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Overview

Context

Technological progress is a considerable driving force behind economic growth and job creation. Information and communication technologies (ICTs), in particular, are reshaping many aspects of the world’s economies, governments, and societies. In developing countries, governments, businesses and people are harnessing the transformative power of ICTs to make public services more efficient, to grow businesses, and to strengthen and expand social networks. More than 75 percent of the world’s inhabitants now have access to a cell phone, with the number of mobile-cellular subscriptions approaching 7 billion globally at the end of 2013. New services and industries are emerging. In Tanzania, for example, mobile money agents now outnumber all other financial intermediaries by ten to one. Over half of those living on less than $2 a day in that country have access to mobile technology.

At the same time, access to mobile and fixed broadband remains prohibitively expensive in some countries where lack of ICT infrastructure and regulatory bottlenecks still hamper broadband development. Residential fixed-broadband services cost about 30 percent of average monthly GNI per capita in developing countries – compared to just 1.7 percent of average national income in wealthy countries. This average masks vast discrepancies between and within countries, affecting opportunities available to citizens. In Djibouti for example, a mobile broadband package costs more than the income of the poorest 60 percent of the population. Done right, ICT infrastructure investment and policy reform can be a key enabler of poverty reduction and shared prosperity. A 10 percent increase in high-speed internet connections is associated on average with a 1.4 percent increase in economic growth in developing countries.

Strategy

The World Bank Group’s ICT sector strategy, adopted in 2012, aims to help developing countries use information and communication technologies to transform the delivery of public services, drive innovations and productivity gains, and improve competitiveness.  The strategy reflects rapid changes in the sector over the last decade, including a dramatic increase in use of mobile phones and the internet, a sharp drop in the prices of computing and mobile internet devices, and the increasing prevalence of social media. Under this strategy, the World Bank, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA) focus on three priority areas:

  • Transformation: Making development more open and accountable, and improving service delivery – for instance, by facilitating citizen feedback to governments and service providers.
  • Connectivity: Scaling up affordable access to broadband – including for women, disabled citizens, disadvantaged communities, and people living in remote and rural areas.  
  • Innovation: Developing competitive IT-based service industries and fostering ICT innovation across the economy – with a focus on job creation, especially for women and youth.

New Bank lending for stand-alone ICT projects in Fiscal Year 2013 (FY13) totaled $171 million for six projects. ICT components, however, are increasingly included in projects across different sectors such as education, health, agriculture, and public sector management. The Bank’s portfolio of active projects with ICT components has grown significantly, from about $500 million in 2006 to about $1.7 billion in 2014. The IFC has invested about $4.5 billion and mobilized an additional $2.7 billion of financing since 2001 in private ICT sector projects in developing countries. In FY13, it committed financing for 25 projects with a net volume of $569 million and mobilized $590 million in additional financing.  MIGA has provided investment guarantees totaling $2 billion in the ICT sector since 1988, including $722 million for projects in Sub-Saharan Africa. FY13 guarantees totaled $40 million supporting four projects.

The Bank’s work in developing countries is informed by in-depth analytical work. Recent publications include   Broadband Networks in the Middle East and North AfricaConnecting to Work, eTransform AfricaThe Role of Information and Communication Technologies in Post-Conflict Reconstruction and the Broadband Strategies Toolkit.

Results

The Bank Group’s work in the ICT sector aims to empower people socially, economically, and politically to reduce poverty and increase shared prosperity. Below are recent examples of projects that have lowered barriers to mobile and internet access, boosted jobs, and improved government effectiveness and transparency.

In the Pacific region, the Bank is helping remote island populations access broadband internet, making it easier and cheaper for people to connect to friends, jobs and knowledge. In August 2013, a new 830 km fiber optic cable connected the country of Tonga, made up of 176 islands spread across 700,000 km2 of ocean, to Fiji and onwards to global broadband networks. As a result, the household price for a month of internet service, per gigabyte, has fallen by 60 percent, and bandwidth utilization has grown ten-fold. The arrival of broadband in Tonga is expected to help create more local jobs through business expansion and facilitate access to remote health and education services.  Similar benefits are expected to spread throughout the Pacific as other countries join the Pacific Regional Connectivity Program.

In Afghanistan, a $22 million credit supported sector reform that made the telecommunications market more competitive and attracted over $1.2 billion in private investments. This helped increase the number of telephone subscribers from 57,000 to 13.4 million between 2002 and 2010, and reduce costs from  $2 a minute to 10 US cents a minute. The Bank is now financing a $50 million project that aims, among other things, to provide internet access to more users, build on widespread use of mobile phones to improve the delivery of public services, and support nascent entrepreneurship in the ICT sector. To date, about 186 km of fiber cable have been constructed. The Ministry of Communications and Information Technology has adopted an open access policy for the national backbone network, ensuring non-discriminatory access to wholesale internet bandwidth for all firms. And about 600 Afghans have been trained to become skilled information technology (IT) professionals.

Boosting skilled job creation in the IT industry is also at the core of MexicoFirst, an institution supported by the World Bank in Mexico that trains and certifies IT workers for higher- paying jobs. As of 2013, more than 64,000 people were certified by MexicoFIRST. An impact evaluation study found that graduates received an average salary increase of 36 percent after going through the certification program. ICTs are also creating new types of work, such as online contracting and microwork, in environments constrained by lack of quality physical infrastructure, travel restrictions or social norms. In the Palestinian Territories, where youth and female unemployment rates are particularly high, the Bank provided technical assistance to facilitate the creation of online work business partnerships between Palestinian workers and international online work companies.

The power of mobile technology was tapped to ensure food security in Uganda, In March 2013, ICT specialists helped the Government obtain rapid feedback on an outbreak of wilt infection in the country’s banana crop, a major staple consumed by over 14 million people in Uganda.  They did this through Ureporters, a network created by UNICEF of more than 190,000 volunteers who use mobile technology to report on development issues.  Over a period of just five days, text messages to and from Ureporters helped track the outbreak and raise awareness of treatment techniques.

In Moldova, the Bank and partners have helped usher an ambitious agenda which aims to transform the delivery of public services using ICTs, including the first public sector shared cloud infrastructure for a World Bank client country, and the launch of many online e-services that have improved citizen-government interactions. There are now 395 services on the Government Services Portal of which 95 are online e-services. Moldova has won several international awards, including one by Transparency International, for its Bank-supported work in this area.

Media Contact:  Flore de Préneuf, +1 (202) 473 5844, fdepreneuf@worldbank.org        


Last updated: 2014-04-04




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