I2I POST-COVID E-CONOMIES
MASTERING OUR VIRTUAL TRADE WINDS THROUGH E-COMMERCE & DIGITAL ENABLEMENT
Photo Credit: Ales Nesetril instagram.com/alesnesetril via Unsplash
A PAPER PREPARED FOR INDIGI-X VIRTUAL EXCHANGE JULY 2020 BY:
Carrie Stoddart-Smith, Managing Director, Opinio Native Aotearoa, New Zealand
Tania Te Whenua, Managing Director, Te Whenua Law & Consulting, New Zealand
Vanessa Mountain, Director, Four our Future Indigenous Economics, Canada
Aroha Dorset, Commercial Manager, Te Arawa Fisheries Ltd, New Zealand
Krystal Abotossaway, Senior Strategic Diversity Sourcing Partner, TD Bank, Canada
To implement the programme of work set out in this paper, it is recommended that the governments of New Zealand and Canada agree to provide in-principle support to the recommendations set out in para 44, within 20 working days of receiving this report.
PURPOSE
1. This paper advances a set of recommendations to:
strengthen the trade and policy frameworks that would enable Indigenous businesses to benefit from the global shift to e-commerce and e-trade more broadly;
explore bilateral policies and initiatives that support the digital enablement and innovation of Indigenous businesses through government enabled funding, partnerships and collaborations; and
identify key instruments and principles that could underpin reciprocal trade relationships between Indigenous Peoples in Canada and New Zealand.
CONTEXT
2. Indigenous Peoples had flourishing economies and entered freely in to trade arrangements prior to colonisation and well into the early contact period. However, the self-imposition of colonial governments on Indigenous territories through the usurpation of Indigenous sovereignty, expropriation of their economic resources, and dismantling of their social, political and economic structures disrupted the ability of Indigenous Peoples to maintain their trading relationships and their capacity to be economically self-determining.
3. Since that time, successive governments enacted laws and policies that violated the fundamental human rights of Indigenous Peoples resulting in reprehensible traumas that continue to harm their descendants today. In addition to those historic injustices, Indigenous Peoples continue to experience the worst effects of economic marginalisation including higher unemployment, lower incomes, poorer health and education outcomes, higher incarceration, and higher rates of domestic and intimate partner violence to mention a few.
4. It must be acknowledged that Indigenous Peoples continued experiences of injustice, as a result of policy making and government inaction, requires that the Canadian and New Zealand governments take active steps to uphold their ethical and legal obligation to reconcile and redress the harms their policies inflict on Indigenous communities.
5. We consider that the global economic impact of COVID-19 provides an opportunity for Canada and New Zealand to reset their relationships with Indigenous Peoples by better utilising the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) to take active steps to support them to be self-determining and impart Indigenous values based leadership in the global economic recovery.[1] We suggest that e-commerce, digital enablement and technological trade is a critical path that could support economic self-determination and ultimately the regeneration of Indigenous economies.[2]
PROBLEM: WHAT ARE THE ISSUES WE ARE TRYING TO SOLVE?
6. COVID-19 amplified the importance of digital connectivity for both social and economic purposes and created permanent changes in how businesses operate and consumers behave.[3]
7. We recognise that Canada is home to some of the world’s largest tech hubs with ‘Toronto, Vancouver, Montreal and Ottawa all rank[ed] in CBRE’s top 20 tech talent markets in North America’.[4] While on a smaller scale, ‘New Zealand’s own base of technological expertise is [also] expanding’ being the third largest revenue sector after tourism and dairy, with an annual growth rate of 9% for the past five years.[5] Furthermore, digital enablement is now recognised as an economic essential as governments pursue more sustainable and efficient solutions to expedite trade and economic recovery strategies in the wake of COVID-19.
8. However, a number of constraints continue to impact the ability of Indigenous Peoples in both countries to benefit from the digital growth their national economies are experiencing. In particular:
Political sensitivities impede government agreement to provide Indigenous specific measures in trade or other international agreements;
Underutilisation of the UNDRIP limits the ability of Indigenous Peoples to actively exercise their economic self-determination; and
Lack of digital infrastructure remains a barrier for many Indigenous communities, particularly those located remotely or rurally.
9. As likeminded countries with striking similarities in parliamentary systems and Indigenous populations, Canada and New Zealand are ideally positioned to jointly support Indigenous businesses and communities in both countries to benefit from the tech capability and capacity that is already generating significant returns to each economy.
10. Repositioning Indigenous Peoples to become the owners and drivers of digitally based enterprises and supporting them with the technologies, capabilities and capacity building they need to channel the virtual trade winds to benefit their communities will help minimise the effects of an imminent global recession, while supporting the future of their economies.
EVIDENCE: HOW DO WE KNOW THESE ISSUES EXIST?
11. Indigenous SMEs (businesses of fewer than 500 employees) form a fundamental component of Indigenous economies.[6] But in many cases they are ignored, overlooked or not taken seriously as legitimate enterprises. Partly, this is the result of policymakers prioritising investments and policy support toward larger tribal or corporate exporters. It is also the result of persistent colonial narratives that convey Indigenous entrepreneurialism, as inferior to the factories and industries established through capitalist expansionism.[7] The effect – unintended or not, erases the centrality of Indigenous SMEs (of all sizes) to Indigenous economies and perpetuates systemic barriers such as:
limited or no access to capital from private lending institutions;
ineffective domestic policies that fail to address the practical and specific business needs of Indigenous SMEs;
overly prescriptive funding criteria that prevents Indigenous businesses from accessing the support they need at the time it is needed; and
over-scrutinization of targeted funding for Indigenous Peoples deterring many Indigenous business owners from seeking government enabled support to avoid any reputational fallout caused by publicly politicised disputes.
12. We consider that under-investment in Indigenous trade and economies caused by social, political and geopolitical sensitivities in a post-COVID context could set indigenous trade and economic recovery and regeneration back by decades contributing to further injustices and making any reconciliation significantly more challenging.
13. We propose that e-commerce and digital enablement has the potential to provide a lifeline that Indigenous businesses and indeed tribal economies need to prosper into the future. For example, the widespread use and availability of Software as a Service (SaaS) products and alternative logistics models such as dropshipping have made it easier for Indigenous businesses to go direct to market independent of traditional forms of support that might have been required in establishing physical offices, logistics and storage warehouses, and premium retail spaces.
14. Although the range of digital products and increased access to internet and digital technologies makes it easier than ever to set up an online business, from our initial engagements with Indigenous SMEs who are currently or who aspire to engage in e-commerce, we have learned that some major challenges still affect their ability to thrive at different stages of their business journeys.
Indigenous Business E-Commerce Survey Findings
15. We surveyed 21 unique Indigenous SMEs from both Canada and New Zealand to get a better sense of the challenges and opportunities they are confronting.
16. The participating businesses operated across seven broad sectors with the majority of participants from the professional services and consultancy sector. More than half of the participants operated SMEs with 3 or fewer employees, while just under half of the participants employed between 6 and 22 employees.
17. The challenges and opportunities the participants identified are summarised below.
Opportunities
Values based business approaches enhance avenues for I2I and B2B collaborations
Support reduced carbon footprint
Product and service diversification
Development of higher value or premium products
Design of education / e-learning platforms
Ease of internationalisation
Penetration of new or previously exclusive markets
Improved visibility of brand, products and services
Remote working / glocalisation
Challenges
Access to e-commerce expertise
Support for market research and product validation
Organisational capacity
Access to high quality business advisory support for Indigenous SMEs including marketing and sales advice
Lacking human dimension through increased virtual interactions
Insufficient digital infrastructure (particularly in remote or rural areas)
Access to capital or financial support from both public and private sources
Freight and logistics (costs and time)
SOLUTIONS: HOW MIGHT WE SOLVE THESE ISSUES?
19. The Post-COVID economic recovery highlights the ability of e-commerce and digital enablement to provide sustainable income for Indigenous Peoples, particularly in areas where they are strong producers of essential products such as food, beverage, health items, clothing, energy and professional consultancy services (e.g. business continuity, financial planning etc) and other services (e.g. sanitisation, cleaning services) but also beyond these sectors.
20. In consideration of the challenges and opportunities identified by the participants in our survey, we set out three areas where New Zealand and Canada could actively and substantively support Indigenous People to benefit from the global shift to the virtual marketplace. These are discussed under the sub-headings below.
(a) Design an Indigenous e-conomies network
21. We identified a need for government enabled support to design a peer to peer, distributed ownership, global Indigenous E-conomies network.
22. Indigenous businesses told us that mainstream platforms do not currently nurture Indigenous ways of doing business in a way that builds on the collective capability and capacity of Indigenous e-conomies globally.
23. For Indigenous businesses, profit is not the primary driver of their enterprises and mainstream models do not reflect the wider value sets that inform Indigenous trade and business. A crucial element of Indigenous trade is the reciprocity that underpins our relationships and knowledge sharing. Whereas mainstream models focus on a buy-sell approach, Indigenous businesses are more likely to follow a non-linear version of connect, share, buy, sell and learn.
24. We would not envision this platform to be developed in competition with existing platforms such as the 5000 Tribes Virtual Mall for individual and collective Indigenous sellers.[8] Rather, we see it being developed as a way of building connectivity between Indigenous economies and existing digital platforms through a range of technologies, capability and capacity supporting tools such as:
building near real time data baselines and geospatial mapping to better track opportunities, challenges and gaps in the markets that Indigenous Peoples want to do business;
activating digital authentication tools such as blockchain technologies and digital credentialing;
providing a hub for market research and avenues for undertaking market or product validation activities – areas that Indigenous SMEs told us they found particularly challenging; and
exploring the possibilities of universal or tribal Indigenous digital currencies, which could also help address international payments issues.
(b) Design a bilateral Indigenous Trade and Innovation Fund
25. We propose that the governments also look to establish a bilateral Indigenous Trade and Innovation Fund to support Indigenous Peoples in both countries to reimagine the paradigms that Indigenous enterprises operate within. This fund could support a range of Indigenous-led opportunities such as:
establishing bilateral indigenous supply chain networks;
supporting Indigenous technology and knowledge exchange programmes;
funding research and development into areas such as protecting cultural intellectual property in digital environments;
supporting Indigenous Tourism industries; or
designing new tech across a range of sectors such as health, education, and finance.
26. We would expect that the core digital infrastructure for rural or remote communities is funded through each governments existing commitments to strengthen and expand the digital access it provides to all its citizens. Moreover, that for rural, remote or communities who are not yet digitally connected, that this access would be fast tracked.
27. Note that we moved away from the language of development, because too often this implies that Indigenous Peoples are a burden on an economy or do not actively contribute to it. We must not forget that the economies of both Canada and New Zealand are built and survive on Indigenous territories.
(c) Creation of a bilateral Indigenous International Trade and Innovation Agreement
28. We also identified an opportunity to work toward restoring an equal partnership between the governments of Canada and New Zealand and the respective Indigenous Peoples of each country through the development of a bilateral Indigenous International Trade and Innovation Agreement.
29. Both governments have expressed their commitment to reconciliation. Yet, reconciliation can only be genuine when there is an equal partnership that is reflective of Rangatira to Rangatira, Chief to Chief, People to People, as opposed to the way that Indigenous Peoples are treated as subjects of the Crown. As such, it is imperative that Indigenous Peoples are supported to take a lead in the creation of this Agreement.
30. We consider that the focus on trade alone, does not address the need for innovation as it tends to focus on rules and mainstream trade considerations, as opposed to the future of possibilities. Innovation is more than including digital or technology provisions in an agreement or making it cheaper or easier to access. It’s also about creating an enabling environment for the emergence of ideas that have not yet manifested. From our discussions with Indigenous Peoples, it must then create space for radical discussions to take place alongside taking active incremental steps toward Indigenous inclusion and self-determination.
31. We would expect Indigenous participants to be provided with ongoing access to experienced trade negotiators, in order to:
support the development of the provisions of the agreement;
clarify any technical or ambiguous terminology; and
enhance Indigenous Peoples trade negotiation capability and trade diplomacy.
32. This agreement would complement and confirm a bilateral commitment to the fund and initiatives proposed in this paper.
33. We note that there are a number of existing social, economic and cultural policy instruments and forums that Canada and New Zealand could draw on in support of the development of an inclusive trade arrangement that provides specific measures to support Indigenous to Indigenous partnerships, innovation and collaborations, including:
UNDRIP and the United Nations Permanent Forum on Indigenous Issues (UNPFII) (as well as other UN bodies);
The Comprehensive and Progressive Agreement for Trans Pacific Partnership (Plurilateral Trade Agreement);
CANZUS (Canada, Australia, NZ and the U.S.) membership;
Rotorua Group (NZ, Canada, Chile, Mexico and Australia);
ITAG (Canada, NZ, Chile);
Pacific Alliance (Canada, Australia, NZ, Singapore);
Digital Economic Partnership Agreement (DEPA) (NZ, Singapore, Chile);
United States-Mexico-Canada Agreement (USMCA) – new NAFTA;
Chapter 19 (Indigenous Cooperation) Agreement between New Zealand the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Cooperation (ANZTEC);
Asia Pacific Economic Cooperation (APEC) membership; and
kOrganisation for Economic Cooperation and Development (OECD) membership.
RESOURCING: HOW MIGHT WE FUND THESE INITIATIVES?
34. Canada has already spent $80 billion on its individual emergency economic response to COVID-19 and intends to spend a further $82.3 billion on wage subsidies over the next year.[9] Overall, Canada plans to spend $570+ billion on business, $107 billion on people and $85 billion on tax and customs deferrals.[10] New Zealand also plans to spend $50 billion as part of its COVID-19 Trade and Economic recovery plan and has set aside $20 billion for future projects.[11]
35. An initial investment amount to cover the phase 1 costs for activating the proposed recommendations and associated activities is conservatively estimated at $1 million.
36. We would expect each government to commit at least $500,000 each to support Indigenous Peoples economic recovery and as a means to smooth the path for reconciliation. It would do this by supporting Indigenous Peoples to build sustainable digital economies so they have a stronger asset and revenue generation base to dedicate time and resources toward addressing the issues and aspirations of their communities.
37. The nominal figure suggested accounts for less than 0.001% of both New Zealand and Canada’s total COVID-19 recovery spends.
38. While it would be premature to define a final figure at this stage for the total cost of the proposed solutions, we note that there are a number of avenues that Officials could scope to determine how New Zealand and Canada could allocate financial resources toward implementation of the proposed initiatives in this paper.
39. In the short term, we would suggest that Officials:
Examine any relevant departmental underspends from the previous Financial Year and/or identify where funding could be reprioritised due to the changed nature of any planned international engagements and reallocate those funds toward Indigenous Trade and Innovation as a Post-COVID economic recovery strategy. This would neutralise any initial set up costs rather than requiring new funding.
Explore whether relevant departments could repurpose any funding that no longer addresses a core need as part of a Post-COVID economic recovery strategy to support Indigenous economies.
40. As a next step, we suggest that Officials actively collaborate with Indigenous Peoples to:
Develop a Budget Bid for each of their governments FY21/22 Budget that supports I2I Trade and Innovation
Apply to the APEC fund through the General Project Account (GPA) (or an alternative relevant fund) to finance this programme of work, given the GPA priorities for 2020 include Digital Society and Inclusive Economic Participation through Digital Economy and Technology.[12]
We are mindful that GPA priorities are decided annually at ISOM, and consider that both governments should work together to take advantage of the opportunity presented by New Zealand’s hosting of APEC21.
41. We consider that these funding options could support ongoing research and development of the proposals in this paper, and provide seed funding to explore the feasibility of further Indigenous trade and innovation initiatives that address the broader e-commerce eco-system.
FURTHER AREAS FOR CONSIDERATION
43. Due to the limitations of time in developing this paper, we consider that the following areas should also be examined as part of the work programme:
Examining the compounding effects of COVID-19 on Indigenous women in business
Exploring the restoration and regeneration of Indigenous supply, value, distribution and information chains
Activating opportunities for Indigenous Peoples with disabilities in the digital economy
Protecting Cultural Intellectual Property of Indigenous Peoples in a digital environment
RECOMMENDATIONS
44. It is recommended that the governments of Canada and New Zealand jointly:
Agree to fund INDIGI-X to establish regular and ongoing engagement and workshopping opportunities between INDIGI-X alumni, Indigenous Professionals, Businesses and Sector/Technical experts and Officials from Canada and New Zealand.
Agree to work toward the establishment of a bilateral Indigenous Trade and Innovation Agreement with the possibility of opening it up to signatories from other likeminded countries in future.
Agree to commit funding and resources to scope a plan of action to implement e-commerce, trade and innovation provisions in an Indigenous Trade & Innovation Agreement, design a bilateral Indigenous Innovation Fund, and develop a website that enables ongoing Indigenous collaboration between Canada and NZ.
Partner with INDIGI-X to establish an Indigenous-led Canada and New Zealand working group comprising up to 6 Indigenous representatives (3 from each country) and 4 officials (2 from each country) to lead the work proposed in the recommendations above.
Note 2020 is the 10th anniversary of both NZ and Canada endorsing UNDRIP as aspirational (both countries among the few who refused to sign up to it in 2007) and provides an opportunity for current Ministers to present on their implementation actions to date, which could include these proposals.
Note that ITAG plans to develop a Trade and Indigenous Peoples arrangement as part of increasing its inclusiveness agenda, and this work could inform their approach
Note that APEC21 provides a unique opportunity to launch the proposal of this programme of work as part of NZ’s APEC21 hosting year in recognition of the more than 271 million Indigenous Peoples who are the original inhabitants of the APEC member economies.
Note that Expo Dubai (scheduled for October 2021 – Mar 2022) also provides an additional opportunity to promote the agreement and seek further signatories to it from likeminded countries outside the APEC member economies.
*I2I refers to Indigenous to Indigenous
Footnotes:
[1] The World Bank suggests that COVID-19 provides ‘an opportunity to work through the traditional authorities of Indigenous Peoples to...support livelihoods and recovery in ways that are appropriate to Indigenous People’s needs and cultures’ see: World Bank. https://www.worldbank.org/en/topic/indigenouspeoples
[2] Indigenous People from both Canada and New Zealand are already engaged in this sector and supporting Indigenous businesses to take their enterprises online by forging a partnership with global e-commerce giant Shopify. See: Shopify. (21 June, 2020). Shopify partners with Indigenous organizations reducing barriers to entrepreneurship. Online at:
[3] Morgan, B. (2020). 5 Examples Of What Post-COVID Retail Will Look Like. Forbes. Online at: https://www.forbes.com/sites/blakemorgan/2020/06/08/5-examples-of-what-post-covid-retail-will-look-like/#3eaea7f6524e
[4] Invest Canada. Online at: https://www.investcanada.ca/why-invest
[5] Willmott, G. (1 June 2020). Deep tech and the Māori economy can be the backbone of NZ’s recovery.The Spinoff. Online at: https://thespinoff.co.nz/science/01-06-2020/deep-tech-and-the-maori-economy-can-be-the-backbone-of-nzs-recovery/
[6] Refer Annex 2 for Māori, First Nations, Metis and Inuit Statistics.
[7] Stoddart-Smith, C. (2020). Ka mua, ka muri: changing the narratives. Opinio Native. Online at: https://www.opinionativeaotearoa.com/blog-1/ka-mua-ka-muri
[8] RNZ. (July 2020). World’s first global Indigenous online marketplace launched in New Zealand. NewsHub. Online at: https://www.newshub.co.nz/home/money/2020/07/world-s-first-global-indigenous-online-marketplace-launched-in-nz.html
[9] Reuters. (July 2020). Canada projects $343bn deficit amid Covid 'uncertainty'. BBC News.
https://www.bbc.com/news/world-us-canada-53340277
[10] Sanchez Ramirez, M. (2020). Infographic: Canada’s COVID-19 Economic Response Plan. Wilson Center. Online at: https://www.wilsoncenter.org/article/infographic-canadas-covid-19-economic-response-plan
[11] (May 2020). Budget 2020: Government's $50b Covid-19 recovery Budget biggest spending package in history. NZ Herald. Online at: https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12332035
[12] APEC Funding sources. Online at: https://www.apec.org/Projects/Funding-Sources
