The current ICT-centred technological revolution, of which the Internet is but one manifestation, is reshaping not only the sphere of economic organisation but also, and relatedly, the sphere of social relations. The impact is likely to be at least as great in developing countries as in OECD ones. As the introduction of the Internet empowers people who were previously discriminated against, beneficiaries of the status quo may quite rationally react to defend their interests. In the Guyanan experience mentioned above, the foray into electronic commerce created tension between the weavers and the traditional regional leadership: threatened by the women’s success, regional leaders moved to take control of the weavers’ organisation. The woman who created the Web site quit in protest, and the group has been struggling since then to get by. More positively, the Grameen Village Phone network in rural Bangladesh has apparently further added to the empowerment of women beyond the acknowledged achievements of the GrameenBank (Bayes, von Braun and Akhter, 1999). The operators of the village phones are all poor women (selected for their strong credit record), whom members of the male-dominated village elite now regularly visit to avail of mobile phone services. Also, these women entrepreneurs appear to exercise greater discretion over the expenditure of profits from their phone service than is the case with other household income.
Along with universities and research institutions, international development agencies and NGOs have been among the early introducers of the Internet to low-income developing countries. NGOs have played an especially important catalytic role, since they are often working in remote areas with isolated communities. They have to some degree primed the demand for wider Internet access. NGOs, for example, have been instrumental in dissemination of the technology to link rural artisans to the Web. A well-known example is that of Bangladesh’s GrameenBank, which has made available its branch infrastructure to administer a village mobile phone network set up by its partially owned affiliate, GrameenTelecom49. An interesting possibility raised by this experiment is that the phones (and in time Internet connections) available to rural households would offer new incomegenerating activities, for which GrameenBank financing could in turn provide seed capital.
In a best case, GrameenBank could become the incubator of a host of rural Bangladeshi dot-coms.
For such dot-coms to flourish, whether in Bangladesh or other developing countries, there is need to cultivate skills in the local population for certain e-commerce support services like web design. One interesting experiment in Kenya is training youth from Nairobi’s slums in web design skills, with some seed capital from the Netherlands government50. The urgency of such training needs is recognised by rich countries’
governments, as exemplified by the Japanese initiative for comprehensive ICT assistance to developing countries51.
As Panos (1998) observes, “(i)f the market is ensuring that access is spreading (in terms of physical infrastructure), the donors and NGOs can shift their focus, ensuring that the benefits are maximised and that marginalisation is minimised”. This seems to be the approach adopted by many official development assistance (ODA) agencies. According to the 1996 annual report of the World Bank-hosted InfoDev initiative to foster ICT diffusion in developing countries, less than a third of the projects then under consideration were focused on infrastructure. Extending access to remote rural areas remains an issue, though the emphasis is shifting from purely public investment financed by development assistance to public-private partnerships. The ITU, for example, has established WorldTel, which is seeking to raise private capital to finance telecommunications links to rural communities and poorer communities in developing countries. Similar public-private endeavours may be warranted for making bandwidth available at low cost to rural parts of developing countries, with the multiple low earth orbiting satellite networks to be launched in coming years by private sector consortia offering the prospect of sizeable slack transmission capacity over low-income countries52.
As for micro-level initiatives, the establishment of telecentres seems to be a favoured investment for the World Bank, various UN agencies, and regional development banks.
UNDP, for example, has begun pilot projects aimed at the creation of electronic community centres as a platform for access and connectivity in rural areas, initially in Egypt and South Africa. They will also serve as centres for capacity building, skills enhancement, training, communications and content development. SMEs are encouraged to utilise these facilities and they will be assisted in the creation of websites, digital web management and the conduct of electronic commerce. A USAID project, Craftslink India, is building IT and e-commerce capacity into the operations of low-income women handicraft-producer groups, equipping and training them to use digital cameras and the Internet to market their wares while showcasing their cultural richness.
Building reputational capital and fostering trust in consumers remain major challenges for prospective developing country entrants into global e-commerce. The association of artisanal exporters with a brand name like IFAT or with a globally recognised and respected NGO has until now been an important means of building customer confidence. Eventually, if market entry barriers are to be lowered for a much wider group of SMEs, generic solutions are needed. It is of course too early to predict whether the open rating system mentioned above will become an e-commerce standard. Assuming it (or some variation thereof) does, then the question arises of whether the average SME in a developing country can independently afford the software and service costs of participation in such a scheme. It may be worth exploring options for negotiating favourable license terms and for cost sharing — e.g., through industry associations, perhaps with partial financing from ODA.
To foster an e-commerce friendly environment, international organisations are seeking to assist countries with the creation of suitable legal frameworks as well as support systems.
As mentioned above, while many of the norms and standards for transacting e-commerce are being forged in OECD countries, developing countries have a stake in participating in fora where key decisions are made. This includes the WTO, with its role in defining the treatment of e-commerce in international trade. Given the limited capacity of many lowincome countries to master the technicalities of even current trade issues, there is a clear need to strengthen capacity for effective participation in multilateral negotiations and standard-setting bodies. ODA can play a useful role here.
Finally, many traditional areas of development co-operation will increasingly incorporate ICT elements — e.g. education and health care53. Maintaining the ICT infrastructure of such projects may be facilitated by the technology’s multipurpose nature, notably through leasing equipment and services to local e-ntrepreneurs.
OECD DEVELOPMENT CENTRE Working Paper No. 164 E-COMMERCE FOR DEVELOPMENT: PROSPECTS AND POLICY ISSUES by Andrea Goldstein and David O’Connor
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