Financing E-Commerce Financing E-Commerce While Fighting Poverty While Fighting Poverty

Asavin ChintakanandaAsavin ChintakanandaSenior Advisor, Asian Development Senior Advisor, Asian Development

BankBank

Manila, PhilippinesManila, Philippines

OverviewOverview• Poverty Reduction and E-Poverty Reduction and E-

CommerceCommerce

• Fostering E-CommerceFostering E-Commerce

• ADB’s Financial InstrumentsADB’s Financial Instruments

The Poverty ProblemThe Poverty Problem• 70% of the 70% of the

world’s poor live world’s poor live in the regionin the region

• 900 million 900 million people survive on people survive on less than $1 per less than $1 per dayday

• Many are not Many are not sharing in Asia’s sharing in Asia’s progressprogress

ADB’s Poverty ADB’s Poverty Reduction StrategyReduction Strategy

• Pro-poor, Pro-poor, sustainablesustainable

economic growtheconomic growth

• Social Social developmentdevelopment

• Good governance Good governance

Why would a multilateralWhy would a multilateral development bank committed to development bank committed to poverty reduction in Asia and the poverty reduction in Asia and the Pacific consider E-commerce a Pacific consider E-commerce a

worthwhile investment?worthwhile investment?

• The Internet is dramatically changing the The Internet is dramatically changing the way goods and services are produced, way goods and services are produced, delivered, sold and purchased.delivered, sold and purchased.

• Internet technologies have the potential to Internet technologies have the potential to empower small and medium size business empower small and medium size business enterprises (SMEs). enterprises (SMEs).

• The potential benefits of e-commerce for The potential benefits of e-commerce for the developing world are immense. Any the developing world are immense. Any company can enter global markets where company can enter global markets where size and location have become rather size and location have become rather irrelevant. irrelevant.

Why E-Commerce is Important

• Economic growth is the engine of poverty Economic growth is the engine of poverty reduction, trade can be enhanced using reduction, trade can be enhanced using

E-commerceE-commerce• Promotes transparency and governance by Promotes transparency and governance by

giving more opportunities for competitiongiving more opportunities for competition• Benefits of inclusion in the global economy Benefits of inclusion in the global economy

are as high as the risks of exclusionare as high as the risks of exclusion

How Will Developing E-Commerce Reduce Poverty in Asia and the

Pacific?

Non-involvement in Non-involvement in E-commerce is not an E-commerce is not an option for developing option for developing

countries, but countries, but obstacles existobstacles exist

Fostering E-CommerceFostering E-CommerceRight conditions must Right conditions must exist for e-commerce to exist for e-commerce to grow and thrive:grow and thrive:• Strong policy Strong policy frameworkframework• Skilled workforceSkilled workforce• Infrastructure and Infrastructure and accessaccess• Awareness and trustAwareness and trust

How is ADB How is ADB Helping?Helping?

By providing the technical By providing the technical assistance and financing to assistance and financing to build the foundation for build the foundation for successful E-successful E-commerce implementation commerce implementation through . . .through . . .

Financial InstrumentsFinancial InstrumentsLoansLoans

Technical Assistance Technical Assistance

Special FundsSpecial Funds

Private Sector InvestmentPrivate Sector Investment

LoansLoansOver $1.5 billion loans in Information Over $1.5 billion loans in Information

and and

Communication TechnologyCommunication Technology

Major Loan ActivityMajor Loan Activity• Greater Mekong Subregion - Fiber OpticGreater Mekong Subregion - Fiber Optic

Telecoms Backbone, 2003 Telecoms Backbone, 2003

• Maldives – Information Technology Maldives – Information Technology

Development and Strengthening Public Development and Strengthening Public

Accounting, 2001 Accounting, 2001

Technical AssistanceTechnical AssistanceOver $40 million for education, Over $40 million for education,

capacity capacity

building and ICT projects building and ICT projects

Current TA ProjectsCurrent TA Projects• GMS – Cross Border Trade and GMS – Cross Border Trade and

Investment for SME DevelopmentInvestment for SME Development• Bangladesh – SME Development and Bangladesh – SME Development and

Export ExpansionExport Expansion• Nepal –ICT for Financial Service Nepal –ICT for Financial Service

ImprovementImprovement• Sri Lanka – School Computerization and Sri Lanka – School Computerization and

Computer LiteracyComputer Literacy

• Enhancing the Involvement of Private Enhancing the Involvement of Private Sector Organizations in the Process of Sector Organizations in the Process of Economic Cooperation in the Greater Economic Cooperation in the Greater Mekong SubregionMekong Subregion

• E-Legal Challenges in Asia: Cyber Law E-Legal Challenges in Asia: Cyber Law Training SeminarTraining Seminar

• Trade Policy and Legal Framework in Trade Policy and Legal Framework in Mongolia Mongolia

• Annual Asia Development ForumAnnual Asia Development Forum

Current TA ProjectsCurrent TA Projects

Special FundsSpecial Funds

• Japan Fund for Information and Japan Fund for Information and Communication TechnologyCommunication Technology

- $10 million grant fund for innovative - $10 million grant fund for innovative applications of ICT applications of ICT

• Japan Fund for Poverty ReductionJapan Fund for Poverty Reduction

- $290 million grant fund - $290 million grant fund to pilot to pilot innovative, participatory and direct innovative, participatory and direct poverty reduction projects related to poverty reduction projects related to ADB loansADB loans

Fighting Poverty While Fighting Poverty While Promoting E-CommercePromoting E-Commerce

Marketing Bamboo Marketing Bamboo Products - PhilippinesProducts - Philippines

Microenterprise Microenterprise Furniture Furniture Manufacturers - Manufacturers - IndonesiaIndonesia

Silk Production in Silk Production in Northern Viet Nam Northern Viet Nam

Private Sector Private Sector InvestmentInvestment

• Helping governments to create Helping governments to create enabling conditions for business. enabling conditions for business.

• Generating business opportunities in Generating business opportunities in ADB-financed public sector projects. ADB-financed public sector projects.

• Catalyzing private investments Catalyzing private investments through direct financing, credit through direct financing, credit enhancements, and risk mitigation enhancements, and risk mitigation instruments.instruments.

Investments Under Investments Under ConsiderationConsideration

• Electronic payment systems for Electronic payment systems for

e-commercee-commerce• Wireless computer networksWireless computer networks

GrameenPhoneGrameenPhoneGood Business Can Mean Good Good Business Can Mean Good

DevelopmentDevelopment• Provides Village Payphone services to overProvides Village Payphone services to over

20,000 villages20,000 villages• Generating employment, trade, innovationGenerating employment, trade, innovation

ADB investment of $18.3ADB investment of $18.3

million and 3% equitymillion and 3% equity

stakestake

A Look At A Look At GrameenPhoneGrameenPhone

Thank YouThank You