Poverty and Development Division
last updated : 20 December 1999
The scope of application of any international agreements will be highly dependent on complementary national policy initiatives. National strategies to support a growing role for electronic commerce have certain common elements, including the following:
(a) Assessment of the national information infrastructure (both physical and soft infrastructure), to examine all facets contributing to the increased use of electronic commerce, including policies, Internet connectivity and computer literacy;
(b) Maximization of the capabilities and services of existing institutions concerned with information and data gathering and dissemination, and targeting programmes to enhance the use of ICT, such as studies to examine greater participation of provincial or state-based enterprises into mainstream trade and investment promotion programmes;
(c) Designing of legal, institutional and regulatory reforms for the benefit of organizations which will serve as nodes or brokers between technology and users. The need for new orientations, the revision of rules, regulations or practices to remove barriers to the development of electronic commerce are central issues. The process of design of reforms should include the participation of the private sector and representatives of SMEs to ensure that their needs and constraints are considered.
The localization of electronic commerce in terms of facilitating its use by indigenous firms has not received the attention that it deserves in many countries in the region. For this to happen, it is necessary for policy makers to realize the possibilities that exist in opening up the Internet to a vernacular audience by localizing information technology. Examples in box V.3 from Thailand and India highlight some efforts to redress this problem.
Developing accepted standards for electronic commerce to facilitate and promote trade is not an easy process. These standards have to incorporate the best technology currently available and must meet the requirements of several components of the technology framework: developers, service providers and end users. However, they must also be flexible enough to allow for innovation and future requirements. Malaysia provides an example of the application of these guidelines. The document entitled "Electronic government information technology policy and standards" sets the policies and standards needed to cover all the components in the technology framework (see box V.4) and to ensure commonality among them.
Electronic commerce in general and EDI in particular thus differ from many other technologies in that organizations cannot implement them in isolation. In practice, this requires negotiation among enterprises and institutions in countries which may have little history of cooperative action and on issues which are technically challenging. For intraregional collaboration, AFACT is emerging as a useful body, especially among those countries which have initiated the adoption of EDI.23
The role of the government in representing a country in multilateral trade negotiations and in coordinating among different actors and sectors in an economy implies that it is in a privileged position to foster electronic commerce.24 Three major issues stand out for immediate attention by the government:
A vision to catalyse the introduction of microlevel efficiencies among firms and organizations in the conduct of international trade
Appropriate institutional mechanisms to monitor and coordinate trade facilitation developments, promote better business practices and foster mutual understanding and trust between the many partners in complex trade relationships
Pilot electronic commerce projects that will provide the scope for learning and sorting out problems, whether technical, organizational or legal, and provide the much-needed experience for rule making
In following through these issues in a practical manner, governments can base their approach on a generic strategic architecture that is at the heart of most of modern business practices.25 To facilitate the seamless flow of product from producer to consumer, as well as supporting this by integrated information and financial flows, is of the essence to any vision that governments adopt for electronic commerce. The goal for the government regulatory community is then to drastically reduce the transaction time for getting regulatory approvals of international trade transactions from days to hours. For an information system specialist, this would be an integrated international transaction based on a single submission of minimal, standardized data for both official and commercial purposes alike.26
Institutions for coordination
Within the new economic and technological context engendered by electronic commerce, there is a need to establish and support a national body dedicated to improving the ability of business, trade and administrative organizations to exchange products and relevant services effectively using simple, reengineered procedures, best practices, modern trading strategies and appropriate electronic commerce technologies. If a national trade facilitation body exists, a good option would be to have it deal with electronic commerce as well. If such a national body does not exist, a government or relevant ministry could establish one with both government and private sector representation dedicated to promoting electronic commerce. One of the important tasks of such a body is to identify the present state of electronic commerce in general and the use of EDI with internationally standardized formats in particular. In addition, sectors that are potential benefactors from UN/EDIFACT should be allowed and encouraged to participate in these activities. Through cooperation with present and future user groups, the national body for coordination can elaborate an implementation strategy and propose concrete measures on how the implementation process should be approached and carried out for each sector and industry. When this action plan is set into motion, it can monitor the progress made and be ready with a follow-up plan.
The activities of these coordination bodies cannot simply be limited to the national sphere. In order to make national electronic commerce activities efficient, they need to be supplemented with international initiatives. To the extent possible, these institutions need to participate in, or be associated with international standardization work carried out by the United Nations or other standardization bodies. Box V.5 illustrates this process and the associated national legislative changes for Singapore, one of the more advanced countries in the application of electronic commerce in the region.
The implementation of sophisticated applications of electronic commerce will depend on the will and capacity of certain key sectors to implement and use EDI. Customs authorities, the transport sector and financial institutions interact with all other sectors involved in international trade and their attitude towards EDI will largely determine the impact of electronic commerce in catalysing trade. Box V.6 enormous benefits which can be expected by ESCAP countries in using electronic commerce and in trade facilitation, particularly for SMEs, will, however, not be achieved without major international and regional cooperation on standards and without major national policy initiatives to encourage electronic commerce and reduce the security, legal and other barriers to its use.
23 For a good account of the possibilities in the future, see the paper by Tae Chang Choi, "Regional cooperation in electronic commerce", presented at the Expert Group Meeting of Trade Promotion Policy Experts, Bangkok, 2 and 3 December 1998.
24 The 1997 conclusion of the WTO negotiations to liberalize telecommunications services is a landmark agreement and market-opening initiative. For many countries, it has led to liberalization and for others it provides an opportunity to make binding commitments with respect to present and future telecommunication liberalization plans. Many countries are challenging, particularly in the short term, its revenue structure; for example, Sri Lanka is faced with making adjustments to cope with lower revenues resulting from the liberalization of its ICT sectors.
25 Strategic architecture is the high-level blueprint for the deployment of new functionalities, the acquisition of new competencies and the reconfiguration of the interface with customers. However, it is not a detailed plan. See G. Hamel and C.K. Prahalad, Competing for the Future (Boston, Harvard Business School Press, 1994), p. 117.
26 Such formulations were key recommendations of the third meeting of the ESCAP Network on Trade Facilitation, held back-to-back with the tenth ASEB meeting in Bangkok in June 1995. ASEB has recently been re-engineered. Renamed AFACT, it is taking a new shape and purpose and is expected to be fully operational from 1999. See Electronic Commerce Initiatives of ESCAP: Role of Electronic Commerce in Trade Facilitation, Studies in Trade and Investment No. 13 (ST/ESCAP/1557).
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