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The globalization phenomenon owes its momentum, if not its genesis, to the revolution the world continues to witness in Information and Communications Technologies [usually referred to as ICTs and defined to include telecommunications].
The explosive and unprecedented technological changes unleashed by the ICT revolution are driven primarily by several factors.
1) First, the drastic increase in computing power and the concomitant reductions in its price,
2) Second, Digitalization which is the technology that increases transmission and electronic processing speed and flexibility by allowing text, sound and images [multi-media information] to be expressed in a series of digits based on 0 or 1,
3) A third factor which has driven the ICT revolution is the propagation of fibre optical cables and networks: [i.e. a technology that facilitates significant economies of scale by allowing thousands of simultaneous communications on a single support],
4) A fourth factor is the introduction of packet, as opposed to circuit switching technology, a technology improves network efficiency by sending data as addressed packages that are reassembled at the receiving ends opposed to the circuit switching technology],
5) The fifth factor which has driven the ICT revolution is the Developments in satellite technology and the deployment of several hundred satellites that serve to increase high-bandwidth communications. High bandwidth refers to data throughput in excess of 128 Kbps, and finally
6) The convergence of the advances in networking, telecommunications, and computing in a transport medium called "The internet".
The central point I wish to communicate is that, by facilitating the instantaneous transmission of information at a decreasing cost and by dramatically increasing processing and transmission speeds, the ICT revolution has succeeded in making time and space less of an obstacle to the establishment and development of economic activity.
Hence, the description of today's world as a "global village." One in which information and its electronic exchange and delivery have come to assume inordinate importance, because the technologies enable us to process, store, retrieve and communicate information, in any form, uninhibited by considerations of distance, time, volume, and increasingly cost.
Thus, with the global economy was born an "information economy." And, in this new global, information economy, we can identify at least two central characteristics:
1) First, the application of ICTs and information in more and more aspects of our lives, as the relative cost of these technologies as well as that of generating, processing and transmitting information continue to decline, and
2) Second, the proliferation of wholly new services (that embody advanced capabilities) as well as entirely new ways of providing existing services. For example, we continue to witness:
a) an increase in the service component of traditional goods,
b) an increasing share of the ICT sector in investment activity and GDP,
c) an increasing contribution of ICTs (not just the ICT sector) to efficiency and productivity in every sector and to real economic growth in general, and
d) increased opportunities for ICT-related employment and the superior remuneration associated with these jobs.
From the perspective of our discourse, we must note that in this new global, information economy, telecommunications have come to assume a pivotal role as the essential underlying transport infrastructure for a variety of new services. Put simply, a modern telecommunication network is indispensable for participation in all of the economic and social activities that the ICT revolution has spawned. How else can one tap into:
1) E-commerce or the electronic transactions in marketing, sales, ordering, etc.,
2) How else can one tap into, remote [off-shore] E-services such as call centres facilities for technical support, customer care, telemarketing, ,
3) How else can one tap into software development, Application Service Provision, web-hosting, and other e-commerce "support industries",
4) How else can one tap into Internet-related industries like advertising, gambling, games, etc.,
5) How else can one tap into distant education and training services, and
6) Tele-medicine services
In other words, as the world has become increasingly integrated, information-based, and electronic, telecommunications has become a key driver of national development. A modern, robust communications infrastructure has become indispensable to economic development and social well-being.
The Centrality of Access to Networks
But it is self-evident that while a modern telecommunications network is necessary for participation and integration in the global economy, it is far from sufficient. Without access to modern telecommunications networks that provides reliable and reasonably priced services, both a nation and its peoples are destined for marginalization. In the Guyana context all stakeholders appear to recognize this.
That GT&T recognizes this reality is demonstrated by the investments it has made, the investment priorities it has followed, and the lengths to which it has gone to modernize the telecommunications networks and to increase access. The company's achievements are well documented so I will not dwell on them here.
Suffice it to say that, in the relatively short 12 years of its existence, it has developed in Guyana a modern, digital telecommunications network, comparable to any in this hemisphere. The company has, among other things:
1) Increased telecommunications access well beyond the level consistent with this country's income. Guyana's teledensity currently stands at 11 percent, well above the level for countries in our income group.
2) GT&T has introduced the Internet and other Data related services to Guyana, propagated its use, and introduced high-speed access.
3) It has positioned mobile cellular communications as a mass-based service, and
4) Lowered international call rates.
However, let us not delude ourselves. For poor, developing countries like ours, increasing access to that network poses a genuine challenge. It is a fact, for example, that there is an indisputable, non-spurious correlation between teledensity (main lines per 100 population) and per capita income. Indeed, according to the International Telecommunications Union's (ITU) econometricians, on a worldwide basis, GDP per capita explains 85 percent of a country's teledensity. In other words, the lower the average income of a country, the proportionately lower the number of conventional telephone lines. Not surprisingly, therefore, 80 percent of the world's people (living mostly in developing regions) have no or little access to phone service while three quarters of the world's telephones are installed in just eight industrialized countries.
All this notwithstanding, the ITU has recognized Guyana as the country with the highest growth rate in teledensity in the region over the period 1991-97. Indeed, even Government has admitted that, "teledensity levels in Guyana are quite high, compared to countries with a similar level of economic development." (Reform of the Telecommunications Sector in Guyana, p.23). In fact, Annex I of the same Paper admits that, Guyana's current teledensity of close to 11 percent is about double what may be expected given Guyana's income level.
Nonetheless, there remains much more to be done to increase access. The issue is how to proceed now that the ICT revolution has spawned a new development paradigm that postulates sector liberalization, the dismantling of monopolies, the encouragement of competitive service provision, cost-based service pricing, and the removal of cross-subsidies as the surest way to increase both telecommunications investment and telecommunications access. Consequent upon international subscription to this new development paradigm, Guyana has suffered a drastic reduction in International Settlement Rates, the primary source of the resources used to expand access.
Historically, the cost of infrastructure development resulted in telecommunications being organized along monopoly lines and the incumbent operator financed increased network access with the economic rent from the then lucrative international telephony business. This was the internationally accepted model and the economic rents were facilitated by the "International Settlement System." In essence, there was significant cross-subsidization which allowed local access to be provided at far less than cost, while maintaining high international rates.
The reason this has occurred is because, based on the new development paradigm, in a world where the technology permits easy entry into the telecommunications sector, a variety of alternative calling procedures, and an emphasis on liberalization and promotion of competition, the settlement rates system cannot be sustained.
So, consider what telecommunications providers in developing countries [like GT&T] are currently faced with:
1) Significantly lower settlement rates [the rate on Guyana's primary traffic route fell from US$0.85 per minute to US$0.23 per minute]
2) Traffic re-file which is the rerouting of inbound traffic to the least-cost settlement route,
3) They are faced with "Call-back" which is the provision of USA dial tone to GT&T's Guyanese customers, without any network investment by the foreign carriers that promote the service,
4) They are faced with Voice on Net [i.e. software programs that facilitate the placing of an international call from the Internet], and
5) Voice over Internet Protocol [i.e. transmitting voice, fax and related services over private (packet-switched Internet Protocol) networks].
Though it is true that these new means of communications are less expensive, it also means there are less resources with which to expand access because in essence the providers of these communications are using the telephone company's infrastructure for free. Of course, based on current sector laws and regulations in these very developing countries like ours, these services have no regulatory status and are all illegal. However, regulators "turn a blind eye" so these services flourish at the expense of the incumbent.
Clearly then, at least in the transition to the new dispensation that the new development paradigm advocates, expanding access will pose a problem.
The new development paradigm ushered in by the ICT revolution has taken hold internationally. I have serious reservations about various aspects of it for countries in the developing world and would caution anyone about unconditional subscription to this new 'ideology." However, you would have recognized by now, Guyana, intends to move in the direction suggested by the new thinking. Indeed, based on the public consultations convened by Government there appears to be a consensus that Guyana needs to move in this direction.
So, Guyana's telecommunications sector too will have to change to become competitive and cost-oriented and the question really becomes how best to make the transition to a competitive industry. (To be continued next Sunday)
Clearly then, the sector must be reformed to bring laws and regulations “up to speed” with technological advances and to reflect the new paradigm. I would caution that the reforms must be sufficiently comprehensive to:
1) Guard against new operators driven by the market incentive of profits, being able to concentrate on the provision of services for those sections of the country and those segments of the market where there appears to be an ability to pay, leaving large geographic areas “un-wired”.
2) Ensure effective and adequate protection against license violations after all, a “free market” does not imply that one does as one pleases
3) The new regulations must provide adequate and effective consumer protection since usually, the greater the competition the greater the need for vigilance in this regard.
Equally important, is that there be agreement on issues such as:
1) the phasing in of competitive service provision
2) negotiations with the incumbent operator to modify its operating license,
3) meaningful re-balancing of service rates,
4) an agreed strategic plan for the ICT sector.
These reforms should not permit the destruction of the network that has already been established at considerable cost. In the case of GT&T approximately US$170 million. This would mean at minimum that the reforms be adequately phased in to ensure that the movement to full competition does not destroy the viability of the incumbent operator. Finally, the new sector paradigm should be designed to reflect a nationally agreed notion of universal access, articulate agreed universal access targets and mechanisms, and ensure that all operators in the sector contribute to this universal access to telecommunications and ICT services.
To summarize for a moment then, in this technologically advanced “global village,” information is indispensable for economic and social activities and access to modern telecommunications networks has become a crucial link in the chain of the development process. Failure to modernize the telecommunications networks and failure to universalize access to these networks will consign a country to backwardness and social and economic deterioration and consign its peoples to limited education opportunities, unemployment, and poverty. Today, access to modern telecommunications means access to a vast array of information and communications technologies and opportunities to:
1) enhance education, health and job prospects,
2) tap into new and more efficient production activities,
3) expand trade opportunities and thereby overcoming natural disadvantages, like smallness of domestic market size,
4) progressively reduce inequities within and among countries.
Those without access become the “information poor” and therefore find themselves on the wrong side of the “digital divide.”
Telecom Sector Reform
The new development paradigm accords the status of being not simply a distinctive sector of economic activity but also the underlying transport medium for other economic activities. And this is why, with the birth of the World Trade Organization (WTO) in 1995, the trade in telecommunications services was, for the first time, placed in a multilateral setting under the General Agreement on Trade in Services or GATS. In fact, the GATS has a special Telecommunications Annex that elaborates on the measures that will affect access to and use of basic telecommunications transport and network services in all member countries.
The implication of all this is that, in the new “Global Village” national borders will not be allowed to encumber access to telecom networks and the movement of telecom services and telecom service providers. Thus, the Telecommunications Annex defines what is considered “essential facilities” and which operators are considered “Major Service Providers,” and deals with issues related to:
1) Competitive safeguards to prevent anti-competitive practices (e.g. anti-competitive cross-subsidization),
2) Issues related to the provision of timely Interconnection in a transparent manner and on non-discriminatory and cost-oriented terms,
3) Issues related to the obligation of all operators to contribute to universal service and correspondingly, an obligation on governments to not make such contribution unduly burdensome,
4) Issues related to criteria for the transparent issuing of licenses,
5) Issues related to the imperative of the Independence of regulatory authorities, and
6) Issues related to the criteria for the allocation of scarce resources (e.g. spectrum).
Equally important is the fact that having placed telecom within a multilateral framework, all four “modes of service delivery” now apply to the trade in telecom services. These four modes of delivery are:
1) cross border movement of service products which are services supplied by one member country to another (e.g. international telephone calls)],
2) the consumption abroad or the movement of consumers to the country of importation,
3) the commercial presence which means the services provided through the presence of a commercial entity of one member in the territory of any other, and
4) movement of natural persons or services provided by individuals of one member in the territory of any other (e.g. consultants etc)].
Member countries must decide on the level of commitments they are prepared to make from the perspective of openness of the domestic market. In other words, the telecommunications Annex under the GATS, by placing the trade in telecom services in a multilateral framework, ensures that market access is guaranteed and that the regulatory frameworks of member countries do not deviate from the template suggested by the new development paradigm.
More than 60 countries have made commitments under the GATS to open their national markets to international competition and trade in telecommunications services. Instructively, these countries account for in excess of 90 percent of the trade in services. There is, therefore, little likelihood of developing countries not “toeing the line.” Further, other multilateral agreements follow the WTO Agreement. For example, the Free Trade Area of the Americas or FTAA Agreement seeks commitments that go well beyond those made under the WTO Agreement. This is the so-called notion of WTO-plus.
Guyana has made WTO commitments in telecommunications in the area of value-added services. It is my understanding that Guyana has made commitments to the effect that all foreign suppliers would be permitted to interconnect to the public telecommunications network, and that online information and data base retrieval would be liberalized. In terms of Modes of Service Delivery, Guyana committed to accord:
1) full market access and full national treatment to all foreign service providers who opt for cross-border supply,
2) full market access and full national treatment to all foreign consumers entering Guyana to consume the specific service, and
3) full national treatment to all service providers granted commercial presence [reservations here had to do with the nature of the operating license held by GT&T].
Jeopardies Associated with the New Development Paradigm
The potential benefits to countries like Guyana from fuller participation in the global economy by way of greater access to modern telecommunications networks and market-opening measures are numerous. But, they are not guaranteed. Admittedly, such integration can open the possibilities for greater investment in the sector, more efficient service delivery, lower prices to consumers, and expanded the range of new services especially in the areas of distance learning, telemedicine, and electronic commerce, increased employment opportunities, and the like. Indeed, a listing of the potential is limited only by one’s imagination. In reality, however, transforming these potential benefits into reality is likely to be fraught with difficulties and jeopardies. This is why I cautioned earlier against unconditional subscription. There are those who argue the ICT revolution and globalization have the potential to become the final colonization. I will turn now to an examination of some of the more obvious of these.
The Imbalance in Technological Endowment
The relative imbalance in technology endowments that countries like ours face can lead to a situation where our network systems become an extension of the system of a few developed countries. Indeed, this happens currently in the case of “call back” services. With zero investment in network infrastructure in Guyana, for example, the current technology allows a USA telecom operator to facilitate one of my customers in Guyana receiving North American dial tone and making an international call to the USA as though that customer were a customer of that company and located in the USA. With such possibilities, its difficult to see, for instance, where would be the motivation for this American company to invest in network expansion in Guyana. Or for that matter, what is the incentive for GT&T to invest if the foreign call back firm is reaping the benefits and paying nothing. In other words, network access growth here would suffer while the external company continues to earn based on the existing network.
The U.S. Centric Internet
A second risk or jeopardy results from the US Centric Internet. Because the Internet has a meshed architecture, most of us lose sight of the fact that it nonetheless has its nucleus in the United States. But it does, for a number of reasons.
1) First, the historical pattern of telecommunications capacities has aided a US centric Internet. After all, almost from its inception, the Internet rode on the existing telecommunications infrastructure that was constructed for the purpose of long-distance international voice calls. However, the best prices, the most available links, and the best quality links were on U.S. routes because that was the most popular incoming and outgoing calling destination.
2) Second, there is a high demand for U.S.-based content on the Internet.
3) Third, there is a lack of regional infrastructure [i.e. low-cost, high-speed international circuits within a region like Latin America] that leads to the US being a central Hub for Internet traffic.
This US centric nature of the Internet increases cost for countries like ours. Some of these costs include a) the costs associated with hosting sites in the USA [i.e. renting server space], b) the costs associated with inefficient Internet traffic routing [regional traffic must go all the way to the USA hub], and c) costs associated with peering [i.e. the exchange of Internet traffic between ISPs].
Of course there are other factors to consider when assessing the ease with which persons in countries like ours can access the Internet. These other factors would include bandwidth and dial-up prices, computer prices, telephone and Internet penetration rates, the availability of high-speed access on copper loop infrastructure, the availability of skilled labour, consumer behaviour, the regulatory framework, and so on. But it is a fact that the US centric character of the Internet helps to determine the extent to which countries like ours can exploit e-commerce, telemedicine, distant education, and many other opportunities, by increasing the cost of Internet access.
The Challenges of Content Provision
The third jeopardy has to do with “dependence” and the reversal of the traffic imbalance that countries like ours enjoyed in the old dispensation. The point is that if, as we have shown, in today’s world access to telecommunications secures access to information then, those who provide and control information [content] become inordinately powerful. The vast majority of Internet host computers, for example [i.e. the computers that we reach for when we go online] are in the developed countries. We are users rather than providers of content.
The implications of this state of affairs are numerous:
First, though we access ICTs and participate in the global economy, we are not at the lucrative end of the ICT business activities. We produce neither hardware nor software and we provide no or little information and content. Thus, we run the risk of being relegated solely to low-end, off-shore processing type activities, like those associated with Call Centers.
Second, because the ICT revolution has blurred the distinction between formerly very separate communications industries [e.g. telecommunications, computers, broadcasting, film, and other entertainment industries], the service and network convergence that have accompanied the ICT revolution allows media barons in the developed world to team up with major telephone operators to deliver films, news, and all sorts of information and content through fibre-optic links into our homes. The danger here is that it becomes possible for liberalization, rather than heralding a new era of cheaper, more accessible communications, instead, liberalization could end up facilitating the emergence of a handful of monolithic, communications trans-nationals [a sort of Orwellian “Big Brother”] with the means to control multi-media traffic and thereby determine what we see, what we hear, what we allowed to know, and what we believe.
A third implication is that, if we do not have a share of the content industry, then the flow of information and content will remain essentially North to South, and the flow of payments, essentially South-to-North. This is an interesting possibility since the information age would then result in a reversal of the payment flows that benefited us in the old dispensation. Remember, under the legacy system [i.e. the International Settlement System] being poor paid because the poor ended up with a surplus of inbound traffic that guaranteed a net inflow of convertible currency for the telecommunications sector.
Already, the direction of information flow is having implications for the cost of accessing information networks. For example, since the Internet Backbones are predominantly in the North and the Host Servers are in the North, Internet Backbone providers have moved away from the “Half Circuit” method of pricing transmission facilities that are jointly used [i.e. the method that typified the telecommunications industry] in favour of “whole Circuit” pricing. Thus, when we purchase Internet bandwidth, we pay for an entire circuit. This means that ISPs in the developed countries enjoy a “free ride.” For this reason, however much bandwidth price falls, Internet access will always have to be priced higher here than in North America.
A fourth implication of the content disparity is that while the means to handle information appear to be increasingly available and democratic, in practice there is a danger that failure to universalize access, the cost of access, regulations related to copyright, the profile of those best placed to exploit the Internet [young, educated, middle class], could potentially create an “information elite” in our society while alienating and disenfranchising the majority of the populace by widening the gap between the “information haves” and “have-nots.”
Insofar as the ICT revolution and globalization have changed the world profoundly, then the university too must reform if it is to remain relevant. In a world where information and communications technologies permeate our entire life [economic, social, entertainment, political, health, education], it is difficult to over-state the importance of consistently generating a critical mass of technically skilled and competent professionals capable of manning, managing, manipulating, and generally exploiting these technologies to tap into the many opportunities offered by integration into the global economy. In fact, even on a world scale, it is projected that the demand for persons who can work with and manage information systems will continue to grow at an exponential rate for some time to come.
The university has a responsibility in this regard and discharging this responsibility will necessitate reform, (just as the telecommunications sector needs to be reformed to adjust to today’s global reality.) At a minimum, the reforms must address the need to shift our graduates to the high end of the skills hierarchy in the global economy such as software developers, programmers and systems analysts. This requires especially the imparting of the skills needed to design and adapt ICT to new and indigenous uses. One internationally accepted indicator of these skills is the number of graduates in mathematics and engineering.
Recently, I saw an episode on ‘Sixty Minutes’ which focused on the India Institute of Technology (IIT), which has now become a major exporter of software specialists. Instructively, it was the Institute that pioneered the effort. It was the institute which recognized the worldwide demand for these specialists. It was the institute that developed a programme which captured the imagination of the young and exposed thousands of students to training. It was the institute that created the incentive of offering lucrative opportunities abroad. Today, places like Silicon Valley know the source of their skills.
Some of you might be aware that after the Government of Jamaica adopted a new thrust to position Jamaica towards becoming a service economy, there followed a multi-million dollar investment to establish a Caribbean Institute of Technology. Unless we take initiatives of this type there will be little likelihood of expanding the contribution of the ICT sector and gradually shifting the country away from its concentration on primary products.
Coming back to the Indian Institute of Technology story, as I said, while this impacted positively on the economy of India, it was the Institute that took the initiative and made it happen. We in Guyana and you at the University, must demonstrate that type of initiative if Guyana and Guyana’s economy is to move forward in the 21st century.
Reforming the University of Guyana in the manner I have suggested or creating an institution like the IIT will not be without difficulty. In particular, attracting and retaining suitably qualified faculty members is not going to be easy, nor is it going to be easy for us, as a country to retain the pool of skills we generate. After all, globalization tends to facilitate an easier movement of qualified persons and in many instances those persons gravitate towards better remuneration and perceived opportunities. [For example, well qualified persons within a certain age range are welcome in Canada and are attracted by the “self filing system.”] Over time, appropriate qualifications might itself equate to a visa and, Canada for instance, might see an individual more as a qualified Systems Engineer than as a Guyanese or Jamaican. However, the University has an obligation to initiate the reforms required to grapple with these issues regardless of the degree of difficulty.
As with the example of India on 60 minutes, the investment in excellence has paid off. It is true that many of the graduates coming from the Technical Institute have left India, but many have remained to create India as a powerhouse in computer programming and software development.
Again, borrowing from 60 minutes, those who have left India are still Indian and have reinvested in their homeland. As a Canadian Guyanese, I know that most of us who had left Guyana at some point, have that same feeling......we are Guyanese to the core and would prefer to remain here or return here. Whether you the students choose to remain or go abroad, the University has an obligation to prepare you, our future generations for the economy of the future. I argued today and I maintain that one of those areas is ICT.
A University Integrated into the Society
Earlier in my presentation I cautioned against unconditional subscription to paradigms and doctrines that might be internationally accepted. However, one cannot effectively criticize these theoretical constructs nor offer viable alternatives without a complete understanding of them. In this global environment then, it is necessary for the University to undertake the necessary research that places it in a position to a) articulate the likely impact on our economy of different aspects of globalization, b) suggest variants that better reflect our reality, c) provide information for policy formulation, and d) make a contribution to the lifting of public debate and the education of the grassroots.
In so many universities, it is research that results in solutions to current issues or problems. Theses and dissertations spark debate and sometimes result in significant change.
These programs can, among other things, follow and analyze developments at the level of the FCC (the US telecommunications body) and at the level of the multilateral trade agreements such as WTO, FTAA, CSM. Can we not develop expertise in the area of trade in services and multilateral trade agreements? Are we placed to assist the Ministry of Foreign Affairs, for example, to articulate service trade negotiation positions? I believe that as an, the University should be in a position to assist in informing Guyana’s trade negotiations and articulating trade commitments. Unless this becomes its orientation the University is unlikely to demonstrate a relevance to the society of which it is a part. My challenge is that we take a hard, honest look at the institution with a view to ensuring its relevance to the society of which it is a part and the society that we will become.
I want to close with my final challenge.
I want to suggest that the University returns to or begins to institutionalize what is called “Brown bag” Sessions [the name stems from the fact that one tends to attend such sessions rather than “do lunch” and therefore brings along one’s lunch in a bag] where lecturers, specialists and professionals in the wider society, members of the Diplomatic Corps, etc. bring research methodologies and research findings for information and debate and make presentations on current world, regional and domestic issues.
Brown bag sessions are not limited to academia in developed countries. They are also an integral part of business and industry where new ideas are offered for consideration, debated and often hotly contested. But it is in the offering up of new ideas in these sessions that we are challenged to think and evaluate. It is my belief that this type of challenging atmosphere is lacking in Guyana.
My suggestion, while offered to the University, is also directed at the wider society since these sessions cannot succeed without the participation of communities outside of the University. However, I have always sensed that the members of those communities are willing and ready to do whatever they could in the interest of the University and its students. This is hardly surprising. After all, “The end of all education [of all knowledge] should surely be service to others.”