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Georg Caspary
Modern information and communications technologies (ICTs) hold great promises for developing countries. However, if they are to benefit the poor their introduction must be carefully examined. This article shows several models of affordable access to ICTs which have been tried in various parts of the developing world.
Common wisdom has it that the advent of modern information and communication technologies (ICTs) such as telephony or the internet hold unprecedented opportunities for developing countries. Academics, policymakers and entrepreneurs alike frequently claim that ICTs represent one of the most powerful tools in the struggle against poverty.
There appear to be good reasons for such claims, too. After all, there are a number of ways - some obvious and some not-so-obvious ones - in which ICTs may serve the development process. For instance, private entrepreneurs benefit because ICTs help to improve access to markets or supply chains and provide a broader base for decision making, thus making risk more calculable. Moreover, many local communities have experienced that ICTs have increased civil society participation in political decision making processes and may expand the reach and accessibility of government services and public infrastructure. In the Indian state of Andhra Pradesh, Internet-based Integrated Citizen Service Centres allow for electronic bill payment, issuing of certificates, permits and licenses; or access to public information.
Nevertheless, a word of caution is in order. There is as yet little systematic empirical evidence of the supposed enormous, developmental impacts of ICTs. Moreover, in many - especially rural - areas of developing countries, the private sector is so far less than keen to invest in ICTs because of lack of experience with rural developing-country markets or low purchasing power of the local population. This means that, if ICT access is to be expanded, public money will have to be spent - which in turn means that there are important trade-offs to be considered. In many areas, there are serious questions about how much money policymakers should spare for the build-up of ICTs instead of investing further in education or health care.
Given such trade-offs, there is a need to identify which kinds of ICT access deliver the best value for money in developing countries, and how the limited resources that can be spent on it can be made to best suit the particular needs of the poor. A number of models for affordable access have so far been tried.
One of the most famous projects is the Grameen Village Phone system, undertaken by Grameen Telecom (a member of the Grameen group). The project aims at ultimately spreading phone access to the over 100 million rural inhabitants of Bangladesh who are so far 'unwired', made possible by combining the Grameen Bank's expertise in village-based micro-enterprise and microcredit, with the latest digital wireless technology. The aim is to have selected member borrowers of Grameen Bank purchase the phones under a lease finance and make the phones available to all users in the village on a fee-paying basis.
Recent research by the consulting firm Telecom Development Group has shown that the Village Pay Phone Program yields significant positive social and economic impacts, including relatively large consumer surpluses and immeasurable quality of life benefits. The consumer surplus for a single phone call from a village to Dhaka, a call that replaces a physical trip to the city, ranges from 2.6 to 9.8 per cent of mean monthly household income. The cost of a trip to the city ranges from 2 to 8 times the cost of a single phone call, meaning real savings for poor rural people of between 132 to 490 Taka ($ 2.70 to $10) per call.
Another model of ICT provision in rural areas of developing countries, and one which attempts to combine phone access with access to other ICTs (in particular the Internet), is that of so-called telecentres. A telecentre is a common point of access for multiple users (often an entire community), providing a range of ICT services including Internet, fax, word processing, and even specialised information retrieval or applications (e.g. distance education).
Telecentres have been established widely in the developing world, and vary in their service provision and means of funding. In Peru, the establishment of numerous Cabinas Públicas, has lead to one of the highest concentrations of public internet access and a significant reduction in prices. Nevertheless, the experience with telecentres has so far been a mixed one. In numerous cases, usage, particularly of PCs, has been lower than expected or commercial viability was not attained. Of the over 70 Community Telecentres established since 1997 by the South African Universal Services Agency, only 40 per cent remain open today, with only 3 per cent making enough money to cover costs. Many other telecentres failed to serve their particular target groups (some telecentres are, for instance, being used disproportionately by tourists).
Telecentres exist in various kinds, each with their respective merits. First, one might distinguish between small, private sector telecentres on the one hand and bigger, donor-funded telecentres on the other hand. Smaller, privately-run telecentres are often financially self-sustaining - but are thus usually restricted to areas where they expect to be viable (usually urban centres) and are usually neither within physical nor financial reach of the poor. They are also unlikely to be able to provide local content. By contrast, larger, often externally funded telecentres are rarely financially sustainable but can focus more on specific 'development' aspects, including access specifically targeted at rural communities and the poorest in general, as well as a focus on training.
All this means that it is highly probable that ICTs do hold some significant potential gains for the development process, leading to a widely-perceived risk of some developing countries being bypassed by the ICT revolution if they do not invest into this sector. Yet, just as great is the danger of exaggerated expectations from ICTs for development, leading decision-makers to expend scarce public resources where there is little hard evidence to justify such steps. Until further systematic evidence on the precise developmental impact of different ICTs on different communities exists, or until there is substantially more private investment in this sector, maximising the use from ICTs for developing countries will require an understanding not only of the opportunities ICTs present, but also of the trade-offs involved - and of the particular ways in which ICT access has to be tailored if any developmental benefits are to be reaped.
Georg Caspary, Policy Analyst at the Organization for Economic Cooperation and Development (OECD).
Extracted from D+C Development and Cooperation, January/February 2002
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