The Development Dimension

1990-1372 (online)
1990-1380 (print)
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A series of OECD books analyzing  the development aspects of policies in other domains, such as economic, financial, environmental, agricultural or trade policies. By systematically taking the development dimension of member country policies into account, OECD analysis and dialogue can help change behaviour in support of development in an ever more integrated, interdependent global economy.

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Internet Access for Development

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16 June 2009
9789264056312 (PDF) ;9789264056305(print)

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The Internet has been remarkably successful in developing greater opportunities for communication access - and economic growth and social development - for the first billion users. The majority of the next several billion users will be mainly from developing countries and will connect to the Internet principally via wireless networks. But there are substantial discrepancies in access to ICTs between developed and developing countries and also within countries, depending on factors such as gender, rural coverage, skills and educational levels.


This book examines how the market for internet traffic exchange has evolved and explores the coherence of policies pursued by developed and developing countries. It notes the increasing innovation occurring in a number of developing countries with competitive markets and discusses how liberalisation has helped to expand of access networks and make ICT services increasingly affordable and available to the poor. The report also highlights the employment, micro-entrepreneurial and social development opportunities which have emerged as access levels have risen among low-income users. The study notes that gateway service monopolies - still in 70 countries -  raise the prices for accessing international capacity and reduce the affordability of Internet access to business and end users.

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  • Executive Summary
    The Internet, in little more than a decade following its commercialisation, has been remarkably successful in developing greater opportunities for communication access for the first billion users. The challenge for all stakeholders is to expand the economic and social opportunities made possible by the Internet for the next several billion users. This report examines where these users will come from, as well as the large shifts in communications policy which enable expansion to be a practical possibility. It also considers how different government policies affect Internet accessibility. The question of whether these policies – in OECD or developing countries – are conducive to development and poverty reduction is discussed as part of the OECD’s programme on policy coherence for development.
  • Policy Coherence for a Globally Accessible Internet
    The 2002 OECD Ministerial mandate called upon the Organisation to "enhance understanding of the development dimensions of member country policies and their impacts on developing countries. Analysis should consider trade-offs and potential synergies across such areas as trade, investment, agriculture, health, education, the environment and development cooperation, to encourage greater policy coherence in support of internationally agreed development goals."1 The concept of policy coherence for development covers the following main areas: (i) internal coherence within development co-operation policies; (ii) intra-country, meaning interaction between aid and non-aid policies; (iii) inter-donor coherence; and (iv) donor-recipient coherence. 
  • The Importance of Liberalisation
    Communication access has undergone tremendous change in recent years, with a great deal of focus on the technological innovations which have accompanied its development. This is understandable, in that technologies such as wireless or fibre optics have dramatically increased capabilities and lowered costs. The role of liberalisation in opening markets to these innovations, however, has only recently been widely accepted. For example, the drive toward introducing fibre optics was created by competition in the long distance telephony market. The rapid development of wireless service, including innovations such as prepaid cards, was driven by competition in mobile communications. The commercial Internet itself is highly unlikely to have emerged in a monopoly environment, let alone have been the source of dynamic innovation it has come to be.
  • Providing Internet-Based Opportunities to Low-Income Mass Markets
    Some two-thirds or more of the world’s population subsist on incomes of less than USD 2 per day. One of the best known advocates for targeting them as a mass market is Professor C.K. Prahalad of the University of Michigan’s Ross School of Business.1 In his words:
  • Growth in Access and Convergence toward the Internet
    In 2006, Professor Muhammad Yunus, the founder of Grameen Bank, was awarded the Nobel Peace prize for his pioneering of micro-finance for development in some of the world’s poorest communities. Early in 2003, Professor Yunus, referring to improving opportunities for women in poor rural regions stated: 
  • Global Connectivity
    The market for international connectivity has been radically transformed over the past decade. Liberalisation of markets and the competition it has introduced, combined with falling technology costs, have largely discounted international costs as a major determinant in the pricing of end user services in developed countries. Local Internet traffic exchange, via IXPs, and greater local content creation and hosting have further contributed to this process. The cost of international capacity, however, still represents a significant obstacle to more affordable Internet access in some developing countries. 
  • Conclusion
    This report focused on the desirability of extending the economic and social benefits made possible by the Internet to the next several billion users, primarily in developing countries. Ideally, this should be seen as an opportunity and not a burden. Liberalisation renders access to communication services in developing countries more affordable and consumers are willing to invest in it due to the tremendous positive impact on their daily lives. These users represent a commercial opportunity for businesses and a social and economic development opportunity for policy makers. The report highlighted the employment, micro-entrepreneurial and social development opportunities which have emerged as access to communication services has risen among low-income users.
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