This week,

  1. E-commerce news in Eurasia;
  2. New details on “Digital Kazakhstan” and Russian “Digital Economy”;
  3. The 3rd Internet Governance Forum in Georgia;
  4. Telecommunications updates in the region;
  5. IT in Armenia is on the rise;
  6. Belarus will complete informatization of eHealth in 2022.

1. Eurasian E-Commerce Review.

Digital Economy | Belarus | Russia | Kyrgyzstan

The National Bank of Belarus has developed a new bill that will accelerate the development of e-commerce in the country. Thus, online trading platforms will be able to use third-party delivery services. At the moment, trading platforms are required to maintain their own courier services, as the regulations state that only the seller can receive payments for the delivered goods. Expenses for courier services at large stores reach USD $1 million a year. Our experts note that in the past months the government has been consistently working to change the business climate in Belarus and to increase the attractiveness of e-commerce investment in Belarus.

On October 2, 2017, the Federal Antimonopoly Service (FAS) of the Russian Federation will discuss the introduction of VAT for foreign online retailers such as AliExpress, Amazon, and eBay. The meeting of the working group will be attended by representatives of the Ministry of Economic Development, the Ministry of Finance, the Federal Tax Service (FTS), the Federal Customs Service. The Association of Internet Trade Companies (AITC) that has been advocating the introduction of VAT for foreign retailers for several years initiated a corresponding proposal to FAS and other agencies. The so-called “tax on Google” has already come into force in Russia. This tax requires foreign Internet sellers of software and digital content to register with the FTS and pay 18% VAT. For foreign trade sites, AITC proposes to introduce a simplified calculation of VAT at a rate of 15.25% of the final price of the goods sold. According to AITC forecasts, the e-commerce market in Russia will grow by 25% and reach USD $17.3 billion, while the share of cross-border trade in the e-commerce will be 37% by the end of the year.

Earlier, we also reported that the Kyrgyz authorities are considering the possibility of imposing their analogue of the “tax on Google”. Head of the State Tax Service of Kyrgyzstan Oktyabr Abdykaimov said that the agency is considering an introduction of such tax for foreign IT companies engaged in e-commerce. At the same time, according to the head of the State Communication Committee of Kyrgyzstan Nurbek Abasanov, the introduction of a “tax on Google” will only lead to a rise in the cost of the Internet.

DR Comments: The intention to introduce a single tax for e-commerce is also voiced in the EU. The Ministers of Finance and Economy of the European Union member-states initiated the application of single taxation for online trade within the EU. It is expected that a decision on this matter will be taken before December 2017.

2. “Digital Kazakhstan” – to Be Finalized; the Russian “Digital Economy” – to Determine the Funding Mechanism.

Digital Economy | Kazakhstan | Russia

The Prime Minister of Kazakhstan Bakytzhan Sagintayev announced main directions of the “Digital Kazakhstan” program that should be improved. The main task set by the government is to estimate the volume of required investments and its impact on GDP. In addition, within two weeks, the Ministry of Education and Science should provide concrete proposals on the revision of the existing education system.

The government also expects the Ministry of Education and Science, the Ministry of Information and Communications and the Ministries of Investment and Development will prepare bills that would stimulate the use of new technologies. The Ministry of Information and Communications was instructed to develop an appropriate PR strategy for promoting digitalization in the society and to expand the concept of “Smart City” to all regional centers of the country. The Ministry will also develop a project on cooperation in the field of digitalization with Russia and Belarus by October 1, 2017.

All improvements of the program should be completed and submitted to the government for consideration by the end of November 2017.

In the meantime, the Russian Government is still discussing the mechanism for “Digital Economy” program funding. Deputy Prime Minister Arkady Dvorkovich noted that “while preparing the budget for the first reading, this has not been done yet since the discussions continue”.

3. GeoIGF-2017: What Did the Experts Discuss?

Digital Economy | Information Security | Digital Access | E-Governance | Georgia

The third Internet Governance Forum took place in Georgia. About 200 experts from different countries came to Tbilisi. The Forum has acquired the status of a regional event, which attracts experts from the post-Soviet states and Europe. Traditionally, the event was organized on the basis of the multi-stakeholder principle – it was attended by representatives of business, public and private sectors.

GeoIGF-2017 experts discussed topics relevant to the global ICT community. A lot of attention was paid to the Internet of Things (IoT). On the one hand, IoT makes life easier, on the other hand, it carries risks. One of them is the loss of data transmission control because IoT is a cloud ecosystem in which many devices simultaneously exchange data. Their autonomy does not allow a person to follow the flow of data.

Since Georgia has signed the Association Agreement (DCFTA), the issue of harmonization of the Georgian legislation with the European legislation became critical. Georgia has 5 years for bringing the laws in line.

With the growth of data exchange, the issue of data protection is becoming increasingly important. The problem of protecting personal information is complicated by the fact that it crosses two fundamental human rights – the right to information access and the right to privacy of personal data. The main task is to find a balance between them.

DR Comments: Earlier we reported that the right for Internet access was included in the constitution of Georgia.

4. The Telecommunications Review in Eurasia.

Digital Access | Belarus | Russia | Ukraine | Kyrgyzstan

The so-called “Big Four” of Russia’s mobile operators (MegaFon, VimpelCom, MTS, and Tele2) would like to test the 5G. This was announced by Deputy Head of Roskomnadzor Oleg Ivanov. It is planned to use the frequency ranges 3500 MHz and 2.5 GHz for the test. According to the “Digital Economy” program, 5G will appear in eight Russian cities by 2020.

Meanwhile, similarly to Ukraine’s initiative, Rossvyaz is preparing a project to regulate the turnover of mobile phones, which involves the creation of a database of IMEI phone codes, which can potentially be used to block stolen or illegal devices.

75% of the Ukrainian population has access to 3G. According to the president of Kyivstar Petr Chernyshov, providing operators with frequencies in the range of 900 MHz will increase 3G coverage of Ukraine to 98%. Chernyshov believes that the strategic task for the company is to make 3G accessible. At the same time, the main issue in the sphere of telecommunications in Ukraine remains the potential introduction of 4G.

The Belarusian mobile operator velcom announced plans to launch embedded SIMs use (eSIM). According to the technology, all information will be stored on the built-in subscriber identification module directly in the mobile device itself and downloaded remotely. Instead of changing SIM cards users will use different profiles of eSIMs. eSIMs will be used in various portable gadgets – smartwatches, fitness trackers and other various sensors. According to experts, the launch of eSIM will occur within the next 3-4 years.

Telecom operators submitted their proposals on cancellation of domestic roaming to the Federal Antimonopoly Service (FAS). This was reported by the deputy head of the department Anatoly Golomolzin. He also noted that the FAS will not extend the deadline for the implementation of the warning on domestic roaming cancellation, and tariffs for this service will be changed by the operators in the prescribed time. Earlier FAS decided that beginning December 15, tariffs for mobile communication services across the country should be unified. According to the regulator, differences in tariffs for mobile communication services in different regions of the country violate the law on the protection of competition. In addition, the existence of such differences has no economic or technological justification.

Kyrgyztelecom will open the second international telecommunications junction on the border with the Republic of Tajikistan by the end of 2017. The new hub will provide an emergency connection in the event of an accident on the networks of Kyrgyztelecom and will increase the capacity of the channel for Tajik operators.

5. IT in Armenia: The Main Trends and Development.

Digital Economy | Armenia

According to Bagrat Yengibaryan, director of the Enterprise Incubator Foundation (EIF), the turnover of ICT companies in Armenia exceeded USD $600 million. Speaking about the dynamics of qualitative growth, he also explained that the number of IT specialists in the country will soon exceed 15,000, that for a country with a population of 3 million is a very good indicator.

At the same time, according to the executive director of the company “Synopsys Armenia” Hovik Musaelyan, there is a problem of shortage of highly qualified personnel in Armenia. Armenia lacks about 3000 specialists in the IT industry and this is one of the barriers for a larger development of the industry.

6. eHealth in Belarus Will Emerge in 2022.

Digital Economy | Information Security | Digital Access | Belarus

The Ministry of Health will finish informatization of the healthcare by 2022. According to Deputy Minister Vyacheslav Shilo, the next task is to establish a unified network, with the help of which an integrated database of all medical facilities will be created. The other task is the massive introduction of digital signatures.

In Minsk, the capital of Belarus, 80-85% of medical institutions have already switched to electronic document management. After the transfer of all healthcare institutions to electronic document circulation is completed, the republic will create a single platform for data exchange, which will simplify the interaction of doctors and patients.

DR Comments: The government of Kazakhstan is also interested in the introduction of eHealth. The government announced that the Polish IT company MedApp is negotiating with the Ministry of Health on the introduction of CarnaLife, a pilot project of the self-diagnosis.

This digest is also available in Russian