UN-OHRLLS Enhancing ICT development and connectivity for the Landlocked Developing Countries Issues Note and Chair’s Summary Adopted at the Thematic Meeting held as part of the preparatory process for the Comprehensive 10 Year Review of the Implementation of the Almaty Programme of Action on 31st October 2013, in Nairobi, Kenya.
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UN-OHRLLS
Enhancing ICT development and connectivity
for the Landlocked Developing Countries
Issues Note and Chair’s Summary Adopted at the Thematic
Meeting held as part of the preparatory process for the
Comprehensive 10 Year Review of the Implementation of the
Almaty Programme of Action on 31st October 2013, in Nairobi,
Issues Note on Enhancing ICT Development and connectivity
for Landlocked Developing Countries
I. Introduction
Geographical factors put Landlocked Developing Countries (LLDCs) at a distinct
disadvantage in the development process as they incur substantially higher transport and
other trade transaction costs when compared to coastal countries. The higher trading costs
for LLDCs emanate from factors associated with the status of the physical infrastructure
of the major transit routes for transporting their traded goods such as poor and inadequate
transport infrastructure and long distance from the sea port; and costs associated with the
soft infrastructure which comprises of the administrative border crossing procedures,
transit procedures, logistics and regulatory and legal systems for permitting passage of
traded goods across borders.
There are studies which have shown that landlockedness reduces GDP growth in these
countries by about 1.5 to 2 percent annually (for example see MacKellar et. Al 2000).
According to the World Bank 2014 estimates, LLDCs spent, on average, $3,203 to export
a standardized container of cargo, against $1,287 for the transit countries; and $3,884 to
import a similar container of merchandise compared to $1,602 incurred by their coastal
neighbours. That means it is 2.5 times costly to import and export for LLDCs. These high
transport and trade transaction costs, diminish export profits, inflate the prices of
imported inputs for manufacturing and discourage investment thereby negatively
affecting overall sustainable development in LLDCs. A recent study conducted by UN-
OHRLLS shows that the LLDCs as a group only exported 61% of the trade volume of the
representative coastal economy in 2010. The study also shows that the cost of trade and
transport services in LLDCs have increased over time. The study indicates that because
of landlockedness, the level of development in the LLDCs is, on average, 20% lower than
what it would be if the countries were not landlocked.
The First International Ministerial Conference of LLDCs, Transit Developing Countries
and Development Partners held in Almaty, Kazakhstan in 2003 adopted the Almaty
Programme of Action (APoA) which is a partnership framework to address the special
needs and challenges faced by the LLDCs. The priorities of the APoA include:
Fundamental transit policy issues, Infrastructure development and maintenance;
International trade and trade facilitation; International support measures, and
Implementation and review.
Some considerable progress has been made in the implementation of the priority areas of
the APoA, however, much more needs to be done to achieve the aim of the APoA and
better integrate LLDCs into the global trading system. Some of the achievements
accomplished since 2003 include development and modernization of infrastructure,
construction of dry ports, telecommunications and energy infrastructure along transit
routes; elimination of physical barriers to trade; introduction of one-stop border points
2
and single window systems; trade facilitation; joining regional and sub-regional
infrastructure programmes; signing of bilateral port and road agreements; and
streamlining of customs and border services. Economic and social development
indicators have improved during the implementation of the APoA despite large
differences among individual LLDCs. According to the 2013 report of the Secretary
General on the implementation of the APoA, LLDCs as a group experienced an
improvement in annual growth of GDP from about 5 per cent to about 6.5 percent
between 2003 and 2011. However, this growth decreased to 4.9% in 2012. Although the
group of LLDCs have improved their trade, they only account for 1.2% of total world
trade showing that they are still marginalized from the global markets.
On the social front, although significant gains have been recorded in several MDGs,
including primary education, gender equality, combating the spread of HIV/AIDS and
increasing the proportion of people with access to improved water source, many LLDCs
are lagging behind other groups in achieving food security, eradicating poverty and
reducing child and maternal mortality. Nearly two-thirds of the LLDCs have a GDP per
capita that is below $1,000.
The LLDCs continue to face combined adverse effects of landlockedness, structural
constraints and newly emerging challenges such as the global economic and financial
crisis, compounded by the negative impacts of climate change, desertification, land
degradation, drought and food crises. Persistent challenges faced by LLDCs include
limited productive capacities, declining value addition in manufacturing and agriculture,
and heavy reliance on undiversified primary commodities. These challenges render the
development process more difficult, impede integration of LLDCs into the global trading
system and into value chains and negatively affect their economic development. Thus
much more needs to be done to significantly reduce the trade transaction costs incurred
by LLDCs, enhance their productive capacities, improve their competitiveness, and
generate higher levels of economic growth needed to promote inclusive and sustainable
development.
Information and communications technologies (ICTs)1 can contribute towards addressing
these challenges and increased economic growth in LLDCs by improving trade
facilitation, increasing productivity across all the other sectors and lowering costs and
facilitating access to services, notably in administration, education, health and banking.
However, in order to enhance the role of ICTs in accelerating the development of LLDCs
it is important to critically analyze the status and performance of ICT development in
LLDCs, identify the challenges and suggest some recommendations. This issues paper
reviews the status of ICTs and identifies important issues and recommendations for
consideration in the development of the new development agenda for LLDCs. Following
1 ICT comprises a complex and diverse set of equipment, infrastructure, applications and
services, used to produce, process, distribute and transform information. It includes
mobile telephony, fixed telephony, personal computers, internet, broadband, tv, radio,
etc.
3
this introduction, the next section highlights the areas where ICTs can help address the
special needs of LLDCs. Section 3 presents the status of ICT development in LLDCs and
major challenges. Section 4 suggests recommendations to enhance the role of ICT in
fostering development in LLDCs.
II. Key areas in which ICT can address the special development
needs of LLDCs
ICT can play a major role to address the challenges facing LLDCs. An attempt has been
made to visually show the challenges faced by LLDCs and how ICT can address these
constraints in figure 1.
ICT can help to achieve fast, reliable and efficient transit transport systems in LLDCs
which are necessary to reduce the high trade transaction costs that they face and improve
their competitiveness. While the average number of documents and time for LLDCs to
export and import has decreased between 2006 and 2014 – it is still much higher for
LLDCs when compared to transit countries. According to the World Bank’s Doing
Business 2013 Report, the average number of documents that LLDCs take to export have
decreased from 9 in 2006 to 8 in 2014 whilst for importing from 11 to 10. The average
time taken by LLDCs to complete export formalities has decreased from 48 days to 42
and to import from 57 to 47 days. However when compared to transit developing
countries where the average days to export is 22 days and 27 days to import, the LLDCs
need to do more to reduce delays in exporting and importing.
The broad application of ICT in reducing paperwork, customs clearance, border crossing,
tracking of shipment that is in transit would have a major role to play to reduce delays in
border and transit procedures and formalities, reduce trade transaction costs, and promote
further international trade. The use of ICT in terms of e-payments would assist in trade
facilitation by eliminating the need to use cash in payments of customs duties, taxes and
fees and reduce time at borders and unnecessary costs. Use of the Single Window
Concept and the Automated System for Customs Data (ASYCUDA) which use ICTs
have greatly improved customs clearance and procedures. This result in improvement in
efficiency and competitiveness of LLDCs’ exports which is crucial for enhancing their
export performance and thereby improved economic growth.
In industry and other business activities, ICT can increase competitiveness and
productivity through more efficient production of goods and services, logistics and new
business processes resulting in higher outputs. ICT can stimulate upstream capacities
(research and development, product design, application development) as well as
downstream services (logistics, transportation, etc). Thus increased ICT use in industry in
LLDCs can improve efficiency and boost GDP growth. According to analysis by the
ITU, improved affordable broadband access to the internet to both households and the
private sector could increase GDP by 1.5% per year. Fuss et. al estimated that when
internet penetration rises by 10 per cent in developing economies, it correlates with an
incremental GDP increase of between one and two per cent.
4
Figure 1: Conceptual links between landlockedness, sustainable development and
the role of ICT
ICT can also improve the LLDCs’ capacity to participate in international trade through
increased trade in services, particularly information-intensive services. Examples of such
CHALLENGES Long distances to sea ports Dependency on transit countries Remoteness from markets Inadequate physical/hard infrastructure Additional border crossings Logistical and institutional bottlenecks High trade costs
DIRECT AND INDIRECT IMPACT Low trade potential Poor economic growth Poor productive capacities Lack of diversification and high
commodity dependence Lack of resources to invest in social and
environmental pillars of development
High vulnerability to shocks
NATIONAL LEVEL OUTCOMES Increased trade and income Increased productivity Increased human development (education, health) Increased productive capacities Poverty reduction and increased sustainable development Increased resilience to shocks including climate change
IMPROVED TRADE FACILITATION Reduce documentation at border crossings
Paperless and quicker transactions and payments
Improved customs procedures
Reduces risks and uncertainties
Cargo tracking
Reduced trade costs
Increased competitiveness
INCREASED TRADE IN SERVICES Facilitates trade in services, esp.
information-intensive services
INCREASED TRADE IN IT COMPONENTS Join relevant global value chains
ICT SUPPORTING BROADER SUSTAINABLE DEVELOPMENT Use of ICT in all sectors: commerce,
Source: ITU Measuring the Information Society Report 2013
Within the LLDCs, great diversity in IDI performance among the countries exists. As
shown in figure 6, some countries such as Kazakhstan, Macedonia and Azerbaijan, have
higher levels of IDI.
4 ITU, 2013, “Measuring the Information Society”.
5 ITU, 2013, “Measuring the Information Society”.
13
Figure 6. ICT Development Index (IDI) for some LLDCs in 2012
Source: ITU Measuring the Information Society Report 2013
Dynamic countries case examples
Each year the ITU’s Measuring the Information Society report identifies the most
dynamic countries, which have recorded above-average improvements in their IDI rank
or value over the past 12 months. In 2012, some of the LLDCs that were featured include
Mongolia and Zimbabwe and in 2011 Armenia was featured. Kazakhstan was the LLDC
with the highest IDI in 2012. Excerpts of the features are included as case studies in this
issues note. Boxes 1, 2, 3, and 4 feature the dynamic case examples.
Box 1. Armenia’s surge in Internet use
The country that improved most in 2011 was Armenia, which moved up 14 places to 72nd, while
increasing its IDI score by 31 per cent. Mobile penetration increased from 75 to 125 per cent, and
household access to computers and the Internet also rose significantly. These factors plus the
available fixed- and mobile-broadband services led to growth in use. An increase in international
bandwidth from 1 083 Mbit/s to 10 547 Mbit/s and growth in mobile-phone subscriptions have
contributed to greater access. Fixed-broadband penetration was around 3 per cent with signs of growth. The Ministry of Economy
of Armenia plans to expand the country’s high-speed broadband network through a mixture of fibre-
0.99
1
1.01
1.18
1.24
1.43
1.54
1.66
1.77
1.81
1.95
2.1
2.4
2.44
2.52
3
3.12
3.21
3.28
3.92
4.45
4.74
5.01
5.19
5.74
0 2 4 6 8
Niger
Central African Republic
Chad
Burkina Faso
Ethiopia
Malaw i
Mali
Rw anda
Zambia
Uganda
Lesotho
Lao PDR
Bhutan
Sw aziland
Zimbabw e
Botsw ana
Uzbekistan
Paraguay
Bolivia
Mongolia
Armenia
Moldova
Azerbaijan
TFYR Macedonia
Kazakhstan
14
optic, WiMAX and satellite technologies. The country’s main operator ArmenTel extended its 3G
footprint, deploying additional 3G base stations in new regions so as to improve coverage. According to Pearce 2011, the Armenian Government’s programme “Computers for All” may have
influenced the sharp increase in internet use in 2011. The programme was launched in September
2009 and it allows Armenian citizens to rent desktop and laptop computers at a low price. The
programme met its goal of providing 30% of Armenian residents with a portable computer and also
met its goal of expanding computers to rural Armenians. Furthermore, most Armenians began using
smartphones to access internet in 2009 and 2010.
Source: ITU Measuring the Information Society 2011 report, Katy Pearce, 2011, Internet Penetration
in Armenia Tripled in the past 2 Years: Caucus barometer, Epress news, 4 December 2011.
Box 2. A relatively strong ICT framework: the case of Kazakhstan
Kazakhstan has been performing better than the rest of the LLDCs, with an IDI level of 5.74 in 2012. In terms of fixed-line, Kazakhstan has a relatively strong telecom sector with a penetration of 20%.
The national operator, Kazakh Telecom, launched a programme to modernize the country’s
telecommunication system. The plan includes the modernization of the company’s rural telecom
network by introducing the use of digital telephone exchange. Moreover, satellite facilities have been
installed in Kazakhstan’s rural areas. The mobile market soared from 3.2 million subscribers in 2005
to 14.9 million subscribers by 2009. Internet use seems to be still lacking, as the quantity of Internet
users in 2009 merely exceeded 3,15 million users that corresponds to density of 19,8 users per 100
inhabitants. An interesting project is the one initiated in 2003 by the Customs Control Agency of Kazakhstan
called the “Programme of Modernization of Customs Services” with the objectives of the
simplification of customs procedures and the facilitation of transit trade of neighbouring countries.
The long-term goal however is the establishment of an electronic customs information system, or e-
customs, to create a uniform customs information environment for custom services, provide web-
based services and enable electronic declaration of goods. The President of the Republic of Kazakhstan gave instruction to establish the Integration Information
System «Single Window on Export-Import Operations», the Governmental Order of 3.30.2011,
№288. The Concept of Creation of the Single Window and Plan of Measures for Implementation
thereof in 2011-2013 were developed and approved by the Enactment of the Government of the
Republic of Kazakhstan of July 3, 2011 No.771. This initiative would be substantial in helping ease the challenges associated with the geography of
Kazakhstan and it shows how the development of ICT infrastructure is essential for the particular
situation of Landlocked Developing Countries. Source: UNESCAP, 2006, “Guidelines on ICT Application for Trade and Transport Facilitation”;
EECA, 2011, “Policy Dialogue in ICT to an Upper Level for Reinforced EU-EECA Cooperation”. Asia Pacific Trade Facilitation Forum 2011
Box 3. Mongolia Case
According to the ITU Report of 2013, Mongolia significantly improved its IDI levels in 2012. Both
the access and the use sub-index values increased by more than the global average. In terms of ICT
15
household connectivity, the progress was remarkable: the percentage of households with a computer
increased from 24% in 2011 to 30% in 2012, and the proportion of households with Internet access
augmented in equal measure, from 9% in 2011 to 14% in 2012. These improvements rely on the fact that in the last decade the Government of Mongolia has been
giving ICT a high priority as a catalyst and an engine for socio-economic development. Among the
various initiatives, Mongolia introduced a new customs ICT system for trade facilitation in June
2003, a Window-based replacement known as the Mongolian Customs Automated Data Processing
System (GAMAS). The goal of the GAMAS was to create a unified information system that covers
all data within the customs system, interfacing other government agencies, banks, freight forwarders
and customs brokers, and that computerizes the tasks of estimation, calculation and duty assessment
among others. Subsequently, in October 2004, the Information and Communications Technology
Authority was established with the mission of “creating a knowledge-based information society in
Mongolia” (Resolution 207, Government of Mongolia). The Authority is responsible for all ICT
policies, their coordination and their implementation under the direct auspices of the Prime Minister.
In the same period, the Government’s adoption of “ICT Vision 2010” drafted the E-Mongolia
Programme, which strengthened the legal environment for e-commerce. The National Broadband
Programme, to be implemented by 2015, is aimed at providing affordable broadband access. All
these initiatives allowed Mongolia to be one of the most advanced in the adoption of ICT for trade
facilitation among LLDCs of the Asian region. Sources: UNESCAP, 2006, “Guidelines on ICT Application for Trade and Transport Facilitation”; ITU, 2013,
“Measuring the Information Society”.
Box 4. Zimbabwe case study
Zimbabwe is one of the most dynamic countries in the IDI of 2012, having made significant progress
on both the access and the use sub-indices of the IDI. In both sub-indices, it is the mobile/wireless
indicators where the most progress was made: while mobile-cellular penetration increased from 72%
in 2011 to 97% in 2012, the wireless-broadband penetration doubled from 15% to 30% over the
same period. The use and diffusion of ICT for national development has been reflected in various government
instruments such as the Science and Technology Policy of 2002. The Postal and
Telecommunications services were provided and regulated under the then Ministry of Transport and
Communication which culminated in the establishment of the sector regulator, the Postal and
Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) in 2000 (Postal &
Telecommunications Act, Chapter 12.05). This bill effectively ended the monopoly of the Post and
Telecommunications Corporation. In September 2007, the Government launched the National ICT
Policy Framework which led to the establishment of the Ministry of ICT (MICT) that resolved a
number of the issues related to divided responsibilities. At the present time, regulation of the ICT
sector is divided between the Broadcasting Authority of Zimbabwe (BAZ), POTRAZ, and the Media
and Information Commission (MIC). In 2012, POTRAZ has started to set up base stations in the
country’s underserved areas, funded through the Universal Services Fund (USF). Statistics from
POTRAZ show that the highest share of investments in the telecommunication and postal sector was
in data and Internet services (78% of total investments at the end of 2012). These initiatives among others allowed Zimbabwe to have the second-highest penetration rate in
Africa, just after Ghana (34%). Sources: ITU, 2012, “Measuring the Information Society”; Zimbabwe Ministry of Information Communication
16
Technology, “Strategic Plan 2010-2014”; African Development Bank, 2012, “Information and
ICT has the potential to increase economic growth through improved efficiency and
productivity growth as discussed in section 2. Figure 7a shows the relationship between
GDP per capita and percentage of Internet users in LLDCs in 2003 and in 2011 and
figure 7b shows the same for transit countries. All the figures show a positive relationship
between Internet use and per capita GDP. They also show that over time some countries
have increased their GDP per capita and ICT use. In spite of the clear developments
achieved since 2003, the divide between the LLDCs and transit countries still remains
substantial: while transit countries have reached GDP per capita levels above $14 000
with a corresponding percentage of more than 50% of internet users in 2011, apart from a
few outliers most LLDCs remained at a level of GDP per capita below $5000 and have a
low percentage of internet users.
Thus it is important for the LLDCs to improve the amount of use of the internet, as it
could enhance their ability to accelerate their economic development.
Figure 7a. GDP per capita and Percentage of Internet users in LLDCs
Source: ITU World Telecommunication/ICT Indicators Database and World Bank Development Indicators
LLDCs in 2003
0
2000
4000
6000
8000
10000
12000
14000
16000
0 10 20 30 40 50 60
% Internet users
GD
P p
er
ca
pit
a
LLDCs in 2011
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
0 10 20 30 40 50 60
% Internet users
GD
P p
er
ca
pit
a
17
Figure 7b. GDP per capita and Percentage of Internet users in Transit countries
Source: ITU World Telecommunication/ICT Indicators Database and World Bank Development Indicators
IV. The challenges faced by LLDCs in improving access and use of
ICTs for development
Despite some encouraging developments in the use of ICT in LLDCs, there is growing
concern that LLDCs are not progressing rapidly enough in terms of overcoming the
digital divide. The digital divide is at its most pronounced between the LLDCs and the
developed world, the developing countries and the transit countries. The foregoing
analysis also shows that there is also a digital divide within the LLDCs themselves.
Within the LLDCs there is digital divide between the urban and rural areas and between
various economic and social sectors (including gender). The bulk of telecommunications
infrastructure does not extend beyond the largest cities and therefore does not reach the
majority of the population. This section explores some of the reasons for the lack of rapid
development of ICT in LLDCs and its limited use in addressing the challenges associated
with landlockedness.
Infrastructure and equipment gaps
ICT is a dynamic sector that is continually changing and requires updating. Most of the
fixed telephone networks in LLDCs are plagued with inadequate capacities, utilize old
and obsolete technology and in many instances suffer from network failures. Under these
conditions, operation and maintenance of the networks become difficult and this results
in poor quality of service. Mobile technology while it has grown rapidly has
infrastructure challenges such as lack of adequate transmission infrastructure to increase
Transit countries in 2003
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
0 10 20 30 40 50 60
% Internet users
GD
P p
er
ca
pit
a
Transit countries in 2011
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
0 10 20 30 40 50 60
% Internet users
GD
P p
er
ca
pit
a
18
coverage and in some cases duplication or parallel infrastructures by different operators.
Thus both fixed and mobile telephone networks have infrastructure gaps that need
addressing if service provision is to be increased in LLDCs.
There are also infrastructure gaps for broadband services that need to be addressed and
intraregional connectivity and sufficient undersea cables for connecting LLDCs to other
areas of the world and to the rich information resources of the global internet are
required. Since LLDCs are not near the coast, their biggest challenge is to invest in ICT
infrastructure that passes through neighbouring and coastal countries in order to access
international network. Work has been going on in Africa to complete the network of
submarine cables surrounding the continent. For example the Eastern African Submarine
Cable System (EASSy) an undersea fibre optic cable system connects countries
in Eastern Africa to the rest of the world from South Africa to Sudan, with landing points
in nine countries and is connected to at least ten landlocked countries which no longer
have to rely on satellite internet access to carry voice and data services. EASSy is the
highest capacity system serving sub-Saharan Africa, with a 4.72 terabit per second
(Tbit/s), 2 fibre-pair configuration. The cable entered service on 16 July 2010, with
commercial service starting on 30 July 2010.
There is also lack of strategy on infrastructure sharing – there are many instances where
operators build parallel infrastructure on same routes thus making it more expensive for
the end users who have to ultimately pay for these investments through the end user
pricing.
Inadequate availability of investment capital. There is low international interest to invest
in ICT infrastructure in LLDCs because the infrastructure development costs are high.
Pricing and affordability
One of the main barriers faced by LLDCs is the higher costs of ICT. The costs for
LLDCs to access high speed international internet bandwidth and their fixed (wired) -
broadband monthly subscription charges are very much higher than coastal countries that
are located close to the submarine communications cable that are laid on the seabed. The
ITU calculates the ICT Price Basket (IPB) which combines the average cost of fixed
telephone, mobile cellular and fixed broadband internet services and computed as a
percentage of average Gross National Income (GNI) per capita. The trends in the IPB in
LLDCs shows that there has been a decrease in the prices of the services, however, the
IPB level of LLDCs is still much higher than transit countries and developed countries
(see figure 8). While developed countries and transit countries had a IPB of 1.5 and 17.19
in 2012 respectively, the LLDCs were still facing an average of 23.8 which is about 30%
more than the transit countries.
19
Figure 8. ICT Price Basket (IPB), 2008 and 2012
Source: ITU Measuring the Information Society Report, 2013. Note: The IPB is a composite basket that
includes three tariffs sets, referred to as sub-baskets: fixed telephone, mobile cellular and fixed broadband Internet services. The IPB is the value derived from the sum of the price of each sub-basket as a percentage of a
country’s monthly GNI per capita, divided by three.
The IPB is also divided into 3 sub-indexes: (a) fixed-telephone sub-basket as a % of GNI
per capita; (b) mobile-cellular sub-basket as a % of GNI per capita; (c) and fixed-
broadband sub-basket as a % of GNI per capita. The difference between the LLDCs and
transit countries is significant. Apart from the fixed-telephone costs, where the difference
between the two groups is of about 3 percentage points, mobile-cellular and fixed-
broadband costs are almost as twice as expensive in LLDCs compared to transit countries
(Figure 9), with the former reaching a level of almost 46% of GNI per capita in 2012 for
the fixed-broadband sub-basket.
2
25.2
34.8
1.5
17.19
23.8
0
5
10
15
20
25
30
35
40
LLDCs Transit Developed countries
2008
2011
20
Figure 9. IPB Sub-baskets as a percentage of GNI per capita, 2012
Source: ITU Measuring the Information Society Report, 2013
There is need to find ways of reducing the cost of broadband for LLDCs. The LLDCs
have an option of connecting directly to satellite since it is not restricted to the sea.
However the costs of utilizing satellite communication are very high and most of the
LLDCs cannot afford.
Azerbaijan is one of the LLDCs that has the lowest IPB in 2012 and box 5 features the
country’s case example.
Box 5. Competitive ICT Price Basket in a Landlocked Developing Country: the case of
Azerbaijan
According to ITU Statistics, Azerbaijan has the lowest IPB among all other LLDCs, with a
level of 1.8 in 2012. Azerbaijan’s ICT sector in particular the internet market has doubled in
every three years recording a 20%-25% increase in the last 10 years, the Ministry of
Communication and Information Technologies has said in its annual report.
The government has indeed adopted several initiatives in order to reach the goal of
developing the ICT sector:
In 2004, the Ministry of Communications and IT with new leadership gets
established
In 2005, a State Programme on development of communication and IT is adopted for
the period of 2005-2008
In 2006, ICT is announced as the second priority after Oil by President of Azerbaijan
The Republic of Azerbaijan is moreover following several projects such as the “National
ICT Strategy for development of Azerbaijan” (2003-2012) and the “State Program on
provision of secondary and primary schools with the information and communications
0
5
10
15
20
25
30
35
40
45
50
Fixed-telephone Mobile-cellular Fixed-broadband
LLDCs
Transit
21
technologies” (2005-2007).
The government acknowledged that the development of ICT infrastructure is addressed in
order to provide and sustain a fair, transparent and competitive marketplace, achievements
that can enhance and ease the particular situation of Landlocked Developing countries.
According to the report of the World Economic Forum ‘Global information technologies
2013’, Azerbaijan holds 56th place among 144 countries for ‘Networked Readiness Index’.
Source: Ministry of Communications and Information Technologies of Republic of
Azerbaijan, 2007, Presentation by Dr. Rufat Gulmammadov, Head of Information Society
Development Department.
Policy and regulatory challenges
As noted earlier some LLDCs do not have updated national ICT and broadband
policies and this is a major obstacle in enhancing ICT development.
Increasingly there is need for convergence policy for the IT, broadcasting and
telecommunications sectors that some LLDCs still need to work on.
Lack of a conducive legal environment to support ICT development and encourage
private sector participation.
Conflicting mandate/overlap of regulatory bodies e.g. telecom and broadcasting
commissions, telecom and competition commissions.
Capacity constraints in policy formulation and of regulatory institutions. The full
complement of skills – technical, economic, legal and others are required.
Lack of adequate data and information: It is difficult to develop and effectively
implement, monitor and evaluate comprehensive policies on ICT due to lack of data.
Regional or sub-regional level challenges
Some regions with LLDCs still lack a common and harmonized policy and
regulatory framework.
Lack of an established mechanism for countries to share information and
experiences.
22
V. Conclusions and Recommendations
LLDCs have disadvantages related to their geography which make them incur high trade
costs thereby restricting their competitiveness and trade activity on the international
markets. They also have structural constraints related to their limited ability to trade and
integrate into the international markets and generate adequate resources to invest in their
sustainable development. These constraints include high trading costs, limited productive
capacities, declining value addition in manufacturing and agriculture, and heavy reliance
on undiversified primary commodities. ICT can act as a multiplier for economic growth
in LLDCs by improving trade facilitation, making supply chains more efficient, financial
transactions faster, accelerate the flow of goods and services across national borders, and
increase productivity in all sectors resulting in higher output.
The following recommendations are put forward to support the LLDCs to fully harness
ICT for their development.
National ICT and Broadband Policies
LLDCs should develop or update their national ICT and broadband plan or strategy and
ensure allocation of adequate resources for its implementation. The plan should include
how to develop a modern ICT infrastructure and internet access that can provide
universal access. Such a strategy should be anchored in strong regulatory frameworks and
domestic ICT laws that conform to international and regional standards, including the
Global ICT policy.
The national ICT plan should fully reflect the cross-cutting nature of ICTs and their
pivotal role in national development. LLDCs should include in their national ICT plan a
strategy of how ICT can be used to promote trade facilitation and address the major
challenges associated with landlockedness.
There is need to forge partnerships between the governments, inter-governmental
organizations and the private sector in developing and implementing ICT plans.
ICT governance
Create and support enabling environments that promotes sound economic and political
governance. In particular, improve ICT governance and affordability by ensuring
freedom of expression, providing a competitive framework for the application of ICT,
ensuring compliance through independent regulation and favoring low-cost, technology-
neutral and open source solutions; Link the creation of an enabling ICT environment to
national planning and strategic frame-works, including performance monitoring and
dialogue processes. Speed up the process of reforms and implementing the provisions of
Acts already adopted into law.
Increased investments from the private sector
ICT infrastructure needs are significant in all regions with LLDCs. Investments in ICT
have traditionally been the domain of the public sector. It has however become very
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obvious in the last decade that public investments will not be sufficient to meet the
demand for growth.
When market players make investments in new infrastructure and technology it is
principally the demand from customers, their willingness to pay and the competitive
situation that will influence when and where the investments are made. The challenge is
to bring about functioning competition and to provide market players with the conditions
they need to invest, so that the investments are made broadly and across the whole
country. Thus policy makers in LLDCs should promote investment in the ICT sector by
creating an enabling environment with investment-friendly policy frameworks, regulatory
certainty and fair competition.
Encourage public private partnerships through providing technical assistance.
Rapid development of the ICT infrastructure in LLDCs
Improve the access of LLDCs to international high-capacity submarine fibre-optic cables,
low-price international voice services, higher-speed internet access, and high-bandwidth
backbone networks to connect towns and cities within countries, across borders. More
efficient technology is required to meet market demand and requirements for access to
high-quality broadband. International community and regional cooperation should
support the LLDCs to be able to access international broadband networks at lower prices.
LLDCs and their neighbours should promote implementation of infrastructure sharing
between transport, energy and ICT sectors.
Improved data collection
Collect ICT statistics and indicators, based on internationally agreed methodologies, and
report regularly at all levels – national, regional and global so as to guide policy decisions
and monitor the effectiveness of past policies.
Improved ICT use to promote trade facilitation
LLDCs and transit countries should increase the utilization of ICT to facilitate trade and
transport, in conjunction with harmonization of customs systems and documentation.
Using ICT to spur economic growth in manufacturing and industry
LLDCs should utilize ICT to improve efficiency and increase productivity in all
production sectors especially industry, agriculture and mining and enhance processing
and value addition in order to reduce commodity dependence.
Promote the use of ICT to support productivity and competitiveness of the services sector
since it is of strategic importance to overcome landlockedness through its potential
contribution to trade and development.
Given that informal and formal small and medium enterprises (SMEs) are the backbone
of broad-based economic growth, it is crucial to mainstream the use of ICT for micro,
small and medium enterprises.
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Enhanced use of ICT to support broader sustainable development
Promote the use of ICT in disaster preparedness, early warning, rescue, mitigation, relief
and response. Intensify ICT use in all sectors – ie. Promote E-Business, e-Government, e-
Banking, e-Trading, e-Commerce; cyber security and in delivery of social services such
as health, and education.
Capacity-building
Benefiting from ICTs requires substantial complementary investments in learning, and
reorganisation by all stakeholders. Implement capacity-building programmes to increase
ICT literacy in LLDCs, including women, children, the elderly and people with
disabilities. Encourage the introduction of ICT at all levels of education. Develop a
workforce and manpower with high levels of ICT proficiency and expertise.
Enhanced regional ICT connectivity
Build or strengthen sub-regional and regional broadband infrastructure.
Ensure and support regional co-ordination in the planning of new infrastructure and in
assuring maintenance of existing infrastructure.
Encourage harmonization of ICT policy and regulatory frameworks at sub-regional
level as a catalyst towards establishment of regional markets. It will also ease
implementation of cross-border projects and attract further investment in the sector.
Promote harmonized regional customs and border crossing procedures to provide for
faster transit and border crossing of goods from LLDCs.
Support creation/strengthening of regional funds to encourage private public
partnership.
Knowledge and experience sharing amongst the LLDCs themselves is very valuable
and allow cooperating partners to benefit from each other’s experiences. It is
important that efficient mechanisms to document, disseminate and share best
practices are set up at regional and global levels.
Support from Bilateral and multilateral development partners
Bilateral and multilateral development partners should increase their technical and
financial assistance to support ICT development in LLDCs. In particular the following
areas:
Support LLDCs to access international optical fibre networks by funding the
deployment of a terrestrial information superhighway to boost access and
affordability regarding fixed broadband Internet services;
Improve the ability of LLDCs to use satellite by lowering acquisition costs
through space segment consolidation efforts;
Facilitate access to technologies and transfer of know-how on ICTs.
Support the Aid for Trade initiative, giving special consideration to the
requirements of LLDCs.
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South-South cooperation and triangular cooperation is important as a means for
diversified trade opportunities, additional foreign direct investment flows that contribute
to improved ICT infrastructure and the achievement of sustainable development of
LLDCs, as well as cooperation in the transfer of appropriate technology is important.
United Nations, International, Regional and Sub-regional organizations
Organizations of the United Nations system, and other international organizations, the
Regional Development Banks, and Regional Economic Communities, are invited to
provide more and better targeted technical assistance to support accelerated ICT
development in LLDCs.
International and regional organizations in particular OHRLLS, ITU, UNCTAD, World
Bank, the International Think Tank for LLDCs, Regional Banks and others should
provide LLDCs with technical assistance on how to utilize ICT to lower trading costs,
boost trade, and stimulate structural transformation. They should also promote sharing of
best practices and advising on new technologies.
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References
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Landlocked or policy-locked? How Services Trade Protection Deepens Economic
Isolation, World Bank Policy Research Working Paper 5942, Washington DC.
The Broadband Commission for Digital Development, 2013, Planning for progress: Why
national Broadband Plans Matter, Joint Publication of ITU and CISCO.
EECA, 2011, Policy Dialogue in ICT to an Upper Level for Reinforced EU-EECA
Cooperation.
Fuss Melvyn, Meloria Meschi and Leonard Waverman, 2005, The Impact of Telecoms
on Economic Growth in Developing Countries in Africa: The Impact of Mobile Phones,
Vodafone Policy Paper Series 2, 2005.
Jorgenson, D.W., Stiroh, K.J. 2000b, Raising the speed limit: U.S. economic growth in
the information age. Brookings Papers on Economic Activity 1,
ITU, 2013, Measuring the Information Society 2013 Report, Geneva.
MacKellar L., A. Wörgötter and J. Wörz, 2000, Economic Development Problems of
Landlocked Countries, Transition Economics Series No. 14
ITU, 2011, Measuring the Information Society 2011 Report, Geneva.
UNESCAP, 2006, Guidelines on ICT Application for Trade and Transport Facilitation,
Bangkok.
UN-OHRLLS, 2013a, The Development Economics of Landlockedness: Understanding
the development costs of being landlocked, New York.
UN-OHRLLS, 2013b, Report of the Secretary General to the 68th session of the General
Assembly: Implementation of the Almaty Programme of Action, New York.
World Bank, 2013a, Doing Business 2013 Report, Washington DC.
World Bank, 2013b, The Little Data Book on Information and Communication
Technology, Washington DC.
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Annex 1: Core indicators on access to, and use of, ICT by households and individuals, latest available data (2008-2012)
Percentage of households with Percentage of individuals who used ICTs