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Bridging the 'digital divide' by improving IT access

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Market porter, Kyrgyz Republic.

Internet cafe, Kyrgyz Republic.

If you can go online, you can do business, go shopping and arrange your banking whether you live in the heart of the capital or in the remotest village. Making phone and internet access more widely available and easily affordable can play a unique role in increasing productivity, reducing costs for existing business and creating new opportunities for knowledge-intensive industries. Information and communications technologies also create jobs in rural and remote areas where there were no previous links to the market. An internet connection represents access to the world – and, for those who know how to use it, instant economic empowerment.

But to get online in many of the EBRD’s countries of operation is often far from easy.

Before information and communication technologies (ICT) can unlock the commercial potential of remote regions, a whole range of improvements must be realised: from the hardware of efficient telecommunications systems, transparent laws encouraging private investment and independent telecoms regulators to the software of government goodwill and investor eagerness.

As EBRD President Jean Lemierre said at a seminar of telecoms ministers and experts from around the region today, “It’s not so much to do with technology as with a mindset – the wish to bring the best to a country that it can get.” The seminar was held in Belgrade where the Bank is holding its 2005 Annual Meeting.

The EBRD set out its blueprint for the sector last year at a seminar in Tokyo for policymakers in central Asia and the Caucasus, identifying three areas in which improvements were needed. One was regulatory reforms to make telecoms more attractive to private investors. Another was offering financial incentives for private-sector telecoms service providers willing to do business in rural areas where their profits might otherwise be low. The third was supporting entrepreneurship in businesses that already have ICT know-how.

Two pilot technical cooperation programmes have since been launched in the Kyrgyz Republic – a study on how to spread ICT into the countryside, and an ICT business incubator to help existing companies to grow by offering space, advice on business development, financial planning and logistical support.

This year the Bank has broadened the scope of its endeavours. Officials and entrepreneurs from the western Balkans – Serbia and Montenegro, Albania, Bosnia and Herzegovina and FYR Macedonia – joined telecoms ministers from the seven poorest CIS countries – Armenia, Azerbaijan, Georgia, the Kyrgyz Republic, Moldova, Tajikistan and Uzbekistan at the seminar funded by Japan, Taipei China and Switzerland.

“We are conscious that ICT can’t be magic solution to problems facing us today. But it can have dramatic impact in achieving development goals,” said Eduard Prodani of Albania’s transport and telecommunications ministry.

Participants not only discussed the best ways to solve problems that have, in the past, slowed the development of their own moves online, but also heard ICT success stories from hi-tech Taipei China at the other end of the world and, closer to home, from e-friendly ex-Soviet Estonia.

Since Estonia introduced its first IT policy in 1994 (followed by a second in 2004), Estonians have got so Internet-enabled that today 99 per cent of public employees have computerised workplaces with internet connections. About 80 per cent of citizens filled in their 2004 tax declarations online. Levels of internet access are above the median EU level. Estonians are fifth in Europe (just behind Britain and ahead of the Netherlands) when it comes to online shopping and banking. And the country’s economy is flourishing.

Estonia has been lucky in many respects in the resources it could bring to developing ICT capacity, said Arvo Ott, Estonia’s head of department of state information systems at the ministry of economic affairs and communications. The small Baltic state has good levels of education and research; no old technology to weed out since its ICT systems are relatively young; the benefit of Finnish, Swedish and German know-how; good telecoms infrastructure; a general consensus among the main forces in society as to how to blend public and private initiatives; and the commitment of Estonia’s political elites.

“The role of government is just to build possibilities for development,” Ott added.

Mr Lemierre recalled the efficient cabinet ministers’ offices he had seen in Estonia – each completely empty of papers and containing only a neat computer. “Estonia really is the benchmark,” he said appreciatively.

Other countries in the region will be richly rewarded if they follow Estonia’s example, he added. “It’s clear that technology and access to information is part of rebuilding a future for the many poor countries in the region. When you have lived in a land-locked, politically locked country for years, it is a great opportunity just to get access to markets and what companies do. And why I am positive is that in the eastern part of Europe you have a unique asset – the skills of the highly educated people.”

Discussing the principles of ICT empowerment was the first step forward, Lemierre said. Making more governments understand the need to create the policies that will allow the private sector to lead the way in bringing ICT to the people – and letting business flourish -- should be part of the EBRD’s policy dialogue with governments.

Practice would make perfect, he added. “Now we have to make a success of spreading ICT. That’s not yet obvious at all. We have to deliver and to implement, country by country, task by task. What has been begun in the Kyrgyz Republic this year is positive and good. Outside our region there are great moves forward. Our job now is to make this experience available to our region too.”

Article by EBRD Press Officer Vanora Bennett.

21 May 2005