News

ITU Plenipotentiary Conference in Romania will elect next management team for UN system agency and chart path for global digital transformation.

The highest decision-making body of the International Telecommunication Union (ITU) opened today with delegates from around the world pursuing digital cooperation and transformation for the good of all.

ITU’s 21st Plenipotentiary Conference, known as “PP-22″, features elections for the organization’s top management posts – Secretary-General, Deputy Secretary-General, and Directors for Radiocommunication, Telecommunication Standardization, and Telecommunication Development – along with the 12-seat Radio Regulations Board and 48-seat ITU Council.

Digital networks and technologies have empowered billions of people worldwide, facilitating business, education, government services, trade, and social interactions through the toughest phases of COVID-19. Yet Internet uptake has slowed over the past year, leaving 2.7 billion people – or one-third of the world’s population – unconnected.

“We are in the middle of a digital revolution that enables and provides the means for the development of new industries and converged services, such as smart vehicles, healthcare, smart cities, and homes,” said Romania’s Vice Prime Minister Sorin Grindeanu in his opening speech to PP-22.

“At this turning point in technological development, we must not forget our essential duty to respect the human being,” he added, stressing the need “to protect the freedom and prosperity of future generations, in whose lives the technologies we see today as emerging will play a determining role.”

ITU is the United Nations specialized agency for information and communications technologies (ICTs). As the conference opened Monday morning in the Romanian capital, ITU Secretary-General Houlin Zhao said efforts must be expanded to make technology accessible and affordable to everyone, everywhere.

“Equitable access to ICTs is not just a moral responsibility, it is essential for global prosperity and sustainability,” said Zhao, who has led the organization for the past eight years. “The decisions made here in Bucharest will determine our direction and priorities in line with the evolving needs of ITU’s diverse and growing global membership, helping shape the future of the information society in both developed and developing countries.”

Shaping global digital growth

Delegates at the quadrennial conference include government ministers and officials, representatives from national, regional, and international bodies, academic institutions, and the private sector –companies dealing with telecommunications and the Internet – reflecting an aspect of ITU’s membership mix that is unique in the UN system.

UN Secretary-General António Guterres highlighted “the opportunity to form common positions that will shape global digital transformation for years to come” and urged delegates to “seize the opportunities of digital technology while protecting against its risks.”

In a pre-recorded video message, he called on the high-level audience from government and industry “to put humanity’s progress at the centre of your discussions” over the next three weeks.

How the conference works

The Plenipotentiary Conference, held every four years, enables nations and governments to reach coordinated decisions on the advancement of vital technologies. PP-22 provides a crucial forum for governments spanning every world region to build consensus on the radio and satellite harmonization, telecom standardization, and digital development.

The election for ITU’s next secretary-general is set to open during the morning of Thursday, 29 September. Elections for ITU’s senior management team will follow.

After all elections are concluded, an expected 2,500 delegates from ITU’s 193 Member States will decide on the organization’s strategic and financial plans, as well as set out its roadmap for connecting the world over the coming four-year period.

“In a world increasingly dependent on technology, ITU’s Plenipotentiary Conference is an opportunity to address crucial topics that will shape our digital future for generations to come,” said Sabin Sărmaș, PP-22 Chair-designate and head of Romania’s parliamentary Information Technology and Communications Commission. “Our primary goal – to improve people’s lives – can only be achieved by adopting a shared policy blueprint reflecting green, gender, and youth inclusion priorities. This is what I, along with the Government of Romania, will stand for during PP-22.”

PP-22 takes place between 26 September and 14 October at Bucharest’s Palace of Parliament.

A year after the UN launched an initiative to accelerate green and digital job creation, and expand social protection, the Secretary-General on Friday urged world leaders to “put people first” by making massive investments in their future wellbeing.


According to António Guterres, the Global Accelerator on Jobs and Social Protection for Just Transitions aims to rebalance societies by putting decent jobs and social protection at the centre of sustainable development.

“The path of inaction leads to economic collapse and climate catastrophe, widening inequalities and escalating social unrest”, which could leave “billions trapped in vicious circles of poverty and destitution”, he warned a High-Level meeting during the 77th General Assembly in New York.

Female construction workers help to build the foundation for a wind farm in Thailand.
© ADB
Female construction workers help to build the foundation for a wind farm in Thailand.

Countries taking the lead

Mr. Guterres commended the actions of countries such as Togo, which deployed innovative digital solutions to expand social protection to hard-to-reach populations, and South Africa, which recently launched a Just Energy Transition partnership.

“It is imperative that we provide the support needed – at speed and at scale – to keep the momentum and ambition of these and similar initiatives alive”, he underscored.

He said the present economic system is unfair, boosting inequalities and pushing more people into poverty, and that’s why it requires a deep structural reform.

“We are working hard to achieve that – but change won’t happen overnight. In the interim, the Global Accelerator is a critical tool to help provide immediate support to people in need and advance action towards transformative change for all”, he said.

The initiative aims to create 400 million new decent jobs—especially in the green, care and digital economies— and extend social protection to the over four billion people currently without coverage.

It is also meant to be a tool to help the world manage the massive transformations in areas such as digital, climate, or demographic change, that will fundamentally change societies in the coming decades.

A woman installs a solar panel on a roof in Bhutan.
© ADB
A woman installs a solar panel on a roof in Bhutan.

Youth at the centre

Meanwhile, The UN’s Special Envoy for Youth, Jayathma Wickramanayake, reminded world leaders that young people must be at the centre of all strategies and actions regarding jobs and social protection.

The total number of unemployed youths worldwide is estimated to reach 73 million in 2022, 6 million above pre pandemic levels in 2019, young women are the hardest hit”, she underscored, adding that young people also experience systemic legal and financial barriers to benefitting from social protection policies and programmes.

“To truly shift this paradigm, we should work with all people including young people as agents of change and not only beneficiaries, and at every level of the just transitions this initiative seeks to enable”, Ms. Wickramanayake said.

Domestic labourers comprise a significant part of the global workforce in informal employment and are among the most vulnerable groups of workers.
@ILO/J.Maillard
Domestic labourers comprise a significant part of the global workforce in informal employment and are among the most vulnerable groups of workers.

Addressing the bottlenecks

Echoing the words of the Secretary-General, the International Labour Organization’s chief, Guy Ryder, warned that the world is on “red alert”, in the event that effective responses to the overlapping climate and cost of living crises are not found.

“We will see massive suffering, more instability, and potentially more conflict.  But it doesn’t have to be this way”, he explained.

Mr. Ryder underscored that it is crucial to address the current bottlenecks to expand and safeguard the 3,000 social protection and labour market stimulus measures put in place by governments at the height of the COVID-19 pandemic.

“We all know what those bottlenecks are: the lack of financing that is scalable, sustainable, socially inclusive and it supports just transitions; the persistent challenges of informality; the limited fiscal space; and the lack of institutional capacity in many countries”, he added.

Young female workers pack beans on a farm in Addis Ababa, Ethiopia.
© ILO/Sven Torfinn
Young female workers pack beans on a farm in Addis Ababa, Ethiopia.

Better lives for billions

The ILO Director General emphasized that the Global Accelerator is a UN proposition to “collectively address these bottlenecks”, and to change the life of billions for the better.

“The four billion women, men and children who have no social protection; the two billion workers in the informal economy; and the millions of men and women who risk losing their jobs and incomes”, on a level “not seen for a generation”, he noted.

Mr. Ryder highlighted that the Global Accelerator was not a distraction from the crisis of climate, fuel, food and finance, but instead a “crucial component” of the necessary global response to address them.

The entire civil aviation system runs on trust, a responsibility that is at the core of everything ICAO does. Passengers expect to fly safely, operators have to trust that safety systems will meet their needs, and States place trust in ICAO to provide a forum for harmonized global standards that enable a safe, secure and efficient civil aviation system. This trust depends on the safe and reliable flow of information between all these parties, an effort that the internet has revolutionized through its management of information on a global scale.

Some of the new and emerging entrants to the aviation system like drones, air taxis, and commercial space operations were “born digital” and rely on the internet for their basic operations. As aviation increases its use and takes more advantage of the internet’s power and reach, some of its limitations make aviation-centric information exchange extremely challenging. This, combined with the rapid, tech-focused pace of the new entrants clashing with legacy aviation’s slow and methodical approach, is why ICAO is developing an International Aviation Trust Framework (IATF).

Historically, aviation has used meticulously designed, purpose-built systems to exchange information between parties. In the early days, this was necessary simply because a global communications infrastructure did not exist. The advantages were that these custom systems met all of aviation’s unique safety and operational needs and ultimately resulted in a seamless sky where anyone could fly anywhere. Aviation information needs to flow safely between parties and needs to be accurate and unaltered. But the internet was never designed with these requirements in mind. It only ensures that information can flow between any two points across any path, but offers no guarantees on the reliability of those paths or that the information can’t be modified while in transit. Solutions to these problems exist, but they are not aviation specific, and without a standardized approach to how they are implemented, the aviation system will ultimately end up with a disjointed patchwork of systems that cannot easily communicate with each other, despite being built on the same technologies.

The new entrants described above will continue to roll out their operational capabilities at a pace that traditional aviation cannot keep up with, leading to even more divergence. Not only does this separation increase the complexity and cost of connecting these systems together, but it can also impact safety and expose aviation to new cyber-related threats that were never considered before.

This is where ICAO’s work on the IATF is needed. ICAO provides an ideal forum for aviation stakeholders to come together and agree on a common destination that all stakeholders, new and old, can target irrespective of their implementation speed. This work leads to the development of standards and harmonized procedures that allow for seamless information exchanges between all parties so that we can maintain our seamless sky.  To address these unique challenges, ICAO is working with experts from around the world with different areas of expertise to develop an information management framework to ensure that information flowing across the internet is done safely and securely. ICAO is also developing policies and practices for digitally signing information to ensure it has not been altered while in transit over the internet.

These efforts, which are aligned with the ICAO Aviation Cybersecurity Strategy and Action Plan, provide the foundation for stakeholders to use the power of the internet to communicate on a global scale while meeting the unique and specific needs of aviation when it comes to information security and management. The next step in the process is to identify and put in place the steps to operationalize the IATF across all stakeholders. This is a unique and challenging role for ICAO. In this regard, we will be engaging with our governing bodies, Member States, and expert groups to determine the most appropriate way forward. Keep checking in with us as we embark on this exciting journey!

  • Over 250,000 URLs containing or advertising child sexual abuse materials were found in 2021, a 64% increase from 2020.
  • A number of technologies have been developed to combat online harm.
  • By adopting these latest technologies, companies can prioritise the trust and safety of their users online.

The scale of harm online is growing and bad actors are becoming more sophisticated when perpetrating such harm. The Internet Watch Foundation (IWF), which works to tackle child sexual abuse material (CSAM) online, found 252,194 URLs containing or advertising CSAM in 2021, a 64% increase from 2020.

When it comes to terrorist content, platforms have been weaponised to live stream terrorist attacks from the Christchurch massacre, the synagogue in Halle, and, more recently, the Buffalo rampage. There has also been a concerning growth in cyberbullying, with the U.S. having the highest rate of racially motivated bullying online.

 

DISCOVER

What is the World Economic Forum doing about improving online safety?

With almost 3.8 billion people now online globally, the digital world offers significant benefits, but also poses the risks of harmful content.

The Global Alliance for Responsible Media (GARM), created by the World Federation of Advertisers, is scaling its impact by partnering with the World Economic Forum’s platform for Media, Entertainment and Culture to improve the safety of digital environments, addressing harmful and misleading media while protecting consumers and brands.

GARM focuses on ensuring viewer safety for consumers, reducing risks for advertisers, developing credibility for digital platforms and, more broadly, ensuring a sustainable online ecosystem.

The Alliance is working with the Forum’s network of industry, academic, civil society and public-sector partners to amplify its work on digital safety and to ensure that consumers and their data are protected online within a healthier media ecosystem.

Businesses can join the Forum’s Platform for Shaping the Future of Media, Entertainment and Culture and apply to partner with the Alliance and similar initiatives. Read more in our Impact Story or contact us to find out more.

 

At the same time, time spent online is growing, leading to potentially greater exposure to digital safety risks. UK regulator Ofcom, for example, found that 67% of people aged between 13 and 24 had seen potentially harmful content online, although only 17% reported it. Technology to proactively detect these harms and prevent exposure is becoming increasingly important given the significant gap between people exposed to this content and people reporting it on platforms. Below are some of the latest tech trends shaping the future of digital safety:

1. Client-side scanning

Client-side scanning (CSS) broadly refers to systems that scan message content (e.g. pictures, text or video) for matches to a database of illegal or objectionable content before the message is sent to the intended recipient on an encrypted channel. An example of this is anti-virus software used to prevent your computer from being infected by malware.

In recent discussions about tackling CSAM and other illegal material, CSS has become a hot topic as it is seen by some as a way to find this material without breaking the technology behind end-to-end encryption (E2EE). There are two main methods for CSS: the first is on-device and the second is on a remote server.

Ian Stevenson, CEO of Cyacomb and Chair of the Online Safety Tech Industry Association (OSTIA), states: “Over the past few months we have seen some really good quality exploration of what is possible with client-side and split or multi-party compute technologies. This technology doesn’t tamper with the encrypted part of the system, leaving all of its protections intact. There is no ‘back door.’ Instead, these technologies act as a border check for content entering and leaving the encrypted domain and do so in a way that maintains the privacy of the user. The content they are sending or receiving cannot be identified, tracked or matched by any third party.”

Many organizations, such as Access Now and the Internet Society, have voiced their concerns about CSS, however. Access Now wrote a letter to the European Commission highlighting the risks to privacy, security and expression. Stevenson and other experts (including the heads of GCHQ and NCSC) do not share these concerns. Stevenson says that these technical capabilities for matching and blocking known CSAM provides excellent privacy protection for users and suggests that metadata leakage from mainstream E2EE apps is far more of a threat to privacy than these newly developed systems.

In addressing fears that certain governments could use CSS technologies to suppress free speech or identify dissidents, he suggests that these should be considered in the context of existing threats, rather than in isolation. “Autocratic governments intent on blocking particular content are unlikely to be very concerned about protecting privacy and, therefore, could easily mandate application of various solutions that exist today. The additional risk arising from deploying these new technologies is very small, with huge potential benefit to society,” he says.

Australia’s eSafety Commissioner, Julie Inman Grant, argues that there is a need to look at safety, privacy and security as the three pillars of digital trust. “It is important to balance safety with privacy and security – they are not mutually exclusive and healthy tensions amongst these imperatives can lead to much better outcomes… But, to continue to pit privacy against safety or as values that are mutually exclusive is totally missing the point – in many cases reported to us, particularly in the area of image-based abuse, privacy and safety are mutually reinforcing,” she says.

2. Artificial Intelligence and Natural Language Processing (NLP) Models

Artificial Intelligence (AI) systems can help increase the speed and scalability of content moderation by automating content moderation processes, as well as the detection of a range of harmful content through Natural Language Processing (NLP) models. One of the big challenges to its advancement, however, according to Bertie Vidgen, CEO and Co-Founder of Rewire, is that every platform is different – they have different users, different kinds of content, different media, different hazards and different norms. This is a huge problem for developers because the traditional one-size-fits-all approach in software development just doesn’t work.

“Over the past two years, we’ve seen the emergence of incredibly powerful models that can do ‘zero shot’ and ‘few shot’ learning. Practically, these advances mean that software can achieve very high performance with relatively little data. We have a way to go, but this has opened up exciting new possibilities to create scalable AI that is fully customised to each platform, without the huge costs and development timelines that would otherwise be needed,” Vidgen says.

There is still scepticism and distrust amongst some around the use of AI for online safety given a lot of software has struggled to handle issues such as nuance, intent, context and jokes. Increasing reliability, flexibility, cost-efficiency and accuracy of AI – together with human supervision to create effective feedback loops – will help increase its uptake.

Justin Davis, CEO and Co-Founder of Spectrum Labs, highlights how better detection of toxic behaviour paves the way for measurement and transparency tools that help online platforms make better policy decisions and create better user experiences. “When that’s combined with the ability to identify and encourage healthy behaviour, trust and safety teams can align with the customer experience and product teams in a data-driven way to reinforce #SafetyByDesign principles,” Davis says.

He believes investing in NLP and AI tools today will help the industry stay ahead of the curve against emerging threats, and drive the growth of healthier communities online.

3. Image and video recognition

Image hashing aims to essentially create a digital fingerprint so that duplicate images can be found; it is the process of using an algorithm to assign a unique hash value to an image. Since replicas of a picture have the same hash value, it enables the detection and removal of known CSAM without requiring further human assessment.

When this technology first came about, if an image underwent small changes, such as cropping or colouration alteration, then each edited version of the image would have a different hash value, reducing the effectiveness of this technology. In 2009, however, Microsoft collaborated with Dr. Hany Farid of Dartmouth College to develop PhotoDNA. This is based on hash technology, but it can recognise when an image has been edited and, therefore, still gives it the same hash value. This makes it harder for criminals to evade detection when it comes to distributing CSAM.

Cloud-based hashlists, such as those maintained by IWF, can prevent CSAM from being uploaded and the hashes cannot be reverse engineered back to the images. New technology from IWF allows for contextual metadata to be added to hashes and enables compatibility with multiple legal jurisdictions, worldwide.

4. Age and identity verification: biometrics and facial analysis

The ability to authenticate users safely, securely and accurately in cases where the identity of an individual needs to be verified to access certain products, services or experiences online is key to online safety. A growing trend is using biometrics – such as voice and iris scans – to verify identity. Apple’s FaceID was a massive move forward in its adoption.

In the future, as many companies begin to think about safety and security in the metaverse, decentralising the identity verification stack, as opposed to centralising on the big tech platforms, will provide users with more control or self-sovereign identity (SSI). Users can then choose which set of unique identifying information to share with a company, minimising the amount and sensitivity of data shared to meet access requirements. Given concerns around bots, impersonators, fraud and misrepresentation, verifying identity, or at least identifying when an avatar or identity has been verified to a real human, will be key to safe experiences online.

In the online dating world, Tinder and Bumble have already added options for profile verification to build trust and safety. In gaming, the ability to verify a user’s accomplishments and digital assets would build trust in avatars and in the overall environment.

In addition, age verification is crucial to ensuring age-appropriate content and experiences, however, many current models for age verification, such as entering the date of birth, are easily bypassed. Facial analysis technology for age verification has been growing in popularity. This software looks for a face within an image and then analyses it for whatever information it needs, such as wrinkles, sunspots, grey hair, etc. to estimate the age of the user. This is distinct from facial recognition, which aims to identify and collect information on the person within the photo. Yoti, one of the companies in the area of using facial analysis for age verification, highlights how its AI reads each pixel and analyses for individual facial features that indicate age, emphasising that users can not be identified or recognised by the model.

Julie Dawson, Chief Policy and Regulatory Officer at Yoti, says: “Age verification will play a pivotal role in safeguarding young people and providing age-appropriate experiences online. Once you know the age of a child, then you can meet the requirements of the Children’s Code or Age Appropriate Design Codes. You can provide age-appropriate content, prevent children from stumbling across explicit content or accessing age-restricted goods or services, be certain the online community is within the same age threshold and turn off excessive notifications.”

Partnerships with Yubo and Instagram show the growing demand for social media platforms to verify users’ age more accurately. In future evolutions of the internet, age-gating will grow in importance as new experiences in the metaverse, such as gambling or watching a movie in a virtual cinema, will need to be age-restricted.

Inman Grant says the time to implement safety by design practices and protections for these new applications is now, while they are in development. “It is easier and more effective to build in safety protections at the start, rather than trying to bolt on or retrofit solutions after harm occurs. In addition to minimising harm and building trust, consistently applying a safety-by-design lens should be seen as an enabler that can help companies lift overall safety standards and improve their compliance with the Australian and other online safety regulatory frameworks.”

Where to next?

There are questions as to whether technological advancements are being adopted quickly enough to deal with these harms. The trust in – and effectiveness of – these technologies will be one of the key tools in the ongoing work to increase safety online. Justin Davis asserts: “Executive leadership must prioritise trust and safety so companies can drive the adoption of technology and sufficiently allocate resources for online safety. The most effective way to align executives behind trust and safety is by demonstrating its impact on revenue and growth through quantitative measurement.”

Similarly, Vidgen highlights that: “The reality is that trust and safety are always going to face substantial budget pressures, at least until platforms start seeing it as a revenue centre – i.e. an integral part of how they attract and retain their users – rather than a cost centre.” In the meantime, reducing the cost of these technologies whilst increasing their effectiveness – and public trust in them – will be instrumental to their adoption.

“Safety innovation is happening all the time, but it doesn’t occur in a vacuum. The right policy and regulatory settings need to be in place and the right balance struck between a range of imperatives involved in ensuring digital trust, including security and privacy,” Imnan Grant says.

The Global Coalition for Digital Safety is working with key stakeholders to advance a range of principles, technologies and tools and policy frameworks that provide a holistic approach to improving safety online. Technology advancements are a core, tangible way to begin seeing progress in improving digital spaces for users worldwide.

Maria Djata, a trader in Bissau, has seen with her own eyes the difference that digital technology has had on her work. Instead of having to close her small convenience store and cross town to purchase products from her supplier, now she can do so from work, thanks to a stronger mobile broadband network and the increased use of mobile money in Guinea-Bissau. This translates to cost savings: more time to staff her shop means more sales and thus great profit. Debora Lobo, a grade school student in the capital, notes that, thanks to more reliable broadband connectivity, coupled with the introduction of online learning, she did not miss out on her studies with the onset of COVID-related confinement policies: she is still on track to graduate and enter the work force. Bissau-Guineans are increasingly leveraging data and digital technologies to improve their lives, but more is needed to unleash digital opportunities. 

A small nation, rich in untapped natural resources, Guinea-Bissau has the highest proportion of natural wealth per capita in the West African region.

Despite its enormous development potential—thanks to its agricultural land, fisheries, forests, and natural habitats—Guinea-Bissau remains one of the least developed countries in the world. This is in part due to the country’s significant political and institutional fragmentation and instability (Guinea-Bissau is also one of the most fragile countries in the world), which hamper the development and implementation of much-needed policy reforms.

Reliable access to electricity is also hampering the country’s economic transformation. The country is characterized by severe electricity shortages (particularly outside of Bissau), resulting in reduced activities for companies and households. Currently, there is limited capacity to supply affordable and quality power to most of the population as the electricity grid remains limited to the capital, causing large disparities in energy access across regions.

Despite these challenges, the country is focused on creating needed foundations for the digital economy to thrive. The World Bank Group stands ready to support Guinea-Bissau in this important agenda, given digitalization’s direct contribution to achieving green resilient and inclusive development. The recently completed Digital Economy Country Assessment of Guinea-Bissau takes stock of recent achievements along the five foundational areas of the country’s digital economy—digital infrastructure, public platforms, financial services, businesses, and skills—and proposes prioritized and sequenced recommendations to ensure its vibrant, safe, and inclusive development. It also notes that digital transformation could go a long way towards addressing several of the country’s fragility drivers, particularly by boosting financial inclusion ; developing new job opportunities outside of the cashew nut trade; and connecting vulnerable populations (particularly girls and women) to the internet.

Guinea-Bissau can boast several recent achievements in the digital transformation realm, with many more right on the horizon. For instance, the country’s Africa Coast to Europe (ACE) submarine cable direct connection is expected to be delivered in November 2022, along with an internet exchange point, both of which should lead to significant decrease in the retail price for broadband internet access and usage. Core government functions are becoming digitized, and Bissau-Guineans can now declare and pay their taxes online, through the KONTAKTU platform. Over the past two years, the number and amount of mobile money transactions increased faster in Guinea-Bissau than in any other country of the West African Economic and Monetary Union (WAEMU).  The country’s nascent digital entrepreneurship scene is growing, and its premier innovation and technology hub, InnovaLab, is bringing private sector dynamism into the public sector.

That being said, much more is needed to unleash digital transformation in Guinea-Bissau. The diagnostic highlights immediate next steps to be taken, including:

  • Restructuring the incumbent operation GuineTelecom/GuineTel to dynamize the country’s broadband market and promote competition;
  • Developing a countrywide, digital transformation strategy with a whole-of-government and citizen-centric approach;
  • Adopting regulations to ensure fair and equitable access to the USSD channel so that banks and other financial institutions can partner with mobile network operators to provide digital financial services;
  • Developing and deploying a short-term, publicly supported seed capital pilot program to finance digital start-ups; and
  • Designing a mass digital skilling initiative for women and youth that leverages mobile-friendly platforms

Leveraging the digital economy is proving transformational for much of Sub-Saharan Africa and Guinea-Bissau cannot afford to be left behind.  Much work lies ahead, but the World Bank Group looks forward to supporting the people of Guinea-Bissau on their digital transformation journey.

My experience with Diplo is twofold: personal and academic, and the two are intertwined.

In 1990, I was working at the Yugoslav Federal Ministry of Foreign Affairs in Belgrade. One morning, a representative from Human Resources introduced us to our new colleague. ‘This is Jovan. He will be working with you,’ was his very brief presentation. The newcomer was nice, a bit reluctant, but eager to become part of the team. After a day or two, Jovan and I had more time to get acquainted, and have remained good friends ever since.

In 1991, I left for Klagenfurt where I was posted as consul, and Jovan left for Malta to study diplomacy. A year later, I was still in Klagenfurt, but now as the Slovene consul, and Jovan stayed in Malta. He was the first one who understood that the internet is the perfect tool to learn about and teach diplomacy.

Academically, I have been working with Diplo during the last decade. Our cooperation started after we met at Diplo’s headquarters in Geneva for the first time since 1991, and it was as if nothing had changed.

Working with Diplo has been a most thrilling exercise, and one which I highly enjoy, from teaching diplomacy and writing blog posts, to being part of Diplo’s highly active community of discussants. In my personal and academic view, Diplo is the perfect place to discuss diplomacy and exchange views with world-leading experts. It offers expertise, know-how, and an enthusiasm for learning.

When you are part of the Diplo community, you are always up to date. Diplo covers the complete spectrum of diplomacy in its numerous online courses and postgraduate programmes. It acquaints you with diplomacy as a profession, a set of skills, and a process, and covers both traditional and 21st-century diplomacy (which I define as a postmodern).

To upgrade your knowledge about this traditional and highly flexible profession, you only need to join Diplo’s vast and continuously growing international alumni. I was, and still am, fascinated by the diversity and dynamics that Diplo students bring to the courses.

There are three dimensions to the Diplo phenomenon.

First: Jovan

Jovan is a ‘prince’ (thank you, Geoff, for this omen), as well as a brand. He has not only moved ‘from plenipotentiary to chief executive’ (thank you, Kishan, for your groundbreaking book), but has also skilfully managed to combine, merge, and advance both of these dimensions. Additionally, he has an endless amount of creativity and a talent to connect with others. I believe this is why Diplo has grown into an international and flexible network, open and encouraging both for new and experiences practitioners. It is a diverse and forward-thinking community where everybody can contribute and gain knowledge.

Second: Diplo

During its 20 years, Diplo has become an inspirational think tank, NGO, and research institute, and a network of experts, associates, and ad hoc contributors. It has an ever-growing alumni community and promotes innovation and creativity.

Third: Diplo’s online expert community

Diplo remains at the forefront of diplomatic studies in both theory and practice. Indeed, the founding of Diplo coincided with the emergence of diplomatic studies. It was the end of the Cold War and the beginning of a new millennium that provided the needed conditions.

One can learn about diplomacy in various institutions, but it is hard to find a more comprehensive, contemporary, and innovative approach to diplomacy as at Diplo, since its experts rank highly, some at the very top of the international diplomatic community.

Generally speaking, Diplo is an international diplomatic hub and a driver of diplomatic change. It is an actor as well as a structural result of the 21st-century global community.

And diplomacy? Diplomacy is about human contact – direct, personal, and lasting. It depends on chemistry and empathy, as well as psychology, sociology, legal issues, history, political sciences, theoretical input, and practical exercises. It stands in the service of people, and their understanding and progress. Diplo mirrors all of this.

In short: Diplo provides inspiration. Inspiration provides Diplo.

Bali, 20 September 2022: Raising collective action and strengthening commitments under Indonesia’s Group of Twenty (G20) Trade, Investment and Industry (TII) priorities were the focus of the G20 3rd Trade, Investment and Industry Working Group (TIIWG) Meeting on 19–20 September 2022 at the Sofitel Nusa Dua Bali Resort in Bali, Indonesia. The meeting discussed recommendations by the public and private sectors, international organisations, and non-governmental organisations to finalise the Ministerial Statement.

Indonesia’s G20 TII priorities are World Trade Organization reforms; the role of multilateral trading system to strengthen the achievement of Sustainable Development Goals; trade, investment, and industry response to the COVID-19 pandemic and global health architecture; digital trade and global value chains (GVCs); spurring sustainable investment for global economic recovery; and sustainable and inclusive industrialisation via Industry 4.0.

During the discussion on digital trade and GVCs, Dr Lili Yan Ing, Lead Advisor for Southeast Asia Region at the Economic Research Institute for ASEAN and East Asia (ERIA), explained the impact of digital transformation, a process that reduces the cost of sharing information but potentially causes displacement effects in labour markets that widen income inequality. To ensure that digital transformation can benefit everyone, she suggested three points to G20 members: continue to pursue international cooperation to address regulatory and institutional barriers to digital trade and support the development of a global framework on digital trade and e-commerce; strengthen digital trade facilitation, with particular emphasis on ensuring a level playing field for all, including more vulnerable groups such as micro, small, and medium-sized enterprises, women, and youth; and continue to support policies that incentivise greater adoption of digital technology, including significant investment in digital infrastructure and retraining of the workforce to engage in the digital economy.

During discussions on sustainable investment and Industry 4.0, Dr Ing underlined the impact of the COVID-19 pandemic and the rising global political tensions that have posed serious challenges to the global economy, along with two long-standing development issues: rising inequality and climate change. To address these issues, she said investment measures in promoting sustainable, climate-resilient, and inclusive investment should be facilitated, and sustainability and inclusivity in the transition towards Industry 4.0, particularly in manufacturing, should be considered. She recommended that the G20 members  continue and build on existing multilateral collaboration, such as the WTO Joint Statement on Investment Facilitation for Development, for a more sustainable, predictable, non-discriminatory, and transparent investment climate; and pay greater attention to systematic efforts to improve the skills of their workforce as they transition towards Industry 4.0 to avoid widening inequalities as an unintended consequence. She emphasised the importance of sustainable investment and sustainable industrialisation as the foundation for resilient and inclusive economic recovery. Noting the importance of sharing the best practices on sustainable investment, Dr Ing voiced her support for the proposed establishment of G20 Sustainable Investment Policy Compedium.

Riding the boom in organic products, Bouchra Masrour has carved out a niche in Tunisia’s cosmetics industry. She grows the ingredients, makes the products, and sells them. Now, she’s ready to export.

Live healthy, live happily!

This is Bouchra Masrour’s motto.

And it’s the reason she left an 18-year career at a private clinic in Tunis to embark on a new adventure, bringing life to her passion for organic cosmetics.

Argan and olive trees at the heart of Moroccan heritage

As a native Moroccan, Bouchra inherited a love for growing olive and argan trees. The nutty oil produced from thorny argan trees is distinctly Moroccan, used to produce beauty and cooking products that form part of women’s daily lives in her home country.

These products stem from thousand-year-old artisanal traditions, providing both income and social cohesion for the networks of rural women who make these products.

After moving to Tunisia, Bouchra was inspired in 2016 to create Bahia Cosmetics, which makes certified organic, natural beauty products. They’re all ammonia-free and wrapped in environmentally friendly packaging.

“Once I realized that Tunisia was importing argan oil from France, I decided to make certified organic products from our local harvest,” she said.

Her love of plants has built a bridge between her scientific education, her knowledge of herbal medicine, and her Moroccan heritage. The result is her Bahia Cosmetics brand.

 

Booming organic industry

Bahia Cosmetics started with two employees and a small workshop in a certified laboratory.

The lab provides the raw materials, and Bahia Cosmetics adds its plant and essential oils, made from argan imported from Morocco and from olives and prickly pear seeds grown in Tunisia.

Tunisia is the first country in the world to standardize prickly pear oil, setting its technical specifications, its quality criteria, and its composition.

As for olive oil, Tunisia is the fourth largest producer in the world after Spain, Italy and Greece, producing about 350,000 tonnes in the 2019/2020 season.

Bouchra’s husband is a farmer. Together they grow figs, olives, mastic, and rosemary on certified organic land in the Kairouan region, without pesticides or insecticides.

To harvest the rosemary and mastic resin, she employs local women. This allows her to maintain traditions while empowering women with jobs.

In addition, Bouchra belongs to a group of women entrepreneurs who are working to trade through the Common Market for Eastern and Southern Africa. Known as COMESA, the trade bloc covers 21 countries, including neighbouring Libya and nearby Egypt.

Tunisian cosmetics

In 2018, Bahia Cosmetics expanded and employed five lab technicians and two sales agents. The company has a showroom in the inland desert city of Kairouan, with a sales outlet in Tunis. Bahia directly supplies several pharmacies.

The Tunisian perfume and cosmetics sector could grow much more by harnessing the country’s agricultural and human potential. The industry mainly consists of small, dynamic companies with an excellent capacity for innovation.

However, the sector is hampered by the national tax system and other barriers.

Moving forward

Bouchra received training from the International Trade Centre (ITC), under its Tunisia: E-Commerce for Women Entrepreneurs project.

“We’re always looking to improve our skills. Being accepted into the ITC programme is a great opportunity for us to improve our knowledge and skills in digital marketing,” she said.

“Through the ITC programme, we have been able develop our own e-commerce site. We can now sell more products. Our production is up, and our employees are very happy to be earning more income.”

The training also covered how to create business plans, to develop content and to take professional photos.

After the training, Bouchra joined Little Jenaina and ILEY’COM, two Tunisian digital marketplaces, and hired a community manager.

With her new digital marketing skills and her excellent products, Bouchra now feels ready to take on regional and international markets.

“Soon I would like to open a branch in Morocco because of the very high purchasing potential, and then expand into markets in the Gulf countries,” she said.

To tackle the Gulf countries, she plans to review her brand strategy to appeal to the luxury market.

 

The International Trade Centre (ITC) E-commerce for Women Entrepreneurs project in Tunisia aims to increase exports of small, women-led businesses through digital marketplaces, a new channel that offers innovative business opportunities. The aim is to create new jobs for women and ensure more inclusive and sustainable social and economic development.

Discover our action-focused advocacy work through the continent, as well as our member advisory initiatives in Africa.

In Africa, the Better Than Cash Alliance is building on lessons from collaboration with African governments in driving and scaling financial inclusion through responsible payments digitization across the continent.

We understand that Africa has the experience, know-how, and inspiration to achieve its Digital Transformation goals and power a successful Single Digital Market in this period of the African Women’s Decade on Financial & Economic Inclusion. Attaining financial equality is pivotal to achieving the Agenda 2063.

We are working with members on their journey to digitize payments responsibly by:

  1. Providing advisory services based on their priorities;
  2. Sharing action-oriented research and fostering peer learning on responsible practices;
  3. Conducting advocacy at national and pan-regional levels.

Read more the Alliance’s about action-focused advocacy work, as well as our member advisory initiatives.

Lessons from digitizing the Hindustan Unilever Shakti channel

In India, one of the COVID-19 pandemic’s most visible impacts has been the dramatic acceleration towards digital solutions, and digital payments in particular. This report presents key insights and opportunities from Hindustan Unilever Limited’s (HUL) business-to-business (B2B) Shakti digitization program to implement the UN Principles for Responsible Digital Payments and build scale.

In India, the retail business sector accounted for over 10 percent of the country’s GDP and 8 percent of employment in 2017. Over 12 million kirana stores were operational across the country in 2019. This makes the Indian retail market the third largest in Asia and fourth largest in the world, which is set to cross US$1.75 trillion (approximately INR 126 lakh crore) by 2026.

In 2001, HUL launched Project Shakti to financially empower and provide livelihood opportunities to women in rural India. Today, they have a network of 160,000 women entrepreneurs and similar programs in other countries. Since 2019, HUL and the Better Than Cash Alliance have worked on digitizing its retail channels, both, in urban and rural areas. In rural areas, Shakti entrepreneurs have played a key role in this journey. They have used the Shikhar app to order digitally, and their customers can now also pay for orders digitally.

The insights gained from this initiative, and summarized in this report, can be of particular interest to other fast-moving consumer goods companies, distributors, and all other players in the supply chain, in both India and other countries globally.

DOWNLOAD

Mount Gede, West Java, Indonesia — On the slopes of Mount Gede, an active volcano on Indonesia’s main island of Java, farmer Wawan Sudrajat sits on a bamboo platform amid a patchwork of fields brimming with vegetables. Volcanic deposits have enriched the soil here with magnesium and potassium, making it extremely fertile.

Yet, it’s never been as productive as it is now as Sudrajat and many more farmers like him increasingly turn to digital tools to grow their business.

Like his father and generations of his family that came before, farming is in Sudrajat’s blood. While like them his back often aches at the end of a long day in the fields, there are some stark contrasts. Instead of hauling what he grows down to the village to sell, the traditional market has been replaced by a smartphone. With one swipe, he has instant access to a host of data which helps him plan his next crops, and he has greater access to Indonesia’s booming grocery market, estimated to be worth US$120 billion.

Wawan Sudrajat, a farmer who collaborates with Sayurbox holding a box of vegetables.
Sayurbox vegetable sorting hub in West Java, Indonesia. The start-up is helping to solve supply chain challenges for farmers. Photo by: Eka Nickmatulhuda/IFC

The 52-year-old is an example of how the disruptive power of the internet is empowering people and boosting their incomes along the way.

At the same time, tastes have changed in Indonesia as a growing middle class armed with greater purchasing power than ever has spurred demand for a greater variety of fruit and vegetables. Here, on the slopes of Mount Gede, tea plantations have given way to rows of kale, black corn, and a Japanese variety of spinach, along with other vegetables you might more commonly find in salads sold in the hipster cafes of Los Angeles.

The kale earns Sudrajat about 15,000 rupiah (about US$1) per kilogram. That’s much better than the cabbage he used to grow. It might not seem like much, but Sudrajat said that for him, it’s been life changing. “I didn’t even know what kale was a few years ago,” he said. “I make three times more money than I did before.”

It’s not just what is grown that has changed. How food gets from farm to plate is being transformed by technology too. Sudrajat is one of 33 million farmers in Indonesia that rely on e-commerce and companies like Sayurbox, a farm-to-plate start-up which connects him directly to an online customer base.

Some of what he produces on the small patch of land he leases from the government — about 1,200 square meters — is destined for tables in upmarket restaurants in the Indonesian capital Jakarta, some 50 miles away. The rest will be bought by Indonesians who increasingly demand organic produce and prefer to do their shopping online, a trend that has surged amid the COVID-19 pandemic.

“We have seen a lot of transformation in Indonesia from the digital perspective, and it’s been happening at an accelerated rate,” said Sayurbox co-founder and Chief Executive Officer Amanda Susanti. “In the case of agriculture, it was very traditional, very manual. What we are trying to do here is redevelop the overall farming ecosystem but in a way that delivers a win-win for multiple stakeholders from the farmers to the consumer,” she said.

The growth of Sayurbox and businesses like it is also solving supply chain issues that have long been a problem in Indonesia. A significant infrastructure gap from poor roads (the 100-mile round trip between Jakarta and Sudrajat’s farm takes about 10 hours by car) to a lack of cold storage present barriers that impede productivity and economic growth. In the past, small crop farmers like Sudrajat would sell their produce in the local village. Often, they couldn’t sell it all, which meant it would be left to rot.

They could try sell their produce to markets that were further away via so-called middlemen. But in Indonesia’s agriculture sector, there were often middlemen at multiple points in the supply chain, each taking a cut. This can drive up prices for consumers, while significantly eroding incomes for producers—farmers like Sudrajat, many of whom at the best of times hover precariously around the poverty line. Creating a direct channel between farmer and consumer removes these costs.

Sayurbox also leverages data analytics to obtain real-time visibility over food harvests and consumer demand. Its platform helps farmers to plan production efficiently and secure better and more stable prices.

Background: A farmer taking photos of bok choy at the farm in Cipanas, West Java, Indonesia. Photo by:  Eka Nickmatulhuda/IFC

Indonesia is a country rich in natural resources with a growing middle class. But for all its progress, Southeast Asia’s biggest economy is also home to a yawning rich-poor divide with almost 10 percent of the population — about 26 million people — living in poverty.

Like many economies, it has been rocked by the pandemic. But just like it did in the wake of the 1997 Asian financial crisis and the global financial crisis just over a decade ago, Indonesia is proving once again that it has the capacity to rapidly bounce back.

The economy grew 5.4 percent in the second quarter of 2022.

Farmers like Sudrajat are benefiting from the resilience of the Indonesian economy, as well as the fact that the country boasts the region’s fastest growing grocery market.


Sayurbox works with more than 10,000 farmers in Indonesia and is seeking to boost that to 40,000 by 2024. Photo by: Eka Nickmatulhuda

In March 2022, IFC invested $10 million in Sayurbox, funds that will enable it to scale up its digital platform and dramatically boost direct farm-to-plate access nationwide. Sayurbox currently serves one million customers on the islands of Java and Bali. While the platform already works with more than 10,000 farmers, it’s seeking to boost that to 40,000 by 2024. Its platform offers more than 5,000 products, from fresh produce, meat and poultry, to snacks and ready-to-eat dishes.

“Scaling up digital platforms such as Sayurbox can make a huge contribution toward unlocking access to markets and finance and to raising living standards for millions of farmers through increased cashflows and support for small and medium-sized enterprises,” said Azam Khan, IFC Country Manager for Indonesia and Timor-Leste. “Digitalization is a key pillar of our strategy and crucial to supporting the economy in a post-COVID-19 business environment.”

report by the consulting firm McKinsey makes clear that faster adoption of modern technology among micro and small businesses is key to fully unleashing the Indonesian economy. Digital technology and its connection with agriculture—which accounts for about 13 percent of the country’s GDP and almost a third of jobs—is also crucial to Indonesia’s post-COVID recovery, the report said.

The report estimated that accelerating the adoption of modern agricultural technologies could generate up to US$6.6 billion a year in additional economic output from improved yields and reduced costs.

For Sudrajat and other farmers, the smartphone has become a digital silo of information that has translated into improved productivity and higher incomes.

Soleh (left) and Cecep (right), harvest spinach at the farm in Cipanas, West Java, Indonesia.
Farmers, Soleh (L) and Cecep (R), harvest spinach at the farm in Cipanas, West Java, Indonesia. Photo by: Eka Nickmatulhuda/IFC

In the past, farmers had limited bargaining power when selling their harvest. “When I sold in the village, often there were not enough customers, so I was forced to use middlemen or see my crop go to waste,” Sudrajat said. “The middleman would not give a fair price. Often, I would barely break even and sometimes I would even lose money. It made me sad, angry. Farming can be very hard work and I worried a lot about making enough money for my family.”

“It’s much better now,” Sudrajat said.

During the COVID-19 pandemic, digital technologies have helped to mitigate some of its negative effects, to combat the virus and ensure the continuity of many economic activities. Lockdowns and other preventive measures that Governments have put in place to curb the spread of the virus have disrupted economic activity in ways for which societies were often unprepared. Amid the slowing economic activity, the pandemic led to a surge in e-commerce and accelerated digital transformation. While this transformation was already taking place, COVID-19 served as a catalyzer of digitalization.[1]

But countries are unevenly prepared for “going digital”. Due to persistent divides in infrastructural, technological and human capabilities, the accelerated shift towards greater reliance on digital solutions has in some respects resulted in wider rather than more narrow divides and inequalities. This is of particular concern to the least developed countries (LDCs).

There are multiple digital divides that need to be overcome. According to the International Telecommunication Union, about 27 per cent of people in LDCs used the Internet in 2021, compared with 90 per cent in developed countries. [2] And where connectivity exists in the LDCs, it is typically offered at relatively low bandwidth and with a relatively high price tag attached. For example, the average mobile broadband speed is about 3 times higher in developed countries than in the LDCs. And while more than 80 per cent of Internet users in Europe shop online, in many LDCs, fewer than 10 per cent do so.[3]

Recently released data from the World Bank’s Global Findex database sheds light on the extent to which LDCs have adopted e-commerce in the past few years (figure 1). For the 18 LDCs for which data exist, the picture varies. By far the largest increase in the share of adults who shopped online using a mobile or the internet between 2017 and 2021 was observed in Myanmar, where it surged from 3% to 20%. Other countries with significant increases include Senegal, Liberia, Uganda and Lao PDR. But for most of the countries, increases were limited and in some cases, the share even declined (South Sudan, Togo and Zambia).

In the area of trade, although global ICT goods trade has grown significantly during the pandemic, the LDCs as a group saw their exports and imports of such goods fall sharply. Similarly, the increase of the share of digitally deliverable services in total services exports was considerably smaller in LDCs than in more advanced economies.[4] In other words, LDCs in general have fallen further behind during the pandemic, raising the risk of widening inequalities. So, doubling the share of LDCs in world trade – as stipulated in Sustainable Development Goal target 17.11 – is likely to be even more difficult unless the ability of countries to participate in and benefit from digital trade is strengthened.

Source: World Bank Global Findex Database

 

A multi-faceted challenge

To create more opportunities for LDCs to take advantage of the fast-evolving digital opportunities, it is essential to look beyond the connectivity aspect. Most LDCs lack sufficient financial, technical and other resources to capture value from digitalization. While significant advances in law adoption have been made since 2015 in many LDCs, the share of LDCs with relevant laws in data and privacy protection and consumer protection is still low (48 and 41 per cent, respectively).[5] In addition, the pandemic’s negative impact on economic growth has also strained public funds that might be available for developing capacities needed in multiple areas.

Coping with digitalization is particularly difficult for governments as the issues involved are cross-cutting in nature and thereby touch upon multiple government ministries. The speed at which technologies are evolving adds a further challenge for policy makers as they often find it hard to determine the most appropriate policy responses. In order to manage the risks and seize the opportunities associated with digitalization, including e-commerce, there is a need for a whole-of-government approach.

Many LDCs can benefit from international financial and technical support in this area. More resources are badly called for to help countries meet increasing financing needs at a time when fiscal space is shrinking and debt burdens are growing in many countries, making the mobilization of domestic resources even more difficult. Current financial support from the international community is far from enough, as shown in recent Aid for Trade commitments. UNCTAD calculations, based on OECD data, show that the share of Aid for Trade resources allocated to the ICT sector increased from 1.2 per cent in 2017 to 2.7 per cent in 2019 and remained unchanged in 2020. In absolute terms, the resources allocated to the ICT area rose by $300 million that year.[6]

 

Assessing and enhancing eTrade readiness

The scale and complexity of this challenge require new forms of international collaboration. At the United Nations Conference on Trade and Development (UNCTAD), we have identified two main problems to address. The first concerns the limited readiness of many developing countries to engage in and benefit from e-commerce and the digital economy. The second relates to insufficient and ineffective support from the international community to address issues related to the digital economy.

One response to the first problem is UNCTAD’s eTrade Readiness Assessments, launched in 2017. While awareness of the importance of digitalization is growing, many governments are struggling to determine what measures to take first to strengthen a country’s digital readiness. Without a clear understanding of the priorities, it is difficult for a government to indicate the type of support that might be sought from development partners. This has sometimes been mistakenly interpreted as a lack of demand for development assistance in the digital area.

Each eTrade Readiness Assessment reviews the state-of-play of the e-commerce enabling environment in the country and provides specific recommendations on how to address existing weaknesses through concrete actions on the ground.[7]  As of August 2022, a total of 32 such assessments had been completed, 24 of which are LDCs (covering 15 of the LDCs included in figure 1). Support for the implementation of the recommendations contained in the assessments is provided through an Implementation Support Mechanism (ISM).

The extent to which LDC governments are acting upon the recommendations contained in the assessments varies considerably. Our follow-up analysis confirms Cambodia as the top-performer, with an implementation rate of 92 per cent of all recommendations, followed by Bhutan, Senegal and Togo (all standing at 81 per cent). In Cambodia, the Ministry of Commerce recognizes the catalytic role played by the eTrade Readiness Assessment for several government initiatives in support of the e-commerce ecosystem. One recommendation prioritized by the Royal Government of Cambodia was to develop a national E-commerce Strategy. The growing importance of e-commerce in the South-East Asian nation has also prompted the Government to develop a Digital Economy and Society Policy Framework 2021-2035, which sets out a long-term vision to build a vibrant digital economy and society. But as indicated in figure 1, uptake of e-commerce in Cambodia was still limited in 2021.

In following up on the recommendations, each assessment identifies potential partners that could offer technical support if needed. For example, UNCTAD has partnered with several LDCs to develop a national e-commerce strategy (Benin, Myanmar, Rwanda, Solomon Islands), to strengthen the legal and regulatory framework for e-commerce (in ASEAN and EAC), empower women digital entrepreneurs in LDCs (e.g. in Rwanda), and boost the capacity to measure e-commerce and various aspects of the digital economy (e.g. in the Pacific). And if UNCTAD does not have the expertise required, the assessments will point to other partnering organizations that may be in a better position to support them. Many of them are members of the eTrade for all initiative.

To respond to the second problem mentioned above, UNCTAD in 2016 launched eTrade for all. It is a global initiative of 35 partners (September 2022) that seeks to connect the dots among organizations, donors and beneficiaries to foster more inclusive e-commerce development. By reaching beyond sector-by-sector silos and taking a comprehensive approach to various policy challenges that countries are facing when they develop their e-commerce ecosystems, the initiative seeks to facilitate more inclusive development outcomes. Its online platformOpens a new window serves as a single gateway to organizations offering technical assistance and capacity building related to e-commerce in English, French and Spanish, and allows potential beneficiaries to connect directly with any offering partner.

 

More is needed

As countries gradually and unevenly emerge from the pandemic, a return to business as usual is no longer an option. Work, education, entertainment and communications are likely to be more dependent on digital technologies than before. This accentuates the need for public policies that can maximize opportunities and address challenges and concerns related to digitalization, including policies and regulations that ensure that the digital economy works for the benefit of people and the planet.

In this context, there will be a need for more rather than less coordination and collaboration. The eTrade for all initiative, with its focus on information sharing to leverage the strengths of different actors, has enhanced mutual understanding of what each partner is doing and where there are opportunities for synergies.

Given the urgency to bridge the gaps in digital capabilities and the insufficient levels of development assistance, development organizations (including the Technology Bank) and bilateral donors, will need to develop new and innovative ways of working together. It takes time to develop and implement solutions for improving legal and regulatory frameworks to enhance trust online, building skills for the digital economy, strengthening women’s digital entrepreneurship and facilitating digital financial inclusion.

 

 

[1] See e.g. https://unctad.org/system/files/official-document/tdb_ede5d2_en.pdfPDFOpens a new window

[2] See e.g. https://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspxOpens a new window

[3] See https://unctad.org/webflyer/digital-economy-report-2021Opens a new window

[4] UNCTAD (2021). Impacts of the COVID-19 Pandemic on trade in the digital economy. UNCTAD Technical Notes on ICT for Development No. 19. https://unctad.org/system/files/official-document/tn_unctad_ict4d19_en.pdfPDFOpens a new window

[5] https://unctad.org/system/files/official-document/dtlstict2022d1_en.pdfPDFOpens a new window

[6] See https://unctad.org/system/files/official-document/dtlstictinf2022d2_en.pdfPDFOpens a new window

[7] For more information, see https://unctad.org/topic/ecommerce-and-digital-economy/etrade-readiness-assessments-of-LDCs

Commissioners address pandemic-driven realities and review next steps for meaningful universal connectivity

​​​​​Digital technologies should form the foundation of education and skills-building as communities continue to adapt to the realities brought on by the COVID-19 pandemic, according to the Broadband Commission for Sustainable Development, which met on Sunday at its annual fall meeting.

The Broadband Commission, made up of public and private sector leaders, makes policy recommendations centered around broadband connectivity to accelerate progress towards achieving the UN’s 2030 Agenda for Sustainable Development.

At the New York meeting, the global technology and development body also emphasized the need for public-private cooperation to develop national strategies to enhance digital skills and advance school connectivity.

“We have made significant progress globally in ensuring universal access to broadband continues to improve, but much remains to be done,” said Paula Ingabire, Rwanda’s Minister of Information Communication Technology and Innovation representing Rwandan President Paul Kagame, Co-Chair of the Commission. “The mission of the Broadband Commission still rings as relevant today as when it was first formed. We must continue to strive for universal access to meaningful, safe, secure, and sustainable broadband communications services that are reflective of human and children’s rights. Public-private partnerships continue to be a key tactic towards enabling us to achieve this objective.”

Advocacy targets aimed at broadband development

To mobilize efforts to achieve universal connectivity–the international aim to connect all of humanity to the Internet—the Broadband Commission puts broadband connectivity at the forefront of global policy discussions. The Commission’s “2025 Advocacy Targets” focus on providing policy and programmatic guidance for national and international action in broadband development.

About 2.7 billion people— one third of the global population—still lack access to the Internet, with even fewer people enjoying reliable broadband access, according to the latest statistics from the International Telecommunication Union (ITU).

With only three years left to meet the Commission’s set of seven targets, the fall meeting set out to address the remaining gaps for reaching universal broadband connectivity.

“The successful expansion and rapid adoption of high-speed connectivity experienced over the recent decades, and especially over the last two years of the pandemic, has been transformative for our daily lives, societies and economies,” said Commission Co-Chair Carlos Slim. “Digital services that have proven so essential during this crisis are however still out of reach, too expensive or complicated to use for too many people around the world.”

Technology’s role in education 

During the meeting, convened ahead of the U.N.’s Transforming Education Summit at the opening of the 77th Session of the U.N. General Assembly, the Commission called for universal, inclusive and affordable connectivity for the digital transformation of education.

“Accelerating broadband for the new realities of a rapidly changing world is as important as it is timely,” said Catherine M. Russell, Executive Director of UNICEF and a Commissioner of the Broadband Commission, who hosted the meeting. “Three years since UNICEF and ITU launched the Giga initiative with this group of Commissioners, we have connected more than 2 million children to the Internet. However, the global learning crisis remains real and the pandemic has made it worse. The Transforming Education Summit is a rare opportunity to drive new commitments and investments in innovation so we can reach every child.”

Smaller businesses can make big contributions

The meeting also explored innovative approaches to increasing affordability of access to digital services and devices—including for home-based work and learning—with a focus on micro, small and medium-sized enterprises (MSMEs) and the most vulnerable populations. The approaches examined considered the current economic environment.

“I am pleased that MSMEs are featured prominently in this year’s State of Broadband report,” said ITU Secretary-General Houlin Zhao, a Co-Vice Chair of the Commission. “Innovation does not come just from big industry. Startups and entrepreneurs make vital contributions in this area, and we should continue to work toward ensuring greater participation from small business throughout ITU’s work.”

A forum for multistakeholder engagement

More than 40 Commissioners and representatives attended the Broadband Commission meeting comprising government leaders, as well as heads of international organizations, private sector companies, civil society and academia. Special guests also attended, including Amandeep Singh Gill, UN Envoy on Technology, and Rabab Fatima, UN Under-Secretary-General and High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS).

Among other topics, participants discussed how connectivity and technological innovations are enabling swift adaptation to hybrid education; empowering learners through open education resources and data; building capacities of civil servants for effective digital transformation; and providing platforms for strengthening the literacy necessary for navigating digital spaces.

State of Broadband Report 2022

At the meeting, the Broadband Commission launched its annual State of Broadband Report, focusing on the shifting realities of the pandemic era.

According to the report, COVID-19 sparked a surge in Internet use, but challenges to universal connectivity remain. The report also explores four principal barriers to achieving universal connectivity: lack of skills, lack of access, lack of devices, and a lack of the means to pay for necessary equipment.

Addressing the persistent digital divide and meeting the Commission’s advocacy targets requires strategies, policies and a conducive regulatory environment, says the report. That environment should encourage affordable, meaningful, safe and inclusive broadband services, and it should attract the large investment that is needed.

“The need for greater access to broadband that is fit for purpose in this new world has never been more urgent,” said Doreen Bogdan-Martin, Director of ITU’s Telecommunication Development Bureau and Executive Director of the Commission, “we need the right regulatory environment and the right strategies and policies.”

Commissioners leading working groups on Smartphone Access and AI Capacity Building presented findings and recommendations of their final reports. The preliminary findings of the interim discussion paper of the Working Group on Data for Learning were also introduced.

During the meeting, Mr. Zhao, whose second term as Secretary-General at ITU ends this year, was presented with a certificate of appreciation for his commitment to bringing broadband to the top of the global policy agenda and to supporting digital cooperation for reaching universal connectivity.

Note to​ editors

Founded in 2010, the Broadband Commission promotes a multi-stakeholder approach to digital cooperation by seeking to align Internet and connectivity growth to achieving the UN Sustainable Development Goals (SDGs). The Commission is recognized for the publication of the annual State of Broadband Report and more than 30 thematic research and advocacy reports addressing such topics as digital health, education, online safety and inclusion of vulnerable populations.

About the Broadband Commission for Sustainable Development
The Broadband Commission for Sustainable Development was established in 2010 by ITU and UNESCO with the aim of boosting the importance of broadband on the international policy agenda and expanding broadband access in every country as key to accelerating progress towards national and international development targets. Led by President Paul Kagame of Rwanda and Carlos Slim Helù of Mexico, it is co-chaired by ITU’s Secretary-General Houlin Zhao and UNESCO Director-General Audrey Azoulay. It comprises over 50 Commissioners who represent a cross-cutting group of top CEO and industry leaders, senior policymakers and government representatives, and experts from international agencies, academia and organizations concerned with development. Learn more at: www.broadbandcommission.org

About ITU
The International Telecommunication Union (ITU) is the United Nations specialized agency for information and communication technologies (ICTs), driving innovation in ICTs together with 193 Member States and a membership of over 900 companies, universities, and international and regional organizations. Established over 150 years ago, ITU is the intergovernmental body responsible for coordinating the shared global use of the radio spectrum, promoting international cooperation in assigning satellite orbits, improving communication infrastructure in the developing world, and establishing the worldwide standards that foster seamless interconnection of a vast range of communications systems. From broadband networks to cutting-edge wireless technologies, aeronautical and maritime navigation, radio astronomy, oceanographic and satellite-based earth monitoring as well as converging fixed-mobile phone, Internet and broadcasting technologies, ITU is committed to connecting the world. For more information, visit www.itu.int.

KATHMANDU, September 18, 2022 — The Government of Nepal and the World Bank today signed concessional financing agreements for $275 million (equivalent to NRs. 34.96 billion) for the Accelerating Nepal’s Regional Transport and Trade Connectivity (ACCESS) Project and $140 million (equivalent to NRs. 17.79 billion) for the Digital Nepal Acceleration (DNA) Project.

The agreements were signed by the Finance Secretary, Mr. Krishna Hari Pushkar, on behalf of the Government of Nepal, and the World Bank Country Director for Maldives, Nepal, and Sri Lanka, Mr. Faris Hadad-Zervos in the presence of Honorable Minister of Finance, Janardan Sharma and World Bank Vice President for South Asia, Martin Raiser.

The projects will help unlock Nepal’s economic potential through better connectivity and trade, enhanced digital engagement among people and businesses, and access to regional markets to support the socio-economic development in an inclusive manner,” stated Mr. Krishna Hari Pushkar, Finance Secretary.

Under the Accelerating Nepal’s Regional Transport and Trade Connectivity Project, the 69 kilometer two-lane section of the Butwal-Gorusinghe-Chandrauta road along the East-West Highway will be upgraded to a climate-resilient four-lane highway. With a focus on ensuring better road safety, the project is expected to reduce travel time by 30 percent, thus providing better access to India’s western seaports. The project will construct at least three market areas with required internet and trade information facilities along the highway to help enhance economic opportunities, especially for women entrepreneurs and traders.

The Digital Nepal Acceleration Project supports the implementation of the Digital Nepal Framework, the country’s digital economy strategy that was announced by the Government in 2019. The project will mobilize private capital to increase access to broadband services in rural areas, benefitting people and businesses that are currently not connected to high-quality and affordable internet connectivity.  It will also support and secure the delivery of digital government services through improvements in Nepal’s public data infrastructure and cybersecurity capabilities, increasing access to digital services by women, ethnic and social minorities, and persons with disabilities.

“The World Bank is committed to support regional integration and digital transformation in Nepal to ensure the country’s trade growth, long-term sustainability, and resilience of investments, and enable an innovative digital economy,” said Mr. Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal, and Sri Lanka.

The need to digitalize information flows in international supply chains became clearer than ever during the pandemic, thanks to the reduced person-to-person contact this allows, on top of important efficiency gains. However, efforts to date have been fragmented. UNECE and its subsidiary body UN/CEFACT are offering a solution: a package of standards to provide interoperability for the digital exchange of data between modes of transport, sectors, companies, agencies and countries.

Experts of the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) finalized work on three air cargo documents: Air Waybill (AWB), Dangerous Goods Declaration (DGD), and Consignment Security Declaration (CSD). This development marks the completion of a package of standards and artefacts for the digitalization of multimodal transport data sharing for the key documents accompanying goods transported by all transport modes: road, rail, maritime, air and inland water. This was undertaken in the framework of the multiagency United Nations Development Account (UNDA) project Transport and Trade Connectivity in the Age of Pandemics, which leveraged collaboration among the five UN regional Commissions and UNCTAD to respond and recover better to the pandemic through resilient supply chains.

A prime objective for developing this package is to help avoid physical contact in transport and supply chains, while increasing the safety, security and efficiency of international trade for different transport modes. Standards and artefacts had been developed for the other modes of transport including some created before the pandemic, such as the electronic cross-industry invoice and road consignment note eCMR. New standards for electronic document equivalents were developed for the railway consignment notes CIM/SMGS and SMGS, the maritime waybill, an inland water transport bill of lading, the three air cargo documents mentioned above, packing list, wagon list, and other additional documents. The package is published on the websites of UN/CEFACT and the UNDA project, together with best practice examples of implementation of the standards for real case multimodal transport and trade operations in transition economies.

The standards and artefacts for these documents include: Business Requirements Specifications (BRS), Core Component Library (CCL) structure, dataset alignment with other ‘document’ objects, XLS guideline structure, XSD schema, UML diagrams, HTML index, etc. For the air cargo documents, a team of air domain experts involving carriers, freight forwarders, experts in dangerous goods, safety, security, airport handling, multimodal transport, and data digitalization elaborated the standards and artefacts through an open process, in collaboration with the International Civil Aviation Organization (ICAO). The next steps include outreach and implementation to assist stakeholders with the deployment of the standards.

Based on the UN/CEFACT semantic standards and Multimodal Reference Data Model (MMT RDM), the package can be used to achieve interoperability in the digital transformation of data and document exchange for multimodal transport and trade. This enables the smooth exchange of data between different modes of transport, documents, data sets, etc., using UN/CEFACT’s semantic standards and MMT RDM as a common foundation.

The project helps map data in existing documents to the MMT RDM, to be used as a common denominator for a seamless flow of data between different electronic documents, data sets, modes of transport, and economic sectors. To support this, UNECE is preparing a guide for users on how to utilize these standards and artefacts for multimodal data exchange, when preparing real world electronic document equivalents.

The overall problem is that efforts towards digitalization of data and document exchanges in transport and supply chains are fragmented between sectors, modes of transport, countries, and enterprises. Fragmented efforts and interests create, in turn, inefficiency and lack of transparency, hindering both growth and regulatory controls. Standards and artefacts created by international stakeholders through UN/CEFACT offer open, proven and trusted standards for trade, transport and regulatory bodies across multiple business and industry sectors enabling significant efficiency and safety gains.

One of the first success stories under the project was the development by a joint working group of UN/CEFACT and the International Federation of Freight Forwarders Associations (FIATA) of a digital version of the FIATA Multimodal Bill of Lading, using the UN/CEFACT MMT RDM and semantic standards.

Users increasingly recognize the significance of this approach. The European Union adopted in 2020 a regulation on electronic Freight Transport Information exchange, which envisages that in five years all transport data exchange inside the European Union will be multimodal, moving from exchanges of documents to the exchange of data and data sets. They have essentially accepted the UN/CEFACT MMT RDM as a common global foundation for this data exchange.

These developments open significant potential for world trade. These ‘technology neutral’ standards are designed to serve as a basis for the new generation of data exchange. They will build on and develop further the success of UN/EDIFACT: the only global standard for electronic data interchange (EDI).

The UNDA project supported several pilot implementations in transition economies, such as the export of wood products from Belarus via Ukraine, the Black Sea, and the Danube, to Serbia, using several modes of transport. The tools created can be used in Single Window systems for export and import clearance. Interest has already been expressed in carrying out an exercise similar to the data mapping and referencing of key documents accompanying goods to the MMT RDM for the five modal Dangerous Goods Declarations and creating a common standard data set, after a proper data harmonization process. The technology-neutral multimodal standards can serve as a foundation for interoperability using XML, JSON API, blockchain or other forward-looking technologies.

Aim of getting the whole world connected remains elusive despite increased web use amid pandemic

An estimated 2.7 billion people – or one-third of the world’s population – remain unconnected to the Internet in 2022.

New data from the International Telecommunication Union (ITU), the United Nations specialized agency for information and communication technologies, point to slower growth in the number of Internet users than at the height of COVID-19.

An estimated 5.3 billion people worldwide are now using the Internet. While continued growth is encouraging, the trend suggests that without increased infrastructure investment and a new impetus to foster digital skills, the chance of connecting everyone by 2030 looks increasingly slim.

“The COVID-19 pandemic gave us a big connectivity boost, but we need to keep the momentum going to ensure that everyone, everywhere can benefit from digital technologies and services,” said ITU Secretary-General Houlin Zhao. “This can only be achieved with more investments in digital networks and technologies, implementing best practice regulation, and a continued focus on skills development as we move to a post-pandemic era.”

Emerging challenges

ITU’s new estimate of 2.7 billion people unconnected compares with an updated estimate of 3 billion people unconnected worldwide in 2021.

In 2019, prior to the COVID pandemic, an estimated 3.6 billion people, or nearly half the world’s population, were unconnected.

Amid concerns about slowing progress, ITU analysis indicates two major challenges in terms of advancing the world’s digital transformation:

  • First, achieving universal connectivity – which in effect means bringing the remaining one-third of humanity online – will prove increasingly difficult. Most relatively easy-to-connect communities now have access to technologies like mobile broadband, spurring rapid and widespread uptake of digital services. Those still offline mostly live in remote, hard-to-reach areas.
  • Second, the shift from basic to meaningful connectivity – by which people not only have ready access to the Internet but are able to use it regularly and effectively to improve their lives – is complex. Often, such challenges are overlooked or under-estimated. Barriers can include slow Internet speed; limited affordability of hardware and subscription packages; inadequate digital awareness and skills; and linguistic and literacy barriers, as well as issues like gender discrimination or the lack of reliable a power source. All these need to be addressed if everyone is to enjoy equitable access to online resources.

Doreen Bogdan-Martin, Director of the ITU Telecommunication Development Bureau, said: “While the rise in the number of people using the Internet worldwide is positive, we should not assume the robust growth witnessed in recent years will continue unabated. Those who are still not using the Internet will be the most difficult to bring online. They live in remote areas, often belong to disadvantaged groups, and in some cases are unfamiliar with what the Internet can offer. That is why our target needs to be not just universal connectivity, but universal meaningful connectivity.”

ITU defines ‘meaningful connectivity’ as a level of connectivity that allows users to have a safe, satisfying, enriching and productive online experience at an affordable cost.

Regional disparities

Globally, the number of Internet users grew by 7 per cent and Internet penetration – the share of individuals using the Internet – grew by 6 per cent between 2021 and 2022.

However, growth is unevenly distributed across regions.

Areas with low Internet penetration have achieved the fastest growth over the past year – following a typical diffusion pattern for new and emerging technologies.

  • Africa, the least connected of ITU’s six world regions, achieved 13 per cent year-on-year growth of Internet penetration. Today, 40 per cent of the population in Africa is online.
  • The Arab States showed robust growth, with the Internet now reaching 70 per cent of the population.
  • In Asia and the Pacific, Internet penetration grew from 61 per cent in 2021 to 64 per cent in 2022, relative to the region’s population.
  • The Americas, the Commonwealth of Independent States, and Europe each achieved 3 per cent growth, with more than 80 per cent of the population online in each region.
  • Europe remains the most connected region globally, with 89 per cent of its population online.

Note to editors:

The updated estimate of 3 billion people unconnected worldwide in 2021 was revised based on new data and refined modelling techniques, from the initial estimate of 2.9 billion released in November 2021.​

Additional estimates will be provided in ITU’s forthcoming Facts and Figures2022, set to be issued later this year. The report will feature 2022 estimates for key indicators including Internet use by gender, age groups and location, as well as mobile network coverage, mobile and fixed broadband subscriptions, and mobile phone ownership. 

Discover what others are saying on social media and join the conversation by searching and posting with the hashtag #ITUdata

​About ITU
The International Telecommunication Union (ITU) is the United Nations specialized agency for information and communication technologies (ICTs), driving innovation in ICTs together with 193 Member States and a membership of over 900 companies, universities, and international and regional organizations. Established over 150 years ago, ITU is the intergovernmental body responsible for coordinating the shared global use of the radio spectrum, promoting international cooperation in assigning satellite orbits, improving communication infrastructure in the developing world, and establishing the worldwide standards that foster seamless interconnection of a vast range of communications systems. From broadband networks to cutting-edge wireless technologies, aeronautical and maritime navigation, radio astronomy, oceanographic and satellite-based earth monitoring as well as converging fixed-mobile phone, Internet and broadcasting technologies, ITU is committed to connecting the world. For more information, visit www.itu.int

On 9 September 2022, for the first time in over a decade, the UPU leadership addressed the European envelope manufacturers and suppliers during the 65th FEPE Congress, held in Ljubljana, Slovenia. Challenges and opportunities related to e-commerce and business diversification took central stage.

As longstanding and natural partners, Posts and envelope producers have been equally impacted by the omnipresent trends of declining letter volumes and skyrocketing e-commerce levels, especially during and post pandemic.

The Federation for envelopes and for light and ecommerce packaging in Europe (FEPE) supports its members, envelope and packaging producers and suppliers, in effectively adapting to these changes, defending and promoting the industry’s interests and growth. Just as the postal sector, in recent years, FEPE has transformed itself and expanded its focus to cover e-commerce packaging, paper bags, bread bags, labels and other paper-based light packaging products.

Speaking in his home country Slovenia, the UPU Deputy Director General Marjan Osvald emphasized the need for an ever-growing collaboration between postal operators and envelope and light packaging businesses as both continue to face shared challenges. Digitalization, transformation of business models, growth through diversification, product innovation, and sustainability concerns are just some of the market-driven demands that shape the strategies of both partners.

To successfully navigate through transforming economies, Mr Osvald highlighted that both entity-level and sector-wide partnerships, such as the one between the UPU and FEPE, are key: “The envelope sector and the postal services are close partners, and these dialogue and cooperation between our organizations must be enhanced to the benefit of both industries.”

Thus, in its role as the prime knowledge centre of the postal sector, the UPU will continue to capture and analyze industry data, allowing for a timely and informed response to the expected developments. The UPU’s Postal Economic Research and Postal Statistics can provide an invaluable source of information to forecast letter-post volumes and envelope sales at the national, regional and international levels.

The recently reformed UPU’s Consultative Committee (CC) is another channel, which envelope and light packaging producers are encouraged to use to benefit from the UPU’s research, products and services as well as to engage more closely with delivery-service providers and other industry stakeholders. With the Global Envelope Alliance having already set an example of a successful cross-sector collaboration within the framework of the UPU’s CC, the new Committee membership structure will allow private businesses to have their say as well.

Finally, direct marketing remains a strategic business line for the envelope industry. Although the share of direct mail in the European marketing mix has been falling, when effectively combined with online solutions, it provides a powerful tool to speed up client acquisition and business growth. The UPU’s Direct Marketing Advisory Board (DMAB) offers a platform to exchange views and expertise in direct marketing and welcomes FEPE and its members to collaborate on innovative joint solutions.

In the increasingly digitalized markets, challenges are numerous, but so are opportunities for cooperation. As we approach the World Post Day celebrations in October, Mr Osvald reiterated the UPU’s invitation to all partners, big and small, private and public, to “be part of the global conversation” in order to build “a strong future for the postal sector and the envelope industry together.”

Download the full presentation of the UPU Deputy Director General at the 65th FEPE Congress here.

Participants in the negotiations on e-commerce continued to seek convergence on various topics in the negotiations during their 12-15 September meetings. The co-convenors of the negotiations — Australia, Japan and Singapore — welcomed Mauritius as a new participant, bringing the total number of WTO members participating in the e-commerce initiative to 87.

The latest cluster of meetings tackled several topics, including implementation periods for a future agreement on e-commerce, in particular for developing and least developed countries, access to online platforms and competition in electronic commerce. The negotiators continued to seek convergence on topics such as cyber security, privacy, telecommunications services, electronic invoicing and electronic transaction frameworks. Two more clusters of meetings will take place in October and November, with co-convenors aiming to issue a more streamlined negotiating text towards the end of this year.

A “stocktaking session” looked at several proposals that have not yet attracted universal support from participants in the negotiations. The proposals were examined to help their proponents decide how to take these proposals forward. Following the withdrawal of proposals from single proponents in July, a further proposal was withdrawn in September due to lack of support. The co-convenors commended members for their flexibility in this regard.

Ambassador Kazuyuki Yamazaki (Japan), co-convenor of the initiative and chair of the plenary meetings this year, underlined the huge potential of e-commerce for the global economy. He said: “Remote product and service providers should benefit from the multilateral rules of these negotiations. We would like to enhance our efforts towards the end of this year to achieve satisfactory results and move further on.”

Ambassador Yamazaki welcomed the participation of capital-based officials in the negotiations and encouraged members to send officials to upcoming meetings in October and November.

Looking at the next phase of the negotiations, Ambassador George Mina (Australia), co-convenor, said by the end of the year the initiative aimed to conclude talks on the majority of issues remaining. “We still think this is within reach,” he said, “but it is going to require us all to buckle down and show the kind of compromise that we have seen throughout the last year and a half.”

Ambassador Mina added: “This will require members to energize in those areas where no convergence has been reached and pull back where it has become clear there is not enough support. This requires senior officials’ and political engagement in the coming weeks.”

Underlining the importance of the negotiations, he said: “The foundation for all activity on digital trade in the future is going to come from here. So it is vital that we continue this momentum and it is vital to continue with the contribution that our teams and leadership are all making.”

Ambassador Mina noted that after the next three sessions organised before the end of the year, the co-convenors will issue a revised consolidated text, which will allow members to work in 2023 towards the finalisation of these negotiations. “That is within our reach by 2023 if we can keep this momentum up,” he concluded.

Speaking on behalf of Ambassador Hung Seng Tan, co-convenor of the initiative, the Deputy Permanent Representative of Singapore, Darry Leong, noted the initiative is very close to “cleaning up” text on electronic invoicing, electronic transaction frameworks and cyber security. He said: “As the runway is getting shorter, it is important to set a roadmap to chart our path forward. The objective is to set critical milestones and a concrete plan to address outstanding issues in the negotiations.”

Digital technologies can provide an opportunity to re-write Mozambique’s story.   Access is a critical piece of this equation – expanding affordable, high-speed internet services, a.k.a “broadband” coverage to all communities across Mozambique and connecting people in their homes, businesses and on their mobile phones.  With access to broadband, people can get online to talk to or send money to far-flung family members, farmers can find better prices for their maize or cassava without being beholden to a middleman, an expectant mother in a rural village can consult with a doctor on her smartphone, a young adult in Maputo can learn car repair by watching videos on YouTube and set up a new business. The possibilities are almost endless.

The percentage of people who have internet access has more than doubled from 15 to 32 percent between 2015 to 2021.  Despite this impressive achievement, this means that more than two-thirds of Mozambicans still do not have access to the internet and are therefore excluded from the digital world . Among the unconnected, almost three-quarters say they can’t afford internet services or internet-connected devices like smartphones and computers.  A third of the population live in rural areas without any mobile broadband signal – unable to connect at any price.  And a third of mobile phone users lack the skills to use the internet on their devices.  These barriers are even starker for the lowest-income families, women, and other vulnerable groups.

This is the backdrop for the Mozambique Digital Acceleration Project. The project is a collaboration between the Government of Mozambique and the World Bank Group to tackle these challenges and ensure that many more Mozambicans are able to get online and have the skills to confidently and safely use digital technologies to communicate, access information and services at their fingertips, and increase their earning potential.

The work is broad and ambitious. Building on the broader Government of Mozambique’s digital portfolio, it will support, among other things:

  • Policy reforms in the telecom sector to encourage more private sector investment to expand network coverage and improve internet speeds while spurring more competition to drive down prices for all consumers;
  • Expansion of mobile broadband networks to cover more than 2 million people in deeply rural areas for the first time, alongside free public Wi-Fi access points and programs to reduce the purchase price of smartphones in underserved communities and for disadvantaged groups;
  • Digital skills programs to boost capabilities and comfort with using digital technologies and accessing digital services as well as programs to prepare secondary level students for future employment by connecting classrooms to the internet, equipping them with computers, and upskilling teachers to ensure that graduates will have the digital skills needed to find good jobs in the future workforce; and
  • Investments in the core digital infrastructure, cybersecurity and data protection capabilities needed to modernize government operations and offer more convenient, secure and user-friendly public services online.

Ultimately, the success of the project will be measured by the stories of the individuals empowered with access to the internet and digital skills. Some will use this to make routine tasks more convenient or their lives more enjoyable.  For example, using a mobile wallet or online banking to avoid having to travel and wait in line to withdraw or deposit cash at a bank, pay a utility bill, school fees or taxes.  For others, especially young people, it could fundamentally change their future trajectory – creating a pathway to work remotely for a global software development company or for a local IT company with earning potential of 20 times or more than the local average.

Zooming out, increased digitization of the economy, society and the government will also pave the way for more robust, equitable and resilient growth for the country as a whole.   The International Telecommunications Union (ITU) estimates that every 10 percent increase in mobile broadband penetration in Africa leads to an additional 2.5 percent GDP growth per capita. Digitization can also help diversify the economy, shifting away from a mining and natural resource extraction led model that employs and benefits relatively few, toward an economy powered by growth of digitally enabled services and trade  which can employ and benefit many and is less vulnerable to economic or climate shocks. For instance, it can expand opportunities for small businesses to become more productive, grow and reach new customers through online platforms and advertising, and connect individuals to new opportunities to earn a living. When the next cyclone, flood or drought hits, or if another pandemic or conflict strikes, it can ensure that businesses and government can continue operations and displaced people can access essential services and financial assistance virtually if physical facilities are damaged or in person transactions are restricted.

By the time the project concludes in 2028, this digital future should be a reality for millions more Mozambicans and the country as a whole should have a much more solid digital foundation to continue building and innovating upon.

For the second year in a row, IFC investments in the telecommunications, media, and technology sector surpassed the $1 billion mark, totaling $1.3 billion and representing a five-fold increase in digital infrastructure commitments over the past five years. IFC’s investments reflect the tremendous growth opportunities presented by the telecom sector across emerging markets globally, including further rollouts of 4G and fiber networks and expansion of digital technologies, enterprise IT services, and cloud infrastructure.

This significant business opportunity is driven by accelerated digital transformation in recent years and a push to bridge the digital divide. As different stakeholders rally to respond to the challenges, IFC’s investments in the sector are also helping to ensure that this transformation contributes to green and inclusive economic growth as well as equitable access to digital services.

“Robust digital connectivity is the foundation of a flourishing digital economy and a fair, informed society. IFC’s investments in the digital infrastructure sector are breaking new ground, connecting the unconnected, and creating opportunities, particularly in Africa, where we secured 51 percent of our commitments,” said Morgan Landy, Director, Global Infrastructure.

eConomy Africa 2020, a report by IFC and Google, found that Africa’s Internet economy has the potential to reach $180 billion by 2025, accounting for 5.2 percent of the continent’s GDP. By 2050, the projected potential contribution could reach $712 billion, 8.5 percent of the continent’s GDP.

In Africa, both small and large investments are making a difference. A $1.2 million commitment to CSquared supports the landing of Google’s Equiano submarine cable in Togo and the formation of the country’s first wholesale open-access fiber network, supplying high-quality and affordable digital connectivity. Larger change-making commitments include the $430 million anchoring of pan-African telecom operator Axian’s inaugural bond issuance to expand the company’s digital infrastructure across several countries. Other projects in the region include a deepening partnership with one of the leading pan-African digital connectivity providers, Liquid Intelligent Technologies, with a new $90 million equity investment to increase the company’s fiber network footprint and expand its data center infrastructure.

IFC’s investment in digital assets managed by DigitalBridge in Southeast Asia and Latin America further exemplifies the corporation’s focus on strategic partnerships as a means to expand digital access and create economic opportunity while enhancing sustainability. Among the projects supported by the $100 million commitment are Brazilian data center operator Scala’s expansion into Chile and Mexico, which includes plans for Latin America’s first data center to run fully on renewable energy, and two independent tower platforms – Highline in Brazil, and EdgePoint, operating in Indonesia and Malaysia.  This was followed by an additional $8.3 million indirect equity investment in EdgePoint to support its entrance into the tower market in the Philippines.

In addition to a strong track record in Africa, 34 percent of IFC’s digital infrastructure investments in the past fiscal year (July 1, 2021–June 2022) were in fragile and conflict-affected situations (FCS) and low-income International Development Agency (IDA) countries. Additional landmark investments this fiscal year will enable better quality and affordable service to more mobile customers in emerging markets around the world. These include:

  • $184.5 million to Telecom Argentina to expand digital connectivity in parts of Argentina that lack service coverage
  • $150 million loan to Dialog Axiata to expand its 4G network in Sri Lanka
  • $25 million in debt financing for Atlas Tower Kenya to build 450 telecom towers
  • $20 million loan to Telecom Armenia to boost Armenia’s broadband connectivity
  • $70 million financing package to Communication and Renewable Energy Infrastructure (CREI) Phils Inc.: In addition to securing better coverage and optimal allocation of high-speed mobile networks in the Philippines, and in line with the nation’s climate goals, this project will lead to significant greenhouse gas (GHG) savings. IFC will also assist the company in aligning its environmental and social practices with IFC’s performance standards.

Over the last decade, IFC committed and mobilized more than $7 billion in digital infrastructure and services, with more than $2.5 billion between July 2020 and June 2022. In addition to providing financing, IFC is helping investees improve corporate governance and align environmental and social practices with IFC’s performance standards. IFC’s expertise plays a critical role in enabling companies to achieve sustainable, long-term growth.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.orgwww.ifc.org/infrastructure, and www.ifc.org/tmt.

Stay Connected
www.facebook.com/IFCwbg
www.twitter.com/IFC_org
www.youtube.com/IFCvideocasts
www.ifc.org/SocialMediaIndex
www.instagram.com\ifc_org
www.ifc.org/tmt
Follow IFC Infrastructure on LinkedIn

  • Turkey became the 10th country to attract the most investment among European countries over two years and hosts six unicorns.
  • A network of entrepreneurs, start-ups, academics and researchers meet each year for the world’s biggest aviation, space and technology festival, Teknofest.
  • Four unicorns in the space say that unicorns must embrace digital transformation and governments must support the ecosystem and nurture small-medium sized businesses through policy but they must refrain from regulation or favouring traditional offline enterprises.

The 2020s mark an important period for Turkey with its entrepreneurial ecosystem advancing fast.

While global venture investment last year totalled $643 billion, compared to $335 billion in 2020 – marking 92 % growth year over year – a similar success story took place in Turkey, even though not a single unicorn was present in the country until 2020. Today, Turkey hosts six unicorns: Peak Games, Getir, Dream Games, Hepsiburada, Trendyol and Insider. In such a fast-developing investment ecosystem, Turkey became the 10th country to attract the most investment among European countries.

Its national target is to host 10 unicorns by 2023 when Turkey celebrates the 100th anniversary of its establishment as a Republic.

This development of the entrepreneurship ecosystem has happened with intent rather than luck, as Turkey vowed to develop an innovative ecosystem of emerging technologies through its Industry and Technology Strategy Plan for 2023. The country has established a mega technology corridor starting from Istanbul, Kocaeli to Izmir where there is a nationwide network for entrepreneurs, start-ups, academic research centres and development institutes.

The Turkish Technology Team Foundation and the Ministry of Industry and Technology also set up Teknofest. The event holds technology competitions covering 99 different categories, attracting more than 1 million visitors each year, including 150,000 teams and 600,000 participants from high schools, universities and entrepreneurs from 108 different countries.

We asked four prominent unicorns to share their views on the biggest digital transformation for the rest of the decade and how governments can provide support. Here’s what they had to say.

Being part of the solution to global developmental challenges will define the rest of the decade for unicorns

—Çağlayan ÇETİN President, Trendyol Group

The effect of groundbreaking technologies such as the metaverse, decentralized finance and quantum computing will soon become a more profound part of our lives. Traditional companies aside, today’s unicorns are doomed to be disrupted if they fail to adapt to these emerging technologies. Unicorns must spend the rest of the decade not resisting but embracing the change.

By their nature, unicorns could significantly help tackle the world’s challenges, such as climate change, poverty and inequality. Being part of the way forward will define the rest of the decade for them. Trendyol is Turkey’s leading and one of Europe’s top five e-commerce marketplaces, with more than 30 million shoppers and 230,000 sellers. While creating value for our sellers and customers, we’ll channel our resources to contribute more to sustainable development in Turkey and other countries we operate.

Regarding governmental support, education and labour market policies should be at the centre of the policy roadmap to increase the number of successful start-ups. Formal education structures should be redesigned in line with the human resource needs of technology companies with high-growth potential. Labour market policies should involve introducing flexible work arrangements to labour codes.

Secondly, an effective financing structure to fund innovative companies is essential to spur innovation. Start-ups focusing on basic research such as biotechnology should see funding come predominantly from government research organizations. Tax incentives for angel investors and implementing state-backed venture capital funding programmes are some of the policies governments can implement.

Customer experiences will define the next decade.

—Hande Çilingir, Co-Founder and CEO, Insider

The main transformation that will define the rest of the decade will stand on creating outstanding customer experiences through digitalization. The number of technology companies outside of the United States and China are rising fast, which is creating new startup ecosystems with a lot of potential and opportunities. The increasing number of startups will make B2B companies more prominent. That was the case for Insider.

Insider recently became the first Software Unicorn from Turkey and 9th B2B SaaS in the world. I believe that the main transformation that will define the rest of the decade will stand on creating outstanding customer experiences through digitalization. From all of the case studies and research we’ve seen, the ability to deliver frictionless, consistent customer experiences will define the next decade, because customers are demanding seamless journeys more than ever.

Moreover, the governments need to increase the community support for startups by encouraging investments, creating more job opportunities and fostering a more lucrative environment for entrepreneurs. Embracing the startup culture from the high school level will have a huge impact on boosting the ecosystem.

Freedom of creativity is essential for progress and too much regulation slows or kills progress

—Nazım Salur, Founder, Getir

By the end of the decade, I think more than 90% of the world’s population will be using digital products. Almost everything currently not sold or serviced digitally will be available online, at the touch of a button or through our smart devices.

To nurture these businesses, governments should consider tax incentives, such as waiving most indirect taxes on start-ups until they are profitable or for a specified time. There can also be tax incentives on start-up employees’ income for several years. In the long run, if more start-ups become big businesses, there will be more taxes to collect.

Regulation is also an area I’d consider revisiting. Unless a specific sector needs regulation for environmental or health reasons, it should not be regulated so that new ideas and companies can emerge. Freedom of creativity is essential for progress and too much regulation slows or kills progress.

As start-ups grow and begin to compete with existing established businesses, governments should refrain from siding with existing offline industries.

The biggest driver of the digital transformation will come from the wider adoption of technologies that already exist

—Murat Emirdağ, CEO, Hepsiburada

As we emerge from the COVID-19 pandemic, the rest of the decade will be defined by the long-term economic recovery. Digitalization and the wider adoption of technologies by consumers and businesses in everyday life will be a huge part of that recovery path.

The digital economy will transform businesses by powering economic growth across a wide range of sectors. The growth of the e-commerce sector, accelerated after 2020, is a clear indication that this transformation is already underway. As a household brand in Turkey, Hepsiburada aims to be at the forefront of the digitalization of the Turkish economy, from addressing customers’ everyday needs to empowering the merchants on our platform with the necessary capabilities they need in an increasingly digital future.

Start-ups and small-medium enterprises (SMEs) will be the biggest drivers of growth and innovation in the coming years and governments should continuously prioritize creating the infrastructure and environment for them to flourish. In the e-commerce sector, for instance, it is important to implement policies that nurture SMEs, allowing merchants and entrepreneurs to continue to innovate and drive competition. For growth to be sustainable, opportunities need to be as widely available as possible and governments have a vital role to play in maintaining level playing fields, ensuring fair competition in the industry and making it open to new players and innovations.

Cabo Verde is on course to becoming a regional ICT hub, thanks to the country’s investment in a digital transformation vision, with active support from the African Development Bank.

The first phase of construction of the Cabo Verde Technology Park’s main buildings, which is funded by the African Development Bank, is 85% complete and will be ready before year-end, officials said on Thursday, 08 September 2022.

The project will enable the West African country to diversify away from an economy dependent on tourism to one driven increasingly by innovation.

Over 50% of the beneficiaries of the technology park will be youths, mainly from West Africa and Portuguese-speaking African countries, like 17-year-old Ederlindo Lopes de Barros from Carbo Verde.

During Thursday’s visit to the NOSi Data Center in Praia, African Development Bank President Dr. Akinwumi Adesina met the young Barros as he softly but excitedly punched his keyboard and stared at the giant screens in front of him.

Barros, a student at the University of Cabo Verde, told Dr. Adesina that his dream is to be a network security engineer. He is undergoing a six-month internship on networking security at NOSi, one of the facilities the African Development Bank is supporting.

Adesina said: “It is great to be here to see this data center. I am delighted that we are financing it and the adjoining Cabo Verde Technology Park. We live in a digital world, so the ability to collect, process, and store data and use data for informed decision-making is critical. I am very pleased with what I have seen at the Data Centre and the main Cabo Verde Technology Park under construction.”

The Bank President described the data center as world-class and of high-security standards, and said he hoped to see its services extended to many more countries.

“I am very pleased with what the government is doing, supporting young people, and training them in science, technology and information. In the modern industrial revolution, you need these skills to work. That is the future,” Adesina said.

Over 15 technology businesses have already expressed interest in the Cabo Verde Technology Park, including Microsoft, Unitel, Huawei, and AfriLabs.

Officials say the ICT facilities will enable Cabo Verde to train, incubate and invest in innovative African youths, start-ups, and digital nomads. The message is clear: young Africans do not need to leave the continent to flourish. Cabo Verde has the necessary facilities and a supportive political system, Adesina said.

“We are moving in the right direction in technological transformation. We will do a lot for Cabo Verde and its youth with the support of the African Development Bank,” said Cabo Verde’s Deputy Prime Minister and Finance Minister Olavo Correia, who accompanied Adesina on his visit to the technology park.

The South Centre and the West African Tax Administration Forum (WATAF) jointly organized a two-day capacity-building program on the topic of “Taxation of the digitalized economy” on 7-8 June 2022. The purpose of this program was to provide South Centre and WATAF member countries’ tax officials with detailed information on the “Two-Pillar solution” politically agreed upon in the Organisation for Economic Co-operation and Development (OECD) Inclusive Framework (IF) on 8 October 2021, and alternative policy measures available for developing countries, especially Article 12B of the United Nations (UN) Model Tax Convention which provides a solution for taxing Automated Digital Services (ADS). The peer-to-peer training was provided by tax officials from the Governments of India and Nigeria, experts from WATAF and the African Tax Administration Forum (ATAF), the International Lawyers Project, and the staff of the South Centre.

Indeed, the need to tax the digital economy led to two proposals, one from the OECD Inclusive Framework known as the Two-Pillar solution, the other from the UN Tax Committee known as Article 12B of the UN Model Tax Convention (UNMTC). To these two proposals are added the national or unilateral measures that some developing countries have already been using to collect tax revenues from activities carried out without a physical presence in their territory. Therefore, this capacity-building program brought together experts for peer-to-peer exchange, analysis of the different proposals, and experience sharing.

The capacity-building program covered topics such as national measures in developing countries, the Article 12B on taxing income from Automated Digital Services (ADS), the content of Pillar One, specifically the scope, nexus, and revenue sourcing rules, the tax base determination process, the elimination of double taxation, dispute prevention and resolution mechanism and the mutual agreement procedure (MAP). It also covered the Pillar Two content, especially the Global Anti Base Erosion (GloBE) model rules and the Subject To Tax Rule (STTR).

The session began with opening remarks by the Executive Secretary of WATAF, Mr. Babatunde Oladapo, and an opening statement by the Executive Director of the South Centre, Prof. Carlos Correa.

Babatunde Oladapo, Executive Secretary of WATAF

Mr. Oladapo, in his opening remarks, highlighted that the purpose of this capacity-building program is to respond to the question of “how can we (developing countries in general and African countries in particular) generate sufficient revenue to fund our development?” He stated that it is good to have a proposed solution from the OECD Inclusive Framework, but this solution as published seems to be not inclusive, and the recent study commissioned by the Coalition for Dialogue on Africa (CoDA) and the South Centre illustrates this. The study has shown that if the OECD/IF’s proposal is implemented, developing countries will be left behind in terms of collecting revenues from legitimate businesses operated in their territories. Therefore, the workshop was an opportunity to harmonize African countries’ positions, so that the participants will be able to inform the policymakers in their respective countries.

Prof. Carlos Correa, Executive Director of South Centre

Prof. Correa, in his opening remarks, recalled that many companies are still not paying taxes in developing countries where they do business due to the context of the digitalization of the economy. Thus, it is important to address this issue. Furthermore, developing countries need to make a decision whether to join or not the Two-Pillar solution, and the study by CoDA and South Centre has provided the revenue estimates from the Pillar One solution and the UN Model Tax Convention solution as well. The South Centre, through this capacity-building program co-organized with WATAF, aims to provide countries with information that will support them to make informed decisions.

After the opening remarks, Abdul Muheet Chowdhary and Sébastien Babou Diasso from the South Centre provided the participants with the results of the research paper commissioned by CoDA and South Centre on comparing tax revenues to be raised by developing countries from Amount A and the UNMTC Article 12B regimes. The results show that the UNMTC Article 12B offers the highest tax revenue for developing countries, especially when applied with a broad scope including both “pure” ADS and “hybrid” ADS with a 4% tax rate. Pure ADS meant exclusively the services mentioned in paragraph 6 of Article 12B, while hybrid ADS applied to a broader range.

After the presentation of the revenue estimates, the floor was given to Mr. Mathew Olusanya Gbonjubola, co-Chair of the UN Tax Committee and Group Lead of the Special Tax Operations Group at the Federal Inland Revenue Service in Nigeria who shared his views in his personal capacity. Mr. Edouardo Terada Kosmiskas from the Permanent Mission of Brazil to the World Trade Organization (WTO) and Economic Organizations in Geneva also shared with the participants the position of his country.

Mathew Olusanya Gbonjubola, co-Chair of the UN Tax Committee

Mr. Gbonjubola made two distinctions between Amount A of the OECD IF and Article 12B of the UNMTC. To him, the first distinction is that Amount A is built on a principle of win-lose while Article 12B is built on a principle of win-win. To him, Amount A is based on one jurisdiction must lose for another jurisdiction to win. Article 12B is based on a mutual agreement between two contracting parties.

The second distinction is that Amount A is based on a top-down mechanism while Article 12B is based on a transaction-by-transaction approach at the country level. According to Mr. Gbonjubola, it is advisable for countries to wait until they have the full package of the Amount A content and, based on that information, carry out their own impact assessment at the country level of the expected gain or loss from the use of Amount A.

Edouardo Terada Kosmiskas, Permanent Mission of Brazil to the WTO

Mr. Edouardo Terada Kosmiskas, Desk Officer for e-commerce and services at the Permanent Mission of Brazil to the WTO and Economic Organizations in Geneva said that the participation of developing countries in the discussion on the reform of the international tax system should end up in a fair taxing right, greater transparency and reduced uncertainty in the process of the reform. To Mr. Kosmiskas, the Two-Pillar solution has become extremely complex and will be less effective. Furthermore, the proposed solution of the OECD seemed to go beyond what was initially planned and does not reflect the perspective of developing countries. He said Brazil has not yet carried out an impact assessment due to the lack of the necessary data. He added that the finalization of the rules, in particular relating to the elimination of double taxation, could affect the revenue impacts.

Regarding Article 12B, he said the revenue gain estimate from the federal revenue authority of Brazil is not very different from those found in the study commissioned by CoDA and South Centre.

Kehinde Kajesomo, Director of Treaties & International Tax Policies Division, Federal Inland Revenue Service of Nigeria

With the opening session concluded, the training started with an overview of national measures and Article 12B of the UNMTC provided by Mr. Kehinde Kajesomo, Director of Treaties & International Tax Policies Division in the department of Tax & Policy Advisory at the Federal Inland Revenue Service of Nigeria. Mr. Kajesomo presented the taxation system in the traditional economy and how the digitalization of the economy made the existing rules outdated, and the realities countries have been facing due to digitalization. He further presented options for unilateral measures and different tools used so far such as the Significant Economic Presence (SEP), the Withholding Tax (WHT) system, the equalization levy, and the digital services tax (DST).

For each of these tools, he discussed the challenges and provided the pros and cons of the use of unilateral measures. As for the UNMTC Article 12B, Mr. Kajesomo explained the income and services covered and not covered, the benefit and challenges of the OECD solution, and ended his presentation with some recommendations to African countries regarding the use of Article 12B.

John Bush, Program Director for Tax and Fiscal Reform, International Lawyers Project (ILP)

The following presentation covered scope, nexus, and revenue sourcing rules under Pillar One provided by Mr. John Bush, Program Director for Tax and Fiscal Reform at International Lawyers Project (ILP), and Mr. Kehinde Kajesomo from the Federal Inland Revenue Service of Nigeria. They explained to the participants how to identify whether a group is in-scope of Amount A reallocation or not, how the nexus rules apply, and how to source revenues of a group in the different market jurisdictions where it conducts activities and derives revenues.

     

Abdul Muheet Chowdhary, Senior Programme Officer, and Sébastien Babou Diasso, Research Consultant – Tax, South Centre

The next presentation was regarding the tax base determinations provided by Mr. John Bush from ILP, Mr. Abdul Muheet Chowdhary, Senior Programme Officer, and Mr. Sebastien Babou Diasso, Research Consultant – Tax, both with the South Centre Tax Initiative of the South Centre. They explained to the participants through practical examples the different steps that a multinational enterprise (MNE) group will follow to compute its profit before tax until it arrives at the share of the profit to reallocate to each market jurisdiction for taxation.

The program on the first day ended with a presentation on the elimination of double taxation provided by Dr. Sri Vatsa Sehra from the Central Board of Direct Taxes (CBDT) of India. He presented the process of identification of paying entities, the calculation of the residual profit in the paying entity, and the allocation of the paying or elimination liability between the identified entities as per the rules of the OECD.

     

Tochukwu Sandra Onyemata, Communications and Liaison Manager, and Dan-Asabe Ozayashi, Training and Capacity Development Manager, WATAF

The sessions of the two-day capacity-building were moderated by both the West African Tax Administration Forum (WATAF) and the South Centre. The moderators from WATAF were Tochukwu Onyemata, Communications, and Liaison Manager, and Dan-Asabe Ozayashi, Training and Capacity Development Manager. From the South Centre, the moderators were Fernando Rosales, Coordinator of the Sustainable Development and Climate Change programme, and Abdul Muheet Chowdhary.

On the last day of the capacity-building activity, several other topics were discussed with the participants. These were the dispute prevention and resolution mechanism, mutual agreement procedure, the GloBE Model rules under Pillar Two, and the Subject To Tax Rule (STTR).

Mr. Chetan Rao, Director of Foreign Tax & Tax Research Division, and Ms. Vidyotma Singh, Deputy Commissioner of Foreign Tax & Tax Research Division at the Central Board of Direct Taxes (CBDT) of India provided information on the overall tax certainty framework for Amount A, in particular the process of constituting a review panel and a determination panel, the role of the actors involved, and the decision-making process. They also presented the tax certainty framework for issues related to Amount A, explaining how is the proposed functioning of dispute resolution panels and the risks they could pose to existing bilateral tax treaties.

Mr. Sukhad Chaturvedi, Under Secretary at the same Division, also provided information on the MAP process, how to implement MAP decisions, and shared practical case studies and lessons learned from developing countries’ experiences.

Aboubakar Nacanabo, Manager: Rapid Response, ATAF

Michael Durst, Special Advisor for Fiscal Reform, International Lawyers Project (ILP)

Mr. Abubakar Nacanabo, Chair of the ATAF Technical Committee on Cross-Border Taxation, and Mr. Michael Durst, Special Advisor for Fiscal Reform at the International Lawyers Project (ILP) explained the functioning of the GloBE model rules. They described the scope, the computation of GloBE income or loss, the effective tax rate, and the top-up tax, the application of the Income Inclusion Rule (IIR), the Under-Taxed Payments Rule (UTPR), and the Qualified Domestic Minimum Top-Up Tax (QDMTT).

The last presentation was provided by Abdul Muheet Chowdhary and Sébastien Babou Diasso from the South Centre regarding the Subject To Tax Rule (STTR). They analyzed the scope and operation under this rule, highlighting some of the key deficiencies in its existing design, and presented data on withholding rates for interest and royalties found in tax treaties for African countries and other developing countries. As the STTR is still under negotiation, the data showed the clear need for an STTR with a broad scope and simple design if it is to be useful for developing countries.

Fernando Rosales, Coordinator, Sustainable Development and Climate Change programme (SDCC), South Centre

The two-day capacity-building program ended with closing remarks made by Mr. Fernando Rosales, Coordinator of the Sustainable Development and Climate Change Programme of the South Centre. Mr. Rosales complimented the trainers for the quality and depth of the presentations and thanked the participants for the interest shown during the two-day session.

By creating multi-stakeholder collaboration platforms we can drive awareness and market uptake of green and digital technologies.

The green transition developed from the consensus that economic growth must urgently be decoupled from environmental harm.

Global production is currently undergoing two major transitions. The green transition developed from the consensus that economic growth must urgently be decoupled from environmental harm to address both climate change and poverty. The digital transition, on the other hand, evolved because firms realized they could reap economic gains from using digital technologies. This, in turn, might also contribute to achieving the green transition, for example by allowing firms to become more resource efficient. Green and digital production is likely to turn into a competitive advantage in the future. Lead firms in global value chains (GVCs) will increasingly rely on green suppliers whose production methods can be traced and verified, which typically requires the use of digital technologies. Suppliers will thus have to comply with green and digital standards to be able to participate in the global economy.

The digital transition evolved because firms realized they could reap economic gains from using digital technologies

A green and digital divide is, however, emerging between the frontrunners and those lagging behind. This not only decelerates the twin transition in general, it also increases the inequality between leaders and laggards over the longer run. Small- and medium-sized enterprises (SMEs), in particular, face several twin transition challenges, as they lack the (financial) space to invest in new technologies characterized by uncertain and long-term payoffs.


Larger firms have higher rates of advanced digital technology adoption than SMEs


Strategies for raising awareness and uptake of digital and green technologies

The figure below summarizes the key drivers of and policies on green and digital technology adoption. Traditional factors continue to play a crucial role. Financial resources and absorptive capacities at the firm level are key for introducing novel technologies and integrating them into current production processes. Similarly, demand factors, competition, modern and operational infrastructure and networks are strong drivers of technology diffusion at the market level. The regulatory framework remains a leading factor at the institutional level by providing, amongst others, tax (dis-)incentives.


Drivers and policies for green and digital technology adoption

A positive attitude towards innovation and change is one of the key drivers of technology adoption.

The lack of awareness about the costs and benefits of new technology uptake are one of the main reasons for (non-)adoption1. Managers usually have little incentive and interest in collecting and sharing information about who to contact, where to find the necessary financial and technical support, and which government policies and initiatives are available2. Most firms have confidence in their production technologies and do not want to take any unknown investment risks. The scarcity of time to gather the necessary information is a leading reason for this3. A positive attitude towards innovation and change is one of the key drivers of technology adoption. More specifically, early adopters of new digital and green technologies have a positive attitude towards such technologies, are forward-looking, and have a clear understanding of which technologies are available, the associated costs and benefits, and relevant management practices4.

As regards customs and culture, field research from India, for example, finds that households often reject new, more energy efficient cookstoves that could replace traditional stoves because the new ones cannot be used to bake chapatti (a type of unleavened flatbread)5. In Bangladesh, religious beliefs may represent a barrier to use of greener stoves. Muslim households, for example, do not want to use biogas units that run on pig waste, even though such units would be far more efficient6. These examples emphasize the significance of context-specificity and the need to find solutions that address culturally engrained preferences and behavioural patterns.

Potential adopters of digital technologies may also be wary of unknown risks, such as digital security and privacy risks. The protection of data and trade secrets is becoming increasingly difficult, especially for SMEs. Digitalization and the revolution in data codification, storage and exchange have contributed to the rise in trade secret infringements7.Increased digital security risks, including risks to the security of data assets as well as personal data protection, reinforces the importance of addressing trust in digital technologies as another barrier to technology adoption. Additionally, the lack of trust in partners who might misuse data, such as ICT companies (which might sell the data) or other partners in the value chain, must be considered. Such concerns impede cross-company information sharing and collaboration, and is particularly pronounced in SMEs8.

Increased digital security risks reinforce the importance of addressing trust in digital technologies.


Using multi-stakeholder platforms to facilitate technology uptake through awareness raising

As depicted in the figure above, awareness and legitimation programmes have been incorporated in the larger set of more traditional policy tools. Policymakers frequently use public communication to encourage compliance with environmental policies. Media campaigns, websites and news items help governments share information with a broad audience. Demonstration projects and information campaigns can be useful to ensure that firms gain a better understanding of and appreciation for available digital and green technologies, especially environmental technologies that have cost-reducing properties, and information on good practices in digital risk management. A recent study on the effects of information dissemination on residential solar photovoltaic adoption in Sweden, for example, concludes that the campaign had significant influence on adoption rates9There are only few studies on awareness campaigns and the adoption by firms of green and digital technologies, and this field, therefore, deserves further investigation.

Intermediary organizations and collaboration platforms can play a key role in the market uptake of green and digital technologies.

Our policy review furthermore highlights that intermediary organizations through establishment of multi-stakeholder platforms can play a catalytic role in the market uptake of green and digital technologies, especially among SMEs. Multi-lateral platform initiatives, such as the ones supported by the G20, can facilitate knowledge diffusion by joining a wide array of key stakeholders, including governments, multinational enterprises (MNEs), industry experts, research centres and SMEs, and provide a common place for participants to connect and share best practices, case studies, policy and legislation experiences through roundtables and multi-lateral discussions.

The functions of such platforms should be expanded within the context of green and digital technology  diffusion to offer more than just a network and knowledge repository. The existing platforms should be used to address the lack of awareness about the opportunities green and digital technologies offer, such as access to global markets and facilitation of linkages between SMEs and larger firms, as well as dispel any doubts about digital security and privacy.

Digitalization is changing our lives with unprecedented speed. New technologies are revolutionizing the way businesses operate, how people connect and exchange information, and how they interact with the public and private sectors.

As Gerd Müller, Director General of the United Nations Industrial Development Organization (UNIDO), says, “Digitalization changes everything.”

In Tunisia, as in many countries around the world, the COVID-19 crisis has accelerated digital transformation. But in the country’s interior regions, businesses still face barriers to fully exploit the potential of digital technologies.

That’s why entrepreneurs are getting a helping hand from the Mashrou3i project. Implemented by UNIDO, together with the United States Agency for International Development (USAID), the Italian Agency for Development Cooperation (AICS) and the HP Foundation, the project provides training, coaching and technical assistance to support the development of new enterprises in Tunisia.

In Medenine, a town in south-eastern Tunisia, the young entrepreneur Ayoub Zammouri took advantage of the Mashrou3i project to improve his digital skills, discover new online tools and identify opportunities for market expansion and sales. He launched Makhtoum, an online platform for the promotion and marketing of local products.

Zammouri explains, “The world today is connected. We have no other choice but to adapt. I wanted to combine the digital world with the agriculture and handicraft sectors, to promote local products, while also taking advantage of the opportunities offered by digital transformation.”

UNIDO’s Müller says, “We see that digitalization is a powerful tool for disseminating entrepreneurial culture and learning,” and Hajer El Hedi, a young entrepreneur from Tatouine, a city in southern Tunisia, proves the point.

In 2020, she launched Examido – an interactive educational platform where teachers and students learn, interact and collaborate with one another. Mashrou3i provided business coaching and technical support in the development of the content and programming of the Examido mobile app.

This innovative platform is one of the first businesses in the region to be awarded the Startup Act Label created by a new law designed to advance digitalization and jump-start the next generation of Tunisian startups.

El Hedi remarks,” I was the first entrepreneur in Tataouine to receive the startup label, which is a great source of pride! This marks the beginning of a new era in the technology sector in the south of the country.”

Another beneficiary of the Mashrou3i project is Dr. Adel Mehrez who founded a medical laboratory in the city of Gabès earlier this year. With the support of Mashrou3i, his Bio Lab has integrated state-of-the-art software to simplify daily management and improve the speed and accuracy of analyses.

“The Mashrou3i project enabled me to acquire Dynamic Lab software. Used in the most modern laboratories, this technology not only facilitates tasks, but also makes life easier. Based on everything being connected, it provides instant processing of all analyses performed with remote validation and almost zero margin of error…Thanks to Mashrou3i, I have entered the era of digital transformation with full force.”

UNIDO’s Müller highlights the Mashrou3i project beneficiaries as examples of progress by innovation. He notes that digitalization is crucial to advancing with UNIDO’s priorities:

  • reducing hunger by helping businesses from farm to fork;
  • preventing climate breakdown by using renewable energy and energy efficiency to reduce industrial greenhouse gas emissions; and
  • supporting sustainable supply chains so that developing country producers get a fair deal and scarce resources are preserved.

Read the full story and a new report published by Mashrou3i highlighting the opportunities and challenges that digitalization presents Tunisian entrepreneurs here.

The United Nations Industrial Development Organization (UNIDO) and the Ministry of Trade and Industry (MOTI) signed an agreement to scale up Ghana’s national initiatives on Micro, Small and Medium Enterprises (MSMEs) promotion.

Since 2012, Ghana has promoted Kaizen practices – a Japanese methodology and philosophy to sustainably and continually improve quality and productivity of businesses. Hundreds of Ghanaian enterprises have introduced and applied Kaizen practices and have suceeded in improving their quality and productivity.

To enhance the developmental impact at industry and national levels, Ghana will scale up this initiative, to further enhance the competitiveness of MSMEs in the country.

In a bid to support Ghana to achieve this goal, UNIDO launched the project “Expanding the Kaizen initiative by enhancing sustainable agribusiness”. The project will introduce the UNIDO digital dashboard system “Smart and Sustainable Agri-Business (SSAB)”, enabling Ghanaian MSMEs to visualize and hence better manage their enterprise performance through a smart and digital platform. By collecting key performance indicators from the production site, SSAB will not only address productivity issues, but will also improve resource efficiency, food safety compliance as well as performance of the MSMEs from a social perspective.

This 3-year project will be implemented by UNIDO in coordination with the Ghana Enterprises Agency (GEA), with funding from the government of Japan.

The launching ceremony was hosted by the Minister of Trade and Industry Alan John Kwadwo Kyerematen, and attended by the Japanese Ambassador to Ghana, Hisanobu Mochizuki, UNIDO Representative to Ghana and Liberia, Fakhruddin Azizi, CEO of GEA, Kosi Yankey-Ayeh, Directors of MoTI and GEA, and other stakeholders.

International Trade Centre launches digital connectivity initiative to support e-commerce across policy, institutional and enterprise levels – starting in Zambia

The International Trade Centre (ITC) has launched a new corporate initiative dubbed: Switch ON. Focusing on digital connectivity, ITC calls on partners to prioritize investments in connectivity and on policymakers to create the right conditions for small businesses in developing and transition countries to profit from digital trade and entrepreneurship.

The initiative is integral to ITC’s 2022-2025 Strategic Plan, which prioritizes digital connectivity as a key enabler to an inclusive, sustainable, and prosperous world.

Switch ON focuses on delivering affordable networks and unlocking access through education and digital literacy. Partnerships with local and international companies play an important role in the initiative’s success.

 

Zambia: First Switch ON country 

In 2022, ITC will evaluate the potential for connectivity to digital trade in Zambia. This will support the Government of Zambia’s ambitions while working with private businesses to develop the case for investment in digital connectivity. The initiative also builds on the already implemented digitally focused ITC project in Zambia called FastTrackTech Africa. The project started in December 2019, supporting tech start-ups, digital entrepreneurs, and their tech ecosystem in Lusaka.

Beyond the immediate opportunities for trade, the Initiative is set to achieve affordable and reliable connectivity in urban and rural areas, establish easy and affordable access to online payment solutions, develop e-commerce services such as local marketplaces, and enable institutions to implement relevant policies and initiatives for small businesses.

Pethel Phiri, Acting Director General at the Zambia Information and Communications Technology Authority, explains: “Although there is more to do in expanding digital coverage in Zambia, the connectivity gap is being addressed. The issue now becomes a usage gap – How do we ensure increased use of digital connectivity for productive economic activities? How do we ensure people leverage improved connectivity to make a living?”

“The future of global trade, especially small businesses, will be through digital platforms and channels,” adds ITC Executive Director, Pamela Coke-Hamilton. “Greater participation of small businesses in digital trade brings important economic benefits, drives the demand for digital capacity and, in turn, improves the business case for further investments in infrastructure: a virtuous cycle needed to build networks. ITC and Zambia are partnering to launch a new way of looking at e-commerce for small businesses, and we plan to expand this approach to other countries in Africa and beyond.”

 

Background

Digital connectivity matters and its importance has accelerated since COVID-19. According to the International Telecommunication Union, in 2021 the number of digitally connected individuals rose sharply to around 63% of the world’s population. That leaves an urgent challenge to address the remaining 37%, who are nearly all in the developing world.  Moreover, many small businesses in developing countries are unable to go online due to weaknesses in the digital ecosystems of their countries and the inefficient use of digital means to engage in trade.

A non-descript black van equipped with multiple receivers and four antennas trundles along a sinewy Romanian road. Inside, a bespectacled telecoms expert monitors his laptop, closely watching different Internet connectivity indicators rise and fall on the screen.

Since 2019, this mobile unit of Romania’s National Authority for Management and Regulation in Communications (ANCOM) has been travelling the country’s roads and towns to collect mobile connectivity data.

Its last mapping exercise collected 2.5 terabytes of data detailing the mobile connectivity offered by operators across Romania.

This was used to create Aisemnal, an interactive map that shows the 2G, 3G and 4G signal levels at any point in the country, including the most mountainous and isolated parts. The map also indicates areas with no signal or where users may encounter the risk of unintended cross-border roaming charges.

“It’s important for Romania to grow, invest and support people, projects and research infrastructure,” says Sebastian-Ioan Burduja, Minister of Research, Innovation and Digitalisation. “I encourage the private sector to innovate and create a sustainable and proper environment for business responsibility.”

Expanding access nationwide

The Aisemnal initiative is just one of several steps taken by the Romanian government to strengthen the telecommunications network and improve people’s access to digital services in the Eastern European country.

Recent years have also seen the Romania deploy an ultrafast broadband network with speeds of at least 100 megabits per second (Mbps).

The latest figures from ANCOM put the number of households with this service at 5.2 million, or 85 per cent of the total. This is well above the European average, according to the Digital Economy and Society Index (DESI).

4G and 5G mobile penetration has also grown. Three out of every four mobile connections in Romania now involves these more advanced, rapid network technologies, up 15 per cent in the last year.

“Twenty years after market liberalization, Romania has one of the most competitive communications markets in the European Union, with low tariffs, quality services and constantly increasing penetration rates,” says ANCOM President Vlad Stoica.

The construction of mobile broadband infrastructure was enabled by a favourable business environment, he adds. Telecom providers could make use of existing cable installations and generally found “low barriers… to enter the market for infrastructure development.”

The Aisemnal initiative, developed in-house by a team of 223 specialists, has two main objectives:

  • to provide accurate and reliable information, enabling users to choose the best mobile operator or Internet service provider for them.
  • to aid telecom companies in meeting their obligation to deploy nationwide coverage.

To date, the platform has received more than 2.5 million visits, government officials say.

Accelerating digital development

Like many countries, Romania faces a range of challenges in its pursuit of digital transformation. Residents of Bucharest – the national capital, as well as host city for the upcoming Plenipotentiary Conference of the International Telecommunication Union (ITU) – enjoy better digital infrastructure than their rural compatriots, for instance.

Narrowing this urban-rural digital divide and continuing to expand e-government are high priorities for the Romanian authorities.

The Authority for the Digitalisation of Romania (ADR), formed in February 2020, is intended to drive the digital socio-economic transformation of the public and private sectors. It has since been integrated into the Ministry of Research, Innovation and Digitalisation, which was created at the end of 2020.

“I strongly believe that research and innovation must generate value in the economy,” says Burduja, heading the new ministry. “I took over the mandate as a minister with the mission to contribute to Romania’s future, as an example of good practices for other states, according to the brilliant minds we have.”

Surging demand for online services amid the COVID-19 crisis – combined with relatively strong existing network infrastructure – prompted the government to step up digitization massively in the last two years.

The national pandemic recovery plan includes initiatives to improve the interoperability of public data registries, migrate government services to the cloud, and develop public open data systems for reuse by the private sector.

More than one-fifth of Romania’s allocation under the EU recovery and resilience plan (RRP) for Romania is being directed to initiatives to digitize public administration, along with the national health and education systems.

“The good part of the new technologies is that we can do a lot from little things,” adds Minister Burduja. “We can accelerate the productivity of the Romanian economy to the maximum, adopting the latest generation technological solutions.”

Nascent tech hub

Romania’s national telecom sector achieved about 20 per cent higher growth than those of other Central and Eastern European (CEE) countries between 2014 and 2019, according to ANCOM.

Government-led digitization initiatives go hand in hand with the emergence of a burgeoning entrepreneurial ecosystem.

FintechOS, a Romanian provider of digital infrastructure for banks and insurers, raised investment funds worth over USD 60 million last year, after being named one of “Europe’s hottest fintech start-ups” in 2020.

The company follows hot on the heels of UiPath, Romania’s first tech unicorn – a start-up valued at over USD 1 billion following its initial public offering (IPO) on the New York Stock Exchange last year.

UiPath – founded in Bucharest in 2005 by former Microsoft engineer Daniel Dines – gained fame as provider of office task automation software. It later moved its headquarters to the US but continues to employ several hundred full-time staff in Romania.

Veteran executives and former big tech employees have played a key role in nurturing local start-ups and mentoring young entrepreneurs.

Last year, investments in seed-stage companies grew by 130 per cent, putting Romania ahead of other markets in the region. The country, ranking among StartupBlink’s top 40 global entrepreneurial ecosystems, aims to make itself a full-fledged European tech hub.

About 7 per cent of its university students graduate into the information and communication technology (ICT) sector, the fifth highest percentage in the EU, according to a report by the Employers’ Association of the Software and Services Industry (ANIS). An estimated 9,000 new employees, on average, are joining the Romanian software and information-technology services industry each year.

Women are becoming more visible in the industry, too, with Global Women in Tech collaborating with local initiatives to boost the presence of Romanian women in science, technology, engineering and mathematics (STEM) careers.

Romania is also an emerging innovation hub.

Over two years of living with COVID-19 taught the world an important lesson: Establishing a system for effectively managing data resources is a fundamental first step in providing a sustainable, secure, and prosperous future.  The traditional approach to data management is no longer adequate—data must be shared and used across disciplines, sectors, and platforms if we are to transition to a truly digital society that contributes to economic growth and prosperity.

Governments and businesses are already adapting to this new reality. But it won’t be easy. It will require retrofitting existing systems and developing data-driven solutions for sustainable and equitable socio-economic growth. What, then, can policymakers do to accelerate the process?

The Bank’s 2021 World Development Report, Data for Better Lives, provides a roadmap. It calls for a new social contract for data founded on value, trust, and equity. It argues that data governance is key to realizing the value of data through the trustworthy and equitable production, use, and reuse of data. The report sets out a vision for an integrated national data system to support such a contract, built on the four pillars of a data governance framework: infrastructure, laws, economic policies, and institutions, as well as the cross-cutting element of human capital.

Delivering on this vision requires a strategy, policies, political commitment, technical expertise, and resources. It means building an integrated national data ecosystem consisting of people, data-centric platforms, processes, and technologies to support those areas of economic activity crucial for a country’s sovereignty, prosperity, and global competitiveness.

An integrated national data ecosystem supports the social contract for data by allowing trustworthy data sharing and the use (and reuse) of a country’s data resources at the national, sub-national, or sectoral levels. In such an ecosystem, the value of data is maximized through data-driven digital products and services that are equally accessible to all citizens, businesses, and administrations.  This approach delivers digital dividends and addresses the digital divide, ensuring business and government services continuity and empowering civil society.

Social contract for data
Source: Authors

An integrated national data ecosystem:

  • provides unified, transparent, and secure access to trustworthy, high-quality data, including administrative, statistical, business, industrial, scientific and real-time, machine-generated data;
  • consists of a set of interconnected, sector-specific trusted data platforms which are interoperable and where (a) personal and non-personal data are secure, (b) stakeholders can freely exchange data subject to rules that guarantee data privacy, (c) users have fast, reliable access to relevant information and services based on international and national data standards, and (d) interoperability frameworks are in place;
  • is implemented with reliable digital infrastructure, including data stacks, ethical, analytical tools (artificial intelligence and machine learning), enhanced cybersecurity, and pooled, distributed infrastructure (for example, cloud, edge, the Internet of Things, and networks) for managing and processing data to create value;
  • is underpinned by laws and regulations to establish trust and safeguard users’ rights, facilitated by economic policies to support innovation, and overseen by inclusive governance institutions, which are essential to ensure the quality, accessibility, protection, availability, reusability, and preservation of the country’s unstructured and structured data and associated metadata;
  • is supported by human capital policies to enhance evidence-based policymaking and the use of data in the public sector and to increase digital skills, cybersecurity awareness, and data literacy for all citizens.

A data ecosystem requires a holistic delivery model that considers human, social, organizational, and technical factors with stakeholders from the public and private sectors and academia and with multidisciplinary development teams of software engineers, data scientists, lawyers, and social scientists. It should identify innovative answers to the following fundamental questions:

  • How does a country extract value from data?
  •  How does a country ensure trust in its data?
  • What resilient data infrastructure does a country need to manage data securely?
  • What skills do a country’s citizens and businesses need to benefit from data?
  • What data governance structures are necessary to oversee and share data?

Policymakers can focus on putting the necessary data governance in place to develop trusted data platforms, unleash the potential of a country’s data resources, and identify new data-driven solutions to a country’s political challenges.  At the same time, it’s important to gain buy-in from stakeholders, particularly the general public.

When a country establishes an integrated national data ecosystem, it sends several powerful messages.  First, policymakers are preparing for a future where data is recognized as a public good. Second, the country is serious about protecting citizens’ digital rights. Finally, it maximizes the potential of data to deliver green, digital transitions, which is crucial for creating a secure, sustainable, and prosperous future.

New report shows how UNCTAD’s customs automation programme, ASYCUDA, helps developing nations increase customs revenues while reducing the time and cost of trade.

UNCTAD has released a new compendium featuring the experiences of 22 countries participating in its Automated System for Customs Data (ASYCUDA) programme.

ASYCUDA – UNCTAD’s largest technical assistance programme – supports customs authorities in over 100 countries to expedite the clearance of goods and ease trade.

The report, the third edition in a series of ASYCUDA case studies, highlights the programme’s success in enabling digital connectivity for inclusive trade. See the 2020 and 2019 editions.

“The COVID-19 pandemic has intensified the digitization of trade processes and procedures,” said Shamika N. Sirimanne, director of technology and logistics at UNCTAD.

“Country experiences during these trying times illustrate how ASYCUDA has helped user countries to grow their international trading activities as they reignite their economies,” Ms. Sirimanne added.

Higher customs revenues, shorter clearance times

For example, in Bangladesh, customs revenues increased by 50% between 2017 and 2021, from $6.43 billion to $9.62 billion. And 73% of imports were cleared within three days in 2021.

In Bosnia and Herzegovina, import transactions rose by 32% between 2020 and 2021.

In Burundi, an ASYCUDA-based module enabled the health ministry to monitor and control the international trade of medicines and medical equipment, enabling the processing of 71% of medical imports in less than 24 hours in 2021.

In Djibouti, customs revenues have shot up by 95% – from $116 million to $226 million – in the past decade thanks to ASYCUDA. The country cleared 94% of goods in transit in less than 24 hours in 2021.

In Dominica, 65% of commercial imports are cleared by customs authorities within 24 hours.

And in Papua New Guinea, customs authorities reduced clearance times from seven days to two hours in 2021.

ASYCUDA helps countries ease trade and boost revenues

ASYCUDA helps countries increase customs revenues and reduce the time and cost of trade
Source: UNCTAD and data from national customs authorities

 

Automated data exchange, better communication

The report shows how user countries have benefited from the automated exchange of standardized trade information and data, thanks to ASYCUDA.

It outlines how ASYCUDA bolsters communication and coordinated intervention among trade stakeholders, including partner government agencies.

With new IT-based tools, the programme enables countries to modernize customs management systems and generate much-needed up-to-date trade data.

To complement its technological solutions, the programme delivers capacity-building activities to ensure system sustainability and ownership by user countries, and alignment of their domestic trade regulations with international norms.

The report explains how ASYCUDA empowers vulnerable economies – least developed countries, landlocked developing countries and small island developing states – to improve efficiency, transparency, accountability and risk management.

New solution to connect systems

To harmonize and facilitate the integration and exchange of trade information, ASYCUDA is piloting ASYHUB, an open standardized platform for processing and integrating data between the programme and third-party systems.

This solution will offer a smart framework to efficiently interconnect government systems and applications.