High-level leaders track: Economy

Event report

The session moderated by Mr Marco Zatterin (Deputy Director, La Stampa) tackled the role the Internet and public digital policy plays in the global economy. While the digitalisation of economic activities through digital trade and remote working can be beneficial, it also raises concerns on accessibility, inequality, and security. The COVID-19 pandemic has highlighted challenges on both sides of the argument and has pointed towards the need for improvement.

Digitalisation as a response to socio-economic challenges in Africa

Discussing the socio-economic impact of the pandemic on the African continent, Mr Victor Harison (Commissioner for Economic Affairs, African Union [AU]) highlighted loss of jobs, rise in poverty, contraction in agricultural production, and a weakening private sector which considerably stifle the economic in Africa. At the same time, public spending has risen due to increased costs brought by the pandemic.

Still, a number of African countries have leveraged technology in agriculture (Ghana and Nigeria), healthcare (Kenya and Cameroon), contact tracing (Madagascar). There are three principles challenges in the way of digitalisation of the African continent. (a) The deficit of digital infrastructure that requires significant investment. (b) The education systems need to be remodeled to equip African youth with basic and advanced digital skills which will be the core of most professions in the post-COVID era. (c) Digital tools of microeconomics and fiscal services need to be expanded.

Pandemic as an accelerator of digitalisation?

Speaking on the interplay between digitalisation and the pandemic in Germany, Ms Daniela Brönstrup (Deputy Director-General and Head of Regulatory framework for Digital Policy, Postal Policy, International Affairs and Media, German Federal Ministry for Economic Affairs and Energy) noted that the pandemic has served as an accelerator of digitalisation. Despite the fact that Internet traffic has increased dramatically, they have not experienced any significant failures of their digital infrastructure during the pandemic.

On the other hand, Ms Armida Salsiah Alisjahbana (Under-Secretary-General of the UN and Executive Secretary of UN Economic and Social Commission for Asia and the Pacific [ESCAP]) explained that the dynamics in the Asia-Pacfic have been somewhat different. Despite the fact that some high income countries from the region are leading in digital innovation, a number of others lag behind. Namely, small island developing states (SIDS) and least developed countries (LCDs) which face the challenge of limited and unaffordable Internet which has been further exacerbated by the pandemic.

Touching upon the different dimensions of the digital divide, the participants stressed that, in addition to the digital divide between countries and at times within countries, the digital gap is not gender-neutral. Despite efforts to bridge the divide through mobile cash transfers and distribution of smartphones; statistics show that in the last seven years, the gender digital divide has widened in LCDs. Mr Ed Anderson (CIO and Director of the Information Technology Department, International Monetary Fund [IMF]) highlighted that since tech has not helped everyone equally, society bears the responsibility to build a sustainable robust system to prevent the widening of the digital divide.

Digital economy vs real economy

A number of other structural differences brought to focus by COVID-19 have also been raised by participants. Dr Gillian Marcelle (Founder and Managing Member, Resilience Capital Ventures LLC) pointed out that pandemic has decoupled the digital economy from the real economy, citing that some experienced considerable growth and others faced considerable crisis. In this context, Mr Mukhisa Kituyi (Secretary-General, UN Conference on Trade and Development [UNCTAD]) emphasised that tech giants have experienced a growth of around 50% since the outbreak of the pandemic; whereas business actors from developing countries had to bear high costs of broadband services when they had to shift their services online overnight. Moreover, it has brought into focus the imbalance between drivers and consumers of digital business and services.

Business and digitalisation

Participants also discussed the correlation between policy and digitalisation. Mr Daniel Trujillo (Executive Vice President, Global Chief Ethics and Compliance Officer, Walmart) pointed out that the pandemic has shown that rapid digitalisation of e-governance is extremely important. Referring particularly to business licences and permits which can have an impact on investment projects, he underscored that they can be useful in accelerating business activities, but also in fighting corruption which has plagued the licences and permits sector. Along these lines, digitalisation can help increase transparency and accountability.

Acknowledging the essential role of digital technologies for international trade and business, Mr Yi Xiaozhun (Deputy Director-General, World Trade Organization [WTO]) underlined that the WTO is particularly determined to pursue its work on e-commerce to improve the standard of living and foster economic growth and help mitigate the effects of the COVID-19 pandemic. He added that member states have integrated investment facilitation in WTO’s agenda to help build the necessary infrastructure for physical and digital trade flows.