ICTs in developing countries: Booklet II - The gaps in provision

Introduction

This is the second in a series of four booklets published by the International Institute for Communication and Development (IICD) on the significance of information and communication technologies (ICTs) for sustainable development. This booklet expands the argument in Booklet 1 that information and communication technologies (ICTs) have increasing relevance for sustainable development in the developing countries. The series is aimed at decision-makers in developed and developing countries that are interested in benefiting from what already has been learned about ICTs in developing countries.

The booklets are based on the results of work developed by a special working group on IT and Development established by the United Nations Commission on Science and Technolgy for Development (UNCSTD) in 1995. It has produced policy documents on issues concerned with the contribution of ICTs to sustainable development goals. On the results, the UNCSTD commissioned a source book entitled Knowledge Societies: Information Technology for Sustainable Development (Robin Mansell and Uta Wehn (eds.), Oxford University Press, 1998).

Key factors creating barriers to knowledge-based development, resulting from inadequate infrastructure, are considered along with suggestions for overcoming them. This Booklet illustrates some of the ways that ICTs are being used successfully to improve services provided by public administration and health care organisations as well as to enhance the overall quality of life of people in developing countries.

This booklet is divided into five chapters:
1 The gap between developed and developing countries: In some parts of the world ICTs are contributing to major changes. Other parts of the world have hardly been touched by these technologies;
2 The urban/rural divide: There is evidence that the use of ICTs is developing rapidly in major cities throughout the world, driven by the commercial interests of leading suppliers as well as users in finance and trade. However, market demand is much weaker in rural and marginal urban areas;
3 Opportunities for bridging the gap: Large variations in provision exist between developing countries that have achieved the same levels of economic performance. This suggests that there is scope for overcoming the gaps, which goes beyond the simplified relationship with economic indicators;
4 Examples of bridging the gap: There are numerous areas where ICT applications have proven the potential to bridge the gap between countries and between urban and rural areas, even in basic sectors of the society, such as public information, health and education;
5 Concluding comments.




1 The gap between developed and developing countries

In 1984, the International Telecommunication Union (ITU) published a report called the 'Missing Link' on the major differences in the provision of basic telephone services throughout the world. There was general agreement that these wide disparities were unacceptable and had to be addressed. More than one decade later, many developing countries still lack the most basic telecommunication infrastructure.

Meanwhile, the application of ICTs in a broader context has blossomed in both variety and complexity. Global and national information infrastructures are being constructed. Multilateral institutions such as The World Bank are highlighting the important connection between harnessing a growing stock of global knowledge and achieving development goals. Developing countries cannot expect to base their development on the advantage of lower labour costs in the long term.

The emphasis is moving toward excellence in the application of knowledge. This is creating major obstacles to establishing an environment for sustainable development. Failure to respond to this challenge could mean that ICTs would accentuate rather than help to alleviate existing disparities of income, wealth, and opportunity.

1.1 The ICT gap in the 1980s
The 1984 ITU Report was the product of the Maitland Commission chaired by Sir Donald Maitland from the United Kingdom. It identified huge disparities in the distribution of telephones around the world. The Commission found that three quarters of the world's telephones were located in just nine countries, namely the major industrial nations including the United States, Japan and the major economies in Europe. There were more telephones in Tokyo than in the whole of Africa.

The Commission made recommendations to address the imbalance in provision of telecommunication services. The overall goal set was to increase the availability of telephones to the point that by the early part of the 21st century, all people would be in easy reach of a telephone. It was argued by some that access to basic telecommunication services should be recognised as a basic human right.

The broader goal of achieving universal telephone access was combined with four principal conclusions:
- The report emphasised the need for much more investment in infrastructure;
- It highlighted an associated requirement for the efficient operation of existing networks;
- It recommended that the ITU should play a more effective role in promoting infrastructure development;
- Financing requirements were identified as key, particularly in countries where there were constraints in the availability of foreign exchange.

The main contribution of the report was to achieve wide acceptance of the important role that the telecommunication sector plays in economic and social development. As well as highlighting the major gaps in provision, it also identified important opportunities to accelerate development. In particular, it focused attention on policy and the overall regulatory environment as a key pre-requisite for enabling new investment and expansion of information infrastructure.

1.2 The ICT gap decades later
Despite the present gap in network provision between countries, there are some positive signs. Investment in telecommunication infrastructure and related services is expanding at a substantial rate in many countries. Investment costs are also decreasing in real terms as a result of technological advances in ICTs.

Unfortunately, major tasks remain to remove the 'missing link' in those countries where the rate of progress has been less dramatic than, for example, in China. The gap between the most industrialised countries and the poorest developing nations remains very large. Even at current accelerated rates of investment, it will take two decades or longer until China and the fastest growing economies of Asia, South America and Eastern Europe reach the telephone penetration rates of the industrialised countries.

While there has been significant progress, there also have been many disappointments as result of limited progress. Many poor countries in Africa, Asia and Latin America continue to have low teledensities, in some cases still less than one telephone per 1,000 inhabitants. For these countries, the period required to bridge the investment gap will be much longer: the period could be as much as 100 years for many parts of sub-Saharan Africa.

Four key changes have taken place during the last decade and a half:
- The telecommunication sector has been subjected to privatisation, liberalisation and regulation at the national level. Competition has proved difficult to stimulate, but new competitive forces are being brought to bear at both the global and the national levels;
- The expansion of the market for services and equipment has occurred at a dramatic pace. This has particularly been the case in South East Asia;
- Key technical advances have enabled many less developed countries like China to take advantage of the latest digital technologies, rather than depending on legacy switching systems. New channels of communication have been created through mobile technologies;
- The opening up of the transition economies of Eastern Europe has been accompanied by a significant expansion of the telecommunication infrastructure that was largely neglected until the political changes of the late 1980s.

The scale of the gap has led to attention being paid to establishing achievable visions. Countries where teledensity remains below 1 per 100 population cannot realistically aspire to the industrialised world model of at least one telephone and Internet access point per person.

A more creative approach is required which considers options such as shared local Internet centres and 'telecottages'. The GrameenPhone project discussed later in this Booklet offers a source of inspiration. It has successfully provided telephone services using mobile GSM-based technology to some of the poorest inhabitants of Bangladesh. Similar projects will be required if the huge disparities in provision between industrialised and developing countries as well as between urban and rural areas are to be addressed.

1.3 The ICT gap and local production capacity
It is not only in the provision of telecommunication networks that there are major disparities. The location of production capacity for ICTs is also spread unequally. It raises major issues about obtaining access to vital telecommunication and other computer-based equipment. Very few poor developing countries have direct access to world-scale ICT production plants. For the world's poorest countries, this application of finite foreign exchange reserves has to compete with other pressing requirements such as imports of pharmaceuticals and agricultural equipment.

Estimates for total production for the global electronics industry were over US$ 1 trillion in 1996. The sector is experiencing rapid growth. It consists of several different sub-elements, principally electronic data processing, control and instrumentation, telecommunication and office equipment. Production capacity has been expanded in developing countries, but the sector continues to be dominated by facilities located in high income industrialised countries.

Several of the Asian economies have enjoyed a significant measure of success in building indigenous ICT production capacity. Korean based multinationals have become the largest producers of computer memory chips while Singapore, Malaysia, Thailand and Taiwan have become significant sources of supply of key electronic goods such as mobile telephones, personal computers, computer disk drives and computer monitors. The global electronics sector is likely to continue to enjoy growth rates that match, or exceed, those of the fastest growing economies. The challenge will be to avoid excessive concentration of the sector, which, in turn, will exacerbate existing imbalances in trade.

1.4 The ICT gap and other access constraints
Telephone and other ICT networks are characterised by what economists refer to as 'network externalities'. This simply means that the value of a network increases disproportionately as it is extended. Network externalities present an important technical constraint for countries that presently have a very low level of ICT provision. If teledensity and other elements of ICT provision are very low, the value derived from the investment remains limited. However, this feature of networks also presents important opportunities. By expanding the network, the benefit that is derived is more than twice the rate of new investment. Once a critical minimum level of coverage is achieved, the perceived benefits of further expansion become visibly greater.

Once a new network has been established there are ongoing requirements for maintenance and software upgrades. There is always a danger that investments are made without fully budgeting for these ongoing expenditures with the result that the available revenues are insufficient to meet all the ongoing network costs. While hardware costs are reducing in absolute and real terms, software costs are rising. In particular, as the development of software applications becomes more complex, development costs with professional labour as the principal component continue to rise.

The physical availability of a particular network does not guarantee that all types of users can equally access it. Pricing as well as other considerations will frequently limit and will sometimes even exclude certain types of user. In particular, users in educational and research establishments often find that the budgets made available do not permit optimum use of communication and information networks. Although a large portion of network costs are fixed, pricing schedules that are based on volume will often act as a discouragement to higher levels of usage. A number of countries are taking measures to address this issue. In the Dominican Republic, the academic community enjoys the benefit of free connection to the public data network that, in turn, provides access to the global Internet. In Colombia, educational users receive special discounts of up to 35 %.

Network pricing issues are particularly apparent in a number of African countries where Internet access has until recently been provided by NGOs. The cost of access has often proved to be prohibitive. For example, Ghana with a population of 17 million people had only 140 Internet subscribers in 1995, each of whom had to pay annual charges of US$ 1,300 per year, equivalent to the local salary of a journalist. These high costs are often due to the high cost of telecommunication data lines that are shared between a very restricted set of users.

The expansion of the Internet has been the telecommunication phenomenon of the 1990s. It is a powerful illustration of network externalities in action. A combination of the increasing availability of low cost personal computers combined with common communication protocols and a standard multimedia interface has created phenomenal growth.

The Internet originates from the 1960s as a computer network that was funded by Advanced Research Project (ARPA) with the US Department of Defense. The original work was taken over by the National Science Foundation in the 1980s and this extended the groundwork for the current highly decentralised network. It was designed to improve communication between the military establishment and the scientific community. The growth of the Internet was steady but unspectacular throughout the 1970s and 1980s. However, as it became more accessible to international and commercial users in the late 1980s, its rate of expansion accelerated. The Internet uses standard network communication protocols TCP/IP (Transmission Control Protocol/Internet Protocol) which make it possible to connect different computers irrespective of the operating system that they are running. In effect, the Internet is a network of networks, with IP identifying each Internet host computer to each other.

Despite this torrid rate of expansion, the size of the Internet remains modest in comparison to the global telecommunication network with which it is inextricably linked. Figures published by the ITU show total revenues derived for the provision of Internet related services to have been less than US$ 5 billion in 1996. While this figure is growing rapidly, it must be compared to the market for public telecommunication services, which was estimated at US$ 670 billion in the same year.

Access to the Internet reflects the uneven global provision of telecommunication infrastructure and is strongly correlated with levels of per capital national income. However, a number of countries including Finland and parts of Eastern Europe have disproportionately high levels of access. Similarly, some of the highest annual growth rates in terms of Internet access have been witnessed in Asia. As the Internet has expanded, users have enjoyed increasing global access and reduced costs. While the network of networks remains in its infancy, it shows every sign of having a radical impact on the provision and use of telecommunication infrastructure over the next ten years.

ICTs depend on reliable sources of generated electricity. In many developing countries, demand continues to outstrip available generating capacity. Many rural areas do not have access of any kind to reliable electrical supplies. Alternative sources such as wind and solar-based solutions are often not viable because of the very high initial investment costs. This means that planning for new ICT based projects often has to incorporate a consideration for reinforcing or creating new power supplies.

2 The urban/rural divide

Many sources of data point to the increasing contrast between provision of the telecommunication infrastructure between urban and rural areas. There is evidence that the use of ICTs is developing more rapidly in major global cities throughout the world.

Whereas industrialised countries have become predominantly urban societies, in many developing countries the majority of the population lives in remote rural areas. The large capital cities of the developing world increasingly resemble their wealthier counterparts. In addition, global telecommunication equipment and service providers have recognised the benefits of being located in major cities wherever they may be, including those located in developing countries.

The development of ICTs in urban areas is strongly market-driven. Both the concentration of demand and the interests of leading suppliers drive this development. However, market- driven demand is much weaker in rural and marginal urban areas.

2.1 The gap measured in teledensity
Measures of the availability of telephones are useful proxies for examining the rural/urban divide in ICTs. The ITU publishes figures that show the teledensities for lower income developing countries, comparing the largest cities with the rest of each country. The variances between countries that enjoy comparable living standards are often extreme.

The examples demonstrate the significant variations in provision between urban and rural areas in developing countries. They appear to indicate that the extreme lack of services in remote and rural areas is less a result of technical and economic factors, than of other political and institutional factors.

In the past many assumed that rural telephony provision could only be assured if there was a constant stream of subsidies to support the extension of service provision. This would permit basic services to be made available. The requirement for ICTs in remote areas was considered too limited to justify widespread universal service provision. The assumption that investment in ICT infrastructure in more remote areas is not justified is being increasingly challenged. If ICTs enable new forms of knowledge creation, then it follows that the needs of rural areas are likely to be equally important as urban areas.

In fact, measures of the rural/urban dichotomy provide a static view that does not take into account the significant exchanges that take place on a day to day basis. Rural areas provide the source of migration to local cities as well as locations abroad. A variety of goods and services are traded. Poor rural small landholders are often at the mercy of unscrupulous traders who are able to exploit their limited capability for price discovery. There is a constant need for access to specialist forms of expertise and knowledge (e.g. educational, medical, agricultural) that is not available in the immediate vicinity. This means that the marginal benefits of communication infrastructure in remote areas may often be many times greater than in urban areas.

Increasingly, there is recognition that a variety of solutions are available to meet the need for basic services in less densely populated areas using innovative technical approaches. Technical advances in wireless communication technologies are playing an important role. In some countries like Peru, highly mountainous terrain has traditionally excluded fixed line access. However, with the opening up of telecommunication markets, it has been possible in some cases to incorporate licence conditions that stimulate innovative approaches to using new technologies for accelerated investment in these areas.

2.2 India: Illustration of the urban/rural divide
India illustrates many of the problems that are still to be overcome in meeting the goal of providing every person in the world with some access to a telephone. India's population of just under 1 billion people is the second largest in the world. Over three-quarters of the population lives in rural areas. With individual villages generally having a population of less than 3,000, the rural population is in effect spread over more than 500,000 villages.

In 1991, the Indian Government established certain policy priorities for the provision of expanded telephone services to rural areas. The aim was to increase tele-density from 0.86 per 1,000 population to 1.85 over a period of six years. By the year 2000, India aims to have a public pay phone in every village. These initiatives reveal increasing awareness on the part of the national Government that obstacles to providing better access in remote regions can be overcome.

2.3 Conditions for bridging the rural gap
Several conditions need to be satisfied to ensure that technological design, price, and the symbolic features of networks and services meet users' needs in a way that closes the provision gap. Cultural factors shape user needs as much as economic and political conditions. There is no universal prescription for closing the gap. Since different user groups have different needs with respect to telecommunication network access, a homogenous package of services suited to all users is not an achievable target. Access to telecommunication infrastructure also has a significant subjective component.

The conditions for access include the physical availability of network connections in various forms including wireless links and pay phones. Indicators such as the number of mainlines and cellular connections, the number of settlements with at least one pay phone, the pay phone distribution, and the prices of services in relation to the cost of living, can be used to judge whether positive conditions for access exist. The period of time it takes to get a dial tone and the time interval between a network failure and having it repaired must also be included in any assessment of quality. The theoretical availability of so many thousand telephone lines does not automatically translate into access. Other key additional factors include the standard of the service that is being provided including the frequency of faults and the quality of the transmission as well as the cost of usage. If pay phones are not operational or if a telephone constantly generates a busy signal then the conditions of providing access are not being met.

These indicators are usually reported in aggregated form averaging data for an entire country. This is not always helpful. It is necessary to disaggregate by a particular geographical area as well as by specific demographic group in order to obtain a clear picture. National statistics mask the fact that there is often a stark contrast between the provision in large cities and that in much more remote or rural areas.

Ensuring that people's needs for access are met means that other conditions for access must be in place. These conditions are culture and group specific. Indicators that incorporate subjective responses to telecommunication services provide a means of assessing this aspect of provision. Indicators of subjective satisfaction, complaint rates, 'churn' (the rate of subscribing to and terminating service subscriptions), provide proxy measures of these subjective responses although they require care in interpretation. For example, the complaint rates have often increased when monopoly operators were privatised even when service quality actually improved. Subscribers, who were resigned to poor service under the earlier regime, started to complain because privatisation raised both their expectations and some of their telephone charges.

3 Opportunities for bridging the gap

There are major gaps in the availability of ICTs at every level when measured in terms of the number of PCs, access to the telephone network and the number of Internet hosts. Several decades of investment will be required before many of the poorer nations catch up with current levels of provision in the industrialised countries. The use and availability of ICTs varies significantly between different developing countries enjoying the same economic level of performance. This suggests that there are other issues involved than simply access to finance or the relative level of economic growth and development.

3.1 ICTs and economic growth
Growth in the use of ICTs has been identified as both a cause and a result of economic growth. When ICTs are seen to be the cause of economic growth, this is because ICTs are being used in the construction of systems and applications that are capable of generating economic value. This economic value can only be realised when the necessary mobilisation of human capital has taken place. Similarly, ICT systems and applications can also be seen to be the result of economic growth. As societies become richer, human working time spent on tasks is an increasingly costly input. This means that there is pressure to automate tasks using ICTs. This applies even when the required skill levels are relatively high.

Over the past 50 years, development has been understood to involve economic growth, increases in per capita income, and attainment of a standard of living equivalent to that of the industrialised countries. This was to be achieved without incurring major social costs. This concept of development has increasingly been questioned because it places too much emphasis on material conditions and fails to consider aspirations that are more social and cultural. The capacity to acquire and upgrade knowledge has the potential of providing a more balanced vision. Knowledge can be applied to bring about material improvement but equally has the capacity to enrich other aspects of human existence.

Technological change is a complex process. It involves much more than simply applying inventions in the laboratory to produce new products or to create enhanced processes that lead to productivity improvements. New technologies form part of larger technological systems. These systems depend on the creation of the necessary skills as well as other complementary technologies that enable their full value to be realised. The more the technologies are inter-related, then the more complex this process becomes. ICTs are particularly noted for their high levels of inter-relatedness. The adoption of ICTs depends on a range of other factors, including institutional changes, the composition of available skills, as well as other intermediate investments.

Together, technological advances permit vast increases in data carrying capacity at much lower cost. The complementary technologies, in turn, require older switching and transmission equipment to be upgraded. In order for the associated economic benefits to be fully realised, other complementary institutional changes were also required. New applications like the rapidly growing Internet needed to be developed in order to take advantage of this increased capacity. Institutional arrangements for selling data transmission capacity had to be revised. Older methods of charging customers based on internationally agreed fixed and variable tariffs required amendment so that the benefits of the radically reduced costs could be realised.

The relationships between ICTs and sustainable social and economic development are complex because ICTs have high degrees of complementarity and inter-relatedness; advances in technological systems involve bringing together a complex mix of related technical and institutional changes. This suggests that the complexities involved in their application mean that developing countries are at a disadvantage when seeking to stimulate their greater use. The next section considers investment in the information infrastructure and the impact of choosing different investment strategies.

3.2 Investments
The traditional measure for infrastructure is the size and growth of the telecommunication network. In general, this has proved to be an effective proxy for other types of infrastructure including data networks, mobile telephony and the number of Internet hosts. The ITU has developed an extensive database that covers more than 200 countries and includes some 100 indicators with data extending over 24 years. The ITU database can be used to provide a demonstration that infrastructure investment is limited by constraints other than technical barriers. Specifically, it provides data on the relative figures for investment in national telecommunication networks.

Historically the investment costs for telecommunication networks have been met from internally generated funds generated by large government owned telecommunication operators. Additional long-term finance was obtained directly from the capital markets usually with the benefit of a Government guarantee. On average, 60 % or more of total investment was funded by internally generated cash flow. In other words, in any given year, a significant element of the revenues that were obtained from customers was allocated to funding expansion and maintenance of the network.

The past 10 to 15 years have seen a major change in the way in which investments in telecommunication networks are funded. Increasingly, expanded or upgraded networks are being financed on a strictly commercial basis where the returns are expected to be commensurate with the levels of risk exposure and those achievable in comparable investments.

Increased revenues are dependent on the volume expansion of new services rather than simply on the benefit of inflation linked user tariffs as in the past. In many countries today, including the United Kingdom, the major telecommunication providers are subject to regulations which require continuing reduction in some prices, often based on an RPI-X formula (Retail Price Index minus agreed constant).

The figures that are available from the ITU database reveal some interesting contrasts between individual countries. While poorer developing countries have much lower tele-densities than highly industrialised nations such as Germany and the US, revenues per main line are often similar, if not higher.

Similar comparisons can be made when considering the number of minutes of international calls. This generally represents the most profitable element of the telephone business. Overall, the number of international call minutes is substantially higher in most developing countries than in the industrialised countries.

International telephone traffic provides a valuable source of foreign exchange that can be invested to pay for imported telecommunication equipment but these revenues are often deployed elsewhere.

The ITU data also include figures for each country showing annual investment in the telecommunication network. Again, there are very wide variations, which occur independently of mainstream economic indicators such as per capita GDP. Investment varies from US$ 895,000 per main line for Uganda to only US$ 4,000 for Armenia. China is making annual investments equivalent to US$ 9.8 per inhabitant compared to only US$ 0.90 for Bangladesh and US$ 2.1 for Kenya. There are wide variations for revenues that are reinvested in the network. China is currently investing amounts that are equivalent to almost 90 % of revenues while, at the other end of the scale; Armenia and Tanzania only apply 4 % and 6%, respectively.

In summary, there is clearly a strong correlation between tele-density and economic growth and development. However, the differences in tele-density between countries with the same economic level indicate that the relationship is not conditional. Yet, in many developing countries, the gap is explained not by its low level of development but by low priority given to the development of ICTs:
- Investment decisions in the telecommunication infrastructure often have a wider agenda;
- Foreign exchange obtained from international telephone traffic is a valuable source of earnings that can be earmarked for special projects rather than being used to reinvest in local infrastructure;
- Restricting investment permits surpluses to be created within the state run telecommunication operators that can then be used to fund deficits elsewhere in the state budget. Operating as if providing better telecommunication to remote rural areas is inherently unprofitable can be used to justify restricting investment thereby ensuring that the revenues per line remain very high.

3.3 China: Innovative approach to overcome the overall ICT gap
China provides an important illustration that per capita GDP does not operate as an overriding constraint on the use and availability of ICTs. On the contrary, the recent development of China demonstrates very clearly what is possible once policy frameworks and objectives are established. China has seen a rapid expansion of its telecommunication networks.

Similarly, the production and use of ICTs in China has been characterised by rapid increases in the volume and range of both domestic and imported ICT products. This rapid increase on the supply side has been triggered by fast-expanding domestic demand from industrial and private users.

New services and technologies like the Internet and mobile telephony have seen rapid increases in usage. The total number of computers in use has expanded from less than 190,000 in 1986 to more 2 million in 1995. Mobile telephone subscriber volume has grown from 18 thousand in 1990 to 3.6 million in 1995. The use of ICTs has seen particularly rapid expansion since the 1980s when China began to pursue a new ICT policy - 'Import, Digest, Develop, and Create'. ICTs were identified as a key high technology in China's '863' plan. In 1993, the State Council set up an organisation called the Joint Meeting of National Economy Informatisation to promote further development and use of ICTs. This policy replaced an earlier emphasis on technological self-sufficiency that emphasised the need to develop basic science and military technologies.

This more open policy has helped China to become one of the largest importers of technology in the world since the 1980s. The Chinese government has had a strong preference for joint ventures. During the initial period of economic reform, China restricted the level of direct foreign investment. However, in the late 1980s and 1990s, opportunities for foreign companies engaged in inward investment were expanded while other types of technology transfer, including technology licensing or turnkey projects have been given less emphasis.

At the same time as promoting technology transfer and indigenous production of ICTs, the Chinese Government also has been promoting the use of ICTs within Chinese organisations. There has been a measure of success in organisations that have intensive investments in ICTs such as aeronautics, telecommunication, chemicals, and manufacturing sectors. However, the level of usage achieved in other sectors such as agriculture, transportation, and health-care has been significantly lower. Diffusion of ICTs has frequently been limited to a relatively narrow range of sectors and functions. There is also a considerable rural/urban divide. Big cities like Beijing, Shanghai, and Guangzhou have much more intensive levels of application than smaller towns and villages, particularly those located in the under-developed Northwest of the country.

The use of ICTs in Chinese organisations is characterised by a mismatch between the highly advanced technologies that are often adopted and the low level of managerial and technical skills within the organisations. This is a legacy of the command economy before the economic reforms of the 1980s. There are also problems due to a lack of technically skilled workers. While unskilled labour is abundant, there is a corresponding shortage of professionals and managers. The increasing demands brought about by China's rapid pace of economic development are difficult to meet, particularly given the damage which was inflicted on institutions of higher learning during the period of the Cultural Revolution (1966-1976).

The level of Internet penetration is actually much higher in China than in India. In January 1997, ITU figures show that while India had just over three thousand Internet hosts, China with a population approximately 1/5th larger had around 20,000 hosts, more than six times as many. While India's Internet usage had grown by 298 % over the previous year, China was enjoying and even more dramatic boom in usage with an expansion of 820 % over the previous year.

There are several important factors that have contributed to this differential growth and they are primarily institutionally based. China has permitted the creation of a larger number of Internet providers under the auspices of individual regional Governments. In India, Internet access remains more centrally controlled. Similarly, China has permitted more flexibility in service implementation and the expansion of its telephone network. This has given China the advantage of a digital network of 55 million main lines. India's telephone network, on the other hand, is only 87 % digital and is comprised of less than 12 million main lines. Finally, the growth of PC sales in China has been much more dramatic than in India. China has been experiencing PC sales growth in the last few years of more than 100% compounded, with the result that China has twice as many PCs as India.

3.4 Bangladesh: Innovative approach to overcome the rural gap
There are a number of other creative initiatives for ensuring that rural areas that are underserved receive greater access to basic telephone services. The availability of new technologies often plays an important role in creating these new opportunities. One case is the GrameenPhone project in Bangladesh. The GrameenPhone project involves the construction of a mobile telephony GSM based network that is designed to serve some of the poorest inhabitants of Bangladesh, a country with one of the lowest tele-density figures in the world. GrameenPhone began services on 26 March 1997. Based on the growth rate experienced to date, it is expected that the number of subscribers will grow to over 25,000 by the end of 1998. The project aims to cover at least 50% of the country's villages within a period of four years .

GrameenPhone offers a radical approach to financing new telecommunication infrastructure at the grass roots level. By effectively being able to fund its future customers, GrameenPhone has placed itself in a strong position to expand telephone provision in some of the poorest parts of Bangladesh. The consortium's challenge is to install telephones profitably in an environment where average GDP does not exceed US$ 260 per year.

4 Bridging the gap

This section presents case studies showing that the ICT gap can indeed be overcome. It provides a general overview, focusing on some of the basic sectors where one would expect the ICT gap to represent a major barrier to development, including public administration, health, education, etc. This demonstrates that even in basic areas ICTs have the potential to contribute to sustainable development. Case studies examining the uses of ICTs in the various sectors can be found in Booklet IV.

4.1 Bridging the gap in the area of public administration
As a result of digitisation, ICTs can reduce some of the basic costs of running an administration. They permit reorganisation of the internal administration as well as the alternative provision of services. In the future advanced ICTs will have the capability to provide private citizens with the means of being more actively involved in civic processes.

All nations regulate their internal and external trade. This requires extensive licensing procedures and authorisations that have to be satisfied before it is possible to import goods. These controls become particularly complex and time consuming when larger capital goods items are involved. ICTs can be used to create information systems that are of value to small and medium sized enterprises (SMEs). Such organisations are also able to benefit from the use of ICTs to automate and speed up procedures for tax collection and other regulatory matters. There are a number of benefits both to the Government and to business organisations. All these processes are likely to be more efficient and less time consuming than paper based methods. This permits advice and information to be made available at a lower cost than conventional methods involving officials supplying the details directly.

ICTs can also play a more direct role in the planning and management of infrastructure and other key resources. Computer based databases are an invaluable tool in monitoring a wide range of areas including population growth, health requirements and resource use. Data drawn from these databases can be used to simulate future events, thereby providing an important tool in the development process.

4.2 Bridging the gap in the health sector
ICTs have a valuable role to play in improving the quality of life, particularly health, education, sanitation, agriculture and the environment. In the health sector, ICTs permit valuable professional expertise to be made available to more remote areas. ICTs can be used to assist in the exchange of information between different health professionals. They can also be used in a variety of other ways. For example, they can be used to transfer patient records between different sites thereby improving clinical effectiveness.

Ultimately it will be possible to implement tele-medicine programmes where some health care is provided remotely, independently of person-to-person contact. Tele-medicine permits medicine to be delivered to isolated places and ultimately directly to the home. However, implementing such programmes successfully is not simply dependent on having the right technical equipment. Equally important is the level of training and ongoing support for the medical practitioners who are involved in delivering tele-medicine in its various forms.

Medical equipment is becoming increasingly more sophisticated. This is also a result of advances in ICTs. However, while these systems offer powerful tools for diagnosing illness and ill health, they require certain economies of scale for their effective usage. Tele-radiology offers an effective means for achieving this by giving wider access to diagnostic equipment. Images generated in digital format can be saved and stored electronically. They can then be transmitted to medical practitioners, thereby avoiding delays caused by misplacement or loss of these images in their printed form. In the future it may be possible to combine these images with other patient data, creating virtual patient record systems that are held electronically.

ICTs also offer a powerful capability for simulation and modelling in the medical sphere. Surgery can be made more effective by giving surgeons the ability to visualise the area of the body that will be the subject of the operation. Images of tumours or other areas of abnormal growth can be obtained with minimal surgical intervention using endoscopes. Advanced 3D imaging permits the creation of anatomical atlases that can be used for medical training.

Medicine in developing countries is also increasingly benefiting from the expansion of the Internet. Initiatives such as HealthNet permit health professionals located in remote areas to have access to current information on best practice. Individuals can obtain basic information on health matters. The potential spread of epidemics can be contained or avoided by the exchange of information on the development of particular diseases, immunisation programmes and the efficacy of different forms of medication. For example, ICTs have been used to map malaria infestations in Sub-Saharan Africa. This has enabled countries to jointly combat this disease in a more effective way.

ICTs also have a very important role to play in improving the quality of life for those with disabilities. ICTs can provide individuals who have difficulties in speaking with a form of artificial voice using voice synthesiser software. Individuals who are visually impaired can be provided with computerised Braille and acoustic displays. Increasingly it is possible to make available voice recognition software to control computers and other equipment. This removes the constraints of manipulating keyboards or fixed input devices. The availability of mobile communication can greatly improve independent living and autonomy by giving individuals the opportunity to summon assistance when required.

4.3 Bridging the gap in education
ICTs have an important role to play in improving the quality of learning in all areas of life. As the emphasis shifts to knowledge-intensive development, there is increasingly an emphasis on lifelong learning. Learning and training continue throughout peoples' lives as new skills and competencies are required, the result of changes which, in turn, are due largely to the development of ICTs. Education no longer begins and ends with school and university.

ICTs have helped to focus the emphasis on learning as opposed to teaching. The latter emphasises the role of the teacher and the knowledge that they have to pass on to their pupils and students. In a learning based model, individuals can increasingly tailor their training and learning to meet their specific requirements and to follow an individual learning path. ICTs have played a major role in making a learner-based model a real, rather than a theoretical, possibility. The development of multimedia software that is based on optical storage systems such as CD-ROMs and DVD (Digital Versatile Disk) permits the individual to follow a course of learning at customised pace. With intelligent software, the user can be required to repeat sections of a course of training until the required level of familiarity has been obtained. These systems coupled with the massive information resources that are available on the Internet can provide a very rich calibrated learning environment.

Digital communication at an affordable price has the capacity to vastly improve the remote teaching that can be made available. Subject specialists are no longer restricted to the geographical confines of a particular school or University. Using video-conferencing and simpler voice based communication, individuals located in remote areas can be given access to specialist teachers. Learning can occur by connecting different groups located in separate locations. Cross-cultural links can be established and strengthened.

Education in a broader sense is being significantly affected by the expansion of digital satellite broadcasting. Older satellite broadcasting systems are based on analogue technology. This means that they are constrained by the amount of bandwidth that is required to carry each channel. Depending on how it is configured, an individual analogue satellite will generally be restricted to broadcasting no more than 30 to 40 individual channels. With the development of digital methods of broadcasting sound and images, a similar satellite costing the same amount to build and to launch into orbit is capable of broadcasting more than 150 individual channels. This provides significant new opportunities for having, for example, a wide range of educational channels each dedicated to a particular subject area or element of the curriculum.

4.4 Bridging the gap in environment
ICTs can make a major contribution towards measures aimed at protecting the environment. In many cases, changes to the environment are not immediately perceptible. It is often only after studying changes for many years that deterioration in air quality, water quality or agricultural can be clearly identified.

These observations require accurate measurements to be made and that the resulting data to be held in electronic databases in order that trends can be analysed and clearly established. Global warming is one of several examples where ICTs have played a very important role. They have made it possible to assemble detailed data and provided the basis for their use in computer based simulations. In this way, some of the potential threats posed from the increasing volumes of greenhouse gases in the atmosphere could be more clearly identified.

ICTs provide the means for giving individual citizens and businesses the information with which to assess the environmental impact of different activities. Geographical Information Systems (GIS) provide the means for combining geographical principles with electronic data manipulation that permits complex assessments to be carried out on future changes in the environment. GIS enables the creation of electronic maps from which different sets of information can be extracted more effectively. GIS, in turn, can draw on data collected through remote sensing devices located on satellites or airplanes. These devices utilise certain physical properties such as the emission of heat (thermal imaging), radio waves and electromagnetic energy or digital photos to create huge data sets that can be analysed over time. GIS can be used to study such phenomena as the deterioration of rain forests in particularly ecologically sensitive regions (more information on case studies in booklet IV).

ICTs are increasingly being used to develop specialised on-line systems that can provide access to the scientific data that is required to monitor environmental change. Similarly, ICTs are being used to develop social and economic plans that can be implemented in response to the challenges presented by long-term climate change.

In the specific case of agriculture, ICTs have a potentially vital role to play in developing land information systems (LIS). LIS are designed to collate information concerning soils, water use, rainfall as well as other factors to support the most effective use of agricultural land. LIS can play a vital part in anticipating potential problems such as a harvest falling short of local requirements. Such projections make it possible to establish contingency plans and to benefit from early warnings on anticipated difficulties. LIS can provide vital policy making tools for decision-makers when considering land tenure and related planning issues.

ICTs can also provide an effective means for disseminating best practice to the farming community based on national and international research. For example, SIMBIOSIS is a project sponsored by the Organisation of American States that is developing an international information system for the biotechnology and food technology sector. Another project, REDPRONAT sponsors research on natural products in Latin America.

4.5 Bridging the gap in commerce
ICTs are having a major impact on the full spectrum of commercial activities throughout the world. In manufacturing they are responsible for accelerating elements of the production process where ICTs make it possible to collect vast amounts of data at every stage. These data can then be used to improve processes, reduce inventory levels and to customise output. Manufacturing and the design of products can be integrated using computer-integrated manufacturing.

ICTs are having a major impact on the creation of technical networks that can be used to support research activities. However, due to the piecemeal development of national networks in many developing countries, there are often urgent requirements for their integration and interconnection. ICTs are being used to overcome major linguistic barriers by improving access across language barriers. Voice recognition systems and computer-based translation systems can be used to overcome some of the constraints that are being faced.

Although most commercial activity still involves some direct human interaction, there is an increasing move to electronically mediated business activity. The Internet is becoming a serious place to conduct business and major companies, including many in the ICT sector itself, are using it as a platform for increasing direct sales to their customers. Electronic trading networks have the potential dramatically to change traditional models of conducting business. The fall in intermediate transport costs can be of significant benefit to developing countries.

The volume of direct business that is transacted on the Internet is already expanding very rapidly. In addition to transacting actual sales, the Internet provides a powerful resource for price discovery. It allows potential buyers to identify where and at what price they can purchase particular goods and to do so at a very low cost. In this way new services offer the means for smaller companies located in developing countries to 'post' their prices to a much wider potential audience of customers than is currently possible.

In addition to having a direct effect on existing methods of selling goods and services, electronic networks and specifically the Internet have the potential to transform the market for particular types of product.

ICTs are also transforming a range of service sectors. In particular, ICTs are having a major impact on travel and tourism where co-ordination costs represent a major component of the final delivered service. ICTs have already transformed airline booking systems, permitting on-line reservations to be made in real time at a cost which is less than 10 % of the non-computerised equivalent. The development of the Internet permits interfaces to these existing systems to be created.

5 Concluding comments

This booklet has examined the imbalances in provision of information infrastructure in developing countries as compared to the industrialised world. While there have been positive changes over the past decade or so, the gap between the richest and the poorest nations remains formidable and will require many decades of major investment before it is closed.

There are also major gaps between rural and urban areas which have important implications for the exclusion of those already operating at a disadvantage and who are living at the margins of the rest of society.

This booklet has also considered how some of the barriers for a strong contribution of ICTs to sustainable development can be overcome. In the first place, there are considerable differences in ICT development between countries with a comparable economic development. This demonstrates that there is considerable scope for ICT development in developing countries and that lacking economic growth and development does not necessarily block this development. Secondly, the examples of successful ICT applications in public administration, health and education demonstrate that ICT can have a contribution to sustainable development even in the most basic sectors in developing countries.

The third booklet in the series makes a closer examination of the policy framework that is needed to encourage the development of the necessary national ICT strategies and to ensure that they can be implemented in an effective way. The fourth Booklet in the series makes a closer examination of a number of case studies that demonstrate the effective use of ICTs for sustainable development.