The global pandemic Covid-19 has not remained only a health issue now, but also became an economic catastrophe. It has hit hard supply chains, trade, investment, tourism with uncertainty of recovery. The death toll from the infection of the virus is rising each passing day. The World Trade Organization (WTO) believes that the decline in global economy is likely to exceed the slump in economy brought by global financial crisis of 2008/09.
Amidst the unprecedented global economic impact of Covid-19, Nepal could not be omitted. The tourism sector, the major contributor of Nepal’s GDP has been shaken by the pandemic. The travel ban, cancellation of flights and most importantly cancellation of ambitious project Visit 2020 has positioned the tourism industry of Nepal into jeopardy. Nationwide lockdown has posed a big challenge for Nepal’s economy especially tourism, industry, trade, agriculture, remittance, investment and infrastructure development.
Against this backdrop, e-commerce is doing extremely well then before according to Adobe’s Digital Economy Index. Covid-19 is altering e-commerce buying behavior as consumers are revamping their digital baskets as groceries and apparel take center stage.
The concept of social distancing is disrupting every aspect of daily life of people. If this was the situation 20 years back there would have been no alternative to the physical interaction model of socializing. Today, people have viable alternative to the physical interaction as digital platform, which includes shopping, health care, education, work and entertainment.
Yet, Nepal is far behind in it. However, Covid-19 has made everyone realized the significance and flexibility of thriving e-commerce like online shopping, online food service, e-banking, online payment, online classes etc. Covid-19 has entered in a time of transition and conflict between traditional and e-society, where the latter is proving to be more sustainable. It might be a great opportunity for tech-driven companies to show their forte.
CWebinar on Covid19 and Dital Economy is an attemt to asses the impacts of covid 19 on the digital economy. In particular, the discussion intends to scrutinize the implications of Covid19 led global lockdowns on digital economy, challenges and future of digital economy.
Background by Mr. Shyam KC:
Global Economy is rapidly undergoing transformation. Advancement of ICT is contributing to the increase in productivity in large markets and further shrinking the operational cost. Conventional business and services models are changing. For example, Uber - world’s largest taxi company - does not have its own taxis, Alibaba - biggest retailer - has no inventory.
With the outbreak of coronavirus we are facing unprecedented challenges with more than 2 million cases and 1.5 lac deaths. Amid Covid19 crisis, digital economy can be a boost to the economy. The webinar intends to discuss the significance, challenges and the future of digital economy in the near future.
Mr Azad Jafarali argues for Sustainability and E-Governance Models, in order to handle the ongoing crisis:
E-permission System for Movement in Azerbaijan has worked really well. On the first day itself, the government received millions of the SMS. This system was put in effect within two days after the regulation has been announced by the operational headquarters. On the one hand the state achieved transparency because those who did not get the permission were well aware of the reasons and on the other hand it was very accessible. There was no inequality among remote and urban cities.
The internet penetration is 80% and the mobile access is almost 100% in Azerbaijan. This system enabled citizens to get the permission quite easily. It was again an effective tool to benefit from the data coming through it. Physical Services in Azerbaijan are also given due importance. If one is talking about unhindered access to public services, social welfare services, and sustainability then it requires diversification. Azerbaijan has initiated services wherein, citizens could call 108 and get services right on the spot.
Azerbaijan has realised the need to achieve sustainability, which is inevitable in these days. The state needs e-services, portal for those services, internet services along with mobile services. Although, the services are not sufficient, but at least the services are accessible from any part of the country. Officials are responding to more than 1000 questions per day on the facebook page, 108 calls and Instagram. Azerbaijan also has a great number of volunteers working in social media. At present, countries need Sustainability and E-governance in order to achieve not just the philosophy but also the spirit of the SDGs.
In order to achieve digital economy, we need to have digital management first not just from the state perspective but also from the individual perspective.
Mr Saurav Dhakal shares his story of Green Growth:
Before the 2015 Earthquake, he used to work for the online platform called ‘StoryCycle’, which he is still working for. After earthquake, food became the core idea of work. The ideas of sustainability started growing and this was the time when we started looking for opportunities to work in the food sector.
Green Growth strengthens the interdependence of the rural and urban economy. Due to variety of topography, Nepal also has a variety of fruits, vegetables etc. But this market is not managed properly. The idea of the company was to promote the local market through connectivity using ICT tools. We identity farms. Only local, organic, permaculture based farms. Not the commercial or chemical induced farms. We have our shops open on Twitter, Facebook etc. One could place orders online. That orders is sent to the farms. Then the order is home delivered by our company.
During Covid19 lockdown, we are unable to source all the products from different parts of the country. But we are able to source this from around 45km of Kathmandu Catchment area. Now we are sourcing those products, following all kinds of safety measures. After due process, we are delivering it to the homes safely. These are the goods under essential list. So even during the lockdown we are able to supply good to the subscriber.
Digital economy is going up in context of Nepal. There are a lot of issues, which are needed to be discussed.
Mr. Biswas Baral showed optimism while discussing the imperatives and effectiveness of digital economy:
In Media Industry, Covid19 has had a huge impact. The organization has started taking online platforms more seriously. Printing is a costly business. Amid lockdown people are also getting sceptic while buying newspapers. Due to those reasons a lot of print media has been shut down during lockdown.
Interestingly, the move from print to online media platforms has accelerated due to the covid19 outbreak. There are speculations that the partial lockdown may continue for another 6-7 months or may be a year. It is unsure, if the older people who used to read printed news would even continue thereafter or not.
E-services has got accelerated due to this crisis. Even the older people have migrated to the digital economy. This could be the moment when Nepal would also enter the online age. There is a little bit of optimism, in an otherwise dark age.
Mr. Azad argues how digital economy is heavily dependent on its electronic service infrastructure as well as data accumulation and analysis:
In order to boost digital economy, the states need to provide electronic channels to the people. Through which the economy gets boosted. However, not all states are well prepared for that neither do they have infrastructure for that. Computer skills, literacy of the population do also play a very major role.
Another important aspect of digital economy is the data. Now we are talking about integration and connection. So do we have data on all these issues? In Azerbaijan, now they are gathering the list of loyal clients. Clients have also started to appreciate the data. During this crisis, data is important. Not just the physical data but also the electronic data. There is a need to have a well updated data and also well integrated data, in order to make it useful.
Private sector can play a very significant role. They have an experience which must be utilized. These are the people dealing with strategy and policies. Infrastructure integration and data accumulation is therefore major elements of digital economy.
Mr Saurav highlighting the challenges of digital economy focussed upon the prevailing economic divide:
When there is a crisis, all essential services are delivered through digital platforms. But when seen seriously, there is an economic divide in terms of digital accessibility and infrastructure. There is a need to look digital and economy as two different words and then try to integrate it.
After Covid19, states are going local and anti-capitalism campaign has begun. At the same time, we need to understand how digitalization could contribute to the medium and small enterprises.
Mr Baral further reinforced the argument on the economic and digital divide. He argues that with lack of digital penetration, government can further increase the divide:
Online education is one major challenge. Students are at home being taught online. However, these online classes are taking place in private colleges only. In government colleges these facilities are not available. There is no logistics available. Students are feeling vulnerable. Outside Kathmandu, the divide is even larger.
There is stark difference in the approach of people in the rural and urban areas. In Kathmandu, people are still aware of the fact that lockdown is necessary. However, in villages people are not taking it seriously. The fear hunger more than corona.
Right now government is making people aware about the crisis and its implications. However, the message is not resonating in same manner across Nepal. The primary concern of a poor in Nepal is the next meal of the day and not Corona.
Nepal is not developed and we do not have system like Azerbaijan does or any other developed economy. Nepal is lot behind in terms of digitization.
Unless, people’s basic needs are met, talks on digitization would sound just fanciful. Present government needs to cater these needs first. The state needs to prioritize its priorities.
Digitization can be seen as a two way sword. If the government switched to digitization without proper infrastructure then it could easily enhance the economic divide in society.
Mr Azad points out the need for complementarity over singularity:
Now is the time for not profits but effectiveness. I agree, many governments will try to find out most sustainable ways rather than the profits. So we are not talking about the highest quality. Certainly there are challenges, not only about the digital economy but also the distribution and accessibility. Even in Azerbaijan, more than 40% of the population chose face to face services over digitized one. So the answer is in complementarity rather than singling out one.
The e-services should go side by side, so that the people can make choices whenever they need. Azerbaijan, therefore added mobile services so that they have a choice.
Governments around the globe need to share their experiences. Also, they should share how they prioritize.
Mr. Saurav elaborates on the concept of food mile and the implications of Covid19 on it:
People have realised the concept of food mile now. Earlier, people were able to get an apple produced in another country. However, amid lockdown, people are unable to source products beyond 50km.
Consumers have understand the geographical limitations. People have understood that they can consume only those products which are produced nearby.
Countries are forced to take more localised approach. Governments need to parallelly work on the digital infrastructure.
Mr. Biswas Baral argues that digitization is important but it should be secure as well:
Current crisis has made people realise the importance of digital access. Once that realisation is there, then parties and governments respond to it.
For instance, next year two of Nepal’s biggest party (ruling and the opposition) had general conventions next year. Both of these parties are planning to hold Zoom discussions in district level. So even political parties have realized the importance of digital platform.
But while we brought in the scope of e-payments and e-banking, the security of these systems are equally important. Digitizing the economy along with making it safer has to go simultaneously.
The discussion was concluded on the note that digital economy was not only about accessibility but also inclusivity. If digital divide continues then it would create not so inclusive digital economy. In order to achieve strong digital economy we need to engage every sector of the population. The major idea being, leaving no one behind.