Developing world poised to benefit from e-commerce

The developing world has been left behind by globalisation. But could the Internet provide a way for it to catch up? A conference in Montreux is exploring how the South can take advantage of e-commerce.

The meeting is being jointly organised by the Swiss State Secretariat for Economic Affairs (seco) and the International Trade Centre (ITC), which is the technical assistance agency of both the World Trade Organisation and the United Nations Conference on Trade and Development.

The ITC helps developing countries to improve their export and import strategies and it feels that e-commerce provides exporters from the South with an easy and relatively cheap way of accessing a global market.

“The hardware, software and most applications come from the North. But a lot of inventive approaches and ideas are being born in the South,” says the ITC’s Executive Director, Denis Belisle.

The Montreux conference brings together business and government representatives from 21 developing countries, as well as representatives of international organisations and people from the industrialised world who have an in-depth knowledge of e-trade.

One would expect that poor telecommunications networks and low literacy rates would mitigate against e-commerce in the developing world. At present, Internet use is limited to the big cities but this could be harnessed to benefit countries as a whole.

“We’re not trying to reach every individual. But we’re convinced that if you identify the right groups, who are already using the technology, you can have a big impact on many other people in the country,” Denis Belisle told swissinfo.

“The years ahead will see tremendous changes in how telecommunications are brought to various parts of the world. While this is advancing, there’s no reason for the business community to wait to use these modern means to promote the commercial interests of their country,” he says.

The Swiss government is very keen to promote trade links with countries in transition, hence its eagerness to participate in the Montreux event.

“We strongly believe that information technology (IT) is very important for importers and exporters,” says Hans Häfliger an economic adviser at seco. “It can form a useful bridge between developing countries and Switzerland.”

Clearly, information technology is not going to have an immediate impact on the lives of those living in dire poverty. But by promoting links with businessmen from the South, the hope is that developing countries can start competing in the global marketplace.

“We’re dealing first with people who already know what it means to do business with northern markets. It’s not a tool for the poorest of the poor,” Häfliger told swissinfo.

“IT will not solve all their problems. It’s just one tool that will help them integrate in the multilateral trading system,” he added.

E-commerce has many advantages over traditional trading methods for the businessman from the developing world. The main one is that it drastically reduces transaction costs by cutting out intermediaries.

The Internet allows the exporter not only to have access to a global market, but also to target the consumer more effectively.

Already traders in West Africa are selling their handicrafts over the Internet, whereas before they relied solely on the tourist market.

And recently a World Bank team was stunned to discover the extent of Internet use in rural Ethiopia. One man told them he had his own website which he used to sell goats to Ethiopians in the United States, who wanted to give them to relatives in their homeland.

Denis Belisle says it is this kind of resourcefulness which makes the Internet an ideal tool for businessmen from the developing world: “When we in the North are faced with a difficulty, we run to the store of the service people. But often these easy answers don’t exist in the South. You have to use your ingenuity to find the solution yourself.”

“Once this technology is better known, and people are aware of its potential, they can let loose their creativity and make a real difference. We hope that difference will be in the area of trade,” he says.

by Roy Probert