Harnessing Digitalisation for Greener Supply Chains in LDCs

Elizabeth Kirk

Digital technologies, such as blockchain, have the potential to revolutionise supply chains by enabling the tracing of product sustainability from their origin to consumers. For instance, these technologies can be used to trace the sustainability of a cotton T-shirt or the source of leather in shoes. This use of digital tracking aligns with the growing emphasis on environmental and social governance (ESG) standards.

Successful implementation of these technologies requires cooperation along the value chain. Collaboration between big brands, situated downstream and facing consumers, and upstream suppliers is essential. By working together, brands and suppliers can overcome challenges and ensure the effective adoption of digital tracking technologies, ultimately contributing to sustainable development.

Furthermore, it is important to recognise the role of these technological efforts in promoting exports of developing countries and Least Developed Countries (LDCs). By leveraging digital tracking technologies, developing nations can overcome trade barriers and harness opportunities for economic growth. A high-end supply chain example showcased the potential benefits that this approach could bring to developing countries and LDCs if scaled up.

It is worth noting that different value chains require different strategies and tools for digital tracking. For example, tracing cotton into a T-shirt necessitates different methods and technology compared to tracing leather into shoes due to variations in bulk and physical marking requirements. Therefore, tailored approaches must be adopted to accommodate the specific needs of different value chains.

Sustainable development encompasses three crucial elements: social, environmental, and economic. These aspects are interconnected and must be considered holistically to achieve genuine sustainable development. As a result, efforts towards sustainability should balance these elements and address the complex challenges that arise.

The textile industry is facing increasing levels of regulation. The EU, for instance, has multiple legislative acts under development that will impact textile companies. While these regulations aim to promote responsible consumption and production, they also pose challenges, particularly for countries in the global South. It is crucial for textile companies to adapt and comply with regulatory frameworks while navigating the complexities of the global market.

Cooperation along the value chain plays a vital role in addressing challenges and establishing long-lasting relationships. By working together, suppliers and brands can navigate the complexities of sustainability initiatives and mutually benefit from cooperation. Building long-term collaborations strengthens the value chain and supports the achievement of sustainability goals.

However, developing nations face unique challenges in accessing digital infrastructure and producing sustainably. Limited access to digital infrastructure and inadequate skills pose obstacles to harnessing the potential of digital tracking technologies. Additionally, there may be insufficient capacity to produce sustainably. Addressing these challenges requires concerted efforts to bridge the digital divide and build the necessary capacity for sustainable production.

In conclusion, digital technologies, particularly blockchain, can enhance supply chain transparency and traceability, ensuring products meet ESG standards. Cooperation along the value chain is essential for the successful implementation of these technologies and the promotion of sustainable development. Efforts should be made to overcome trade barriers and increase exports of developing countries and LDCs. Sustainable development should encompass social, environmental, and economic aspects, taking a holistic approach. The textile industry is experiencing increased regulation, and cooperation within the value chain is vital for adapting to these changes. Developing nations face challenges in accessing digital infrastructure and producing sustainably, highlighting the need for supportive measures.

Audience

During the discussions, several topics were explored, including trade barriers, inclusive growth, climate change mitigation, sustainability initiatives, digitalization, and the global supply chain. One important issue highlighted was the pricing disparity in the textile industry, particularly in developing countries. It was noted that in a $10 T-shirt sold in New York, the cotton produced in countries like Pakistan only earns the farmer a mere five cents. This pricing disparity was seen as a hindrance to inclusive growth and development in these countries.

The participants also discussed the need for developing countries to play an active role in climate change mitigation measures. It was argued that developing nations should take responsibility and actively engage in efforts to address climate change. However, concerns were raised about the recurring issue of reckless accrual of debt by the political class in these countries, even as they profess commitment to climate actions. Instances where the nation’s macroeconomic structure has been damaged due to reckless borrowing were pointed out, indicating the need for better financial management.

Affordability and accessibility of sustainable initiatives for mid-size and local brands emerged as a concern. One participant, an entrepreneur working with micro-small businesses, expressed worry about how these businesses would be able to afford and implement sustainable initiatives. Recognizing the competitive nature of the textile and leather goods markets, the discussion highlighted the potential impact of increasing environmental barriers on jobs and overall growth.

The tension between digitalization and green supply chains was discussed, with one attendee noting that these two concepts can sometimes be conflicting. While digitalization is seen as a driver of economic growth and profitability, there is a need to balance it with environmentally-friendly practices. This raises the question of how businesses can navigate this tension effectively and ensure both economic and environmental sustainability.

Understanding and implementing macro-level trade policies were also identified as a challenge for businesses. It was pointed out that macro-level trade talks often do not make sense to businessmen, and there is a need for policymakers to provide clearer explanations on how these policies can help in practical business implementation. By doing so, it would enable businesses to fully comprehend the benefits and opportunities available from these policies.

Furthermore, the importance of partnerships in driving work in less developed countries (LDCs) was highlighted. One attendee, a businessman, expressed an interest in finding partners to support initiatives in LDCs. This emphasis on partnerships aligns with the SDG 17 goal of fostering partnerships for the goals, indicating the recognition of the collaborative efforts required to achieve sustainable development.

The distribution of value along the global supply chain was identified as another significant issue. The discussions pointed out that this problem extends beyond the raw material sector and also affects the manufacturing sector. Participants highlighted the need to address and attribute value properly along the supply chain, ensuring that all stakeholders receive fair compensation for their contributions.

Lastly, the importance of focusing on the lower levels of the supply chain, such as farmers, when addressing digitalization and environmentally-friendly solutions, was emphasized. One participant shared their experience working in Ethiopia with tech startups and farmers and pointed out the challenges including digital literacy, connectivity, and convincing farmers of the worth of adopting green solutions.

In conclusion, the discussions covered a range of important topics related to trade, sustainability, and inclusive growth. It highlighted the need for fair pricing in the textile industry, active participation of developing countries in climate actions, affordability and accessibility of sustainable initiatives for local brands, finding the right balance between digitalization and green supply chains, addressing challenges in understanding and implementing macro-level trade policies, fostering partnerships in less developed countries, properly attributing value along the global supply chain, and focusing on farmers in the adoption of digitalization and environmentally-friendly solutions. Overall, these discussions shed light on the complexities and interconnectedness of these issues and the need for collaborative efforts to achieve sustainable development.

Yasmin Ismail

In a recent report by the International Telecommunication Union (ITU), it was revealed that the infrastructure and connectivity divide in Least Developed Countries (LDCs) is still widening. This presents a major barrier for these countries in their digital transformation efforts. However, there is hope for improvement, as there is an increasing political will to address this issue. This can be seen in the Doha Programme of Action, which mentions the term ‘digital’ 82 times, demonstrating a clear focus on digitalisation. In contrast, the Istanbul Program of Action only mentions it six times. This increased political will is considered an asset and provides opportunities for digitalisation in LDCs.

One of the key factors that can drive digital adoption in LDCs is their young population. The majority of the population in LDCs consists of young people who are more proficient in using digital tools. This presents an opportunity for LDCs to harness the potential of their youth and encourage widespread adoption of digital technologies.

Furthermore, some countries within the LDC group, particularly those in Group 1, have showcased significant progress in terms of ICT indicators. This indicates that despite the widening connectivity divide, there are success stories within LDCs that demonstrate the potential for digital adoption and advancement.

Another noteworthy observation is the existence of successful examples of digital technologies being utilised to promote greener supply chains in LDCs. For instance, Rwanda has partnered with a technology company that uses satellite imaging to monitor deforestation in coffee farms. Ethiopia has also leveraged online vehicle booking systems to minimise carbon emissions associated with incoming vessels and flights. These examples highlight the positive impact that digital technologies can have on promoting sustainability and responsible consumption and production in LDCs.

However, it is important to note that the adoption of green practices in LDCs requires support from developed countries. The implementation of green standards and protocols is increasing, but without the necessary aid, less developed regions may face difficulties in implementing these practices. Effective partnerships and cooperation are essential to transform barriers into effective needs and ensure the successful adoption of green practices in LDCs.

Furthermore, adopting green practices and standards now can lead to cost savings in the future for companies and countries. With increasing environmental awareness among future generations, there is likely to be a rush to adopt green regulations. Failing to comply with these regulations may result in higher costs. Therefore, companies and countries that prioritise the adoption of green practices now are better positioned for a forward-looking and optimised future.

However, the complexity and interdisciplinarity of tasks related to digital transformation and green practices pose a challenge in finding collaboration partners. These tasks often require multiple partners, making collaboration time-consuming and costly. Addressing this challenge and fostering effective cooperation is crucial to provide the necessary support to LDCs and ensure their successful digital transformation.

In conclusion, while the connectivity divide in LDCs remains a significant barrier, there are positive developments and opportunities for digitalisation. Political will, the young population, significant progress in digital adoption, and successful stories serve as blessings that can pave the way for the digital transformation of LDCs. Addressing the challenges and barriers through effective partnerships and cooperation, along with the adoption of green practices, will contribute to a more sustainable and inclusive future for LDCs.

Kemvichet Long

The Pentagon Strategy, implemented by Cambodia, focuses on transitioning the country into a green and digital innovative economy. This strategy is influenced by geo-economic fragmentations, environmental and climate change concerns, and the need to adapt to digital transformation. The strategy has several key elements, including sustainability and readiness for climate change.

One of the main focuses of the Pentagon Strategy is the development of key sectors for economic growth. This is done by incentivising investment in affordable clean energy, which is seen as crucial for fostering economic diversification and enhancing competitiveness. The strategy also emphasises the importance of developing high-value industries, such as through the transformation of commodity exports into high-value products and services to increase value addition.

Cambodia’s support for ASEAN’s vision for transitioning into a green community and digital innovation is also highlighted. This support is evident through the adoption of tools for green transition, such as the Framework for Circular Economy and Strategy for Carbon Neutrality. Additionally, Cambodia’s digital innovation efforts are backed by the Digital Economic Framework Agreement.

Brands are increasingly looking for reduced carbon footprints, which poses a burden on manufacturers in Cambodia. These manufacturers risk losing business if they fail to reduce their carbon footprints, putting pressure on them to meet these sustainability expectations. The garment industry, which employs over 800,000 people in Cambodia, is particularly affected by these demands.

Another important aspect highlighted in the summary is the need for sustainable digitalisation. While digitalisation brings numerous opportunities, it is essential to ensure that it is not a major consumer of non-renewable energy. The energy consumption of big servers used in digitalisation processes should be considered, and the source of this energy should be taken into account to ensure sustainability.

Lastly, good governance is emphasised as a crucial element in policy implementation. In the Pentagon strategy, good governance is placed at the centre, acknowledging the significance of effective governance in ensuring successful implementation and achieving desired outcomes.

In conclusion, the Pentagon Strategy implemented by Cambodia aims to transition the country into a green and digital innovative economy. It focuses on sustainability, readiness for climate change, and the development of key sectors for economic growth. The strategy emphasises the importance of green and digital economic sectors, high-value industries, and good governance. Additionally, brands’ demands for reduced carbon footprints and the need for sustainable digitalisation are key considerations in Cambodia’s economic development efforts.

Moderator

The potential of digitization in greening supply chains in Least Developed Countries (LDCs) is being discussed as a tool for promoting environmental sustainability and inclusive economic development. Digital technologies are believed to play a significant role in reducing the environmental impacts of supply chains in LDCs, promoting transparency, and driving digital adoption. The joint organization of a meeting by the Mission of Cambodia and the World Trade Organization (WTO) highlights the importance of this topic.

In addition to greening supply chains, digitization is seen as a means to explore other opportunities for environmental sustainability and economic development. There is a need to leverage digital technologies to address challenges and achieve inclusive sustainable growth. This can be done by creating an enabling environment for digital adoption in LDCs, fostering partnerships, and promoting transparency.

Promoting sustainable inclusive development is considered a crucial goal for LDCs in their efforts to overcome poverty. By focusing on inclusive development, LDCs can ensure that the benefits of economic growth are shared equitably among all segments of society. This aligns with the United Nations’ Sustainable Development Goals (SDGs) of reducing poverty and inequalities (SDG 1 and SDG 10).

The advancement of the digital economy was a key outcome of the recently held G20 Summit. This highlights the global recognition of the importance of digital technologies in driving economic growth and fostering innovation. The G20 Summit, which took place in India, was considered a successful event in terms of advancing the digital economy.

The Moderator has a strong positive stance towards the potential of digitization and the digital economy in fostering inclusive sustainable development. This stance is supported by the joint organization of the meeting by the Mission of Cambodia and the WTO, the discussion of the potential of digitization for greening supply chains in LDCs, and the mention of the recent G20 Summit and its focus on the digital economy.

In striking a balance between the transition to a green economy and meeting basic necessities, it is important to ensure that the transition does not hinder access to basic services, such as power, in countries of the global south. This is highlighted by the fact that many countries in the global south still have populations that lack access to power, which is a basic necessity. The transition to a green economy should consider the basic needs of the people and ensure that access to power is not compromised.

The weak implementation of laws and regulations is identified as a significant problem in developing countries. This weak implementation is often attributed to a number of factors, which hinder the effective enforcement of laws and regulations. This poses a challenge for achieving sustainable development and addressing various issues, including environmental sustainability and combating corruption.

Regional approaches are seen as a viable solution to deal with climate change. Climate issues are considered exogenous and are not confined to the boundaries of a single country but can have regional implications. The understanding developed by the ASEAN body, which emphasizes regional cooperation to tackle climate change, can serve as a model for other LDCs and developing nations.

Sustainability is recognized as a concept with multiple dimensions, encompassing the environment, the economy, and equity. Achieving sustainability requires a holistic approach that considers these dimensions and seeks to strike a balance between various interests and priorities.

The need to revise or reform industrial development strategies is identified as an important step to address the challenges and problems faced by industries in the present context. By reassessing and reshaping their industrial development strategies, countries can better adapt to the changing economic landscape and ensure sustainable and inclusive growth.

The United Nations Economic Commission for Europe (UNECE) focuses on using digital technologies, particularly blockchain, for traceability and compliance with environmental, social, and governance (ESG) standards in value chains. They have developed a system that utilizes blockchain to trace the cotton in a T-shirt, ensuring that consumers are informed of sustainable purchasing choices. This project is supported by the European Commission and highlights the potential of digital technologies for promoting sustainability and responsible consumption.

It is emphasized that digital and green initiatives should create development benefits for the global south and not become trade barriers. Elizabeth Kirk believes that these initiatives should aim to increase exports in developing countries and LDCs through digitization and sustainability. They should be designed in a way that promotes inclusive growth and reduces inequalities.

However, there is a concern that ESG could become a new trade barrier impacting developing and least developed countries. This suggests that there is a need to carefully navigate the potential conflicts between ESG requirements and the economic development goals of these countries. It is important to strike a balance between ESG compliance and the ability of these countries to grow their economies and reduce poverty.

Inclusive development is recognized as a critical aspect of the ESG debate. It is highlighted that ESG is not just about corporate social responsibility but also about creating better jobs and promoting inclusive growth. This emphasizes the need to ensure that ESG policies and practices consider the needs and aspirations of all segments of society.

There can be economic disparities in trade pricing, as illustrated by the example of a T-shirt sold for $10 in a high-end location like Fifth Avenue in New York, while the cotton farmer in Pakistan receives only five cents. This reveals a significant disparity in income distribution within the supply chain.

The moderator expresses concern about how new barriers like ESG could impact jobs, growth, and development if not properly addressed. This emphasizes the importance of considering the potential impacts and unintended consequences of ESG requirements to ensure that they do not hinder economic growth and development.

Balancing green and inclusive growth is deemed necessary to ensure that economic development is sustainable and benefits all members of society. It is recognized that while a focus on environmental sustainability is important, it should not come at the expense of inclusive economic growth, particularly in developing countries and LDCs.

Governance and corruption are identified as significant hurdles in achieving climate goals and promoting sustainable development. The implementation of climate change initiatives and sustainable practices is hindered by problems such as corruption and misused funds. These issues need to be addressed to ensure effective governance and the efficient utilization of resources.

The complexity of bringing sustainable initiatives to local and mid-sized brands is acknowledged. This involves challenges related to scalability and affordability. The need for support and assistance in overcoming these challenges is recognized to promote sustainable practices in a wide range of businesses.

Singapore is acknowledged as a role model for LDCs in terms of good governance. The country has been recognized for its minimal corruption, and the leadership of Lee Kuan Yew is cited as an example of effective governance. This illustrates the importance of good governance in achieving sustainable development.

Small businesses may face conflicts between greening the supply chain and digitization. The compatibility of these two initiatives is questioned, particularly in the context of small businesses where digitization is seen as a means to increase profits. This highlights the need to carefully balance environmental sustainability with the economic realities faced by small businesses.

There is a gap in understanding and application between high-level trade policies and their implementation in practical business operations. This poses challenges for businesses on the ground who may struggle to comprehend and implement trade-related policies. Efforts to simplify trade talk and translate policies into practical help for businesses are needed.

The textile sector is increasingly regulated, with multiple legislative acts under development in the European Union that will impact textiles and clothing companies. These regulations will cover various aspects, including green claims, labels, waste, and due diligence. This highlights the growing focus on sustainability and responsible consumption in the textile industry.

The need to assist countries in the global south to respond to these regulations is emphasized. Projects aimed at helping countries trace products and prove compliance with ESG standards are seen as crucial in ensuring that these countries can adapt to changing regulatory requirements.

The project for sustainable initiatives is recognized as not yet scalable or affordable. The cost of the final product resulting from the project is high, making it inaccessible for many consumers. This highlights the need to address scalability and affordability challenges to ensure the widespread adoption of sustainable practices.

The importance of cooperation along the value chain is emphasized. By mapping farms and small suppliers and fostering long-lasting relationships, suppliers can gain access to premium markets. This highlights the role of collaboration and partnerships in promoting sustainable practices and improving competitiveness.

The adoption of climate goals by big brands has implications for manufacturers in export countries such as Cambodia. Manufacturers may face losing orders if they cannot meet the carbon footprint reduction requirements set by these brands. This highlights the impact of global sustainability initiatives on industries and economies in developing countries.

It is emphasized that tackling climate goals and implementing sustainable practices requires collaboration and involvement from various stakeholders, including government and more developed partners. Manufacturers alone cannot address these challenges, and the collective effort of all stakeholders is needed to achieve meaningful change.

Digitization, while offering opportunities for SMEs to maximize their profits, must also be mindful of its environmental impact. Digital technologies consume a significant amount of energy, and it is important to ensure that the energy source used is green. This underscores the need for a holistic approach to digitization that considers both economic benefits and environmental sustainability.

The importance of good governance is highlighted as a core element of strategies to achieve peace, justice, and strong institutions. Good governance ensures effective implementation of policies and fosters trust and accountability in society. It is seen as essential for achieving sustainable development and addressing various challenges.

Effective cooperation is emphasized as necessary to support lesser developed countries (LDCs) in overcoming challenges. LDCs often face funding constraints and complex issues that require the support of more developed partners. Effective cooperation can ensure that LDCs receive the necessary support to implement necessary changes and achieve their development goals.

The conflictual nature of digitization and green standards and their adoption by the private sector is recognized. While they may present conflicting priorities or requirements, it is believed that a forward-looking perspective should be adopted to optimize future standards. The increasing awareness of green issues among future generations makes green standards more attractive and necessary.

The interdisciplinary and complex nature of the topics being discussed is acknowledged. This complexity requires the involvement of multiple partners and increases the time and cost involved in finding solutions. It highlights the need for collaborative approaches and a comprehensive understanding of the various dimensions and challenges involved.

Finding partners to support LDCs is identified as a challenge due to a lack of funding and the complexity of the issues they face. LDCs require support from developed partners to address their challenges and overcome barriers to sustainable development. The need for financial resources and appropriate expertise is crucial in helping LDCs achieve their development goals.

Moderator:
Good morning to all of you. Now that we have a whole panel with us, let me start with welcoming you all to this important meeting, which we are thankful for the Mission of Cambodia, the WTO, for having joined us to organize this, and particularly because the discussion is focused on LDCs, and therefore the partnership that we have with Cambodia and this is important, and we hope that this will be spread across the whole trading community, which includes others. The focus of this session is on the potential of digitalization as a tool for greening supply chains in LDCs. Specifically, this session explores the ways in which digital technologies can be leveraged to drive environmental sustainability, enhance efficiency, and foster inclusive sustainable economic development in LDCs. Now the last four words, the whole phrase is very loaded. It’s not simple as it appears to be. When we talk about sustainable inclusive development, we are looking at the totality of how do we help particularly the poor from getting out of their poverty, and this is an important goal for most LDCs, including developing countries like India, for example. Now what we hope to do is through interactive discussions, participants will address key questions such as how, number one, how digital technologies can be used to monitor and reduce environmental impacts, number two, how to leverage digital platforms for transparency and traceability, number three, how to overcome barriers to digital adoption and build capacities for effective integration of digitalization. 4. How to foster partnerships to support LDCs? Ultimately, through this workshop, participants from governments, IGOs, business and NGOs will gain insights and exchange ideas for a pathway to harness digitalization as a catalyst for achieving inclusive sustainability and LDCs. Let me also add, just the other day we had the G20 Summit in India, which was a very successful event. And one of the major agendas, one of the major outcomes of the particular summit was in terms of how do we spread digital economy gains around the world and not just in G20 countries. So I just wanted to flag this particular issue as being very important to this event as well. Now, we have an excellent panel of speakers with us. His Excellency Mr. Kembechet Long, who is the Director General for International Trade in the Ministry of Commerce in the Kingdom of Cambodia. Prior to his appointment as Director General for International Trade in July 2023, Mr. Long was the Ambassador and Permanent Representative of Cambodia to the WTO and international organizations in Geneva. In Geneva, Mr. Long held many leadership roles in all the IOs under his responsibility. He served as the Chairman of the Council for Trade and Services at the WTO in 2022. He was the President of the 84th Session of the Working Party on Programme Plan and Programme Performance at UNCTAD, and as Chairman of the 20th Session of the Working Group on Legal Development of the Madrid System for International Registration of Marks at WIPO. Among his notable achievements during his tenure, Mr. Long held led the development and implementation of the Cambodia Trade Integration Strategy 2010-2023, the e-commerce strategy, the GEO4 ECAM project and e-commerce marketplace called Cambodia Trade. With this, it is quite apparent that Mr. Long has extensive experience in trade and has also been involved with FTA negotiations with which Cambodia is connected. With that, over to you, Mr. Long, and we have, I think, about 8 to 10 minutes for your presentation.

Kemvichet Long:
Well, thank you very much, Mr. Moderator. Good morning to everyone. It was really flattered to hear about my own CV from someone else, and I was really absorbed in that. But in any case, I think we can start my presentation. So as the theme of this session is about green, so I thought I might go to the Internet and find a green theme for my presentation, and I managed to get one. So the presentation is about Cambodia’s actions and policies for greener supply chains. And I’ll be making this presentation by focusing on two areas. The first one is Cambodia’s policies for green economy transitions and economic diversification and competitive enhancement. And then I will also focus on some regional initiatives, which is under the framework of ASEAN. I’ll explain what ASEAN is in the later slide. But we also have some initiative for green future. So that would be the focus of my presentation. So let me start with some perspective on Cambodia, and it’s really fortunate that we hold these sessions just after the launch of our new strategy, social economic development strategy, what we call the Pentagon Strategy, which was just released in August of this year. So I thought I might as well, you know, bring what this strategy means to Cambodia in terms of transitions into a green and digital innovative economy. The taglines you may have seen on the slide is growth, employment, equity, efficiency, and sustainability. So this strategy will be implemented to support the achievement of Cambodia’s vision 2050, which is for Cambodia to become a high-income country by the year 2050. So I just want to highlight a number of factors before we go into details as to what green and green transitions and digital economy means in the strategy. But just want to highlight a few influencing factors for the formulation of this strategy. One is the geo-economic fragmentations and de-globalizations, which impact the flow of goods and services and investments. It also caused regional and global supply chain, production chain to undergo restructuring, you know, when we, in terms of, you know. country using the word French-shoring, near-shoring, these kind of things. And the second influencing factor is the digital transformation. As we all know, this digitalization has increased in its significant role in economic activities, businesses and governance. And the third is the environmental and climate change. There is also a need to tackling environmental issues and climate change, and there is a need to consider environmental issues and climate change issues within the scope of trade and economic development as well. So I just want to explain the illustrations of the strategy, as you may have seen on the screen here. It consists of a lot of pentagons, so I’ll go through what’s in pentagon number four and pentagon number two. So this is just a zoom-in into one of the pentagons of the pentagon strategy, which is pentagon four, which is on resilience, sustainable and inclusive development. So this pentagon, as you can see, has five sides, so each with its own strategic objective. So the five strategic objectives focusing on ensuring environmental sustainability and readiness for responding to climate change, as well as promotions of green economy. This would be the main focus of my presentation on the pentagon number four. But nonetheless, all the sides here from side number one and side number five are all very relevant to the topics at hand. And also there is an interconnection between all these sides within the Pentagon No. 4. So this strategic objective is very important, especially to respond to the challenges, that is environmental issues and climate change. It also gives a clear indication of where Cambodia is heading, that is to transition into a resilient, sustainable, and inclusive green economy. So as I said, I’ll be focusing a lot on side No. 5 of the Pentagon No. 5. So I highlight a few keywords here that are the actionable items that we will be implementing when we sort of like go through the implementation phase of this Pentagon strategy. So the first point is on the promotions of green development and circular economy, the incentivizing and encouraging investment in affordable clean energy, and as well as introduction of smart and green agricultural policy, innovative policies. So all these things are what we need to pursue once we go into the implementation phase of this strategy. The second key point in side No. 5 is the increasing use of ITs to promote environmental-friendly and climate-friendly practices is very important because, you know, as we look into the future, the rise of industrial 4.0 technologies are really crucial when we’re trying to tackle the climate change issues as well. The third point is the continue to strengthen laws and regulations. This is something that Cambodia at this time is still lacking in terms of legal and regulatory frameworks, especially in the, you know, the environment, the water and natural disasters, these kind of policies that we need to develop in the future to be able to mitigate all the issues that can come in the near future. And the fourth point is on the development of skills and technologies and knowledge to be able to, you know, to achieve our, you know, green objective. So that would be the main points inside number five. How many minutes do I have? Two minutes. Two minutes. Yeah, so I’ll just speed up my presentation. The next, well, I just want to also highlight a few things on Pentagon number two because when we’re talking of supply chains, not just about green supply chains, not about climate issues that we need to look at, but, you know, on trade, economic diversification and competitive enhancement as well. So that is why I brought this Pentagon number two into the presentation as well, especially on side number one, which is to develop key sectors and new sources of economic growth. So I’ll just speed up a little bit and just show you what side number one is all about. So first of all, we need to focus on micro, small and medium enterprises. We need to develop them, especially to give them backward linkages, especially to the largest enterprise and the largest exporters. So that’s very important, and especially we need them to use technologies as well. and digital tools to promote the inclusiveness development of MSMEs. And we also need to look into how we can attract more investments, especially in the high-value edited and green industries. So this will link to the next intervention that I will give in the next part of the session, which is on how we can attract more investment on a number of these sectors. And continue to promote tourism sectors, which is one of the largest sectors in Cambodia. We also gain a lot of growth through the tourism sector, so this is still a very important sector, but we need to transform it into green, clean, and smart tourism. And the fourth point on the industrial development, which is something that we really need to speed up as well in terms of transforming the country in the near future, because right now we are depending a lot on commodity exports, which, as you know, doesn’t really have a lot of values. So we’d like to process what we have into high-value products and services, so that we can further export. So just some perspective on the regional approach. As I said, I just want to give a very brief information what ASEAN is. As you know, we are the association of 10 member states in Southeast Asia. We have Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, and Timor-Leste will soon become the 11th member of ASEAN. In terms of the number of people we have, it’s 680. million people and, you know, when we consider ASEAN as a regional bloc, we are the third largest economy in Asia and the fifth largest in the world, so there’s plenty of room to grow in ASEAN, but, you know, in terms of transitioning into, you know, a greener and digital innovative community, we’ll be working along the lines of these core values, these core visions that ASEAN has is to, you know, to make sure that ASEAN transition into a green community and also we have to look at how digital innovations can also, you know, help these transitions. So the tools that we have are highlighted in this slide here, the tool for green transition is we have the ASEAN Framework for Circular Economy for the ASEAN economic community and the second tool is the ASEAN Strategy for Carbon Neutrality. These are very recent tools that ASEAN has adopted, especially recently in the ASEAN Summit that we just concluded last week, yeah. And for digital innovations, we have the Digital Economic Framework Agreement and the Bandha Sri… Do you like the microphone? Yeah, yeah. So, yeah. You went over. So, yeah, sure, sure. I’ll just skip these slides because, you know, all the information can be found here, it’s easy to understand. I just want to conclude a little bit to end my presentation here. I just want to say that, you know, at least in our national strategy, we are seeing the interlinkages between economic growth, supply chains, and environmental and climate change issue. These two issues, these two areas, have always been discussed or being considered in silos before, separately. There have never been a strategy that looked to solve these two issues collectively. So at least for us, this is very new. And yeah, I mean, we have to look, see how we can implement the Pentagon strategy to achieve what we have, the vision 2050 for us.

Moderator:
Thank you very much. Thank you very much, Mr. Long. Just a couple of immediate reactions. One thing which wasn’t mentioned in terms of resilience was the arrival of pandemics. This has hit the whole world, and you don’t know what is likely to happen in the future. So there’s something which you need to keep in mind in terms of inclusive development. We’ve been well-defined. As I said in my opening remarks, a lot of people still don’t understand the meaning of the word inclusive development. We can talk about green economy at the same time. We still have to look at the basic needs of people. So in many countries, you don’t have power reaching the people. It doesn’t mean that you stop generating and distributing power, even though it may have an impact on the environment and economy. I mean, so there has to be some balance. That is where it is. We have to understand these things. Now, strengthening laws, Mr. Long, is something which was not mentioned by you was what we find in the global south is the implementation problems. We can talk about strengthening laws, but the implementation is often weak for several reasons, which I think we need to. Finally, on the climate issue, what The discussion that we had, the presentation on the regional strategies seems very sensible because climate is an exogenous factor also. It’s not, you know, confined, it is not generated, problems are not generated within the boundaries of the country but from around the region as well. And therefore, the understanding which has been developed by the ASEAN body is, I think, very sensible for other LDCs also to emulate, there has to be regional approaches in particularly dealing with climate issues. And the same thing then applies to your industrial development strategy as well, that also has to be reformed or revised to deal with the kind of problem that we have. Now, sustainability is something which again has multiple dimensions. It has not only environment but also economy as well as, you know, as well as equity. So we’ll have to keep this in mind that it is not only, and therefore, how do we balance all these factors is something which I would like to hear from Elizabeth Kirk, our next speaker. Elizabeth Kirk is the Director of the Economic Cooperation and Trade Division at the UNECE and heads the division’s work across its four sections, Cooperation and Partnerships, Economic Policy Development, Market Access and Trade Facilitation, as well as the cross-cutting themes on Circular Economy and Digitalization. In addition to servicing the organization’s trade-related normative machinery, the division supports UNECE’s United Nations Commission for Europe, 17 program countries in Central Asia, Southern Caucasus, Western Balkan and Eastern Europe through capacity building and technical assistance. Prior to that, Elizabeth acted as Chief of the Section on International Investment Agreements in the UNCTAD Division of Investment and Enterprises, where she led these sections, activities and contributions to the annual World Investment Report. Elizabeth holds a Master’s Degree from the World Trade Institute in Bern and both a degree in International Management and a degree in Law from the Karl Franzens University in Graz, Austria. We’ve had long associations, particularly from the UNCTAD, so welcome, Lizzie. Over to you, eight to ten minutes.

Elizabeth Kirk:
Excellent. Pradeep, you have me with timekeeping as well. I’m considering it to be a ruthless statement. Let’s see how we go for that. We must have a Q&A. Absolutely. People must respond. We must have time for that. Quite often we end up, you know, only the speaker speaking and the audience then going home. So let me see how I can frame that, but still I would love to start by saying it’s a great pleasure for me to be here and Pradeep, it’s a great pleasure for me to be part of Karl’s activities and what we have done in the past was always very, very fruitful. And DG Long, congratulations to your speech because I felt what you showed us with Cambodia’s development strategy and the Pentagon, there are so many issues that resonate so well with the United Nations SDGs. So I could almost place my SDG icons in your Pentagon and I think that’s also beautiful to see how that works together. No, that was excellent. Now, Pradeep, I think that the panel you chose, or the topic, Harnessing Digitalization for Green Supply Chains in LDCs, is a really good title because Here in the public forum and in UNECE, we talk a lot about green and digital. But what we really need to talk about is how to ensure that green and digital creates development benefits for countries in the global south, for the poor countries, and that green and digital don’t turn into barriers to trade. So I think that’s, for me, a first really, really important message. And the question might be a little bit, how does UNECE come in here? Because as you mentioned, Pradeep, UNECE is the United Nations Economic Commission for Europe, so we have Europe in our title. We are not the European Commission, yeah, Economic Commission for Europe in the United Nations, like ESCAP, for example, in Asia. And at the same time, we have certain activities, best practices that are also applicable to the global south. Now, let me flag a few of them. And in between, I invite the audience to scan the QR code so that you can also see already one of our specific activities. In the division we work, as Pradeep mentioned, on innovation, investment, and trade. And when we talk digital and green, I think it’s really important to also mention innovation and investment. And you had it in the Pentagon as well. But today, we zoom into trade. So what have we been doing in trade? In trade, we have tried to use digital technologies to trace the environmental and social governance aspects along value chains so that products can be documented to be complying with ESG standards, and that consumers can sort of like purchase, make an informed purchasing choice. And just to give you a concrete example, we have been able to use blockchain to trace, for example, a T-shirt, the cotton in the T-shirt. This is regenerative cotton produced in Turkey. And it can be, with digital technologies, traced onto the T-shirt so that consumers would decide to pay a lot of money for a Stella McCartney T-shirt, but they can actually be sure that it is a green T-shirt. And we’ve also been doing that with other countries in the UNECE region. but also with LDCs, and I’m happy to share with you an example of Cambodia. So if we go to the next slide, what is the idea behind this? The idea is, in our sustainability pledge, that we use digital technologies, so that could be blockchain, that could be Internet of Things, artificial intelligence, physical markers, that they present really a potential for green supply chains. And we decided at the beginning of our work to focus on textiles and footwear, because these are really two hotspot sectors in terms of sustainability, and these are also sectors that matter a lot for export potential from developing countries and LDCs. Within textiles and footwear, we really zoomed into cotton and leather at the beginning. And again, cotton, I think, is an important export commodity. We know it has huge environmental implications in terms of water use, but we also know it’s very important, let’s just think about the cotton for the LDCs how important that sector is. Now, what did we do in UNECE? We picked up on the idea that, on the one hand, consumers in developed countries in northern markets, like in the European market, they’re willing to pay a price premium for sustainable products, and we picked up on the idea that fashion companies, textile companies, they need to have the right tools to manage and document what is happening along their supply chains. And, of course, all of this is against the background of a very heavy regulatory activity, be it in the EU, you think about the due diligence regulation, you have a lot of tightening of environmental and supply chain regulations here. Now, what we did in UNECE, we developed a so-called sustainability pledge that has a policy recommendation and information exchange standard, business requirements specification, and tested it in a blockchain environment. And we started testing the blockchain in 2020, and by now we have actually managed to have close to 20 use cases. in 95 partner countries around 23 companies. And I should say that this work is only possible thanks to the support of the European Commission, DG INPA, and we do this in cooperation with ITC, and it’s lovely to have ITC colleagues in the room as well. Now, if we maybe move to a next slide here to give you an example, or yeah, we trace sort of like sneakers and T-shirts and pajamas. And as I already said, like we looked, I brought with me some of the examples we did together with Uzbekistan, which is one of UNECE’s program countries. It’s not an LDC. It’s a landlocked, double-landlocked country. But I think some of the experience can still be quite instructive. So what we usually start with is mapping the value chain. So we map it really from the field through sort of the growing of the cotton, the harvesting, the ginning and spinning, and we document the value chain. So you can see on the slide the value chain. And then we identify on which stages of the value chain what type of information needs to be shared and will ultimately be uploaded on the blockchain. So here to say that we are just testing the blockchain, the system we have developed can also operate in other digital environments. Now, what I’m saying also is I talk about uploading information. So what does this mean? That means in UNECE, we just developed the information exchange standard. So some classification of how information needs to flow along the value chain. We don’t really work on the standardization itself. Here we work with well-established standards such as Better Cotton or GOTS or the Ecotech standard. So it’s very important to see this interplay between standardization agencies and the information that is being uploaded on the blockchain. So this is one example. As I said, blockchain is quite useful because it allows for a decentralized access to information and it also allows to have this… this information available in real time. Now, very briefly, Pradeep, you’re looking at me in terms of timing already. No, no, no. No? Okay. I’m looking at you, but I’m fascinated by your… Wonderful. Thank you. So what exactly happens here? At the beginning, we map sort of also the companies engaged in the sector, and we focus in on many of the big brands that actually have the ability, the money, the knowledge, to kind of like work on this traceability. And we formulate with them the sustainability claim. So step one is formulating the sustainability claim. Step two is then figuring out what type of data does the company need, and what type of evidence can be given. And step three is then uploading in the blockchain. Now, if we think about this, all of this wouldn’t work without cooperation. So if we take a big brand, if we take Hugo Boss, Stella McCartney, Adidas, they are sort of like at the downstream part of the value chain. They face the consumers, but they are ultimately dependent on what the suppliers on the upstream part can do. So in our work, along the value chain, this cooperation between the producing countries, the producing companies, and the sort of consumer side big brands is a very, very important aspect. And I would like to flag that right here very, very strongly. So this is one case, Indorama case. Let me go to the next slide, which I think is the Samarkand blockchain case. So we still stay in Uzbekistan, but I’d like to show this, because in the Samarkand blockchain, we really zoomed into the environmental and social aspects. The first one, the Indorama one, is very much on the chemical side, which is important in the textile sector. So here, we look a little bit at the issues around labor and also environmental additions in addition to chemicals. And we know that for Uzbekistan, that’s an important issue. So here, we have managed to do everything until the spinning. So here, we have a yarn. We have a yarn that can be traced to be ecologically and socially sustainable. But what still needs to happen is that we need to find somebody who actually purchases this yarn and turns it into the T-shirt that can ultimately be sold. And in a perfect world, the turning of the yarn into the T-shirt would actually happen in Uzbekistan so that you have the value added created in the country. To just run you through one other example, Yasmin, that’s for you because we are looking on the next slide to Egypt, the Firmar use case is tracing leather from Egypt to sneakers – sorry, we are still with block, with cotton – is tracing cotton from Egypt into socks in Italy. So here, what is the challenge? We are trying to use second-use cotton and we need to ensure that cotton isn’t blended in the socks that are then being sold by an Italian supplier. And if I’m not mistaken, we also have on the next slide maybe – now, this is a global one – but I wanted to show the one about Uganda because we did indeed also work with Uganda, one of the LDCs. This one is about tracing leather for Adidas from Brazil, so you can see again we have a big brand at the end and we are also working with major other economies in the global south. What is important here is that each value chain is different. It’s very different whether we trace cotton into a T-shirt or we trace leather into shoes or into handbags. And if you think about the technology behind, it’s also very different because cotton is big bulk. How do you trace it? You maybe need to even spray DNA markers on it so that ultimately you still see where is the cotton yarn part of the sustainable cotton. Whilst in leather, we have realized that the physical marking is maybe less important, so we didn’t do it on the leather case. Now, where does this all bring us to close here with the examples? I think it’s a very interesting project. I’m hugely proud of what we are doing in UNEC. again, proudly showing our t-shirts, but what is important is that this can be scaled up because at the moment it’s a very high-end supply chain. And what is very important is that we use it all for really empowering developing countries and LDCs to increase their exports through digitalization and through sustainability, and that we sort of overcome any trade barriers that might be arising in this context. So I’m gonna stop it here. I’m happy to talk more about digitalization, interoperability, or anything subsequently. Thank you, Pradeep.

Moderator:
Excellent. Anyway, since both of you took 15 minutes, I can’t be- Microphone for the speaker, please. Discriminating against Yasmin. You’re allowed to get 15 minutes. Wait, sorry. Having said that, I have great pleasure in introducing my colleague, Yasmin Ismail. Sorry, Yasmin Ismail. She’s program officer at Cuts International Geneva. We are a think tank catalyzing the pro-equity voices of the global south in trade and development debates in Geneva, and this is something which I need to reflect on your presentation, but I’ll come back to that later. Yasmin leads Cuts research and technical assistance projects on e-commerce and the digital economy. She also advances Cuts’ work on the trade and environmental linkages. Research and publications on trade and development of topics also include regional trade agreements, WTO institutional reform, trade and gender, and trade and climate change in the context of the WTO and the UNFCCC. Yasmin holds two master’s degrees in economics of development and in international and European law from the University of Grenoble, Grenoble Alps in France. Prior to joining Cuts, Yasmin served as project manager at the Global Partners Governance Limited, a UK-based international consultancy on political institutional reform and governance. She has also served as International Cooperation Specialist at the Egyptian Cabinet Information and Decision Support Center. Over to you Yasmeen.

Yasmin Ismail:
Thank you so much, Pradeep. I mean, this day is historic for me because I think this is the first time I’m on a panel with you, Pradeep. So it’s a pleasure and it’s also a great honor. It’s my second time to be a panelist with His Excellency Long. Thank you so much for being with us, Your Excellency, and congratulations on your new post. And Elizabeth, always a pleasure to have you and be together here. So sorry for being late today. And yeah, I want to start my presentation with, I was thinking, opportunities, barriers, and success stories for digitalization for greener supply chains and LDCs. So I’m going to start with the barriers and I’m going to explain why. So the most important barrier that everyone knows about already is the infrastructure and connectivity divide, which is, according to the latest report by the ITU, is still widening. Despite all the efforts that are being put with us, despite all the calls in previous years for decades, it is still widening in LDCs and we need to do something about it. Whether the international bandwidth usage per Internet user or access to the Internet, it is still widening. Next slide, please. A lot can, I can go along with also the barriers. And it always starts with lack of, lack of digital skills, lack of infrastructure, high cost of digital solutions, lack of enabling policies and incentives. Lack of finances and investments. I can go, I mean, the list can go on and on. But between myself, while doing this slide, I decided that this is the last time I will do a slide like this. This is the last time I will put a slide on barriers of LDCs. I will no longer talk about barriers because we’ve been talking about them for years and years. I will now count my blessings, and this is what my yoga instructor told me I need to do. Next slide, please. All right, first blessing, some opportunities here. I can see that the political will is emphasizing and emphasizing, and I think from the presentation of Your Excellency, it shows very well, whether at the national level, at the regional level, it is maximizing in LDCs and hopefully also from developed partners. And this is what is showing from the Doha Program of Action. So I’ve done a little comparison between, I just searched, searched the word digital in the Istanbul Program of Action back in 2010, and in the Doha Program of Action in 2022, and I found a great, huge difference. Back in 2010, the program included only six mention of the word digital. And in 2022, now, the program includes 82 mention of the word digital, and it is mainstreamed across the objectives. So now we see how digital is being crucial. for all sectors. It is not only ICT, it is not only about research and innovation, it’s about all sectors. It’s about all objectives. And we see this political wind being transformed into strategies and policies that are being planned at the national level, at the regional level, across the continent. Next, please. I run another research of the word sustainable. And also, the difference, not so flagrant, but it is still significant, 113 times in the Istanbul one, 175 times in the Doha program. Sustainability is also becoming a core objective. It is becoming mainstreamed across the program. And we are seeing this also translated now into strategies and policies. So the political will is there. And it’s one of the key blessings that we hope will make the change that we are hoping for. Next slide, please. Another blessing is the fact that LDC is a population of young people. And I’m sure every one of us in this room knows how much Generation Z and Generation Alpha are more apt to deal with digital than other previous generations. Yesterday I was in another session and I told a very interesting story. My son was able to break the password of my phone at the age of three years old. So we need to empower young population and we need to count them as a blessing. It can be a challenge. Every blessing can be a challenge. We have sons and daughters, and we know that they are our blessings, but they can be a challenge as well. So we have a young population, and the challenge is how to make use and how to empower them for a digital and green economy, and how to enroll them more in a digital-oriented education, and how to ensure they will have jobs in the next future. Another opportunity is the fact that it’s not that gloomy. I mean, LDCs are making significant progress as well. According to the ITU, also, recent report, we can show progress, show miles that have been taken by countries. Cambodia is one of them in Group 1. I did a sort of a visualization of this information in the report. They’ve been trying to see the key ICT indicators by groups of similar LDCs versus the world average across the different indicators, share of individuals using the Internet, gender equality, which we can see the progress is not very good, share of individuals owning mobile phones. We can see that countries in Group 1 have taken a lot of steps. They’ve done a very good job so far. So Group 2 is also advancing on other elements. Same thing for Group 3, and they are catching up. What I want to say is it’s not that gloomy for LDCs, and we shouldn’t be pessimistic, and we shouldn’t just focus on barriers, and this is the last time, really, that I will put barriers in my slides. The thing is, we need to foster mutual transfer of best practices between those countries. Collaborate more, learn more from each other, how each group was able to make the transition in those indicators. Next slide please. LDCs are also not a single group in terms of their progress at the economic level, not only digital. Some countries are moving forward so fast, others are muddling through and those falling behind is a mix really in terms of their digital abilities. Just foster collaboration and best practices and mutual learning between the whole group and we will see I’m sure a lot of difference. Next slide please. Another opportunity is there are a lot of success stories in terms of adopting digital technologies for greener supply chains in LDCs. Cambodia is one of them for sure. We saw in His Excellency’s slides, Uganda was one example from Elizabeth, but I can tell you there is a lot more and I thank so much my colleague Hiral who I told her I need to show that LDCs have best practices, success stories in terms of adopting the digital technologies to green their supply chains and she helped me a lot with this research. Thank you Hiral. So the first one for example was Rwanda. She partnered with, Rwanda the country, partnered with a technology company that used satellite imaging to derive data on coffee farms and this information, this data was used in order to mount deforestation in the supply chain. It’s a success story. It’s an interest. We see that LDCs want and understand the importance of green objectives. Next slide please. I’ll finish soon. And the list can go on and on. Other success stories, Kiribati, Rwanda, Bangladesh, Ethiopia, and in different sectors, whether it be agriculture by empowering farmers, giving them platforms in order to know what’s the weather today and how to manage their crops, whether it be Bangladesh, who in the textile industry adopted monitors and sensors for their energy consumption, whether Rwanda, with Zipline, and this is very interesting, they deliver medical supplies by drone in order to minimize pollution, particularly out of pollution. Kiribati, the government adopted an online system to process documents for incoming vessels and flights. I mean, the success stories can come on and on. Those countries are capable 100%. They just need the support like Elizabeth has provided, and they just need to be empowered and to collaborate between them and their developed partners. And thank you so much.

Moderator:
Thank you. Thank you, Yasmin. You did well. Oh, thank you. And I’m so glad, being my colleague, very disciplined. Having said that, let me go back to a point which you made about ESG. We suspect, Yasmin may bear with me, that ESG is now likely to become a trade barrier. How do we deal with that, and particularly impacting developing and these developed countries? Number one. Number two is our own work in the area of ESG, which we have seen for a long time, and which relates to inclusive development. is the social aspect of it. Yes. The trouble is that the ESG debate has been overtaken by climate change. And in fact, on a little aside, what we are not talking about in terms of environmental issues which impact all LDCs is biodiversity as well. But let me come back to this whole ESG thing, particularly the social issues, that you are not, it is not corporate social responsibility alone, which is what a lot of people think it is. It is about good and better jobs. Inclusive growth is what then leads to good and better jobs. And therefore, when we are looking at many of these, you put up a very good slide and very good example that you took. The only problem with many of these analytical chains is they don’t look at the developmental issues which impact human beings or the citizens of that particular region. I’ll give you an example, many years ago, which I studied. In a T-shirt which is sold for $10 in the Fifth Avenue in New York, of which the cotton which is produced in Pakistan, the farmer gets only five cents, five cents of that $10. Look at the kind of disparity in terms of the income support, and that then impacts on inclusive growth as well as the development of the country as such. There are these kind of economic barriers, I would say, not necessarily trade barriers, that the pricing is never very… and on this also there’s been a lot of work which has been done. And then that would then impact with a lot of discussion that we’ve had so far, the kind of examples that you’ve taken and so on. Pricing is a very critical issue, whether the LDC producer is getting the right kind of price or not. That producer has to compete, again, with a very large number of suppliers. You took examples of textiles and leather goods, shoes, etc., etc. Highly competitive market and more and more barriers coming up on the grounds of environment which you spoke about, without understanding the implications on jobs and growth or development as such. So, where do we draw a line in order to ensure that whatever is happening, let it be green, but it has to be inclusive as well. Where do we draw a balance between both? You know, will it be only green because of what you pointed out that consumers can pay? Consumers are paying. I’ll give you the example of the study in Pakistan which was done. Ten dollars for a T-shirt, the Pakistani cotton farmer gets only five cents off that ten dollars T-shirt. And the same thing in Cambodia also. You find there are a lot of goods which are produced and which the producer in the developing world gets a very low price for it, with the result that it then impacts development and this is a history of the last hundred years that we can see. And that continues. So, therefore, the fear is, quite often which we have not spoken about, is that these are going to become new barriers to trade. And how do we deal with that? With that, let me open the floor for any questions. We have another 15 minutes? We have until 12, I imagine. Yes. A good 20 minutes. 20 minutes. Yes. Good. The gentlemen in the back and then you.

Audience:
So, my name is Emmanuel Wachando from the Institute of Economic Affairs, think tank in Kenya. So, thank you so much for your presentation. Now, my question is this, now, coming from a perspective where it’s important for developing countries and even developing country civil society institutions such as ours to take responsibility and also be aggressive in terms of what we talk about, so not so aggressive in the sense that there is, many of us come to these forums and we talk about, you know, we don’t want this or that policy, you know, this is going to inflict too much of a burden, but I think, so, that we should also take responsibility and say this is what we should do and this is where we should put our skin in the game. So, my question is about putting skin in the game in terms of governance. So, there’s a lot of positive things we want to do for, so for LDCs to contribute to make efforts towards meeting, you know, climate change mitigation measures, but what would you say about the instances where, you know, let’s say country, nation microeconomic structure has been wrecked by reckless debt, reckless accrual of debt and these, you know, the same political class will fly around, you know, in Geneva and Paris and talk about all the great things that they also want to do in their country back home, but when you look at the numbers, everyone knows that they’re in a very tight fiscal space and these kinds of irresponsibilities recur again and again and, yes.

Moderator:
I mean, governance is a major issue, and then a lot of these initiatives then get faltered. As somebody said, what is the point of, you know, raising more funding for climate change? That will probably go into the pocket of the politicians. And this is, when you talk about Kenya particularly, after Kutu, sorry, what’s your president? Ruto. Ruto, his famous speech in Paris, he made a very impactful speech, but I talked to my Kenyan friend, he said, what is the point? That money will not be seen on the ground. Fine, but that is not a topic we are discussing in this particular thing. But the point taken that, you know, governance is a major issue. And in most developing countries, corruption leads to a lot of leakage for very good intentions as well as funds. Sir, over to you.

Audience:
Thank you, Mr. Moderator. My name is TJ. I am from Singapore. I flew 17 plus hours here as an entrepreneur and business owner of a micro-consulting firm. I try to do work across Southeast Asia with micro-small businesses, and I have a lot of thoughts, but I will cut to the chase and ask three questions for the panelists to share your thoughts. Because when you share, I think of it from the business perspective. I think of it from the ground. One question, I like the initiative, I like the work that is being done. I will not be able to afford the cost of that particular pilot project right now. How would you bring this? to the mid-size brands and the local brands because at the end of the day it’s about cost-benefit analysis. Five cents, I want to bring my five cents to ten cents, how am I going to do it? Who can help me do it? Because I see Giorgio Armani, I see Adidas, but what about the local brands, how do we bring it there? That’s one question. Yeah, you know, because when we talk about the entire value chain, it’s not just from the farm, you have your intermediates, the people who are producing, the people who are distributing, the people who are transporting and selling. You talk about greener supply chain, it’s this entire value chain, right? And we are talking about multiple stakeholders, multiple players. So how do we bring this down? Next question. I’ve been hearing over the last few days, digitalization, I’ve been hearing greener supply chain. In some sessions, it’s complementing. In some sessions, if I read between the lines, or I don’t really need to read between the lines, it’s conflicting. Because from a perspective of business, I look at digitalization as helping me to grow my business, right? If I’m talking about a micro-small business, digitalization must mean that I can make a bit more money. Otherwise, why do I bother with digitalization if I’m making the same amount of money? Then, what’s the convincing case for the businessmen to then look into greening the supply chain through digitalization? I would love to hear your thoughts on this. And last question, this will be my businessman pitch in that sense. Do you have challenges finding partners to drive your work in the LDCs? Because I see… In coming to this particular forum, one objective of mine is to really see how can we move high-level trade talk, cascade it down, simplify it, so that the businessmen on the street can understand, can appreciate, because otherwise my biggest gripe with policies, I can appreciate policies that are needed, I can appreciate regulation, but my biggest gripe is always macro talk makes almost zero sense to the businessmen, because at the end of the day, how can I make my 5 cents to 10 cents to 15 cents if someone can share with me how the trade policies actually helps my implementation, helps my business, I think then that’s where value can come in. I’ve been working with a bit of IGOs across Southeast Asia, digitalization across all sectors remain a fundamental issue, but I would be very blunt to say I think they are looking at digitalization for profitability, economic growth right now, so value creation.

Moderator:
No, no, the point is well taken. Emmanuel, TJ comes from Singapore, one of the best countries, corruption-free, and thanks to one authoritarian leader. Minimal, minimal. We are having one sensational issue right now. Leak one you, but no, what I’m saying is that it’s a country which is a role model for LDCs, but anyway, let me turn to Elizabeth.

Elizabeth Kirk:
Shall I reflect a little bit on what you’ve heard and also the points you just raised? Just try to put what you started, the barriers challenge, and I see sustainable development. and really with the three elements, social, environmental, and also economic. And we need to look at them in their entirety. And that’s super difficult to do, but we have to try. And I also very much see the risk of the barriers. So if we just look at, for example, the textile sector, the sector I spoke about, it’s really increasingly regulated. If we look just at the EU, we counted like 16 legislative acts that are under development, and that will impact the textiles and clothing companies, and about the green claims, the textiles, labeling, the waste, the due diligence, all those things. So we see there is really strong regulatory drive. And for us, it was also a little bit, how to say, the push to look into that, and what can we do to help countries in the global South to respond to that if those regulations happen? And I hope that our project comes in exactly here, because we are not putting the barrier. We are saying, we help you to trace, and in so doing, actually continue exporting, even if they have to prove ESG compliance. So I think that’s part of the thinking behind. Now, obviously, and you also mentioned it, it’s not yet scalable, and the T-shirt is not yet affordable. Like, it’s a very high-end T-shirt, Selma McCartney, 300 bucks. So we are yet to see where this goes. But let me add two further reflections here, because I mentioned value chain, and we are talking about the big brands. So what we have really emphasized is cooperation along the value chain. So we start always with the mapping, and that includes the mapping of the farms and the sort of like small suppliers. And we try to create, through our project, a space where actually the brand also helps the supplier to deal with it and to do it. So cooperation, for me, is essential, and the supplier, I think they gain by having a maybe more long-lasting relationship. with the brand by maybe having access to a price premium market. But this is, how to say, we really go case by case, we are proud of our close to 20 cases, we are not yet large scale. And second point maybe because, okay, cotton is quite relevant for LDCs. Now we were asked by our member states to do the same for agri-food and for critical raw materials. So critical raw materials brings us exactly to the issue about digitalization actually has a huge environmental impact. If you just think about all the social environmental challenges that happen when we mine the CRMs. And much of this is happening in the really poor parts of the world. So we are trying to see now what we can do to roll out something similar on critical raw materials and also in agri-food, specifically cocoa and coffee. So from that perspective, I still see that our endeavor is sort of trying to bring the two things together in a positive way, but very much against the background of the potential trade barriers. And Yasmin, also all what you mentioned in terms of not speaking about challenges anymore, I can give you the same list of what is coming out of the reports of our blockchain. Access to digital infrastructure, access to skills, lack of awareness raising, and very fundamentally also lack of capacity to produce sustainably. And here, my last point is, I’m this year also chairing UNFSS, that’s an interagency group of UN agencies and ITC on voluntary sustainability standards. So that’s the label, basically. Huge challenge here, there are so many different labels. As an SME in the developing world, you have to comply with all of them almost. So we see huge fragmentation there, and for me, as much as I really believe in buying green and being sustainable, I do see the challenge. happy that in the international organization setting, I think, we are aware of this and that we partner across agencies to see what we can do to support.

Moderator:
Thank you. Thank you, Wendy. Mr. Lam, would you like to also answer Emmanuelle’s question, although it is not a part of the topic, but it is still important, on governance issues in LDCs and how do they impact policy formulation and policy implementation? And quite often, we have seen that many of these policies are then tailored towards vested interests.

Kemvichet Long:
Well, before answering that, I just want to touch upon the barrier questions as well. Thank you. Please do. Yeah. Because, you know, we all know that the – just a very real example from Cambodia, because as you know, all the big brands – you know, Cambodia is exporters of garments and clothing articles as well. So what we see is that when the big brands are adopting climate goals of the destination markets, for example, the EU or the U.S., then they start looking at how they want to reduce, for example, reduce the carbon footprints of the manufacturers in the – in Cambodia and other, you know, manufacturing countries. So it’s really up to the manufacturers, the factories, to reduce it as well, because otherwise, they would risk, you know, losing some of the orders from those brands. So that’s why you mentioned about, you know, growth and social – May we ask Mrs. Turk to please switch off the microphone? Thank you. You know, the factory losing the orders is not just the factory who are, you know, losing. It’s the people as well, the workers, you know. In Cambodia, we employ over 800,000 people, you know, in the garment factories. So some of them may lose their jobs if the, you know, the orders are reduced. So we just need to make sure that we understand. the issues very carefully and for everyone to work together, because this is not an isolated issue for the manufacturers to overcome alone, it’s the government has to make all the efforts as well, it’s the partners, the partners who are more developed than us, they have to contribute to tackling all these issues as well. I just want to also touch upon what TJ mentioned about digitalization and supply chains and I fully agree with you that in the end for businesses, for SMEs, it’s how much they make. They want to maximize their profits and digitalization is one thing that they can use to do that, but when you talk about digitalization and green supply chains, you have to look at the whole picture of the supply chain. When you look at digitalization alone, digitalization is not just about using technologies, but if you want to have a green digitalization, you have to look at how much energies are being consumed by the technology as well, because when you use technologies from different companies, they produce, consume a lot of energy. The big servers, they also consume a lot of energy, and where does that energy come from? So we have to look at how to make those technologies, digitalization tools green as well. I think that’s one thing we should look at, the overall picture. In terms of governance, what I can say from the policy point of view is if you look back in our Pentagon strategy, it’s right in the middle. It’s right at the center of our strategy, but it’s like TJ mentioned, strategy policies are very good, but it’s how you implement it. We have all the smaller pentagons that provide all the strategic objectives that we need to implement. implement, but it all leads back to the core, which is good governance. So that’s all I can say on governance, thank you.

Moderator:
Thank you. Thank you very much. Yasmin?

Yasmin Ismail:
Yes. Very quickly, just to clarify that, of course, the barriers are there and we need to like keep calling for support and having our developed partners understanding that without them, simply put, we will not be able to implement. So definitely it’s there. But all I wanted to say really is that this is my third public forum and I saw this slide many, many times. So all I’m saying is perhaps it’s the time for really considering paths and pathways of effective cooperation in order for us to turn this slide into more effective needs rather than just, say, barriers. So just to clarify my point or perspective, and I wanted to also touch on what TJ said regarding complementarity and how conflictual digitalization and green can be and what could be an interest of a private sector to try to adopt both. And I will tell you from my perspective, your interest would be forward-looking and optimization because simply put, if you know that you’re not forced at some point, you’re not like so pressured to deal with green standards now, you will be in a few years. And this is exactly what Elizabeth has been saying, that there is a rush in adopting regulations related to green standards and voluntary standards that are… And I think at some point also Generation Z and Generation Alpha, they are more aware. They see the circular sign, they see electric vehicles, they hear about this all the time in YouTube and others. So all I’m saying is the awareness of future generations are a lot higher. So if you want to prepare yourself and minimize your costs in the future, because the cost may be higher, then maybe consider optimization. If you’re buying a technology anyway, why don’t you just buy it and ensure that it will provide you some green standards at the same time. So this was just one of the key comments that I wanted to say. And finding partners to collaborate with in order to support LDCs, definitely a challenge. It’s a challenge in my perspective that is not just related to lack of funding or channels of funding or mechanisms. They are there to an extent, but not covering the need. But also it’s really how the topics that we’re talking about are becoming interdisciplinary and complex. It’s not any more easy for one organization to act in the field. You need multiple partners, which takes time and is sometimes costly. So thank you so much.

Moderator:
Thank you. We have now come to an end, but if anybody has a burning question, I’ll be happy to take that. One, the last one. I have a burning comment.

Audience:
I want to thank you, Farid, for bringing up this value distribution along the global supply chain and value chain. I think this is fundamental going beyond the raw material sector. But if you look at the manufacturing sector, it’s actually facing a similar issue. So my question is, I know this is not a topic for the WTO to discuss, but I think fundamentally we really need to to look at that relationship within the supply chain and how value actually is attributed, unless we have to. Or distributed. I think we can. No, and that is a point which I have been making for many years now. Lady here. So, quickly, I’m Cathy and I’m from ITC, the Tech Sector Development Team. So we talk about barriers. We all know what are the barriers, but I wish I heard what we should really do about those barriers. And we talk about corporates, MSMEs, but what about things that we do at the farmer level? I work in Ethiopia. We work with tech startups. We bring them in the field. They meet farmers, but there are many challenges, right? We talk about digital literacy, connectivity, and how do you also convince a farmer who gets five cents on a $10 t-shirt that green, environmental-friendly solutions are a priority for them? So I think this is really basic, but we should look at this level because the digitalization process start at that level, at the farmer level. And this is where adoption is an issue. This is where awareness of these topics is also an issue. So it was just a comment.

Moderator:
Thank you. Does the panel have a comment, or we can close the session? Mr. Long? Yes, sir? I think the point she made was very valid, and it’s a useful contribution to this discourse. With that, let me thank all of you once again for having participated in this event, and particularly the Mission of Cambodia for having taken the lead with us to organize this particular session. And I’m sure that the outcome of this will go out to the larger community, particularly the LDCs. world, because there was a lot of learning that I can talk about which can influence the future. In terms of partnerships in LDCs, what kind of partnership are you talking about? That is not very clear. It is not an issue of funding, you ask me. Moderator- Would Mr. Moderator want to end the session, sir? Sadhguru- Yeah, no, no. No, because that… No, this is a very important point which you raised, but people have not yet understood the point. Moderator- Partnerships, because there is a lot of… Sadhguru- Partnerships with what? Ventures? Joint ventures? Moderator- No, no, no. It is more at key levels. Across different levels. You have got partnerships for capability building… Sadhguru- Okay, okay. I get your point. Yeah, yeah, right. Moderator- So, actually I am really… Do you guys want to hear about the new partnerships in women and blockchain? Do you have any message for women? Sadhguru- No, no, no. No, no, no. No, no, no. No, no, no. No, no, no. No, no, no. No, no, no. No, no, no. No, no, no. No, no, no. No, no, no.