Communication for development Knowledge

Posted November 2000

Special
The role of information and communication technologies in rural development and food security

Rethinking telecentres in the Second World:
Knowledge demands, remittance flows, and microbanks

By Scott S. Robinson
Depto de Antropología
Universidad Metropolitana-Iztapalapa
Mexico DF
E-mail: ssr@laneta.apc.org


Workshop papers:

The international telecenter movement is barely under way in Latin America (http://www.tele-centros.org). While the traditional and new, mercantile elites, awash in the current neoliberal rhetoric and blessed by multilateral development banks' structural adjustment programs, have assured Internet access and training for their children in the expensive private school system, public schools, urban and rural, languish without connectivity and social services have been curtailed across the board (viz. www.bicusa.org, an NGO documenting the impact of IMF/WB lending strategies). At the same time, the pollyanish "let's get everybody connected" slogans (viz. 3 April 2000 TIME Latin American edition cover story) and costly, high profile, difficult-to-replicate pilot programs (e.g. www.worldbank.org/infodev, www.iadb.org/regions/itdev) have gleefully galvanized the "IT development business". However, no measurable impacts are yet to be observed in this hit or miss strategy, as the "market is deciding who can play" and the heterogeniety of the current pilot projects begs a common denominator. At the same time, it is apparent there are no public policies that recognize the virtues of capital flows in remittance economies, and employ the public sphere to catalyze social development with, for example, Internet-based sources of credit, microbanks. For most of the world, the touted "knowledge society" (viz. www.techKnowLogia.org/welcome.asp) will run on credit and remittance-fed microbanks offer an alternative to the current, polarized dual economy, at home and abroad. Traditional agriculture is credit and technology-starved, while governments cut back or eliminate extension services; many regions now export people rather than food. Few migrants and their kin at home in villages and urban ghettos understand how all the technology and information now readily available in the North may benefit them and their children; however, the migrant communities, always pragmatic, increasingly perceive how the IT tools can be used for social development at home and it is beginning to occur on a small scale in certain metropolitan centers.

The Second World may refer nowadays to those beyond connectivity, on the other side of the Digital Divide (the Third World can move into this abandoned, formerly proud socialist category, thereby removing some of the stigma inherent in "third", although some nostalgic militants will noisily object to this transformation of those who remain beyond or behind the wall). And the Second World is growing in proportion to the connectivity rate among the First World elites and their cousins throughout the class and ethnically polarized Second World. In Latin America, the mediocre public school systems and their dropouts are not being equipped nor teachers and students trained to use today's digital tools; similarly, public libraries are either non existent, or subsist with few resources and services. Nurses, always on the underequipped and gender sensitive front line of public health services, staff rustic clinics where medicines are scare, demands are overwhelming and continuing education courses often unknown. A few, privileged public universities offer online extension courses, but duplication of expensive efforts is rampant and planning for economies of scale (in countries or linguistically homogeneous regions) often nonexistent. Providing public domain information and training in its usage is not a priority for elite public policy makers in Latin America today (with three exceptions: the unique INFOCENTROS project in El Salvador: www.infocentros.org.sv, the new www.telecentro.cl in Chile and the recently created netowork of 1600 Centros Tecnologicos Comunitarias in Argentina). Thus, it should be no surprise that universal access, microbanking and telecentre services plus content creation attuned to public needs are absent from telecommunications priority agendas throughout the region. Commercial television generates demands for the delivery of knowledge and skills which few states in the South are committed to providing much less equipped to supply in the short term. This frustrated pentup demand for access to the jobs, resources, infotainment and opportunities implicit in the "new digital economy" may be one factor fueling widespread student discontent.

Policy makers and program officers at the bevy of United Nations agencies charged with "development" and "reducing poverty" may be hampered by an old fashioned Bretton Woods' mentality, whereby sovereign member states' lack of commitment may torpedo virtuous projects in the global era; others simply know not what to do or how best to proceed (never to be publicly admitted, of course). Over the past few years we have been privy to a slew of pilot projects funded by the World Bank, for example (www.worldbank.org/infodev) whose accountability, scalability and representation of vanguard civil society initiatives are in question. The Sustainable Development Network of the United Nations Development Program (www.undp.org) created expensive ISPs in at least four Latin American countries which in fact competed with local entrepreneurs and NGOs. UNESCO co-sponsored a regional IT and Development with the Mexican INEGI (census and geographic data) last October (http://www.inegi.gob.mx/informatica/espanol/simposio99/inicial.html) where the lack of leadership on key issues was noteworthy; it was symptomatic that informatics was confused with information. Currently, there is a stalemate about the appropriate mix of public and private resources in viable business plans for IT applications in the Second World's public sphere (note the tardiness of a budding universal access initiative for Latin America: www.citel.oas.org -- CITEL is releasing the publication Universal Service in the Americas). Witness as well the circular discussions in the World Bank's DevForum (www.worldbank.org/devforum). As always, there are exceptions to this pattern. Why this is so is beyond the scope of this paper, but in sum, I submit it stems for a lack of consensus among the senior technical and policy personnel in the UN family, a lack of commitment from national elites, as well as a curious fear of alienating the major powers who now govern the IT pantheon of hardware and software gods.

Those who inhabit the Second World are poor, increasingly urban or subsist on overpopulated and marginal lands, without credit and if fortunate, dependent upon unstable wage labor. Rampant globalization appears to translate into more food insecurity and environmental degradation as traditional farmers are forced off the best lands to be used for export crops, while regional trade agreements discriminate against subsistence food crops. In Mexico, half of the population lives from and in the informal economy. In vast regions and in many countries, remittances from migrant family members obliged by conditions at home to move abroad, often induced by the extant "development model", now account for the majority of aggregate incomes in small towns and villages (www.worldbank.org/wdr/2000/). There is a well researched pattern of migration to the United States and Canada from Mexico, Belize, Guatemala, El Salvador, Honduras, Nicaragua, Cuba, Dominican Republic, Haiti, and parts of Colombia, Ecuador and Peru. Similarly, in the southern cone (MERCOSUR) another regional pattern exists whereby the industrial centers of Sao Paolo, Rio de Janeiro, Buenos Aires and Cordoba, attract migrants from Bolivia, Paraguay, and Uruguay, as well as Brazilians and Argentines from the "interior". This same phenomenon can be found in extensive areas of francophone and anglophone postcolonial Africa (migration networks to the UK, France and elsewhere in the EU), and in parts of India and the Philippines as well (UK, Canada, US and the Gulf states) (viz. www.cmsny.org/index.htm, and www.lexis.pop.upenn.edu/mexmig). The argument can be made that the First World's prosperity is to a major extent a function of the presence of a stable flow of cheap labor provided by migrants from the Second World. Remittance economies now drive families' subsistence strategies at home in the South while fueling labor intensive industries in the North who exploit the migrants' illegal status and cultural networking. In fact, the migrant networks are a de facto employment agency subsidizing many companies and productive sectors.

This paper proposes a novel use of ICT to link the First and Second Worlds: create telecentres using satellite or local ISP Internet connections linked with microbanks providing digital remittance services while offering a set of generic financial, communication, education, informational and ultimately B2B and B2C e-commerce resources (www.idrc.ca/pan/telecentres.html). It's important to query: who would use a rural or community telecentre (especially if the best and brightest have already left)? If we observe the pattern of telephone usage in rural, migrant-exporting regions, significant resources are invested in communicating with kin abroad (these data publicly unavailable, to my knowledge) about their welfare and conversations about "when are you sending money home?". In Mexico, reliable estimates peg the total transfer costs for remittances to average around 20% (of the over 8 billion US dollars sent home every year by the more than 10 million mexicanos in El Norte) (viz. www.indiana.edu/~jah/mexico/). Migrants pay a service charge on both ends of the transaction and are given a poor exchange rate, often below the going market currency conversion. Together, the transfer and communication costs represent a significant chunk of capital that could be redirected to create a rural microfinance system presently absent in most regions of the Second World. The operational premise here is that practical people will use the system if it represents a significant savings over current practices, is secure and available close to home on both ends (consult www.cap.org re microfinance institutions). The microbanks required to handle digital remittance transfers can assist their clientele to exploit certain benefits of electronic commerce and operate back to back with telecentres offering ICT training and skills (useful in the migrant job markets), in addition to the creation of a public domain of local information (presently unavailable in Mexico, for example), as well as voice IP (to be resisted nastily by domestic telephony companies) and distance education services (www.icde.org). This could represent a win-win scenario for migrant communities North and South.

What is required to jump start this telecentres cum microbanks proposal? Because migration networks are community based, each microregion is the hub for its respective network of citizens who have left to work elsewhere. Therefore, research needs to detail each migrant exporting hub (regions tend to share an overlap in destinations and patterns), the location of migrant clusters, the existence and location of credible institutions where money can be sent home, and the community's commitment to collaborating with the proposal. The goal is to develop a managed and secure system that drops the transfer cost to a minimum (e.g., a maximum cost of 5%) while providing a series of IT-based benefits and services. In effect, the marginal condition of domestic and international migrant communities, presently a liability, can be transformed into the motor for local and regional development by a judicious application of ICT in conjunction with community will and local organization.

The issue of connectivity is being resolved by what promises to be a competitive market in Internet by satellite services recently announced for Latin America (viz. www.tachyon.net, www.gilat.com to name only two). Whether connectivity is achieved by satellite or by dedicated lines (which the Red Cientifica Peruana is rolling out in Peru and with joint ventures elsewhere, viz. www.rcp.net.pe) is a function of local infrastructure, the "portal players" and their carriers, and oftentimes, regulatory caprice. A complicating factor is the lack of a clear and public commitment on the part of Latin American national telecommunications regulatory bodies whereby universal access and competitive markets and pricing may be induced by the rules of engagement in each domestic market. It is almost redundant to remind ourselves that the public sphere requires this commitment from the appropriate agency of the State charged with advancing and protecting the universal access policy goal. And the historical impotency of civil society and/or NGO policy proposals in the increasingly lucrative Latin American telecomm scenarios is a matter of major concern. Without accountability and citizen input, national regulatory commissions are beholden to their clients, the carriers and their associated portal players. This does not bode well for the future public sphere and innovative proposals therein. One option to counteract the "closed shop" script now in effect involves using existing international organizations, such as the Internet Society, for example, to create countervailing pressures and credible policy proposals difficult to ignore by all the institutional and corporate actors involved. We cannot, I fear, expect any effective watchdog actions on the part of the UN agencies, nor will audacios innovations be forthcoming from this corner.

The issue of the appropriate software for secure remittance transfers and other banking and commercial functions is central to a project of this nature. This requires an effective public key infrastructure, PKI, (www.pkiforum.org) which consists of three components: a certificate authority (CA), preferrably to be installed in each country where operative, a registry authority (RA) for each institutional and individual actor in the network, plus a repository of all certificates. Such a system also implies using a personal digital ID card (readable with a biometric device, for example) to be installed at both ends of the system. This is no small challenge and there are currently efforts to resolve the formidable cross-certification issues (CA to CA operations, issues also linked to permissible encryption software exports). For secure remittance transfers to scale requires a resolution of the problems inherent in designing a PKI with CA cross-certification (For an overview see, www.networkcomputing.com/1108/1108colmoskowitz.html).

Low cost digital remittance transfers permit the creation of microbanks on a broad scale. In effect, each migrant could administer her or his account at a terminal with an IP connection, from wherever they are. Of course, this possibility is not embraced enthusiastically by the established banking community in migrant exporting countries such as Mexico. This is a situation analogous to the Plain Old Telephone Service (POTS) companies pressing regulators to outlaw VoIP, Internet telephony. There may not yet be a generic microbanking model with the requisite off the shelf accounting and operational software (although new shareware products are promising, viz. www.MicroBanker.org), but the present convergence of interests and proposals is today historically unique (consult: http://www.bellanet.org/partners/mfn/links.html). International NGOs and some of the major foundations assume microcredit and banking to be a central issue on today's agenda (viz. http://gsips.miis.edu/ips1/ips1d7_IS581.html). Digital remittance transfers can capitalize local and regional microbanks in migrant exporting communities. These microbanks, once approved by national regulatory agencies (a tall order in some countries), may be an appendix to established credit unions or local savings and loan institutions. Each "branch" requires the requisite PC with a reliable connection to the net and the PKI CA and RA software, and the means for dispensing cash to clients. This latter function can be problematic as the cost of secure armored car service to remote regions is almost prohibitive and logistically complex. Until key local merchants are willing to accept debit cards issued by the microbanks, for example, the cash dispensing function will remain an obstacle for bank clients in the villages and small towns without regular bank branches (1600) and orthodox ATM machines (in Mexico two thirds of the nation's 2427 municipalities do not have a branch bank). The development of a low cost third generation ATM machine for microbanks is waiting to happen.

On the back side of each village microbank is a telecentre, a public, low cost access point for the Internet and IP services including telephony. The voice over the Internet Protocol service alone will pay for the operation of the complete telecentre. Each telecentre may have 5-6 PCs in a LINUX OS LAN connected to the net, some by satellite and dedicated lines, where available, and others may be obliged to use dialup services to regional ISPs in the meantime. Telecentre users not only may communicate with their relatives for less cost than long distance POTS calls, but have the wealth of Internet supplied information at their disposal. It is important to distinguish a telecentre from a cybercafe: telecentre staff generate reliable local and regional information, placing it on a website for public consumption. Cybercafes only offer net access, but have no role in local institutions and few training programs. A telecentre may well become a key auxiliary to the school and clinic, offering continuing education for local teachers and nurses (and doctors, if any). The issue of who will create and maintain the continuing education courses as well as lobby for their certification on the part of national education and health authorities is central to the microbank cum telecentre strategy. Telecentres may become the fulcrum for geographic information systems that allow for environmental and agriforestry planning (viz. www.fao.org/waicent/faoinfo/agricult/guides/sites.htm). Basic and intermediate IT training packages (in addition to elementary PC software usage plus Internet browsing) can be another component of each telecentre's menu of content services. In short, each telecentre requires a support group, usually in the guise of a local NGO with a strategic plan linked to others on a regional or national scale.

Given the current rates of outmigration throught northern Latin America and the Caribbean, as well as the improbability of major changes in the current development model, plus the impossibility of attenuating the observable and widescale ecological impoverishment in the diverse regions some xenophobic observers in the North call the "homelands" (Oaxaca, Mexico, for example), it makes sense to offer job skills that will be useful in the future workplaces in the North (yes, training for migration!). This is a need younger returned migrants have expressed to me in different locations within Mexico. Viewed in this fashion, local telecentres complement the microbanks by offering communication services, IT and other skills training plus continuing education for local professionals who staff local institutions (Viz.www.tele-centros.org for information re recent Latin America wide efforts to create telecentres). And the communications networks within each migrant stream augurs well for a rapid diffusion effect when it comes to useful and low cost IT services to be made available on both ends, North and South.

Microbanks capitalized by digital transfers from migrants in the North sharing Internet connectivity with telecentres in small towns and villages in the South translates into an institutionalization of today's parallel migration-fed remittance economies. This regional dual economy wherein migrants are feeding their extended families at home and subsidizing small and medium manufacturers with their cheap labor is now a vast, regional phenomenon. It extends from the US-Mexico border, around the Caribbean and down the Central America isthmus, in pockets throughout Colombia and Ecuador as far south as Peru. In order for this novel public sphere initiative to move forward, considerable research is necessary to create the series of reliable databases for the community-based overlapping social networks in each national "migrant stream". Today, this research is neither uniform nor available for many countries' migrants. Research in Mexico has produced (Viz, www.embassyofmexico.org/english/4/3/migration3.htm and www.iadialog.org/publications/DeSipio.html) an enormous body of materials, often updated as the government has finally publicly recognized the importance in the national income accounts of the $8 billion US dollars Mexican migrants send home every year, as noted above ($6 billion via commercial courier services and an estimated $2 billion by personal messengers). However, elsewhere the data are uneven and there are few overview reports in the public domain offering current data and profiles of migrant networks, remittance sending patterns and resource usage in home villages (viz.http://www.globalexchange.org/economy/alternatives/americas/Immigration.html and also www.thedialogue.org/publications). For example, El Salvador is now considered a full blown remittance economy (receiving approximately $1.5 billion US a year from its "transnational community" (www.jhu.edu/~soc/pcid/papers/18.htm). The available Salvadoran online data and analysis contrasts dramatically with its neighbor, Guatemala, where few relevant contemporary studies re the pattern of native Mayan outmigration and remittance transfers appear: www.gtz.de/orboden/thiesenh/thi4_b.htm. The same statement applies to the rest of the Central American states with the exception of Costa Rica, who receives many migrants (rough estimates peg it at 800k people) from neighboring Nicaragua.

In sum, a substantive and useful public sphere has yet to appear in most States with remittance driven economies in the South. Given the current cyber-goldrush underway whereby carriers, megaportals, cable companies, satellite service providers, franchise ISPs and all the major IT players enjoy a feeding frenzy in high carat markets, often unregulated ("if it's not prohibited, it's permitted…."), it is unlikely much priority will be assigned to the public sphere. National elites are uninterested as it would interfere with the traditional colonial terms of ruling their subordinate populations and regions beyonds the cities. It may well be that the extensive migrant communities create and pay for a network of microbanks and telecentres to serve their own needs while simultaneously crafting a new digital public sphere. Each telecentre would generate a menu of local and regional information that municipal and provincial governments do not offer in the public domain at this time; in effect, the telecentres would substitute for certain functions of local government as well as educational and health institutions. Again, the paradox of those with the least who may creatively gain the most, while generating a public sphere of information and accessible online opportunities, a true multiplier effect for the balance of their respective national populations. The migrant organizations may well catalyze the telecentre rollout in their countries, a development irony bar none. Given the convergence of IT sensitive transnational migrant organizations, the growing rural credit movement, a few pilot telecentre projects, some enlightened regulatory agencies, available connectivity and increased innovation by IT-savvy entrepreneurs, this scenario may soon be a reality in a few Latin American regions. It's safe to predict a massive global diffusion of this model over the next few years.



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