|Latin America III 1997
|Finance and Trade Colloquium: Colloquium Report
|Connect-World Latin America, UK
The Latin American and Caribbean Telecommunication Finance and Trade Colloquium organised by the Telecommunication Development Bureau (BOT) of the International Telecommunication Union (1TU) was held in Brasilia (Brazil) from 14-16 July 1997. Connect-World was there to participate in the event. Here is a summary of what went on.
The Latin American and Caribbean Telecommunication Finance and Trade Colloquium organised by the Telecommunication Development Bureau (BDT) of the International Telecommunication Union (ITU) was held in Brasilia (Brazil) from 14-16 July 1997. Over 120 delegates from 29 countries representing 88 organisations participated in the colloquium, the third in a series of five Colloquia on commercial liberalisation aspects organised in all ITU regions. The comprehensive 3-day Colloquium programme had more than 30 presentations, which covered a wide spectrum of topics presented by government ministries, private sector companies, to national, regional and international agencies, and independent consultants. The topics ranged from accounting rates, universal access and sources of financing, to countries’ experiences and the implications of the GATS and WTO Agreements on the Latin American countries. Opening Address Ahmed Laouyane, Director of the BDT addressed the event by highlighting the ever-growing importance of the telecommunications sector in the heart of industries, projecting a growth rate of 7% as compared to the global economic growth rate of 3-5%. Mr Laouyane also noted the threat of tough competition in the domestic market for the 19 Latin American countries which signed the WTO Agreement on Basic Telecommunications Services. Furthermore, there is a need to facilitate the complete and full integration of developing countries in the global trading system. The Brazilian Government, as host of the event, was represented by Renato Navarro Guerreiro who welcomed the participants and officiated the closing ceremony. Mr Guerreiro commented upon the importance and relevance of the colloquium, and the fact that it was held in Brazil (Brazil had approved the New Telecommunications Act a week before, and it was subsequently signed by President Cardoso which coincided with the end of the Colloquium). Mr Guerreiro said that the world is going through a special decade of major changes in trade, and the consequence of the process of change is to influence society in the most fruitful way since the industrial revolution. In his own words, “telecommunications is the cause as well as the effect of a new society”. Next to address the audience was Mr Carlos Guedes of the IADB, who detailed the role of the IADB as a major financial body in the region. Presently it is engaged in a 4-year investment plan of US$40 billion. Its high priority is to help countries set up their communications infrastructure in such a way that Information Technology can be clearly absorbed and used, and it is working with the World Bank and others to find the best guidelines to attain its goals. A letter from Dr Ernesto Dehl, President of CITEL was read to the participants in which he stated the fundamental problem confronting governments is in deciding how to invest in telecommunications infrastructure. With the widely acknowledged deep impact telecommunications have on sustained economic development of a country, CITEL is preparing a document on regulating procedures in the region, as a means to institutionalising good practices. Day 1 – 14 July 1997 After the opening addresses, the Colloquium proceeded at a relentless pace, as evidenced by the dynamic programming, overrun presentations, late task force meetings and official dinners each night. Each participant’s pigeon hole was filled to the brim, and if success can be measured by the amount of papers circulated, about 20kg in weight was thought to be brought home by each participant. One of the programme highlights on Day 1 included presentations by Chuck Lankester of the UNDP who warned of insufficient telecommunications planning in most countries, and the lack of regional and sub-regional cooperation. He emphasised the reconcilation of economic growth with sustainable development. Another highlight was the opportunity to share Brazil’s experience. As the host and the biggest country in the region, there is no doubt that Brazil will play a major role. Baptista Neto of the Ministry of Communications explained Brazil’s late entry to the WTO agreement, and this was followed by a lengthy presentation by Dr Ercio Zilli, Special Advisor to the Minister on Brazil’s new telecoms act and the restructuring and privatisation of Telebras, its national telecommunications operator. In general, the theme of the day was about the relationship between telecommunications growth and economic growth of a country, and the implications of the GATS and WTO Agreements. Day 2 – 15 July 1997 Day 2 began with the discussion on accounting rates; from cost calculation to international policy changes and implications. The Federal Communication Commission (FCC) of the US presented its work in this area which offered a good example of how lessons can be learnt to benefit the region. The FCC stated that subsidy rates cannot be continued and therefore governments must work with other telecommunications operators to find a solution. Next, the topic of presentation was on universal access/service. Dr Barr of S.R. Telecom presented an interesting session on the provision of rural telecommunications service via Public Call Office (PCO) and Multipurpose Community Telecentre (MCT). Andrew Fyfe of Price Waterhouse talked about the various methods of funding universal access. All in all, the impact of privatisation and competition in the provision of social services meant that there is a need to have subsidies. However, there is no clear definition of social/universal service, which can make both the provision of such a service and its financing problematic. Day 3 – 16 July 1997 The last day of the colloquium mainly focused on issues of financing. Aileen Pisciotta of Kelly, Dry and Warren pointed out the types of risks in financing, and quoted the World Bank’s estimate on the telecommunications financing requirements, which is calculated to be worth US$60 billion per year world wide. Eloy Vidal of the World Bank highlighted its role in the financing of information infrastructure to alleviate poverty in countries, such as the Information for Development (INFODEV) initiative, which provides schools with connections to the Internet, and assists countries with the WTO applications. Continuing from a presentation on Project Financing by Judith O’Neil of Reid & Priest LLP the previous day, Francois Giuliani of Societe Generale also spoke on the same topic and reiterated its growing popularity. However, project financing is not always viable or available due to the allocation of risks. In the last session of the day, a summary of each panel’s discussions was given by the respective rapporteurs who each gave an excellent and concise report. The conclusion to the Colloquium Was certainly auspicious. In closing the event, Ahmed Laouyane commented about the significance of the event being held in Brazil and the timing of the signing of the New Telecommunications Act by the Brazilian President. Comments There were a number of excellent presentations on aiding financing and trade, particularly in project financing, reforms in accounting rates and universal access. The Colloquium was a major event as it provided a very useful gathering point for the various stakeholders in the region to learn, share and discuss ways of cooperation on a national, sub-regional, regional and international level. The role of the BDT in the region was discussed in various quarters both during and outside the colloquium. As Ken Lindhorst of AT&T quite rightly pointed out during his presentation, the BDT is seen to have a unique role that provides credibility, coordination and leadership, a feeling which was shared by many from my discussions with some participants. This is further evidenced by the fact that the ITV Brasilia office has become a victim of its own success, being overwhelmed with numerous request for assistance. A number of pertinent questions were also raised by the participants. Roderick Sanatan of the CTU commented upon the lack of transition points for developing countries to deal accounting rates and regulatory requirements. His idea for the establishment of Centres of Excellence to focus on these and other critical issues, such as transition management, enterprise restructuring and negotiations, were taken on board by the Task Force. The Task Force meetings, although they attracted a much smaller audience, were more focused and oriented towards some action, as can be expected. At the end of the Colloquium, a Framework of Action document was drawn up by the ITU with the IDB. Some of the action items included establishing a universal access programme and appropriate funding mechanisms, and developing and negotiating a Multilateral Code of Investment to achieve telecommunications development programmes. Connect-World gave its presentation, entitled “Speaking the Same Language and Speaking with Actions”. This recognised that there is now a global effort to speak the same language of telecommunications liberalisation, and it would be good to see more countries and private sector companies making the effort to also speak the same language of action, to “speak with actions” rather than mere words. The Colloquium saw the beginnings of some real action with the ITU, IDB and World Tel agreeing in principle to work together. Mr. Ahmed Laouyane announced an agreement where both ITU and IDB are committed to providing support for the development of universal access programmes which would extend access to telecommunications to more people in the developing world. He added that the new Framework for Action was an useful initiative to push forward the development of communications infrastructure in the Latin American and Caribbean region Observations One of the most incredible things that happened during the Colloquium was the dynamic programming of each day’s proceedings, thanks to the dynamism of the BDT team. Although the BDT team’s effort was faultless, one can imagine that it was an undesirable situation to be in for both the organisers and participants. The programming was chopped and changed constantly. Also, time-keeping was a real problem as the programming was rarely on schedule. Most presentations were very professional and of high quality. However, the range of topics covered was perhaps one too many. The hectic schedule for the organisers, presenters and audience seemed to suggest either there was too much to cover, or simply more time was needed. A stronger focus is required for each session. The Telebras Training Centre where the Colloquium was held, provided an adequate location and conference facilities. A nice gesture was extended to all participants where they were given limited free international calls per day to keep in touch with their colleagues and loved ones. Conclusion One of the goals of the colloquium is that its conclusions would provide a betterUnderstanding of the necessary conditions for attracting investment. To what extent this was achieved, it remains to be seen in the coming years. For the BDT, the event was viewed as a success in terms of accomplishing in laying the foundations for further development in the region. Connect-World shares this view too, and believes that the BDT’s role in the region is both unique and vital in continuing its leadership and promotion of the spirit of cooperation among the various stakeholders in the region. Last but not least, the team at the BDT should be congratulated for its hard work and success in organising the event. The team is very helpful and efficient, and are already preparing for the Asian Pacific Colloquium to be held in New Delhi (India) from 3-5 November 1997. I look forward to this event and will publish my report in Connect-World India 1998 Quarter l issue.