2022 396 exabytes
2020 254 exabytes
2015 76 exabytes
2010 3 exabytes
1998 0.0001 exabytes
* Estimates from Cisco’s Visual Networking Index, 2017 and earlier reports.
It is a quarter-century since WTO members approved a “moratorium” on applying tariffs to electronic transmissions, at “MC-2” — the second Ministerial conference — in the spring of 1998. Last June, a quarter-century later, the twelfth Ministerial conference extended this once again, with another decision point at the 13th Ministerial conference likely in late 2023. In the intervening years:
Cambodia’s 800,000 garment workers, mostly young women from rural towns and villages, have been the country’s engine of industrial development over the past generation. At the national minimum wage for garment factories, they earn $194 and up monthly, which is about 50% above Cambodia’s $1,591 per capita income at paycheck time. But they lose some of this, and assume personal risks that workers in middle-income and rich countries don’t, because they are mostly paid in cash and have great difficulty finding safe places to put their money.
Visiting factories around Phnom Penh a decade ago, the Trade Fact series editor noticed that almost all the line workers at sewing machines were wearing silver necklaces, earrings, and bangles. Experts and factory managers explained that this was not a fashion choice, but the best among a poor set of savings options. Since rural Cambodia lacked an effective birth certificate or ID system, workers could not open bank accounts and took wages in cash. To avoid carrying lots of paper money around, or trying to hide it in their (usually shared) apartments, they would visit pawn shops and buy small pieces of jewelry, essentially ‘wearing’ their savings until the holidays. Then they would resell the jewelry at a small loss in order to bring remittance money and presents to their families. In financial-services jargon, this is a negative-interest savings account, but the best choice available since it is physically safer than others.
World Bank researchers now see the falling cost and eased availability of financial information transfer — the ability to move data cheaply and securely, combined with worker’s widespread adoption of smartphones with low-cost monthly data plans — beginning to change this system. For a one-time fee of $5,900, a Cambodian garment factory can contract with a bank or telecom company to replace cash payouts with automatic digital deposit that workers can access through phones and ATMs with unique pins. This in turn will enable a worker to earn interest and develop credit rather than losing part of her wages to pawnshops, and send remittances home digitally rather than carrying a purseful of cash on a bus.
This local case has analogues throughout the low-income world as data flows grow cheaper and reach more countries: financial inclusion for informal-sector workers, telemedicine for rural areas, weather and soil bulletins for farmers, and other support for the poor. More generally, World Bank researchers believe that raising access to mobile digital service by 10% in low-income countries raises per capita income by 2% (and in sub-Saharan Africa by a somewhat higher 2.5%). The WTO members will be arguing these matters as they prepare for “MC-13” sometime late in 2023 or early 2024. Arguments for slowing this growth by taxing it, however attractive to accountants in Finance ministries, need to be weighed against larger-scale potential loss in development and daily life.
Digital growth and policy
What does “grow from 100 terabytes per month in 1998 to 396 exabytes in 2022” mean? A “byte” is eight binary digits, enough information to form one letter. Prefixes run as follows: kilo represents 1,000, mega 1 million, giga 1 billion, tera 1 trillion, peta 1 quadrillion, exa 1 quintillion, and zetta 1 sextillion. Yotta comes next, but has not yet been achieved by anything human. Thus, the 396 exabytes thought to be transmitted each month this year are about 4 million times more information than the 100 monthly terabytes of 1998. By analogy, the ratio of digital information flows in 1998 to those of 2022 is about the same as the ratio of the 2 million trees in and around Washington D.C., to the 3 trillion trees thought to be alive and growing on Planet Earth.
Cisco’s most recent Annual Internet Report, with counts of users, devices, and speed for the world and regions.
The WTO looks to another debate on electronic transmissions, tariffs, finance, and development in its next Ministerial conference.
Data flow, development, and the garment worker
The World Bank examines the role of digital information and inclusion in low-income country development.
… and looks at the transition from cash payments to digital banking for Cambodian garment workers.
The International Labour Organization has a wide-scale take on life and work in Cambodia’s garment and shoe factories.
And a look back:
The White House electronic commerce report, from the Clinton administration in 1997, argues that “Unnecessary regulation of [Internet-based] commercial activities will distort development of the electronic marketplace by decreasing the supply and raising the cost of products and services for consumers the world over. … Accordingly, governments should refrain from imposing new and unnecessary regulations, bureaucratic procedures, or taxes and tariffs on commercial activities that take place via the Internet..
CNN recalls the world’s Internet user community as of 1998.
And the WTO’s 1998 Declaration on Electronic Commerce.
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
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