Workshop on ICT Strategies for Islands and Small States
(Malta, 17-19 March)

 

Session 5 : Infrastructural Development

Mr Keith Yeomans (Consultant) focused on the threats and opportunities of the knowledge society for small island states. He noted that small island states are a special case because of their narrow resource base, high dependence on external trade, their remoteness from world markets, high per capita cost of infrastructure, masked poverty and low population scattered in small clusters with a low income. They often face the double bind of foreign exchange loss while lacking the critical mass for attracting commercial investment. A more disturbing factor is the fact that ICT infrastructure development is not considered as a priority by development agencies. Small island and states are conscious of the need to safeguard their traditional lifestyles and customs and to preserve the natural environment. The conventional telecommunications service has tended to emphasize isolation through a tele-cost environment. The new technology should help small island states to overcome their remoteness but the costs appear prohibitive. A South Pacific Forum Report (1994) found that its member countries would need an eight-fold increase in the number of telecommunications services to close by half the gap between them and OECD countries.

The solution is the adoption of an integrated cross sectoral strategy based on building partnerships across society, maximizing the resources available for investment; creating economies of scale; promoting inter-sectoral collaboration; aggregating demand for equipment and services and thereby increasing bargaining power; harmonizing standards in systems; and identifying gaps in provision. On the basis of a review of the ICT strategies of Malaysia, Malta, Singapore and the UK, the following critical success factors have been identified : a clear vision of needs and priorities, a commitment from the top (the most senior politicians), a needs and resources audit, the role of government, the complementarity of interests between the public and private sectors and the development of effective partnerships. In the emerging globalised environment, the governments of small island states seem virtually powerless but this may not necessarily be the case. Governments may still exercise power, in the following areas : statutory control over access to public land and building, licenses for transmission and reception services, laws governing the management of business, taxation and profits, and rapid access to key client groups in education, defence etc.

The infrastructure is integrally linked to content and human resources development. Development is content-driven and access to good content is important. Strategy formation depends on the dynamics of partnership - partnerships tend to be ad hoc rather than planned and for this reason, they generally underachieve or do not survive. Each and every partner need to know more about the other partners they are dealing with - it is critical that they profile their partners. Mr Yeomans proposed a strategic approach to information society development for small island states, the needs-based approach. Small island states have to ask themselves the following questions to identify their specific needs - Are they able to act on a national basis ? Have they got the critical mass to do it ? or do they need to develop strategies on a sub-regional basis ? Polities have to be pragmatic. In some cases, the lead organization does not necessarily have to be government. Some of the factors affecting the needs-based approach include functionality (what the people are going to use the technology for), changing utility patterns, vital issues including contextual factors, economic and social factors, the environment; income distribution; technology change and redundancy and innovative approaches to business.

Dr Michael Frendo (former Minister for Telecommunications, Malta) started by posing the question whether governments are in fact completely powerless in the globalised economy. Small islands have small populations and are isolated and they must therefore consider telecommunications as a strategic resource. Telecommunications is the infrastructure of infrastructures. Telecommunications constitute an opportunity which small states cannot overlook, as they allow them the possibility of doing business over the Internet. Telecommunications present a tremendous advantage for small islands and this has important implications for policy. Malta has developed its telecommunications along the clear lines established by the ITU. These are the main lessons to be drawn from the Malta experience :

Small island states need to develop a good telecommunications base, if they are to attract investors, as the latter want to ensure that the new plant can be integrated into their global network and link up with their other plants. Telecommunications is a liberating infrastructure which opens up all sorts of business.

It is important to have the legal framework in place, in order to regulate the structure. Latecomers, like Malta, are in a weak position when negotiating with the big operators as the latter have whole teams of negotiators. Small island states need to have a strong legal framework in place, otherwise they will be outdone in negotiating deals. It is also important to decide on how to regulate the telecomms sector - do you have the expertise ? Small islands may import a regulator, or they may try to develop capacity within the country. The regulator needs to look at both legal and business issues.

Another crucial issue is the issue of licensing - a lot of operators will only bring their business to islands, if they can be assured a monopoly. Small islands have to be aware of the fact that while a licensing agreement may reap certain benefits in the short-term, unless it has a limited time frame, it will become a liability in the long-term. Licensing agreements need to be flexible due to ongoing processes of fast global change. Governments have to ensure that the terms of the licensing are strategic and not short-term. In granting licenses, governments must include as part of the package, some obligations on the part of the licensee to develop the network throughout the community to reach the remoter parts of the country, otherwise they are not doing justice to the strategic needs of the community.

Small island states should be aware of the value of frequency management as a resource which can be used to generate a sustained revenue.

One of the strategic options open to islands is to create hubs using fibre optic cable. Small islands can earn a sizeable income from transit traffic, by connecting to the nearest hub. By doing so, they are no longer isolated and they can become significant players. Malta is fortunate in being able to establish a marine fibre optic link to Palermo, a major hub connecting Europe to the rest of the world. This link has not been fully exploited as Maltacom is only now actively selling space on the link.

The issue of competition is important as states should not be tied to one operator. This is extremely important from the consumer’s perspective.

Internet usage and electronic commerce are important sectors which should be developed.

Main points from the discussion:

1. In deciding whether to opt for satellite or fibre optic links, it is important to bear in mind that the laying of fibre optic cable takes longer but it provides a cheaper service than satellite and is affordable for consumers. Cable provides a more clean line than satellite and more capacity. However, if one needs to make fast changes, satellite is better in this respect. Rather than choosing one and excluding the other, the two systems should be seen as complementary. It is possible to depend largely on fibre optic cable and still have satellite as backup. With regard to cable, although at the start there may be a lot of space, this can be quickly used up.

2. The key success factors of Malta’s telecomms policy were :

the concept of hubbing - before Palermo, Malta was the centre of telecommunications in the Mediterranean. When the investment was being made, the focus was on the island rather than its regional context.

the commitment at the political level is crucial.

the 400 year old university which provided an important technical base and the expertise to understand the know-how which was imported;

the investment depended on continued economic growth - act of faith.

size is important as it is easier to reach people.

overall, there was a determination to get there due to a realization that Malta could not do without telecommunications. The latter was seen as a major development tool, which is in line with the philosophy of ITU. The telecommunications policy was actually planned with ITU assistance and it was achieved in a four year span which has lead to Malta being used as a model. Malta needs another plan now to take it to the next stage.

3. The setting up of call centres is a good option for small islands as they are labour-intensive and offer opportunities for training local staff at the expense of the foreign client. However, in order to attract call centres to set up in the country, there must be a pool of people with a good knowledge of languages.

4. It was agreed that there was a need to develop a framework for formulating an overall ICT strategy for small islands and states. This would address such key issues as the dynamic between regulation, competition and monopoly. It was noted that in small islands and states where it is difficult to achieve economies of scale, it may make sense to opt for monopoly situations in the short-term, with a view to introducing competition in the medium/long-term. In terms of importing the regulator (to designating standards, telecomms service etc), it is important to take note of the fact that in small island economies, the regulator has to understand the role that telecomms has to play in the development of the country and efforts should be made to develop national competence in this regulatory function. Similarly, in deciding whether to opt for domestic telecomms ownership or overseas ownership which would provide more cost-effective services, it is important to adopt a more long-term policy perspective aimed at harnessing national capacity-building.

5. It was noted that in some small island states, there are other limiting factors apart from small size, e.g. the islands of the Pacific are spread out over a large ocean space and the population is scattered. The premise of the technology is that this should not be a problem. One would have to analyze different technological solutions with a view to identifying the most efficient and effective system. It was recognized that the issue of determining the cost-effectiveness of the various options could prove problematic and that the long-term benefits of such an investment for all the other sectors, would have to be taken into account. One way of approaching it would be to measure the internal traffic between the islands and the level of the islands’ international traffic, however these calculations would have to take into account the potential for a substantial increase in traffic once the services are made available. In Malta, for example, in the initial investments in telecomms upgrading, data services took the backseat for a long time. Thus, the introduction of packet-switching capacity was delayed on the basis of current usage and demand which was limited at the time - this contrasted with the increase in demand once the facility was made available. It was noted that issue of costs is a major obstacle in developing a strategy and this is where the vision is important in breaking out of the current constraints and explore the range of possible future scenarios. In this context, it is important to convince decision-makers of the vital importance of investing in ICT and developing a national ICT strategy. The politicians’ five year time horizons constrain their consideration of long term scenarios.

6. Another model of relevance to the Pacific Islands is Finland, a country where the mobile phone system has been used to connect the dispersed population. This type of breakthrough technology may not be affordable for the Pacific Islands. Other technological options mentioned were cable television, CETA (the airlines network, which has spare capacity), copper wire (high redundancy), Iridium, and Project OXYGEN.

7. There were differing opinions on whether Malta constitutes a good model for other small island states as there were major differences in Malta’s specific circumstances as compared to other small islands. In particular, Malta’s 400 year old University gave it a clear advantage in terms of its human resources. It is therefore important that small islands do not use other small islands as models, simply because they are small islands.

However, the Malta model was important for other small islands in terms of recognizing the specific environment of small islands and the constraints which small islands face in the globalised knowledge-based economy and how proactive strategies can be developed by governments. The Malta model is not there to be copied faithfully by other small island states but it should serve to provide ideas for possible conceptual approaches to the development of policy strategies. However, it is important that small islands develop their own home-grown approach as part of a community-wide collaborative effort based on interactive learning processes. it is only by developing their own policy development and policy learning capacities that small islands can generate the national learning curve.

Session 5b : Guidelines for Developing a National ICT Strategy

1. VISION

What should the vision look like ?

The Vision should be based on :

defining a set of core values and ensuring they are respected throughout the process and changing people’s perceptions and attitudes accordingly

a holistic supra-sectoral approach -

all the stake-holders have to be involved (the whole community, the public and private sectors, top politicians and decision-makers, religious groups, and citizenry in the Diaspora);

capturing existing development and sectoral policies and revising them in line with the new vision. The new Vision should not be subject to or constrained by existing policies as the basic aim is to move to a completely new paradigm for the electronic age.

a long enough time horizon to adapt to the fast pace of change and changing needs (one of the characteristics of the culture of the new electronic age is that we have to think in longer-term time scales);

short, medium and long-term phases;

bringing in global organizations and experts on the country’s terms and if really required (must ensure that they are competent for the task at hand and that they do not monopolize the process);

focus on opportunities and how they can be used to overcome the constraints.

The Vision is a process not a project. It is a dynamic, iterative, learning process.

STEPS TOWARDS A CIVIC ECOLOGY

2. STRATEGY

What should the strategy cover ?

Existing national development plans/policies should be consulted as an initial point of reference but they should not be allowed to influence the strategy, as this has to be developed in line with the new ICT paradigm.

The strategy needs to be driven from the top. There must be a champion to take the process forward, even in the face of serious difficulties.

It needs to address the core values of all the stakeholders in the nation

The strategy needs to be flexible to adapt to change at the national and global level. It also needs to be dynamic with in-built IT-based feedback processes which allow the strategy to be refined and improved on an ongoing basis. This will make the strategy process more transparent and accelerate the learning curve.

The strategy should draw on the experiences of other countries but adapt them to local needs.

The buy-in strategy involves showing different stake-holders how their needs will be met.

How do you bring in the partners ?

3. IMPLEMENTATION : SETTING UP A NATIONAL ICT FRAMEWORK

It is important to set up a national entity to champion the process. It may be advisable where resources are scarce to use an existing entity as it takes time for a new entity to develop adequate resources for the task at hand. It is important that the entity is adequately resourced.

This entity should reflect a public sector/private sector/community partnership.

It should have political accountability, and a legal and fiscal status, and it should maintain contact with the full range of stakeholders. It should be politically robust and well-embedded, strategically located close to the central policy-making arm of government. It should be based on political consensus - this is also very important in terms of ensuring continuity beyond five year political plans.

The entity could have a 3-tier set up consisting of :

a forum where all the’ stakeholders are represented and consensus views developed;

a small working unit of technical people (not just IT technicians) and trouble-shooters who can really monitor what is happening to the strategy and ensure that it is dynamic, by providing stimuli;

a linking mechanism with the government information strategies (Government on-line) and the governance process.

The entity should incorporate an electronic feedback mechanism for keeping the strategy updated and integrated and improving its transparency.

The working unit should incorporate a policy learning component responsible for monitoring developments at the national and international levels; looking out for new models and drawing lessons from success stories at the national and international levels in order to update the strategy accordingly.

This national entity would be responsible for :

Formulating and and implementing the strategy and keeping it updated

Developing a management programme

Advising on the strategy’s long-term sustainable implementation and resourcing

Developing a national capacity-building approach covering legal, institutional development, human resources development and community awareness

Incorporating a legal framework which is flexible and can easily adapt to change

Conducting negotiations with global partners (telecomms operators and investment and venture capital)

Prof Bernard Woods

Sustainable financing solution - payment for use of hardware and software

Comprehensive approach to the multi-functional applications of the technology (rather than the linear, sectoral approach)

A new form of utility - a new item on the development agenda

Transformation in approaches for, and funding of, the seven main fields of application of ICT

Usage - a new commodity

A mechanism for channeling funds directly to the poor

A role for Commonwealth institutions in leading new awareness, planning and action to introduce advances.

Small country advantages - flexibility, adoption of new ideas, etc