Building a Digital Economy in the ECCU
Key Messages:
- Connectivity and digital tools have been a lifeline throughout the COVID-19 pandemic.
- Digital transformation is essential to the recovery, resilience and transformation of the Eastern Caribbean Currency Union.
- The future of the global economy is digital. That future is now. The time to act is now!
The COVID-19 pandemic ushered in unparalleled pressures on the economies in the Eastern Caribbean Currency Union (ECCU) and redefined social interactions. The initial lockdowns and subsequent social distancing protocols rendered traditional business and work practices obsolete. As such, digital technologies offered the only means for societies in this unprecedented situation. Inadvertently, the pandemic has served as a catalyst. It has ensured that digital technologies are leveraged in every way imaginable and, thus, established a new normal for: business continuity, tele-education, government services, grocery shopping and socialising. There is no turning back!
A New Flexible ECCU Seizing New Opportunities
During the lockdowns and ongoing COVID-19 restrictions, teachers, students and, by implication, some parents had to resort to online delivery of education albeit with mixed results given the significant variability in access to connectivity and digital tools.
The evolution of the business models of some traditional businesses in response to the pandemic bears testimony to the adaptability and flexibility of the region. Online payment platforms for grocery shopping and delivery have quickly developed. Some local produce markets have evolved into virtual markets via WhatsApp, with a delivery option. Spas now offer more flexible hours via home visits. More small businesses are using Facebook and exploring e-payment solutions. Virtual social events via Facebook and Zoom have become commonplace, with users embracing this new normal.
Are we maximising the use of digital technologies?
On reflection, one can reasonably conclude that existing digital technologies, as critical as they are at present, are currently underutilised. Our region’s high cash usage, such that the value of ATM withdrawals exceeds the value of debit and credit card transactions, rendered us less prepared for the initial impact of the pandemic and the ability to cope thereafter.[i] Indeed, when the lockdowns ensued, we became aware of stranded customers holding cheques with no bank access to cash them. These experiences demand a more resilient payment system in the ECCU and inject even greater urgency for DCash, the ECCB’s digital currency, which was rolled out to the public on March 31, 2021. Furthermore, it highlights the great need for the Caribbean Digital Transformation Project (CARDTP).
Seeking to Optimise Digital Technologies
Though we have seen increased reliance on digital technologies, much still needs to be undertaken by all players in the digital space.
Ms Tahseen Sayed, World Bank Country Director for the Caribbean, in the press release announcing the World Bank’s approval of funding for the CARDTP, made the following observation:
“The digital economy offers a unique opportunity for the Eastern Caribbean countries to become digital leaders. Wider and more rapid adoption of digital technologies can support countries during the COVID-19 recovery phase and help build resilience, create jobs and boost future growth.”
The acceleration of the adoption and/or use of digital technologies is paramount. Its incorporation is critical for traditional sectors to remain viable and for emerging sectors to offer modern solutions . However, the tenets of a digital economy should preface or, at the very least, be established simultaneously with its evolution. For instance, the infrastructure requires an overhaul; the Telecommunications Act is in need of an upgrade; and policies need to be introduced to allow for competition and guarantee quality and affordability of service. As we transition to the digital economy, cybersecurity becomes increasingly important and, with it, a commitment to strong cyber hygiene by all citizens.
Given government’s central role, it has the principal task in facilitating the transition into the digital economy by offering strong signals and support. An ideal start would be:
- Recognition by governments and all of society that access to broadband connectivity is a human right and essential to the attainment of the United Nations Sustainable Development Goals especially SDG 9.C;
- Digitise all citizen-facing services such as bill and tax payments, and social transfers;
- Include IT/digital technologies in the school curriculum at all levels, with IT as a mandatory subject at CSEC;
- Train youth in coding using both schools and academies; and
- Provide incentives for innovation and establish innovation incubators to spur job creation.
Policies must ensure that the underprivileged and marginalised are catered for, by finding creative ways to allow for their participation in the digital economy. Sections of the region lack the necessary devices and/or connectivity and are therefore excluded from participating in the digital economy. Thus, while the mobile penetration for Eastern Caribbean Telecommunications Authority (ECTEL) member states stood at 107.1 per cent in 2017, mobile broadband penetration was only 57.1 per cent. Further, the fixed broadband penetration as at 2018 painted a further troubling picture at 19.4 per cent.
In addition, the Organisation of Eastern Caribbean States (OECS) region records some of the highest cost for broadband internet in the western hemisphere. Evidently, a significant portion of the sub-region lacks access to affordable and reliable broadband internet (fixed and mobile), rendering the region somewhat unprepared for the initial COVID-19 impact and restricting its ability to cope. These are some of the pertinent issues the CARDTP, financed by the World Bank and implemented by the member countries and regional entities, seeks to address.
Digital Economy in the ECCU
CARDTP incorporates four governments of the ECCU (The Commonwealth of Dominica, Grenada, Saint Lucia and Saint Vincent and the Grenadines), four regional institutions (OECS Commission, ECCB, ECTEL and Caribbean Community Implementation Agency for Crime and Security - CARICOM IMPACS) and the World Bank. The benefits of the project extend to all members of the ECCU and not only the directly participating governments. Importantly, it should be noted that Saint Kitts and Nevis is making significant strides and is already digitising citizen-facing services and other member governments are pursuing various initiatives.
The CARDTP is two-tiered. Nationally, the Project seeks to converge and digitise many citizen-facing services. Regional level project activities, as captured by the project appraisal document, aim to create a dynamic, seamless regional market for digital investment, services and trade, and foster cross-country collaboration to support development and security of the Eastern Caribbean Digital Economy.
The regional project activities are aligned with and reinforce the mandates and capacity of the regional institutions. These include the ECCB’s role in regulation and promotion of digital financial services; ECTEL’s role in regulation of the telecommunications sector; OECS’s role in digital skills and technology adoption, data protection and privacy; and CARICOM/IMPACS’s role in promoting regional cybersecurity.
Imagine a future where all citizen-facing services are digitised, therefore no time wasted in queues. A future where the region’s youth are globally competitive in the digital technologies arena. A future where all the financial and legislative inhibitors are removed, thereby opening up possibilities and spurring creativity. A future which encourages innovation, the real essence for the sustainability of the digital economy. A future where citizens and residents of the ECCU are not merely consumers but producers in the digital economy. That future is now!
I conclude this blog post with an oft-repeated saying of mine: “as a region we cannot change our history and we cannot change our geography but we can elevate our development trajectory through collective action and the deployment of digital technologies”.
For an overview of trends in global cash use, see piece by Upgraded Points titled, “Essential Stats and Data on Cash Usage and Spending Habits Around the World.”
Acknowledgement
The ECCB acknowledges the significant contribution of Mr Imran Williams, Project Officer II, Governor’s Immediate Office (currently seconded to the OECS Commission as Project Manager of the Caribbean Digital Transformation Project), in the preparation of content for this blog.
About the Author
Timothy N.J. Antoine has been the Governor of the ECCB since February 2016. He is passionate about the socio-economic transformation of the Eastern Caribbean Currency Union (ECCU) and regards it as the pathway to shared prosperity for the people of the ECCU.
About the Eastern Caribbean Central Bank
The Eastern Caribbean Central Bank (ECCB) was established in October 1983. The ECCB is the Monetary Authority for: Anguilla, Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, Saint Christopher (St Kitts) and Nevis, Saint Lucia and Saint Vincent and the Grenadines.
