The article is by Aileen Aguero, Harsha de Silva and Juhee Kang. It’s not about food prices, per se, but about some extensions that allow the identification of necessary goods and luxuries. Their interesting finding is that voice telephony is a necessity in Asia (in the six countries covered by LIRNEasia’s teleuse@BOP research), while it is still a luxury in Latin America. How could the same thing be a luxury in one place and a necessity in another?

Research on healthcare in Africa changing from a luxury to a necessity within a decade, also reported in the article, suggested an explanation: As communication services become cheaper, they become necessities. Latin American mobile voice users currently suffer from much higher mobile prices than their Asian counterparts. When and if they decrease, they too will be seen as necessities, and one would be able to conclusively refute the claim that communication is a luxury for the poor and a necessity for the rich.

Having written the guest editorial, I thought I should do a little more checking. The Annual Report of the Central Bank of Sri Lanka, 2010 compares data from the Household Income and Expenditure Survey of 2006-07 and 2009-10. Go right to the last page: for some reason only known to the Central Bank, the 2009-10 data are given only in the last page.

Household incomes have gone up a quite a bit, from LKR 26,286 to LKR 35,495, a 35 percent increase.

Household expenditures have also gone up: LKR 22,952 in 2006-07 to LKR 32,446 in 2009-10, an increase of 41 percent.

Now communication expenditures should have gone down, if Aguero, de Silva and Kang, are right:

And they have: transportation and communication expenditures declined from 10.5 percent of total expenditures to 10 percent. Nice if communication was broken out from the combined number but given fuel prices increases, we can assume that transportation increased, giving a decline (larger than 0.5 percent) for communication. So Aileen, Harsha and Juhee are on safe ground.

Now comes the surprise: expenditures on food (as a percentage of the total) have not declined, but have increased: from 37.6 percent to 39.8 percent. So food is a luxury in Sri Lanka, not a necessity?

Perhaps, Harsha de Silva will provide an explanation?

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Purpose – This paper aims to explore the extent to which low-income migrant workers in emerging Asia are aware of and are likely to use mobile phones for remitting money to family members at home.

Design/methodology/approach – Data were obtained through a survey of 1,500+ local and overseas migrant workers at the bottom of the socio-economic pyramid and subsequent qualitative research in Bangladesh, Pakistan, India, Sri Lanka, the Philippines and Thailand.

Findings – Findings reveal that less than a quarter of respondents in India, Pakistan and Sri Lanka were aware of such services. However, the Philippines and Thailand reported awareness of levels of over 40 percent. Using a logit model to assess socio-economic characteristics of those aware of such services (versus those who are not), findings revealed those aware of such services tended to enjoy higher standards of living, in terms of both income and education and ownership of mobile phones and bank accounts. Barriers to use are also explored.

Originality/value – This study is likely one of the first of its kind in attempting to empirically estimate socio-economic characteristics of those aware of such services versus those who are not. Such findings can, undoubtedly prove useful to operators in deciding how best to market such services, including addressing potential barriers to use, such as perceived ease of use and trust and reliability issues

The full press release is available here.

The guidelines propose a license renewal fee of BDT 10 crore from each operator. An additional fee of BDT 150 crore per MHz of GSM  1800MHz band and CDMA frequency; and/or BDT 300 crore per MHz of GSM 900MHz band from each operator for the initial assignment of spectrum, and a subsequent annual fee is also proposed.

LIRNEasia questions the seemingly arbitrary justification used to set the upfront lump-sum license renewal fees. Furthermore, given the substantial sums involved, the basis on which the additional annual spectrum fees has been proposed (currently based on subscriber numbers) has also been questioned.

The proposed method for issuing licenses and spectrum is contrary to emerging best practices in that the amount charged should reflect the correct economic value of the spectrum and its efficient use via the license. The ‘right price’ is always a convergence of competing interests of demand and supply and to administratively establish the same is extremely difficult. If somehow the amount is ‘wrong’ then it can have long-term negative consequences to all stakeholders; consumers, government and operators leading to sub-optimal use of resources causing high opportunity costs in economic development.

LIRNEasia urges BTRC reconsider their position and opt for a market determined or at the very least, a market-based mechanism.  The need to lay the basis for secondary trading is also highlighted.

Click here to view the full document submitted by Dr de Silva.

The broad objective of LIRNEasia is to bring evidence to the policy process and thereby improve it. The means by which we achieve this objective range from directly taking evidence to the policy process, through advocacy and dissemination, to building up policy intellectuals. We never quite thought that the means would extend to actually placing researchers within the supreme legislative body of a country, but with the entry of Dr Harsha de Silva to the Parliament of Sri Lanka representing the United National Front, the principal opposition party, this too has happened.

We warmly congratulate Harsha and wish him the very best in continuing to improve policy discourse in Sri Lanka by bringing evidence to bear on the important questions that face our country.

Harsha has been an exemplary policy intellectual, though much of his policy advocacy has occurred outside the framework of his work as LIRNEasia’s Lead Economist. He had the greatest impact in contributing to the shifting of the frame for discussing inflation in Sri Lanka from the misguided focus on imported inflation to one that correctly places the actions of the Central Bank and the now commonly understood term, money printing, at the center. His persistence paid off; his words made into the discussions of the Monetary Board. He was called names, but the Central Bank corrected itself.

Harsha’s interventions, along with those of Fuss Budget in LBO, served the country well. In particular business and the asset-poor benefited. While LIRNEasia would like to take credit for this stunning achievement, it cannot. Harsha did it in his spare time. Macro economics falls outside the remit of LIRNEasia, however broadly defined.

His next great achievement was in advancing the understanding of the role of information in agricultural markets and contributing to well-designed applications that mobilize ICTs, especially the now almost ubiquitous mobiles, to reduce the frictions that characterize the agricultural value chains.

Here, LIRNEasia has played a role, but we cannot claim credit for getting Harsha started on this path, or even for the majority of the work. He started investigating the functioning of a specialized agricultural market, the market for tea, back around 2000, before LIRNEasia had even been thought about. He was responsible for one of the successful pilot projects funded under the eSri Lanka initiative, in 2003.

This was the beginning of Govi Gnana Seva (GGS), centered on the Dedicated Economic Center in Dambulla, the country’s largest wholesale market for agricultural produce. ICTA was very pleased with the success of the project, especially when it received the highest evaluation. But the funding did not continue. Harsha kept the project going, paying the salaries of the workers out of his own pocket and twisting the arms of companies and organizations to assist with some of the technical functions. While the project could not be continued at the previous levels, the basic data collection continued, with GGS becoming the source of daily price reports given out by Sirasa FM and being even picked up for free by government organizations.

It was at this point that LIRNEasia entered the picture, funding some exploratory research on transaction and information costs in agri-markets in the Dambulla area. The research got written up, people started citing Harsha in papers and proposals, and appointing Harsha to international research advisory boards and such. Now some of the key ideas developed in this stream of research are being incorporated into the design of commercial services. Another great achievement of Harsha the policy intellectual.

But the work of a policy intellectual is never done. The UNF manifesto included a section on the necessity for forward contracts and better market design in agriculture. Without question, the policy debate has to be shifted from the easy focus on spot markets to forward markets. We know that Harsha will use the bully pulpit afforded by his seat in Parliament to advance the debate on improving agricultural value chains and ensuring that the people who grow our food do not remain in poverty. Inflation is creeping up again and Harsha’s informed voice is still needed on the macro-economic front.

We wish Harsha well and look forward to continuing our mutually supportive relationship. I hope he will consent to continue as our part-time lead economist.

We congratulate the Leader of the Opposition on his decision to include professionals such as Dr Harsha de Silva and Mr Eran Wickramaratne (the founding Chair of the ICT Agency and a key proponent of the eSri Lanka initiative) in the National List, honoring the intent of the Constitution. We urge the President and the ruling party to draw upon their considerable knowledge and experience to solve the pressing problems besetting our people.

Rohan Samarajiva, Chair and CEO of LIRNEasia
Cape Town, 21 April 2010

75% of passenger transport is via public transport and of that 93% by bus and 7% by train. Roughly 5500 SLCTB and 18000 private buses. The fare is regulated by National Transport Commission (NTC). They also have timetables which are n0t implemented.

Shortest distance (~2KM) LKR 6:00.

Longest distance 260 KM – LKR 655.00.

Most of the BOP uses bus transport. 36% of the BOP use mobile and fixed phones.

SLTB buses use both ticket books and manual ticket machines to issue tickets to commuters

Private buses primarily use digital ticketing machines that prints out tickets. Can store data, process memory. Can even tell you how may people have to get off at the next bus stop.  The one in use now is also lighter in weight.

These are mainly used in the Western Province and on a few inter provincial buses.  Manual ticket machines are used in other areas.

Issues with the current ticketting system:

Money lost in Transit. Bus conductors and Drivers take the money, or tickets are not issued, or passengers do not buy the tickets. CTB estimates a 15% loss of revenue and private bus owners 25%.

Chanuka: How is the estimates done?

RS: through Load share.

HdS: Bus owners want to reduce leakage.  They wold like to issue a e-bus tickets. So the solution is either a card system or a mobile. So from the suply side there is a need but what about the demand side?

A  simple survey was done at the Fort railway station. Not a Sample survey but to get an idea. 2/3: 1/3 male: female. There maybe selection bias as it is a starting point.

What is the real cost of a ticket? Do the passengers receive the balance after getting a ticket? only 5% said that they always get there balance. Most people carry exact change. And only 50% of the people receive a bus ticket. Ticket checkers are used both in public and private sector. Some private companies have their own people to check for tickets.

So because of these issues, there is a need.

Possible benefits of e-tickets:

For Bus operators

• reduce leakage
• Offer loyalty plans etc.

For Commuters

• Cost only actual fare
• Can better schedule travel; save on transport expenditure

State [local government]

• Tax collection
• Target subsidies

What are the options?

Contactless smart cards: Oyster, ez link. Delhi is running a pilot, minimum reload INR 25.

Mobile phones: either through SMS or Near field Communication (NFC) merging mobile phones with a contactless smart card (Innovation).

NFC mobile phones: Nokia introduced the first in 2005 (3220). Break through innovation is instead of a NFC  phone, what about an NFC SIM. China Telecom has come p with a NON NFC standard RF SIM.  Nokia 6216: First NFC standard SIM compatible. Operator can load application.

Japan is leader with NTT DoComo Osaifu-Keitai e-wallet phones. Spain, Netherlands, France and Germany, mobile bus and rail ticket system are being piloted.  China has started.  UK to start by 2015 and fully switch to NFC by 2020.

The studies are ongoing. But we now have the ongoing research being implemented as a commercial service:

Sri Lanka’s top celco Dialog Telekom is offering a trading platform based on short message services (SMS) that can help farmers to sell their produce and create a forward market for agriculture produce, officials said.
“The Dialog TradeNet agricultural trading platform service is offered free of charge to users, but normal call charges and SMS charges will apply,” Hans Wijayasuriya, chief executive at Dialog Telekom, said.

“We want to penetrate the entire farming community with this service.”

More details will follow.

(Photograph courtesy of Sameera Wijerathna, Dialog Telekom PLC)

Over the past month, I’ve had the opportunity to present my research on mobile money for remittances in two different conferences, with different audiences (the paper and PPT presentation can be downloaded here and here).

On October 10, I presented my research on the use of mobile money for remittances in a panel on Mobile Adoption and Economic Development. This was for a conference held in New Brunswick on Mobile Communications and Social Policy, hosted by the Rutgers School of Information and Communication.  Harsha de Silva also presented his paper in the same panel on the “Role of social influence on mobile phone adoption: Evidence from the BOP in emerging Asia.” His paper and presentation can be downloaded here and here.

On October 23, I then presented the same research, this time to a Filipino audience in the 2nd Living the Information Society conference at the Ateneo de Manila University in Quezon City

The audiences for both conferences were academic in composition. Their reactions, however, were different. Those in the largely Northern audience, still had an abstract understanding of how it all worked, and their questions  tended to focus more on the methodology, and notions of how it would impact on social capital and community relationships. With the Filipino audience, I was fortunate to find people who were able to relate their own personal experiences in using mobile cash. One shared how he learned to use it regularly to send money to his relatives. Despite the initial apprehension, he vouched that it was safe, reliable and costed much less. On the other hand, another person said that she first used the service to purchase something online. Enrolling, and the process of changing money to mobile currency for her was a complete hassle, although she did say that for the seller/vendor, this would have been very convenient.

All in all, the audiences were quite different from the regulators, I previously had to present to TRE research to, and different from the IT and Development group and IDRC network I’ve been meeting with in recent months, and much different from the people at the LIRNEasia colloquia I’ve had the privilege of first discussing this research with.

The good thing about moving around your usual circles is the chance to expand your network, and getting new perspectives about your own work.  Interestingly, it was the serendipitous encounters I had with people not directly connected with the conferences that I discovered greater interest in what I was doing.

In New Jersey, I bumped into Gil Lacson, who works for the Women’s World Banking in New York. He told me this was the very same technology that someone presented to his group the previous week. Likewise, when I got back to Manila, I receieved an email from Grameen Foundation. Apparently, Grameen wanted to put together a conference in December, focused specifically for technologies that microfinance institutions can utilize in their services. They were able to attend the last day of the conference, but due to an error in my email, they missed my presentation by a few minutes.  However,  I did end up giving them a personalized presentation of my paper.

One of those who came with them was Mr. Eric Severino, whose company called ENCASH is doing some interesting work in providing rural ATMs where the unbanked can also encash money from. I haven’t personally seen how this works, but as he explains it, the transactional fees are based on the distance the ATM is from the nearest urban center (the farther it is, the higher the fee—although he says it will still be much cheaper than the transportation cost), and non-account holders get to withdraw money using Mobile PINs that are texted to them along with the amount that they can withdraw.   I see this as a potentially good complement to m-remittances, as the problem of converting mobile money to actual cash is one of the major issues that came out in my research.

In the end, these conferences and chance encounters show that many people are looking to reach the unbanked. Hopefully, with the aid of innovations in mobiles that go beyond voice, the benefits reach them soon.

***

In addition to the above two papers presented, LIRNEasia research on m-health, led by Nuwan Waidyantha, was presented by Dr. Gordon Gow at the conference. The paper can be downloaded here.

A working paper is available here.

As a policy-oriented organization, we are indeed pleased that our research is being used to influence policy, not just in emerging Asia but in other regions as well.

LIRNEasia’s paper, “Diversifying Network Participation: Study of India’s Universal Service Instruments” can be downloaded here. More on the study can be found here.

The presentation was well-received and a long discussion ensued on how South Asia has been able to successfully provide affordable mobile phone services at the BOP so that ICT can play an effective role in agriculture.  The presentation can be downloaded here.

The other papers presented at the symposium are below:

• Maumbe, Blessing  & Julius Okello: Information and Communication Technology (ICT) Uses in Agriculture and Rural Development in Sub-Saharan Africa: Experiences from South Africa and Kenya
• Aker, Jenny: The digital provide: The role of mobile phones in improving efficiency of grain marketing in Niger (presented by Muto Megumi)
• Okello, Julius,  Edith Ofwona-Adera and O.L.E Mbatia: Using ICT to integrate smallholder farmers into agricultural value chain: The case of DrumNet in Kenya
• Al Hassan, Ramatu and Julius Okello: The eARN project: Goals, status, and the way forward.

In addition to Harsha’s many interventions in improving the quality of public discourse in Sri Lanka through his BizFirst program and many activities as part of LIRNEasia, Harsha has engaged in many public-spirited actions, ranging from the personally funding the source collection of agricultural price information used by many government agencies and the media to his key role in the Colombo Regency Rotary Club’s web-based fund raising for the victims of the 2004 Indian Ocean tsunami that led to the construction of a large number of houses in Kalutara. We are happy that his contributions and potential have been recognized by others.

LIRNEasia lead economist Harsha de Silva presented a paper on “ICT Policy for Agriculture in Sri Lanka: An Economic Perspective” at the first ever information technology in agriculture conference jointly organized by the IT Department of the University of Moratuwa and the Agriculture Department of the University of Ruhuna.  Harsha argued for mobile-centric, demand-driven, value-chain based, accurate and timely two-way information exchange systems that could lower transaction costs leading to increased efficiencies in agricultural markets to move farmers from subsistence to commercial agriculture.  His presentation slides are here.

All papers will be uploaded on the conference website in the near future.

The project is funded by the International Development Research Center (IDRC) of Canada; an inception meeting was recently held in Kampala, Uganda, which Harsha de Silva attended. The project will be conducted in six African countries: Kenya, Malawi, Uganda, Ghana, Benin, and Madagascar.

The  Scientific Advisory Committee constitutes:

• Prof. Chris Ackello-Ogutu, Department of Agricultural Economics, University of Nairobi, Kenya
• Prof. Julian May, School of Development Studies, Kwa Zulu Natal, South Africa
• Dr. Colin Poulton, School of Oriental and African Studies, University of London
• Dr. Adrian Mukhebi, CEO Kenya Agricultural Commodity Exchange and Market Economist, Nairobi
• Dr Harsha M. De Silva, Lead Economist, LIRNEasia

Harsha leads the agriculture-focused research at LIRNEasia, including a study on the impact of ICTs on transaction costs in agricultural markets in 2007.