EFFECTIVE GOVERNMENT POLICIES TERMED VITAL FOR CLOSING DIGITAL DIVIDE IN DEVELOPING COUNTRIES

Information Economy Report 2006 says countries should have a plan in the first place, should review it, and should stimulate competition

Government policies that encourage competition and innovation can play a major part in helping developing and transition countries establish and expand information and communication technology (ICT) networks that in turn stimulate economic growth and help domestic businesses compete internationally, the Information Economy Report 2006 (1) says.

Currently 44% of developing and transition countries have national plans for fostering their information societies, and 20% are developing such plans. However, the report says, few of the countries that have such plans scrutinize how effective they are.

Policies that stifle competition are apt to result in limited ICT penetration, higher costs, and slower uptake of the latest and most effective technologies, the report says. It provides as examples a series of success stories. In Nepal, national policy was modified in 1999 to liberalize the telecom sector by encouraging the participation of private firms. That same year, telephone penetration grew by 22%. By 2004, the Nepalese telecommunication sector was fully open to private service providers and competition through open licensing and by restructuring of the State-owned operator. Among the results were that a mobile phone service launched in 1999 had achieved by January 2006 over 99,000 post-paid and 200,000 pre-paid mobile subscribers. The network is now fully digital and offers full national and international direct dialing services. Other payoffs of liberalization were a growth in the number of fixed phone lines from approximately 65,000 in 1992 to over 470,200 in January 2006.

The report also notes that Government ICT policies can be applied directly to the provision of more efficient and transparent Government services. South Africa´s "Batho Pele Initiative" -- or "People First Initiative" -- provides a single on-line entry point for Government services and information. A user may register a birth, renew a driving license, apply for registration as a voter, apply for water and electricity, apply for VAT registration, register as a service provider/supplier for the Government, register a copyright, and apply for naturalization, for a study permit, or for a visa. In Chile, the ChileCompra centralized public-sector procurement system benefits both Government agencies and private companies by making procurement competitive and transparent -- by the end of 2004, 879 public agencies and municipalities and more than 100,000 providers were registered.

The Information Economy Report devotes a chapter to Government ICT policies that may open up new opportunities and methods for poverty reduction. In some countries, mobile phones are facilitating businesses and are providing trade opportunities for poor men and women, the report notes, and the Internet is allowing migrants to keep in touch with their families and communities. New technologies are also bringing valuable environmental information to rural populations, including weather forecasts for agriculture and fisheries, and early warnings on natural disasters. The chapter emphasizes that ICT can most realistically play an enhancing rather than a primary role in poverty-reduction strategies.

Developing countries not only should have national ICT plans but should review them thoroughly for effectiveness, the report recommends. It provides a model framework for such assessments, and it is foreseen that UNCTAD, in the near future, will help Governments to carry out reviews of ICT policies much as it now assists countries with Investment Policy Reviews.

The UNCTAD ICT policy review framework is a generic model that can be used and adapted by developing countries, and has three main components: a review of the global ICT situation and an overview of a country´s ICT status, focusing on the extent of use by different participants in the economy; an in-depth evaluation of the national ICT plan, including its components, priority actions, concerned sectors, targets and relevant projects; and an assessment of the effectiveness of the institutional framework and implementation mechanisms that back up the plan.