The Telematics Revolution in Africa and the World Bank GroupPeter T. Knight Paper Prepared for AFRISTECH '95 Symposium on Information Superhighways: What Strategy for Africa? In this paper and my presentation to the Symposium I discuss how the World Bank Group is addressing the opportunities opened up by the most powerful wave of technological change to surge through the world economy in the second half of the twentieth century, the telematics revolution. I will give special attention to Africa, and divide my remarks into five sections:
The Telematics Revolution Joseph Schumpeter was an economist who focused his analysis on the key role of technological change in driving economic development. He said that great waves of technological change drive economic development through a process which he called creative destruction -- these waves of change offer great opportunities to individuals, firms, and countries which can surf them. But these waves of technological change also present great hazards to those who those who do not perceive them, or notice them too late, for while creating new opportunities they destroy old ones and often the organizations which are unable to adapt to and profit from the new opportunities. The telematics revolution, which has been reducing the cost of processing, storing, and transmitting information at the on the order of 50 percent every 18 months for the past 40 years is such a Schumpeterian wave of technological change. It is causing what The Economist in its recent special study, called "the death of distance." It is profoundly affecting the way we live, learn, produce, and consume. In an increasingly knowledge-based economy, the impact on the speed and nature of learning is particularly significant, and lies at the very heart of this revolution. Other speakers at this symposium have already discussed this. We will return to this point. But it is important to note that this telematics revolution's full potential cannot be realized if prices do not fall to reflect the fall in costs. Competition in the telematics market is therefore crucial, which takes us to the question of obstacles. Overcoming Obstacles to Realizing the Benefits of the Telematics Revolution The obstacles to the development of NIIs, their integration into the GII, and the realization of the major benefits in increased international competitiveness and socio-economic development which the telematics revolution offers are not technical or even financial. They are essentially political, regulatory, and organizational. That is what the experience of the World Bank and other international organizations working in this field teaches us. Let us take the case of Africa -- the least connected continent, where NIIs are least developed, and Internet connectivity is lagging badly. For less than the cost of a moderately well equipped F16 or MIG 29, every country in Africa lacking a full Internet connection can have a "starter" Internet node with a 64 kbs VSAT or fiber optic link to the global Internet for 18 months, ten sub-nodes, and the necessary training and equipment to operate it. That is not what a fully developed NII will cost, of course, but what it takes to get started, perhaps on the order of $500,000 per country, exclusive of salaries of the national staff who would be trained. This kind of money is not lacking, and if it were, there are an increasing number of international development assistance organizations ready to provide it. No, what has been lacking is the political will to establish this connectivity. In most cases relatively inefficient monopoly state telecom companies -- often in a retrograde symbiosis with short-sighted Ministries of Finance and authoritarian political systems which fear the free flow of information -- stand in the way. They have not been willing to give a VSAT license to private Internet service providers (ISPs), and have not themselves provided this service. But perhaps this is going to change soon, as privatization, competition, and access to such elements of the GII as the Africa 1 project provide new incentives. Let me very clear about this. While this is not the universal rule in Africa, in many countries such inefficient monopolies are preventing the flow of the life blood of the knowledge-based economy into which we are moving so rapidly -- information, the access to humankind's common knowledge base, and the ability of their own nationals to contribute to this knowledge base. In most cases they cannot meet even the expressed demand for traditional telephony services. It takes months, if not years (or a very substantial bribe), to get to the head of line waiting to get such services. These services are rendered at prices which are far above those paid in countries which recognize information to be a vital economic asset. If the prices for telephony services reflected the true costs of providing them in a competitive, information-friendly environment, the demand would be much greater. And they are not even offering the Internet services most needed today as the first step toward building a modern NII. If there is cess demand for traditional services at high prices, and domestic and international companies tell us that they are willing to invest in providing these services more efficiently and cheaper, the problem is not economic or technological. It is political, regulatory, and organizational. Clauswitz taught us that war is to important to leave to the generals. The World Bank Group, and many other development assistance agencies, are now convinced that telematics is too important to leave to the telecommunications ministers and state telecom monopolies. If their stranglehold on information flow is not broken, the benefits promised by the telematics revolution will not be obtained. What is required, then, is to build understanding of the benefits of a well developed NII from the grass roots of civil society to the highest levels of the national decision-making structures. Civil society, the private sector, and the ministries responsible for health, education, agriculture, industry, and trade together have to make their demand for cheaper connectivity felt. When they realize that their vital interests are at stake, that their country can never be competitive in what is increasingly an information- and knowledge-based global economy, the dead hand of monopoly will be removed, and an information-friendly regulatory environment created. When this happens, the invigorating forces of new ideas, new investment, and competitive provision of value-added services will break the stranglehold I have described. Needed capital and human resources, both domestic and international, will quickly flow to take advantage of the new opportunities. The key here is competition. Without competition, it is highly unlikely that the continuing rapid fall in the cost of processing, storing and communicating information will be translated into falls in prices, which are what matter to producers and consumers. Inefficient monopoly providers lack the necessary incentives to reduce prices. The state in most developing countries does not have the capital needed to invest in a modern information infrastructure. While it does not take huge amounts of capital to get started, the volume of investment necessary to realize the benefits of the telematics revolution throughout a country can in most cases come only from the private sector. Thus privatization and liberalization are the watchwords to for developing what the World Bank is calling an "information friendly environment." This is increasingly being realized. In Africa, fresh winds are blowing. In April of this year, at the Symposium on Telematics for African Development, hosted by the United Nations Economic Commission for Africa (UNECA) with support from UNESCO, the International Telecommunications Union (ITU), and Canada's International Development Research Center (IDRC), hundreds of enthusiastic Africans met with colleagues from around the world to discuss these issues. They decided to begin building the support needed to realize the benefits of the telematics revolution. In May, the UNECA Conference of African Ministers Responsible for Economic and Social Development and Planning passed resolution 795 (XXX) entitled "Building Africa's Information Highway" which called for work on "national information and communication networks for planning and decision-making as part of Africa's information highway", for exchange of experiences and for establishment of a High Level Working Group on Information and Telecommunications Techlogies made up of African experts to prepare a plan of action to assist Africa's entrance into the Information Age to be presented to the next meeting of the UNECA Conference of Ministers to be held in May 1996. IDRC, ITU, UNESCO, and Bellanet (a multi-donor funded initiative aimed at increasing the impact and relevance of development assistance through the utilization of communications technology for greater collaboration and concerted action) have joined the UNECA in organizing the High-Level Working Group (HLWG) and providing the necessary resources for its work. The Government of Egypt, through its Cabinet Information and Decision Support Center (IDSC) hosted the initial meeting of the Group, held in Cairo, 12-13 November, 1995. The task of the Working Group is to study the economic social, scientific and technological implications of the information highway for Africa and advise the Executive Secretary of UNECA and African governments on policies and strategies that will assist in confronting and taking full advantage of this global phenomenon. The output of the HLWG will be an action plan based on a continental, integrative policy-level study (a "White Paper on African Telematics Policy") examining regional and continental policy implications of Africa's entry into the Information Age and including specific policy recommendations to be submitted to the May 1996 meeting of the UNECA Conference of Ministers. This output will be published, both in printed and electronic format, for wide distribution. A computer conference has been set up to facilitate discussions among the HLWG members, and a World Wide Web sites established in Egypt and South Africa to facilitate public access to the background papers and publications of the HLWG. Tencourage broader public understanding, television programs presenting the principal conclusions and recommendations of the White Paper and a series of supporting national case studies, are to be prepared. The country case studies will examine social, economic, technical, and policy issues related to the creation of Internet services. South Africa, Egypt, Tunisia, Zambia, Senegal, Ethiopia, and Mozambique are being considered a candidates for the country studies. In short, an international effort, led by Africans, is now underway which should help mobilize the political will necessary to begin realizing the substantial promise of the telematic revolution in the least connected continent. Africa is preparing to leapfrog into the twenty-first century. The Role of the World Bank Group Most people think of the World Bank as a source of money for investments in economic and social infrastructure. Indeed, the World Bank is that, but it is much more. In the first place, the World Bank is more than one institution , hence we call it the World Bank Group, composed of:
IBRD, IDA, and IFC are all sources of money, but particularly the IBRD and IDA, which operate under a common management using the same lending criteria, are also major sources of technical assistance in the form of extensive and in-depth economic and social analyses which guide the World Bank Group's policy dialog with the governments of the countries where it makes loans, credits, and investments or sells risk insurance. Thus the World Bank Group is a major provider of policy advice, based on its highly qualified professional staff, research and operational experience in developing countries around the world, and unparalleled access to top-level decision makers in developing countries. Returning to the telematics revolution, and the obstacles to its realization in Africa, it is clear that technical assistance and policy advice are likely to be the most important instruments in removing these obstacles, particularly since private sector investments are the most promising source of funding of NIIs. Creating an information friendly environment is more a question of getting policies right than in providing loans, credits, investments, and risk insurance. But of course, the World Bank Group is prepared to provide funding as well as advice when this is sought, policies are adequate, and private sector capital is not available or appropriate. This may be particularly true in such sectors as public administration, health, and education where applications of the NII can contribute importantly to economic and social development. And the IFC is increasingly active in the telecommunications and informatics sectors. Very recently the World Bank has developed a new instrument specifically designed to help create an environment in which substantial private capital investments will take place. This new instrument is called InfoDev, the Information for Development Program, a global program managed by the World Bank to help developing countries fully benefit from modern information systems. InfoDev
InfoDev's key methods of intervention are through specific activities in consensus building, NII development strategies, telecommunications reform and market access, and demonstration projects. All InfoDev activities are designed to support workable strategies and can include workshops, assessments, demonstration projects, feasibility studies, or other approaches. They can cover one or many countries; and address one or many sectors. The InfoDev program is administered by the World Bank with the assistance of a Donors' Committee and a Technical Advisory Panel of outside experts selected from research institutes, academia, governments, and other organizations. InfoDev makes grants (not loans) and is funded approximately 20 percent from the World Bank's budget, and 80% from trust funds administered by the World Bank but obtained from a variety of sources including other multilateral organizations, bilateral donors, and, importantly, the private sector (both corporations and foundations). Approximately 120 applications for funding of potential InfoDev activities have already been submitted, and funding of approximately US$5 million has been committed to the program by donors including the World Bank. The first grants should be announced shortly. Detailed information on the InfoDev program is available from the World Bank's Telecommunications and Informatics Division, Industry and Energy Department in the Finance and Private Sector Development Vice Presidency by telephone at (+1-202) 477-1234 or e-mail at <InfoDev@worldbank.org>. Examples of Technical Assistance and Proposed InfoDev Activities in Africa The following examples are indicative of the kind of non-lending activities in support of the telematics revolution in Africa which have been undertaken by the World Bank during the present year, and of proposed InfoDev activities presented by African and International institutions, at least five of which are represented here at AFRISTECH '95. Increasing Internet Connectivity in Sub-Saharan Africa: Issues, Options, and World Bank Group Role -- a policy framework paper. Responding the various proposals from Bank staff members and external organizations, such as the Internet Society, in the early months of 1995 a group of Bank staff including the current author prepared a paper under this title which is the closest the Bank has come to having an official policy regarding the subject. Though it has still not been formally adopted by the Bank's Africa Region Management Team, it was released at the end of March 1995, distributed at the Symposium on Telematics and African Development in Addis Ababa in April, and the means to implement it are being actively discussed. The paper proposes a pro-active policy based on three elements.
The paper went on to note that while there are no technological barriers to rapid expansion of Internet service in Africa, there are many in the sphere of obsolete regulatory frameworks that result in constricting barriers to information access and knowledge expansion. It urged the World Bank group should concentrate its efforts in a role as catalytic agent, coordinator of donor efforts, and stimulator and financier of projects applying these empowering technologies. Among the key types of projects suggested are education, training, health, electric power, and private sector development. Production of television programs and videos in support of the telematics revolution. A major activity of the Electronic Media Center (EMC) of the World Bank -- launched as an internal joint venture of the Vice Presidencies for Environmentally Sustainable Development and Finance and Private Sector Development, the Economic Development Institute (the Bank's external training arm), and the External Affairs Department -- has been the production of videos and television programs in support of the telematics revolution, globally, and in Africa. At the global level, the first release in broadcast quality was a half-hour program, Learning Nations: Technology and Development, which summarized in video form the findings of a joint World Bank-U.S. National Research Council symposium on Marshaling Technology for Development. EMC also produced a 12 minute video in support of the InfoDev program, a highlights video of the Private Sector Roundtable held during the first day of the World Bank Conference on Information Infrastructure: Challenges and Opportunities for Developing Countries in July 1995, and is now completing two half-hour television programs on the general themes of that Conference (Meeting the Challenge) and on the potential of distance learning to accelerate development (A Revolution in Learning through Telematics) which should be released in early 1996. More recently, following the decision of the High-Level Working Group on Information and Communications Technologies in Cairo on November 12-13 and the lead of the Egypt's Information and Decision Support Center (IDSC), EMC has begun work on a series of television programs intended to convey in video form the conclusions of a series of national case studies on Internet development in Africa. These television programs are being undertaken in association with producers and official supporters of Internet development in African countries, beginning with South Productions in Egypt and the IDSC, on Egypt's Information Highway. Work is beginning as I speak on production of a Senegalese program; discussions are under way for similar productions in Ethiopia, Mozambique, South Africa, and Tunisia; and Nigeria and Zambia have been mentioned as additional possibilities, though formal discussions have not yet been begun with these countries. EMC is seeking resources to dub each of these national productions into other international languages, so that the series would be available in Arabic, English, French, and Portuguese. Finally, EMC plans to produce, in collaboration with the HLWG, a summary Pan-African program to disseminate the findings of its policy paper, also to be made available in the same four languages. The production schedule for these programs is tight, since the programs should be completed and broadcast prior to a series of important meetings, including the UNECA Ministerial-Level meeting and the G7 Meeting scheduled for Johannesburg in May of 1996. Both national and international broadcast of the programs will be encouraged, with the first International broadcast most likely to be on WETV, a new satellite-based service working with terrestrial affiliates around the globe which has been gestated by IDRC with the support of the World Bank and a number of other United Nations family organizations, bilateral aid agencies, private foundations, and more recently private investors. The first experimental broadcasts of WETV were held during the Fourth International Conference on Women in Beijing in September, 1995, reaching a global audience estimated at 340 million. EMC has pre-purchased time on WETV for broadcast of the African Internet programs, to begin in May 1996. Proposed InfoDev Activities by the Telematics for African Development Consortium, South Africa. Nebo Legoabe and Bob Day of South Africa's Council for Scientific and Industrial Research (CSIR) are presenting some of the proposals of the Consortium here at AFRISTECH '95. Let me just summarize to say that the Consortium -- an impressive grouping of strong South African institutions including CSIR, Telkom, South African Broadcasting Corporation (SABC), University of South Africa (UNISA), University of Pretoria, St. Albans College (a secondary school in Pretoria), the Mamelode Community Information Service (MACIS), and the Entrepreneur Development Group -- has developed an ambitious vision of using information technology to improve Africa's access to and utilization of information for community development and education. The Consortium's approach involves content creation, networking, and usage in four stages, and a package of three first-stage activities has been presented to the InfoDev program. The Consortium's proposal "seeks to create a demand-pull and supply-push to the development of the information highway in Africa and seeks to use local and foreign expertise to achieve this." The overall project has been divided into sub-projects that address each role in the information economy model developed by CSIR, and each sub-project has been divided into phases in order that risks and progress may be assessed at the end of each phase. The Consortium envisages that the private sector will be able to capitalize on the content creation, usage and networking components and carry this development further. It is also possible that this project will eventually result in one or more World Bank lending operations or IFC investments, it has already attracted attention from the Prince of Wales Business Leaders Forum in the UK and the Oracle Corporation. Proposed InfoDev Activity by the Regional Information Technology and Software Engineering Center (RITSEC), Egypt. The main purpose of this proposed activity is to facilitate information technology education and learning process to professionals in member countries of RITSEC in the Arab region, using distance learning approaches and techniques through the use of networking and communication technology. Participating in the first stage of the project are the Cabinet Information and Decision Support Center (IDSC) in Egypt, the National Information Center (NIC) in Jordan, the Regional Center for Informatics and Communication (IRSIT) in Tunisia, and the Kuwait Institute for Scientific Research (KISR), Kuwait. In a second stage the project is expected to be extended to other RITSEC partners in Morocco, Syria, and the UAE. While including countries in Asia as well as Africa, the RITSEC proposal's first stage includes Egypt and Tunisia, two countries in Africa already having full Internet connectivity. The proposal seeks "to support the Arab countries in leapfrogging into the information age through developing the necessary professional skills required in the area of Information Technology." It will help training the trainers, educators and professionals on the advanced tools and techniques of Information Technology using videoconferencing, the World Wide Web, and other forms of computer-based instruction. The models developed in this proposed InfoDev activity may later be applied to other forms of vocational and higher education in Egypt, making use of Egypt's rapidly expanding broadband information highway being developed by IDSC, and also in other Arab countries. RITSEC is encouraging private sector participation through strategic alliances with RITSEC itself with and its member national institutions, and as in the case of the South African Telematics for African Development Consortium's proposal, it may eventually lead to World Bank lending operations and or IFC investments. Proposed InfoDev activity by IDRC for Demonstration and Policy Workshops on Extending the Internet in Africa. IDRC -- in association with UNESCO, UNECA, the Internet Society, and Bellanet -- have proposed an InfoDev activity to conduct three national demonstration and policy workshops each in two parts -- one for potential private and public users in priority areas, the other for senior policy level officials to demonstrate the development potential of computer networking, examine policy restraints in regulatory and pricing areas, taxes, and monopolies on equipment. The proposal envisages that participants in the two modules would come together on the final day of the workshops in order that they would have a full exchange of views and each would understand the position of the other. The countries to be selected for the workshops would be expected to have the following characteristics:
World Bank participation in African Internet Forum and Activities of the African Networking Initiative. A number of World Bank staff were founding members of the African Internet Forum (AIF) an informal association of professionals from donor organizations -- including the World Bank, UNDP, and USAID -- which seek to encourage and coordinate donor efforts in support of Internet development in Africa. AIF has a home page on the Internet with information on its activities and those of some of its members which is located on the UNDP's web server in New York. Through the Electronic Media Center, the World Bank and AIF have also participated in activities of the African Networking Initiative, including the present symposium. Conclusion In an increasingly knowledge-based economy, information is becoming at least as important as land and physical capital. In the future, the distinction between developed and non-developed countries will be joined by distinctions between fast countries and slow countries, networked nations and isolated ones. The information revolution offers Africa a dramatic opportunity to leapfrog in to the future, breaking out of decades of stagnation or decline. Africa needs to seize this opportunity, quickly. If African countries cannot take advantage of the information revolution and surf this great wave of technological change, they may be crushed by it. In that case, they are likely to be even more marginalized and economically stagnant in the future than they are today. Catching the wave will require visionary leadership in Africa. The World Bank, other international agencies, bilaterals, and NGOs can all help. External donors should be encouraged to mobilize their know-how, their own needs for connectivity, their financial support, and their ability to dialogue with African organizations -- all to empower Africans, including Internet service providers, so that they can build their NIIs, connect them to the GII, and move rapidly into the information age. We are encouraged by the rapid progress we have witnessed over the past year, as enthusiastic and capable Africans have taken up this challenge with increasing support from the international community. The important symposium organized under UNECA auspices with support of UNESCO, ITU, and IDRC in Addis Ababa, and follow-up events in Cairo and now in Dakar are important milestones in the telematics revolution in Africa. There is no technical or financial reason why there should be any country on the African continent without a full connection to the Internet by the end of 1996. Let us rededicate ourselves to making this happen. |
