Tigran Sargsyan: Digital transformation plays a pivotal role in the emerging economic landscape
Almaty, 15 May 2023. Digital infrastructure took centre stage at the investors forum held on 15–17 May 2023 in Almaty, alongside the 46th Annual Meetings of the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP).
The session brought together international organisations from various regions, including Europe, Eurasia, Asia and the Pacific, to exchange experiences in implementing and using digital technology to streamline processes, uplift living standards, and foster development opportunities.
Tigran Sargsyan, Vice Chairman of the Eurasian Development Bank’s (EDB) Management Board, emphasised the pivotal role of digital transformation in the emerging economic landscape.
The EDB is observing a trend towards fragmentation of the global digital space, and Asia and the Pacific, particularly the Eurasian Economic Union (EAEU), are no exception. In 2020, the EDB established a Fund for Digital Initiatives to foster digitalisation efforts.
“We are pleased that the COVID-19-Free Travel mobile app, the flagship project of our Fund, was honoured with the Sustainable Awards in Technology Development by ADFIAP last year. Thank you for this recognition,” said Tigran Sargsyan.
The COVID-19-Free Travel app helped to facilitate safe international travel during the pandemic, surpassing 5 million uses for PCR test result verification.
Furthermore, the Fund launched the Work in the EAEU app to streamline access to public and commercial services for EAEU citizens. Presently, the app offers over 30 services in Russia and Armenia, with ongoing negotiations to expand its reach to other countries.
Additionally, the Fund is actively working on digital projects in different sectors, including healthcare, jewellery, and textiles. Many of these projects will be showcased at the upcoming Third Eurasian Congress on 8–9 June in Sochi.
In the realm of digital infrastructure, particular attention is directed towards cross-border digital identification and document management. These aspects hold significant importance for all countries in the region, and the Fund is actively pursuing optimal solutions for their implementation.
A key task of international development institutions is to seek feasible cross-border solutions. This will inevitably lead to the establishment of new digital banking infrastructure. While banks are currently adopting digital identification technologies, a more advantageous approach would involve the development of a system by intra-bank coalitions. This would not only reduce costs but also ensure secure data exchange. We plan to initiate active discussions within ADFIAP on the creation of relevant joint infrastructure.
The second service pertains to exchange. Each year, it continually expands as a comprehensive digital customer footprint. The evolving customer due diligence practices in various countries provide an abundance of information. A digital infrastructure must be put in place to guarantee the secure flow of data.
“The third service is access to banking transaction data. Banks have begun monetising non-personal financial transaction data, including purchase history and spending locations. This commercialisation has generated billions of dollars in revenue but necessitates proper regulation and digital infrastructure to make sure that access to such information is secure and non-discriminatory,” Tigran Sargsyan emphasised.
The fourth service evolves around the compatibility of payment systems. This will require establishing a non-discriminatory digital infrastructure.
The development of Eurasian digital infrastructure greatly hinges upon the harmonious combination of strategic digital initiatives undertaken by major players such as the Digital Silk Road and the Asia Pacific Information Superhighway initiatives, and the EAEU Digital Agenda.
In conclusion, Tigran Sargsyan noted that international development institutions and regulators need to ensure fair and mutually beneficial cooperation by creating a cross-border space of trust to prevent unfair competition in digital infrastructure.
Cecilia C. Borromeo, President and CEO of the Land Bank of the Philippines, shared a success story of building digital infrastructure and the public sector’s contribution to its development.
“As of early 2023, there were 85 million Internet users in the Philippines, accounting for 73% of the country’s population. More than 84 million people use social media, positioning the Philippines as one of the top three Internet-using countries worldwide," she said.
However, Internet usage in the Philippines faces challenges such as low and slow connectivity due to the large number of users and competition among service providers. The high cost of Internet services is due to the need to maintain infrastructure across multiple islands and frequent typhoons that can disrupt communications.
The Philippine government has acknowledged the utmost importance of digitalisation and is undertaking efforts to enhance communications in underserved areas. Measures are also being implemented to promote competition among service providers and expedite the permitting process for infrastructure expansion.
Digitalisation brings forth ample opportunities for learning, training, and financial inclusivity. The total volume and value of transactions have increased significantly. The Central Bank of the Philippines plans to expand the utilisation of digital payments and increase the share of retail payments to 50%. In addition, it is planned to increase the percentage of adults using banking services to 70% of the population.
Cecilia C. Borromeo presented three initiatives aimed at bolstering financial inclusion and driving digital transformation in the country.
The banking infrastructure interacts with the Philippine statistical authorities to facilitate the registration of national IDs. This has enabled 8.35 million Filipinos to gain access to banking services through the DOBS digital platform.
Strategic collaborations across different sectors will foster transparency and accountability in transactions, while also enhancing operational efficiency and service delivery through online payment platforms.
To enhance accessibility to financial services, the government supports the QR Class programme and the Financial Centre to streamline payments and share social safety net programmes. The primary objective is to improve access to local financial services and provide transactional accounts to 10 million beneficiaries, enabling them to conduct banking transactions.
Shri Shaji K. V., Chairman of the National Bank for Agriculture and Rural Development (NABARD), shared his perspective on infrastructure development and public-private cooperation. He believes that public-private partnerships are instrumental in fostering the exchange of knowledge, resources, and technology.
NABARD started its journey by forging close collaborations with prominent software companies to jointly embark on the initial steps in public-private partnerships. This endeavour has influenced both the official economy and individual sectors.
Available data indicate that digital infrastructure has contributed one percent to India’s GDP growth. NABARD formulates specific strategies, adapts to emerging realities, and monitors changes, as a large part of India’s population is already actively using digital technology.
Infrastructure as a service is becoming a crucial component of operations in India. Specifically designed platforms are being implemented to democratise banking services and payment systems. A unique system available to Indian residents connects them to their bank accounts. Currently, approximately 6% of the country’s population has access to this system, which offers a central bank account for transfers. Furthermore, this system enables document storage and facilitates electronic transactions.
“The GMTrinity project represents an affordable blockchain-based digital infrastructure aimed at enhancing the well-being of the country and its people. Any community transactions can be done through digital platforms, creating new opportunities for all. This initiative reflects the Government of India's commitment to establishing an inclusive and modern digital infrastructure," said Mr. Shri Shaji K. V.
India is witnessing a significant surge in digital adoption, even among the economically disadvantaged. New technological solutions have been developed to address the issues faced by individuals and organisations alike. In rural areas, access to financial services is available to nearly 60% of the population. More than 95,000 businesses and regional banks are participating in the programme.
However, digital technology comes with its fair share of challenges. Its development requires political will and support within democratic systems, alongside significant investments to guarantee data privacy and security. Despite these challenges, NABARD has formulated a plan to expand digital infrastructure and enhance access to digital services. To accomplish these objectives, the organisation focuses on strengthening cybersecurity, ensuring regulatory compliance, establishing digital community centres, and promoting the acquisition of digital skills.
Adama Mariko, Secretary-General of Agence Française de Développement (AFD), concluded the panel by sharing valuable insights from his experience in implementing digital processes in the European region.
AFD acknowledges that digital technology serves as a key tool for sustainable urban development and has formulated a roadmap for the establishment of smart cities.
Despite the rapid advancements in technology, cities continue to grapple with economic and social challenges when it comes to adopting smart city concepts. Many cities and regions struggle with effectively integrating digital technology into their infrastructure and services.
This necessitates the implementation of appropriate policies that encompass infrastructure connectivity, software, applications, and other tools.
While local governments are actively exploring and embracing the opportunities presented by digital technologies, they also encounter challenges in effectively managing cities and addressing the interests of various stakeholders.
Territories often encounter diverse challenges when transitioning to digital technology. However, embracing digital technology can accelerate urban development and contribute to the achievement of еру United Nations’ Sustainable Development Goals. AFD has developed an educational tool to provide step-by-step support for local governments in developing digital projects and leadership, taking into account local needs and the utilisation of digital services. The digital transition necessitates robust political support, the digitalisation of interventions and citizen engagement, as well as new modes of communication among stakeholders. Gradually integrating ICT into skills promotes efficiency and accountability.
In the digital age, fostering interaction between the government, civil society, and the private sector is crucial for effective governance. Establishing communication channels and integrating ICT into skills are pivotal in enhancing processes and accountability. Regulating digital governance through appropriate frameworks and partnerships ensures balance and security in the use of digital tools and technologies. Controlling the utilisation of digital data is essential for mitigating economic, environmental, and social risks. The sustainable cities roadmap and projects such as the integration of smart cities in the Balkans exemplify a sustainable approach to addressing climate change and transparency. These endeavours enhance citizens’ access to public services and streamline the digital transition.
Digital technology improves urban transportation and helps to modernise cities. Collecting and analysing digital data optimises transport networks and improves services. AFD supports solutions that tackle issues such as traffic congestion, unprofitable transport services, and air pollution through the reorganisation of public transport routes and improved traffic management. In Scotland, for example, digital apps have simplified access to healthcare and improved the management of medical records. Public development banks play an important role in financing subnational infrastructure projects, while affordable digital solutions help build the capacity of local governments to foster change.
Adam Mariko concluded his presentation by underscoring the crucial role of development banks in financing subnational infrastructure.
“Any city, depending on its starting point, can establish goals aligned with its territory and needs. The lack of local finance should not be a hindrance, as we have simple digital solutions that can be easily used and tailored to make a significant impact. It is about building the capacity of local governments to encourage change,” he summarised.
Additional Information:
The Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) was established in 1976. ADFIAP is a major international business association comprising 90 member institutions in 39 countries, including non-regional members such as Canada, Germany, and France. Its mission is to promote sustainable economic, environmental, and social development and growth in the region.
The EDB has been a member of ADFIAP since 2022. The Bank’s charter capital totals US $7 billion. The EDB’s portfolio mainly consists of projects with an integration effect in transport infrastructure, digitalisation, green energy, agriculture, industry, and machinery. Its operations are guided by the UN Sustainable Development Goals and ESG principles.
The forum has brought together 240 delegates from major banks, investment funds, and development institutions from China, Turkey, Japan, India, the Philippines, New Zealand, the European Union, the U.S., Latin America, and the Middle East. It is hosted by the Eurasian Development Bank (EDB).
The event’s global communications partner is the Anadolu Agency, with media partners including BNE IntelliNews, Cronos Asia, FINANCEkaz, Kapital.kz, Kazakhstan today, Kursiv.media, LSM.kz, Tazabek, TRT, Delovoy Kazakhstan, the MIR TV channel, and the Khabar 24 TV channel.