ICTsICTs for for Enhancing Rural Enhancing Rural

ProductivityProductivity

ShobhaShobha ShettyShettySr. EconomistSr. Economist

EASREEASREMarch 29, 2007March 29, 2007

ICTsICTs and Traditional Mediaand Traditional MediaTraditional media (fliers, newspapers, radio and television) are suitablefor disseminating information, but less useful for personal interaction orthe completion of transactions.

The Internet and the telephone may also be used to broadcastinformation, but when used this way – i.e. to disseminate staticcontent - the richness of information and understanding that can beachieved through interactive exchange is lost.

The Internet and the mobile phone are no substitute for face toface communications, but they can empower farmers, ruralcommunities and the poor, by enabling expanding andstrengthening networks and allowing greater continuity of humaninteraction.

However, it is important to see the need to apply a mix of old and new ICT tools to havethe maximum coverage and impact in rural areas.

How Do How Do ICTsICTs Contribute to the Contribute to the Rural Agenda ?Rural Agenda ?

The economic and productivity benefits of rural ICT access can be generalizedin the following categories:

Access to Information and Markets

Access to Information on Techniques and Environmental Conditions

Increased Business Opportunities, Efficiency, and EmploymentCreation

Improving Governance

Benefits are wideBenefits are wide--rangingrangingPotential beneficiaries of improved rural connectivity include:

Primary producers: communications infrastructure facilitates access toinformation on market prices, weather, agricultural extension services;improved

research-extension linkages;

Small and medium-sized enterprises: lower communications costs reduceOverall business transaction costs; communications infrastructure facilitatestransactions, opens up new marketing and distribution channels, improvesaccess to information about markets, prices, consumers;

Service industries (rural non-farm economy): connectivity offersopportunities for entrepreneurship, establishment of new services such asinternet cafes, call centres, financial services;

Govt.agencies, particularly in decentralizing administrations: connectivityenhances their ability to exchange data between national and sub-nationaloffices, e.g.,disease surveillance, planning and budgeting, land andproperty registration, BDS, voting, disaster recovery, and improving overallgovernance and delivery of community services

Selected Examples Selected Examples

GyandootGyandoot (Dist. Govt. initiative (Dist. Govt. initiative –– C. India)C. India)

•• IntranetIntranet--based Governmentbased Government--toto--Citizen Citizen (G2C)(G2C)

•• Service delivery portal Service delivery portal –– started in 2000 in started in 2000 in DharDhar district, Madhya Pradesh (C. India) of district, Madhya Pradesh (C. India) of a population of 1.7 million a population of 1.7 million --54% tribal; 40% 54% tribal; 40% below poverty linebelow poverty line

•• 21 e21 e--kiosks kiosks –– now 39 (now 39 (addnladdnl 18 private)18 private)•• EE--clubs (in local schools) clubs (in local schools) –– 3232•• Covers a population of 1 millionCovers a population of 1 million

ServicesServices

EE--GovernanceGovernance

Caste/Income/Domicile CertificatesCaste/Income/Domicile CertificatesLand records Land records Registration of birth and deathRegistration of birth and deathGrievance Grievance RedressalRedressalOld age/Social Security PensionOld age/Social Security PensionInformation on government Information on government schemes/allocationsschemes/allocationsGuidelines for property registrationGuidelines for property registrationExpert AdviceExpert Advice

EE--commercecommerce

MandiMandi (market) rates(market) ratesVaivahikiVaivahiki ((matrimonialsmatrimonials))Village Auctions Village Auctions

E-Education

Exam Results(10th, 12th grade)

Question BanksSchool curriculaE-library

II. Advisory Services II. Advisory Services –– ChiragChirag kioskskiosks

Source: IIT Madras &n-logue communications

India: Medical/Agric. Consultation through VC with experts

EE--kiosk in a villagekiosk in a villagenn--Logue CommunicationsLogue Communications: : a Rural Service a Rural Service ProviderProvider

–– Gets an entrepreneur in every village to set up Gets an entrepreneur in every village to set up a kioska kiosk

–– Enables setting up of the kiosk infrastructure Enables setting up of the kiosk infrastructure including multimedia PC with web camera, printer, power including multimedia PC with web camera, printer, power backback--up, software, training, 6 months unlimited Internet at a up, software, training, 6 months unlimited Internet at a

cost of just US$ 1200 cost of just US$ 1200

–– Partners with the Government, NGOs, private Partners with the Government, NGOs, private enterprises, schools, hospitals to offer various enterprises, schools, hospitals to offer various services through the kioskservices through the kiosk

Kiosk: Bouquet of ServicesKiosk: Bouquet of Services–– Education and Vocational TrainingEducation and Vocational Training

Learning typing, Learning typing, Computer education & Computer education & EE--learninglearning

–– Photography, entertainment and Photography, entertainment and moviesmovies

–– DTP work, DTP work, Email/voice & video mailEmail/voice & video mail–– ee--GovernmentGovernment–– TeleTele--medicine & Vet Caremedicine & Vet Care–– EE--AgricultureAgriculture–– CraftsCrafts–– IT based ServicesIT based Services–– VoIPVoIP

Difficult to make kiosk economically viable with single service;Difficult to make kiosk economically viable with single service;needs to now make $90/month to be viableneeds to now make $90/month to be viable

Chile Chile –– Advice Online Advice Online www.redsercotec.clwww.redsercotec.cl

Microentrepreneurs send e-mails with specific queries. They choose from over 40 different topics, and, for each topic, have several consultants from which to choose. (CV & prior responses available online). Response issued within 48 hours & users rate every response. Free service.

II. Advisory ServicesII. Advisory Services (2 of 3)(2 of 3)

Indonesia Indonesia –– ee--petanipetani -- Advice OnlineAdvice Online

Indonesia’s Ministry of Agriculture started an advice service online in 2005 based on the Chilean model and, since March 2007, receives and answers queries using mobile phones. The questions cover a broad range of subjects, including marketing advice, product quality requirements of markets and opportunities for marketing through different outlets. Promising but needs close M&E to correct design flaws and improve service delivery. Will be strengthened through new Bank ag services project.

II. Advisory ServicesII. Advisory Services (3 of 3)(3 of 3)

In Senegal, Manobi, has since 2003 been providing price and weather information to fisherfolk. Market data is gathered in three locations in Dakar by four collectors using PDAs, and retransmitted to farmers and fisherfolk via mobile phones. The sms version of the Xam Marsé system launched on May 2005 and reportedly serves 3,400 farmers who receive a free daily update through their mobile phones. In August 2006 Manobientered into partnership with IICD to realize pilot projects in Burkina Faso, Ghana, Mali, Uganda and Zambia.

Globe and Smart in the Philippines have pioneered the use of low-costmobile-enabled financial services (3.5 m users combined) for remittancetransfers, micro-payments, designed primarily to meet the needs of the rural communities through extending banking and money managementservices to the largely “unbanked” sector. (InfoDev, 2006)

III. MobileIII. Mobile--based Servicesbased Services

Key Issues (1 of 3)Key Issues (1 of 3)

I. Importance of Connectivity/InfrastructureI. Importance of Connectivity/Infrastructure

Poor access to, and high cost of telecom.Poor access to, and high cost of telecom.infrastructure and services in rural areas is ainfrastructure and services in rural areas is acritical constraint despite recent growth of mobilecritical constraint despite recent growth of mobilephone networks that has extended the potentialphone networks that has extended the potentialreach of reach of ICTsICTs. Other infrastructure constraints esp.. Other infrastructure constraints esp.lack of power supply) also reduces economiclack of power supply) also reduces economicviability of innovative ICT applications. viability of innovative ICT applications.

Key Issues (2 of 3)Key Issues (2 of 3)

II. Content/Applications Development:II. Content/Applications Development:

Importance of local content creation. Further, for theImportance of local content creation. Further, for theinformation to be useful, any content provider needs to (a)information to be useful, any content provider needs to (a)identify the critical information needs (linking to demandidentify the critical information needs (linking to demanddriven extension services); (b) integrate informationdriven extension services); (b) integrate informationresources; and (c) package information that can beresources; and (c) package information that can beunderstood and applied by the farmers. understood and applied by the farmers.

III. Training/Education: III. Training/Education:

In rural areas where literacy (including IT literacy) is low, thIn rural areas where literacy (including IT literacy) is low, the increase ine increase inICT sophistication may lead to intimidation on the user side.ICT sophistication may lead to intimidation on the user side.Increasingly, ICT intermediaries e.g. head farmers, agriculture Increasingly, ICT intermediaries e.g. head farmers, agriculture productproductassociations, NGOs, are actively involved in providing informatiassociations, NGOs, are actively involved in providing information withon withexplanation and demonstration to the rural population. explanation and demonstration to the rural population.

Key Issues (3 of 3)Key Issues (3 of 3)

IV. ScalingIV. Scaling--up/Sustainabilityup/Sustainability

Needs appropriate technology, business modelNeeds appropriate technology, business model

NN--loguelogue (India) uses low(India) uses low--cost cost technology,andtechnology,and local entrepreneurs to aggregate demandlocal entrepreneurs to aggregate demandand provide a bouquet of services; and provide a bouquet of services; $1000 (including taxes) per Kiosk providing telephone, Internet,$1000 (including taxes) per Kiosk providing telephone, Internet,multimedia PC with webmultimedia PC with web--camera, printer and camera, printer and power power backback--up for PC; needs $2.5 per day to break even (7cents per personup for PC; needs $2.5 per day to break even (7cents per personper month);per month);

…… and an enabling regulatory environment and supportive and an enabling regulatory environment and supportive fiscfisc policiespolicies

Incentives (subsidy from USO funds) to Incentives (subsidy from USO funds) to pvtpvt. operators to provide service in commercially. operators to provide service in commerciallymarginal or nonmarginal or non--viable areas; stimulate rural access through creating rural servviable areas; stimulate rural access through creating rural serviceiceprovider categoryprovider category

Facilitating electronic transactions, provision of financial serFacilitating electronic transactions, provision of financial servicesvices by nonby non--banksbanks(e.g. mobile phone companies);(e.g. mobile phone companies);

supporting distribution of lowsupporting distribution of low--cost mobile phones (in many countries, these arecost mobile phones (in many countries, these arestill heavily taxed) and PCsstill heavily taxed) and PCs

Questions for DiscussionQuestions for Discussion

1. 1. What types of ICT applications are relevant to the rural economyWhat types of ICT applications are relevant to the rural economy and atand atwhat level (incl. but not restricted to farm level)? what level (incl. but not restricted to farm level)?

2. The private sector has become extremely innovative in the dev2. The private sector has become extremely innovative in the development ofelopment ofICT applications. What, then, is the role for the public sector ICT applications. What, then, is the role for the public sector ? Do information? Do informationand knowledge services have attributes of public goods requiringand knowledge services have attributes of public goods requiring governmentgovernmentinvolvement to correct market failures and information asymmetriinvolvement to correct market failures and information asymmetries ? es ?

3. What policies can governments put in place to support enabli3. What policies can governments put in place to support enabling factors,ng factors,particularly rural ICT infrastructure and regulatory reforms e.gparticularly rural ICT infrastructure and regulatory reforms e.g. regulations. regulationspermitting nonpermitting non--banks (e.g. banks (e.g. telcostelcos) to offer financial services ?) to offer financial services ?

4. The Bank4. The Bank’’s ICT Sector Strategy has divided roles between center (rural acs ICT Sector Strategy has divided roles between center (rural access, infracess, infrareforms) and regions (capacity building, applications). But how reforms) and regions (capacity building, applications). But how well is this working ? Dowell is this working ? Dosectoralsectoral TTLsTTLs have the knowledge and access to resources (within and outside have the knowledge and access to resources (within and outside the Bank)the Bank)to help clients: (i) understand strategic goals within sector; (to help clients: (i) understand strategic goals within sector; (ii) capture andii) capture andunderstand information relevant to goals; (understand information relevant to goals; (iii)understandiii)understand process andprocess andorganizational changes needed; and (iv) design organizational changes needed; and (iv) design sectoralsectoral ICT projects whereICT projects whereappropriate. What types of support are needed by ARD staff ?appropriate. What types of support are needed by ARD staff ?