PRESS BRIEFING BY UNCTAD

PRESS BRIEFING BY UNCTAD

The growth of e-commerce will continue despite the strong economic pessimism generated by the dot-com crash, the 11 September terrorist attacks and the war in Afghanistan, Jean Gurunlian of the United Nations Conference on Trade and Development (UNCTAD) said at a Headquarters press briefing this morning.

Launching UNCTAD's E-Commerce and Development Report 2001, Mr. Gurunlian said that despite last week's announcement by the International Monetary Fund (IMF) of lower-than-expected global growth figures, there were grounds for optimism as far as e-commerce was concerned.  Mr. Gurunlian is the Director of the agency's Division for Services Infrastructure for Development and Trade Efficiency.

He noted that compared to 500 million Internet customers worldwide today, there would be 700 million in 2002 and a billion at the end of 2004.  By 2002, the Asia-Pacific region would take the lead in Internet customers, with

248 million compared to 144 today.  It would surpass North America (200 million to 180 million) and Europe (193 million to 155 million).

"If you have double the number of Internet customers in the year 2004, you can expect that electronic commerce will continue to grow rapidly," he said.

Business information was also growing, he said.  It was unthinkable to create an enterprise today without having a Web site.  They would continue to grow and improve in the developed world, where almost everybody had one, and they would be created in the developing countries.  Business information was an expanding market, he added.

Mr. Gurunlian said business-to-consumer (B2C) had a bigger consumer base and more products on offer.  Between July 2000 and July 2001, the number of Web servers that had introduced SSL -- the encryption method used to facilitate online credit card purchases -- had increased by 50 per cent.  Business-to-business (B2B) had, in principle, contributed to lower transaction costs and increased productivity.

He said e-commerce was still in its infancy for most developing countries.  While they represented an enormous market that would develop where hardly anything had existed before, if they failed to embrace the new technologies, they would lose in relative as well as absolute terms.  The gap with the developed world would increase, he added.

Asia, however, even without a productivity increase of 1 per cent would not lose, he said.  It would still gain $800 million, owing largely to the fact that Asian countries, unlike other developing States, controlled part of the transport that benefited from increased productivity in the developed world.

Stressing the importance of tourism for developing countries,

Mr. Gurunlian said it was the fastest-growing e-commerce sector on the Internet.  It was important for them to understand that the traditional functions of tour agents and tour operators had already started and would continue to change. 

Traditionally, $70 out of $100 spent on a tour remained in the destination country, while the remainder went to the country where the ticket had been purchased.  New technologies would help improve that ratio, he added.

Mr. Gurunlian said the aim of the report was to help governments and the private sector to better understand the implications of information and communication technology (ICT) and electronic commerce, and eventually to help them set their priorities.

Asked whether the widening gap between the least developed countries (LDCs) and the developed world was due to a problem of language and education, he agreed that education placed a limit on what could be achieved in the least developed countries.  However, they had many highly educated people who were unemployed or held poorly-paid jobs.  If they could start businesses, they could probably create further businesses for others.

Another correspondent asked whether developing countries could better develop e-commerce through the use of $20 telephone handsets of through

$1,000 computers.

Mr. Gurunlian replied that creative e-tourism entrepreneurs in the Philippines had invested in cell phones information and ticket purchases with very good results.

Asked about the effect of 11 September on e-commerce, he said there had been absolutely none, and figures were still growing.  The United States might even have experienced growth as a result of the anthrax scare, he added.

Responding to another question he told the same journalist that the dot-com crash probably would have an effect on e-commerce and that more firms would go bankrupt.  But while the effects of the crash were not over, they should not be overestimated.

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