Teledensity, a new criteria for measuring wealth

Luís Ángel Fernández Hermana - @luisangelfh
14 March, 2017
Editorial: 79
Fecha de publicación original: 8 julio, 1997

Date of publication 8/07/1997. Editorial 79.

Conscience is made up of non-computable ingredients

Despite the fact that telecommunications bring obvious benefits to all the countries in the world, the poorer countries are caught in the dilemma of deciding whether to invest in this sector or focus on other priorities such as health, food and education. Nevertheless, creating and improving telecommunications infrastructure is a sector to which more and more interest and investment is being devoted. China plans to invest 100.000 million dollars in telecommunications equipment over the next decade, which would represent a 40% increase in investment in this area. According to the Chinese authorities, their efforts will concentrate, above all, on rural areas, a privilege which the present regime’s combination of a free market economy and political dictatorship allows them to indulge in. The same cannot be said of other countries in the Asia-Pacific region whose economies are exposed to free competition from international operators. In these countries, the cream of the business is to be found in the big urban centres and, more specifically, in financial havens. The particular needs of each country, on the one hand, and the predictable concentration of foreign investment in the most profitable areas, on the other, are already causing a lot of tension which is being translated into a wide range of formulas to exploit their incorporation into what is known as the “infolytic age”.

China and India have a joint population of more than two thousand million people. But less than 1 in every 100 inhabitants has a telephone (a teledensity rate of 2). The rate in the US is 57 and in Sweden 68. If China’s investment forecasts are fulfilled, the ratio will go up to 25, a phenomenal leap which practically no other developing country will be able to make in the next decade. The government in Beijing has done a study, frequently quoted by the International Telecommunications Union (ITU), according to which, for every 12 million dollars invested in telecommunications, the national income will increase by 160 million dollars over a period of ten years. That is on condition that the investment covers a wide spectrum of the economy, a point on which all developing countries are in agreement. And the reasons are obvious:

1.- Agriculture depends on knowing when to bring produce to market to ensure optimum prices, and the ability to move goods and services at the most opportune moment. In Spain there exists a clear example of this. The success of intensive agricultural techniques in Andalucia, particularly in areas such as El Ejido (Almeria) or Lepe (Huelva), has depended as much on the use of certain agricultural techniques (greenhouses and hydroponics) as on good telecommunications. Farmers, in constant contact with agricultural produce markets, have known when the moment was ripe to send their products to European markets thus enabling them to sell at the best prices. A study published by the ITU on the impact of telephonic communications introduced for the first time in some rural areas in Sri Lanka, calculated that farmers increased their earnings by 50% when they were able to find out by phone when prices were at their most favourable for selling their products and choosing their distributors accordingly, whereas in the past they had lived under the domination of local tyrants.

2.- Education and research. Via e-mail and low cost telecommunications, universities and research centres can keep up to date with international scientific literature and lines of research from other parts of the world. Even Bill Gates‘ famous electronic libraries might have an impact on education in poorer countries, although in order to assess that one would need to know beforehand what type of communications would be necessary to access these future digital archives worthy of one of Borges‘ fantasies. The University of the West Indies (Jamaica) holds seminars in 14 Caribbean countries via teleconferencing reducing the teaching costs from 11.000 dollars daily in “real” mode to 1.000 dollars at the open university.

3.- Health. Telecommunications could bring about spectacular changes in public health policies in developing countries. The difference between the “barefoot doctors” of the 60’s and 70’s advocated by the WHO, and the tele-connected ones of the 90’s and the new millennium, lies in having access to data bases for making diagnoses, obtaining specialised help, and reducing administration costs, which in many African countries represent more than 50% of the cost of medical attention simply because of the lack of communication.

4.- Online media will be able to disseminate much more information than reaches the population as a whole at present due to logistical problems such as paper, printing and distribution costs, etc. This is already the experience of those that use the information services of numerous NGOs, capable of transmitting much more useful information to a much greater sector of the population than that covered by traditional media thanks to the use of electronic conferences distributed by e-mail. These systems, in addition, allow for the decentralisation of knowledge and dynamites the idea that only by living in mega-cities one can have access to the necessary information for participating in emerging markets.

5.- Finally, through the Internet and local telecommunications systems, SMEs (small and medium-sized enterprises) can participate in markets which they themselves create just by moving to cyberspace, thereby opening themselves up to transactions on a global scale in electronic markets where they come into contact with producers and consumers, supply and demand. The ITU itself mentions the example of Ghana, where small companies spend more than 50% of their time looking for goods and order slips in person because of the lack of telephones, fax and of course, e-mail.

The challenge of taking advantage of these resources, just as important today as our natural resources, is imperative, phenomenal. The ITU calculates that in order to create and maintain telecommunications infrastructures in accordance with the foreseeable growth rates over the next few years, it will be necessary to invest 40% of the income generated by these services. This is where there has been a chronic deficit in developing countries and it is the door through which the rich countries are now entering. In 1994 alone, the 50 biggest telecommunications corporations made profits of 35.000 million dollars. In other words, they have at their disposal a “little stash of money” put away in their safes to let them go into other countries and impose their laws on them. The question is how to find a balance between the social needs of developing countries and the need for the profitability of projected investments. If, indeed, that balance exists.

Translation: Bridget King.