ECONOMİC DİGİTALİZATİON

İN OIC MEMBER
COUNTRİES
International Forum on Islamic Digital Economy
“Islamic Economic Digitalization and Inclusion:
Policy Development and Implementation in the OIC Countries”
29 October 2020
Jakarta, Indonesia

Mazhar HUSSAIN
Director
Economic and Social Research Department
Statistical, Economic and Social Research and Training Centre for Islamic Countries (SESRIC)
 Outline

1. Digitalization
2

2. Digital3 Economy

3. Prospects and Challenges

4. Way Forward

2
 Digitization, Digitalization… Towards E-life

Digitization is the process of Digitalization is the integration of

converting information into a digital technologies into everyday
digital (computer-readable) life.
format.

E-mail Developments in Information &

Database Artificial
E-commerce Communication Technologies
(ICT)
Intelligence
E-trade Virtual
Cloud
E-government Reality Internet Online Computing Robotics
E-banking Data
Mobile Devices CAD
E-learning Blockchain 3G…4G…5G
E-gazette Automation PDF Big Data
… Cybersecurity
Internet Bluetooth Computers
Social Broadband Link
of Things Infrastructure
Media 3
 Evolution of Global Internet Traffic

The internet and connected devices have become a central part of most
individuals’ and firms’ everyday life across the world.

By 2022, global IP traffic is projected to | 2022 |

! exceed 150 thousand GB per second

More and more people coming online
150,700
+ for the first time GB per second
Increase in mobile and fixed broadband
+ subscriptions
| 2017 |
Expansion of the Internet of Things
+ (IoT) 46,000
| 2007 | GB per
| 2002 | second
100
2,000
GB per GB per
second
second 4
UNCTAD (2019)
 Measuring Digital Economy

 Digital transformation today affects all spheres of life. However, defining the digital
economy is not a straightforward task.

“Measuring the digital economy and related value creation and capture is fraught
with difficulties. Firstly, there is no widely accepted definition of the digital economy.
Secondly, reliable statistics on its key components and dimensions, especially in
developing countries, are lacking.” (UNCTAD, 2019)

“There is currently no internationally agreed definition of the Digital Economy

overall, and this has been identified as one important barrier to meaningful and
comparable measurement.” (OECD, 2020)

 Comprehensive tools are needed to assess the level of transformation into the
digital economy and the factors affecting it.
 A combination of three factors is key to the data-driven digital economy;
• Availability of ICT infrastructure and access,
• High level of ICT usage, and
• Capability to use ICTs effectively
5
 Definition of Digital Economy

“The Digital Economy incorporates all economic activities reliant on, or

significantly enhanced by the use of digital inputs, including digital technologies,
digital infrastructure, digital services and data.
It refers to all producers and consumers, including government, that are utilizing these
digital inputs in their economic activities.” (OECD, 2020)

DIGITALIZATIO
• Conversion of N
• Economic
information
• Application of activities using
into digital
digital digital inputs
form
technologies
DIGITAL
DIGITIZATION
ECONOMY

6
Supply & Demand Sides of Digital Economy

7
 Size of Global Digital Economy

| DIGITAL |USA & China| | Global employment in the

ECONOMY | ICT sector |
40%
4.5- of World Total 39 million in
Value Added in
15.5% ICT Sector 2015
of World GDP
34 million in
2010
| Digitally deliverable service exports,
2018 | | ICT sector in total employment |

$2.9 50% 2% in 2015

Trillion Global Services
Exports
1.8% in 2010

Source: UNCTAD (2019) 8

 Digital Economy in OIC Countries

 Muslims represent an important consumer base of around 2 billion people

 Data on Contribution of Information and Communication Technology (ICT) to the
national economy doe not exist for the majority of OIC Countries!
 Available statistics on share of ICT in GDP show a great degree of variation among
member countries. Malaysia (18.3%, 2018); Nigeria (13.9%, 2019); Morocco (5-
6%, 20..?); UAE (4.3%, 2017); Egypt (4%, 2018/19); Indonesia(3.76%, 20…?);Qatar
(2.7%, 2017)
 Share of ICT goods in total goods exports is another important indicator to gauge
the economic importance of digitalization. Bahrain (0.4%); Benin (0.1%); Brunei
(0.2%); Egypt (2.4%); Gambia (0.1%); Indonesia (2.9%); Jordan (2.0%); Malaysia
(33.1%);United Arab Emirates (7.1%)

 Islamic Digital Economy Muslim consumers value to the global digital economy is
estimated to be worth US$277 billion (DinarStandadrd)
 Most of it is e-commerce spending by the consumers
 Turkey, Malaysia, Egypt and Indonesia are the top countries w.r.t. Muslim digital
commerce spending 9
 Developments in ICT Sector-I

Mobile-cellular telephone subscriptions

100 Individuals using the Internet
Fixed-telephone subscriptions
Active mobile-broadband subscriptions
80 Fixed-broadband subscriptions
Per 100 inhabitants

60

40

20
12.1

0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Note: * Estimate
*
Source: ITU World Telecommunication /ICT Indicators database
10
 Developments in ICT Sector-II

World 74
W 107
125 Developed 125 Active
Mobile Non-OIC Developing 71 Mobile
Non-OIC Develo...
Cellular 105
broadban
Telephone 100 OIC 54 d
Subscriptio ECA 107 ECA 70 Subscriptio
ns, 2019 103 ns, 2019
ESALA 60
(per 100 111 (per 100
inhabitants) MENA 70 inhabitant
83
SSA 29 s)

0 20 40 60 80 100 120 140

87
65 63
51 47
Individuals 41
31 28
Using the Comparatively LOW
Internet, penetration of ICT in OIC
2019
(per 100 group with substantial OIC
inhabitants) sub-regional differences

11
Source: Calculations based on ITU Statistics
 Developments in ICT Sector-III
United Arab Emirates (3) 201 United Arab Emirates (2) 240

Active Mobile-broadband Subscriptions, 2019

Kuwait (15) 132
Mobile Cellular Telephone Subscriptions, 2019

Kuwait (11) 174

Turkmenistan (17) 163 Brunei Darussalam (18) 128
Malaysia (19) 127

(per 100 inhabitants)

Maldives (20) 156
(per 100 inhabitants)

Côte d'Ivoire (28) 145 Qatar (21) 125

OIC 54
OIC 100
Syria (187) 12
Somalia (197) 49
Yemen (196) 6
Chad (198) 48
Niger (198) 4
Mozambique (200) 48
Chad (199) 3
Djibouti (206) 41
Somalia (201) 2
Niger (207) 41 (World Ranking)
(World Ranking)

Individuals Using the Internet, 2019 (per 100 inhabitants)

Digital Divide

99.7
99.7
99.5
99.2
95.7

Large
differences
40.8
(World Ranking)

among OIC
8.5
6.5
5.3
3.9
2.0

countries
12
Source: Calculations based on ITU Statistics
 Internet Users

| 2019 | Internet Users, 2010 Internet Users, 2019

(Share in Total) (Share in Total)
3.94
12%
billion 19%
24%
active internet users 38%

50%

51.3% 57%

of the global
population Developed Non-OIC Developing OIC

 More and more people in the developing world access to

the internet over time.
 This process is somewhat faster in OIC countries than in
the other developing countries. 13
 Increase in Internet Users in OIC Countries
| 2019 |
Number of Internet Users (millions), 2010 vs. 2019
129,062,97
765 2
102,654,67 2010 2019 Change
7
million active 84,404,712
66,176,844 58,043,544 61,718,465
internet users 57,505,215
in OIC Countries
46,315,306 39,628,796
26,408,295 32,917,854
28,800,611
18,227,868 11,728,238 17,876,419

530 Indonesia Nigeria Iran Egypt Turkey

million new
internet users
in 2010-2019

Internet Users per 100 Inhabitants, 2010 vs. 2019 From to

15 users 41 users
95.7

2010 2019 Change

92.4

in 2010 in 2019
81.9
70.0
56.6

55.7
54.7

54.1

50.3

49.2
41.0

40.8
Additional
35.8

31.6

25.8

26 users
15.9

15.0
6.5

Oman Saudi Arabia Iran Kazakhstan Djibouti OIC

per 100 inhabitants
14
 Mobile and Broadband Download Speed (Mbps)
| September Mobile
• Only 10 out of 39*
2020 | South Korea 121
OIC countries above
China 113
36 Mbps United Arab Emirates
Qatar 93
109
the global average.
• Some member
Global Average countries (Sudan,
Netherlands 80
Mobile Download Norway 79
Palestine,
Speed Saudi Arabia 76
Afghanistan) have a
mobile download
Canada 76
speed below 10
Bulgaria 76
Mbps.
Australia 72
0 20 40 60 80 100 120 140

Fixed Broadband • Only 4 out of 52* OIC

| September countries above the
Singapore 227 global average (UAE,
2020 | Hong Kong 211 Kuwait, Malaysia, and

86 Mbps
Romania 193 Qatar).
Switzerland 179 • Half of OIC countries
Thailand 175
Global Average have download speed
France 173
Fixed Broadband Denmark 162
below 20 Mbps.
Download Speed • In Turkmenistan,
Monaco 162
Yemen, and Algeria,
Hungary 162
the download speed is
United States 161
below 5 Mbps.
0 50 100 150 200 250 15
Source: SpeedTest.net
 Connectivity and Digitalization
 Global Connectivity Index - GCI (Huawei)…“created to analyze a broad spectrum of indicators for
ICT Infrastructure and digital transformation to provide a comprehensive map of the global digital
economy.”
 18 out of the 79 countries included in GCI are OIC members
 United Arab Emirates, Malaysia, Bahrain, Oman, and Saudi Arabia are top performers

GCI Ranking of OIC Countries, 2015 vs 2019

2015 2019

78

78
77

76

75

75
80

74
73
71
68

65
70
64

64
63

63
62
61

59
58

57
60

49
47

46
46
45

50

43

43

42
40
40
34

33
32
30

28
30

23
22
20
10
0
pt t
sia es
h ria rkey cc
o sia non stan y UA
E r ia ai sta
n
nd
a n
da hra
in
ab
ia an
ay d lg
e u or
o ne a ki  E
g ge uw h a r r m
al gl
a
 A  T do  Leb  Pa  N
i  K za
k
 U
g  Jo
 B
a A  O
 M a n   M  In a udi
 B  K  Sa

↑ Improvement in Ranking ↓ Decline in Ranking

16
 National Initiatives to Develop Digital Economy
 Many OIC member countries have national
strategies and plans of actions to develop their
national digital economy.

 Nigeria (Nigeria Vision 2020); Gabon

 Egypt (ICT 2030 Strategy), Algeria (E-Algeria),

Morocco (Digital Morocco 2020) , Tunisia,
United Arab Emirates (Vision 2021), Bahrain
(Vision 2030); Oman (Digital Oman Strategy ,
eOman); Jordan(Action Plan REACH2025);
Qatar (e-Government 2020 Strategy)

 Malaysia; Indonesia

17
 Regional Initiatives

 Digital Economy for Africa Initiative (DE4A) by World Bank

• “Aims to ensure that every individual, business, and government in Africa will be digitally enabled
by 2030 in support of the African Union “Digital Transformation Strategy for Africa.”
• To support this initiative, the World Bank intends to invest $25 billion by 2030.
 Asia-Pacific Regional Initiatives, Buenos Aires Action Plan, 2018-2021 by ITU
• ITU activities in Asia-Pacific are centred on regional initiatives designed to address specific priority
areas of particular importance to the region.
• The World Telecommunication Development Conference in Buenos Aires (Argentina) in October
2017 adopted the following five regional initiatives (2018-2021) for Asia and the Pacific.
1. Addressing special needs of least developed countries, small island developing states,
including Pacific island countries, and landlocked developing countries
2. Harnessing information and communication technologies to support the digital economy
and an inclusive digital society
3. Fostering development of infrastructure to enhance digital connectivity
4. Enabling policy and regulatory environments
5. Contributing to a secure and resilient environment

18
 Risks & Challenges

 Although digitalization has the potential to support development, the outcomes

are not likely to benefit all stakeholders equally.
 Even if individuals, firms and countries do not − or only partially − take part in
the digital economy, they can still be adversely affected indirectly.
• Workers with limited digital skills
• Local firms competing with digitalized domestic and foreign ones
• Various jobs lost due to automation
• Cyber security (cyber-attacks, viruses, and fraud) & privacy issues
• …

19
 Major Obstacles

 Limited awareness of e-commerce relevance among policymakers and

lawmakers, consumers and businesses.
 Limited Internet access in rural/remote areas and costly access to fixed and
mobile-broadband Internet.
 Overreliance on cash-based transactions, plus low access to and limited
experience with online payments and the use of credit cards.
 Inadequate facilities for physical delivery of online purchases.
 Weak legal and regulatory frameworks, including protection of consumers online.
 Inappropriate education for the digital economy.
 Lack of business development skills and adequate e-commerce skills for MSMEs.
 Unsuitable financial mechanisms for start-up enterprises to engage in e-
commerce.
 Persistent barriers for women and youth to engage in e-commerce, preventing
the leveling of playing fields through increased inclusivity.
 Lack of statistical data on electronic commerce.

Source: UNCTAD (2019) 20

 Focus Areas for Digital Future
Innovation &
Empowering
Infrastructure Technology Jobs & Growth
Society
Adoption

R&D in
Investment in
Digital Literacy Information ICT Investments
Broadband
Industries

Focus on Mobile Narrowing the Supporting Jobs in the ICT

Broadband Digital Divide Business R&D Industries

Higher Internet People’s use of ICT Use by

E-Commerce
Speed the Internet Businesses

Prices for
Mobile Money
Connectivity

Household Access
to Computers & E-Government
Internet
Source: Adopted from OECD (2018, 2020) 21
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ATTENTİON

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