth offered by digitalization. He noted that in the transportation and tourism sectors, shifting consumer behaviour is seen by the use of online applications for local transportation. He also discussed how technology could promote innovation by utilising e-commerce platforms for providing logistic services, and the importance of the public-private partnerships instruments.

LCT CHEA Ratha, Vice President of the Cambodia Women Entrepreneur Association (CWEA) stated that women-led enterprises are a majority of Cambodian MSMEs, but women tend to lack access to market, technology, and information. Responding to this, CWEA has a ‘3E’ strategy: Engage, Equip, Empower. This involves engaging women-led enterprises, equipping them with technology skills to transform their digitalisation, and empowering women with knowledge and skills. She highlighted the importance of investing in women as an opportunity, not a charity. She also mentioned some programme initiatives led by CWEA by implementing the principle of collaborative approach.

PRAYAG Chitrakar Country Manager of DHL Express (Cambodia) Ltd. shared how DHL has provided cross-border trade facilitation through shipment services and customs facilitation. He discussed the importance of public-private partnerships to enhance cross-border trade in Cambodia, highlighting DHL initiatives that focus on B2C to support Cambodian SMEs in cross-border trade facilitation. He also described DHL’s efforts to provide lower value shipment and de minimis threshold in order to provide seamless cross-border trade facilitation in Cambodia.

Kenneth Tang, of Auscham Cambodia and Managing Director of Dynamic Technologies, shared his views on the cross-border market in Cambodia, emphasising three emerging business sectors in Cambodia: tourism, e-commerce and manufacturing. He discussed strategies on how to increase venture capital in Cambodia relating to labour costs, the growing middle class, and technology awareness amongst Cambodians.

Session 3: Discussion on Bridging National Interest and Global Trends

H.E. DG RATH Saravuth of the General Directorate of International Trade, Ministry of Commerce, stated that the e-commerce provisions of RCEP offer opportunities for cross-border trade amongst participating countries. RCEP will foster Cambodian e-commerce by providing a framework for consumer protection and data protection. He also noted that government assistance to enhance the capacity and competitiveness for MSMEs and start-ups is a priority, as well as sharing thoughts around the existing policy framework to support and to facilitate the private sector and MSMEs in regional trade and resilient global-value chain.

Mr MOM Varin, Vice-President, Cambodia E-business Association and CEO, AngkorStores.com, stated that RCEP will foster Cambodian e-commerce development as the stakeholders feel protected under the regulatory structure. He highlighted the importance of facilitating MSMEs to use e-commerce in order to expand their market businesses. He also noted the importance in providing better understanding to all of the stakeholders in e-commerce to optimise RCEP’s potential  benefits.

Mr Anthony Samson, Second Secretary, Australia Embassy, discussed the benefits of RCEP to Australia in expanding their business development trajectory. He noted the importance of investment in ICT infrastructure so that Cambodia profits from digital transformation. He mentioned Australia’s commitment to promote the MSMEs development to tap in digital economy through several programme initiatives in partnerships for instance with the Cambodian Ministry of Commerce for the E-commerce Aid for trade fund and ERIA’s capacity building programme. He stressed the importance of ensuring fair and competitive business sectors to enter the digital market, in which RCEP plays a crucial role.

Mr Sven Callebaut, International Trade Consultant for ERIA’s Capacity Building Programme moderated Sessions 1 and 2, with Mr Danny Burrows, Founder and Principal of TradeWorthy Ltd. moderating Session 3. Mr Jeremy Gross, ERIA’s Director of Capacity Building of ERIA was the host of the Dialogue.

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WBG

Gender equality and digital development are inextricably linked. Yet globally, men are 21 percent more likely to be online than women, a figure that rises to 52 percent in low-income countriesThe Web Foundation estimates that barriers that keep women and girls offline — high device and data costs, lower digital skills, and restrictive social norms, to name a few — have cost developing countries about $1 trillion over the last decade.

The Digital Development Global Practice recently launched a new approach to accelerate its work on gender equality, with an ambitious vision that centers women and girls across its financing and analytics. The approach orients solutions to the five foundational pillars of the digital economy: digital infrastructure, digital public platforms, digital financial services, digital businesses, and digital skills. It also emphasizes the need for more and better sex-disaggregated data and to tackle risks, such as algorithmic bias and online gender-based violence.

Digital Infrastructure

Within infrastructure, practical solutions that increase access, affordability, and usage are critical. Intentional design that locates public Internet access points in safe spaces (for example, libraries and community centers) is a good start. Other interventions that support the closing of adoption gaps improve the affordability of devices and data plans and tailor digital skills programs for women. Traditionally underutilized universal service and access funds can help. However, only four out of 69 countries have deployed these funds to close the gender digital divide.  Device affordability schemes also show promise. The recently approved Uganda Digital Acceleration Project will test some of these innovations.

Digital Public Platforms

Access to digital public platforms often requires digital identification, which women lack compared to men. Barriers that women face often include legal requirements to present additional documents, for example, a marriage certificate. High registration costs and inconveniently located registration points also deter women. The Nigeria Digital Identification for Development Project conducted a qualitative study designed to understand the needs of women and marginalized groups, which surfaced several solutions. These include working through trusted networks and women’s groups to share information; locating registration centers close to communities; and designing registration policies that prioritize vulnerable groups. Other options include women-only registration centers, mobile registration services, and female enrollment agents.

Digital Financial Services

Digital payments, whether to provide wages, social assistance, or agricultural transfers, can save women time and provide added privacy, security, and control, thereby contributing to women’s empowerment. This is a key focus on the G2Px initiative, launched in early 2020 in partnership with the Bill and Melinda Gates Foundation.

In Benin, where an estimated 19 percent of women make or receive digital payments compared to 38 percent of men, another World Bank initiative aims to provide women smallholders with a safe and private place to store their money and connect them with other financial services. Complementary training on digital financial literacy for recipients and promoting a network of women agents can also help, as social norms often limit women’s ability to interact with male agents.

Digital Businesses

Women entrepreneurs often face a range of barriers, including unequal access to financing, legal discrimination, differences in skills, less access to networks, and more care responsibilities. They are also poorly represented in technology startups. To address these constraints, the Digital Cabo Verde Project aims to support women entrepreneurs with business and entrepreneurial mindset training, access to business networks, peer support, and mentoring.

Beyond comprehensive support for women-led businesses, tackling investor bias is critical. Research suggests that the persistent gender gap in financing cannot easily be explained by differences in education, experience, sector, intellectual property, or geography.

Digital Skills

Building digital skills starts early with hands-on exposure to technology to build girls’ interest and confidence. Typically, complementing technical skills training with soft skills, engaging role models, and creating structured linkages to the labor market through internships, apprenticeships, and job placement programs have positive outcomes. The Kosovo Digital Economy Project, which trains rural women in programming and web design to become online freelancers, shows how digital skills training can create pathways to economic prosperity. Women with disabilities, older women, and illiterate adults may require tailored curricula and flexible programs with active outreach to develop their basic digital skills — another key area for engagement.

Cutting across these pillars is the need to address restrictive gender norms that prevent women from fully participating in the digital economy. Solutions to tackle these vary with context but addressing gender stereotypes and engaging men and boys are essential steps in shifting beliefs and behaviors.

Ensuring that women and girls have equal access to and use of digital technologies — mobile phones, computers, and the internet — is central to their economic and social empowerment and inclusive economic recovery. As we accelerate our efforts on the digital inclusion of women and girls, we call on our partners to join us in this ambitious agenda.

UN

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

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

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

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

‘Connectivity boost’

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

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

Uneven growth 

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

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

A ‘connectivity Grand Canyon’

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

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

‘Digitally excluded’

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

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

WBG

For citizens in countries around the world, paying taxes is among their most challenging and time-consuming interactions with government.  For many governments, enhancing tax compliance and collecting sufficient revenue have been a matter of necessity to finance public goods and services.

That is why tax administrations are undertaking the digital transformation and automation of their systems. The adoption of technology can enable successful and sustainable tax reforms, ensure the proper taxation of the digital economy, and reduce the obstacles to compliance. The COVID-19 pandemic, which led to a boom in the use of digital commerce, made this change especially urgent for tax administrations.

The transformation has progressed increasingly rapidly over the past decade, as the cost of digital technologies has plunged and powerful tools to develop applications have become more user-friendly. One example of the falling cost: Cloud storage is now over 50% cheaper than it was a few years ago.

The rise of big data is an important factor in the shift because it can allow easy cross-checking of information, which enhances compliance by taxpayers. Overall, global data volume from mobile payment providers, electronic cash registers, online marketplaces, and other digital sources is expected to nearly triple from 2020 to 2024. 

Digital transformation is also being driven by the rapid growth of e-commerce, which is projected to expand 24% from 2020 to 2025, making it an increasingly important part of the tax base.

The increasing use of cashless payments, through mobile phones and other devices, is also powering the change. Such payments can be easily reviewed by tax administrations and often leave a digital trail that can be audited.

Digitalization makes life easier for authorities by easing the administrative burden, which gives officials more time to focus on higher-value activities.  But it also allows authorities to simplify procedures and reduce the compliance burden on taxpayers. Research shows that in South Korea, for example, digitalization has reduced compliance costs by as much as 19% in the 2011-2016 period.

A real-time, more user-friendly future

With these changes underway, taxation is likely to look a lot different in the future:

  • Instead of storing huge amounts of taxpayer data, administrations will have access to encrypted, distributed ledgers that allow them to capture tax information seamlessly and in real time. This has the added benefit of making tax administrations “less visible” to the public.
  • The decisions of the tax administrations will increasingly be supported and strengthened by artificial intelligence. But the system will need to be closely monitored for errors.
  • Tax administrations could become warehouses for more and more government data. That will give them a central role in the formulation of economic policy, enabling policymakers to review transactions in the economy and allowing better forecasting.
  • The tax system could become much more user-friendly. Services could include prefilled tax returns, taxpayers’ access to their own filing information, the sharing of data with banks to expedite credit approval, along with privacy preserving queries on the tax file by researchers and local communities.
  • Tax administrations will streamline the interface between taxpayers and tax officials, for instance by connecting corporate accounting systems with the tax administrations’ e-filing and e-payment platforms.

Making change work

Despite all the benefits, this transformation is up against major challenges. Research shows that most digital transformation initiatives don’t succeed. Of the $1.3 trillion spent in 2018, an estimated $900 billion was wasted.

To have the desired result, the digitalization of tax systems must enlist a broad coalition of stakeholders to make the necessary legal reforms and provide the funding. 

The shift should also focus on providing value by simplifying procedures and permanently bringing taxpayers into the e-filing, e-payment, and e-document ecosystem. The value could be provided by reduced compliance costs, increased tax certainty, and higher compliance.

In addition, reform should aim to change the culture from managing processes to managing data, and administrations should focus on getting the right data. One high-income jurisdiction told us that there were errors in 15% of their taxpayer files and that 98% of returns could be prefilled with data from just banks.

Finally, tax administrations must develop scalable and interoperable systems that can be used across departments, in headquarters and in the field. 

The process can be cumbersome, but by providing finance and technical assistance, the World Bank has already supported administrators’ efforts on automation and digitalization in dozens of countries—benefiting governments and citizens alike.

ITU

ITU Digital World 2021 SME Awards showcase sustainable digital solutions, helping creative start-ups forge partnerships and attract investment

​Inspiring technology solutions hold the potential to change and improve lives across the globe through the drive and dedication of small and medium-sized enterprises (SMEs).

Winning solutions from digital SMEs based in Hong Kong (China), Mexico, Saudi Arabia, Switzerland, South Korea, and the United States were showcased and announced at the ITU Digital World Awards Ceremony, the finale of the ITU Digital World 2021 event and a key SME promotion programme from the United Nations tech agency on Wednesday.

The International Telecommunication Union (ITU) – the UN’s specialized agency for information and communication technologies (ICTs) – has highlighted SMEs as crucial contributors to help harness the world’s ongoing digital transformation to ensure sustainable development.

The latest ITU Digital World Awards recognized outstanding SME contributions to advance connectivity, smart cities and smart living, e-health, digital finance, and education technology.

“Innovative tech SMEs – fast-moving and responsive to the needs of different markets on the ground – have a vital role to play in accelerating digital transformation,” said ITU Secretary-General Houlin Zhao. “Governments and the ICT industry need to act together to foster a climate that supports technology and business innovation, helping companies like our award winners scale up and flourish.”

Six winners emerged this year, spanning the five key categories.

Winning SMEs

The winners were:
Company Category​ Country
Benefit Vantage Limited – Ipification Connectivity Hong Kong, China
WIWI Connectivity Mexico
URBIT GROUP LLC Digital finance United States of America
Baobabooks Education Sàrl Education technology Switzerland
Mawidy E-health Kingdom of Saudi Arabia
SCE Korea, Inc. Smart cities, smart living Republic of Korea

ITU Deputy Secretary-General Malcolm Johnson recognized the winners and presented their certificates in the presence of Viet Nam’s Deputy Minister of Information and Communications, Phan Tam.

This seventh edition of the Awards marked the final event of a three-month online conference and exhibition co-hosted by Viet Nam. Opening in September, ITU Digital World 2021 also marked the 50th anniversary of ITU’s flagship Telecom conference and exhibition series.

During the ceremony, a new partnership for ITU with US technology firm Hewlett Packard Enterprise (HPE) was announced, aimed at accelerating the programme next year and equipping SMEs with access to HPE tools, networks, and mentoring.

Competitive selection

The competition was open to all SMEs worldwide, with winning projects ranging from mobile authentication and information accessibility to connectivity for public transport, financial technology (fintech), creative writing, and healthcare powered by artificial intelligence (AI).A jury of experts, representing the fields of business, technology and entrepreneurship, selected the winners from a total of 133 eligible applicants from 53 countries.

Prepping transformative SMEs

The ITU Digital World Awards formed part of an expert-led SME Programme of online masterclasses and pitching for digital SMEs. Maintaining the virtual format, the final awards ceremony celebrated the creativity and innovation behind digital solutions meeting real-world needs.

The special masterclasses explored areas such as sustainable start-ups and SME-corporate collaboration, bidding for government procurement opportunities, customer service and innovation, e-health, designing for disability inclusion and fundraising. The SME Programme and Awards are key components of ITU Digital World 2021, which was co-hosted with the Government of Viet Nam and took place from September-December 2021.

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