Re: [GKD-DOTCOM] The Role of the Private Sector
Related to this question: 1. What specific elements does a policy environment need in order to encourage the private sector to expand access to poor, isolated, underserved areas? Where do such policies exist? I just came across the latest issue of Telematics and Informatics http://www.sciencedirect.com/science/journal/07365853 - Volume 21, Issue 1 - Telecommunications Development in Africa. Besides offering some real empirical research (how refreshing!), there is an excellent article titled The Washington Consensus' in relation to the telecommunication sector in African developing countries by Jorn Stovring. Here are a few snippets below, but I strongly encourage people interested in universal access to give this article and the entire issue a read. What the Washington Consensus paper points to, from my perspective, is the critical importance of civil society involvement in national telecom policy and regulatory reform - and the role of donors in building the capacity of civil society organizations, particularly those with rural constituencies (such as farmer organizations and rural NGOs). ..snip... ...The actual practices--e.g. using the public operator as a domain for extended family employment, siphoning operator surplus off through sub delivery contracts, political-administrative use of communication without pay, etc.--are difficult to document, but the cumulative effects are clearly a lower performance than if the [incumbent operator] had been managed on strict commercial conditions in a market context. Transparency on a level playing field is also necessary for deregulation to obtain the benefits of competition. For these forces, to work they must be implemented within capable regulatory frameworks. In a context of neo-patrimonial practices, the rationale simply does not work as in a situation based on good governance premises. Typically, the dominant elite or the main operator may have long established relations to the state department and may try to capture regulatory reform processes. What sets the mobile cellular sub sector apart was the introduction of market forces in the form of competition. The construction of duopoly and oligopoly has in a number of countries resulted in competition. The market dynamics were established through the introduction of a number of new entrants... The fact that more players have been introduced into the once docile monopoly area is going to strengthen the regulatory institutions. The mobile cellular operators are (mostly) united in the need for a level playing field and transparent relations to the main operator. Over time, the plurality of players will strengthen regulatory institutions. Thus, even in structures and institutions with elements of patrimonial practices, the market dynamic may curb such effects. ..snip... Don Richardson This DOT-COM Discussion is funded by the dot-ORG USAID Cooperative Agreement, and hosted by GKD. http://www.dot-com-alliance.org provides more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd For the GKD database, with past messages: http://www.GKDknowledge.org
Re: [GKD-DOTCOM] The Role of the Private Sector
Some quick answers... Don Richardson KEY QUESTIONS: 1. What specific elements does a policy environment need in order to encourage the private sector to expand access to poor, isolated, underserved areas? Where do such policies exist? The World Bank's Global Information Communication Technologies Department provides some excellent publications on universal access policy measures. See for example: Telecommunications and information services for the poor - toward a strategy for universal access by Juan Navas-Sabater, Andrew Dymond and Niina Juntunen: http://www-wds.worldbank.org/servlet/WDS_IBank_Servlet?pcont=detailseid=00 0094946_02041804225061 Closing the gap in access to rural communications - Chile 1995 - 2002 by Bjorn Wellenius: http://www-wds.worldbank.org/servlet/WDS_IBank_Servlet?pcont=detailseid=00 0094946_0203070403326 Another excellent source of the latest evidence for what policies that work - Intelecon Research and its reports and publications - http://www.inteleconresearch.com/pages/rep.html 2. What lessons have we learned about the risks and rewards of creating public-private partnerships to expand access to the underserved? Where have these lessons been applied, and where have they worked? One of the best papers I have read recently: ICTs: Poverty Alleviation and Universal Access Policies (Review of Current Status and Issues) by Andrew Dymond and Sonja Oestmann: http://www.atpsnet.org/docs/Daymond.pdf [this paper also highlights rural telecom developments in Uganda as a potential model for other developing nations] 3. What are specific, unexploited opportunities for public-private partnerships to expand access to the underserved? Please provide examples where these opportunities can be exploited effectively. Remittance economies and increasing their significance in supporting revenue generating universal access initiatives. Remittances are both a source of revenue for private operators, and a strong source of demand for telecom services. The Asian Development Bank (ADB) estimates that Asian countries alone received US$75 billion from workers abroad in 1995 compared with US$54 billion in official foreign aid. Despite the significance of remittance economies for telecommunications development, this is a relatively unexplored area. Micro-finance institutions ought to be strongly encouraged to get more involved in universal access initiatives - Grameen Telecom's VillagePhone initiative is a clear case where the importance of remittances is linked to rural ICT access. One of the leading proponents of links between remittance economies, rural development and ICTs is Scott Robinson. See: Rethinking Telecenters in the Second World -- Knowledge Demands, Remittance Flows, and Microbanks by Scott Robinson: http://www.interconnection.org/resources/telecenter2.htm 4. What concrete lessons have we learned about stimulating/supporting local businesses to extend access to the underserved? Please be specific. Where have these lessons been applied effectively? See the Uganda Rural Communications Development Policy and its related Rural Communications Development Fund - http://www.ucc.co.ug/rcdf/rcdfPolicy.pdf One outcome can be seen through MTN Uganda's rural payphone operations - MTN Publicom in Uganda - http://www.itu.int/ITU-D/pdf/fg7/mtn.htm 5. Within underserved communities, women often face special difficulties becoming ICT providers (e.g., lack of capital, education, competing demands for time). Are there particular approaches that can be used to support women entrepreneurs who want to offer ICT access to underserved communities, beyond the 'Grameen cell phone' model? The Grameen model invites further replication. The replicable elements of this model are poorly understood. The Grameen Telecom experience is not simply about providing rural women with cell phones. It is about linking existing and successful micro-credit organizations with telecom operators (fixed line and/or wireless) to expand Public Calling Office coverage in rural areas. Small loans to rural entrepreneurs (Grameen's experience shows that women are excellent candidates for operating successful businesses and repaying loans) can enable entrepreneurs to establish PCOs providing a range of services including telephone, fax, email and even web, photocopy and computer word-processing services. It is a public-private partnership model that works effectively, and leverages remittance economies. MTN Uganda is already partnering with Grameen to establish 5,000 Village Phone operators in rural Uganda. This DOT-COM Discussion is funded by the dot-ORG USAID Cooperative Agreement, and hosted by GKD. http://www.dot-com-alliance.org provides more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd For the GKD database, with past messages:
Re: [GKD-DOTCOM] The Role of the Private Sector
On 11/25/2003, Global Knowledge Dev. Moderator wrote: Many GKD members have argued that the for-profit private sector must play a key role in expanding access to underserved communities. The notion is appealing. At the outset, let me state that I operate as an entrepreneur, mainly because the regulatory environment for public trusts in India is not very good. However, the work we do and the technology solutions we promote are almost completely focused on developmental issues, and I do not see any conflict of interest here. Of course, we don't make a lot of money either, and that is because we find ourselves shut out from several funding opportunities. I also have found some NGOs reluctant to deal with a for-profit, because it affects their own funding proposals. 1. What specific elements does a policy environment need in order to encourage the private sector to expand access to poor, isolated, underserved areas? Where do such policies exist? The first part is a challenging question. To my mind, policies do not drive access, demand does. Private companies will step in to supply against demand if there is sufficient possibility of a profit in doing so. Having said that, policies can and do work to *prevent* such a supply situation from being created, or even the demand situation. In India, for instance, currently the use of VoIP with termination within the POTS system (and that includes cellular and WiLL telephony) is banned, thus depriving half a billion people from access to cheaper and possibly affordable telephony. Without the experience of telephony, users are deprived of the ability to demand, and providers to devise, more imaginative uses for it (than POTS, that is). 2. What lessons have we learned about the risks and rewards of creating public-private partnerships to expand access to the underserved? Where have these lessons been applied, and where have they worked? Businesses are driven primarily by the profit motive. Unless there is a significant change in market mechanisms (and this is one place - perhaps the only place - that policies can make a difference) this situation will continue. To look at lessons in expanding access, I can suggest the experience of 'community' radio in Nepal, where several stations have been established in difficult areas, where opposing political groups routinely employ violence to further their cause. In India, several rural development groups are attempting to deploy better microbanking systems, using a hybrid combination of physical access and electronic data capture. In the absence of higher availability of electricity and low cost computers and networks (connectivity) this must be the only practical solution. 3. What are specific, unexploited opportunities for public-private partnerships to expand access to the underserved? Please provide examples where these opportunities can be exploited effectively. I have a little earlier suggested voice mail systems deployed over smartphones using cellular and WiLL networks. To develop such a system needs private-public partnering, even if the actual cost of software is met through development in publicly owned facilities such as universities. Actually, the cost of development is trivial, the deployment needs a large investment, and I am not aware of any such investment ever being made in the past by a public agency for promoting access. 4. What concrete lessons have we learned about stimulating/supporting local businesses to extend access to the underserved? Please be specific. Where have these lessons been applied effectively? The example of hybrid microbanking systems is a very good one, I believe. The reports I have read indicate that users consistently exhibit better banking behaviour, with higher rates of savings and lower defaults on loans, thus stimulating local economies. Both men and women appear to benefit, often the latter more. 5. Within underserved communities, women often face special difficulties becoming ICT providers (e.g., lack of capital, education, competing demands for time). Are there particular approaches that can be used to support women entrepreneurs who want to offer ICT access to underserved communities, beyond the 'Grameen cell phone' model? I have been told, verbally, that the private Reliance Infocomm WiLL network in India has encouraged about 5,000 small entrepreneurs, of which perhaps 20% are rural based, to use the phones as PCOs. No reports have been published yet of this effort. However, where ordinary users pay as little as Rs 500 (just over 9 euro) upfront for a phone with connectivity, entrepreneurs under the scheme do not pay anything at all. They also do not pay Reliance any commission, for billing of under Rs 250 per month. A call costs Rs 0.40 per minute (this was the cost, till very recently, of a call within the Reliance network, anywhere in India, but has probably gone up as a result of a regulatory change. The organisation is
Re: [GKD-DOTCOM] The Role of the Private Sector
Let me preface my comments by some more general considerations: (a) No matter how wealthy he might be, a donor is only willing to finance operation costs -- or even a substantial fraction thereof -- for 1 or 2 years. (b) As accumulated cost for ongoing operations rapidly exceeds inital investments (due to breakdown or obsolence), most projects should consider operation cost and relacements right from the beginning (it's: only the first PC is for free, you have to pay already for the next one). (c) As a consequence of (b), many if not most projects collapse, once the original donor disappears. (d) To prevent (c) there is a new buzz-word: sustainability (e) However, the concept of sustainability holds a deep and fundamental misunderstanding about the difference between NGOs and for-profit companies. (f) In the North (or whatever synonym you like) a NGO gets funding mainly from donors, endowments, tax-reducibles, public money. (g) In the South (or whatever synonym you like) there are no rich donors nor a huge amount of persons interested in tax-deductions, and public money is urgently needed for 1,001 tasks -- ICT4D is just one among many. (h) Thus, sustainability in the South actually means: those who benefit, one way or the other, have to pay for the services they receive -- at least for the direct costs (e.g., for replacements, upgrades, expansion. Whoever is the provider has to charge for those costs - regardless of whether it's a so-called Small Business or a NGO). (i) Another way to look at it: most private small businesses are not really for profit, but rather are a way to for someone to generate self-employment income, i.e., the small business is not expecting to generate revenue for share-holders or interest for capital-investment. (j) This makes the Northern distinction between small business (for profit) and NGO (charity) -- found in many fund-applications of World Bank, Regional Development Banks and Big national Donor Organizations -- not only incorrect but counterproductive. (In the Southern context, aquiring sustainability means going into business and charging fees, just like any other business). (k) With respect to national public funds: assignment of extremely scare public funds to subsidize ICT4poor seems reasonable and ethical if and only if using ICT vs. other means will save money. Example: a Nicaraguan Teacher is paid roughly 0.58 US$ per class-lesson assuming class-frequencies of 35 and more. Operation of 1 single PC costs roughly the same per hour. Nicaragua has a recognized deficit of some 10,000 primary and secondary teachers in public education, mainly due to budget limits. Under these circumstances, spending 1 single US$ (or asking the parents to pay) to sustain a School-computer is not only a waste but anti-ethical. (l) Corolary from a-k: the usage of ICT in the South can only be sustained if it provides measurable economic benefit, either in form of services directly for end-users, or in the form of reduced costs (or extended coverage) compared with traditional approaches to providing the same or similar services. Having said this, here are my answers: KEY QUESTIONS: 1. What specific elements does a policy environment need in order to encourage the private sector to expand access to poor, isolated, underserved areas? Where do such policies exist? Drop the artificial distinction between for benefit NGOs and for profit micro and small enterprises. 2. What lessons have we learned about the risks and rewards of creating public-private partnerships to expand access to the underserved? Where have these lessons been applied, and where have they worked? Assume that, unless there is a clear benefit for the public sector, as explained above, public spending in PPP must and will tend to 0. Thus, the contibutions will be only for limited administrative costs, administrative and policy support. 3. What are specific, unexploited opportunities for public-private partnerships to expand access to the underserved? Please provide examples where these opportunities can be exploited effectively. Use smallest-scale bids for local would-be service providers, open to NGOs and small businesses. Treat both as part of the local micro/small/medium-enterprise environment, and provide support, etc., to both that are normally given to any of these types of enterprises. 4. What concrete lessons have we learned about stimulating/supporting local businesses to extend access to the underserved? Please be specific. Where have these lessons been applied effectively? If you don't do as expressed above, realize that the utmost probability is that your (donor) project will be history as soon as you stop throwing in money. (You have the odds of the experiences of thousands of Tele- and Info-centers against you). This DOT-COM Discussion is funded by the dot-ORG USAID Cooperative Agreement, and hosted by GKD. http://www.dot-com-alliance.org provides more information. To post a
[GKD-DOTCOM] The Role of the Private Sector
Many GKD members have argued that the for-profit private sector must play a key role in expanding access to underserved communities. The notion is appealing. The 2003 UNCTAD E-commerce and Development Report states that in 2002, 32% of the world's Internet users were in developing countries, and they are likely to constitute 50% of the total by 2007. That's a lot of demand to attract private sector investment. GKD members also seem to agree that a crucial element in extending access is an open, transparent policy environment that encourages competition. Yet relying on for-profit firms to extend access can be problematic, even in the right policy environment. If donors and government want to realize universal access, they may have to distort the market by providing venture capital, loans, training, and other types of support to encourage companies, including local entrepreneurs, to serve poor, rural, isolated communities. Otherwise, the market may never be large enough for companies to invest the time and money it takes to develop services/products for underserved communities. And non-profits that do provide solutions may be unable to generate sufficient revenues to continue without subsidies. KEY QUESTIONS: 1. What specific elements does a policy environment need in order to encourage the private sector to expand access to poor, isolated, underserved areas? Where do such policies exist? 2. What lessons have we learned about the risks and rewards of creating public-private partnerships to expand access to the underserved? Where have these lessons been applied, and where have they worked? 3. What are specific, unexploited opportunities for public-private partnerships to expand access to the underserved? Please provide examples where these opportunities can be exploited effectively. 4. What concrete lessons have we learned about stimulating/supporting local businesses to extend access to the underserved? Please be specific. Where have these lessons been applied effectively? 5. Within underserved communities, women often face special difficulties becoming ICT providers (e.g., lack of capital, education, competing demands for time). Are there particular approaches that can be used to support women entrepreneurs who want to offer ICT access to underserved communities, beyond the 'Grameen cell phone' model? This DOT-COM Discussion is funded by the dot-ORG USAID Cooperative Agreement, and hosted by GKD. http://www.dot-com-alliance.org provides more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd For the GKD database, with past messages: http://www.GKDknowledge.org
