5 things to know about eTrade readiness assessments

21 November 2022

Through the assessments, UNCTAD helps developing countries harness the evolving digital economy for inclusive development.

News

© Shutterstock/sotheara | A man delivers food to online customers in Siem Reap, Cambodia.

Globally, the digital economy has been booming – a trend that COVID-19 sped up as more people and businesses went online.

E-commerce sales worldwide, for example, grew 4% in 2019 to hit an estimated $26.7 trillion. And the latest UNCTAD data shows the pandemic’s boost was sustained in 2021.

But some countries are less ready than others to take advantage of all the opportunities. So UNCTAD conducts eTrade readiness assessments to help them harness the power of the digital transformation to create better business opportunities, jobs and living conditions for all.

Here are five things to know about the assessments.  

  1. What’s an eTrade readiness assessment?

UNCTAD’s ongoing eTrade readiness assessments are a key programme under its eTrade for all initiative supported by 35 global development partners.

As a policy tool, eTrade readiness assessments help developing countries identify opportunities, barriers and policy solutions to drive digital transformation and e-commerce development under seven pillars.

These include e-commerce strategies, information and communications technology (ICT) infrastructure, payment solutions, trade facilitation and logistics, legal and regulatory frameworks, skills development and access to finance. 

The assessment also tackles challenges related to gender equity, e-commerce measurement and the needs of disadvantaged populations.

  1. How many countries have been assessed?

UNCTAD has so far finalized 32 assessments covering developing economies where e-commerce is nascent, with 24 of them in least developed countries.

To support regional integration, it has also conducted assessments for economic communities including the Pacific Islands Forum Secretariat, the East African Community and the Economic Community of Western African States.

Additionally, two country assessments are in progress and four more are planned for 2023.

  1. Why does it matter?

Creating an enabling framework for e-commerce, which requires extensive consultation and coordination, remains challenging for most developing countries.

UNCTAD’s eTrade readiness assessments facilitate much-needed dialogue among public- and private-sector actors and help set the stage for institutional cooperation and identification of priority action areas.

They also provide analysis – quantitative and qualitative – to enable more informed policymaking.

These efforts have better equipped developing countries to develop e-commerce strategies and engage in regional and global trade negotiations.

So far, 15 countries have followed the UNCTAD’s recommendation to develop e-commerce-friendly plans and policies, with Kenya being the latest.

More than 60% of the participating countries have adopted regulations to promote payment solutions and trade facilitation measures.

Tunisia and Jordan, where the most recent assessments took place, have both started formulating e-commerce action plans, drawing support from development partners.

  1. What’s the impact?

With partnerships at its core, the assessment helps countries mobilize resources, boost collaboration and strengthen legal frameworks for e-commerce development.

Cambodia tops the list of countries that have implemented assessment recommendations, having implemented 92% of them.

The country has made strides in digital payments with a blockchain-based central bank digital currency. Its CambodiaTrade online marketplace particularly welcomes small businesses to participate in the digital economy.

In Senegal, the assessment contributed to the adoption of the Start-up Act in 2020, creating a legal regime for the registration and labelling of digital startups, while outlining support and governance concerning those entities.

Tuvalu and Kiribati, acting on the recommendations, have started using UNCTAD’s ASYCUDAWorld software to automate and expedite customs clearance processes – much to the benefit of their e-commerce sectors.

  1. What’s next?

From diagnostics to implementation support, the assessment helps countries prioritize e-commerce in their national economic agenda and promote inclusive development.

UNCTAD and its partners are committed to fast-tracking the assessments’ implementation and related policy recommendations.

Once an assessment ends, UNCTAD’s provides additional assistance under its eTrade readiness implementation support mechanism (ISM) launched in 2020.

It regularly conducts reviews to bolster national capacities for effective implementation, driven by principles of country ownership, inclusivity and results-based management.

It relies on a network of focal points in beneficiary countries, most of whom work in trade ministries, to keep track of progress, identify gaps and adapt implementation support to evolving national priorities.

During an UNCTAD workshop entitled “eTrade readiness: From diagnostics to implementation” held on 27 and 28 October, participants said developing economies need stronger capacities to better leverage opportunities from the digital economy.

The event gathered government officials from more than 20 countries and international partners to discuss good practices and development lessons from the assessments.

UNCTAD’s work on the assessments and the support mechanism are funded by Germany, Sweden, Switzerland and the Netherlands.