Digital debate

The GCC e-commerce conference last year was the first of its kind for the region; Eliot Beer looks at its conclusions and speaks to First Gulf Bank’s IT head about the issues.

  • E-Mail
By  Eliot Beer Published  December 22, 2005

|~|sheikhmohammed200.jpg|~|Sheikh Mohammed: This conference is occurring in a new era for the Arabic countries.|~|The inaugural Gulf Cooperation Council (GCC) Conference on e-Commerce was held in November last year in the UAE capital Abu Dhabi, under the patronage of His Highness General Sheikh Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai and the UAE Defence Minister. The aim was to bring together enterprises, technology providers, and governmental departments and bodies from throughout the GCC countries to align the region’s approach toward the growing e-commerce sector. According to figures from the UAE Ministry of Economy and Planning, e-commerce growth is around 15% in the Gulf and Arab region. Total e-commerce turnover in the region is around US$10 billion a year — about 1.5% of total GDP for the region — compared to a global average of 5% to 10%. Much of the drive for this conference seems to have come from the UAE, judging from Sheikh Mohammed’s patronage of the event, to the attendance of delegations from large Emirati institutions such as Etisalat, Tejari and a number of banks. Sheikh Mohammed also highlighted the country’s efforts to promote e-commerce in his keynote speech at the conference. “In the UAE we have recorded good figures for e-commerce, close to those in the developed countries, and we have supported e-commerce by spending US$2 billion,” he stated in his speech. “The Emirates’ IT market is growing at around 10% and it is expected to reach US$2.7 billion by the end of 2005. “This conference is occurring in a new era for the Arabic countries, where many of the Arab nations have joined the World Trade Organization. Work has begun on the Arabic Free Zone, and the GCC countries have the experience of the customs union. All these developments will support the importance of e-commerce, as well as business quality and flexibility and the speed of commercial deals.” Suresh Rajagopalan, senior vice president and head of IT at First Gulf Bank (FGB), one of the key sponsors of the conference, says this level of leadership from the UAE is natural to some extent, because of the country’s rapid technological and economic development in recent years, but adds that this will change as development increases elsewhere and a framework for e-commerce in the region is laid down. “I’d say this conference was a first step, and was well received by the delegates as such,” he says.” This is the first time this has happened in the region, so once it is done, once the laws are drafted, then we can start to move forward. But yes, it is inevitable to a certain extend that the UAE will be ahead at the moment, because of the economy and because of Sheikh Mohammed’s vision as well.” The key decision to come out of the conference was the establishment of the Gulf Committee for e-Commerce, which will be based in the UAE. According to the minutes of the concluding session, the committee will be responsible for drawing up common policies for e-commerce throughout the GCC countries, and will represent the region at conferences and other events throughout the world. Other important conclusions concerned the need for more education to promote e-commerce in the region, and the need to fund this education. There was also discussion of new laws to govern aspects of e-commerce — potentially based on existing laws in the European Union and the Organisation for Economic Cooperation and Development (OECD). The delegates also recognised the need for further encouragement of smaller enterprises to embrace e-commerce as a way of doing business. But, as the delegates recognised and Rajagopalan confirms, e-commerce initiatives must be undertaken in conjunction with organisations such as banks, telecoms companies and internet providers if they are to stand any chance of success. The FGB IT manager points out that it is easy for a company to make a commitment regarding e-commerce, but they are not solely responsible for its delivery. “It is one thing to say, for example, we guarantee to perform a transaction within two minutes, and another thing to actually do this, because there are multiple layers between our system and the customer — our network, our link to Etisalat, Etisalat’s network and the customer’s connection — and the same is true if we connect to another organisation as well.” Rajagopalan, who was also a speaker at the conference, says there are several key areas to focus on in order for e-commerce in the region to move ahead. One is the automation of organisations’ internal processes, which he claims is needed before enterprises can start to offer truly personalised services to their customers. Another is what Rajagopalan calls ‘straight-through’ processing — having systems in different organisations, such as banks or government departments, directly linked rather than exchanging files manually. “One very important task is building a legal framework across the GCC region — this would be an excellent step forward,” says Rajagopalan. “It’s vital that laws across the countries are all aligned towards the same goal, otherwise it becomes very hard for enterprises to operate in several different countries, or offer e-commerce services throughout the region, instead of in just one country. “Then there is education and learning — if you start an initiative in one country, it can be used across the region. And you need to make people aware that they can use government services, or apply for a visa, online — they don’t have to visit an office. The area of cross-border financial transactions is also very important to consider, from the point of view of money laundering and making them secure and eliminating the risk.” The FGB senior vice president says another major advantage will be the ability to notify customers about transactions instantly, such as by SMS text message, and so cut down on fraud. He says FGB, as with many other banks in the UAE, is working hard to prepare itself for e-commerce and to offer secure, useful services to its customers. The e-commerce conference is intended to be an annual event, of which last year’s was only the first. The conclusions drawn in November will form the foundation of a framework for governments and enterprises across the region to build up the level of e-commerce in their countries. If the level of goodwill and cooperative spirit remains as high in future years, this work should continue to bear fruit in the form of concrete proposals. But Rajagopalan says there are still important issues which need to be addressed before e-commerce becomes accepted in the same way it is in other parts of the world. One is e-commerce education, which he says is vital to do from an early age, rather than wait until people are older before explaining the concept. Rajagopalan concludes, “Many of the speakers concluded that there is a digital divide in the Middle East, and this has to go. The width of this divide is the key issue, and this has to be dealt with before e-commerce can succeed in the GCC region.”||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code