Information and Communication Technologies

Information and Communication Technologies
and Poverty
Charles Kenny
Infrastructure Economist, World Bank1
ckenny@worldbank.org
Few would argue that lack of access to information and communications technologies (ICTs) is
an element of poverty in the way that insufficient nutrition or inadequate shelter are. If being
poor is defined as lacking access to the Internet, for example, no one in the world escaped
poverty before 1969, when the first network was built. But, ICTs are increasingly central in
the effort to escape poverty. This article will discuss the use of ICTs in poverty alleviation, the
poor’s limited access to ICTs, and government policies that might help to overcome this ‘digi-
tal divide.’
ICTs and Poverty Alleviation
The impact of ICTs on the lives of poor people goes far be-
yond income generation, however. In education, at the pri-
mary and secondary levels, radio and television are an in-
We have forty years of evidence on the utility of broadcast
creasingly important means of reaching the rural poor. Edu-
media as a tool for improving incomes. A survey of some of
cational radio has been utilized in:
the 21,000 farmers enrolled in radio-backed farm forums in
Zambia showed that 90 percent found programs relevant and
• Mexico and Mali, for literacy training;
more than 50 percent credited the programs and forums with
• Thailand, to teach mathematics to school children,
increasing their crop yields.2 Building telephone centers is
and for teacher training and other curricula; and
another significant means for creating income. In the Indian
• The Dominion Republic and Paraguay, in support of
state of Punjab, for example, one study found over 10,000
primary education. 4
staffed telecenters had sprung up by 1996—generating close
to 9,000 USD in gross revenue per center, much of which
There are also a number of Internet-based education pro-
went to salaries. In Bangladesh, Grameen Phone gives
grams, including ENLACES in Chile and the World Bank’s
loans to low-income women entrepreneurs in rural areas to
WorldLinks program.
provide payphone services based on cellular technology.
Villagers report that the introduction of the service has al-
Information technology also has a role in improving the
lowed rural farmers to check livestock prices and coordinate
quality of health services. A significant percentage of health
medical needs, and has challenged the traditional power that
workers in Uganda (54 percent) and Kenya (20 percent/year)
wealthy landowners and intermediaries have held over rural
have taken part in radio-backed training courses and there are
economies and politics. Also, the phones themselves have
consistent reports and surveys suggesting that these result in
become an important new business sector in the villages,
improved knowledge, attitudes and practices. ICTs can also
generating jobs and income where none previously existed.3
significantly cut the cost of education and health care
The average income per village telephone operator has been
through the improvement of management systems using net-
estimated at $700 per annum. Small manufacturers of tradi-
worked computers. ICTs also have a role in supporting envi-
tional handicrafts are also discovering how ICTs can assist in
ronmental awareness programs and publicizing the actions of
the marketing and distribution of their wares to a worldwide
polluters, in preserving and disseminating cultural informa-
client base. In Kenya, the Naushad Trading Company
tion and practices, and a range of other development tasks.
(http://www.ntclimited.com), which sells local woodcarv-
ings, pottery, and baskets, has seen revenue growth from
Finally, ICTs also have a major role in reducing the vulner-
US$ 10,000 to over US$ 2 million in the two years since it
ability of the poor —especially to natural disasters and pow-
went online. Consumers and shopkeepers can access con-
erlessness. One of the reasons for this is the part that ICTs
stantly updated color pictures of NTCLimited’s product line,
can play in amplifying the voices of the poor. ICTs bridge
place orders, and make inquiries of other types of handi-
the distance between remote communities and service pro-
crafts.
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viders—markets, government departments, and aid agencies.
pointer to the dominance of industrial countries. A recent
They can allow the opinions of the poor and the needs of the
host survey shows that Africa generates only 0.4 percent of
poor to be heard. For example, in India, the women’s rights
global content. Excluding South Africa, the rest of Africa
NGO ‘Sakashi’ had faced difficulties in lobbying for sexual
generates a mere 0.02 percent.5
harassment legislation. With help from international
women’s networks provided over the Internet, Sakashi was
And, especially for the Internet, use is dominated by a tiny
able to receive advice and technical assistance on legal issues
educational elite. Ninety-eight percent of Ethiopian Internet
surrounding sexual harassment. As a result, the group suc-
users had a university degree—in a country where 65 percent
ceeded in convincing the Supreme Court to establish sexual
of the adult population is illiterate. Finally, women have less
harassment guidelines in the workplace and brought the issue
access to ICTs than men. Only 38 percent of the population
within the purview of human rights violations.
polled in urban Latin America who use a computer and
Internet are women. The numbers are even more skewed in
The Digital Divide
Africa: a survey of African users found that 86, 83, and 64
percent of Internet users in Ethiopia, Senegal, and Zambia,
respectively, were male.
Despite these potential links between ICTs and poverty re-
duction, direct access by the poor to more advanced ICTs in
Should There Be Concern?
particular is extremely limited. Radio is listened to every
week by as much as 80 percent of the populations of many
developing countries. Figure 1 suggests that even the poor-
Having said that, the mere existence of a gap in levels of ICT
est developing countries also have more televisions per cap-
services between rich and poor across and within countries
ita than would be suggested by their income level. But citi-
does not imply that ICTs should be a priority for government
zens of poor countries have significantly less access to tele-
action; after all, poor countries also have fewer factories,
phones and the Internet than those living in rich countries,
fewer cars, fewer doctors and nurses, and lower calorie in-
while poorer people within countries are even further ex-
takes per capita than wealthy countries. That said, there are a
cluded. For example, Rwanda has a population of over 6.5
number of reasons why a growing gap in the provision of
million. In 1998, it had 11,000 telephones—about half the
advanced ICTs should be of concern:
number of telephones as Gibraltar, with a population of
27,000. Within Rwanda, these telephones were almost ex-
• The gap in provision is already large, and for advanced
clusively concentrated in Kigali. There were 4 telephones
ICTs it is much larger than income disparities. This rep-
per hundred people in the capital city, compared to 4 per
resents a majority of people around the world—and es-
10,000 in the rest of the country.
pecially the poor—having no access to modern net-
working technologies. And the gap is growing at a time
when the trends in other determinants of development,
such as levels of education, health, and access to trans-
port, are converging.6
• Threshold effects are at work. Two linked economic
features suggest that low provision could force people
and countries into poverty traps—network externalities,
where there are increasing benefits to a connection the
more that others are connected, and bottlenecks. In the
same way that a weak port infrastructure reduces the at-
tractiveness of all merchandise trade with a country, it
might be that a weak information infrastructure will re-
duce the competitiveness of an even wider range of
goods and services. Weak information infrastructure
might then act as a bottleneck to trade-led development.
Evidence is growing that a range of ICTs is vital for
taking part in trading, and the lack of such technology
really does act as a bottleneck. For example, surveys in
Botswana and Zimbabwe suggest that areas lacking tele-
phone access see significantly less entrepreneurial activ-
Looking at the Internet, in 1998, Bangladesh had a popula-
ity than those with access.
tion of 125 million, with just over 1,000 Internet users. The
availability of local content on the Internet is a further
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• Within-country gaps in service provision worsen ex-
communications operators; moving toward cost-oriented
isting inequities. If the opportunities for improved in-
tariffs and the elimination of internal cross-subsidies, with
come generation and access to services provided by the
the limited exception of carefully designed subsidies to en-
new ICTs are limited to the wealthy, this will perpetuate
sure access and use for the poor; as well as recourse to a
and strengthen a number of disparities, including gender
strong and truly independent regulatory agency, capable of
inequality and the inequalities faced by the disabled.
enforcing rules.
Policies to Ensure Access
for the Poorest
The first step to begin fulfilling the communications needs of
the poor is to leverage the full potential of market mecha-
nisms in reaching out to poor communities, by allowing the
establishment of a competitive, private sector–led market. A
range of studies suggest that there can be dramatic increases
in access to telephone and Internet services, through a tele-
communications-sector reform program based on three pil-
lars: privatization, competition, and independent regulation.
Privatization
Figure 2 below, based on evidence from a set of Latin
American countries, shows that privatized open telecommu-
nications markets in that region saw basic line rollout ap-
Regulation
proximately three times as fast as countries with a state mo-
Moving to private competitive markets is unlikely to be
nopoly and twice as fast as those with private monopolies.
A liberalized telecommunications sector is also vital to make
enough to ensure that the poor have access to ICTs, however.
access to advanced information technology more affordable,
A combination of regulatory requirements, carefully de-
signed privatization and license contracts, and bidding pro-
because a large part of the costs of Internet access are ac-
cedures and financial support for private provision of public
counted for by telecommunications. A recent study of Afri-
access will be required to meet this goal.
can Internet service providers suggests that countries with a
highly liberalized telecommunications network had costs of
Internet access eight times lower than those with a com-
Service requirements are a simple method used by regulatory
agencies to ensure a certain minimum level or distribution of
pletely closed market. Countries with more open telecom-
telecommunications development within a country. They are
munications sectors also had more host sites, lower monthly
primarily written as conditions into the license of an opera-
Internet charges, a greater number of providers, and higher
tor. They can involve teledensity or rollout targets for public
rates of Internet penetration.7
and private lines, along with conditions on the quality and
Opening the broadcast sector to independent operators can
speed of service. Regulations can also support access by the
disabled, supporting enhanced accessibility features to allow
also have a dramatic impact on the range and quality of pro-
use by the visually and hearing-impaired. Service require-
gramming. In Columbia, for example, over 1,000 new li-
ments should be set bearing in mind their commercial feasi-
censes were issued to community stations in 1995. This
bility: requirements that are unrealistically ambitious may
should be part of a broader move to issue spectrum licenses
to local and national stations, which can dramatically in-
jeopardize financial performance and thus operators’ ability
crease listener choice and information flow.
to meet the targets and improve access.
Competition
In license-tendering processes, build-out targets are increas-
ingly used as an important, sometimes primary, bid evalua-
Gaining full benefit from private-sector participation and
tion criterion, alongside the bid price. This approach, if pre-
liberalization also requires the regulatory environment of the
ceded by careful analysis of the target users’ capacity to pay,
communications industry to be conducive to a well-
ensures that the rollout targets are indeed feasible. For ex-
functioning competitive market. In the telecommunications
ample, in both Uganda and India, bid evaluations included
sector, this can be achieved through legal and regulatory
rollout or coverage criteria. If license conditions are to be
mechanisms that promote, among other things: fair intercon-
met, enforcement procedures to follow up on the accom-
nection and revenue-sharing arrangements between tele-
plishment of committed targets and a plan of sanctions for
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failure are essential. To make licenses with rollout conditions
approach to support the establishment of public Internet ac-
more attractive, a range of options are available, including
cess points, notably through telecenters. This has been the
bundling, packaging areas, and free choice of technology.
approach followed in South Africa, where the Universal
Service Agency has used the funds to franchise telecenters
Potential Benefits
around the country. Peru has recently started using a similar
mechanism to support the public provision of telecenters and
Using regulatory and policy support for public access, be it
Internet terminals in poor city neighborhoods.
to a telephone line, to a radio, TV screen, or to an Internet
terminal, countries can aggregate demand so that a large
number of people benefit from one or a few connections.
Into the Future
This allows sustainable provision of ICT services even where
incomes are low. In Senegal, for example, more than 6,000
It should be noted that the ICT movement is still in its early
privately operated and highly profitable telecenters have
stages in developing countries, and it has faced some set-
come into existence since the early 1990s.9 Public access to
backs. One study of a pilot program of the Ministry of Envi-
a telephone has more than doubled. India, Peru, South Af-
ronment, Natural Resources, and Fisheries in Mexico, for
rica, and Thailand have also seen dramatic growth in pri-
example, found that of 23 telecenters set up in rural areas
vately owned and operated telecenters providing rural in-
around the country, only five remained functional after two
habitants with new information sources and opportunities.
years. Problems encountered included insufficient mainte-
nance funding, inadequate political interest and will, and
In a competitive environment, the costs of providing public
cultural constraints that hampered community interest in the
access in environments where private returns to provision are
projects.11 This suggests the importance of participatory de-
likely to be low can be financed through special funds. These
sign and continued government support. Local communities
funds are set up as a transitory mechanism to help partially
need to be involved in the design of universal access pro-
defray the initial investment costs of network expansion in
grams by participating in decisions about particular informa-
rural and poor areas.
tion access outlets. Indeed, most studies find that the most
effective way of ensuring the economic success of ICTs in
A prime regulatory objective in setting up universal access
rural areas is to encourage local participation and create so-
funds is to maximize the impact of the subsidies awarded,
cial institutions in support of the new technologies. This can
which is why the funds should be allocated to operators in a
be achieved through a participatory approach, to complement
competitive way. The introduction of competition through a
technical and economic calculations of telephone placement.
bidding process for the use of funds encourages operators to
look for the best technology and other cost-savings practices.
Further, given the cost and skills demands of Internet access,
This tends to minimize the need for subsidies, if they are
it is likely that direct access by the poorest in developing
required at all. The choice of a funding strategy can also sup-
countries will remain limited. Through the more affordable
port a level playing field among operators so that none of the
intermediary of the radio, however, some of the benefits of
operators is overly compensated or unfairly burdened by the
Internet access can be provided to those without direct ac-
funding mechanism.
cess. In Kothmale, Sri Lanka, a joint project between
UNESCO, the Ministry of Posts, Telecommunications and
In such a competitive bidding process, the fund administrator
the Media, the Sri Lanka Broadcasting Corporation, and the
determines the target areas to be served, normally based on
Sri Lanka Telecommunication Regulatory Commission uses
socioeconomic studies and on consultation with the local
radio as an interface between rural people and the Internet.
authorities and population. New entrants and sometimes ex-
A daily one hour live radio program in which an announcer
isting operators compete for subsidies for network build-out
and a panel of resource persons browse the Internet at the
in these areas. The subsidy is then awarded to the operator
requests of listeners, has proven to be capable of overcoming
with the lowest required subsidy or the highest service roll-
linguistic barriers in using the Internet by non-English
out commitment, or a combination of both.
speakers. The radio station adds value to the information by
interpreting it into a local context, by broadcasting it in ver-
In Chile, for example, just over US$ 2 million in public
nacular languages, and by providing a platform for feedback
funds leveraged US$ 40 million in private investment to in-
through local discussion and networks of local correspon-
stall telephones in 1,000 localities, at about ten percent of the
dents. In addition to the radio program, the Kothmale Com-
costs of direct public provision. Very few areas received no
munity radio station is developing a rural database
bids and thus remained unserved.10
(http://www.kothmale.net), primarily by packaging public
domain information often requested by listeners for off-line
Although the initial focus of these types of universal access
use.
funds was to support the provision of public telephones by
telecommunications operators, some countries are using this
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range of subjects and topics (math, language, health, and
It should be noted that provision of infrastructure is only the
agriculture) have been found to be highly cost-effective.
first step in exploiting ICTs for development. Without ap-
propriate content, for example, the Internet will not be rele-
Utilizing private investment and entrepreneurship to its full
vant to the poor in developing countries. There is also a
extent, then providing government support to ‘fill in the
large role for government to support the creation of appropri-
gaps,’ developing countries can go a long way in overcoming
ate content in broadcasting media. Same-language subtitling
the digital divide and use ICTs as a powerful tool of poverty
for television broadcasts supports language and literacy
relief.
goals, and radio-based educational programming across a

1 Based on Kenny, Charles, Juan Navas-Sabater, Christine Z. Qiang (2001) "Information and Communication Technologies
and Poverty in the World Bank" (Ed) Poverty Reduction Strategy Sourcebook, Washington DC: World Bank.
(http://www.worldbank.org/poverty/strategies/chapters/ict/ict.htm) The longer paper also discusses the importance of ICTs in
improved provision of government services and governance. The ideas and opinions in this paper are those of the author, and
do not necessarily represent the views of the World Bank or its Executive Directors.
2 Dodds, T. (1999) Non-Formal and Adult Basic Education through Open and Distance Learning in Africa. Mimeo, Centre for
External Studies, University of Namibia.
3 More information can be found on Grameen Phone at http://www.rdc.com.au/grameen/impact.html.
4 The examples on the use of radio come from Nwaerondu, Ndubuisi Goodluck, and Gordon Thompson. 1987. "The Use of
Educational Radio in Developing Countries: Lessons from the Past." Journal of Distance Education 2(2): 43-54.
5 The statistics in this paragraph are drawn from Africa Internet Forum. 1999. “Internet Economic Toolkit for African Policy
Makers,” available online at http://www.infodev.org/projects/finafcon.htm, ITU.(1999). World Telecommunication Develop-
ment Report. ITU, Geneva, and Wilson, E. and Rodriguez, F. 1999. Are Poor Countries Losing the Internet Revolution? in-
foDev Working Paper. Washington, D.C.
6 See Easterly, W. 1996. Life During Growth. Washington D.C.: World Bank..
7 Africa Internet Forum. 1999. “Internet Economic Toolkit for African Policy Makers,” available on line at
http://www.infodev.org/projects/finafcon.htm.
8 Wellenius, Bjorn. 1997a. Telecommunications Reform: How to Succeed, World Bank Viewpoint Note No. 130.
9 For more information on telecenters in Senegal, see http://www.idrc.ca/acacia/engine/eng_6.htm and
http://www.sonatel.sn/deplac.htm.
10 Wellenius, Bjorn. 1997b. Extending Telecommunications Service to Rural Areas—the Chilean Experience, World Bank
Viewpoint Note No. 105.
11 Robinson, Scott S. 2000. Telecenters in Mexico: Learning the Hard Way, presented at the “Partnerships and Participation in
Telecommunications for Rural Development: Exploring What Works and Why” conference at the University of Guelph,
Guelph, Ontario, Canada, October 26-27. http://www.devmedia.org/documents/robinson.htm.
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