Originally posted on the GBI Portal – Page 45

The farmers with Androids…

Credit: Heather Thorne/Grameen Foundation

The Seattle-based Grameen Foundation Center launched a comprehensive Android phone-based project for Ugandan farmers recently, that could significantly improve farming processes, but sustainable is the initiate.

The project is a high-tech response to fundamental challenges in agriculture, including unclear pricing structures and markets, unreliable weather forecasts, and a myriad of inefficient/ absent extension services about when and how to plant crops. Each Android phone has an open-source data-collection app that feeds into a system called Salesforce. The Grameen innovation counters the electrical challenges in the East-African country, that would otherwise doom projects dependent on electrical power, by utilizing rechargeable batteries which solar energy can sustain.

The project is organized around 400 select farmers, known as ‘community knowledge workers’, who own Android phones—and 3 in 4 of all their peers value their high-tech extension services. But an Android phone costs US$600 plus upkeep costs, nearly twice the per capita income in Uganda. So, how do these smart phone owning farmers acquire them legitimately? The project offers select farmers loans to purchase the phones. On the surface, this approach suggests a level of sustainability, but I have a few reservations.

First, are the benefits of using a smart phone, compared to a regular phone, so great that a farmer ought to take a loan and bear upkeep costs (combined) twice his/her country’s per capita income simply to access information? Of course, information is important, but it is only one variable among many that must be resolved to result in improved earnings for the farmers. Second, even if in the long-term ‘community knowledge workers’ charge for the services they offer, and even pay a fee to the platform providers, how long will it be before they can recoup and repay their loans? What is the interest rate on these ‘Android loans’? These are critical questions that ought to be answered in order for us to truly grapple with the potential economic impact of deploying this sophisticated technology

July 21, 2011/by actualize

Agriculture, Health, Health, Health Systems, Mobile, Originally posted on the GBI Portal

How is coordination possible in mHealth? Experts gather and discuss

The mHealth Working Group, a collaborative forum created in 2009 by K4Health, held a meeting yesterday that focused on the “Coordination of mHealth projects within and between organizations in the field.” The meeting brought together many experts from the field of mHealth in a meeting that was ripe with rich discussion and promising potential going forward in the field.

Representatives at the meeting came from a number of organizations including USAID, K4Health, John Snow Inc. (JSI), mHealth Alliance, and the UN foundation, just to name a few. Therefore, the meeting focused on mHealth implementation in the developing world rather than here at home where mHealth is much more sophisticated.

The overarching theme for the meeting was examining how to promote coordination amongst organizations that are active in mHealth. This is an important issue because of the lack of large scale mHealth efforts programs in the developing world and the dire lack of monitoring in existing mHealth programs.

The discussion began with the current status and perception of mHealth programs in the developing world. Michael Frost, an official from JSI, stated that mHealth is “exploding with a lot of new interest” but “needs to mature a little bit.” He also echoed claims found in the latest mHealth report, that “projects have a narrow focus, and they don’t have strong evaluation principles.”

Photo Credit: USAID

John Novak from USAID discussed the importance of external collaboration and USAID’s current efforts in structuring their standards for doing so. One of his take home messages here was that all parties involved with implementing mHealth projects, including the country government, ministry of Health, telecoms, NGO’s and medical professionals on the ground need to convene and join hands before implementing a project. One suggested way to accomplish this is creating “coordination groups” at the international and country levels that serve to bring the relevant players to the table.

Discussions about the mHealth Summit that took place early last month in Cape Town also surfaced. One presenter mentioned a case study in Bangladesh that highlighted the fruitful impact of government taking control of the telecom industry to implement mHealth initiatives at no cost to citizens. The presenter expressed that governments need to take more active roles in coordinating programs; it is an effective way to get programs rolled out.

Photo Credit: Hub

The meeting produced more than lectures and discussions. Two mHealth resources were presented that are designed to make the process of collaboration and coordinating easier. Frost from JSI discussed their mHealth center whose primary roles are to create mHealth initiatives and assist existing ones by improving communication and information sharing methods within them. The mHealth alliance introduced a new knowledge resource website called Health Unbound (Hub) that aims to bring different stakeholders together to share, collect and produce information on the intersection of technology and health. Hub is planned to be unveiled to the public in about a month.

The core discussion never strayed away from the importance of coordination amongst organizations involved with mHealth initiatives. Nearly everyone seemed to agree that coordination in vital, and all parties involved in the process of creating mHealth programs must be represented in the planning process.

So the next question to ask is, how do you manage to get everyone to the table given each country has a distinct political and economic climate? How do you mediate between governments that want power, telecoms that want money and NGO’s that have ambitious goals? The answer, I learned, is multifaceted. Nonetheless I will attempt to discuss them over the next few posts with the information provided at the meeting. And even better, the answers will continue to be discussed over the next round of mHealth Working Group meetings.

July 21, 2011/by actualize

Agriculture, Mobile, Originally posted on the GBI Portal

Mobile payments in the Philippines: Future Opportunities for Growth

The following is a guest post we’re pleased to share by Salah Goss and Clara Veniard from the FSP program at the Bill & Melinda Gates Foundation

Access CEED Store We often hear that M-PESA was able to scale quickly because it targeted an unmet need: urban to rural remittances. Safaricom based the initial launch of the M-PESA service on the ‘send money home’ proposition because a large proportion of split families in Kenya needed a way to send money to relatives in rural areas but had few ideal options to do so.

In many markets, however, such a clear unmet need does not exist.

The Philippines is a prime example of this. Even though mobile money providers have been in the market for over ten years, they have struggled to gain market share in the face of well known and well established payment providers. Knowledge and usage of mobile money services are low with less than 4% of users of all payment service providers reporting usage of mobile money services and awareness of four mobile money products ranging between 28% and 46%, even though more than 70% of users have access to a cell phone

Our study focuses on the demand side of domestic payment services: bill payments and money transfers

In 2010, the Bill & Melinda Gates Foundation launched a study with Bankable Frontier Associates to understand the demand for domestic payment services in the Philippines and to identify potential opportunities and unmet needs for mobile money providers to target. The study found the Philippines is an active and mature payment market, with a myriad of payment providers, including payment centers, banks and pawn shops to choose from. Only 28% of respondents reporting they make no payments and most Filipinos are aware of and using multiple service providers.

In our study, we focused on three primary types of domestic remote transactions mobile money has the potential to target: bill payment, money transfers, and loan payments. Bill payments are most common and are used by 55% of the population. They are followed by transfers (used by 33% of the population), and loan payments (used by 16% of the population). We did not explore access to financial services, although 29% of respondents claim to be saving at home or in banks, or other potential drivers of mobile money that have had success in other countries, such as public transportation and online purchases.

In this paper we use the results from the study to explore five alternative and almost equally used channels for bill payments or money transfers. Pawnshops are the preferred channel for money transfers, with 29% of Filipinos citing the leading pawnshops (M Lhuillier and LBC) as the main payment service provider in the last twelve months. Payment centers are used to pay bills by 21% of Filipinos while bank transfers are the prefer method for 17% of Filipinos for both money transfers and bill payment. Informal transfer options are the primary method for money transfers and bill payment for 15% of Filipinos. Alternatively, 13% of Filipinos pay their bills directly or are direct payers.

Existing payment channels are good but far from perfect

In order for mobile money to take off in competitive markets like the Philippines, providers will not only need to identify a high potential target opportunity, but also ensure their ability to effectively serve the market’s needs relative to the competition. We have identified user pain points in the following areas when paying a bill or conducting a money transfer: speed of delivery, trust and reliability, price, and customer service. Consumers in the Philippines have access to a number of channels that may provide either speed, trust or good customer service but none of them is ideal, leaving room for a service that gives customers more of what they value.

For bill payments, customers can pay in a bank or payment center. Both options have their short comings: although banks are trusted (especially with large amounts), they suffer from long queues, unfriendly and limited staff. Payment centers are cheap and closer to home than a biller’s office, but also suffer from long queues and delays to credit customer payments at the biller. In addition, neither banks nor payment centers are widely accessible, especially in rural areas. In fact, 32% of users reported they would be willing to pay PhP 50 (US$1.50) for bill payment services that do not require them to leave their home.

For money transfers, customers have the option of using banks,” big brand” money transfer services, pawnshops or informal channels. Pawnshops are the most popular given their ubiquity, trusted brand and speed (if picked up at the pawnshop) but the most popular pawnshops, M Lhuillier and Cebuana, are not completely customer friendly. M Lhuillier has long queues, strict verification and unsafe locations and Cebuana has high fees. The larger transfer companies like Western Union and LBC have high attrition rates due to high fees and other problems. LBC, for example, offers door-to-door service, but it can be slow and their customers complain that their neighbors know when money is delivered. Consumers also complain about the stigma of entering pawnshops. Banks offer security, privacy and trust for larger transfers, but are not always accessible.

Although alternative channels are not perfect, mobile payment providers find it difficult to convince consumers to try a mobile payment service as evidenced by low usage figures (4%) compared to other payment options. According to our study, users of one type of payment providers tend to be sticky. Our survey conducted among users of payment services found that fewer than 10% of one-time users have stopped using a service. They also tend to think their payment service is the best, providing high scores on trust, convenience, speed, security, fees and customer service. Users say they would utilize a new payment service in addition to their current service, rather than in lieu of it.

Some segments are still not served by formal providers

Mobile payment providers also have an opportunity to target market segments not served by formal providers such as personal direct payers and users of informal service providers.

33% of the population still pays for their bills and loans directly at the biller’s office, and do not use other intermediaries such as banks or payment centers. The vast majority of personal direct payers (75%) indicate that they trust only themselves to deliver payments, although 57% agreed that paying bills would be easier to do via a third party. Perhaps by tackling the issue of trust, mobile money operators can convince these potential customers, who tend to be male, to try their services for the convenience they can offer.

Users of informal service providers may also be a potential market niche. 25% of all users use informal service providers on a regular basis for smaller, regular transactions. These users tend to be rural and poor women who generally make bill and loan payments intra-island. In fact, these users in rural areas rarely pay bills or loans through formal service providers, and when they do, they use the leading pawnshop. Although informal options are low cost, they suffer from delays, the sender has no automated confirmation of when the money arrives, funds can be stolen, and unanticipated costs may arise (such as tips or paying for food or petrol of the deliverer). Similar to a country that does not have many formal payment options, such as Kenya pre-MPESA, providing an alternative to the existing options can meet a need that resonate strongly.

Lower value transfers are an untapped opportunity

Mobile payment providers may also have an opportunity to facilitate lower value transfers between family and friends that occur informally and that higher cost channels (including pawnshops) cannot profitably serve. Our study found that 52% of Filipinos receive money from friends and family (either as a loan or a remittance) in the event that they need to make a purchase or pay a bill but do not have enough money. The rest seek money from alternative sources: 15% will do something to earn the money themselves, 12% will wait for their salary and 10% will go to an ATM to withdraw cash. Filipinos also regularly send or receive money, for emergencies, daily household expenses, education, bill payment, or business expenses. Sweeping these low value transactions through mobile money services would mean a significant increase in their volume of transactions as well as customers. In addition, 33% of all users said if they could make cross payments between mobile money schemes, then they might find this persuasive enough to try them.

Next steps for mobile money providers

During the last ten years, mobile money providers in the Philippines have struggled to gain traction in the market. They compete against an active payment market with numerous strong alternative channels for bill payments and money transfers. However, these alternatives are far from ideal, according to customers themselves, and niches exist in the payments market that have not been targeted.

Mobile money providers have an opportunity to attract customers away from existing payment options, persuade customers to use their services in addition to their current payment provider or to target segments that are not currently served by formal payment providers, such as personal direct payers and users of informal service providers. In addition, they may have an opportunity to capture lower value transfers.. The challenge faced by mobile money will be to encourage customers to try their service and to convince them through early trials of the superior value of the service. The extent to which they will succeed in doing so will depend on the investment mobile operators are willing to make in strategic marketing, getting their fee structures right and creative partnerships with banks and others that may add value to the customer experience.

You can download the full report from the BFA website.

July 21, 2011/by actualize

Agriculture, Food Security & Rural Development, Areas of Expertise, Economic Growth & Trade, Originally posted on the GBI Portal

Regional Integration and Food Security in Africa

Credit: Google

Sustained economic development, including efforts to reap and secure gains in food security, in Africa hinges on regional integration. The impetus for the rapid pace at which regional integration projects were deepened across the continent, in the last decade, underscores this. In particular, African states acknowledged the political and economic benefits of regional integration, as per the general objectives of the Cotonou Partnership Agreement in 2000, the launch of the New Partnership for Africa’s Development (NEPAD) in 2001, and the emergence of the African Union in 2002.

Nonetheless, the African integration processes have a far way to go. Although people move relatively freely across borders in ECOWAS and other sub-regions, much more ought to be done to create a critical mass of people who believe in the vision. The fact that regional integration can result in tangible benefits for the average African, by putting food on their plates cheaper and more efficiently, should be a strong selling point. But inefficiencies within the existing regional frameworks impede these significant gains.

According to the FAO, intra-regional trade account for a mere 13% of Sub-Saharan Africa’s US$6 billion food import bill. As Vanessa Adams, Director, USAID West Africa Trade Hub, noted at a recent panel discussion, “whether food is sourced nationally, regionally or internationally, the need for faster and cheaper transport of food is urgent. It also offers promising business opportunities…” This observation is critical as upwards of a third of all foods grown in Africa never gets to market in edible fashion; it’s wasted…and that’s not because it reached anyone’s plate. To a great extent, this is due to poor transportation, but, in a broader sense, it is much more a matter of poor value chain management and practices.

My main assertion is that an inverse relationship exists between transport infrastructure and trade—and ultimately economic development. The World Bank corroborates this view in its declaration that a 10% decrease in transport costs results in a 20% increase in trade. But the extent to which logistics technologies have been leveraged and effectively deployed to warehouse and transport farm produce on the continent is limited. Some might add that the roadways across Africa, particularly West Africa, are far better today than they were a decade ago, and to that I would say, yes, but transport in a regionally integrated context depends on much more than improved roadways, though important. These inefficiencies underline my emphasis on the link between regional integration and food security.

In other words, inefficient regional trade breeds food insecurity. So, until the cross border impediments to the free flow of goods are removed, this transportation challenge will remain and food insecurity will persist!

Below are a few anecdotes from business owners faced with transportation challenges in West Africa’s ECOWAS area. The notes were shared by Vanessa Adams during the panel discussion.

If we could cross borders faster, we could make 12 trips to Accra instead of current 3, reducing costs. (Furniture)
We’ve been ETLS registered for 6 years. But countries still impose high duties, raising our delivered prices by 30%. We can’t compete against imports! (Juice producer)
ECOWAS misplaced our application for ETLS Registration. When will application process be “on-line”? (Agriculture trader)
We sized our plant for an ECOWAS-wide market. That didn’t happen and we’re now operating at 20% capacity. (Paint)
We intend to invest $5 million and hire 120 staff – IF we can be assured of access to a larger market. (Furniture)

July 20, 2011/by actualize

Business Enabling Environment, Economic Growth & Trade, Originally posted on the GBI Portal

What did Vodafone and the UN Learn from Working Together?

Photo: UN Foundation flickr

This morning leaders from the United Nations Foundation (UNF) and Vodafone Foundation gathered at the Center for Strategic and International Studies in Washington, D.C. to discuss their projects and key lessons learned after nine years of working together in partnership. The discussion focused on the broader implications for other public-private-partnerships (PPPs) hoping to contribute to global development.

Drawing on the “Mobilizing Development” report of the partnerships efforts, UNF CEO Kathy Calvin stressed that the partnership slowed down project implementation, at least initially, but made for greater efficiency and long-term impact. Discussions about how to orchestrate the partnership lasted two years, and it took another two years to decide on the actual projects that the partnership would complete, she stated.

Photo: UN Foundation flickr

William Kennedy, a senior official from the United Nations Office for Partnerships in New York, discussed the “cultural divide” between business and development. “I don’t think you can underestimate the effort it takes to bridge the cultural divide between a big company and a foundation.” One example is the business mindset to immediately scale projects as large as possible, as opposed to the development mentality of respecting local culture and adapting solutions for particular communities. He added that what makes this partnership different from other less successful development PPPs are the relationships between the leaders on each side. Also, they had consistent evaluations of the development projects, which was important in business culture. Leaders were willing to address the UNF’s needs and shortcomings, and to make extra efforts to complete the work.

Members of the audience voiced questions about the “shared value” and motivations for each organization to partner with the other. Vodafone had recently bought other telecommunications companies, becoming a global brand right before its partnership with the UN. Before partnering with the UN on this philanthropic initiative, Vodafone was able to attach its own brand to the UN’s global appeal. Other UNF leaders, however, voiced their concerns with this opinion, stating that Vodafone officials took particular care to separate business and philanthropic motivations, citing their willingness to allow service providers to run mHealth initiatives set up by the program as evidence of their philanthropic motivations in their efforts with the UNF.

As for the future of PPPs hoping to meet global development goals, Calvin expressed her opinion that the age of partnerships between one private company and one public organization is coming to an end. Instead, she said that what the UNF is learning is that alliances, made up of a variety of government, private, and non-governmental organizations, are the future of philanthropy. She pointed to the formation of the mHealth alliance, which stemmed from the original UNF-Vodafone partnership, but currently is able to increase scale and efficiency as an alliance with other organizations contributing to different aspects of the program.

July 20, 2011/by actualize

Anti-corruption, Civil Society, Democracy & Governance, Elections, Originally posted on the GBI Portal

#ArabSpring Activists on How 140 Characters Help Unite

Syrian protests with a coffin being carried through the crowd

Photo Credit: Reuters

Current discourse on the Arab Spring excludes social media as the sole perpetuator of the movement—but scholars and activists alike, agree that technology has helped to unify and project, citizen’s feeling of dissent.

My previous post about last Wednesday’s Future Tense event explored some speaker’s discussion on the West’s connection with new technologies, as either aiding or embedding the revolution.

Other panelists, however, elicited a more homegrown, internal perception on how the uprisings evolved.

Merlyna Lim, Professor of at the Consortium of Science, Policy and Outcomes and the School of Social Transformation – Justice and Social Inquiry Program at Arizona State University, discussed origins of anti-Mubarak protests in Egypt.

She claimed it was rooted before the Tahir moment occurred, stemming from three stages of organization—networks, narratives and claim making—to mobilize collective action.

The first protest organized exclusively online, without physical headquarters, was arranged by Kefaya in 2004. Using a website called Misr Digital, Lim recalls, the organizers increased the reach of the oppositions movement through the websites by engaging weak ties.

After the death of Khaled Said on June 6, 2010, the participatory youth culture, added emotions onto their organizational network’s narrative—and Egyptians feared being killed.

Khaled Said’s passing changed Egyptian’s view on human rights violations, the panelist stated. While it was once an abstract narrative, they are now saw concrete infringements by the regime—such as corruption, torture, and eventual death.

Egyptians shared these contentions, spreading them by networks. “The Tahir moment was facilitated by cabs, signs, cell phones, word of mouth, SMS, and social media provided the organizing platform,” Lim alluded.

Ahmed Al Omran & Oula Alrifai Photo Credit: New America Foundation

Another panel convened by Oula Alrifai and Ahmed al-Omran discussed their firsthand perspectives on the violence in Syria, and the political and social issues of Saudi Arabia.

Alrifai, a Syrian youth activist discussed the origins of the Syrian protests. With no independent media and post-imprisonment of an Al Jazeera correspondent, she stated, social media and video were the only ways to get information about the revolutions to the outside work.

However, the connections to do so were not always available.

For activists, using cell phones with cameras was the easiest way to take pictures and record videos, but since they had no networks in the ground someimtes they had to cross the borders. Some activists, “were crossing the borders to go to Jordan to download the videos in Internet cafés and (would) come back and fight again or be on the street and protest, risking their lives,” Alrifai said.

Ahmed al-Omran, a blogger for his site saudijeans.org, discussed the excitement many have felt across the Gulf of the revolutions.

Though the demand for freedom and justice in his home country of Saudi Arabia is similar, the dynamic is different—elections do not exist, and Saudis are largely politically unaware because citizens are not allowed to, “practice politics”.

Ahmed only became aware of politics when he started blogging in 2004, as he was not raised discussing the government, but social media gave him an outlet to learn about them. “I think that the Internet and social media has given this generation a space where they can express themselves and engage with one another and talk about the issues that are typically hard to talk about in the public sphere,” he said.

Ahmed also stated that an uprising similar to Egypt will be difficult in Saudi Arabia because of the monarchy, but predicts it will occur because time is on the people’s side. “Money is a short term resolution, these issues need a fundamental solution,” Ahmed poignantly observed, “At some point the money will run out, the oil revenues will not be there forever”.

Though opinions vary on how imperative social media was to aiding the Arab Spring uprisings, almost all scholars and activists agree—it is an organizational tool that can bring like-minded individuals to collaborate for change.

July 20, 2011/by actualize

Agriculture, Health, Health, Health Systems, Mobile, Originally posted on the GBI Portal

ICT’s in Health: A Crash Course

The world of ICT is expanding into the health sector, and their interactions are garnering more and more attention by the day. Therefore, we must be mindful of the beginnings and demarcations of ICT usage in health. After all, we can’t know where we are going unless we know where we came from.

Current ICT for health news in the developing world is dominated by initiatives using mobile telephony; the bread and butter of mHealth. This is not a total shock since over 85% of the world now has mobile coverage. Moreover, there are over 5 billion people on Earth with a mobile phone, and 3.5 billion of them are in developing countries. As a result, mHealth initiatives are booming in developing countries, especially in Africa and South Asia.

But what about other forms of ICTs that play a role in healthcare? What are they and how do they work? This crash course on the intersection between ICT and Health will explore the different avenues within that intersection and how to distinguish them from one another to prevent confusion.

Avenues of ICT and Health

Avenues are the different types of structured practices that implement ICTs in the health field. An avenue in the intersection of ICT and health will utilize old technologies, new technologies or a convergence of both in a structured and systematic way to achieve positive health outcomes. These are the different avenues:

eHealth: The term eHealth refers to the practice of using and being supported by electronics in healthcare. eHealth is the umbrella concept for many other avenues of ICT and health such as telemedicine and mHealth. The term is interchangeably used with health informatics by some experts. The term characterizes a way of thinking, an attitude, and a commitment for networked, global thinking, to improve health care locally, regionally, and worldwide by using information and communication technology. According to the World Health Organization (WHO), eHealth is the quintessential embodiment of the intersection of ICTs and health. Electronic health record systems, health information systems, mHealth and telemedicine all fall under the jurisdiction of eHealth.

Telemedicine: Technically, telemedicine has been around for decades, ever since doctors on one end of the phone have consulted patients on the other end of the phone. It pertains to providing remote clinical care through forms of telecommunication and information technologies. What distinguishes telemedicine from telehealth, since they are sometimes incorrectly used interchangeably, is that the former delivers clinical care while the latter offers clinical and non-clinical care such as health research and education. Telemedicine services include live patient consultation over phone or video, remote patient monitoring, medical and health information acquisition, and emergency telemedicine.

mHealth: Also called mobile health, mHealth is a form of eHealth that uses mobile devices such as mobile phones and PDA’s for health services. The Global Observatory for eHealth (GOe) defined mHealth as medical and public health practice supported by mobile devices, such as mobile phones, patient monitoring devices, personal digital assistants (PDAs), and other wireless devices. mHealth capitalizes on mobile telecommunication services such as SMS, general packet radio service (GPRS), third and fourth generation mobile telecommunications (3G and 4G systems), global positioning system (GPS), and Bluetooth technology.

Health Informatics: This is the field that aims to analyze the information needs of consumers, implement ways to disperse information to consumers and health professionals, and integrate consumer preferences into medical information systems. The field uses devices, resources and methods to store, obtain, retrieve, and disseminate information for healthcare purposes. Health informatics mostly uses computers but also takes advantage of clinical guidelines, advanced medical devices, and ICT services.

July 19, 2011/by actualize

Economic Growth & Trade, Originally posted on the GBI Portal

ICTs and their salvific economic power…

A a grey cellphone with a sad yellow face on its screen, bandaged left arm, a crutch under in it right hand, and a broken antenna.

Credit; Google Images

ICTs are spoken of in almost salvific economic terms by many dogmatic evangelists. The fact that these are potent tools, yet not a silver-bullet, is easily missed. Shouldn’t the truth to this tale already be known? The few available studies suggests that ICTs do present significant economic opportunities, but, as a recent Inter-American Development Bank (IDB) study reinforce, access alone cannot bring about sustained economic development.

As I contended in a previous blog, the findings of the IDB study, the first systematic examination of the impact of ICTs, should be instructive. In particular, it highlights the importance of building and boosting capacity in order for countries to capitalize on the gains in access. Of course, this is all very logical, but the manner in which the ICT space in some contexts operate seems to confuse the concept of access with use, two patently different and important elements for the potency of ICTs to be realized.

Aside from access, the IDB report notes three key points, the scarcity of resources and cost-benefit (that’s newer is NOT always better), the importance of complementarity, and public-private cooperation. These factors are key to our understanding of disparities between countries and regions with respect to how ICTs have been successfully leveraged. Essentially, ICTs work better in places where the policy environment and capacity is better.

In my previous blog, I talked about the main thrust of the report, so it is fitting that I now share with you a few of the successful ICT projects studied by the researchers. As you glance over these projects, bear in mind the lesson above: newer is not always best, simplicity is often what rules in many interventions.

Here are a few examples of the successful projects profiled in the IDB report:

1)Savings Reminders—BOLIVIA

Clients who received monthly reminders saved 6% more than individuals who did not.
Reminders that mentioned a specific future expenditure of the individual increased his/her savings by 16%.

2) Internet-based Sexual Education—COLOMBIA

Significant improvements in sexual knowledge and attitudes (STD prevention, condom use, pregnancy prevention and sexual violence/abuse)
Kids are more able to identify safe and risky sexual practices, STD symptoms and violent/abusive sexual situations
More importantly, behavioral change: teenagers initiate sexual activity later and have fewer sexual partners
Reduction in pregnancies, from 2.2% to 1.3%

3) Government Efficiency and Computers—BOLIVIA

Use of ICT to improve efficiency in the issuance of national ID cards
Productivity of computer use (as opposed to typewriters) increases by more than one third.

4) Environment: Case of ‘Green’ Bags—MEXICO

Digital messages and banners in Mexico City and elsewhere
Clients exposed to information reduce new bag consumption and tend to increase consumption of reusable bags, 12 percent.

Key lessons: Information is key, more so than delivery in some cases. And, ICTs cannot do it all: The success rates of indigenous women in the Bolivian project is much lower. As with all projects, a myriad of systemic domains and factors are at play—be they discrimination, ignorance, or simply bureaucratic delay!

Overall, the study touch on the major areas. It can be best summarized as: start small, evaluate, and then scale up!

July 19, 2011/by actualize

Economic Growth & Trade, Economic Policy and Governance, Originally posted on the GBI Portal, Trade & Investment

Hong Kong in Honduras

Trujillo, Honduras - Site of first charter city. Photo: MundoTV

Dr. Paul Romer, economist professor at New York University, is in talks with the Honduras government to establish “new reform zones,” designed to attract foreign investors. The “charter cities” would be about 1000 square kilometers in size, and be run by foreign developers with their own laws, leasing the land from the Honduras government.

I corresponded with Dr. Romer about the role of broadband technology in charter cities, particularly in Honduras. His responses to my questions are listed below. Additionally, Dr. Romer’s presentation at TEDGlobal2009 can be seen here, and an update on the progress in Honduras from TED2011 is located here.

President Lobo of Honduras supports the “cuidad modelo” concept, and endorsed it to government officials. Last month, the President announced that Trujillo would be the first charter city, with investors from South Korea, Canada, and England, as well as support from the Inter-American Development Bank.
The importance of terrestrial fiber cables for broadband connectivity to charter cities will probably be essential to their economic success. Additionally, if the cities are to slowly be incorporated into the rest of Honduras’ economy, it will be crucial that traditional businesses in Honduras go online in order to trade with the businesses present at the charter cities.

The social and political implications of a charter city are hotly debated, as critics express their concerns that charter cities are too similar to colonialism and require nations’ to lose their sovereignty. These issues are complex, and should be debated. Despite this, Dr. Romer’s vision is thought-provoking and is being put into practice in Honduras. His answer regarding the role of broadband in charter cities, are listed below:

1. What would be the role of ICTs, particularly broadband Internet in a charter city?

As the developing world urbanizes this century, the cities that will stand out will be the ones that join the global network of hub cities. ICT is one of the key interfaces that will link hub cities to one another, along with the shipping container and the airplane.

The driving force of economic life is the non-rivalry of ideas. Because we can share ideas, each idea has a value proportional to the number of people who use it. Cities are enormous sources of value because they allow us to share ideas in face-to-face exchanges with ever more people. Digital communications are a critical link for sharing the ideas that arise in one city with others around the world. The cities that make it efficient and safe for people to exchange goods, travel, and share information electronically will benefit enormously from an enhanced access to new ideas.

2. Would the Internet be considered a fundamental good in charter cities that should be provided by the government, such as electricity or water, or would it be left to the private sector?

The Internet is an extremely important service. That said, I’m not sure that there is one best way to deliver such utilities across all contexts, or that delivery should breakdown on strictly public or private lines. For much of the developing world, government provision and self-finance, supplemented by sovereign debt, might not be enough to provide citizens with access to adequate utilities and infrastructure. Governments will have to find ways to harness the private sector in order to provide adequate levels of service.

3. Do you envision the Internet being a platform for communication essential within charter cities or is it expendable?

Low cost bandwidth and redundant connections will be essential for any city that aspires to be a global hub.

4. In particular with Honduras, what technologies do you envision being publicly provided?

The Hondurans are discussing a model of land-based public finance in the new city. The autonomous development authority that is responsible for governing the new city would retain ownership of the underlying land and lease parcels to private developers to build residences, industrial parks, etc. The development authorities revenue would therefore depend on the value of the land.

This system gives the local authority an incentive to think like a sophisticated real estate developer and ask the right question when thinking about what the governing authority should do, either on its own or by working with private firms: What maximizes the value of the land?

Certain things come immediately to mind such as low-levels of crime and pollution, high quality schooling, and access to sear and air ports, but access to broadband and mobile telephony would certainly be important factors as well.

But again, whether things like infrastructure, utilities, or technologies are publicly or privately provided is somewhat of an open question. I can think of a couple scenarios in the Honduran context.

Suppose an equilibrium is reached where everyone expects a city of a given size to emerge in Honduras. There are several services with big fixed costs that could be provided by either the city administration or the private sector. Think for example of telecoms. The efficient financing arrangement would be for the city administration to pay for the provision of the telecoms infrastructure (fiber and wireless) and then price bandwidth using congestion pricing. In the case of fiber, congestion pricing might imply a zero price, but the city administration could finance fiber through the increase in the value of its land. Consumers would capture the entire consumer surplus from being able to use bits at marginal cost, and would be willing to pay more to live there as a result. So absent any constraints, the efficient arrangement might be for the city administration to rely more on its own ability to borrow against increases in the value of the land and less on monopoly prices charged by private sector providers.

Now consider the other case. Suppose that there is some uncertainty about whether the equilibrium with a fully developed city will be sustained and therefore some constraint on the city administration’s ability to borrow against the future value of the land. In this case, one might want to rely more on private sector financing. The city administration could give private concessions for services like telecoms, roads, utilities that will not be fully competitive. It could regulate pricing, setting some kind of average cost pricing that keep monopoly distortions from being too big, but allowing for the unavoidable level that comes with prices above marginal cost. This will, in the long run, make the city less attractive as a place to live and show up in the price of land, but might be a second-best solution to the initial financing problems.

One might also use a transitional approach, like build, operate, transfer, where the city administration takes over infrastructure later and shifts toward marginal cost/congestion pricing later.

The point is that given these tradeoffs, the right division is between private and public finance in the early stages of development will have to be made in response to public expectations that affect the city government’s ability to borrow. There is some capital like equipment and structures that can be provided in a competitive market and that the private sector can provide entirely on its own, but much like roads, telecoms, and utilities it could go either way.

5. Do you have any strong opinions regarding the ITU’s Broadband Commission and the need to provide Internet to all people worldwide?

I certainly sympathize with the intentions, but I’m not a big believer in mandates or millennium goals or codified rights as a way to force governments to do their job well. I believe it is better to harness the power of competition by letting people vote with their feet. The vision behind charter cities is to help in creating a world where every family has a choice to move between several well-run cities that are actively competing for their residency. If would-be migrants had those kinds of options, governments would have the right incentives to extend things like broadband services to all people.

July 19, 2011/by actualize

Education, Originally posted on the GBI Portal, Workforce Development

Mobile Money to Pay Rwandan Teachers

Ange is a teacher at the Rubona Public School living too far from the nearest branch of the Rwandan Teachers’ Credit and Savings Cooperative, or the Umwalimu SACCO, to receive her monthly salary.

She relies on her payment each month to put food on the table.

To resolve this problem, Umwalimu SACCO announced last month commencing a mobile money transfer service to pay members living in areas where the cooperative has no branches.

Currently, the cooperative has 16 branches countrywide, with about 57, 000 members.

Teachers living in rural areas similar to Ange, complain of having to trek long distances to access their salaries and loans, which is costly and time consuming, so SACCO decided initiate a mobile money transfer system.

Umwalimu SACCO, is a Rwandan cooperative of credit and saving which gives out loans and salaries to teachers, allowing them to set up income-generating activities to complement their measly monthly pay

The typical salary for Rwandan teachers is $40 per month. To supplement this, requests for start-up loans to engage in activities such as making mandazis (donut-like pastries) and selling them to other teachers on school grounds, is standard.

Jean Marie Vianney Nzagahimana Photo Credit: Rwandan Patriotic Front

Jean Marie Vianney Nzagahimana, the Chairman on the Board of Directors of the cooperative, recognizes that mobile payments allow teachers to be paid on time, while spurring further economic development and growth.

“We knew about the problem and that’s why we came up with this system to further address teachers’ needs. We cannot do it at once but we will be addressing them beginning with priority areas,” Nzagahimana says.

Although MTN and Tigo are currently offering money transfer services in Rwanda, Nzagahimana said that the SACCO money transfer system is to be implemented in partnership with South African company, MFS. Teachers will be able to get overdrafts through the same process.

The cooperative is also looking to expand beyond merely providing fiscal provisions for the teachers, aiming to meet the demand for new services from one of the biggest cooperatives in the country.

The Umwalimu SACCO cooperative has experienced rapid growth. Their financial assets have nearly doubled in a year from 3b Rwandan franc (Frw) in 2009, to Frw 7.3 billion in 2010.

The cooperatives financial budget for the next fiscal year worth Rwf 11.7 billion, converts roughly to $US 18 million.

“We are committed to at least establish a permanent SACCO office in every district by the end of July,” Nzagahimana asserts “This (is) done to get close to teachers and facilitate access to our services, which we also want to expand beyond financial ones. We are working on one laptop per teacher and solar energy at every teacher’s house.”

The financial services provided by SACCO are encouraging more teachers to educate Rwandan children in the classroom, while the cooperative’s new mobile payment system ensures that educators receive the money they deserve—in the time and place they need it.

July 19, 2011/by actualize

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