As telecom providers in most countries of the GCC region trial 5G networks, we find ourselves in a new era of economic development.

One that is experiencing declining GDP contributions from traditional economic sectors that have long been the pillars of national economies. Meanwhile, emerging sectors, such as digital economy, are gaining importance and leading to initiatives and activations that were unheard of before the Fourth Industrial Revolution.

5G networks make it possible to quickly transfer huge amounts of data, enabling cutting-edge technologies – like self-driving cars that require more than 100 GB of data per second to operate, or virtual reality that needs a high-speed broadband with reduced response time – to enter the mainstream.

They help hone internet of things (IoT) solutions, allow users to broadcast high-definition videos, and power a whole new generation of video games and content.

With the imminent commercial launch of 5G networks, smartphone owners will be able to enjoy a significant boost in internet upload speeds. They can also look forward to an improved mobile app user experience in terms of downloading map content, software, games, virtual and augmented reality technologies, and other solutions that simplify people’s lives and enhance business performance. Meanwhile, tech companies will be able to utilize state-of-the-art technologies such as self-driving vehicles and AI applications that have the potential to create multibillion-dollar investment opportunities in the GCC region.

The GSM Association estimates that 5G networks will add US$565 billion to the global GDP by 2034 – an amount that equals the entire GDP of Sweden.

Countries of the GCC region have started deploying infrastructure and laying down legislative frameworks in response to these momentous tech developments in order to attract foreign investments in the rising digital sector. Their strategic plans – Oman Vision 2040, Saudi Vision 2030, UAE Vision 2021, Bahrain Economic Vision 2030, Qatar National Vision 2030, and Kuwait Vision 2035 – prioritize digital economy as a key driver of sustainable development.

Decision- and policy-makers are now convinced that in the future, ideas will replace oil and gas in boosting economic growth.

In a nutshell, innovative digital technologies are poised to change the way we live and do business.

The digital transformation in the GCC region is rapidly stepping up with the surge in the use of smart applications in government services and with the increasing implementation of the smart city concept.

To keep the momentum going, we must adopt wide-ranging, bold reforms that will create an economy led by the private sector and governed by regulations that encourage innovation and promote investment in digital infrastructure.


Governments believe that upskilling individuals to keep up with the latest advancements in digital economy is the best investment for the future and the most beneficial way to leverage the capabilities of our youth in the post-oil era.

This requires revamping our education systems with a focus on coding and technology.

According to the latest World Bank MENA Economic Update report, the foundations for a complete digital transformation in the GGC region already exist. Countries here boast some of the highest smartphone penetration rates globally.

However, residents are more likely to use their devices to access social media than to start new projects. Nevertheless, the report mentions several rebound indicators related to the digital economy, including the rise of the Careem ride-hailing app from a startup to a billion-dollar company that has created thousands of jobs. Interestingly, in the labor-intensive GCC region that is a magnet for professionals from around the world, new digital platforms are now connecting employers to job seekers, offering professional training, and hosting startup incubators.

It is evident that the GCC region is ready to embrace its digital future.

Our task now is to provide optimal conditions for digital growth. We need to equip our youth with the necessary skills for the new economy and remove any barriers to innovation.

This will help millions of young people find gainful employment and, ultimately, drive sustainable economic growth in the region.

Source: Timesofoman

Last month the World Bank released its flagship World Development Report entitled “Digital Dividends”.

The report is appealing because it does more than simply celebrate all the ways that digital technology has made the world a better place.

It also laments and warns against outcomes where the digital economy becomes divisive and exclusionary.

Unlike Professor Pangloss in Voltaire’s Candide, the World Bank does not believe that all is for the best in the best of all possible worlds. While few would argue with the good news, the less good news is often not so well understood.

First the good news. According to the report, more than 40 per cent of humanity has access to the internet.

Internet use has tripled from 1 billion to 3.2 billion people just in the last decade. Mobile phones are owned by more people in the poorest households than those that have running water, electricity and modern sanitation.

The digital economy has connected people, business and governments in multiple ways, creating a host of new production opportunities, expanded consumer choice, and the scope for entrepreneurship and self-employment.

Small enterprises with very few personnel can reach numerous customers in any number of locations through internet platforms.

As the report emphasises, at its best information and communications technology is a source of growth via increased trading opportunities, productivity, competition and employment.

Among the drivers of increased trade are lower transactions and capital costs, improved information flows, and product and process innovations.

Digitisation and the development of algorithms to perform routine tasks increase productivity.

Lower entry costs and more readily available information foster competition, which in turn spurs innovation.

Direct employment in information and communications technology activities does not involve large numbers, but activities enabled by it create many more jobs.

It has been estimated that each information and communications technology job in the United States creates five additional jobs. In China, the e-commerce sector has reputedly generated 10 million jobs in related services, accounting for 1.3 per cent of overall employment.

Dozens of governments have developed e-government platforms, with facilities for interactive communication.

These can be used to transact regulatory obligations, disseminate information, and communicate with citizens for a variety of purposes.

All this suggests that the digital economy is a valuable vehicle for development and one that reduces inequality in a world where inequality is on the increase.

But not necessarily so, according to the World Bank.

While the digital economy can have all the positive benefits enumerated above, the absence of what the World Bank calls an analogue policy foundation means that reality lags behind the promise.

If 40 per cent of the population has access to internet, it follows that 60 per cent does not. They are excluded and further marginalised precisely because of the rich opportunities offered by digital technology. What is needed to address exclusion, argues the World Bank, is a sound business climate, adequate human capital, and good governance.

The economics of the internet suggest a tendency towards monopoly, not so much in the case of hardware, but with software platforms such as Google and Amazon.

The sources of potential monopolistic power reside in incumbency advantages linked to information, economies of scale and lock-in effects linked to complex customised operating environments.

Vested interests, a poor regulatory environment and bad governance can sustain and reinforce these barriers to entry. Labour-saving technology can reduce employment opportunities. Lagging or underfunded education hampers skill development, intensifying the struggle between capacity and technological sophistication.

Technology then further emphasises skill differentials and deepens inequality.

As for e-government, the same exclusions based on digital access and skill levels arise.

Another problem in some jurisdictions is linked to the quality of governance. Instead of serving the citizenry, the personal information requirements needed for digital interaction can be used for control and repression.

Nobody is arguing for arresting the progress of the digital economy or that its huge benefits should be compromised. Rather, the argument is that the benefits fall short because policy failures mean they are poorly shared.

Source: scmp

Bahrain launched rules in February for cryptocurrency companies such as trading platforms, including rigorous customer background checks, governance standards and controls on cyber security risks

When Belarusian President Alexander Lukashenko met entrepreneur Viktor Prokopenya in March 2017, their discussion was scheduled to last for an hour but went on for three times that long.

The meeting, Prokopenya said, ended with Lukashenko asking him to propose regulations to boost the country's tech sector. Prokopenya worked with IT firms and lawyers to draft guidelines to cash in on an emerging digital industry: cryptocurrencies.

Some two years later, the rules are in place. Investors can trade bitcoin on an exchange run by Prokopenya, while other companies are launching their own cryptocurrency platforms.

"The idea was to create everything from scratch," Prokopenya told Reuters in an interview in London. "To make sure that it is free in some of the aspects it needs to be free, and very stringent in other aspects."

Contacted for comment, Lukashenko's office directed Reuters to an account of the meeting on the president's website.

Belarus is among a handful of smaller countries coming up with specific rule books for digital currencies. Their efforts could help shape the development of the global market and the growth of industry players, from exchange platforms to brokers.

So far, cryptocurrency companies have often had to choose between two extremes when deciding where to set up shop.

Major financial centres like London and New York, which apply traditional financial services rules to the sector, might be attractive to big institutions seeking safety but the compliance complexity and costs preclude many of the startups at the heart of the fledgling industry.

Conversely, lightly-regulated jurisdictions like the Seychelles and Belize allow far easier market access. But states with light rules can offer less protection for investors and have looser checks on money laundering, lawyers say.

The likes of Belarus and other newer entrants - including Bahrain, Malta and Gibraltar - are seeking to offer a third way: crafting specific rules for the cryptocurrency sector, betting they can attract companies by providing regulatory security as well as perks like tax breaks.

While there is no guarantee of success, cryptocurrencies represent a rare chance for these states or territories to grab a slice of an emerging market, potentially attracting investment and creating jobs, at a time when big financial hubs are adopting a more conservative, "wait-and-see" approach.

"There are jurisdictions in the see-no-evil, hear-no-evil camp," said Jesse Overall, a lawyer at Clifford Chance in New York specialising in crypto regulation. "On the other end there is the U.S., UK, EU. In the middle, that's the juicy part of the spectrum."

Overall said both countries and companies could benefit from the emergence of frameworks specifically for cryptocurrencies. But states that get the rules wrong could fall foul of global rules to stamp out illicit use of digital coins, he added.

Indeed, there are major questions over whether these nations will be able to consistently prevent the hacks and illegal activities, such as money laundering, that plague the opaque sector and could hammer their reputations as secure centres.

Another risk of building rules for an unpredictable and rapidly evolving industry is that they could soon become outdated.

'CARROTS WITH NO STICKS'

ZPX, a Singapore-based crypto firm, will launch a cryptocurrency trading platform, Qume, next month catering to institutional investors such as high-frequency proprietary trading firms and hedge funds.

It has decided to base the business in Bahrain's capital Manama - and the considerations it faced are emblematic of the quandary confronting many players across the industry.

ZPX's CEO Ramani Ramachandran said it decided against operating in a so-called offshore jurisdiction with low or no regulation. Such a base could deter big investors as scrutiny of digital coins heats up from global regulators and politicians, he said.

"As the market matures analogous to traditional capital markets, mainstream institutional capital will increasingly look to come to regulated exchanges such as Qume as opposed to 'light-touch' venues in offshore jurisdictions."

Bahrain launched rules in February for cryptocurrency companies such as trading platforms, including rigorous customer background checks, governance standards and controls on cyber security risks.

It's also usually far cheaper in terms of compliance and administration costs to set up in smaller locations like Bahrain than in major financial hubs, said Ramachandran.

ZPX estimates such costs would come to around $200,000 a year in Bahrain, versus at least $750,000 a year in London.

Another advantage of setting up in a smaller country, said ZPX co-founder Aditya Mishra, was the close communication companies could have with regulators, something that would be difficult in a big financial centre. Bahrain also offered good access to Gulf markets, he added.

Another cryptocurrency trading platform, iExchange, began operating in the Belarusian capital Minsk this month, aiming to attract investors from the CIS market of Russia and the former Soviet states.

Co-founder Igor Snizhko said Belarus was the best option because it had a regulatory framework that other countries in the region lacked.

Belarus demands audits of issuers of digital coins and details of the projects underpinning any issuance. For trading platforms, the rules include keeping tabs on suspicious transactions to meet international money laundering standards.

"For many the CIS market is very promising and very dangerous at the same time," he added. "Many large and accomplished players are still afraid of one factor - a lack of transparency. We didn't want to work in any 'grey' jurisdiction."

Sweeteners offered by Belarus include tax breaks for companies mining or trading cryptocurrencies. The rules, described by PwC as "carrots with no sticks," also give firms looser rules on currency controls and visas.

In the United States, by contrast, digital coin transactions are taxable. In Britain, capital gains taxes apply.

iExchange said it had also initially looked at other countries including Estonia and Malta, but chose Belarus because of its proximity to its target market.

BESPOKE APPROACH

The size of the global cryptocurrency sector is hard to gauge because of its complexity and lack of transparency. Still, Ireland-based Research and Markets reckons the sector will grow to $1.4 billion by 2024 from $1 billion this year. Other estimates see a faster rate of growth.

Crypto regulations vary through the world. While Facebook's unveiling of its Libra coin has prompted signs of a coordinated backlash against cryptocurrencies by major economies, a patchwork of approaches still rules from country to country.

China has even banned cryptocurrencies outright, while an Indian government panel last week recommended a similar measure. 

Sui Chung of Crypto Facilities, a London-based cryptocurrency futures exchange, said there were clear benefits to being in a major financial hub, including having access to highly skilled employees.

"You need to be in place where you can get the staff," he said. "Our product teams, development teams have financial institution experience."

Being regulated in an established centre can also allow companies access to deeper, more liquid markets and provide greater certainty on securities law, said Ann Sofie Cloots, one of the authors of a Cambridge University study on cryptocurrency regulation.

"It may mean you have a more sophisticated investor base, greater access to capital," she said. "It's also a reputational thing."

To be sure, it is not just the likes of Belarus and Bahrain that have coined their own crypto rules: Some larger countries like France and Japan have also made moves in that direction.

But it's the smaller countries that have tended to launch the most sophisticated "bespoke" approaches, according to the Cambridge University study.

That could bring clarity to both cryptocurrency companies and related services like banks previously wary of the sector's unclear legal status, said Cloots.

Belarus entrepreneur Prokopenya, whose Instagram posts of sports cars in Cyprus and beaches in Dubai are followed by 5.6 million people, acknowledged the risks that came with blockchain technology, including the potential for money laundering.

But he said these could be mitigated with clear regulation, and that countries like Belarus should not miss out on a chance to grab a slice of an emerging market.

"The biggest risks come from not taking any risks," he said.

Source: zaway

The main difference between traditional trade activity and e-commerce in the market.  The market in essence is the space that provides information about the goods or services available by the producers.

Here lies the difference and importance of e-commerce at the same time. The consumer does not need the physical presence of the spatial space in which information is available about the item or service he wishes to purchase.

The "cash for product or service" deal between the product and the consumer can also be done via digital tools. This e-commerce feature provides the hassle of moving to the market, which may be in another country, and provides the ability to identify products that are much broader than those offered by the market Traditional Which is limited to limited geography while the electronic market is a global market without limits, but one of the most prominent obstacles to the electronic market appear in the reliability, in the sense that is the guarantor of the consumer that the product or service that will pay for it will be identical to what is displayed on the electronic platform, The case for the product provider, which wishes to receive the amounts due for its producer from the problem of reliability, which still hinder the expansion of e-commerce in the Arab region.

 Saudi Arabia's Ministry of Commerce and Investment has issued a new law regulating the electronic commerce process to enhance the reliability of electronic commerce in order to increase its contribution to the national economy to achieve the objectives of the vision of the Kingdom in 2030, according to the ministry's statement.

   As for article 26 of the new law, the service provider is required to use the means necessary to protect the consumer data and not to keep it. And the responsibility to maintain the confidentiality of personal data declared by the consumer and to prevent any process of disclosure to any other entity without the consent of the consumer, as regards data on the service provider, Article VI requires the service provider to disclose the procedures B on the buyer to take to the conclusion of the contract and data relating to the service provider, the basic characteristics of the products or services, in addition to the total price, which includes all additions of fees or taxes and arrangements for payment, delivery and implementation.

   The law also guarantees the right of the consumer to cancel the purchase of the "contract termination" within seven days from the date of contracting or receipt of the service, if not benefited from it, and to ensure the refund of payments in case the service provider delayed delivery of the goods / service for more than 15 days.

The details of the new law’s articles mentioned above and other articles indicate the possibility of expanding e-commerce exchanges in the Saudi market , while providing more reliability and transparency in electronic activity, which are essential requirements in the market ranked among the top ten countries in terms of growth of the e-commerce sector, The growth rate of e-commerce in the Kingdom to more than 32%, with a total volume of trade amounting to 80 billion Saudi riyals (about 21 billion dollars) in 2018.

يكمن الاختلاف الرئيسي بين نشاط التجارة التقليدية والتجارة الإلكترونية في السوق، والسوق بجوهره هو الحيز الذي يوفر المعلومات حول السلع او الخدمات المتوفرة من قبل المنتجين، وهنا بالذات يكمن اختلاف واهمية التجارة الإلكترونية في آن، فالمستهلك ليس بحاجة للحضور الفيزيائي للحيز المكاني الذي تتوفر فيه المعلومات حول السلعة او الخدمة التي يرغب في شرائها، كما ان عملية انجاز الصفقة (النقد مقابل السلعة او الخدمة) بين المنتج والمستهلك هي الاخرى يمكن ان تتم عبر أدوات رقمية، هذه الميزة للتجارة الإلكترونية توفر عناء الانتقال الى السوق، الذي قد يكون في بلد اخر، كما توفر إمكانية التعرف على منتجات أوسع بكثير من تلك التي يوفرها السوق التقليدي الذي ينحصر بجغرافية محدودة، بينما السوق الإلكترونية هي سوق عالمية بلا حدود، إلا ان احدى ابرز معوقات السوق الإلكترونية تظهر في الموثوقية، بمعنى ما هو الضامن للمستهلك ان السلعة او الخدمة التي سوف يدفع ثمنها سوف تكون مطابقة لما هو معروض على منصة البيع الإلكترونية، كذلك الحال لمقدم المنتج، الذي يرغب من جهته بتلقي المبالغ المستحقة مقابل منتجه. انطلاقا من مشكلة الموثوقية التي مازالت الى الان تحد من عملية توسع التجارة الإلكترونية في المنطقة العربية، أصدرت وزارة التجارة والاستثمار السعودية قانوناً جديداً ينظم عملية التجارة الإلكترونية الذي اتى ليعزز موثوقية التجارة الالكترونية بهدف زيادة مساهمتها في الاقتصاد الوطني لتحقيق اهداف رؤية المملكة لعام 2030، وذلك حسب بيان الوزارة.

اما عن اهم ما جاء في المواد الـ 26 المنظمة للتجارة الإلكترونية، فكانت تتمحور بمجملها حول الشفافية والافصاح في النشاط الإلكتروني وحماية البيانات الشخصية للمستهلك، حيث جاء في المادة الخامسة من القانون الجديد إلزام موفر الخدمة (مقدم الخدمة) استخدام الوسائل اللازمة لحماية بيانات المستهلك وعدم الاحتفاظ بها، وتحميله مسؤولية الحفاظ على سرية البيانات الشخصية المصرح عنها من قبل المستهلك ومنع أي عملية افصاح عنها لأي جهة أخرى دون موافقة المستهلك، اما بخصوص البيانات المتعلقة بموفر الخدمة فتلزم المادة السادسة موفر الخدمة على الإفصاح عن الإجراءات الواجب على المشتري اتخاذها لابرام العقد والبيانات المتعلقة بموفر الخدمة، والخصائص الأساسية للمنتجات او الخدمات، بالإضافة الى اجمالي السعر التي تشمل جميع الإضافات من رسوم او ضرائب وترتيبات الدفع والتسليم والتنفيذ.

كما يضمن القانون حق المستهلك في إلغاء عملية الشراء (فسخ العقد) خلال سبعة أيام من تاريخ التعاقد او تسلم الخدمة، في حال لم يستفد منها، وضمان استرجاع المبالغ المدفوعة في حال تأخر موفر الخدمة عن تسليم السلعة/الخدمة لمدة تزيد عن 15 يوماً.

تشي تفاصيل مواد القانون الجديد الواردة أعلاه، والمواد الأخرى، عن إمكانية توسع تبادلات التجارة الإلكترونية في السوق السعودية، وذلك مع توفير المزيد من الموثوقية والشفافية في النشاط الإلكترونية، وهي متطلبات أساسية في سوق يصنف من بين اعلى عشر دول من حيث نمو قطاع التجارة الإلكترونية، حيث وصلت معدلات نمو التجارة الإلكترونية في المملكة لأكثر من 32%، بإجمالي حجم تداولات تصل الى 80 مليار ريال سعودي (اي حوالي 21 مليار دولار) وذلك خلال عام 2018.