Aid for Trade: E-commerce: potential and challenges for developing countries

I am pleased to participate in today’s event on “E commerce: potential and challenges for developing countries”.

The rapid digital development is transforming the global economy and our societies in many different ways and regardless of developmental stage. My Government is convinced that this digital revolution opens great opportunities for growth, jobs and sustainable development around the world. E commerce can facilitate reaching many of the Sustainable Development Goals.

This positive Swedish outlook is based on our national experiences in taking advantage of new digital technologies such as securing ICT access for all; well-functioning internal markets and digital solutions for an efficient public sector. Stockholm is the second tech hub in the world with companies such as Spotify, Skype and Klarna. We have learned important lessons: in order to innovate, compete and thrive you need openness to trade.

Some of our experiences are also relevant for developing countries. But learning goes both ways. There are leap frogging opportunities for developing countries to bridge the digital divide. An impressive African example is mobile payment systems to facilitate transactions without bank accounts.

There are also many challenges, especially for LDCs. Bridging the digital divide requires policy responses and actions in many areas such as infrastructure, affordability of technologies, capacity building, logistics and trade. It is important that the digital dimension is fully incorporated into national development strategies. African governments’ own commitment and actions are key in creating an enabling environment for e-commerce. A partnership approach is further needed with broad stakeholder involvement. Private business, both national and international, has an essential role to play in providing financing and investments. In short; cooperation among all relevant actors is crucial for progress.

This also applies to the international level. Development cooperation from IFIs and bilateral donors can play an important supportive and catalytic role in raising African countries’ capacity to reap the benefits of the digital economy.
Swedish Aid for trade support is therefore strong. The Swedish development cooperation agency, Sida, disbursed in 2018 approximately 400 Million US Dollar in Aid for Trade (3,7 Billion Swedish Kronor) with a considerable share going to LDCs, mainly in Africa. Many of these projects contribute to combatting the digital divide, through building physical and digital infrastructure and productive capacity of firms to be able to participate in the digital economy.

Another instrument for donor support to LDC is the Enhanced Integrated Framework, EIF with a Swedish commitment of 16.1 million US dollar for the period 2017-2021. We welcome an increased EIF focus on digital issues and e-commerce.

The International Trade Centre, ITC, to which Sweden is among the biggest donors, has successfully integrated digital aspects across its work and empower small businesses in using online marketplaces. Through the NGO, World Wide Web Foundation, Sida is supporting increased internet access in many African countries for people in poverty, and especially women.
I would like to end by mentioning UNCTAD’s work in this field. Sweden supported the establishment of the e-trade for all platform as well as the first e trade readiness assessments. These assessments have since then been carried out in many African countries (including Madagascar here today) and provide a diagnosis of a country’s achievements and challenges in the digital trade field.

I would like to follow up my earlier intervention on challenges and solutions concerning the rapidly developing digital economy, by focusing on international partnership and the growing cooperation between the European Union and Africa.

I had the privilege to represent my Government at the EU Africa High Level Forum in Vienna last December. We discussed innovation and digitalisation as important enablers and how current partnerships between Africa and Europe can contribute in unlocking the potential of the digital economy. An important action was the establishment of the European Union - African Union Digital Economy Task Force with its broad participation of private sector, donors, international organizations and civil society.

Considering the challenges in getting the remaining 76 % of Africa’s population on line, all contributions and thinking on how to progress are welcome. Increased connectivity is not the sole solution but needs to be complemented with other measures such as skills and affordability.
I find the task force report’s policy recommendations and actions quite interesting. It touches important areas such as affordable broadband, digital skills, improving the business environment and government eServices. It will be interesting to follow its implementation.

I further note the aim to contribute toward synergies and the ambition of an African Single Digital Market. I share the view that Africa can benefit from experience gained by the European Union in developing its digital single market.

I would also like to mention the initiative my Government took in 2016 to create the D9 of digital front runners in the EU. The purpose of the D 9 is to set the agenda for, and lead the development of, the EU Digital Single Market. This is done in dialogue with other actors such as industry, trade unions and consumer organizations.

Experiences from the D9 initiative could be of interest for digitally advanced countries in Africa. The regional context and substantive issuers might differ but the approach and way of work of D9 could stimulate African front runner initiatives in promoting e-commerce and a possible digital common space.

Regional integration, and regional trade agreements, are important for developing digital rules but they need to be complemented with modern international rules on trade related e-commerce which reflects the rapid development of the global digital economy. Sweden and the EU therefore strongly support the recently launched plurilateral WTO negotiations on e-commerce.

The main EU objectives of these negotiations are to enhance global electronic commerce, facilitate the operations of businesses, including micro, small and medium enterprises, strengthen consumers’ trust in the on-line environment and create new opportunities to promote inclusive growth and development. An additional component is market access for e-commerce related goods and services, which contributes to bridging the digital divide by making them more available and affordable.

The aim of the negotiations is a high ambition outcome while with flexibility and a broad participation. The development aspects are very important for Sweden and flexibility should include the possibility, especially for developing countries and LDC to take commitments with different levels of ambition. The negotiations are open to all WTO Members and African countries are encouraged to join in.

It is crucial that developing countries make their voices heard and strongly welcome Benin for its decision to join the negotiations.
I would like to end by adding that the negotiations are of great importance not only to facilitate e-commerce, but also to strengthen WTO as an organization and a vehicle for developing global trade rules.