5. Policy priorities

Box 1 continued

Singapore’s paradigm revolves around the expectation of accountability of entities that manage personal data (data controllers) to all stakeholders (customers, regulators, suppliers, business partners). The regulatory framework extends beyond compliance obligations to attempt to instill a permanent sense of urgency in organizations that use personal data. This is accomplished through requirements outlined in a series of frameworks and guidelines emphasizing data security, risk-based data management, trusted data sharing, transparent and human-centric artificial intelligence decisions, and proactive response in case of data breaches. Data collaborations among private and public entities holding big data are also fostered within sandbox environments in which data sets are anonymized and then pooled to be analyzed to gain novel insights that can be beneficial for public policy or commercial interests. Once the analysis is complete, the pooled data set is destroyed. Companies assessed as being good data stewards (through in-depth external audit procedures, which include on-site visits and interviews with employees) are awarded the Data Protection Trustmark seal.

Source: Cusolito et al. 2022, Box 7.1.

5. Policy priorities

In view of the scale effects of ICTs, combined with their general-purpose applicability, a bold policy approach is desirable to rapidly increase Internet access, reliability, and affordability to allow for widespread diffusion and use of digital payment systems. The Middle East and North Africa region could prioritize expansion of digital payments in addition to universal access to broadband. To reap the most rapid economic gains from digitalization, priority in access to digital broadband should be given to underserved populations. Although this chapter does not examine the costs of bringing digital infrastructure services to underserved populations within countries, existing evidence from high-income economies such as Australia and the United States indicates that reaching rural consumers can be more costly than reaching urban dwellers.

The analyses in this chapter suggest that improved governance in areas pertinent to digital technology adoption is important and should feature prominently among policy priorities for expanding the digital economy. In this regard, two priority reform areas are identified for increasing adoption of digital technologies to expand use of digital payments and hence expand the digital economy.

The first priority reform area is to build trust in government institutions and the financial system. Trust in use of digital payments appears to be a crucial factor. Further empirical analysis is needed to better understand the role of trust in the digital economy, yet it is valid to posit that insufficient trust underlies the persisting ubiquitous use of cash in the Middle East and North Africa. Even for online purchases, most people select “cash on delivery” as their payment option.

Trust could be increased by reforming e-commerce regulations, strengthening consumer protections in e-commerce transactions, and strengthening data governance and protect data privacy. Enabling people to become more familiar with using digital payments can also increase trust. Trust could be enhanced through use of government-to-person and other e-government mechanisms. Actions can be taken to widen use of digital payments by modernizing government programs, such as digitalizing payments of cash transfer programs and creating other e-government opportunities to use digital payments for public services. Evidence suggests that e-government options—such as digital transfer of social