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Ukraine’s digital lifeline: Diia
In GZERO's livestream event presented by Visa, chief innovation officer of USAID, Mohamed Abdel-Kader shed light, on Ukraine's groundbreaking eServices platform known as Diia. This platform, he emphasized, has significantly strengthened the connection between the government and its citizens—a vital development for Ukraine, particularly amid the ongoing brutal war with Russia. Abdel-Kader say’s Diia has transitioned from primarily serving procurement and basic services to now facilitating reporting of property damage and unemployment status management during crises, which has been vital for providing immediate support to citizens and, equally important, rebuilding trust in government responsiveness.
Mohamed Abdel-Kader also highlighted that 19 million people use Diia and the frequency of interaction depends on individual needs and activities. Some might use it for tasks like obtaining a digital driver's license or paying taxes online. Additionally, Abdel-Kader emphasized the robust security measures in place, highlighting that user information is distributed across multiple servers, not stored on a single device, ensuring data safety, especially in the context of the ongoing conflict.
Lastly, Abdel-Kader noted that Diia's success has sparked interest from other countries looking to adopt a similar system tailored to their specific needs, promoting a global exchange of innovative solutions in the realm of digital governance.
To hear more about the challenges and opportunities that nation-states face when it comes to digitization, and how it could shape a more inclusive and resilient future, watch the full livestream conversation:
What Ukraine's digital revolution teaches the world
Adapting to a digital economy around the world
In the next decade, 70% of new value in the global economy will come from digital businesses. But more than 3.5 billion people without internet access will be cut off, and not all of them will live in the developing world.
“This is very much a global challenge,” Eurasia Group senior analyst Ali Wyne says in a livestream conversation hosted by GZERO in partnership with Visa.
Much of the developing world went digital during the pandemic. We see this, for instance: in Nepal, where it pushed people to go cashless and women in rural areas to embrace digital banking. Yet many remain unbanked, and that means they struggle to create wealth because they only deal in cash, according to Visa's Rubén Salazar. Having no bank account also makes it harder to send remittances, as we learn from a Mexican recipient and from the World Bank's Dilip Ratha.
There is hope, though. For Nextrade's Kati Suominen, digital payments are helping small businesses around the world reach new markets. The global move toward online shopping is a huge opportunity to scale, adds PayPal's Usman Ahmed.
In short, digital adoption faces many challenges but also huge opportunities to make things better for those who have the least.
Watch our recent livestream discussion on remittances and other tools for economic empowerment.
- The world economy's digital destiny - GZERO Media ›
- The Graphic Truth: The digital payment boom - GZERO Media ›
- Connecting the world: the power of digital trade - GZERO Media ›
- How can we get unbanked people to go digital? - GZERO Media ›
- Will Nepal cash out? - GZERO Media ›
- Lowering costs of poverty with digital & economic access - GZERO ... ›
The world economy’s digital destiny
One of the most important changes happening in the global economy today is invisible. It’s the accelerating move from hard currencies and brick-and-mortar banks to digital and mobile-based platforms for commerce, payments, and banking.
This shift, which got a boost from the COVID pandemic, will transform the global economy from the ground up: broadening households’ and entrepreneurs’ access to the financial tools they need to thrive and grow, which strengthens national and regional economies, ultimately spurring more global economic growth. The annual value of the digital economy is already valued at $14.5 trillion. And through the next decade, it will account for nearly three-quarters of global GDP expansion.
At the same time, the move to digital brings with it fresh challenges. The most basic one is access. Even as you comfortably read this on a device screen, more than 40% of the world’s population still is not using mobile internet. The so-called “digital divide” between the digital haves and have-nots is most acute for the global poor, women – particularly in traditional societies – and people in rural communities. Even in the largest economy in human history, nearly a tenth of Americans – mostly outside of big cities – lack reliable internet access.
There are also big regulatory challenges when it comes to the digital economy. If an artisan in Ukraine sells something to a buyer in Japan using a payment system located in the UK, whose laws govern the privacy of the associated data flows and the commercial and tax terms of the transaction? If a US tech firm sells digital services to a French company, which local privacy laws does it have to follow? Elaborating on these rules of the road for the digital economy remains a major challenge.
Lastly, there is the security problem. Mobile banking and digital payment systems are doubtless more efficient than clawing cash out of your mattress and handing it over in wads. On the other hand, the digital alternative is potentially vulnerable to millions of hackers or data thieves all working hard to fleece the world’s digital mattresses. Digital platforms expand opportunities not only for business entrepreneurs but for criminal ones as well. Keeping financial and data flows safe and private in a digital world is an immense challenge.
What’s 1 + 0? In sum, the promise of a digitalized global economy is immense, but businesses and policymakers will need to work together to ensure that the new economy doesn’t replicate, or accentuate, the inequalities of the old one.
A customer sets-up M-Pesa money transfer servive inside a store operated by Kenyan's telecom operator Safaricom.
What We’re Watching: Boosting access, gender equality, and trust in the digital economy
More tha 3 billion people are still not operating within the digital economy, thus widening global inequality. We look at three issues the world’s grappling with to bring them on board.
Why internet access is everything
Scan any UN report’s “development goals” and the importance of expanding global internet access becomes obvious. To end poverty, boost healthcare, improve the quality of education, reduce all forms of inequality of opportunity, create jobs, power innovation, and enhance life in the world’s cities, more human beings need reliable access to the internet. That’s why it’s disappointing that half the world’s countries remain slow to introduce information and communications technologies (ICT) in schools and that too many poor countries still lack the mobile broadband needed to connect. The pandemic has been a good-news, bad-news story here. The virus has forced greater investment in ICT and provided people everywhere with obvious incentives to learn how to use it. But a difference in means ensures the gap between rich and poor countries has grown wider. The solution to these problems depends, as ever, on greater international investment. This isn’t charity, and it isn’t simply a matter of “fairness.” All countries need a stronger, more resilient, and more sustainable global economy. Shared prosperity depends now more than ever on access to the internet for everyone.
Start young to address gender digital divide
Tech advances have been a game-changer for millions of women previously excluded from participating in the digital economy. Still, research suggests that the gender digital divide is significant for women in emerging market economies, where around 41% of adult women use the internet compared to 53% of men. Indeed, research suggests that around 393 million women in developing countries do not even own a mobile phone. For women living in or around urban areas, in particular, this results in exclusion from large parts of the gig economy, the economic engine of bustling cities like New Delhi and Dhaka. Moreover, surveys show that even when women across South Asia or Africa do have mobile phone access, they often own less sophisticated “talk and text” devices. Consider that in India, for instance, 57% of the male population has used the internet compared to just 33% of females (based on 2019-2021 data), a dynamic reflected in Indian women’s low participation in the workforce. So what’s the solution? Start young. In partnership with the African Union, UN Women pioneered a program in 2018 to boost digital literacy among young girls throughout the continent, including teaching them to code. Still, in a continent where the median age is 18, this is just the tip of the iceberg.
Putting trust in the digital economy
Digital advancements like artificial intelligence, cryptocurrency, and blockchain have revolutionized the way people deal with their finances. In 2021, blockchain technologies – the financial services platform used to trade cryptocurrencies – reached $6.6 billion and are projected to reach a whopping $19 billion by 2024. The financial sector accounts for almost one third of blockchain’s total value, meaning there is plenty of potential for it to still penetrate other sectors. But scarce digital trust has caused some societies to keep the fintech world at arm’s length. In Japan, for instance, more than 90% of those surveyed say cash is their primary payment method, according to Statista, with many citing security and privacy concerns as the reason for their preference. And the Japanese might have a point: the World Bank estimates that while the digital economy was valued at a whopping $14.5 trillion in 2021, efforts to contain cybercrime cost 41% of that. Private companies and governments have introduced stopgaps to limit identity theft, and some experts have proposed a digital identity system that would both reduce instances of cybercrime and boost users’ trust.
The Graphic Truth: Mobile payments around the world
Mobile payments took off during the pandemic, and there's no going back. Contactless payments using your phone are now king in many parts of the world, like China, where cash is becoming an afterthought. But adoption has been uneven, with Asia leading the way and Latin America struggling to keep pace. Meanwhile, people in sub-Saharan Africa are digging low-tech mobile payment solutions that work on simple cellphone networks. We look at which regions will dominate these transactions in the future and which are the most popular platforms globally, highlighting a few select markets.
Lowering costs of poverty with digital & economic access
By the end of the decade, 70% of all new value in the global economy will come from digitally enabled businesses. The pandemic accelerated a push toward digitalization, especially in developing nations, yet nearly 4 billion people are still offline, and 1.4 billion don't have a bank account.
Expanding access to digital tools for individuals and small businesses is a no-brainer, but easier said than done. So, what can we do to expand digital trade further, come up with fairer and safer remittances and digital payments, and push to include everyone in tomorrow's digital-first economy?
To get some answers, GZERO hosted in partnership with Visa the livestream conversation "Closing the Gap: Digital Tools for Economic Empowerment," moderated by JJ Ramberg, co-founder of Goodpods and former host of MSNBC's Your Business.
Rubén Salazar, global head of Visa Direct, underscored how digital decency has become more acute in the post-pandemic world, yet many systems — for instance, payroll — remain analog. He also explained why unbanked people live in a vicious cycle of hardship because they can only operate in cash and lamented why cash-only networks make remittance fees so high — even as the UN goal wants to set a global 3% limit by 2030.
Ali Wyne, senior analyst for global macro-geopolitics at Eurasia Group, discussed how the discrepancy of having 1.7 billion people now cut off from the direction of travel of the global economy creates both an urgent imperative to go digital and an opportunity to narrow the gap. The likely geopolitical fallout from all of this happening after COVID and the food and energy crisis made worse by the war in Ukraine? Waves of political unrest that'll topple governments.
Dilip Ratha, head of KNOMAD and lead economist at the World Bank, shared his personal story of sending remittances to his family when he was still a student in the US. That's how he learned why it's so hard for migrants to send money back home — a lifeline for their families and remittance-dependent economies around the world.
Kati Suominen, founder and CEO of digital tech firm Nextrade Group, extolled the virtuous cycle of digital payments and access, which helps everyone the same way lack of it holds up all of us. She singled out paperless customs and logistics tech improvements as a major COVID silver lining for digital trade and offered her take on why — when they go digital — women-led small businesses often perform those led by men.
Usman Ahmed, head of global public affairs and strategic research at PayPal, offered some striking figures on what happens to small businesses when they embrace digital: sales triple by selling online, and quadruple by selling across borders. Does he see any downsides to a cashless economy? Nope, especially when it comes to the digital services created around it, but Ahmed recognized that unbanked people face tough challenges to ditch cash.
Watch live October 19: Can access to digital tools transform the world's economy?
Is digitization crucial to economic growth? GZERO Media is partnering with Visa to explore what it means when 70% of the global economy’s growth in the next decade is projected to come from digitally-enabled businesses – yet 3.7 billion people lack internet access. What are the tools and initiatives needed to bring more people into the digital economy?
Live on Wednesday, October 19, our expert panel will explore the impact of digitization on empowering consumers and small businesses. Please register to attend.
Participants:
- JJ Ramberg, Co-Founder, Goodpods, and former host of MSNBC's Your Business (moderator)
- Usman Ahmed, Head of Global Public Affairs and Strategic Research at PayPal Inc.
- Dilip Ratha, Head of KNOMAD and Lead Economist at the World Bank
- Ruben Salazar, Global Head of Visa Direct
- Kati Suominen, Founder and CEO, Nextrade Group
- Ali Wyne, Senior Analyst, Global Macro-Geopolitics, Eurasia Group
Will Nepal cash out?
Like much of the world, Nepal saw digital payments soar during the pandemic.
Tulsi Rauniyar, a young Nepalese documentary photographer, experienced the transition firsthand. With COVID making human touch a big concern, e-commerce and cashless transactions became more commonplace — so much so that Rauniyar herself rarely uses cash anymore. This technological globalization is increasingly helping female entrepreneurs and businesswomen succeed in Nepal. But it still needs to reach rural areas — where many hard-working women are unaware of these transformative technologies.
Watch our recent livestream discussion on remittances and other tools for economic empowerment.
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