Prioritise resourcing, capacity support to unlock digital potential- Dame Meg to MSG E-Commerce workshop

Pacific SMEs like the Lapita collective in Vanuatu, are keen to reach global markets via E-Commerce. Image: LapitaCafe.

4 November 2020

Acting Director General MSG, Mr. George Hoa’au, ,Senior Officials, Representatives of CROP agencies, Representatives of regional and international development agencies,  Donor partners.  Ladies and gentlemen- Good morning from Suva.

I am very pleased to be able to join you all at this sub-regional workshop on e-Commerce for Melanesia and indeed, acknowledge the gracious invitation by the MSG Secretariat to participate today.

I understand that several of you participated in the Forum-wide regional workshop yesterday and I trust that discussions were robust and valuable to all.

Before I go on further, allow me to also acknowledge the development partners whose support has made this workshop and the strategies we will be discussing today, possible – your continued support is appreciated.

[Our Current Context]

Colleagues, we meet today in a global environment that is characterised by uncertainty and fluidity. The COVID-19 pandemic has set the world back economically, and has unraveled years of development progress across the world, and more specifically in our Pacific region.
As we continue to grapple with the impacts of the COVID-19 pandemic, we are also witnessing first-hand how digital technologies help to confront the threat and keep people connected at times such as this.

Indeed, the true potential of digital transformation and the digital economy, particularly in our region, can only be realised if we make concerted efforts to ensure its prioritisation through the allocation of adequate resourcing and capacity support to capitalise on digital transformation.

In saying this I am also very aware that digital technology does not exist in a vacuum – whilst it does have potential for positive change, it can also reinforce and magnify existing vulnerabilities and worsen economic inequalities. Therefore, we must harness the potential of digital economies whilst mitigating the harm it may cause.

[Stocktake of the Pacific’s progress in Digital Transformation]
In turning to our efforts here in the region. It is no secret that meaningful participation in today’s digital age is incumbent on internet connectivity. In the Pacific, the overall internet penetration rate stands at 35.4% – well below the global average of 59%.

In spite of this, Forum Island Countries continue to show an increasing trend in digital connectivity with mobile cellular subscriptions in the Pacific steadily increasing from 52.14% in 2010 to 70.11% in 2017.

To support strengthened connectivity in the region, we continue to make strides in improving our regional infrastructure, such as through the laying of submarine cables, which have become the primary drivers of internet connectivity.

Collectively as a region, we have introduced several initiatives over the years to tackle e-Commerce and its potential, with the latest development in 2016, being the Pacific Regional ICT Strategic Action Plan for 2015-2020 for better utilisation of ICT in the region.
Whilst there has been substantial progress in developing ICT sector policies, significant gaps remain, notably in terms of policy focus, implementation capacity, and the ability to track progress.

We, as a region, must build on the opportunity that the COVID-19 pandemic has presented and prioritise and expedite the advancement of digital economies within our own region and in our own countries.

[Challenges in progressing e-Commerce]
To do so, we need to understand the key challenges that we are faced with, apart from connectivity:

(1) The regional environment for payment solutions
The payment ecosystem in the Pacific remains under-developed, compared to other regions in the world.

Access to formal financial services, use of mobile money and other cashless payment solution is relatively low compared to the world average. Except for Papua New Guinea, which launched the Retail Electronic Payments System (REPS) payments system on 21 July 2019, other FICs have not yet deployed fully interoperable payment systems.

Issues as simple as the establishment of merchant accounts, especially for Small Medium Enterprises, face high bureaucratic challenges and require relatively high deposit requirements.

(2) Regulatory Frameworks for financial services
Progress on the development of regulatory frameworks for financial services are at varied levels in the Pacific, including issues such as data protection, privacy laws, laws on electronic transactions and so forth.

(3) Financial Inclusion
Overall, financial inclusion in the Pacific region is low. Due particularly to geographic remoteness, low financial and technological literacy and limited digital infrastructure. These challenges constrain the promotion of financial inclusion, therefore limiting the growth of the e-commerce sector.

[Moving forward]

With all this in mind, our Pacific e-Commerce Initiative serves as an important tool in identifying and addressing some of these gaps thanks to its sharper focus on the trade-related aspects of digitisation, as well its holistic and inclusive approach to the development of a Regional and Sub-Regional e-Commerce Strategy and its subsequent implementation.

The Melanesian sub-region comprises around 90% of the population of the Forum Island Countries and ecommerce, if properly harnessed, has the potential to transform and improve lives and businesses in the sub-region. The Forum Secretariat is, therefore, pleased to work with the MSG Secretariat on this project and to help contribute to advancing the e-Commerce aspirations in the MSG Trade Agreement and to ensure synergy with the wider Forum initiative.

The consideration and discussion of the Sub-Regional e-Commerce Assessment before you will serve as the basis to develop strategic options for Melanesia, which will complement the work that we are collectively undertaking at regional level.

With that, I wish you well in your deliberations, and look forward to the lively discussions ahead of us.

I thank you

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