|Latin America I 2001
|Delivering the BenefitsKey Policy Questions for Developing Countries
|Director, Division for ECOSOC Support and Coordination
|United Nations Economic and Social Council, USA
IP Telephony raises a broad series of policy questions. Economic and social development depends upon finding the answers and acting upon them. The IP question is embedded within the question of how to use information and communication technologies (ICT) to propel regional development. A multi-pronged approach, adapted to local conditions, providing widespread access, education to fruitfully use new technologies and significant local language content is needed.
Information and communication technologies (ICT) hold a promise for unprecedented economic and social development. More than that – ICT is rapidly creating a new context for development. As the world economy is being integrated through ICT, development policies need to be rethought to help developing countries connect to the new information-based world economy. The unfolding ICT revolution offers a huge window of opportunity for making a tangible difference in the lives of the vast majority of the world’s population which remains disconnected and economically disenfranchised. The largest assembly ever of world leaders, the United Nations Millennium Summit most recently identified key development targets to reduce poverty by half by 2015, to provide clean water and basic education for all, to reverse the spread of HIV/AIDS and to reach other development goals. To meet these challenges, developing countries need to achieve much higher economic growth than in the past and share its benefits much more widely among their people. The potential of ICT to accelerate development and their empowering character generates a new sense of hope, especially for the poor, including women and young people. But for this hope to be realised countries will need to adopt bold innovative and inclusive policies. Emerging evidence in developed economies indicates that information technology increases productivity and income. This has been particularly evident in the US economy over the last decade. In the developing world, however, due to limited ICT penetration, its impact on productivity and economic growth has been more difficult to detect. Many developing countries also worry about the relative advantages of investment in ICT if this is perceived to be at the expense of health, education and other national priorities – “Why should we buy computers instead of medicine?” Clearly, there is no magic ‘digital wand’ that would overcome the scourge of poverty overnight. However, the lessons of experience and the weight of accumulating evidence in several countries (for example Costa Rica, Estonia, and Malaysia) suggest that approaches combining sector specific interventions with dynamic national strategies can have a transforming impact on development. To err on the side of inaction will increase the risk of not just being marginalized, but bypassed. The question is no longer, ‘either/or’ – but ‘what and how’. Despair or development Paradoxically, while ICT technologies have been viewed as an equalizing force as they eliminate the relevance of distance, time and space as well as size and capacity and create new economic opportunity, the ICT revolution can also exacerbate existing inequalities and the underlying socio-economic divide between developed and developing countries. The question is whether ICT will be used to offer a new and significant opportunity to further socio-economic development in poorer countries or will, through neglect, make the situation even worse by further marginalising developing countries and exacerbating polarisation. Today’s world is divided by the extent of access to technology. Half the world, or more than three billion people have never made a telephone call; less than five percent of the world’s people use the Internet; there are more Internet hosts in New York City than on the entire African continent and more hosts in Finland than in Latin America and the Caribbean. It is estimated that in 1999 over 150 million people worldwide had Internet access: of these 0.7 percent were in Africa, 2.9 percent were in South America, 17.3 percent were in Asia and the Pacific, 21.8 percent were in Europe and 56.8 percent were in North America. And by the year 2002, the United States is expected to have 135.9 million web users. As the most dynamic sectors of the world economy are information intensive and as access to and application of information and knowledge through networks have become the ‘strategic engines’ of growth, the risk of marginalisation of those who do not or cannot “board the train” becomes even greater than in the past. Indeed, available evidence of the past few years shows that as the pace of the digital revolution has accelerated, the digital divide between and within countries has increased rather than diminished. Also, a strong correlation has emerged between wealth and access to information as a factor of wealth creation. The relative cost of Internet access, for example, is far higher in the developing countries than in the rich nations. Within the developing countries, the cost for the rural poor is even greater than for those living in urban centres. Such formidable factors tend to militate against bridging the growing digital divide and engender a sense of despair. But there is equally strong evidence that even small countries with committed leadership, a clear vision and a comprehensive long-term strategy can achieve remarkable results. Estonia and Costa Rica are well known examples of how successful ICT strategies can help accelerate growth and raise income level. But even some of the least developed countries, such as Mali and Bangladesh, have shown how a determined leadership and innovative approaches can, with some international support, connect remote and rural areas with the Internet and mobile telephony. Key policy questions for developing countries, multi-pronged strategies and public private partnerships There are no ready-made or standard solutions for all country situations. Strategies can vary in focus depending on specific needs and conditions. The primary focus in one country could be development of the software sector whereas infrastructure development may be more appropriate for attention in another country. But there are some broad parameters of action that can be categorized as: connectivity, capacity and content. Unless there is affordable and equitable access and connectivity, prospects for partaking in the knowledge economy are dim. Without requisite human and institutional capacities, the framework and skills required for the use of ICT and the Internet, application and usage of ICT become next to impossible. Without linguistically and culturally diverse digital content and material, a large portion of people, especially in developing countries, may be unable to understand and benefit from what is being offered. While action on all three fronts is essential, it would be neither possible nor advisable for countries with limited human and resource capacity to spread their efforts so thin that there is no sustainable impact on development. The selection and sequencing of interventions designed to achieve breakthroughs and ‘critical thresholds’ of key components are central to success. Such a multi-pronged strategy can have a cumulative impact that is greater than the sum total of specific interventions. ITC can thus jump-start a development dynamic that has eluded many developing countries for so long. A proactive policy framework that fosters a fair and open competitive environment and promotes investment is fundamental but, in many countries, not quite enough to ignite an ICT based development dynamic. Policies must also be seen as transparent and inclusive. They should be technology neutral. And above all, policies must be complemented by strong institutional capacity for follow-through and implementation. A pro-active policy stance does not necessarily mean that governments themselves should invest in the costly roll-out of comprehensive infrastructure and technology platforms. Rather, a strategic approach should be developed by each country based on a careful assessment of demand-driven needs that can deliver low cost and progressively universal access to ICT for key sectors, small and medium enterprises and local communities. Such a strategic approach also involves building public-private partnerships that can generate innovative technological solutions and new business models that combine market expansion with social responsibility through ‘risk-sharing’ and ‘thinking outside the box’ by both the public and the private partners. Many successful models and practices of such partnerships have demonstrated their viability and value. The need is to seek out, replicate and scale-up these practices. Policies intended to promote local business development and wealth creation through ICT are an equally important element of a multi-pronged ICT strategy. A business friendly policy framework would need to address such issues as availability of credit and venture capital, appropriate tax incentives, a liberal trade regime, secure property rights as well as a speedy, efficient and predictable legal system. Beyond a facilitating environment, policies to promote e-commerce and access to global business-to-business networks can help small and medium enterprises to take advantage of new opportunities for growth by linking up with the global economy. Another key component of a multi-pronged ICT strategy is the development of human capacity. The challenge for countries here is to combine an effort to fill the skills gap by training knowledge workers and technical experts to create and maintain infrastructure and deliver content, with the long-term goals of creating the foundation of an ‘information society’ that can plug seamlessly into the global knowledge economy. A concerted effort will be needed to establish ‘centres of excellence’ and technology institutes with twinning arrangements with similar institutions in advanced countries. A second prong should be the training of middle-level skilled workers for maintaining networks. At a third level, a strategic long-term goal should be to use children, boys and girls alike, as ‘accelerators’ for spreading ICT throughout the whole society. Access to knowledge and information networks can be meaningful only if the content is relevant to local needs and conditions. The development of local content in widely understood languages is therefore an essential element of an overall ICT strategy. The use of Internet in China exploded with the development of Chinese language content. In Russia, the introduction of Cyrillic character sets for computer interface in 1997 dramatically increased local content provision and use, so that 60percent of the traffic in Russia today is within the country. Local content development will require training of software engineers and public support for projects designed to achieve clearly identified goals. Building global partnerships for an ICT based development dynamic Given the scale and complexity of the challenge and the need for a multi-pronged response that can fill gaps and address market failures, few developing countries can be expected to succeed on their own in bridging the digital divide. There is a need for ‘strategic partnerships’ at the local, national, regional and global levels that can bring together all stakeholders around well-coordinated actions to stimulate a new development dynamic using ICT as an enabling tool to empower the poor so that they can participate productively in the new global economy. At present, there are many initiatives and activities at all levels and in all regions of the world attempting to address the digital divide. Diversity of effort is vital, since one size does not fit all. At the same time, the cumulative impact of diverse initiatives would be greatly enhanced if we could strengthen synergies, ensure complementarities, promote mutual awareness, if one could more effectively support, replicate and scale-up practices that work: this requires building of partnerships. The need is to create a ‘win-win’ situation where boosting development and expanding markets are complementary and mutually reinforcing. Global initiatives can only be sustainable and effective if these bring together all stakeholders. Governments need to be fully committed and to provide leadership. Civil societies are indispensable. But support and participation of the private sector is absolutely imperative. For ICT to realize its develop-ment potential, actions need to be local, co-operation should be strengthened at the sub-regional level, but the broad agenda needs to be set globally. This is where the United Nations’ unique strengths – universality, legitimacy, experience and presence on the ground, its convening and catalytic capacities – should be fully utilized. The United Nations Economic and Social Council at a Ministerial Session in July 2000 ignited an effort to develop a global response to the challenge of bridging the digital divide by calling for the establishment of an Information and Communication Techn-ologies (ICT) Task Force to be established early this year. Rather than building an additional bureaucratic structure, a compact group of international ICT leaders, drawn from public, private and non-profit sectors from all regions of the world, serviced by a small secretariat will act as a catalyst among international agencies and as a linkage between private and public sectors to build strategic partnerships for leveraging their individual capacities and roles for sustainable ICT-based development programmes. Their terms of reference are to act quickly, with transparency and a high degree of accountability. One of the basic principles of its operation will be achieving synergy with other activities that share similar objectives, in particular the dot force initiative launched by the G8. Although the private sector is and will remain the principal driving force for the development and use of ICT, legislation and regulatory structures are important to how far and how fast the new information technologies spread. These issues topped the agenda at the United Nations Economic and Social Council Ministerial Session last July. By consensus, the Ministers developed a viable programme for action on several fronts. Key policies identified, included: 1. Establishment of a transparent and consistent legal and regulatory framework that fosters ICT development including, as appropriate, the removal of impediments to growth in the ICT areas; 2. Development of the basic infrastructure necessary for connectivity including most remote areas; 3. Application of ICT, wherever possible, in public institutions, such as schools, hospitals, libraries, government departments and agencies; 4. Generation, development and enhancement of local content transmitted by ICT through, inter alia, the introduction of local language character sets; 5. Promotion of access to ICT for all by supporting the provision of public access points; 6. Measures to bring down connectivity costs to make ICT affordable, including market-based mechanisms and com-petition; 7. Development of appropriate policies to promote investment in the ICT sector; 8. Making the necessary investment in human resources development, and strengthening the institutions and net-works for the production, acquisition, absorption and dissemination of know-ledge products; 9.Technical preparation of national man-power for securing national capacities to administrate information systems and to develop sustainable ICT projects; 10.Promoting the digital enhancement of already established mass media. In his Millennium Report, the United Nations Secretary-General Kofi Annan has recognized the role that ICT can play as a tool to empower the poor. He has demonstrated leadership and vision by calling for a “Global Compact” – a public-private partnership designed to address the environmental, social and human rights dimensions of development and poverty eradication. The ICT Task force would complement the Global Compact. Under his dynamic leadership, the United Nations is spearheading global efforts to bridge the digital divide using the ICT Task Force as an instrument of partnerships for making strategic interventions and developing sustainable programmes of ICT for development. A start has already been made by the United Nations in launching initiatives such as the United Nations Information Technology Service (UNITeS), a corps of United Nations volunteers for ICT training, and the Health Net, a network of medical, research and health facilities and institutions to bring state-of-the-art knowledge and experience to the doorstep of the rural poor in developing countries. Conclusion The digital revolution is still in its incipient stage. It has yet to be absorbed into the mainstream of the world economy. It is useful to recall that it took electric power more than 40 years to transform industrial production at the turn of the twentieth century. Change will of course be far more rapid this time around. The fact remains, however, that we are only at the beginning of the new information economy. The great challenge before the world community is to ensure that the rich and the poor alike can participate in it and share its benefits fairly. This is not only an ethical question but also an economic imperative. The new economy can only be productive and sustainable over the long-term if it spreads worldwide and responds to the needs and demands of the people of the world.