Net profit

Trading activity on the internet – in contrast to information about product and services – is a relatively new development. The major impediment till recently was lack of a reliable and secure method for transfer of funds. The ethos of open, unrestricted access could not easily square with security necessary to protect buyers and sellers. However, with the advent of sophisticated encryption algorithms, ´firewalls´ and user-access monitoring and restrictions, many of these basic problems have been overcome. Globally, Internet-based commerce is poised to take off and the projected turnover is expected to exceed USD 100 billion by the end of 1998. The figure was no more than USD 100 million in 1995.   Thus, Internet commerce is increasing at a phenomenal rate and the main beneficiaries are small-scale businesses which could otherwise never hope to market their ware beyond their local district. The inherent advantage of the Internet is local presence combined with the potential for global impact. It enables small players to market their products directly to a global audience. Also, increasingly, a larger proportion of Internet-based trade will be transnational.

An example of the brave new world which is already here is in a transaction recently concluded by this writer. Then located in Crete, he was recently able to rent out his apartment in Edinburgh, Scotland, to a couple in New York, all with no more effort than posting a "for rent" message in an appropriate buletin board. The rest of the transaction was negotiated and settled via email exchanges, and the landlord and tenant never met in person. As with learning and exchange of information, the Internet renders virtual the whole arena of trade and commerce. The attraction of buying and selling on the Internet is its seamlessness – geographical location of either buyer or seller does not matter. For trading in ´soft´ goods such as magazines, tutorial courses and counselling/consultancy, the Internet alone is sufficient. But in order to exploit the full benefit of e-commerce, aspects other than the Net have to be modernised and updated.

For example, while an order may be taken on the Net, the exporting has to be made hassle-free and corruption-free and also easier. This means doing away with the tedious and non-cyber activity of form-filling and rubber-stamping. Only then will small- and medium-scale industries and traders be able to take full benefit from the Net.   Once ordered, the goods should be delivered efficiently and without hitches. At present it is normally easier to smuggle goods in or out of South Asian countries than to do so legitimately. Also, the quality and specification would have to live up to their description on the Internet site. The improvement in basic infrastructure to allow for fast, efficient delivery will also need to be in place before such fantastical notions can become reality.

Simplifying bureaucratic procedure alone will not suffice, though. Before a person sitting in New York can select and order a carpet from a handweavers´ co-operative in Pakistan, a lot of ground reality in South Asia will have to change. For the New Yorker, accessing the carpet weavers´ website should be just as quick and easy as visiting the website of the local pizza takeout. That means payment with credit cards or alternative modes of e-cash should be possible. This is something that the average South Asian bureaucrat would blanch at as a matter of routine.

The problem is that most of the policy-makers in our countries are hopelessly oblivious of the advantages of the Internet, generally because they have had little or no exposure to it. Even those who do have some experience usually lack the suppleness of mind and intellect to deal with the change in perception required to fully comprehend its impact on all aspects of human activity.   Imagine the loss of com­prehension that the average scribe must have felt when confronted with the idea of the printing press, and then the reader will understand why those in South Asia who control me­dia and communication resources fail to see the obvious advantages of the Internet. As in other arenas of society and economy, in all likeli­hood, then, the countries of the Sub-continent will continue to lag in the area of e-commerce. They will, therefore, make less e-cash.

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Himal Southasian