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Open Economies - Challenging common assumptions [Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index] Challenging common assumptions
A key idea in developing Open Economies is to challenge accepted positions and orthodoxies, so that mistakes are not made by assumption. Following on from the initial posting as to the purpose of the list and the format, here are some dimensions and starting points for discussing digital development, its potential, impact, and pitfalls. Each of the dimensions is structured in the following way - TITLE o ELEMENTS Common Asuumptions Challenges In responding to this message, it would be great to start a seperate thread per area, so for example, if you are the first to comment on the human capital issues, title your email with that and we can all respond to that message with specific comments in that area. Of course I do not think that these are the only areas, or that these are the only assumptions we can challenge, so please feel free to add to the list in both categories. And on to the discussion ...... Regards Finbarr Livesey =============================================== Economic fundamentals o National accounts, balance of payments, debt position, government spending o Fiscal policy Common assumption: Countries need to clear their debt positions before they can invest in new sector development Challenge: Can a digital sector be developed at low cost, so that countries can begin to repay debt from a position of strength in that sector? Common assumption: Debt relief is the best way to ensure that countries can develop their economies without the millstone of national debt Challenge: How do we improve the debt position of countries, and at the same time help them to develop new economic sectors, i.e. should we be bundling our relief efforts in that if debt relief is giving a percentage of national budget must then be spent on telecom infrastructure, or ICT skills development? Telecommunications infrastructure o Connectivity within the country o Routing to the rest of the world (peering) o Changes that are coming in the overall infrastructure o Access policies for providers (local, long distance, international) o Regulation of ISPs o Privacy, security Common assumption: The cost of connectivity and the bandwidth to developing countries means that they cannot be part of the global digital economy Challenge: In a year the amount of connectivity to India, Africa and other countries will increase significantly (SAFE project), and at the same time competition policies are being introduced into many developing nations telecoms sectors. Are these enough to make a digital economy work? Challenge: Can we seed countries with special economic zones that have fast cheap access, while the rest of the country has none, and will these act as a frame around which individual access will later grow? Financing o Restrictions on capital flows into and out of the country o Existence of private equity markets o Formal and informal institutions for funding of new ventures Common assumption: The only way this sector will begin to grow is if foreign companies place subsidiaries into the countries, the local private sector cannot grow this kind of business to scale. Challenge: The cost of building and running a digital services company is lower than creating a manufacturing plant, and so there are countries that will be able to grow locally owned companies that develop and export digitally-based goods and services. Can we provide the advice that they need, and can they access the global market? Challenge: How do we build trust in these companies, operating at a great distance from their customers? Common assumption: There is no culture of entrepreneurship in developing countries to build on when starting a new economic sector Challenge: There are significant levels of entrepreneurship in developing countries, for example the number of Internet cafes that are in existence in Ghana, and our challenge is how to access it, foster it, and help it to grow? Common assumption: Development aid should only be used to pay off debt and provide basic structural services, such as healthcare and food provision Challenge: How do we get IMF and World Bank funding to be focused in the area of digital development, not to be overly restrictive, and to respond in a short time to meet the speed of Internet development? Human capital development o Current skills base of the country – level of ICT usage, languages, manufacturing versus agricultural base o Educational system, and the cultural aspects of education (e.g. access for women) Common assumption: These skills do not exist in the countries that we are talking about, and they will take at least a generation to bring to the country Challenge: How do we bring required ICT skills (and business skills that may be lacking) to people in short periods of time? Can we use distance learning programs to provide content? Challenge: How do we ensure equal access to skills development? Common assumption: All of these countries will need to operate in English Challenge: The demographics of the Internet will change radically in the next 5 – 10 years, and English may not be the dominant language. In the meantime how do we develop non-English content, and how do non-English speakers operate on the web? Trade policy o Restrictions on importation of goods, tariffs o Foreign restrictions on exports of goods to the country o Position on GATT, TRIPS o Internet taxation, VAT on digital goods Common assumption: Developing countries will have to accept the mainstream positions on trade policy and Internet related issues in order to be accepted as a trusted trade partner Challenge: Do we understand where it is a comparative advantage for developing countries to differ, and when legal reform is required how that can be achieved in such different legal regimes? Is the distance between some DCs legal regimes and those of their digital trading partners too great? Competition policy/entrepreneurship o Enforcement of laws on monopolies, existence of government-controlled monopolies o Support for new businesses o Barriers to new company formation, tax code o Restrictions on foreign ownership (e.g. Saudi Arabia where 51% has to be held by a national) See trade policy Intellectual Property Rights (IPR) o Strong property law, ownership, understanding of the differences between physical goods and digital goods See trade policy ====================================================== _________________________________________________________________ Get your FREE download of MSN Explorer at http://explorer.msn.com/intl.asp
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