| bibo:abstract |
I. COVID-19 and Latin America’s Digital Transformation
II. Digital Transformation Policies of Major Latin American Countries
III. The 2021 Korea-Latin America Digital Cooperation Forum: Key Takeaways
The coronavirus pandemic has ravaged the world. It has sickened more than 130 million people worldwide and more than 28 million people have died of the disease (April 5, 2021). The global economy shrank significantly, and the World Bank expected the world economy to contract 4.3 percent last year. As it predicted that there is a possibility of a 1.6% to 5% change in economic growth in 2021 depending on how well countries respond to the virus, all countries around the world will have to deal with many uncertainties that will continue to loom in 2021. Against this backdrop, countries have consistently called for “digital transition”as a solution to recover from the COVID-19 crisis and regain stability. Countries in Latin America, the region worst hit by the pandemic, have set digital transformation as one of the core strategic priorities to overcome the socioeconomic vulnerabilities amplified by COVID-19 and keep pace with the rapid transformation unfolding in all corners of the world.
I. COVID-19 and Latin America’s Digital Transformation
Digital transformation is the integration of digital technology into all areas of a business to seek new growth opportunities. It has a profound impact on economic growth as well as on society as it affects human behavior, values, and culture. Latin America accounts for 19 percent of the world’s confirmed cases and 28 percent of COVID-19 deaths, and pandemic-induced economic lockdowns and movement restrictions have hit major industries hard, further aggravating the region’s already reeling economy. The United Nations Economic Commission for Latin America and the Caribbean (ECLAC) projected an average economic contraction of 7.7% for 2020 and said unemployment will rise to 13.5% and poverty will reach 37.7% of the population. The Commission warned about the socioeconomic consequences the region will face in the years ahead. International organizations and economic organizations in the region stressed that Latin America needs to urgently move towards a new growth model – digital transformation - to escape the current crisis and the so-called “development trap.”
What Latin American countries aspire to achieve through digital transformation is an inclusive and sustainable economic model. Latin America is rich in natural and agricultural resources, and owing to the surge in global commodity prices, the region had experienced strong economic growth from 2003 to 2013. But the benefits of growth have not been evenly distributed; Latin America is the region with the worst social inequality and highest poverty rate. The OECD pointed out that low productivity, high social inequality, a high percentage of the informal economy, and lack of public services and system are chronic and structural issues that hinder Latin America’s growth. According to the Organization, digital transformation will convert the American economy from a commodity- to a service-based economy and allow the region to participate more actively in global value chains (GVCs). Such a transition, the OCED argues, will increase the region’s productivity; improve lives, the quality of jobs and education as well as social welfare; improve public governance and restore public faith in government, and provide opportunities to advance international cooperation and integrate the region into global trade.
According to the latest IMD World Digital Competitiveness Ranking, which analyses 63 countries, Chile ranked first in the region (41st), followed by Brazil (51st), Mexico (54th); Peru (55th); Argentina (59th); Colombia (61st) and Venezuela which ranked in the last position out of all 63 countries. It revealed that Latin American countries’abilities to prepare for digital transformation, understand and build new technologies and develop digital technologies remain weak. Meanwhile, the region’s Internet penetration rate was 69.6 percent in 2019 and about 54 percent of its population had access to mobile internet in the same year, which all surpass the global average. Moreover, 67 percent of the population are active users of social networks and 64 percent use them through mobile devices, which is far ahead of the global average (47%) and close to the percentage held by the United States. Although there are gaps between countries, regions, and individuals, the potential for digital transformation is high as all countries in the region consider increasing internet penetration rate a top priority and thus are pushing for various initiatives and programs to improve related infrastructure and advance internet usage.
II. Digital Transformation Policies of Major Latin American Countries
Even before the pandemic struck, Latin American countries sought to devise national development strategies as well as legal and institutional frameworks to cope with digital transformation. Argentina has been implementing various policies to stride towards digital transformation within the framework of the country’s Agenda Digital Argentina established in 2018. The objectives of the policies include improving public administrative services, developing national cybersecurity strategies, and nurturing digital technology industries. It is worth noting that Argentina adopted Korea’s digital government system, also known as e-government, and built its own data center to be used for government purposes.
Brazil has seen a significant increase in Internet, mobile and fixed broadband penetration in recent years, but the numbers are still below the OECD average. What lies at the core of Brazil’s digital transformation policy is increasing Internet and smartphone penetration. The country’s most well-known digital transformation strategy dubbed as “E-Digital,”aims to adopt a whole-of-government approach to a data-driven economy. The strategy foresees three ICT sector action plans: the National Internet of Things Plan (IoT.Br), the Science at School program, and Brasil Conectado (Connected Brazil).
Mexico’s efforts to increase its Internet penetration and reduce the digital gap have borne fruit, as the country has seen a significant increase in Internet and mobile penetration in recent years. The 2019-24 national development plan (NDP) is Mexico’s main development planning instrument. The NDP embeds digital tools in specific policy areas to achieve its goals, specifically targeting productivity, inclusion, public administration and climate change. The Office of the President of the Republic developed Estrategia Digital Nacional (National Digital Strategy) with the goal of maximizing information and communications technology (ICT) capabilities. The National Plan to Fight Corruption and Impunity, and to improve the Public Administration 2019-2024 uses digital tools in its execution. The goal is to establish a program to promote efficiency in public administrations while modernizing and improving public service provision. Specifically, the program will implement a system of digital platforms and tools for citizens to supervise federal public administration activities, including public procurement processes.
Chile has the most mature digital ecosystem in Latin America and boasts an environment conducive to the growth and activities of start-ups. The 2020 digital agenda (DA) Chile Digital para Tod@s (Digital Chile for everybody) is the main reference document for the digital transformation of the country. It looks at technology as a means to reduce inequalities, open new and better development opportunities, and advance human rights. The DA is based on six objectives: respecting human rights related to the Internet and information and communications technologies (ICTs); achieving universal connectivity; using ICT to improve quality of life; contributing to expanding the digital economy; using digital technologies for quality education; and supporting policies for the digital transformation that have a multi-sectoral approach.
Colombia has made efforts to enhance digital access and use for all. Internet users, active mobile broadband, and fixed broadband subscriptions increased in the last decade. The 2018-22 national development plan (NDP) Pacto por Colombia, Pacto por la Equidad (Pact for Colombia, pact for equity), and the 2018-22 information and communications technology (ICT) plan El Futuro Digital es de Todos (The digital future is for everybody) are the main planning instruments for the development strategy and digital transformation of Colombia. The ICT plan, Colombia’s national digital strategy (DA), is based on four axes: the ICT environment, digital social inclusion, empowerment of citizens and households in a digital environment, and digital sectoral transformations. The government passed a law to modernize the ICT sector and also adopted the National 5G Policy to facilitate adoption nationwide. Other relevant policies include the National Policy for Digital Transformation and Artificial Intelligence and the National Policy on the Exploitation of Data.
III. The 2021 Korea-Latin America Digital Cooperation Forum: Key Takeaways
The 2021 Korea-Latin America Digital Cooperation Forum was held in Seoul from March 17 to 18, under the theme of “Partnership towards Digital Innovation and Inclusiveness.”The Forum offered some meaningful takeaways. First, the Latin American region, which is on the opposite side of the world and in a completely different time zone, turned out to be Korea’s first “Digital New Deal”partner. This shows that digital innovation has ushered in a new era of diplomacy that frees countries from geographical constraints and connects them in real-time.
Second, Korea bolstered its global standing by successfully confirming its image as a digital leader in the eyes of Latin American countries. The increasing urgency of the digital transformation in Latin America was highlighted at the Forum, and the countries expressed their willingness to actively work together with Korea to achieve digital transformation. Eight ministers from the Latin American region visited Korea despite the ongoing pandemic, and many high-ranking officials delivered presentations and participated in discussions. Latin American countries expressed hope that Korea would share its digital technologies, knowledge, and experiences with the region and they wanted to learn about and build upon Korea’s development model.
Third, the Forum laid the foundation for the so-called “value diplomacy”towards Latin America. The values upheld by the Korean New Deal (the Korean government’s new national development strategy) - Innovation, inclusiveness, and sustainability – are also advocated by Latin American countries as part of their efforts to pursue national development. Facilitating a two-way communication underpinned by shared values and visions will create opportunities for Korea to advance its global standing and bolster mutual trust.
The Covid-19 crisis is presenting new opportunities as countries are doubling down on efforts to adopt innovation and technologies to deal with a wide array of social and economic issues. Latin American countries are well aware of the cost a country has to bear if it lags behind competitors on technological advancement. The countries in the region, therefore, are willing to join forces with Korea to take a leap forward and navigate major transitions unfolding in many parts of the world. From Seoul’s perspective, Latin America is an important market and an indispensable partner for future growth; Latin America’s population is twice as large as that of the United States and its GDP is half that of China, and the region has ample strategic and agricultural resources. As digital transformation is increasingly becoming essential to the survival of many countries, Latin American countries are striving to engage in digital cooperation with China and Europe. It is hoped the recent forum could pave the way for Korea to advance cooperation with Latin American countries in the digital sector.
* Attached the File
|
