A short piece I wrote on my own time (IDRC is subject to Canadian government restrictions against any expenditures of Canadian funds in/for Myanmar) was just published in English in the Myanmar Times. I am hopeful the Bamar translation will also be published.

The text is below:

In 2010, I worked on a section of an ITU report about information and communication technologies in the least developed countries (ITU, 2011). Analyzing the countries that were at the bottom of the league tables in telecom, I found to my unhappiness that Burma was one before the last in mobile telephony. Hearing that N Korea was reaching 1 million active connections by end 2011, I checked the data again. Now Myanmar is last, other than for St Helena, a UK colony with a population of 5,000, which does not seem to have any mobiles.

Figure 1: Countries with lowest mobile SIMs/100 people,

Source: ITU/ICT Indicators Database, 2011.

It is not that N Korea has more mobiles than Myanmar, but that as a proportion of the population it is performing better, as a result of the rapid increase in connections driven by a foreign-owned private operator issued a license in 2008. Myanmar has had mobiles for longer, but according to data reported to the International Telecom Union by the government, the government-owned operator’s progress has been slow, compared to other low-performing countries that have not reformed their sectors.

Table 1: Total mobile connections and growth rates among the countries with lowest penetration

Source: ITU/ICT Indicators Database, 2011.
Notes: CAGR stands for Compound Annual Growth Rate, the best indicator of growth over time. The right-most column shows the percentage increase from 2009 to 2010.

There is no doubt that some of the data may not be accurate (whenever one sees numbers nicely rounded to thousands, one questions their veracity). It is the duty of the relevant country authorities to report the most current and accurate data to the ITU. In the case of Myanmar the 2009 number has been supplied by the Ministry of Posts and Telecom, while the 2010 number is an ITU estimate, which explains the round figure for 2010 and not for previous years. It would not be fair to use data from the Ministry only for Myanmar, but even if one tries, there are problems. The Ministry reports data by project not by aggregate connections; and the problems of rounded numbers persists.

But let us assume that there may be more mobiles in Myanmar than the ITU reports. Even then, it can, at most, overtake N. Korea and regain its old place at second (or third, counting St Helena) from the bottom. Is this something worth debating? The real challenge is to vault out of the Bottom Ten altogether, and give the people of Myanmar electronic connectivity on par with neighboring countries.

To achieve this goal, Myanmar has an advantage.

Late-starter advantage

Starting late means that most of the mistakes have been made, by others. In the world of policy design, we spend the most effort working around previous mistakes. For example, Thailand’s recent effort to develop its ICT sector has been bedeviled by the existence of concession contracts from a previous time. A green field is much easier to work with.

So, if the government wants to take Myanmar out of the Bottom Ten, what should it do? This is not the place for detail, but here are five key actions that must be taken at the outset:
• Build a national open-access fiber backbone as a Public Private Partnership
• Conduct an assessment of spectrum use and availability, especially for 3G and 4G technologies
• Initiate action to refarm or reassign frequencies if valuable frequencies have been assigned to low-value uses (it is most likely that the military are using frequencies across the spectrum)
• Design a technology-neutral access network license system
• Design and implement a clear market entry/exit policy modeled on Pakistan’s 2003 policies
In all these cases, the government should insist on solutions that are appropriate for developing country contexts and avoid the wholesale importation of policies developed and implemented in advanced market economies (Samarajiva & Zainudeen, 2008). International consultants will be required, but they should be carefully managed and coordinated so that the overall scheme is coherent and suits the local circumstances.

Managing the policy actions will require the establishment of a policy cell within a strong Ministry, preferably Finance and Planning. Most, if not all, of the present employees of Ministry of Posts and Telecom (14,770) should be moved into the national backhaul network PPP.

A sector specific regulatory authority will be needed. The first policy actions can be taken in parallel with the design and planning of the regulatory body.

Getting the architecture right

The green-field advantage will be lost if the overall architecture is not right, if the different policy actions do not cohere. For example, Timor Leste had green-field advantage, but wasted it by giving a long-term monopoly concession to Portugal Telecom. Today, Timor Leste is a telecom backwater, even if it is not in the Bottom Ten.

One way to get the basic elements of the architecture right is to learn from the experience of China’s engagement with the World Bank as it emerged from decades of closed-economy policies (Bottelier, 2006). Engaging with an entity such as the World Bank, rather than a specific country or company, opens up access to a range of lessons on telecom reforms: many successes, but some failures as well. The lessons are more important than the money.

I will illustrate with one failure and one success.

Since the late 1990s, the World Bank and its associated experts (e.g., Wellenius, 2000) promoted universal service funds as effective tools to bring the benefits of connectivity to the poor. At the time, this was an attractive solution and one that was superior to the previous practice of imposing universal service obligations on telecom operators. While significant benefits were gained, the instrument did not perform as well as expected, with more than USD 8 billion lying unspent in universal service accounts worldwide (Somasekhar, 2010).

The World Bank Independent Evaluation Group (2011, para 4.28), upon reviewing experience in multiple countries over five years, conceded that it failed to live up to the original promise:
Equity and integration of marginalized groups have been more effectively supported by Bank support for ICT policy and sector reform than by operations specifically designed to achieve these goals. ICT operations that supported reforms to introduce competition into the sector, when successful in supporting those reforms, have had significant impact, especially in access to cellular telephony services. This increase in overall access has had a spill-over effect of providing access to the underserved. Lower tariffs (especially in cellular telephony), falling handset prices, and the expansion of prepaid cellular services are all channels that facilitate access by the poor. One indicator of the poor becoming part of the customer base of cellular telephony providers is the monthly average revenue per user (ARPU), which declined from about $20 in 2002 to about $5 in 2010 in developing countries.
The success was in reforms to introduce competition to the telecom sector, as referred to above. Not only did these reforms bring the benefits of electronic connectivity to the poor, they paid back the costs of reforms many fold.

I was personally involved in managing aspects of telecom reforms for the government of Sri Lanka, funded by credits from the World Bank (Samarajiva, 2000, 2001; Samarajiva & Zainudeen, 2008). The total expenditures could not have exceeded USD 15-20 million. In 2010 alone, the government of Sri Lanka took in USD 122 million as revenues from the partially privatized telecom industry (Rajapaksa, 2011). Today, Sri Lanka is at the forefront of ICT developments in South Asia (behind only the Maldives in mobile connectivity), with almost universal access to voice telephony at some of the lowest prices in the world, and making good progress on broadband connectivity as well.

References
Bottelier, Pieter (2006). China and the World Bank: How a partnership was built. Stanford Center for International Development, Working Paper 277. http://www.stanford.edu/group/siepr/cgi-bin/siepr/?q=system/files/shared/pubs/papers/pdf/SCID277.pdf
ITU (2011). The role of ICT in advancing growth in least developed countries: Trends, challenges and opportunities. Geneva: ITU. http://www.itu.int/ITU-D/ldc/turkey/docs/The_Role_of_ICT_in_Advancing_Growth_in_LDCs_Trends_Challenges_and_Opportunities.pdf ).
Laurence, Jeremy (2011, November 21). Secretive N. Korea opens up to cellphones, Reuters. http://www.reuters.com/article/2011/11/21/uk-korea-north-cellphone-idUSLNE7AK01C20111121
Rajapaksa, Mahinda (2011, November 21). Fiscal management report 2012. http://www.treasury.gov.lk/depts/fpd/reports/fmr/2012/fmr2012-eng.pdf
Samarajiva, Rohan & Zainudeen, Ayesha (2008). ICT infrastructure in emerging Asia: Policy and regulatory roadblocks, New Delhi & Ottawa: Sage & IDRC. http://www.idrc.ca/en/ev-117916-201-1-DO_TOPIC.html
Samarajiva, Rohan (2000). The role of competition in institutional reform of telecommunications: Lessons from Sri Lanka, Telecommunications Policy, 24(8/9): 699-717. http://www.comunica.org/samarajiva.html
Samarajiva, Rohan (2001). Sri Lanka’s telecom revolution. OECD Observer (February 1). http://www.oecdobserver.org/news/fullstory.php/aid/487.html
Somasekhar, M. (2010). Pak ahead of India in use of Universal Service Funds, Hindu Businessline, http://www.thehindubusinessline.com/todays-paper/tp-info-tech/article991070.ece?ref=archive
Wellenius, Bjorn (2000). Extending Telecommunications beyond the market: Toward universal service in competitive environments. Public Policy Journal, Issue 206. http://rru.worldbank.org/PublicPolicyJournal/Summary.aspx?id=206
World Bank Independent Evaluation Group (2011). Capturing technology for development. http://ieg.worldbankgroup.org/content/ieg/en/home/reports/ict.html

Born in Seoul, Korea in 1959, Jim Yong Kim moved with his family to the United States at the age of five and grew up in Muscatine, Iowa. His father, a dentist, also taught at the University of Iowa, where his mother received her Ph.D. in philosophy. Kim attended Muscatine High School, where he was valedictorian and president of his class and played quarterback for the football team. He graduated magna cum laude with a B.A. from Brown University in 1982. He was awarded an M.D. from Harvard Medical School in 1991, and a Ph.D. from Harvard University, Department of Anthropology, in 1993. He is actively involved in a variety of sports including basketball, volleyball, tennis and golf.

In other priority areas, including ICT applications, the Bank Group’s contributions have been limited. Targeted efforts to increase access beyond what was commercially viable have been largely unsuccessful. Support to universal access programs was largely superseded by the roll-out of phone services by the private sector, in some cases supported by World Bank sector reforms. Access for the poor has been more effectively supported through general, non-targeted interventions focused on the enabling environment and direct support to private investments. The World Bank’s record in ICT applications has been modest, despite their significant role in Bank projects.

This to me suggests that general reforms were successful. In some cases, they contributed to failure of the “targeted efforts.” Unless 80% of the World Bank’s disbursements were for “targeted efforts” how could one claim 80% were failures?

Lack of knowledge of social infrastructure like schools and hospitals makes it more costly when natural disasters strike, setting back recovery efforts, sometimes by months. And lack of data, in general, makes it harder — both in government and in the community — to argue for improved services or increased funding.

The answer? A good start would be scaling up the use of modern mapping technology with crowdsourcing. It’s just this potential that’s been the driving force behind a new partnership between the World Bank and Google. Under the agreement, the bank and its development partners — developing country governments and U.N. agencies — will be able to access Google Map Maker’s global mapping platform, allowing the collection, viewing, search and free access to data of geoinformation in over 150 countries and 60 languages.

Simply put, it means that up-to-date maps of social infrastructure used by nearly a billion people around the globe can be created using crowdsourcing tools, partnering with volunteer mappers using GPS enabled phones and other devices.

Success will hinge on using local expertise to break new ground — finding an active community of passionate citizen cartographers from civil society organizations, local governments, public service providers and universities who can plug in the data that makes its way to publicly available online maps.

The steps Mrs. Clinton announced on Thursday were modest in scale but important symbolically. While the United States is not yet considering lifting the sweeping sanctions that ban most imports from Myanmar, she said, Washington will no longer block the World Bank and International Monetary Fund from carrying out assessment programs, and will support the expansion of United Nations development grants for health care and small businesses in Myanmar.

Earlier this year, LIRNEasia won the contract to establish the PIRRC with initial funding from World Bank and relocated its Senior Policy Fellow M. Aslam Hayat to act as PIRRC’s founder director.

The distinguished guests included Regulators and representatives of Pacific Island Countries, Representatives of the World Bank, the Pacific Islands Telecommunications Association, the International Telecommunications Union, the Pacific Islands Forum Secretariat and the Japan International Co-operation Agency as well as the Vice Chancellor and representatives of USP.

The launch was followed by two-day working session, where we discussed challenges of Broadband, Alternate Dispute Resolution/Alternate Regulatory Practices and how to use ICT indicators regulatory purposes.

PIRRC will collect key industry statistics and issue periodic reports on the state of the telecom sector in Pacific Island countries, develop information packages on priority regulatory topics including those where technical skills may be required in analyzing industry trends, provide advisory services in response to country requests and to identify additional sources of expertise and issue good practice statements on telecommunications policies, laws, implementing rules and regulatory instruments.

The event was covered in the Fiji Sun, the Fiji Times and on the Fiji Government Portal.

4.28 Equity and integration of marginalized groups have been more
effectively supported by Bank support for ICT policy and sector
reform than by operations specifically designed to achieve these goals.
ICT operations that supported reforms to introduce competition into the
sector, when successful in supporting those reforms, have had significant
impact, especially in access to cellular telephony services. This increase in
overall access has had a spill-over effect of providing access to the
underserved. Lower tariffs (especially in cellular telephony), falling
handset prices, and the expansion of prepaid cellular services are all
channels that facilitate access by the poor. One indicator of the poor
becoming part of the customer base of cellular telephony providers is the
monthly average revenue per user (ARPU), which declined from about
$20 in 2002 to about $5 in 2010 in developing countries.

In line with the axiom that all problems are easy if we can solve the hardest ones, LIRNEasia has been interested in the problems of regulation in micro states. This is where capacity issues are most challenging. Dilini Wijeweera calculated based on benchmarks that Bhutan, a country with a population of 690,000, cannot have a regulatory agency with more than 25-30 people. The developing countries in the Pacific, except two, are smaller than Bhutan. The solution to the problem of effectively regulating with a staff of less than 25 deserves the equivalent of the Nobel in our field.

That is why we bid for the contract to establish and run a regulatory resource center embedded in the University of the South Pacific to support the regulators in the Cook Islands (19,808 population), the Federated States of Micronesia (110,728), Fiji (849,218), Kiribati (98,045), Nauru (10,210), Niue (1,477), Palau (20,457), Papua New Guinea (6,732,159), Marshall Islands (62,041), Samoa (178,846), Solomon Islands (523,170), Tonga (103,976), Tuvalu (9,929), and Vanuatu (239,788).

The Center has two years of funding from the World Bank. During that short start-up period, we must make the Center so useful to the member countries that they will make it their own and be motivated to contribute to its revenues. This is terribly hard. It is one thing to partake of club goods (a subset of public goods that are excludable but are not rivalrous) when offered free, but quite another when a price is put on them. Within the economics perspective, the free-rider problem suggests that there will always be an outlier who will feel like taking the benefits without paying the fees. Within a political science frame, it will be the problem of collective governance that will pose the greatest threat. It is extremely rare for 14 countries to have a successful governance arrangement for anything. But the University of the South Pacific where we will be housed, is a collective enterprise and it works. We hope Pacific IRRC can be as, or more, successful.

Sri Lanka’s state-run postal service lost 3.0 billion rupees in 2010 up 22 percent from a year earlier, while revenues fell 6.8 percent to 4.3 billion rupees amid lower letter usage.

Data released by the Central Bank shows that expenses rose 3.1 percent to 7,330 million rupees in 2010. Revenues had fallen despite efforts to get into banking services and sell pre-paid phone cards.

Letters per inhabitant fell to 17 in 2010 from 21 in 2009, according to data released by the Central Bank.

Sri Lanka’s telecom use has been rising in recent years, and in 2010, telephones exceeded the population. Availability of phones and email use can reduce the demand for letters.

I said as much in 2007. But the Minister who was receptive to the idea, ceased to be in charge of the subject. And nothing happened. Next time we look, the losses may be more than what the post office brings in.

Charles Kenny, an economist whose work we have been following for some time, has written a new book called Getting Better, dealing with this problem. Here is an excerpt from the review:

Among the seven major regions into which the World Bank divides the planet, life expectancy has grown more since 1980 in the Middle East and North Africa than anywhere else (12.2 years). South Asia has had the second biggest gain (9.6 years), Latin America (8.9 years) is third and East Asia fourth (8.1 years). Yemen — the latest political hot spot — has closed almost its entire longevity gap with India since just 1990, for example. Liberia has closed nearly half its gap with India over the same span.

The main reason is that health and well-being are cheaper than they used to be. Africa and large parts of Asia and Latin America remain abjectly poor. But they can often still afford antibiotics, immunizations and clean water. So even as African countries have fallen further behind economically, some have begun to catch up in other areas.

Just as important, their citizens, who are better educated than their ancestors and have far better access to information, often have the political power to demand better basic services. Compared with past decades, vastly more people today live under a political system that at least resembles democracy. It was only 40 years ago that women in Switzerland — Switzerland! — could not vote.

Of course, that still leaves the puzzle of what causes the good outcome. Bangladesh has achieved good outcomes in telecom. The cause is a business model, we have concluded. All that government has done is removed barrier to participation by the private sector, even if imperfectly. Is there such a causal mechanism outlined in Kenny’s book? One would have to read it to find out.

The end result was a USD 71 million plus World Bank soft loan to help repair 32 of the most endangered dams. If not for that initiative, one wonders whether things would be worse than today, where we are suffering the effects of multiple small tanks breached, but all the big ones safe, so far.

I wrote about the need to pay more attention to dam safety and maintenance, after the first flood of 2011.

The Dam Safety Project only covers 32 of the 350 large and medium dams; the 12,000 small dams that were the causes of most of the damage in 2011 are outside its scope. They are under the authority of the Department of Agrarian Services, under a different ministry.

There is no systematic effort to assess their safety and to remedy the problems, if any, even as of today. One hopes attention will be paid as a result of the most recent disaster.

Why are all the human-made reservoirs that dot this country not under a single Ministry? What is the rationale for a Mahaveli Ministry, decades after the accelerated construction program was completed? Why is the Department of Agrarian Services, a creature of Philip Gunawardene’s reforms of 1958, still alive and kicking five decades after those forgotten socialist experiments? Why is it in charge of the neglect of village irrigation?

It is heartening to see that the government is taking action to expand the scope of its dam safety work:

Sri Lanka will expand its dam safety program to cover more large reservoirs and will ask for additional funding from the World Bank following recent floods, officials said.

D C S Alakanda, who heads Sri Lanka’s Dam Safety and Water Resources Planning Project said the talks with World Bank to expand the project will begin next week.

The current project funded with a 7,500 million rupee interest free credit from the World Bank covers 32 out of 80 large reservoirs deemed to be most in need of rebuilding or having their safety improved.

Irrigation minister Nimal Siripala de Silva said most of the large dams in the country except for some built in the last three decades were made out of packed earth and they had a life of around 50 years.

The report went on to quote me and refer to LIRNEasia’s 2005 work, but that is not the main point. Everyone who cares about the lives and livelihoods of people who live in the shadow of Sri Lanka’s thousands of reservoirs should support the government and its international donors in their efforts to establish a sustainable system of dam safety and maintenance.

We see a similar trend in the global development landscape, with developing countries assuming important roles alongside traditional development partners. These new partners are contributing not only aid, but more importantly are becoming major trading partners and sources of investment and knowledge. Their experiences matter.

Yet for too long prescriptions have flowed one way. A new multi-polar economy requires multi-polar knowledge.

With the end of the outdated concept of a Third World, the First World must open itself to competition in ideas and experience.

The flow of knowledge is no longer North to South, West to East, rich to poor.

Rising economies bring new approaches and solutions. We see that as India advises Africa on dairy farming; as China learns from Africa about effective community-driven development approaches in Ghana and Nigeria; as the United States learns from China about high-speed railways; and the Chief Economist of the World Bank, for the first time in our 66 year history, comes from a developing country: Justin Yifu Lin — a student of the University of Beijing and the University of Chicago.

The entire speech is worth reading. It provides an overview of how development economics evolved and ends with a section on “open data, open knowledge, open solutions,” again, terms that should not be unfamiliar those working with LIRNEasia, and with IDRC, our principal funding partner.

Happy new year and thanks to my good friend Deepak Maheshwari for sending me good reading for the new year.

Given the policy was almost fully formulated, I decided to focus on performance indicators, a subject I was working on for both UNCTAD and one which had preoccupied me since the time I was a regulator. It is also a subject that LIRNEasia has developed considerable expertise in. My guess was correct. Decisions had been made on the policy instruments that would be used and the ends that were desired, but not on how to figure out whether the policy instruments were working or not. Brazil_May10.

I first raised the standard criticisms about “teledensity” and such, where the failure of the ITU to recognize the qualitative change from a government-dominated monopoly service to a vibrant competitive industry had led to continuing reliance on supply-side data that came through multiple steps (operators to regulatory agency to ministry to ITU) with all the attendant delays and errors, had resulted in a mess. The flaws in the data increased from fixed lines to mobile to Internet, with massive problems caused by non-standard definitions and flawed data collection. For example, no one knows what an active SIM is, despite their numbers being bandied around. Broadband lacks common definition and in some cases, arbitrary multipliers have been used (10 in the case of Indonesia) to arrive at numbers of Internet users.

I then moved on to discuss the work I had done with Haymar Win Tun of the LKY School at National U of Singapore, where we had organized the countries covered by the ERI, NRI, IDI and KEI by deciles. Here too the end results were problematic because they drew from the same poisoned wells of UN system indicator databases, but at least they recognized factors other than ICTs. The inclusion of other indicators in the mix diluted the errors in the ITU databases, though perhaps introducing additional errors. Haymar and I argue that it was more defensible to simply talk about deciles and not about positions in a ranked list because the existence of input errors makes the small differences between countries insignificant.

Brazil was in the third decile from the top in KEI and IDI, which posed the question as to what target they should adopt. Advancing a decile at the top of a league table is a lot more difficult than doing so at the bottom. To advance to the next decile, Brazil would have to displace an OECD country and or city-states such as Hong Kong, Macau and Singapore. The sense of the room seemed to be that they would like to set the country an ambitious target. It would be nice indeed for a BRIC to take out a European country. I pointed out that Cypress and the Slovak Republic seemed doable and that Greece, which was currently two deciles ahead was also vulnerable.

We discussed the ways in which the target could be achieved, including unpacking the indices to identify the subcomponents most amenable to increase and then concentrating policy attention on them. The value of relying on demand-side data that would allow the questions most pertinent to Brazil’s broadband policy was underlined, even if this meant that comparability and benchmarking would suffer.

Given the heavy reliance on subsidies and other interventions, I asked whether it would not be better to let market forces operate by allowing greater entry, thereby triggering a shift to the Budget Telecom Network Model. I wondered why Brazil was consistently at the bottom of the rankings in terms of Nokia’s mobile and mobile data TCO tables and why billion of USD were lying unspent in the Brazil Universal Service Fund. If these problems could be resolved there would be less need for subsidies, I said. I also pointed out the need to ensure cost-oriented and non-discriminatory access to fat pipes, not only within Brazil, but also under the sea. Unless these input prices declined, there was no point in lowering retail data and voice prices, which would only result in congestion and poor QoS. Without lower retail prices more people would not get connected and use would not increase.

Svet Tintchev, World Bank expert on the telecom industry in developing countries, says, “The first ones who put in electricity generators in rural areas are the telecom operators … in a way, their leverage goes beyond pure telecom service.” Tintchev calls the local telecom companies “the economic enablers in Somalia”. Four main telecom companies now operate in Somalia and, despite competing for customers, they have cooperated with each other to maintain their networks and set prices to ensure that competition doesn’t become too cutthroat. Horseed Media writes quoting Wall Street Journal.

ITC Limited, an Indian company that is one of the largest buyers of soyabeans, felt it was paying over the odds, but was unable to monitor the traders closely. Starting in October 2000 it began to introduce a network of internet kiosks, called e-choupal, in villages in Madhya Pradesh. (Choupal means “village gathering place” in Hindi.) By the end of 2004 a total of 1,704 kiosks had been set up, each of which served its host village and four others within a five-kilometre (three-mile) radius. The kiosks displayed the minimum and maximum price paid for soyabeans at 60 mandis, updated once a day, along with agricultural information and weather forecasts. ITC also posted the price it was prepared to pay for soyabeans of a particular quality bought direct from farmers at 45 “hubs” (mostly in the same towns as mandis). By setting up the kiosks, ITC enabled farmers to check that the prices being offered at their local mandi were in line with prices elsewhere. It also gave them the option to sell direct.

Bean there, done that
To evaluate the impact all of this had on prices, Ms Goyal used historical data from mandis and the locations and installation dates of the kiosks. She found that the presence of kiosks in a district was associated with an instant and persistent increase of 1.7% in the average price paid at mandis in that district. As expected, the availability of price information increased the level of competition between the traders, raising prices and reducing the variation in prices between nearby mandis. Farmers’ profits increased by 33%, and the cultivation of soyabeans increased by an average of 19% in districts with kiosks. And by buying some produce direct, ITC reduced its costs, which paid for the kiosks.