India’s FDI Outflows Exceed Inflows: The Role of ICT

Last week, I attended a presentation at the International Development Research Centre (IDRC) by Dr. Pratap Bhanu Mehta speaking on India‘s great economic transformation.  It was an excellent talk, but he had raised one point in particular which caught my specific interest, which nagged at me to investigate further — that India’s FDI (foreign direct investment) outflows had exceeded inflows and that the primary recipients of this investment were North America and Europe.  This was presented as a key favourable indication of India’s strong economic development, but the question which nagged at me was what part the ICT sector had to play in this important statistic.

Non-exhaustively investigating this statistic, I’ve found pieces of information:

– India’s FDI inflows were USD 24.6 billion in fiscal year 07-08, with ‘Computer Software and Hardware’ and ‘Telecommunications’ ranking second and third respectively as sectors attracting the highest FDI inflows (source:  Fact Sheet on India’s FDI March 2008 from India’s Department of Industrial Policy and Promotion).

– A number of online news articles, including this one from the Asia Times in March 2007 and this one from India PR Wire released at the same time, cite a report from India’s Associated Chambers of Commerce and Industry (Assocham), ‘Study on FDI Outflow and Role of Manufacturing in the Mergers and Acquisitions Front, 2007’.  This report states that for 2007-08, FDI outflow was predicted to be USD 15 billion while inflows were exptected to be USD 12 billion.  (Searches to find Assocham’s report did not end successfully.)  However, Asia Times has this information from the report:

“Preferred investment destinations are Europe, the United States and Africa, in the last case taking advantage of that continent’s cost-competitiveness. Sectors such as pharmaceuticals and automobiles will give a major push to the FDI outflow, though information technology will continue to dominate the scene, said the report.”

– A UNCTAD report from 2005, “India’s outward FDI:  a giant awakening?“, though outdated and drawing on data from 2003, stated that indeed FDI outflows have risen sharply, and that the sector receiving the most Indian investment is manufacturing, although “Indian IT companies are actively establishing operations abroad to expand markets and to service clients better”.  The top 15 Indian ICT software and services companies had all invested abroad, and primarily in developed countries.

Digital Culture, Brazil and the Virtual Pistolâo

[Partial] Review of The Throes of Democracy: Brazil since 1989 – Brian McCann

Studies of internet use in the South rarely come from outside a small circle, so it is worth examining The Throes of Democracy. Written by Latin American historian Brian McCann, it analyses Brazil’s emerging digital culture as one strand within processes of democratisation in Brazil. In line with the book’s wider argument, McCann presents two views of digital culture, celebrating it as a force for democracy, whilst examining the “corroding forces” which limit the potential of this new media channel.

McCann argues that ICTs and digital culture can be seen to have “reconfigured Brazil’s market” and this has led to a new vibrant network of active citizens. Nor is this happening only within the middle classes, thanks to the government’s support for telecentros which link the peripheries and favelas. Emerging from this digital culture, McCann sees promising examples of citizenship and democratic practice such as the popular interactive crime blogging of Jorge Antonio Barros, and the regional cultural sharing on the site Overmundo. In a wider context, online spaces like Orkut and LAN games, break real-life social barriers for the poorest through participating in online networks.

However, McCann also sees trends that connect this new media into less positive histories. For example, Overmundo is rightly lauded as an “innovative cultural endeavour that draws participation”. But when digging deeper things are not so black and white. The site founder Hermano Vianna is a consultant for the Brazilian TV programme Central da Periferia shown on the much maligned Globo chain, and McCann sees Overmundo as essentially part of the conveyor to produce talent for this show. Additionally Overmundo cannot be seen in the purely entrepreneurial model of new media: it received a $1m grant from Brazillian oil giant Petrobas, as part of the Rouanet Law, a way for corporations to reduce taxes through cultural sponsorship.

McCann uses the Brazilian figure, the pistolâo to explain his critique. In the job market the pistolâo is a powerful figure, who through recommendation can open up paths for those unemployed. The virtual pistolâo operates the same way, for those less connected in the new media world. Often from a family within the upper echelons of society or celebrity, the virtual pistolâo is an eminently conservative figure, with an eye on reputation and retaining cultural sponsorship. The control and nepotism that plague other sectors of Brazilian society can be seen to be seeping into digital culture through the virtual pistolâo. For a hip-hop group like Cidinho e Doca this means moving away from proibidão, the controversial (but one could argue genuine) voice born in the favelas, in order to maintain the support of the virtual pistolâo, placate the sponsors and remain within the system.

In the rest of his book McCann highlights the importance to democracy of outsiders who break through such hierarchical structures; whether that be the left-wing leaders who eventually came to power, the rise of the landless movements and even the drug gangs. So it is surprising that he seems to underplay the importance of such groups within digital culture, in particular the less hierarchical and vibrant activist networks. These groups have been voicing similar critiques for a number of years and their work seems to offer a basis to move beyond McCann’s virtual pistolâo.

In sum, McCann’s work is very useful in that it tries to understand technology use within a local historical domain, something not often considered within ICT4D. From such a vantage point it is easier to analyse the effects of ICTs, and in particular to see if the introduction of ICTs simply reinforces societal norms or brings genuine change.

Does Perez Hilton belong in the Congo?

I stumbled upon an interesting post from a blog that is promoted through a respected Canadian newspaper. It archives the journey of a Canadian journalist as she braves the dangers of Africa to bring us quality stories from the front lines of the war on poverty. Her blog is quite insightful, yet witty and upbeat, so I quite enjoy some of her stories as it reminds me of a similar adventure I took (shameless self-promotion). The presence of such blogs may be a discussion for a later post (bringing stories of Africa to ‘The West’ through blogging), however I would like to discuss the implications of this post, which I think applies quite generally to the field of ICT4D. She asks “What to say of a world where Blackberrys work in a region [Eastern Congo] with no food or clean water?” This question seems to present a paradox that we, as ICT4D practitioners, may find ourselves defending, at least in justifying our profession to a wider development community and developmentally-minded individuals (such as friends and family).

How can one justify investments in technology in an area that is suffering extreme poverty? I realize that this is a redundant question to a development worker, as making that trade-off seems an unlikely scenario when one takes a wider perspective of development, as we must do. Of course, ICT4D should be part of a more holistic development approach that considers all contextual factors, we know that. However, I get a sense from within the wider development community, whether influenced by the politics motivated by such viewpoints or not, that technology for development may come across as a bit extreme, as this story subtly suggests.

But what of the investors who chose to invest in these technologies in such a poor region? Should we vilify them for taking these risks without subscribing to a holistic approach? Perhaps it is unfair to judge the provider of blackberry services in the Congo, since they have apparently been able to justify such an investment in terms of being profitable; after all, UN workers need their Perez Hilton!. If there is a market for such services, so to justify the investment in infrastructure, all the better for the poor I say, as it should come at no direct cost to them (although indirectly I’m sure they may pay for it somehow). Although most may be with “no food, no clean water, no toilets…..”, hopefully the new infrastructure can be put to a more productive developmental use to change that: ICT4D practitioners can devise a way to exploit it so to benefit the poor; ICT4D practitioners can empower Congolese to devise their own use; or some enterprising Congolese may be able to leverage this technology on their own (recall Heeks’ innovation models). To me, it seems that at a minimum it doesn’t hurt just having it there vs. the opportunity cost of not having it there.

Thus, pointing out the juxtaposition between poverty and such luxury items in the developing world seems a bit of an oversimplification and possibly a bit unfair to those who took the risk to put it there. However, this seems to be the stigma that we, as ICT4D practitioners, may have to overcome politically to justify our profession if these types of messages dominate the public debate. I wonder what Perez would think?

Comments?

The New Wave of Non-Western ICT4D Aid Donors

As growing numbers of non-Western nations become ICT4D aid donors, how will this change the ICT4D landscape?

The tidal patterns of Western aid donors and ICT4D are relatively well-known.  Each individual history varies but we can chart the big sweeps from tied aid to less-tied aid; from virtually ignoring ICT to the DOTForce-type love affair to falling out of love and now back to a more considered view; and likewise the moves from “markets with everything” to the MDG paradigm and now the first signs of post-MDG thinking such as more growth-oriented aid.

But there’s another big sweep coming and new kids on the block: newly-industrialised and transitional nations are themselves setting up ICT4D aid programmes.  China, India, South Korea, Taiwan – and probably many others – are becoming players.

I’ve not found very much about this, at least with an ICT4D focus, and would welcome some pointers in comments.  With Korean colleagues, we’ve just completed an overview of the South Korean ICT4D aid programme, published in EJISDC.  By 2007, Korea had already spent more than US$120m on ICT4D aid, which formed over 10% of its total aid budget.

In one way, we could see this aid as a “throwback” to early Western ICT4D aid – tied to orders for Korean companies, techno-centric, lacking insight into context.  But in other ways, it presents an intriguing contrast to the current policies of Western donors.  The latter seem to have let technology slip somewhat from their agendas.  The new wave donors are much clearer that technology has been central to their own nation’s recent development achievements – likely they are therefore more optimistic about technology; give it a greater importance, and fund it more in their aid programmes.

The new wave donors are yet another sign of the slow shifts in global power.  As another example, we have seen “investment competition” in Africa between China and the West, with African nations often preferring the former.

It is too early to talk of “aid competition” in ICT4D, but it will be interesting to see – whatever the criticisms we might level at the new donors’ ICT4D aid – how recipient countries and users react.

Katine, one year on

The Guardian’s Katine project is a unique attempt to track a development project by reporting it over a long period and by using the full range of media. It is coming up to a year since the project was launched, so this is a good time to see how effective the media components have been so far.

Katine might also provide lessons to a whole family of similar projects, such as Kiva, The Millenium Village and Nabuur, where ICTs, whilst not the principal intervention, are involved predominantly to allow a Northern audience to connect more closely with these interventions.

The Goal

Based in Northern Uganda, the Katine project seeks to provide improvements in the region through a number of interventions in health, education, governance and livelihoods. The Guardian, along with Barclays bank occupies the position of development donor, supplying the funds for NGOs AMREF and Farm-Africa to carry out the interventions.

But, the Guardian “unlike many more traditional donors..is not a ‘hands off’ donor”*. With regular reporting and coverage on its dedicated Katine website, it is closely involved in following and scrutinising what is happening on the ground. For the Guardian editor Alan Rusbridger, this hands-on approach is a way to allow the Guardian to report development complexities, moving “beyond the sloganising and occasional yah-boo politics of the development debate” whilst allowing space for readers to contribute, “we would like a technical know-how bank of people who are prepared to offer time and advice”.

Reporting

We can see two styles of reporting that have emerged, one comes from the writers from ‘outside’, the other from those who have a longer association with the project. Unsurprisingly, the more embedded views tend to be the most interesting; the work by Guardian reporters and visitors often seems indistinguishable from online material produced by other NGOs.

The embedded Ugandan journalist, Richard M Kavuma, has provided a number of interesting pieces, particularly more recently. For example, he takes up the case of the non-payment of the builders within the project, and recently has used website comments to question AMREF’s contracting practices.

Equally enlightening is the writing of the independent evaluator Rick Davies. It is disappointing that his blog is separated from the Guardian, as it provides the most interesting discussions. He has used the extended form of his blog to debate a number of interesting development issues, such as project aims and goals, openness of implementers and the jargon of development.

The surprise is that the voices of the locals of Katine are muted. Where local voices do appear, such as in the small documentaries or the village voices section, they are often mediated through a video narrative or a communications officer. The Katine website could have been an opportunity for locals to interact with the online community through articles, photography, video and audio, particularly given the presence of the Guardian as a resource. Without this, the Ugandan villagers often seem secondary to the opinion of the writer or narrative; not exactly in line with the empowering rhetoric of the overall project.

Benefits of media?

Increased amounts of funding can be seen to come through this higher profile method of fundraising. Not all of this goes directly to the project, as there are significant costs that come from the extra requirements as outlined in the budget; internet access, IT specialists, supporting UK journalist visits, UK based “liaison with the Guardian and Barclays”*. However, it would be unfair to say that the donators are simply funding the Guardian’s media operations. This type of media-aware action provides potential for increased contributions to a development project.

And what about editor Rusbridger’s comment abou the media coverage influencing the project itself? In his most recent evaluation, Rick Davies comments that “Most AMREF staff…could recall particularly postings that had prompted a reaction of one kind or another”, although he doubts any changes, “in Katine my impression was that in some cases nothing more was heard”. Perhaps Davies is underplaying their power. Even if not explicit, the media awareness and learning must have some effect on the way the project partners act, even if it is not possible to measure.

What about more advanced hopes of the Guardian ‘crowd-sourcing’ help for development? Despite a few isolated successes, Davies provides a more convincing critique as to why this is not occurring. Rusbridger is making an incorrect assumption “that the main problems are technical when in fact it could be argued that they are really more social and institutional”.

Outlook

In sum, Katine has provided a more expansive view of development, mainly through the ability to build stories over time, particularly from those like Kavuma and Davies who are closely connected with the work. But there seems a missed opportunity for local production which still leaves a suspicion of the Guardian project being a one-way conversation.

Increased funding can also be attributed to the Guardian, and although this has been somewhat diminished by the extra resources needed, the extra funds generated point to the financial potential of such close media link ups in development.

As this is a three year project. I’m look forward to seeing how this develops, both in terms of the project itself (and the inevitable issues that arise) and how the media components evolve as technology changes.

Why so many competitions?

Finding solutions to support development has always been a fraught experience, and it seems that organisations are calling on your help.

Just in the last few weeks, Google has launched 10^100 in which is offering $10m to five ideas that “help as many people as possible”. Meanwhile, Nokia is ‘Calling all innovators‘, asking developers to submit mobile solutions which will “Make a difference” to the environment or “pioneer and monetize services impacting the daily lives of millions in developing nations” and offering up to $25K for the winners. How do we interpret this constant need to call on the Northern public when it comes to solutions (and particularly technical ones) in the South?

For the organisations involved there is no doubt that this drums up extra publicity, both within the blogosphere and the mainstream press. For Google, the competition coincides with its 10th birthday and conveniently reminds us that Google is still “not doing evil”. Nokia nudges mobile developers to take a break from java development for a while and chance their arm using Nokia’s Symbian platform instead.

Both competitions imply that change and impact in the South is simply a matter of the big idea or piece of software that will solve a problem. But look at Nokia’s list of potential ideas and one becomes a bit more skeptical, whilst it talks breathlessly of ‘holy grail’ solutions, it reads like a list of existing ICT4D developments

Nokia: “Imagine if an application could help relief workers reallocate resources in real time for disaster-torn areas”
– Stop imagining! You could partner with Vodaphone on the EpiSurveyor or use Frontline SMS
Nokia: “What if a mobile device could test the potability of water”
– It can! Perhaps you should talk to there guys

Nokia’s talk of “social responsibility” seems uneasy. They pinpoint to
solutions where partnerships to add impetus to existing solutions would surely
be the best way forward, rather than more technical solutions doing virtually the same things.

For Google the small print is interesting, “once we’ve selected up to five ideas for funding, we will use an RFP process to identify the organisation(s) that are in the best position to implement the selected ideas. We will be providing funding to these, organisations to implement the ideas”. So to offer a solution is not to be able to provide any input into its implementation, leave that to the experts. This suggests a curious future relationship, the competition winner is taken out of the loop, whilst their solution is presumably morphed into something more useable by the implementors. Which makes you wonder, why bother with the whole gathering process in the first place?

There’s no doubt that from time to time, one of these competitions unearths an idea that has legs, and might progress onto better things. But the question if whether the public competition is the best approach to unearthing and implementing ideas and solutions in the South. Competitions begin to look like publicity campaigns which are having the added effect of giving a skewed view of what solutions for development entail.

[Disclaimer: I never win competitions!]