Money and infrastructure, and not white elephants, are needed to bring ICT to poor countries and bridge the digital divide, writes Alec van Gelder* There is a clamour from development agencies, the UN and poor countries are clamouring for the wonders of information and communication technology to cure the ills of the developing world with the magic bullet of information and communication technology (ICT): rich people have computers, poor people do not, therefore giving poor people computers will make them richer. At the World Summit of the Information Society in Tunis on 16-18 November. These ICT lobbyists will bemoan the "digital divide" and call for a Digital Solidarity Fund. Dazzled by the allure of e-commerce, the global information society, e- learning and all the other buzzwords, they believe that new technology will allow them to leap-frog decades of incompetence and corruption and achieve rapid development. But the barriers to technological development are exactly the same as the barriers to any economic development: market restrictions, lack of contract law, state controls, customs duties, bureaucracy, corruption and so on. With all these still in place, diverting resources to ICT is just another white elephant -- the contemporary equivalent of the dams, highways and aluminium smelters that were going to drag Africa up by its infrastructural bootstraps in earlier decades. The Internet and mobile telephones appear to have launched a revolution in the economies of developed countries and it is natural that everyone else should want a taste: India's famous success in contracting outsourced work over the web and by "phones look like a wonderful example of what can be done -- although it applies to a tiny part of the economy. But it is not the ICT that has made developed wealthy countries richer, it is open economies that have allowed ICT to bloom and flourish. India provides the perfect example: the country's private software programmers and call centres compete fiercely with eachother, which, combined with light taxation and the absence of heavy regulations, have resulted in world class IT and service industries. After the state-owned telecom company was privatised in 2002, private competitors were able to undercut the prices VSNL, the incumbent, charged by 50 per cent. Through market-based competition, sensible regulation, an unfounded respect for private local and foreign investments, and the rule of law that promotes confidence in entrepreneurs seeking to make investments, entrepreneurs can then begin to cater to the demands of local and foreign consumers. Without market incentives to improve quality, service or number of customers, for example, Ethiopia's state-owned telecom and ISP monopoly is not forced to improve its service or decrease costs. While it is Africa's largest recipient of foreign aid, it still costs the average Ethiopian -- who earns roughly $300 a year -- just under $100 to subscribe to a local mobile phone provider. If they are lucky enough to have a phone line, the prohibitive cost of using the Internet -- almost $200 a year -- makes joining the network economy practically impossible, despite the benefits it can bring. To determine whether an economy is open and capable of developing, we need to know about its business freedoms, laws, courts and investments rules, the state of its education, the regulation of telecommunications, the reliability of transport, if there are limits on foreign investment, if there are local sources of capital, how hard or easy it is to set up a business and what legal protections there are for the contracts and activities of businesses and investors, particularly for intellectual property. For ICT specifically, we also need to know if the country allows private Internet Service Providers, if its telecommunications system allows competition and what access citizens have now or may have to commercial providers. And, of course, we have to ask how many people can afford PCs or cellphones. In Ethiopia, for example, without competition, Ethiopia's state communications monopoly is not forced to improve its service or decrease costs. Ethiopia is Africa's largest recipient of foreign aid but it still charges the average Ethiopian who earns roughly $700 a year -- just under $100 to subscribe to a local mobile phone provider. For anyone lucky enough to have a phone line, the prohibitive cost of using the Internet -- almost $200 a year -- makes joining the network economy practically impossible, despite the benefits it might bring. In reality, there are not only all the usual economic and legal obstacles but also, in many countries, the political obstacles set up by regimes that are terrified of their people getting free access to information. Iran, China, Saudi Arabia, Cuba and others will be pushing for regulation of the Internet at the Tunis summit. Nowhere was this clearer than the recent debate over UNESCO's treaty on cultural diversity: Iran and China saw this treaty as an opportunity to restrict the flow of materials and information technologies that might undermine the government's power. They are joined by Saudi Arabia and Cuba, among others, in trying to regulate the Internet, at the forthcoming World Summit of the Information Society in Tunis on 16-18 November. Even in those countries that genuinely do want to embrace ICT and make it work where ICT is welcome, few policy-makers understand how to help the e-commerce, e-learning and even e- healthcare that could allow their people to gain access to the markets and resources of the world. Just look at the telephone: more than half of the world's population has never made a phone call and there is nothing new or complicated about telephone services. One-third of the world's population has no access to electricity. Often, technology is wrongly seen as an end, rather than a means to an end and the international agencies offering solutions this month to the digital divide have tended to hinder rather than help the deployment of ICT. Instead of being realistic about how ICTs can positively affect countries where infrastructure is dilapidated, agencies like the International Telecommunication Union have a vested interest to over-emphasise this potential. Furthermore, spending on ICTs dictates that money cannot be used for health, education, housing or other projects -- many of which have equal or greater merit. The nature of their funding means that development money spent on technology is not used for health, education, housing or other projects -- many of which have equal or greater merit. Often, technology is seen as an end, rather than a means to an end. Nowhere is this more apparent than in ICT/education projects, not least in developed rich countries, where the overwhelming focus is almost always on buying computers, and not on teacher training, curriculum design or actually improving learning. Without clear objectives, it is difficult to measure results. Moreover, development agencies seldom learn from their mistakes. Because of the way that project pipelines and lending portfolios operate, projects that receive funding now were most likely designed two or several years ago -- in the meantime, needs have probably changed, flaws have been identified in the project design, and the project is doomed to failure. But there is a glimmer of hope. The radio remains the most widespread application of communication technology in the developing poor countries today but the rapid spread of mobile phones in some African countries does give hope that enthusiastic local entrepreneurs can indeed leap-frog, by wireless transmission, the infrastructural failures of governments that have failed to provide telephone or electrical lines in their boastful five-year plans and have prevented entrepreneurs from providing them. High-profile international meetings about the digital divide can be used as a lever to make progress to bring attention to the real barriers to economic and ICT growth: state control, regulation and excessive taxation of the economy in general and ICT in particular, such as education, corruption, free speech and encouraging foreign direct investment. That is what the poor of the world need. That is the great divide we must bridge. * The writer is a research fellow specialised on technology issues at the International Policy Network, a development charity in London which promotes the institutions of free society.
