Electronic Commerce: Challenges And Dangers
Mr. Cesar Torrente
Partner
Cano, Torrente, Rivas, Sanguino y Asociados
First of all, I would like to thank the Pacific Basin Economic Council for the honor of being asked to act as panelist in this important session on electronic commerce.
All the distinguished panelists have talked about the importance of e-commerce and about what needs to be in place for e-commerce to flourish. Computer penetration, teledensity, broadband access, global connectivity, banking infrastructure, a dependable postal system, appropriate legislation and security, are some of the issues that have been discussed.
I would like to share with you a different perspective. We all hear constantly about the great benefits and opportunities of electronic commerce, but we seldom hear about its challenges and dangers.
The challenge facing each government, non-profit organization, each businessman and each of us, is whether we have the wisdom and vision to make e-commerce work for all of us in the best possible way. How to make it work to create prosperity and development for all nations and raise standards and personal advancement everywhere.
I have no doubts whatsoever, that e-commerce is changing and it will change the way we live, the way we learn, the way we work. It has the power to raise entire nations from poverty or to live them behind as industrialization did with some countries just two decades ago.
The development and the revolutionary effects of electronic commerce are unpredictable. In 1997, 2.300 billion dollars were sold and that amount is expected to increase up to 300.000 billion dollars in 2005, where 1 billion persons will have access to Internet.
However, the figures show that there is a great difference between developed and developing economies regarding e-commerce and Internet conditions:
- Computer density in the US, Australia and Singapore is 40%, 30% and 23% respectively. In the Phllipines, India and Indonesia is 1.1%, 0.6%, 0.22% respectively.
- The percentage of computers for each 100 people is of 18 for higher income countries, 2.3 for medium income countries, and only 0.1 for lower income countries. (www.itu.org).
- In the US, one of each 3 persons uses Internet, compared to one of each 10.000 persons in South Asia. Similar figures will be found in teledensity, quality of telecommunications and costs of access.
As you can see, there are great differences and this facts will have a tremendous economic and social impact in these countries. This is a fact. What we must do, is to recognize it, to face it and to do something about it.
It must also be recognized that the problem exists, even within developed countries. In order to illustrate this, let me quote an statement from President Clinton dated, February 4: "We must make access to computers and the Internet as universal as the telephone -in our schools, libraries, communities, and homes. ... Access to computers and the Internet and the ability to use this technology effectively are becoming increasingly important for full participation in America's economic, political and social life. Unfortunately, unequal access to technology and high-tech skills by income, educational level, race, and geography could deepen and reinforce the divisions that exist within American society ".
For that reason, he announced a program to work towards solving this divide. He has pledged $3 billion for Civilian science and Technological research and in the State of the Union last January 27, he said: "Opportunity for all requires something else today - having access to a computer and knowing how to use it. That means that we must close the digital divide between those who've got the tools and those who don't."
If this is true for a Country where one of every 3 persons uses Internet, we must recognize that a tremendous effort must be made in developing nations and regions.
We have to bring the benefits of e-commerce to more people. Internet and e-commerce do not distinguish between developed and developing countries. In some way, the world is still divided between those who have and those who have not, and in this case between those who are connected and will benefit from e-commerce and those who are not connected and will suffer the dangers of e-commerce: supply chains may be destroyed; dependency on multinational corporations may increase; IT industries may be the only ones who benefit, if local industries are week; those without access to electricity, telecommunications and computers will never have access to the benefits and therefore the difference between developed and developing nations will increase.
This has to change quickly. Is in our hands and in the hands of our leaders.
For instance, there is a very interesting project of Faulkner County in the State of Arkansas in the US where the local business community, taking into account the growth of on-line sales, decided to take some action considering what such growth will mean for the future. Their strategy is to allow local merchants to compete with "category killer" on-line merchants. The bottom line: to keep dollars and jobs in the local economy; to protect Arkansas against the loss of business due to e-commerce.
Following that and many other initiatives, PBEC should coordinate an international effort for the development of policies that will promote global e-commerce, especially in developing countries, for the benefit of all nations and all people of the PBEC Region. With the participation and dedication of all the companies and organizations represented here we can build a set of concrete steps that will help e-commerce, not only to promote trade, but to create prosperity and development for all nations and raise standards and personal advancement everywhere.
These are some of issues that could be considered:
- to achieve equal access to high tech skills and technology.
- to accelerate the development of the required infrastructure.
- to stream line the export process through an Internet based infrastructure.
- to promote strategies to help small businesses, and rural areas, overcome barriers to the use of Internet and e-commerce.
- to eliminate laws and regulations that may create barriers to e-commerce.
- to promote e-commerce technical assistance for developing countries (governments and businessmen).
Otherwise economic development could be impeded for many people in many nations and e-commerce will create more dangers than benefits for them. Our countries, governments, businessmen and people face a big challenge, we either use e-commerce wisely or we will be left behind, loosing a marvelous opportunity to create prosperity and development for our nations and people, increasing the divide between those who have and those who have not.