ICT Connectivity and Shared Prosperity

Dr. Salehuddin Ahmed

Former Governor, Bangladesh Bank (Central Bank), Professor: BRAC University
IRD Expert, CIRDAP

The global financial crisis of 2008-10 and subsequent happenings point out to the degree of interdependence of countries within the context of globalization. The global economic outlook influences the performance of individual countries especially the developing countries. Improved connectivity, if properly devised, can bring inclusive and shared prosperity. According to the ESCAP, the regional connectivity refers to the networks to facilitate goods and services, people and information and ideas. High international bandwidth prices, fragile undersea structures hamper information flow.

Policy measures are not always friendly (VOIP, IGW etc). In Bangladesh, regulatory bodies are not strong and independent. Close interactions with private sector is necessary. Most of the countries of the Asia-Pacific region have similar factor endowments. For example, China, India, Bangladesh, Indonesia are all labor abundant. Without distinct comparative advantage trade potentials among them are limited. ICT Connectivity can improve the comparative advantage and innovative practices leading to more cooperation among the countries of the Asia- Pacific region.

Competitive advantage is the heart of a company’s performance. It reflects a company’s ability to offer consumers greater value either by means of lowering prices or by providing greater benefits and services that justify higher prices (Porter and Miller, 1985). When it comes to ICT’s role in connection with company competitiveness, ICT offers enterprises avenues to compete on a global scale with improved efficiency and provides closer customer and supplier relationships (Alam and Noor 2009; Yusuf 2013). ICT also plays an important role in the case of innovation, which is a prime characteristic of entrepreneurs whose main area of the business is SMEs. ICT also plays an integral role in the implementation of new or significantly improved goods or services, process, a new marketing method, a new organizational method in business practices, workplace organization or external relations (OECD, 2003). Moreover, Porter (2001) argues that today the issue for organizations is not the acquisition and deployment of technology but rather how companies innovate.

Software (management) and hardware (physical infrastructure): To manage the infrastructure, be it ICT, road or oil pipelines, requires human capital development. This is equally challenging as hardware investment. High skilled labor is a scarce resource in the region.

UN- Economic and Social Commission for Asia & Pacific (ESCAP) in its Annual Report of 2014 emphasized the need to strengthen ICT connectivity among the countries of the Asia-Pacific region. The report highlighted, among others, the following steps to achieve the goal:

  • Fully integrated and coherent: The unified network should provide robust cross-border connectivity across the continent, with a particular focus on reaching rural and less commercially profitable areas.
  • Cost-effective: If constructed on the proper scale in terms of both geographic coverage and transmission capacity, a pan-Asian terrestrial network could effectively compete with submarine infrastructure on both a regional and intercontinental basis.
  • Open access and non-discriminatory pricing: For the network to achieve development and policy goals, as well as to best serve the region’s consumers, all purchasers of capacity must be able to access the network on equal, non-discriminatory terms. The concept of non-discrimination should also be carried over on a geographic basis so that countries can receive bandwidth at equal prices, in an effort to overcome the high price of bandwidth in least developed, landlocked and Pacific island markets.
  • Of the above key principles, special attention should be paid to open-access principles. An integrated Asia-Pacific Information Superhighway that operates on a set of open-access principles would allow the forces of a competitive marketplace to drive down the prices of international bandwidth. In Asia and the Pacific, legacy telecom operators have typically invested heavily to develop broadband infrastructure in commercially viable areas, which are mainly centered in major cities and urban centers. Often they maintain exclusive access to submarine and terrestrial cable networks.
  • The benefits of a vibrant open-access market can be seen in the mobile telephone market in which intense competition among service providers led to a high-volume and low-profit margin model that lowered the cost for the end user and spread mobile telephone to rural and less connected areas. An open-access model in which PPPs construct an open access network of fiber-optic cables crisscrossing the region would lead to lower bandwidth costs, and hence accelerate broadband adoption throughout Asia and the Pacific.
  • Seamless regional connectivity should be established. The role would be first to bring together government experts on ICT infrastructure and regulators, with the objective of drafting an intergovernmental framework agreement on principles and norms for future development of a Pan-Asian terrestrial fiber-optic network. They should work with UN ystem partners, notably ITU, and it would tap into expert analysis provided by research companies and regional institutions

Source:

Dr. Salehuddin Ahmed

Former Governor, Bangladesh Bank (Central Bank), Professor: BRAC University
IRD Expert, CIRDAP