Political India: Engaging America

From The Hindu


More intriguing, however, is the assessment that while the Bank’s interventions succeeded in promoting sector reforms and private investments for mobile telephony, their effectiveness was “limited in targeted efforts to increase access to the underserved beyond what was commercially attractive.”

This was a key finding of an insightful assessment report titled Capturing Technology for Development, a review of the Bank’s efforts in the ICT sector of numerous developing countries that was released on Thursday by the Independent Evaluation Group.

The IEG, an independent body reporting to the Board of Executive Directors of the World Bank rather than Bank management, argued that the Bank supported ICT through lending, policy advice, investments, advisory services, and political risk guarantees in the past decade, committing a total of $4.2 billion in assistance to the sector between fiscal years 2003 and 2010, of which about $2.9 billion was to the poorest countries.

However, the Group said in its report this week, it was the general, non-targeted interventions focused on the enabling environment that were more effective in increasing access for the poor and underserved, rather than targeted strategies.

Speaking to The Hindu Marvin Taylor-Dormond, Director of Private Sector Evaluation at the IEG, described a rural development project in Guatemala as a case in point, saying, “The processing of the application [by the Bank, for the project] took so long that the conditions of the market changed and the private sector was willing to intervene there and provide the services to the population that were originally not [accessible].”

Arguing that for such reasons only 30 per cent of the projects targeting underserved groups succeeded and approximately 70 per cent of them failed, Mr. Taylor-Dormond and IEG Manager Stephan Wegner said to The Hindu that in the case of Guatemala the initial approval process began in 2006 yet only concluded in 2009, by which time conditions on the ground had changed significantly.

Yet given the vital role of the ICT sector in developing countries such as India it was clear that the Bank Group “can continue to play a catalytic role, especially in ensuring access for the poorest... where gaps still exist and the largest development impacts can be made,” said Vinod Thomas, Director-General of IEG.

Component replication

Indeed India itself has been an important example of ICT sector growth, according to Mr. Wegner, who said that in such countries the role of the Bank had shifted, and needed to shift further in the future, away from the pure access and connectivity–oriented focus towards component replication.

In India, for example, developing satellite-based applications may be crucial to fishermen who are seeking information on the best times to go out to sea and maximise their catch. Yet this developing sector continued to be “very risky”, Mr. Wegner explained, and there were “quite a few failures in projects related to the fact that they are venture capital type investments, early companies that face a lot of risks.”

Other areas of involvement by the Bank included mobile banking services that helped deepen financial access in rural areas, and the “huge success story of the Business Process Outsourcing industry,” which, while being a “huge asset going forward that India will have to play with,” could see a very select role of the Bank and IFC in terms of supporting sector development towards more value added services, Mr. Wegner noted.

In terms of response to the IEG’s critical findings, which pertain both to reaching the underserved more effectively, Laurent Besancon, Coordinator for the New ICT Strategy of the World Bank said to The Hindu that the focus going forward would be on policy reform to unlock broadband potential in developing countries; and also a push towards helping operators finance the “public good” aspect of infrastructure, for example setting up telecom towers in remote rural areas. The Bank considered India’s “e-choupal” experience an important source of learning for future investments in other developing nations, Mr. Besancon added.

With a new ICT strategy being rolled out soon, possibly in early 2012, it is quite likely that the Bank will continue to be one of numerous stakeholders who hope to be part of the “unprecedented ICT revolution that has spread to the developing world over the past decade.”