Contact: Mauricio Rios (202) 458-2458 mrios@worldbank.org Charles Kenny (202) 473-3540 Ckenny@worldbank.org WASHINGTON, D.C., November 10, 2005: Payoffs of successful E-Development projects are huge and can produce dramatic returns across a range of sectors in countries poor and rich alike if the risks involved are managed properly, according to E-Development: From Excitement to Effectiveness-a World Bank report that urges countries to learn from past lessons to implement effective projects. The report, issued in the lead up to the UN World Summit on Information Society to be held in Tunis from November 16-18, examines the record of the Internet as a tool for development to date and suggests lessons and policy recommendations to increase the impact and sustainability of e-development projects. “This E-Development report examines what we have learned in terms of minimizing the risk of failure and maximizing the returns to developing countries from the Internet revolution,” says World Bank Vice President of Infrastructure Kathy Sierra. “The report focuses on the enabling environment for e-development, e-government applications and the role of the Internet in lifelong learning. It also emphasizes the importance of monitoring and evaluation to successful e-development initiatives.” The World Bank is the largest international donor in the field of ICT for development, with ICT projects in over 80 countries and an overall portfolio amounting to more than US$3 billion. Part of these funds is spent specifically on e-government initiatives. “An increasing number of countries are receiving World Bank support for ICT components in traditional investment projects and to design e-government applications and integrated, large-scale e-development projects. These include e-Sri Lanka, e-Bharat in India, e-Ghana, the Vietnam ICT Development project, and the ICT Sector Development Project in Tunisia,” says Mohsen Khalil, Director of the World Bank Group’s Global ICT department. Huge payoff Worldwide, introducing advanced ICT applications can be a risky business, unless accompanied by the proper strategies and institutional reforms. A survey, cited in the report, found that only forty percent of companies that adopted on-line purchasing systems actually saved money when they deployed such systems as part of a change management process. The proportion of companies that saved money when they introduced such systems without a change management program was only three percent. The risk is similar when governments mix Internet with bureaucracies. “The record of e-government projects in both developed and developing countries has been mixed” notes Robert Schware, the editor of the report. “While e-government applications can be useful tools for improving governance and the quality of life of citizens, a lot can go wrong along the way. This report presents some of the basic building blocks of e-government for countries to know what are the key areas that they should be focusing on to achieve success.” Further, the payoff from successful projects can be huge. In 1997, for example, the South Korean government introduced an e-procurement system that offered online information on more than 420,000 standardized products. The system replaced a procurement process that was widely regarded as non-transparent, complicated, and lacking accountability. As of 2002, the government’s investment of US$26 million had generated savings estimated at US$2.5 billion a year. Chile, another example, introduced an online taxation system in 1998. Three years after the project was launched, over 400,000 taxpayers had checked their tax assessments online, some 183,548 sworn returns and 89,355 income tax returns had been received online, and the Chilean exchequer had collected US$1.943 billion in taxes over the web. Digital Divide Regarding the use of Internet applications, an analysis of e-commerce development across the world carried out for the report suggests that the “digital divide” is very much part of the broader “development divide.” Use of Internet e-commerce applications as reflected in the number of secure servers in a country is largely determined by income. Roughly 80 percent of the variation in number of secure Internet servers between individual countries can be predicted on the basis of GDP per capita alone. But the analysis also suggests –explains Schware- that “improving policies and institutions to encourage investment in ICT applications while extending access to telecommunications infrastructure can dramatically extend use of e-commerce at a given level of income per capita.” This underlines the importance both of the basic telecommunications reform agenda as well as a broader effort to improve the climate for e-development. The level of development in a number of supporting infrastructures for ICT applications can have a dramatic impact on rollout. Weak financial systems, for example, can be a significant drag on the expansion of e-commerce. And the general level of development will also be an important determinant of the suitability and sustainability of particular e-development applications, the report notes. “Overall, successful e-development projects are suited to the level of a given country’s development, and relevant to the needs of targeted users,” explains Schware. “They integrate infrastructure, applications and skills development and they are implemented within a broader process of institutional change. Project design is coordinated as part of a larger strategy, recognizing the complexity of change and the need for constant monitoring and feedback.” - | 
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