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Digital transformation in Brazil could reinforce economic recovery from COVID-19 crisis

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Brazil has made significant progress in improving Internet access, digital security and regulation, yet more needs to be done to reduce the country’s digital divide and embrace digital technologies. As Brazil, like the rest of the world, works to contain the COVID-19 crisis, stepping up the pace of digital transformation could hasten and reinforce a just and resilient recovery, according to the OECD.

“Digital technologies are the backbone of today’s economies, and digital tools and connectivity are essential in helping businesses and people to weather the COVID-19 crisis,” said OECD Secretary-General Angel Gurría, launching twin Reviews of Brazil’s digital transformation and its telecommunication and broadcasting sectors. “As Brazil and the world work to tackle this devastating crisis, Brazil should do everything to seize the opportunities offered by digitalisation to strengthen the recovery and build a resilient, inclusive future economy.”

The Review of the country’s digital transformation, Going Digital in Brazil, finds that despite recent progress, Brazil lags in investment in digital innovation and in the level of digital skills in the workforce. The Review recommends ways to increase digital uptake among people and firms, strengthen digital security and privacy, and spur innovation. It calls for better co-ordination of digital transformation policies among ministries and government agencies and for greater resources for implementing Brazil’s Digital Transformation Strategy (E-Digital).

A parallel report, the OECD Telecommunication and Broadcasting Review of Brazil 2020, shows where there is room for Brazil to catch up with advanced economies in ensuring access to high-quality communication services that are fundamental for a successful and inclusive digital transformation. It suggests actions to improve market conditions, competition and the policy and regulatory framework in communication and broadcasting. It also recommends an overhaul of taxes, fees and tariffs that limit operators’ scope for investment and innovation.

Creating a single independent regulator to oversee communication and broadcasting services, as some other countries have done, would help to lower prices and improve quality as services in the two sectors increasingly overlap, the Review says. Similarly, introducing a single-class licensing regime for the two sectors would lower legal costs and administrative burdens for operators. Meanwhile, an upcoming auction of 5G spectrum should be carefully designed to ensure optimal network coverage and competition conditions.

Getting digital policy right is vital in all countries to ensure that the benefits of the digital transformation – such as boosting productivity and improving well-being – are shared fairly across economies and societies. Digital tools can also help to efficiently target social spending. On the other hand, getting digital policy wrong risks worsening existing inequalities between high and low-skilled individuals, large and small firms, and urban and rural regions.

Among the progress made in Brazil in recent years, subscriptions to communications services have steadily increased, thanks to a more than tripling in mobile subscriptions from 2012 to 2019, and relatively affordable mobile voice and data plans. The share of households with Internet access rose to 67% in 2018 from 40% in 2013, and the share of adults using the Internet to 72% from 50%. New laws have strengthened digital security, and consumer and personal data protection. Brazil has created an exemplary institutional structure for Internet governance – the Internet Steering Committee – and has taken steps to strengthen the independence of the communication regulator and to promote competition in mobile markets.

Despite this progress, challenges remain. As of 2018, nearly a quarter of Brazilian adults had never used the Internet, with data showing that Internet use is closely linked to levels of education, income and age. There is also a persistent urban-rural digital divide, with 75% of the adult population in urban areas using the Internet against only 49% in rural areas.

Fixed broadband is less affordable in Brazil than mobile, and while Brazil had 90 mobile broadband subscriptions per 100 inhabitants as of June 2019, not far behind the OECD average of 113, fixed-line broadband penetration of 16% was only half the OECD average of 31%. Only 54% of firms with 10 or more employees had a website in 2019, compared with an OECD average of 78%, and while e-commerce is growing steadily, only 21% of companies conducted sales online in 2019.

A summary of key recommendations from the two Reviews:

Continue to improve digital skills, particularly among micro enterprises and people with low levels of education. Offer firms tax incentives for investing in digital technology upgrades and training. Do more to support research and development in ICT services and innovative start-ups. Increase funding for students in STEM (science, technology, engineering and mathematics) subjects. Remove regulatory barriers to the development of e-commerce.

Improve access to reliable, affordable and high-quality Internet by deploying fibre optic infrastructure to rural and remote areas and by encouraging competition in communication services. In broadcasting, where concentration is higher, reduce barriers to entry and remove de facto legal restrictions on the vertical integration of the pay TV value chain. Design the upcoming auction for 5G spectrum in a way that ensures a competitive market, particularly in light of new legislation enabling the successive renewal of spectrum licences.

Create a converged and independent regulator to oversee both communication and broadcasting, and replace the current dual licensing system with a single-class licensing regime for communication and broadcasting services. Harmonise tax rates in the communications sector across states and reduce them where possible. Aim to overhaul the indirect tax system in the long term to reduce distortions.

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Lebanon crisis: More international assistance needed urgently

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lebanon beirut
Photo: Marten Bjork/Unsplash

Lebanon’s enduring economic crisis risks reversing decades of gains in people’s wellbeing, the head of the UN World Health Organization (WHO) said on Friday.    

Speaking from the capital, Beirut, at the end of a two-day visit to the beleaguered Mediterranean country, Tedros Adhanom Ghebreyesus described finding shortages of “basic and essential medicines”. 

Although the WHO has done what it can to fill gaps in healthcare there for the last 15 years, the WHO Director-General said that the situation had become “very dire” and that international support was needed immediately.  

“It’s not just COVID, almost all services are being affected,” he said. “We visited two hospitals today… they told us that you know, they had, patients, cancer patients or other patients, but a shortage of medicines and those who cannot afford not having access to, they can’t have medicine, so meaning other services are being disrupted, and this is life, life, life and death.” 

Lebanon’s unprecedented political and economic crisis has been made worse by the COVID pandemic and last August’s port explosion. 

Fuel and power shortages

Tedros said that when he went to meet top Government officials, a power cut interrupted their encounter. 

Similar fuel shortages have left hospitals functioning at 50 per cent capacity, the WHO Director-General said, adding that he had agreed to send a team of health experts to Lebanon to offer technical support as soon as possible. 

The UN health agency has also provided “Band-Aid” assistance to the country’s medical sector, Tedros added. 

This includes the purchase of essential medicines for 450,000 patients with acute and chronic conditions last year and this year. 

But Dr Iman Shankiti, WHO Representative in Lebanon, told journalists that the caseload is now increasing and that demand is growing for medications to treat cancer, dialysis and emergency patients. 

“At one point in time we were able to support 2,000 cancer paediatric cases and we were able to support 17,000 persons with catastrophic medications, but this is not enough,” she said. “I cannot say that we have filled the gap, we have closed the shortage. The needs are huge….It needs a whole-of-Government approach (to solving the shortages)”. 

Regional insecurity risk 

While in Beirut, Tedros visited several health facilities, including the newly renovated Central Drug Warehouse that had been destroyed by the Beirut port blast.

Accompanying him, Dr Ahmed Al Mandhari, Regional Director for the Eastern Mediterranean, highlighted the threat to regional instability if Lebanon’s health sector was not propped up.

The country was rapidly losing its longstanding status as a key provider of medical professionals, he warned, as its youngsters left the country to seek work elsewhere.

Lebanon’s strong vaccination and immunisation system was also under threat, said Dr Al Mandhari, noting that it had “protected the children of Lebanon and all those living in Lebanon, which helped us in the region and beyond to control communicable diseases like for example polio, measles and other communicable diseases that affect adults and children. So, if there is a break or a weakness in this expanded programme of immunisation in the country it will definitely hit other countries in the region.”

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77 million children have spent 18 months out of class

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The UN Children’s Fund (UNICEF) says the world is facing an education crisis due to the COVID pandemic, that has left nearly 77 million children shut out of the classroom for the past 18 months.  

This Thursday, the UN agency is closing down its social media channels for the next 18 hours to send one message to the world: #ReopenSchools for in-person learning as soon as possible. 

The UN Educational, Scientific and Cultural Organization (UNESCO) is joining UNICEF, together with the World Bank, the European External Action Service (EEAS), the European Commission Humanitarian Aid operation, the LEGO Foundation and the WEF Global Shapers community of world youth.  

Right to education 

For UNICEF, the right to go to school is central to every child’s development, safety and well-being. Yet in too many countries, classrooms remain closed while social gatherings continue to take place in restaurants, salons and gyms. 

The agency believes “this generation of children and youth, cannot afford any more disruptions to their education.” 

New numbers from UNESCO, released this Thursday, show that schools are now fully open in 117 countries, with 539 million students back in class, ranging from pre-primary to secondary levels. 

This represents 35 per cent of the total student population across the world, compared to 16% who returned to school in September 2020, when schools were only open, or partially-open, in 94 countries. 

Around 117 million students, representing 7.5 per cent of the total, are still affected by complete school closures in 18 countries. The number of countries with partly open schools, has declined from 52 to 41 over the same period.  

In all countries that had prolonged full school closures, education was provided through a combination of online classes, printed modules, as well as tuition through TV and radio networks. 

Schools can reopen safely 

UNESCO and its Global Education Coalition partners have been advocating for the safe reopening of schools, urging full closures to be used as a measure of last resort. 

Since the onset of the pandemic, schools were completely closed for an average of 18 weeks (4.5 months) worldwide. If partial closures are accounted for, the average duration of closures represents 34 weeks (8.5 months) worldwide, or nearly a full academic year. 

For UNESCO, the past two academic years have resulted in learning losses and increased drop-out rates, impacting the most vulnerable students disproportionately.  

Schools in most countries have adopted some forms of sanitation protocol such as wearing masks, using hand sanitizers, improving ventilation and social distancing, which were also key to re-opening schools last year. 

Some countries have also introduced large scale testing as well as temporary classroom and school closures when the virus is detected.  

Vaccination key 

Rising vaccination rates among both general population and teaching staff, has also been a key factor in reopening schools. 

The vaccination of teachers has been prioritized in around 80 countries, allowing for the inoculation of some 42 million teachers. In a handful of countries, the vaccination of students aged 12 and over, is an important factor in determining the full re-opening of schools. 

Action to accelerate the recovery of learning losses remains an essential component of national COVID-19 education responses. For that, UNESCO says teachers and educators need adequate support and preparation. 

Connectivity and bridging the digital divide also remain key priorities in building the resilience of education systems and providing hybrid learning opportunities. 

For that reason, UNESCO, UNICEF and the World Bank have partnered in an initiative called Mission: Recovering Education 2021, that supports governments in bringing all learners back to school, run programmes to help them catch up on lost learning, and prepare teachers to address learning losses and incorporate new digital technology.

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Rising demand for agricultural products adds to competing pressures on tropical forest landscapes

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Annual consumption of food and agriculture products rose by 48% between 2001 and 2018 – more than twice the rate of increase in human population – as reported in a new analysis published by the Tropical Forest Alliance at the World Economic Forum entitled Forests, food systems and livelihoods: Trends, forecasts and solutions to reframe approaches to protecting forests.

The report, which tracks the relationship between the rising demand for food and agricultural products and deforestation, paints a picture of increasing competing demands on tropical forest landscapes. Since 2001, 160 million people have been lifted out of poverty and undernourishment increasing the per capita food consumption, particularly protein which has risen 45% since 2000.

In producer countries, these trends are often linked to economic development and rural livelihoods that creates a set of complex trade-offs for decision makers. For example, soybeans are now the most valuable export product for Brazil, and around 16.3 million people (12% of the total workforce) are employed in the palm oil industry in Indonesia.

The report also highlights the significant loss of primary forests, which are rich stores of carbon and biodiversity. An area exceeding 60 million hectares of primary tropical forests have been lost since 2002 – almost the size of France. The loss was 12% higher in 2020 than the previous year, despite all the efforts by governments, businesses and civil society. More than 80% of this deforestation happened in landscapes where agriculture is the dominant driver and much of this is linked to the production of globally traded commodities including soy, palm oil, cattle, cocoa, coffee and wood pulp.

In the face of this reality, the report concludes that those working to reverse deforestation need to deploy systemic solutions that take into account the multiple competing demands on these landscapes. For example, incentives can be provided for farmers to conserve more while producing food, with potential sources coming from both carbon finance and domestic finance for rural credit. More effort needs to be applied to boost productivity sustainably, particularly for smallholder farmers in the face of greater climatic stress. Improved technical assistance and new plant material to help increase yields, as well as support with the diversification of income streams, are essential.

Mr Samuel Abu Jinapor, the Minister of Lands and Natural Resources, Ghana says: “The time for action is now. We will pursue progressive policies with the overarching view to restoring the forest cover of Ghana, thereby contributing to the global effort against climate change.”

Justin Adams, Executive Director, Tropical Forest Alliance, says: “No single policy or solution can resolve this. Commodity-driven deforestation must not be treated in isolation – either as a purely environmental issue or a supply-chain problem. Keeping forests standing is linked directly to sustaining rural livelihoods, ensuring food security for a growing global population and supporting economic development. Crucially, the community of action working on this issue must broaden beyond those engaged at the forest frontier and environmental issues to include actors in the food system more broadly, such as farmers, local communities, local businesses and local governments.”

There is some evidence that private sector supply-chain strategies are helping to reduce deforestation. For example, Nestlé has assessed that 90% of key ingredients – including palm oil, sugar, soy and meat – are deforestation-free as of last year, and has committed to 100% deforestation-free products by 2025. Magdi Batato, the Executive Vice President and Head of Operations of Nestlé says: “A forest positive future is possible if the private sector collectively moves its focus on achieving a positive impact in the critical landscapes that underpin our food systems, and if we work hand-in-hand with farmers and local communities, and governments to form wider solutions across local, regional and global levels. The benefits are numerous: more resilient communities and livelihoods, more sustainable food systems, and a healthier planet.”

While many companies are committing to ambitious efforts in their own supply chains, it is also critical that this is done in conjunction with a broader sector-wide transformation to reduce net deforestation. Landscape-scale or jurisdictional approaches, which promote sustainable practices by rooting them in local governance systems, offer a practical way for both companies and governments to collaborate.

Christine Montenegro McGrath, Vice President and Chief Global Impact and Sustainability, Mondelēz International and Co-Chair, Consumer Goods Forum Forest Positive Coalition of Action says: “Important shifts are taking place – and as we look ahead to the UN Food Systems Summit and COP26 this year – we need to integrate food production as a critical part of the collective action required to meet both the Paris Agreement and goals on biodiversity. This report shows that landscape-scale initiatives provide a crucial piece of that puzzle for businesses who are on the journey to becoming forest-positive.”

The Intergovernmental Panel on Climate Change (IPCC) last month provided alarming evidence about the irreversible changes to the climate including for forests, and has also established that climate change is already having an adverse impact on food security and terrestrial ecosystems, with the tropics among the most vulnerable regions in terms of crop yields. This report predicts a shrinking agricultural labour force, posing even further risks for agricultural production.

President of the World Economic Forum Borge Brende says: “This combination of risks from climate change and demographic shifts suggests that the rural development models that have underpinned the expansion of tropical agriculture in the first two decades of the century are coming under increasing pressure from several angles. This underpins the need for a multistakeholder approach to find systemic solutions exemplified by the work of the Tropical Forest Alliance and the FACT Dialogue that will be presenting its findings at COP26 in Glasgow.”

Finally, the report points to the need to tackle data gaps that can enhance transparency in supply chains. There have been a number of promising innovations in recent years in improving transparency and data quality, especially the use of satellite imagery. However, despite this progress, gaps remain, including concession boundary maps, trade and export data, distinguishing between tree cover loss and deforestation, spatial data on crop production, incorporating information on time lags (between deforestation and associated production) and improving the rigour by which drivers of deforestation are understood.

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