Azerbaijan, RCC members discuss digital economy development

18 April 2019 14:51 (UTC+04:00)

By Leman Mammadova

Digitalization is an important component of the dynamics of the global economy’s development. Movement towards a digital economy is officially one of the priorities of a number of countries, both the developed and developing ones.

Digital development in the field of information technology is one of the priorities for Azerbaijan, and this process is of great interest both for the country and for the member states of the Regional Commonwealth in the field of Communications (RCC), said Elmir Velizade, Deputy Minister of Transport, Communications and High Technologies of Azerbaijan.

He made the remarks at the 6th meeting of the High-Level Working Group on the Development of the Information Society held in Baku on April 17.

The event was organized by RCC and the Ministry of Transport, Communications and High Technologies of Azerbaijan.

Velizade told reporters that discussing the outcomes of the recent World Summit Forum on Information Society, evaluation of digital development in countries as well as exchanging information on the activities of the countries in this area, evaluation of preparatory work on application of the 5th generation new mobile technology, cyber security issues and many issues related to the development of information societies were the key topics of the agenda.

The event participants also discussed the priority areas of the activities of the High-Level Working Group in 2019-2025, a draft economic development strategy for the CIS countries until 2030, implementation of the projects entitled "Concepts of cooperation among CIS member states in the field of digital development" and the "Plan of priority actions on its implementation".

They also spoke about challenges faced by telecom operators as part of the implementation of digital economy programs in RCC member states as well as cooperation of RCC participants and development of the joint approaches in Internet governance.

The high-level working group on the development of the information society is a collegial working body of the RCC Communications Administrations Heads Council. It serves the objectives of the development of the information society in the RCC member states.

The development of digital sales channels, internet and mobile banking in Azerbaijan is envisaged in the Strategic Road Map for the Development of Financial Services.

It is expected that in 2020, as a result of digitalization, Azerbaijan’s GDP will increase by 135 million manats. Digitalization will make it possible to increase the total income of banks by 20 percent in 2020.

International experts believe that the full use of non-cash settlements in Baku will lead to an increase of $1.9 billion in revenues, including in business income – by $1.4 billion, government’s revenues – by $400 million, and consumers’ income – by $100 million.

It is noteworthy that the velocity of circulation of cash is lower than that of electronic payments, the cash flow is less transparent, and therefore more adapted to the shadow economy. In addition, cash is subject to high risks of impairment from inflation and other economic fluctuations.

According to international studies, there are three major positive effects from an increase in the share of non-cash money in the economy:

Transparency - a group of effects associated with better accounting of monetary transactions, increasing tax collection, reducing the share of the shadow economy, reducing the operating costs of various businesses, etc.

Sustainability - systems with a high proportion of non-cash payments, according to a number of studies, are more resistant to fluctuations in the economic environment in the phases of recession.

Growth - a number of studies indicate the direct effect of increasing the share of non-cash payments on overall economic growth through increasing the speed of transactions and increasing their number by reducing the cost of each transaction.

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Leman Mammadova is AzerNews’ staff journalist, follow her on Twitter: @leman_888

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