Facebook Blogging

Edward Hugh has a lively and enjoyable Facebook community where he publishes frequent breaking news economics links and short updates. If you would like to receive these updates on a regular basis and join the debate please invite Edward as a friend by clicking the Facebook link at the top of the right sidebar.

Sunday, December 07, 2003

A smaller digital divide

The Digital Divide between rich and poor countries is narrowing, according to a new report from the International Telecommunications Union. Telephone networks are developing rapidly. Total teledensity (fixed and mobile networks) in developing countries has grown more during the last decade then in the entire period before 1990. "A standout is East Asia (which includes China), where total teledensity levels in 2002 were more than 24 times higher than ten years prior."

In fact, there are sometimes bigger digital divides within developing countries then between them and the rich countries:

"In Chile, 93 per cent of large businesses have Internet access, higher than the European Union average. But the corresponding figure in small Chilean firms is only 37 per cent. While Mexico’s top secondary schools provide one computer for every 12 students—better than Germany, where the figure is one to 14—the corresponding ratio for Mexico’s bottom quartile of schools is 59 students for every computer. Government access to ICTs—the sector where indicators are least standardized and available—shows similar disparities. In Peru, 81 per cent of central government agencies have access to the Internet while only 21 per cent of local government offices have such access."

The report is going to be widely read at the World Summit on the Information Society of witch phase one will take place this week in Geneva. Some developing countries are asking for financial aid for telecommunications intrastructure, a kind of solidarity fund. But this fund is probably unnecessary, according to one of the lead author of the report. Not only is the digital divide narrowing, it is probably smaller then it was thought to be.

Indeed, many poor countries are digitally developing on their own. Not because they are getting money, but because they are reforming. Privatising state telecom companies, introducing competition (so that alternatives are available) and fighting corruption. And introducing open financial systemsso that the poor can get access to much needed financial means. Consider Bangladesh:

"Bangladesh, with a per capita GDP of $1,570, has had annual cellular growth of nearly 150%, in part because of programs like the Grameen Bank’s Village Phone, which loans a phone, collateral free, to women in Bangladeshi villages, who in turn resell the service to their neighbors. This is double leverage, as it not only increases the number of phones in use, but also increases the number of users per phone."

So do indeed give aid. But not by throwing money away. Help the poor countries develop financial markets instead. In any case, after all the bad news about a globalization process in crisis, this ITU-report is surely a more cheerfull event.

No comments: