What do a mountainous landlocked country, a post-war African nation, and three small island developing states have in common?
All are asking themselves how best they can capitalize on the etrade boom that is fundamentally changing the way the world does business.
Nepal, Liberia, Samoa, Vanuatu, and the Solomon Islands have recently had their readiness and willingness to embrace etrade analysed by the UN Conference on Trade and Development (UNCTAD) — with support from the Enhanced Integrated Framework (EIF) — as part of the eTrade for all initiative.
“Countries approach us saying: ‘we see etrade as a potential for export diversification but we don’t know where to start – what product, what market we can target?’” says Sven Callebaut, trade advisor who has been leading UNCTAD’s rapid e-Trade Readiness Assessments service offering. Ten countries have been assessed so far, with most of them classified as Least Developed Countries (LDCs).
Etrade is any business transaction that is conducted online — from buying books on Amazon to sending remittances to family in another country. It has the potential to challenge the model of export-led growth by enabling both individual consumers and firms to shop for the best deal globally, thus lowering prices and increasing quality of imports. But according to Callebaut, we’re far off realizing that future.
“Ninety percent of the countries we analysed only engage in domestic etrade because they don’t have a mechanism to export cross border for ecommerce. In developed economies it’s the other way around: most etrade is happening across borders,” Callebaut says.
The assessments are unique in that: they are instigated by the country governments (usually the Ministry of Trade or Commerce) and they are rapid (they only take three to four months). Additionally, they make specific recommendations in seven key policy areas, or as Callebaut puts it: “everything you need to have ready in your ecosystem for etrade to happen,” namely:
- ecommerce readiness and strategy formulation
- ICT infrastructure and services
- trade logistics and trade facilitation
- payment and mobile money solutions
- legal and regulatory frameworks
- ecommerce skills development
- access to financing