Transcript GICT - Minister Lindén Visit

Global Information and Communication Technologies Department
June 10, 2009
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Signs of crisis
Percentage change in real GDP in high-income
and developing countries, 1980-2010
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OECD area in full
recession
Global trade projected to
fall in 2009
Crisis spreading from
developed to developing
world
Trillion dollar economic
bailouts are the order of
the day
Coordinated interest rate
cuts and stimulus
packages, but where is the
bounce?
Well-known companies are
being sold at bargain
prices or slipping into
bankruptcy
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Some reasons to be cheerful!!
 Previous downturns created opportunities for “creative
destruction” and entrepreneurship
– Korean broadband grew out of Asian Financial Crisis
– Google, Amazon and Skype survived the dot.com crisis and
subsequently boomed
 Telecom is often a lead indicator of recovery
– Research shows that growth in international traffic volume is a lead
indicator of general economic recovery
 Competitive pressure on operators is good for customers
– Prices for mobile handsets, computer memories, netbooks or call
minutes are cheaper than ever before
 Governments see ICT as integral part of recovery
–
US stimulus package includes US$7 billion for broadband
deployment in rural areas
 Cost-cutting encourages network sharing
– Shared infrastructure will assist network roll-out in geographic
areas that might otherwise be neglected in competitive markets
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ICTs can contribute to the recovery
Contribution of mobile comms to total GDP, 2007
7%
6%
 High and rising contribution
of mobile to total GDP
(Deloitte: see chart)
 Job creation: 3.6 million
jobs created in India by
mobile industry (Ovum)
 Productivity increases
through business expansion,
employment search,
entrpreneurship, mobile
banking, lower transaction
costs etc (Deloitte)
5%
4%
3%
2%
1%
0%
Bangladesh
Pakistan
Serbia
Ukraine
Thailand
Malaysia
Source: Deloitte, cited in World Bank (2008), “The role of
mobile phones in sustainable rural poverty reduction”
 Critical mass in economic impact
appears to be reached at 25%
penetration (Vodafone, India study)
 Increased tax revenue (GSMA)
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Crisis Response in a number of countries
Infrastructure Spending as a Fiscal Stimulus Measure…
 Counter-cyclical public spending in infrastructure is an effective
tool to create jobs and provide the foundation for economic
recovery and sustained growth
 The share of infrastructure spending in announced fiscal stimulus
packages varies substantially across countries:
―
So far announced infrastructure spending for 2009 represents on average 64
percent of the total stimulus in emerging market economies and 22 percent of
the total stimulus in high income economies
 Transformational opportunity to invest in “green” infrastructure
and advanced information communications technologies (ICT’s)
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… and Broadband Infrastructure prominent
in Stimulus Packages
Broadband Component as
Percentage of Total
Stimulus Plans
US$bn
Canada
27.1
United
States
789.0
Japan
375.0
Spain
14.6
Finland
2.65
Australia
30.0
0.0%
5.0%
10.0%
15.0%
Source: “Broadband Infrastructure Investment in Stimulus
Packages: Relevance for Developing Countries” , Christine
Zhen-Wei Qiang, The World Bank, May 2009
Comments
 United States, Britain, Canada, Germany,
Portugal and Finland have all included
measures to expand broadband access
and to bolster connection speeds in their
planned economic stimulus packages.
Australia, France, Ireland, Japan,
Singapore and the Republic of Korea have
announced separate broadband plans
 Plans seek to speed up existing links to
build faster fixed-line and wireless nextgeneration networks.
 Another goal is to expand broadband
connections to rural areas where they
are currently unavailable, in some cases
considering turning broadband into a
universal service
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Response to the crisis from the World Bank Group
Infrastructure Recovery and Assets (INFRA) Response
• Timeliness
Swift response in
the short term e.g. projects
ready for implementation
• Targeting
Projects that have employment
generation potential and are a
government priority
• Productivity
and growth
Projects that remove infra.
bottlenecks and enhance
long term productive capacity
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INFRA Platform – Key Steps Toward Roll-out
1.WBG on-going fundraising of US $45 billion
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Financing specific to World Bank / IFC / MIGA initiatives
2.WBG promotion of the INFRA instrument by region
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Initial presentations and discussions in Asia
3.Process initiated based on country request for support
4.Diagnostic tool implementation (by country/sector)
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ICT infrastructure viewed as “quick win”
― Can be initiated relatively quickly
― Labor intensive
― Considerable short-term employment generation potential
Some estimations predict that $5 billion stimulus would create almost
100,000 new jobs directly in short term and almost 2.5 million jobs as
network effects (Communications Workers of America, 2008).
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