The Economic Commission for Latin America and the Caribbean (ECLAC) is pushing countries to create a single digital economy, saying such a market will help them reap the dividends of ‘economies of scale’ like countries in the European Union.
Thanks to the similarity in language and culture, Latin America is better positioned to integrate its economies than any other continent on the planet. “Digital technologies and new business models will foster regional integration that was not possible with old technologies,” stressed the officials from the UN agency at the recent Fourth Latin American Telecommunications Congress held in Cancun, Mexico.
A single digital market will not only contribute to economic development but also help countries cut back on ecological destruction, the agency noted, adding that a digital market increases connectivity for people and businesses, facilitating the online exchange of goods and services.
“We must overcome taboos and open an honest discussion of the obstacles in the way of developing a digital economy in the region. Today it is urgent that we advance toward a political decision on the creation of a regional digital market,” said Mario Cimoli, Director of ECLAC’s Division of Production, Productivity and Management.
Cimoli urged the countries to strengthen their digital ecosystem through the development of networks and digital platforms.
Elsewhere in the world, linguistic and cultural diversity are the barriers to forming a single digital market, but in Latin America the obstacles are the lack of coordination in terms of standards and regulations, and the shortages in infrastructure and goods transportation, say experts.
Last year at the Fifth Ministerial Conference held in Mexico City, the ECLAC set up a ‘Working Group’ specifically to enforce its digital agenda. As a first step towards achieving this goal, countries need to integrate their network infrastructure and reduce the cost of data roaming, which would ease internationalization of companies in the region, especially small- and medium-sized enterprises (SMEs).
“Almost half of Latin America does not use the internet, and most SMEs—the main source of job creation—make basic use of the network,” warns ECLAC. “To read an e-mail abroad with a photo attachment is 10 times more expensive when using data roaming (approximately US$0.28) compared to the local pre-paid service (around US$0.3).”