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Digital inclusiveness: pushing for connectivity in Latin America

 

Eduardo Navarro (Chief Communications, Corporate Affairs, Brand and Sustainability Officer), Ignacio Corlazzoli (Respresentative of the Inter-American Development Bank for Europe and Israel) and Juan Jung (Head of Public policy in ASIET and cet.la coordinator) met in Casa de América’s amphitheater on the 23rd of April to tackle how to make digital inclusiveness in Latin América.

Antonio Pérez-Hernández, general director of Casa de América, opened the cicle of conferences reflecting on the need of bringing connectivity to Latin América, by tearing down the obstacles to improve people’s lives through providing the region with the opportunities associated with digitalization. In this sense, how can the public sector, the private sector and the development banks operating in the region help to bridge the digital gap? That was the first question posed by Natalia Chientarioli, editor-in-chief of the newspaper eldiario.es and moderator of the round table.

The speakers agreed that digital inclusiveness is one of the main challenges that Latin America is currently facing. Therefore, it should acquire a preeminent position in the policy agendas of the region.

Although better infrastructures and lower prices for the service have been implemented in the region, there is still a long way to go. Currently about 30% of Latin America’s population lacks access to Internet, as Eduardo Navarro explains:

 

 

Building upon this topic, Juan Jung stressed the need that public and private sectors develop cooperation models that allow network deployment, ensuring accessible and affordable services. New business models, with more flexible and creative approaches are needed.

Telefónica has gathered a significant amount of experience in this field by developing Internet Para Todos Perú, a project for making network deployment possible in remote areas of Perú, in cooperation with Facebook, CAF and IBD. This initiative strives to bring mobile bandwidth to populations where the deployment of conventional networks is unfeasible from an economic perspective. Internet Para Todos Perú is a different, flexible and creative business model for network deployment, achieving a more affordable service for people.

The existence of the digital gap in Latin América is closely linked with its productivity rates. It has been estimated that a 10% increase in bandwidth speed can lead to up to 1% increase in GDP.[1] Nonetheless, estimations currently show that unless changes are implemented the region’s economy will grow in the next 15 years half of what it did in the past 15 years.[2] This places the productivity of the countries of the region in the lowest thresholds of the OECD’s productivity rankings.

The problem’s origin lies in the factors that are negatively affecting the adoption of digitalization in Latin America, and thus productivity. In this sense, it is essential to create tax policies capable of addressing these challenges.

On the one hand, tax collection is essential to improve people’s quality of life and the offering of public services, such as healthcare, transport or communications. Thus, as Ignacio Corlazzoli stated, companies operating within the region must contribute in a fair and equative manner to local communities, creating a sustainable economy.

On the other hand, excessively taxing certain industries may hinder investment. The telecommunication industry in this sense is one of the most significant in Latin America. Juan Jung put this into perspective by indicating that fiscal pressure for the telecommunication industry is up to 51% greater compared to other industries.

 

 

Other than the challenges facing network deployment and adequate tax policies, other specific adoption barriers can be identified. This barriers widen the existing digital gap, and one of the main barriers is the lack of skills and adequate digital education in order to integrate digitalization both in the work and personal lives of users. In this sense, Spanish can be a useful tool to generate interesting content, fomenting the share of information and thus broadening commercial opportunities in the latinamerican market. 

Latin America is facing a thrilling opportunity to succeed. It is essential to ensure political leadership, public-private sector collaboration and dialogue with all the parties involved in this transformation process. “We cannot allow ourselves to miss this opportunity” was the final remark of the speakers.

 

Do not miss the full debate on  https://www.youtube.com/watch?v=n7uZcV10Gbs

 

The meeting “Digital Inclusiveness: pushing for connectivity in Latin America” is the starting point of the cycle of conferences “Towards a human-centric digitalization”, which strives to create a discussion forum about topics related to the digital transformation. Casa de América becomes the meeting point for experts, analysts and regulators to debate about how we can take advantage of all the new challenges brought by digitalization, while mitigating the risks generated.

 


[1] Katz, Raúl (2018). La digitalización: una clave para el futuro crecimiento de la productividad en América Latina.

[2] Cardena A., Remes J., Grosman N., De Oliveira A., Where will Latin America’s growth come from?, McKinsey&Company, 2017

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