A new report has warned that the digital transformation push of Pacific Island countries (PICs) stands on a fragile footing, marred by several headwinds despite concerted efforts.
The report, compiled by the Carnegie Endowment for International Peace, noted that PICs are advancing the digitization of their economies using emerging technologies. While the countries have made keen progress with technological advancements, regional progress remains uneven.
It highlights Fiji, Samoa, and Tonga as regional leaders in digitization due to their stronger economies. Meanwhile, the Solomon Islands and Tuvalu are positioned at the lower end of the ranking, due to their geographic isolation and climate vulnerability.
In 2023, ICT ministers from 13 Pacific Island nations signed the Lagatoi Declaration, a commitment to pursue the digitization of their local economies in six key areas. Under the declaration, the countries pledged to focus on digital transformation, digital capacity building, regional cooperation, digital security, innovation, and entrepreneurship.
Amid the frenetic push, analysts from Carnegie noted that several government-led digitization projects have come under fire for launching without proper public consultation. For instance, Palau’s rollout of a stablecoin despite over 40% of its population having no access to an Internet connection has drawn the ire of critics.
The report revealed that a significant chunk of the region’s digitization push relies on foreign donations from advanced countries. China, the United States, New Zealand, and Australia have emerged as leading donors to the digitization efforts of the PICs, with the report highlighting several pitfalls.
A drop in funding can bring digitization efforts in the region to a grinding halt. Meanwhile, only a trickle of the funding is deployed to maintenance and local capacity-building, exacerbating the existing problems faced by the region.
Already, PICs are losing skilled professionals through migration to Australia and New Zealand, leaving the regions without human capital to sustain their digitization push. The report urged PICs to strike a balance between their reliance on foreign donations and sovereign digital development, while strengthening regional cooperation and prioritizing innovation.
A long streak of digitization efforts
Keen on keeping pace with the rest of the world, several PICs have unveiled digital transformation initiatives. For several countries in the region, the most viable option is blockchain-based applications, with digital IDs gaining traction in Fiji and Vanuatu.
Meanwhile, Tuvalu is pursuing full digitization to improve its governance processes, while others are keen on transforming into a global financial hub to diversify their local economies. Almost all PICs are dabbling with a central bank digital currency (CBDC).
Vietnam and Laos ramp up digital push
Elsewhere, Vietnam and Laos have pledged to extend their bilateral relationship toward the digital transformation of their local economies, leaning on next-gen solutions and heightened cooperation.
Laotian and Vietnamese diplomats met on the sidelines of the 2025 Autumn Economic Forum in Ho Chi Minh City to iron out details of the bilateral cooperation. Vietnamese Deputy Prime Minister Bui Thanh Son and Lao Technology and Communications Deputy Minister Saysana Sittiphone led their respective delegations.
Son told his Laotian counterpart that digital transformation will be a key pillar in improving connectivity between both nations. Going forward, Son stated that Vietnamese ministries and agencies will collaborate with their Laotian counterparts on areas of artificial intelligence (AI) and other core technologies.
Furthermore, Son revealed that the government will support Vietnam’s technology giants in their quest to set up operations in Laos. Conversely, Vietnam will reduce the complexities associated with Laotian firms launching operations within its borders in a show of bilateral cooperation.
The Vietnamese delegation pledged to support Laos’ digitization efforts with training initiatives to deepen the local talent pool. Apart from training initiatives, Son confirmed Vietnam’s readiness to “share experiences,” hinting at talent exchanges to provide first-hand learning experiences.
Sitthiphone, meanwhile, expressed delight with Vietnam’s assistance for the development of a national population database and plans for startup and innovation ecosystems in both countries.
He noted that both countries can take things up a notch via the development of cloud and data center infrastructure, building on existing bilateral cooperation. Laos is also eyeing an improvement to the cybersecurity capabilities of both nations while accelerating the digital transformation of the public sector.
An upswing in digitization efforts
In July, Laos and Vietnam teamed up to launch a mobile application for digital payments, targeting tourists and SMEs in the region. Christened LamoPay e-wallet, the joint solution offers a veritable solution for cross-border payments between nations, sidestepping geographical and fee barriers.
In Laos, biometrics have found new utility in policing, while digital ID use cases have soared in neighboring Vietnam. Both countries have recorded impressive milestones with emerging technologies in key sectors of their economies, including healthcare, finance, security, and manufacturing.
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Source: https://coingeek.com/pacific-islands-face-tech-woes-vietnam-laos-seek-digital-ties/
