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Open Economies - Bridging the gap [Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index] Bridging the gap
Let's zero in on a small slice of the problem ... Do negative consequences exist for R (the rich country) to help P (the poor country) in reducing the "digital divide"? There are many factors to consider but I think most weigh on the side of "No!". 1) Consider the Telecom sector in the US. They are desperately looking for new markets overseas to peddle their wares! Telecom has been hit with a severe demand recession at home, which has been traditionally the primary market. If you follow this sector, you may agree with me that currently every large wireless infrastructure and handset company is trying to break into the relatively untapped Chinese market. Coupled with the fact that a large portion of Telecom employees reside in R, it is clearly in it's interest to reduce the digital divide. This is true without any "humanitarian" considerations. (Isn't economics great!) 2) Information Technology is a weird good in that it's value increases with the number of users. The telephone is a great example of this and so is the fax machine. From this, we can also infer R's motivation to help P. 3) Long-run structural changes in R's economy may result if P is more efficient at producing information technology than R (As we speak, this is happening in the "production" of software). Is this a reason for R to impede P's access to new technology? It has happened in the past for many commodities. The TV was initially produced in the US. Then, Japan due to cost advantages. Currently, I believe Taiwan and other countries in the region are the primary manufacturers of small electronics. As an economist, I argue fighting against structural changes in the long-run simply because it is a futile struggle. Also, innovation seems to be a hallmark of R. R's economy can get geared up for the next big thing! 4) How much is R willing to pay for political stability/ democracy in P? I strongly believe that communication technology begets democracy. Someone can probably write a book trying to prove this! Given that this is true, I would say that R is willing to pay quite a bit. Notice how a missile shield to protect against rogue nations would not be needed if there were no rogue nations! How much are we paying for that? Are there cheaper but more indirect routes? Regards, Iqbal Mohomed www.mohomed.com __________________________________________________ Do You Yahoo!? Make international calls for as low as $.04/minute with Yahoo! Messenger http://phonecard.yahoo.com/
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