MSG Regional E-Commerce Blueprint

At the initiative of the Melanesian Spearhead Group (MSG) Secretariat, support from the TradeCom II Programme Management Unit (TCII PMU) and funding from the European Union, International Economics Consulting Ltd. (IEC) prepared the MSG Regional E-commerce Blueprint. All of the MSG member states recognize the importance of E-commerce in boosting their economic growth. Through the Melanesian Free Trade Agreement (MFTA), they have strengthened their commitment to promote E-commerce and enhance cooperation on its development and use amongst state parties and other countries. In this light, all MSG countries have undergone National E-commerce Assessments between 2018 and 2020 whereas the MSG region undertook its assessment in 2020. On the 4th of November 2020, MSG Members deliberated on the recommendations of the draft MSG Sub-Regional Assessment Report and endorsed the draft MSG E-Commerce Assessment Report “in principle” and also endorsed the development of a draft Pacific E-commerce Strategy taking into account the specificities of the MFTA through a joint collaboration between the MSG Secretariat and the Pacific Island Forum States (PIFS).

The Melanesian Spearhead Group (MSG) is a political group consisting of four member countries, Fiji, Papua New Guinea (PNG), Solomon Islands, Vanuatu, and the Front de Libération Nationale Kanak et Socialiste (FLNKS), a pro-independence movement from New Caledonia. The region is characterized by geographic isolation, ecological fragility, limited resources, and a narrow economic base, representing hurdles to economic development. Nonetheless, these challenges can be mitigated through ICT advancement and in turn through E-commerce adoption and thus allow MSG states to enhance their connectivity and overcome the challenges linked to their remoteness from major international markets. E-Commerce has the potential of increasing international trade and improving the region’s ability to position itself into key global supply chains. Micro, small and medium enterprises (MSMEs) will also be able to access markets that would have otherwise required significant start-up capital and large investments. As such, ICT policies have been a key feature of regional strategic development plans. The Pacific Islands Information and Communication Technologies Policy and Strategic Plan 2002, and the Pacific Plan Digital Strategy 2005 were the first ICT-centred plans. Since then, there have been many other strategies and policies aimed at increasing ICT penetration in the region. Although an upward trend can be noted, not all countries in the region are progressing equally well. Recently, the COVID-19 pandemic has also highlighted the urgency to address the existing challenges in the region and the need to leverage the benefits and opportunities to be derived from E-commerce.

The MSG Regional E-Commerce Blueprint provides key recommendations on 1) E-commerce Policies and Strategies, 2) ICT Infrastructure and E-Commerce Support Services Ecosystem, 3) Trade Logistics and Trade Facilitation Systems 4) Payment Solutions for E-Commerce, 5) Legal and Regulatory Framework, 6) E-Commerce Development and 7) Access to Financing Initiatives for E-Commerce. Regarding the E-Commerce policies and Strategies, some of the recommendations that need to be prioritized by the region include, amongst others, the need to facilitate a sustained multi-stakeholder dialogue regarding the national ICT and e-commerce issues. This can be done by developing a single sector coordination mechanism based on institutional mandates on ICT and E-Commerce. In regard to improvements needed in access to finance, one of the high priority level recommendations included in the Blueprint requires that the countries in the MSG ensure that their regulatory environment is conducive and addresses the financial needs of the sector, especially that of MSMEs. This can be achieved, for instance by establishing a National Financial Inclusion Committee or a working group that will monitor and propose the adoption of solutions to increase access to banking and financing.

The MSG Secretariat will have a key role in identifying the opportunities that exist to implement the recommendations outlined in the Blueprint at the regional level and to promote peer-to-peer learning across its Members, building upon best practices. It should equally ensure that all efforts are well directed and target the region’s needs. While each MSG country should also work on their respective national E-commerce strategies, they should keep each other informed of any progress or impact that E-commerce is having upon the region. Thus, it has also been recommended that a comprehensive Monitoring and Evaluation Plan should also be considered and approved by MSG states so that they can effectively monitor, identify, and tackle any emerging challenges affecting the region or its individual member states.

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