Brazilian Strategy for Brazilian Strategy for

e - commercee - commerce

Vanda ScarteziniNational Secretary for Information

Technology PolicyUNCTAD - Geneve – July 2002

Surface - 8.5 millions Km2 Population 2000 – 173 millions

GDP 2001 - US$ 606 Bi

GDP 2002 * + 2,2% Trade balance Exports 2001 - US$ 58.2Bi

Imports 2001 - US$ 55.6Bi

Inflation 2002 * +5,4 %

ThisThis is BRAZIL is BRAZIL

25% 25% GDPGDP

42% 42% GDPGDP

BRAZILBRAZIL

33% 33% GDPGDP

Source: Gov. of Brazil*forecast

LINES OF ACTIONLINES OF ACTION

• UNIVERSALIZATION OF SERVICES

• e – COMMERCE (Market)

• HUMAN RESOURCES (Jobs)

• CONTENTS & CULTURAL IDENTITY

• e – GOVERNMENT (services)

• KEY-TECHNOLOGIES & APPLICATIONS

• ADVANCED INFRASTRUCTURE

LINES OF ACTIONLINES OF ACTION

• UNIVERSALIZATION OF SERVICES

• e – COMMERCE (Market)

• HUMAN RESOURCES (Jobs)

• CONTENTS & CULTURAL IDENTITY

• e – GOVERNMENT (services)

• KEY-TECHNOLOGIES & APPLICATIONS

• ADVANCED INFRASTRUCTURE

Information Society Information Society ProgramProgram

Strong focus for all Strong focus for all initiativesinitiatives

The Government StrategyThe Government Strategy

InfrastructureInfrastructure

Legal Legal FrameworkFramework

ImplementatioImplementationn

InfrastructureInfrastructure

Installed Fixed Telephone Installed Fixed Telephone

13,25 14,65 16,4918,82

22,13

27,77

33

40,5

16,4914,65

13,25

18,8222,13

27,77

35

44,5

1994 1995 1996 1997 1998 1999 2000 2001

Contracted

Real

Source: Paste / ANATEL.

•Pay phonesPay phones : : 1.1 millions – 1.1 millions – Dec Dec 20012001 Annual Annual Growth Growth 17.9% per year17.9% per year (1994/2001) (1994/2001)

Annual Growth (1994/2001)68.6% per year

Mobile Phones in ServiceMobile Phones in Service

Source: Paste / ANATEL.

in million

0,755 1,42 2,744,55

7,37

15,03

21,47

29,2

33,4

7,374,55

2,741,420,755

19,3

27

1994 1995 1996 1997 1998 1999 2000 2001

planned

real

•Cable TV available in all cities over Cable TV available in all cities over 500.000 inh.500.000 inh.

IT Hardware - Local IT Hardware - Local Production Production

0,98 1,2

12,8114,73

9,9411,43

4,75,26

28,43

32,62

automation computer telecom component TOTAL

2001

2002

Source : Abinee

US$ US$ BillionBillion

Local Production X Imported Local Production X Imported SoftwareSoftware

1,5

0.07

1,8

0,08

1,9

0,19

2,8

0,31

3,2

0,50

3,9

0,73

3

0,96

3,2

1,023

3,2

1,021

1993

1994

1995

1996

1997

1998

1999

2000

2001

Local

Imported

US$ BillionUS$ BillionCurrency Currency DevaluatioDevaluation n

Source- Central Bank & Braz. Soft Ass. + Source- Central Bank & Braz. Soft Ass. + SepinSepin

1%1%

9%9%

16%16%

62%62%

24%24%

6%6%39%39%

36%36%

7%7%

0%0%

Geographic distribution Geographic distribution Software Production Companies Software Production Companies

1999 - 2.363 established companies1999 - 2.363 established companies2002 - 3500 established companies2002 - 3500 established companies

73% are SME73% are SME

• Users profile - Users profile - 57% men x 43% women57% men x 43% women– 21 % belong to A social class 21 % belong to A social class – 42% belong to class B /17% belong to class C42% belong to class B /17% belong to class C– 20% belong to D & below20% belong to D & below

public + private initiatives (NGO)public + private initiatives (NGO)• Number of HOSTS : 1.6 millionNumber of HOSTS : 1.6 million

– Brazil is the 11Brazil is the 11th th in the world (ITU)in the world (ITU)– 33th th in Americas ( USA –Canada)in Americas ( USA –Canada)– 11st st in Latin Americain Latin America– Number of Domains : 414,876 (90% =.com.brNumber of Domains : 414,876 (90% =.com.br)

• .br.br - 5 - 5th th ccTLD ccTLD• Running IPv6 protocol at national research Running IPv6 protocol at national research

network (RNP) ( Portugal/Brazil test bed)network (RNP) ( Portugal/Brazil test bed).br.br committee public + private committee public + private

• Brazil has 61% Latin America sitesBrazil has 61% Latin America sites• Full automated banking (since 80’s) – e-Full automated banking (since 80’s) – e-

bankingbanking

Internet Internet

Source :http://www.cg.org.br

Legal FrameworkLegal Framework

e – Commerce legal frameworke – Commerce legal framework

Overcoming the brick world concept Overcoming the brick world concept regarding :regarding :– Contracts – Documents - Financial Contracts – Documents - Financial

transactions - Credit Bonds - Signatures transactions - Credit Bonds - Signatures - Certificates- Certificates

• Establishment of certificate entity or Establishment of certificate entity or entitiesentities

• Regulatory agencies to deal with the Regulatory agencies to deal with the market (certificates entities) market (certificates entities)

• Acceptability of electronic document and Acceptability of electronic document and digital signaturedigital signature

• Cryptography & Public Key Infrastructure Cryptography & Public Key Infrastructure (PKI).(PKI).

• Free development of technology Free development of technology including cryptography including cryptography

• Secure environment regarding to Secure environment regarding to contracts and signaturescontracts and signatures

• General rules related to advertising General rules related to advertising and public offer by electronic means and public offer by electronic means

• Data protection & Information Data protection & Information privacyprivacy

• New procurement rules to deal with New procurement rules to deal with electronic acquisition.electronic acquisition.

• New payment structure related to New payment structure related to electronic money transference, electronic money transference, currency use and related issues.currency use and related issues.

e – Commerce legal frameworke – Commerce legal framework

• Basis for legal charges regarding suppliers Basis for legal charges regarding suppliers and advertising of goods and servicesand advertising of goods and services

• Intellectual Property Rights Intellectual Property Rights • Basis for legal charges regarding systems Basis for legal charges regarding systems

invasion, electronic piracy, modification- invasion, electronic piracy, modification- destruction or unauthorized use of datadestruction or unauthorized use of data

• Crimes & their relation with the networkCrimes & their relation with the network– the the felonfelon resides in the network resides in the network

• opening sites as instrument for criminal action opening sites as instrument for criminal action

– the the victimvictim resides in the network resides in the network• attack to organizations or individuals with the attack to organizations or individuals with the

network and harming themnetwork and harming them

– custodian of recordscustodian of records resides in the networkresides in the network (neither the (neither the felonfelon or the or the victimvictim necessarily necessarily

reside in the network) reside in the network) - pretending to be the owner or constrain their - pretending to be the owner or constrain their

action action

e – Commerce legal frameworke – Commerce legal framework

Government & Congress:Government & Congress:

• PL 3016 / 2000 Deputado Antônio Carlos PannunzioPL 3016 / 2000 Deputado Antônio Carlos Pannunzio– Records of transactions related to InternetRecords of transactions related to Internet

• PL 0151/2000 Senador Luiz EstevãoPL 0151/2000 Senador Luiz Estevão– Internet information accessInternet information access

• PL 3692/97 Dep. Vicente André Gomes (linked to PL 3692/97 Dep. Vicente André Gomes (linked to PL1713/96)PL1713/96)– Internet Subscribers addressInternet Subscribers address

• PL 2358/2000 Deputado Nelson ProençaPL 2358/2000 Deputado Nelson Proença– Internet rules for election marketingInternet rules for election marketing

• PL 3303/2000 Deputado Antonio FeijãoPL 3303/2000 Deputado Antonio Feijão– Internet rulesInternet rules

• PL 3360/2000 Deputado Nelson Proença PL 3360/2000 Deputado Nelson Proença – Data privacy Data privacy

• PL 0933/99 Federal Government PL 0933/99 Federal Government – Crimes related to banking automationCrimes related to banking automation

• PL 1713/96 Dep. Cássio Cunha Lima ( linked to PL 1070/95 PL 1713/96 Dep. Cássio Cunha Lima ( linked to PL 1070/95 ))– Internet access related crimes & chargesInternet access related crimes & charges

• PL 1806/99 Deputado Freire Júnior PL 1806/99 Deputado Freire Júnior – Internet crimes related to unauthorized accessInternet crimes related to unauthorized access

• PL 1809/99 Deputado Bispo RodriguesPL 1809/99 Deputado Bispo Rodrigues– Banking trasaction security and related issuesBanking trasaction security and related issues

• PL 0084/99 Deputado Luiz PiauhylinoPL 0084/99 Deputado Luiz Piauhylino– Crimes and charges related to internetCrimes and charges related to internet

• PL 0152/91 Senador Maurício Corrêa ( PL 4102 A / 93 )PL 0152/91 Senador Maurício Corrêa ( PL 4102 A / 93 )– Crimes related to data undisclosureCrimes related to data undisclosure

• PL 0076/2000 Senador Renan CalheirosPL 0076/2000 Senador Renan Calheiros– Crimes definition for internet Crimes definition for internet

PornographyPornography• PL 1070/95 Deputado Ildemar Kussler PL 1070/95 Deputado Ildemar Kussler • PL 3258/97 Dep. Osmânio Pereira (linked to PL 1070/95 )PL 3258/97 Dep. Osmânio Pereira (linked to PL 1070/95 )• PL 0253/99 Hélio de Oliveira Santos ( child & teenager)PL 0253/99 Hélio de Oliveira Santos ( child & teenager)Data BaseData Base• PL 0268/99 Senador Lúcio Alcântara (PL 0268/99 Senador Lúcio Alcântara (habeas data)habeas data)

Files /data /digitizer issuesFiles /data /digitizer issues• PL 0022/96 Senador Sebastião Rocha ( linked PL 0022/96 Senador Sebastião Rocha ( linked

to PL 3173/97 )to PL 3173/97 )• PL 2644/96 Deputado Jovair Arantes ( linked PL 2644/96 Deputado Jovair Arantes ( linked

to PL 1713/96 )to PL 1713/96 )• PL 1532/99 Deputada Angela GuadagninPL 1532/99 Deputada Angela Guadagnin

E- commerce (general) + Electronic Document E- commerce (general) + Electronic Document + digital signature related issues+ digital signature related issues

• PL 0672/99 Senador Lúcio Alcântara (Uncitral PL 0672/99 Senador Lúcio Alcântara (Uncitral ))

Electronic invoiceElectronic invoice• PL 1483/99 Deputado Hélio de Oliveira Santos PL 1483/99 Deputado Hélio de Oliveira Santos • PL 1589/99 Deputado Luciano Pizzato (linked PL 1589/99 Deputado Luciano Pizzato (linked

to PL1483/99) to PL1483/99)

ImplementationImplementation

Policy Management by Policy Management by Partnership Partnership

Official Committee - public & privateOfficial Committee - public & private Private : Associations Commerce; Industry; Internet Private : Associations Commerce; Industry; Internet

Providers; Transport/Logistics; SoftwareProviders; Transport/Logistics; Software6 Sub Committees6 Sub Committees

• I - Payment means for e-commerce I - Payment means for e-commerce – ( Gov Coord.)( Gov Coord.)

• II – Logistics & National Integration II – Logistics & National Integration – ( Gov. Coord.)( Gov. Coord.)

• III – Economic AspectsIII – Economic Aspects– ( National Industry Ass. Coord)( National Industry Ass. Coord)

• IV – Applications & Projects ( social approach)IV – Applications & Projects ( social approach)– ( IP ass. Coord.)( IP ass. Coord.)

• V - Technology & Products for e-commerce V - Technology & Products for e-commerce – ( Software Ass. Coord) ( Software Ass. Coord) 

• VI – e-commerce for Small Business VI – e-commerce for Small Business – ( National Commerce Ass. Coord)( National Commerce Ass. Coord)

Full acceptance of electronic offers inside and outside Full acceptance of electronic offers inside and outside national border ; On line currency and credit markets; national border ; On line currency and credit markets; Electronic stock and options market ; Full offers of Electronic stock and options market ; Full offers of goods, information and services ; Third part safetyness goods, information and services ; Third part safetyness regarding electronic documents; Full legal guaranteeregarding electronic documents; Full legal guaranteeNew Brazilian Payment System –SBP – running since New Brazilian Payment System –SBP – running since

june7thjune7th

I -Payment means for e-commerce I -Payment means for e-commerce

( Gov Coord.) ( Gov Coord.)

II– Logistics & National IntegrationII– Logistics & National Integration( Gov. Coord.)( Gov. Coord.)

Logistics, local & national transport network Logistics, local & national transport network and services, distribution, regional access, and services, distribution, regional access, cost, investments, new rules and statistics cost, investments, new rules and statistics related to e-commerce, logistic & transport related to e-commerce, logistic & transport aspects; competition aspects; competition Post Office Program Post Office Program

III – Economic AspectsIII – Economic Aspects( National Industry Ass. Coord)( National Industry Ass. Coord)

International aspects related to e-commerce; International aspects related to e-commerce; investments; financing and credit; costs; investments; financing and credit; costs; international legislation; statistics; international international legislation; statistics; international agreements and intellectual property rights; agreements and intellectual property rights; disputes arising under e-environmentdisputes arising under e-environment

New Law for Arbitration –May2002 New Law for Arbitration –May2002

IV – Applications & Projects ( social approach)IV – Applications & Projects ( social approach)

( IP Ass. Coord.)( IP Ass. Coord.) e-procurement ; local IP access; training + e-procurement ; local IP access; training + local capacity for Internet use and trade – local capacity for Internet use and trade – focus on reducing the social & economic focus on reducing the social & economic gap using e-commerce for local gap using e-commerce for local development – public & private partnership development – public & private partnership

Free web site for all municipalities Free web site for all municipalities

(e-procurement)(e-procurement)

V - Technology & Products for e-commerce V - Technology & Products for e-commerce ( Software Association Coord.) ( Software Association Coord.) 

New technologies development ; local software New technologies development ; local software solutions; experimental joint development ; R&D solutions; experimental joint development ; R&D promotion; innovation promotion; venture capital promotion; innovation promotion; venture capital promotion; focus on new products and new services.promotion; focus on new products and new services.Innovation law; new funds to improve e-technology Innovation law; new funds to improve e-technology

inside SMEinside SME

VI – e-commerce for Small Business VI – e-commerce for Small Business 

( National Commerce Ass. Coord.)( National Commerce Ass. Coord.)

e-procurement promotion for small e-procurement promotion for small business; low cost hardware ; training and business; low cost hardware ; training and promotion local capacity (SEBRAE); joint promotion local capacity (SEBRAE); joint work with V & IV sub committees for local work with V & IV sub committees for local solutions.solutions.

Post Office ProgramPost Office Program

First ResultsFirst Results

ICP – PKI BRAZILICP – PKI BRAZIL

Certifying Authorities – AC – ROOTCertifying Authorities – AC – ROOT• interoperability , credibility & auto interoperability , credibility & auto signed certificatesigned certificate

Certifying Authorities - ACCertifying Authorities - AC• issue, delivery & control of life cycle issue, delivery & control of life cycle for certificatesfor certificates- certificate traceability and historical - certificate traceability and historical storage (issued, due, cancelled, storage (issued, due, cancelled, revoked)revoked)

Registrar Authorities - ARRegistrar Authorities - AR• users Identification and Registry users Identification and Registry • delivery of certificatesdelivery of certificates

On Line Directory and Storage Data for On Line Directory and Storage Data for InformationInformation Audit & SecurityAudit & Security

ICP – PKI BRAZIL - servicesICP – PKI BRAZIL - services

Digital Signature Digital Signature Secure Cryptography Secure Cryptography Certificate storage Certificate storage Certificate revoke Certificate revoke Secure copies and key recoveringSecure copies and key recovering Key automatic updateKey automatic update Key traceabilityKey traceability Cross certification Cross certification Validity for certificates Validity for certificates Unretractability guarantee for Unretractability guarantee for

electronic transactions and electronic transactions and operationsoperations

Electronic DocumentElectronic Document(law)MP 2200-2 (law)MP 2200-2 ( 96 UNCITRAL model)( 96 UNCITRAL model)

Art.12 – all Public and private electronic Art.12 – all Public and private electronic document are legal.document are legal.

§1° Documents content are presumed §1° Documents content are presumed truthful related to signature owner if truthful related to signature owner if certified by ICP Brazil and will be valid as certified by ICP Brazil and will be valid as art 131 Law 3.071 1/1/ 1916 Civil Codeart 131 Law 3.071 1/1/ 1916 Civil Code

§ 2° Document exchanged among private § 2° Document exchanged among private persons are free to use any certification if persons are free to use any certification if agreed among those personsagreed among those persons

e-commercee-commerce

0,3 0,7

1,11,9

2,9

14,6

10,2

6,6

3,91,7

2

7,7

4,6

12,1

17,5

2000 2001 2002 2003 2004

US$Billion

B2C B2B Total

Source: IDC brSource: IDC br

Brazil = 44% Latin America e-commerceBrazil = 44% Latin America e-commerce

85%85%

Average annual Average annual purchase/customerpurchase/customer

6322146 211 246

857792727662597

13041573

18422112

2381

2000 2001 2002 2003 2004

mobile

residential

corporate

Source: IDC brSource: IDC br

US$US$

e-commercee-commerce

Business to Consumer – B2CBusiness to Consumer – B2C

• Virtual StoresVirtual Stores– > 1000 virtual small stores > 1000 virtual small stores – Income Concentration on famous brands < Income Concentration on famous brands <

10% total stores10% total stores• Amélia , Americanas , Makro, Ponto Frio Amélia , Americanas , Makro, Ponto Frio

, Submarino , Submarino • New Access AlternativesNew Access Alternatives

– 2.5 & 3 , 3.5..generation telephones2.5 & 3 , 3.5..generation telephones– Low cost hardware (São Paulo test bed)Low cost hardware (São Paulo test bed)– Digital TV- 92% homes have TVDigital TV- 92% homes have TV

• Portals and Incentives Portals and Incentives – Sebrae , Apex , Banco do Brasil , States Sebrae , Apex , Banco do Brasil , States

and Municipalities Government and Municipalities Government – The Post Office ProgramThe Post Office Program

• Open Door ProgramOpen Door Program– Everyone must have an address – e-addressEveryone must have an address – e-address

– Public Internet kiosk with training program Public Internet kiosk with training program with local students with local students

• Virtual Shopping ProgramVirtual Shopping Program• Digital certificationDigital certification• E-SedexE-Sedex – logistic for small business – logistic for small business

– Launched october 2000.Launched october 2000.– 70% of all e-commerce delivery done by 70% of all e-commerce delivery done by

themthem– 2001: 1.241.000 deliveries2001: 1.241.000 deliveries

• Post Office ExportPost Office Export – quick process for Small – quick process for Small Business export (process simplification – cost & Business export (process simplification – cost & bureaucracy)bureaucracy)– From <US$ 1 million (12/99) From <US$ 1 million (12/99) – to US$43 million (12/01)to US$43 million (12/01)

e – government e – government POST OFFICE ProgramsPOST OFFICE Programs

Business to Business – B2BBusiness to Business – B2B

• e-procurement e-procurement – Federal , State & Local GovernmentsFederal , State & Local Governments– Volkswagen , Gerdau , Pão de Açucar Volkswagen , Gerdau , Pão de Açucar

, Agrega , Quadren , Latinexus , Agrega , Quadren , Latinexus • e-distribution e-distribution

– Belgobekaert , Coopetrol , Klabin , Belgobekaert , Coopetrol , Klabin , Paradigma Paradigma

• e-marketplaces e-marketplaces > 65 marketplaces> 65 marketplaces

E-MarketplacesE-Marketplaces• Agrosite , Cafesall , FNP , Portal do Campo, Agrosite , Cafesall , FNP , Portal do Campo,

Fruticom , MegaAgro, Agronegócios , Fruticom , MegaAgro, Agronegócios , AgridataAgridata– Agribusiness - small businessAgribusiness - small business

• CliconClicon– Building construction materials - small businessBuilding construction materials - small business

• Texlinea , SittexTexlinea , Sittex– Textiles, fabricsTextiles, fabrics

• Pharmadis , PortalfarmaPharmadis , Portalfarma– Medical & pharmaceutical products - small Medical & pharmaceutical products - small

businessbusiness • Web , Web Química , InterforbWeb , Web Química , Interforb

– chemicals , petroleum , paper , cellulose logisticschemicals , petroleum , paper , cellulose logistics • Ex: Ex: Mercado EletronicoMercado Eletronico alone deals with alone deals with

>18,000 customers in >10,000 >18,000 customers in >10,000 transactions/day focusing on SMEtransactions/day focusing on SME

• 1111

Internet Data CentersInternet Data Centers

• Optiglobe , Dedalus , ComDominio , DatasitesOptiglobe , Dedalus , ComDominio , Datasites– IT infrastructure & related servicesIT infrastructure & related services

• IBM , EDS , Xerox , HP , Atos OriginIBM , EDS , Xerox , HP , Atos Origin– Hardware for rent, set up& manager IT Hardware for rent, set up& manager IT

facilitiesfacilities• Uninet , IFX , PSINet , Matrix , VentoUninet , IFX , PSINet , Matrix , Vento

– web hosting and web corporate accessweb hosting and web corporate access• Telefônica , Embratel , Diveo , Tnext , Intelig , Telefônica , Embratel , Diveo , Tnext , Intelig ,

Comsat , Impsat , Brasil Telecom , Global One , Comsat , Impsat , Brasil Telecom , Global One , Metrored , ATT, TCO, Telemar.Metrored , ATT, TCO, Telemar.– IT infrastructure, space and bandwidth supplyIT infrastructure, space and bandwidth supply– > 100.000 square meters / US$ 600 billion investment> 100.000 square meters / US$ 600 billion investment

2001 United Nations Administration 2001 United Nations Administration Report Report

• 132 members countries ranking132 members countries ranking• Brazil = 18Brazil = 18thth (>Japan& Italy) (>Japan& Italy)

– including infrastructure and general including infrastructure and general human development.human development.

• Brazil = 5Brazil = 5thth together with USA, AU, NZ together with USA, AU, NZ – if only e-government implemented if only e-government implemented

services and information have been services and information have been considered.considered.

e – governmente – governmente-gov is building confidencee-gov is building confidence

e-governmente-government

• ~15 million applied income tax on line ~15 million applied income tax on line • Election 2000 – 108 million & 5,561 municipalities Election 2000 – 108 million & 5,561 municipalities

by electronic voteby electronic vote• IT e-gov budget 2002 – US$ 50 MMIT e-gov budget 2002 – US$ 50 MM

– Network - Training people - Systems integrationNetwork - Training people - Systems integration– Regional promotion of already implanted Regional promotion of already implanted

facilitiesfacilities– FUST – provide telecom/Internet access for allFUST – provide telecom/Internet access for all

• US$ 450 MM/yUS$ 450 MM/y

• Congress and Judiciary – laws & process can be Congress and Judiciary – laws & process can be followed on line.followed on line.

• Many States offering local services by Internet Many States offering local services by Internet

• Health – electronic file / citizen card Health – electronic file / citizen card • Education – computers & internet in schoolsEducation – computers & internet in schools• Internet connected to all villages – final public Internet connected to all villages – final public

consulting period. consulting period. • Ombudsman Ombudsman • Internet Library program – publics and NGOs Internet Library program – publics and NGOs

to be launchedto be launched• Free simultaneous web sites for all 5,561 Free simultaneous web sites for all 5,561

municipalities government + 5,561 local municipalities government + 5,561 local chambers of representatives focus on public chambers of representatives focus on public account (free use)account (free use)

• Interconnection of local states education Interconnection of local states education networks networks

• E – procurement for all municipalitiesE – procurement for all municipalities

e - government special e - government special programsprograms

Which were Brazilian main Which were Brazilian main issues?issues?

- Create an attractive program to Create an attractive program to joint the whole society joint the whole society

- Build a strong e-gov environmentBuild a strong e-gov environment- Handle all related infrastructureHandle all related infrastructure- Get approved an adequate legal Get approved an adequate legal

frameworkframework- Focus on partnership with private Focus on partnership with private

areaarea- Use special programs to show how it Use special programs to show how it

can workcan work

Will it be enough??Will it be enough??