On January 25, 2017, former Haiti Prime Minister Laurent Lamothe stressed the need to embrace vital technology such as blockchain, which could help Haiti and other developing countries.
Poverty is a major issue that many people worldwide face every day. According to the World Bank, as of 2013, roughly 10.7 percent of the world’s population lived on less than US$1.90 a day. This is alarming as the problem leads to socio-economic discrepancies and other inadequacies in areas such as health and nutrition, education, and shelter, hindering social progress. To eradicate this malady, governments have taken various measures, including the formation of, and assistance from, groups like non-governmental organizations (NGOs). Given the potential benefits of blockchain technology, governments should also consider adopting the new innovation to combat poverty, boost growth, and improve people’s economic well-being.
According to the United Nations Development Program, Haiti ranks 163 out of 187 countries on the 2014 Human Development Index. This isn’t surprising given the number of problems in the Caribbean country. Many in the nation remain unbanked, uneducated, and unemployed. In 2015, Haiti’s Gross National Income (GNI) per capita was US$810. This is discouraging considering that it is exceedingly below the GNI average for Caribbean and Latin American developing countries ($8,933.34) and the world average ($10,547.57). In light of these statistics, Lamothe is optimistic that blockchain technology could improve the Haitian economy, as well as the global economy.
“In fact, [blockchain] will have a huge impact on the way we do business—in particular on the global tax system. It could be used to register and record property transactions, for example, or government-licensed assets, intellectual property, and even to make sure that a voter uses one vote only,” he mentioned. “Considering the pace at which organizations and governments are beginning to explore and test Blockchain, once the remaining challenges are tackled, the new technology could take off very rapidly.”
However, the adoption of the new technology would require a shift in regulatory thinking. Lamothe stated:
“Innovation is important in the development arena and blockchain requires a fundamental shift in mindset because the current regulatory framework aims to regulate the financial system through the access point of a central operator, regulator or management body.”
Additionally, there are a number of challenges that developing nations have to consider before implementing the technology. First, there is the problem of infrastructure. Many of these nations lack the tools, personnel, and financial capacity to erect sufficient infrastructure that can utilize blockchain technology. NGOs can help to overcome this hurdle by investing in the required infrastructure, but unfortunately these entities can only do so much. Second, logistics is another issue faced by these nations. The development of blockchain technology requires sufficient logistical components such as production logistics, logistics management, and warehouse management. And third, trust and integrity remain a perennial problem for developing nations. The threats of theft and other crimes, as well as corrupt regimes, deter investors from providing the resources necessary for projects to break ground.
Over the past year, we’ve witnessed the growing interest in blockchain technology. Just as businesses have recognized its potential benefits, so too have governments and international organizations (the International Monetary Fund will be debating the use of blockchain technology at the 2017 World Government Summit in Dubai). The adoption of blockchain tech will revolutionize the financial sector—hopefully the poor will not be left behind.