Episode Seven: The Road to the Arab Digital Common Market

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Date: 09 - 05 - 2019

Dr.. Eng. Ali Mohamed El Khouri

Economists and technology experts believe that e-commerce has very attractive advantages for investors and planners in the Arab economic field, to create Arab e-commerce platforms, which will have enormous effects, some of which we mention:

Economists and technology experts believe that e-commerce has very attractive advantages for investors and planners in the Arab economic field, to create Arab e-commerce platforms, which will have enormous effects, some of which are mentioned:

  1. E-commerce platforms are expected to raise the levels of popularity of goods and motivate Arab retailers, manufacturers, producers – especially in the manufacturing and agricultural sector – and service providers to use the Internet and enhance their production, especially in light of the availability of access to hundreds of millions of consumers.
  2. The decline in commodity prices as a direct result of competition between companies and a decrease in capital, commercial and operational burdens in general, which will mean a decrease in inflation rates.
  3. Improving the quality of life of citizens living in remote and rural areas, with their increased ability to access goods and services on an equal basis with urban residents.
  4. The increase in the number of companies that can rely on e-commerce (B2B) in the Arab region, which will support the competitiveness of companies and institutions and work more efficiently.
  5. Activating and raising the efficiency of supply chains in the Arab countries, in addition to enhancing the interconnection between business sectors, which would support economic boom, accelerate growth rates, and enable the network to create economic value added to move faster, more effectively and efficiently.
  6. Compatibility of standards for establishing and operating Arab e-commerce platforms with those in the European Union and other global platforms, which will lead to expanding the reach of Arab countries to new international markets.
  7. Governance, good management and integrity of procurement processes in the public and private sectors, which governments seek to provide transparency and accountability, and calculate taxes.
  8. And last but not least, the creation of new jobs, whether at the level of technical support services, e-marketing, data analysis, or at the level of delivery services, which can expand significantly during the next stage in the future.

In view of these great and essential benefits of e-commerce in supporting the Arab economy, the government’s role is pivotal in supporting and revitalizing this sector, especially in addressing the reasons that obstruct efforts to achieve logical results, which would contribute to the diversification of the economy and support the GDP.

Also, although electronic commerce is the most prominent and important application of financial technology and the space with which the concepts of digital inclusion are realized,

And the existence of Arab strategic plans to enhance financial and digital inclusion – most Arab central banks and governments seek to generalize them – but we do not notice the arrival of these plans to some concepts that have been legally and organizationally established in major economic groupings

Such as the European Union and falls on top of the imposition of confidence standards, for example.

The lack of trust constitutes the most prominent and important reason that obscures the widespread demand for e-commerce markets and justifies the great hesitant behavior that we observe from users of online shopping applications.

To prefer the cash-on-delivery feature instead of paying through electronic payment gateways.

A statistic published by MasterCard International in 2018 indicated that the percentage of credit card payments in Egypt does not exceed 3% (noting that it exceeds 30% in the United States of America).

This reflects the great reluctance and concern about the security and safety of digital payments from the point of view of dealers in the Arab region.

This confirms the importance of adopting an Arab system to impose a sign of trust on electronic markets to ensure the rights of consumers, whether financial, commercial, or related to data confidentiality and privacy – including the right of retrieval, retrieval and replacement, and the merchant bearing legal responsibility to the same degree as that imposed by law in traditional stores.

Moreover, e-commerce represents a direct translation of the concept of the value-added chain network, as it links all supply chains in its clearest form, starting from the origin and passing through the entities that will add value to raw materials, whether industrial or service, and ending with their delivery to the customer. And if we want to compare the traditional model, which depends on the old means of trade, which includes many complications, intermediaries and the need for stores and access to retail stores, we will find electronic platforms that raise the level of the producer’s ability to communicate directly with the final customer without intermediaries,

Which speeds up the time cycle of production and distribution, reduces costs, and markets the product more easily, and there is no doubt that this is in the interest of the consumer, who will benefit from these advantages in the form of discounts and price reductions.

From an economic point of view, such popularity helps speed the circulation of money in the market, that is, it causes an economic recovery to the availability of funds in the official market instead of storing them away from investment, which would lead to a depression and scarcity of funds circulating in the market.

The dream of the Arab common market, which accompanied the founding of the League of Arab States, is still present before our eyes, and it has been reinforced through many Arab trade agreements, and the Arab Free Trade Area initiative that was launched at the beginning of this century represents a challenge and a difficult and important number that has not yet achieved its goal, and has not yet reached its goal. For the ambition of our Arab nation, which has all the ingredients to create a common Arab market on the ground. And here technology offers us today an ingenious solution that can overcome many obstacles and difficulties that faced the previous stages, especially in the cross-border trade exchange.

Through the technological capabilities available today, it is possible to build electronic platforms that establish a common Arab digital market and provide innovative solutions to the challenges facing today, and in the face of bureaucracy and complications that Arab officials involved in implementing the Arab Free Trade Agreement have not been able to overcome for decades. These electronic platforms will enable the organization and simplification of the procedures for implementing the agreement, and link the systems of all commercial and customs authorities in electronic environments, which will help Arab exporters and importers to conclude their deals in a better and easier way.

Perhaps one of the most important of these difficulties was the certificate of origin, which can be issued electronically today, and applied with greater transparency, in a controlled manner and subject to Arab governmental regulatory standards. It became possible for such platforms to track the product from its inception to its arrival to the beneficiary, which would be a major achievement if achieved and would benefit in many legal requirements as well as in preserving the rights of consumers.

The Arab world deserves to have its common market, and we have reached the age of digital technology in which we can realize this dream project, which started on the basis of the vast opportunities for inter-Arab trade and attracting investments in Arab countries. Perhaps the large trade gap becomes clear in the Arab countries when we see that the ratio of intra-Arab trade today does not exceed 10%, especially if we compare this percentage with European countries, which based their digital strategy on the principle and title of a “single digital market” ), an experiment that aims to raise the current intra-European trade (66%) of the total European foreign trade.

However, in positive terms, all this means that we are facing a unique historical opportunity to jump the rates of investment, manufacturing and production to unprecedented levels. With the simplest analysis models, we find that the Arab market exists, but it is currently dependent on foreign markets, and the matter is no longer only a choice and a decision to benefit from our Arab market for the benefit of the Arab nation, which would support the creation of new job opportunities, new markets and more revitalized Arab economies.