New Information and Communication Technologies and Poverty

NEW INFORMATION AND
COMMUNICATION TECHNOLOGIES
AND POVER TY
Some evidence from developing Asia
M. G. Quibria, Ted Tschang and Mari-Len Reyes-Macasaquit
Abstract The paper addresses the question of how the new information and
communication technologies (ICTs) can potentially help reduce poverty in
developing countries. Starting with the de nition and types of ICTs, the
paper discusses a number of instances where various ICTs have been fruitfully
applied to improve the welfare of rural people in a number of developing
economies. The paper also reviews how ICTs can be an indirect instrument
of poverty reduction through their impact on growth. Finally the paper dis-
cusses the various factors that in uence the adoption of new ICTs and the
policies developing countries can adopt to take advantage of the new ICT
revolution.
Keywords Information and communication technology, poverty, educa-
tion, employment, Asia.
JEL classi cations I31, L86, O32.
I think that information technology can make unprecedented con-

tributions in removing poverty, if we can use it for the bene t of poor
people. This would be in terms of creating jobs and creating income
situations so that they can sell directly through the Internet, just like
everybody else is doing now, and get market information through the
Internet and so on.
(Professor Muhammad Yunus, Asia Society 2001)
1. INTRODUCTION
The new millennium unfolded a sad economic paradox. On the one hand,
the global economy seemed to be on the cusp of a new technological revol-
ution that is poised to usher in a new era of economic prosperity for the
inhabitants of the advanced countries. On the other hand, many of the poor
Journal of the Asia Pacic Economy 7(3) 2002: 285–309

© 2002 Taylor & Francis Ltd
ISSN 1354–7860 print/ISSN 1469–9648 online
DOI: 10.1080/1354786022000007852
M. G. QUIB RIA ET A L.
countries of the world found themselves scourged by massive poverty that was
stubbornly resistant to change. According to the most commonly employed
international de nition of poverty – that is, subsistence on an income of less
than a dollar a day, measured in purchasing power parity terms – about 1.2
billion people of the developing world would be considered poor (World
Bank 2000). If a higher and perhaps more realistic de nition of poverty – say
two dollars a day – is adopted, almost 3 billion people of the developing world
would be classi ed as poor. A broader concept of poverty that includes other
aspects of human deprivation – such as illiteracy, malnutrition, bad health,
poor access to water and sanitation, and vulnerability to economic shocks –
would render the picture far more frightful.
Against this backdrop of massive poverty and deprivation that engulfs the
developing world, the new information technologies (ITs) – or, more
broadly, new information and communications technologies (ICTs) – have
inculcated new optimism in the development circle. These technologies
have delivered unprecedented economic prosperity to the US – and
promise to be the main engine of growth for the developed world in the
coming decades. Given the universal applicability of these technologies,
one wonders whether the enormous potentialities of ICTs can be exploited
to enhance the development prospects of the poor countries. In particular,
whether ICTs can help poor countries leapfrog the intermediate stages of
technological development to the advanced stage, achieve accelerated
growth and nd a solution to the pervasive problem of poverty in develop-
ing countries.
The organization of the paper runs as follows. Section 2 deals with the
de nition and types of ICTs. Section 3 discusses how ICTs can potentially
affect poverty both directly and indirectly. The direct bene t accrues from
immediate application of ICTs to improve the welfare of the rural and econ-
omically disadvantaged population of the society. The section draws heavily
on the ‘case stories’1 culled together from the experiences of the develop-
ing countries, particularly from Asia. The emphasis on Asia throughout the
analysis in the paper stems from the fact that the authors are more familiar
with the situation in Asia as well as from the predominance of experiments
in Asia in this regard. It is hoped that these experiences will have wider
relevance beyond Asia. However, many of the qualitative ndings regard-
ing a number of ICT projects reported in the paper need to be examined
in light of their replicability, their full economic bene t–cost ratios as well
as their overall success in reaching the poor. Section 3 also examines how
ICTs can be an indirect instrument of poverty reduction through their
impact on growth. This can occur in two ways: either the ICT sector emerg-
ing as the leading sector of growth and innovation for the economy,2 or
ICTs contributing enormously toward productivity growth through their
across-the-board adoption in the economy – which is analytically equivalent
to leap-frogging. Finally, section 4 offers some concluding remarks.
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COM MUNICATIO N TECH NOLOGIES AND PO VER TY
2. DEFINITION AND TYPES OF ICTs

Roughly, the new information and communication technologies can be
divided into three broad categories: (1) computing; (2) communications;
and (3) Internet-enabled communications and computing.
(a) Computing
With the invention of computers, which represent the most signi cant
technological breakthrough of the last half of the twentieth centur y, the
cost of computing has declined exponentially over the years – and the use
of personal computers (PCs) has increased by leaps and bounds. At the
most general level, computers augment and improve thinking capabilities
of individuals and organizations and enhance ef ciency. One important
example relates to the business management system, known as ‘enterprise
resource planning’ (ERP) where new software enables rms to ef ciently
integrate all facets of business, including planning, manufacturing, sales
and marketing. Another example of an important use of computing is com-
puter-aided manufacturing and computer-aided design (CAD/CAM) in the
product design for the manufacturing process. This process has radically
improved product lifecycles (particularly, reduced the time lag between
conceptualization of the product and its entr y into the market) as well as
the quality and complexity of product design.3
(b) Communications
Communication, which is one of the most important aspects of modern
human life, has two broad categories: one-way and two-way communi-
cations. The most common form of communication is one-way communi-
cation, which includes broadcasting media like radio and television.
Two-way communication devices, such as telephones, telegraphs and
pagers, have improved signi cantly over the last two decades or so. The
Internet’s growth is largely a function of two-way communications links
(telephone lines) and PCs. However, in most developing countries, mobile
telephones are easier to get than traditional xed landline telephones.
Therefore, the movement of the Internet and Internet applications onto
mobile phone systems will have tremendous technological implications for
these countries.
(c) Internet-enabled communications and computing

The Internet, including the World Wide Web, is one of the most import-
ant technologies to affect both communication and computation. The
Internet provides, on the one hand, a new communication medium that
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allows activities like e-mail or chat lists for group communication and, on
the other, multiple modes of communication by fostering new interfaces
between new and old all forms of communications. For example, one can
now communicate via voice to others through Internet telephony, or use
mobile phones to access the Web. The World Wide Web allows people to
search for and obtain information in the Internet. It is now common for
people to post messages, create home pages and communicate with many
others. The Internet also provides communities with a whole new means of
communication (i.e., many-to-many point communication such as chat lists
and discussion forums), and collaborative platforms.
The Internet not only provides individuals with access to more infor-
mation but also facilitates new ways of representing information (multi-
media), structuring information (through hyperlinks) and creating
information (through collaborative and distance work). Unlike many other
media that treat users as passive, the Internet is an active medium that
demands a greater degree of sophisticated thinking and logical skills than
others.
Finally, the Internet is also evolving. It is going beyond PCs and into palm-
tops, mobile phones and appliances. Already, Bluetooth technological stan-
dards and devices allow any device to ‘talk’ (electronically) to any device
through wireless systems, including the wireless Web, cell phones and
laptops. The Internet has revolutionized not only communication, but also
commerce and computing in all elds, including scienti c computing and
business automation. With the advent of ICTs, e-commerce has burgeoned
(along with trade in information products). In business, the simple automa-
tion of business processes like accounting and payroll, and the subsequent
integration of these functions via ERP software, are being gradually
replaced by Web-based inter-enterprise or intra-enterprise ERP (with the
outsourcing of most non-essential business functions), supply-chain
management, auctions for procuring supplies, and the like.
3. HOW CAN ICTs HELP REDU CE PO VER TY?

ICTs can potentially enhance the welfare of the poor in two ways: directly
and indirectly. Direct bene ts of ICTs include those applications of ICTs
that directly contribute to the welfare of the poor. ICTs can also enhance
the welfare of the poor indirectly, albeit often more effectively, through
rapid growth – and the associated trickle-down effect in terms of enhanced
income and employment that ICTs can generate in the economy.
(a) Direct impacts of ICTs

As noted above, ICTs have the potential to improve the welfare of the poor
directly in a number of different ways. New applications of ICTs can help
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improve the availability of market information, create new economic

opportunities, facilitate access to health and education facilities, and
promote a more ef cient and fairer system of governance.4
(i) ICTs to provide market and other information for improving livelihoods
ICTs can be an important source of market information. They can provide
consumers with information on the lowest prices of products, the rms’
information on the lowest and different sources of supply, help reduce
transactions costs and barriers to entr y, and improve market ef ciency.
Following the lead of advanced countries, but understandably to a con-
siderably much lesser degree, ICTs are being used in various states of India
as well as in other developing countries to help improve the availability of
market information to consumers and producers. This helps improve the
ef ciency of the markets in which the poor participate and thereby improve
their economic prospects. The following paragraphs brie y discuss a few
examples.
Information centers A number of such information systems exist in India.

First, the M. S. Swaminathan Research Foundation (MSSRF) in Chennai
has established village information centers to provide rural farmers infor-
mation about agricultural practices. These were set up with support of the
Canadian International Development Research Center (IDRC) and other
aid agencies, to provide poor villagers with various types of information
through the Internet in order to enhance their economic well-being. This
information includes the cost and availability of farming inputs (from
distant suppliers), grain and seed prices, health and life insurance, welfare
opportunities, and other aspects of their work and daily lives. Second,
another such project is the Warana Wired Village in Maharashtra which has
set up information kiosks in seventy villages to allow villagers access over
the Internet to agricultural as well as medical and educational information
(Bhatnagar 2000). Third, on a much larger scale, states like Andra Pradesh
and Karnataka are undertaking efforts to equip, with private sector invest-
ment, thousands of villages with information kiosks that can access govern-
ment and other information.
Electronic marketplaces In India, the Internet is being used to market the

products of the poor communities. Two such examples are notable. First,
a US-based non-governmental organization (NGO) PEOPLink, has linked
producers of commodities in poor communities in Tamil Nadu to poten-
tial markets through the Internet (PEOPLink 2000). One village in Tamil
Nadu, Kizhur, which excels at making traditional cotton saris and other
cotton garments, sells its produce through PEOPLink’s website to con-
sumers all over the world. These types of innovations have the potential of
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substantially reducing transaction costs by eliminating the layer of inter-

mediaries who often absorb a large chunk of the pro t. Second, similar
functions are performed by the Foundation of Occupational Development
(FOOD), an Indian NGO, which promotes the sale of rural women coop-
eratives’ products through the Internet.
Other local artisans and merchants, organized into community-based
producer groups, in a number of developing countries in Asia have joined
the innovative marketing strategy offered by PEOPLink. These include
women artisans from Nepal, handicraft makers from Bangladesh, Sri
Lanka, the Philippines, Thailand, and even Tibet (PEOPLink 2001).
In the Philippines, a virtual marketplace for agricultural products was
recently launched by the Land Bank of the Philippines in partnership with
a private e-commerce company called ‘b2bprice now.’ This Internet-based
initiative was intended to provide a marketing alternative to farmers’ coop-
eratives and small entrepreneurs and enable them to engage in direct
selling. Registered cooperatives are provided with free access to the Inter-
net through government facilities like that of the Department of Agricul-
ture or NGOs and parish churches (The Philippine Star, 2001). However,
success in such efforts is not likely to be easy or immediate as there are
insurmountable barriers to Internet commerce, such as trust (between
buyers and sellers), payments, security and distribution.
Milk cooperatives One successful application of the ICTs has been the use
of technology to enhance milk collection in Gujarat milk cooperatives,
India (Bhatnagar 2000). The electronic technology measures and transmits
the quality and quantity of milk that farmers are delivering to the system.
This system makes the collection and evaluation process faster and more
ef cient, and reduces the scope for fraud practices by middlemen.
Farmers’ task managers In some parts of Jammu and Kashmir in India,

farmers sitting at home can monitor the soil on their elds. ICTs can be
used for managing the farmer’s timetable, crop scheduling, insect and
rodent control, marketing and even water management. There are some
websites set up to exclusively serve farmers, giving information, ranging
from crop patterns and weather forecasts to the latest government policies
on agriculture. Similarly, in Rajasthan, software called ‘SimTanka’ was
written to help villagers calculate the amount of rainwater they could expect
in their tanks and ponds based on simulations and past records of the area.
This illustrates how ICTs can help people overcome the barriers to access-
ing various types of information, including both local information and
global knowledge.
As the examples illustrate, there are many different types of information
lacuna that the ICTs can help with. One of the main efforts in this regard
has been the establishment of information centers that provide the rural
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population with access to a variety of information services. However, for

information centers to be successful, a number of issues are salient. The
rst and foremost issue is of course the relevance of the center – whether
the information content catered by the center is relevant to the needs of
the clients. Other issues of similar import relate to the availability of ade-
quate nancial and human capital and physical infrastructure; to the mode
of operation of the information center – whether it or some other node in
the network has information-gathering and other capabilities; and to the
cost effectiveness and the degrees to which appropriate technologies are
used.
Needless to say that one does not have to rely on the Internet only for
the purpose of disseminating market information to the rural areas or to
sell produce of the poor. ICT tools such as xed-line telephones and mobile
phones can be as effective at improving business opportunities and trans-
action ef ciency as the Internet. As such facilities permeate into the rural
areas, it is expected, as is obvious from the present trend, that they will be
increasingly used for such commercial purposes. For instance, the Self-
Employed Women’s Association (SEWA) in Gujarat helps women in remote
villages to support themselves by trading, buying and selling goods using
telephones (InfoDev 1999).
Some of the projects pro led above are innovative and apparently
bene cial to the farmers and other poor villagers, but many of them,
especially the pilot projects, are still nancially supported by external
donors. What are not clear are the full costs involved, the bene ts, the sus-
tainability of the projects and, on larger scales, the amounts of human
capital and other support required to make the best use of these types of
facilities. 5
(ii) ICTs for creating new employment opportunities

The need for business information as well as the inexorable trend toward
globalization that even touches the lives of remote villagers in such coun-
tries as Bangladesh (in the form of migrant workers) has led to new busi-
ness opportunities in the ICT sector.
One example is the demand for cellphone services in rural Bangladesh.
The Grameen Phone program is a remarkably innovative initiative that
makes use of ICTs to generate incomes for poor households in rural areas.
The program is an additional lending window for Grameen Bank members
who would like to earn supplemental income by operating a mobile phone
service in the village. A study by the Canadian International Development
Agency (CIDA) concludes that the program contains many rural develop-
ment ‘ rsts’: It is the rst rural development micro-credit facility in a
developing countr y to target the creation of micro-enterprises based on
ICT services. It is the rst rural development micro-credit facility in a
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developing country to assist in the creation of village telephone service busi-

ness using digital, wireless telephony. It is the rst private sector rural
telecom initiative that speci cally targets poor village women for establish-
ing micro-enterprise. Finally, it is the rst private sector telecom initiative
with the explicit purpose of rural poverty reduction (Richardson et al.
2000).
The impact of the program on improving household incomes of those
who own such mobile phones has been tangible since the revenue stream
from the telephone business is substantial. In addition, this activity is largely
supplemental – the owner of the mobile phone does not have to give up
her existing business or household chores while operating the telephone
services. This has also enhanced the status of the women (since most village
phone (VP) operators are female): it has greatly improved her authority in
regards to decision-making in the household (especially when the tele-
phone is under control of the women rather than their husbands!). The
social status of telephone owners in the village has signi cantly increased
because her house becomes a hub of rural activity with people waiting to
make phone calls, including the better-off villagers.
The success of the Grameen Phone program in Bangladesh has spurred
similar programs in other parts of South Asia. These programs allow people
to rent out mobile phone services to others in their villages. Such programs
can be cost effective in terms of handset cost recover y (although cost-recov-
er y calculations often do not factor in the cost of base stations and other
infrastructure). Also, one needs to recognize the inherent limitations of
such programs as an instrument of employment creation: however success-
ful these projects are at creating opportunities for some people, they are
not likely to be expandable to many. That is, not ever yone in a village will
be able to make a living by offering mobile phone services. However, other
types of employment opportunities may arise from other applications of
ICTs. In India, the proliferation of the so-called STD booths, small street-
side shops offering access to long-distance phone services, has resulted in
the employment of thousands of people, presently estimated at 600,000 in
300,000 booths. This also paved the way for the creation of Internet kiosks
where a user can get access to networked PCs for a fee. Like the STD booths,
these kiosks create low-cost employment (Ramani 2000).
It is also possible for ICTs to create employment opportunities for the
rural poor directly in the IT industries. One possibility is to transfer lower-
end computer work from urban to rural areas, so-called ICT-enabled
services. Many of these activities, such as data entry, website design and
some back-of ce processing (e.g. call center operation), are low wage,
labor-intensive and can be potentially transferred to rural areas. The preva-
lence of such employment opportunities could help deter rural to urban
migration and could even result in reverse migration of urban IT workers
relocating to new rural back-of ce sites. However, all these are contingent
292
upon the existence of adequate infrastructure. Moreover, this could ver y

well need scal incentives to persuade businesses to shift their operations
to rural areas with telecommunications links. Without such incentives, the
work is most likely to remain in urban areas with existing business ties.
It has also been suggested that ICT-enabled services could create excit-
ing income and employment opportunities for traditionally disadvantaged
groups such as women and the disabled (Gothoskar 2000; Mitter 2000).
However, the potential is largely in relation to home-based teleworking,
allowing a woman to earn a living while managing her home, but requiring
immediate or constant access to computer equipment, something that poor
women and the disabled could not afford.
While these ideas of using ICTs to create employment for the rural and
urban poor are interesting and ambitious, there are reasons to be skeptical
of them as an important vehicle of poverty reduction. It is not clear how
many illiterate farmers or shermen in the developing world will be able
to cope with the demands of sophisticated ICTs and telematics tools.6 The
most basic educational requirement for using ICTs is some degree of liter-
acy.7 In addition, further capabilities like interpreting information and
creating knowledge will require more domain expertise and some basic IT
skills (the latter of which can perhaps be learnt in informal ways).
(iii) ICTs for educational and learning opportunities

An important distinguishing characteristic of the poor is that they have few
assets, including human capital. Most of them have little or no education.
One way for the poor to escape poverty is to improve their human capital
by way of education. Education can be formal or informal. Formal learn-
ing requires the support of traditional institutions. There are many variants
of formal distance education. For adults, informal education can be more
relevant and can be designed to cater to their speci c needs. In this con-
nection, along with the conventional literacy programs provided by the
private and public organizations, distance education can be a powerful sup-
plementar y instrument to educate the poor. Distance education through
radios has historically been quite an effective mechanism in many coun-
tries, and many new ICT programs are being designed around these. Dis-
tance education can also offer valuable credential opportunities for
commercial employment for workers seeking work in the more modern
sector.
Depending on the type of technology and the degree of change in edu-
cational practice, the potential impacts of ICTs on education differ. Edu-
cational technologies can be broadly classi ed into three different modes:
First, distance education via satellite and other traditional means – this
involves traditional content (e.g. lectures) in synchronous learning (i.e. all
students learning at the same time). Owing to the larger scale and
293
synchronous nature, this may be more suited to traditional or formal forms

of distance education. Second, web-augmented learning – this involves use of
the Web for improving content or educational deliver y of standard content,
e.g. lectures. Often, this may be done asynchronously (i.e. each student
learning at his own pace). Third, more advanced ICT-enabled learning environ-
ments – this involves the creation of new learning environments, in which
both pedagogy and content take on such new forms as computer tutors,
deliver y of asynchronously ‘chunked’ Web-based lectures (i.e. lectures that
can be accessed in parts in non-linear sequences) (Brusilovsky and Miller
2000). These online educational systems may be supplemented or sup-
ported by access to Web resources, e-mail and other communication, and
collaborative environments. The second and third modes are suited to both
formal and informal learning.
Many, if not most, distance education systems are an amalgam between
the rst and second modes. Even the more technologically rich systems for
students in higher education institutions are mainly offering variants in
content or pedagogy. The World Bank’s African Virtual University (AVU)
is an exemplar of this: it connects African institutions of higher education
with universities in the West via synchronous satellite broadcasts of lectures.
There may have been some improvements by delivering better quality
content (e.g. lectures from the best teachers), but the satellite delivery
method is second generation at best, being less interactive or asynchronous
than the best Web-based methods. Nevertheless, as a recent evaluation
suggests, the AVU can be economically viable, and the content and peda-
gogy has been appreciated by students ( Juma 2000). This model relies on
‘foreign’ institutional cooperation, and there is a need to ensure that local
institutions can be equally successful when foreign cooperation ceases.
Some countries like India and China have well-developed distance edu-
cation systems and are moving to the second and possibly even to the third
mode. Larger, more established, distance education institutions are making
the transition to Web-based delivery systems, which should improve both
pedagogy and content. For instance, the Indira Gandhi National Open Uni-
versity now carries a substantial amount of the content of their distance edu-
cation systems via the Web. Similarly, the University of the Philippines Open
University has started offering courses online through the Integrated
Virtual Learning Environment, a courseware management system that was
designed and developed by the Center for Instructional Technology of the
National University of Singapore (UPOU 2001). Another case is the Indo-
nesian vocational system, which allows students and teachers to communi-
cate via the Internet.8 Other institutions, such as the new breeds of schools
in Thailand, and similar Smart schools in many countries like Malaysia,
India and Pakistan, are putting in Internet connections and computers to
ensure that their students can have access to new content and learning
opportunities (Szczypula et al. 2000). It may be noted that the above
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projects are mostly being carried out in established educational institutions

for formal learning in urban areas. It is also important to recognize that
learning with ICTs and trends in distance education are also inextricably
associated with the existing demands of current society for lifelong learn-
ing and individual perceptions on ‘learn how to learn.’
For the poorest, however, things are changing more slowly and in bits
and pieces. A few pilot projects and software development efforts are under
way for rural areas. Of these, a notable example is Andra Pradesh, where
villagers can now gain literacy from computer-based software learning
systems. Another example is the World Bank’s program to train low-income
women in computer skills in India. The Grameen Bank is collaborating with
Nippon Electric Company (NEC) of Japan in developing an online edu-
cational system that would provide ‘knowledge on demand’ for whole
families. People would decide what, how much and the pace at which they
would want to learn. Meanwhile, the Science Education Institute of the
Philippines came up with its ver y own mobile IT classroom loaded with
computer equipment, educational software, and other instructional tools
and materials. This moving classroom is envisioned to expose teachers and
students to the state-of-the-art technology for an alternative method of
learning and instruction. Particularly targeted are schools in rural areas
that do not have access to computers (National Computer Center 1999a).
To facilitate the educational needs of illiterate villagers, the Grameen
Bank is working with media experts at the Massachusetts Institute of Tech-
nology to develop a voice-operated system. This speech technology would
allow a person to speak in Bangla and the computer would re ect the inter-
preted text instantaneously on the screen. This text can be interpreted back
into voice and read out aloud by the computer. With this technology, an
illiterate woman can talk to the computer and start learning how to read
and write (Asia Society 2000).
As laudable as these experiments are, it is not clear how replicable these
projects are. Experience suggests that many potentially good technologies
or practices could not be replicated beyond the demonstration phase. In
addition, perhaps the more economically viable way to reach these poor
communities may still be the traditional means, such as radio, television and
print, which are essentially outpost classrooms. Village information shops
and kiosks may also provide some learning opportunities, but they are not,
in most developing countries, in a position to supplant those traditional
means.
While ICTs open up new learning opportunities, most developing coun-
tries simply do not possess the nancial wherewithal to take full advantage
of these opportunities. Many of these countries still lack such basic edu-
cational infrastructures including trained teachers and adequate physical
facilities (consequently, many students in rural areas still go without desks,
writing boards or proper school buildings). Given the paucity of traditional
295
facilities, it is highly unlikely that these countries would be able to sustain

a well-developed physical infrastructure that new ICTs demand. It is there-
fore not clear whether and to what extent ICTs can be an effective com-
plement, or let alone a substitute, for traditional educational tools.
(iv) ICTs for healthcare

The poor in developing countries suffer from many serious disadvantages,
one of the most serious being the lack of access to adequate healthcare
services. One suggestion to overcome the inadequacy has been to link up
with the better medical facilities at home and abroad. To this end, some
effort has been made to link up with the developed countries. For example,
hospitals across India – in particular in Mumbai – and other developing
regions are making use of systems such as WebMD’s Internet system to link
healthcare workers around the world, and to provide access to medical
information from other countries about illnesses and treatments (United
Nations Foundation 2000). There are also efforts to widen the coverage of
healthcare information and health service delivery through IT networking
at the national level. The University of the Philippines–Philippine General
Hospital has recently ventured into medical informatics and has helped
establish the National Telehealth Center in 1998 to facilitate integration of
IT to healthcare deliver y and promote interaction among health pro-
fessionals and the public all over the country as well as update medical
know-how through the use of telemedicine (National Computer Center
1999b). Meanwhile, the Grameen Bank and Hewlett-Packard have been
working together in a joint venture to bring health services to rural villages
through e-Health Care System. It will operate in a way that is self-support-
ing. The system will hopefully be operational by the end of 2000.
These specialized public databases and communities illustrate the poten-
tial value of the Internet, but again, as with other ICT applications, it is far
from proven whether investments in such systems are more ef cient, or
even as ef cient, as traditional investments in better equipment, more
doctors or hospital wards. It is also unclear as to what extent these Internet-
based services can be accessed by the urban poor, let alone the rural poor.
In rural areas, without the assistance of third parties, more often than
not, the required expertise would not be there to interpret and use some
of the information from sophisticated domain-speci c elds like health
services. Again, as with other ICT applications, it will be necessar y for the
policy-makers to establish at what point in the stage of the healthcare
system’s development that such ICT-based systems should be added on to
complement the traditional system.
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(v) ICTs for good governance

The proponents of the notion of e-government argue that it will ensure
greater ef ciency, transparency and accountability of government. In
particular, the citizens will not have to waste time for paper work in either
running around to nd the right agencies or waiting in the queue or
waiting a long time for the papers to be processed. Most things will be done
online from replacing lost identi cation cards (IDs) to registering vehicles.
In addition to ef cient services, an e-government can also be expected to
create opportunities for citizens to participate in the decision-making
process as well as to check on the arbitrariness and unfairness of govern-
ment operations associated with the traditional system.
Many developed countries are making many of their services available on
the Web. Some countries such as Singapore and Austria have set up one-
stop shops for satisfying the citizens’ needs. Some developing countries –
such as India, China and the Philippines – are tr ying to imitate these
examples.
China has begun using ICTs to revamp its government services. The
‘Government Online Program’ calls for the proportions of government
services to be online to be 30 per cent, 60 per cent and 80 per cent by 1998,
1999 and 2000 respectively. This also relates to several ‘Golden Projects’
being carried out by the government. These include the ‘Golden Tax’
project, which uses ICTs for tax ling; the ‘Golden Bridge’ project for con-
necting citizens to a nation-wide nancial network; the ‘Gold Card’ project
which uses smart cards for facilitating nancial transactions and payments
to the government; and the ‘Golden Customs’ project for tariff collection
(Wu and Yuan 2000). Similar efforts are under way in a number of Asian
developing countries. In the Philippines, the government, by virtue of an
Executive Order issued in year 2000, adopted the Government Information
Systems Plan. Dubbed ‘Philippine Government Online,’ the plan serves as
a framework and guide for the government-wide computerization of key
frontline and common services and operations of government (Of ce of
the President 2000). In fact, a number of IT-enabled projects are under way
including the Electronic Procurement System, which is an Internet-based
procurement facility that would simplify the procurement process and
hasten supplier registration and payment, and the e- ling of taxes and
payment system or the Automated Data Capture System of the Bureau of
Internal Revenue (Yap 2001). These projects, as well as similar recent
undertakings, are expected to improve productivity, heighten transparency
and reduce red tape in government transactions as well as improve the
relationship between the business sector and the government through the
so-called B2G (business-to-government) transactions.
Another successful early effort in the area of e-governance is the Indian
government’s computerized ticketing system for its railways which has
297
improved ef ciency and reduced corruption amongst ticketing of cials
(Heeks 2000).
The latest and most ambitious projects in e-government are the Gyan-
doot project in Madhya Pradesh and Vision 2020 of the Chief Minister
Chandrababu Naidu in Andhra Pradesh. These projects seek to provide a
broad range of government services with ICTs, including access to govern-
ment departments’ information, issuance of smart cards and electronic
billing and tax processing.9
Critics argue that e-government is just another fancy idea, which has little
relevance for citizens of developing countries where basic economic needs
still remain largely unful lled. Moreover, even if it is a good idea, the
successful implementation of such an idea is virtually impossible in most
developing countries for bureaucratic and political reasons. For instance,
in India, earlier attempts to computerize government operations have
failed due to bureaucratic apathy as well as the lack of implementation capa-
bility of the government (Heeks 2000). It can also be recalled that the plans
for the modernization (including automation) of elections in the Philip-
pines have encountered some rough sailing and delay due to in ghting in
the Commission on Elections.
Finally, it may be noted that while e-governance can be a source of ef -
ciency for the government, it has its own downside. In the absence of a
vibrant participator y political system, e-governance may take Orwellian
turns, as comprehensive computerization of individual data can make
government omniscient and omnipotent. In addition, in such a state, if all
decisions are taken mechanically based on a computer’s interpretation or
assessment of the data, citizens are likely to lose their voice. However, com-
puters are not necessarily good or bad; much depends on what use we make
of them.
(vi) ICTs for empowerment

The experience from India suggests that the introduction of ICTs into the
government’s operation has partly contributed to the empowerment of
poor villagers by enabling them to improve control over their lives. These
technologies have made their voices heard, increased their access to local
resources, as well as their participation in de ning public services to serve
their own needs. Thanks to ICTs, villagers can fairly easily reach higher-level
of cials, through electronic mail, video conference or live television pro-
grams, to express their needs or report the wrongdoings of government
of cers, especially those at middle and low level.10 The practice of the
government of Madhya Pradesh in consulting regularly with local citizens
to select services provided, design and test the network system has not only
contributed to the success of the project but also opened opportunities to
the villagers to take part in the decision-making process.
298
From the case studies discussed above, it appears that there are poten-
tially important direct impacts of ICTs that can be bene cial to the society,
if not necessarily to the poorest segment of the society. Developing coun-
tries should creatively use the traditional means, in conjunction with ICTs,
to alleviate the various facets of poverty. However, the role of ICTs is likely
to var y from country to countr y, depending on the stage of development.
In societies, where basic literacy and numeracy are missing and infrastruc-
ture is primitive, traditional tools to foster basic education are likely to be
more effective. Similarly, basic services like healthcare, doctors and hospi-
tals have to pre-exist before ICTs can be utilized to improve the deliver y.
For more developed societies, ICTs can play a more effective role in improv-
ing the economic status of the poor and disadvantaged segment of the
society.
Finally, given the paucity of hard data, more micro-level research is
needed to assess the impacts of ICTs on the poor: their employment oppor-
tunities, their education and skills formation and their overall empower-
ment within the society. The raw data for these studies may come from the
many ICT programs that are now being implemented in many poorer coun-
tries. These studies would also guide future implementation of such pro-
grams, by avoiding the pitfalls of faulty conceptualization and poor
implementation and by building on their strong points.
(b) Indirect impact of ICTs

Empirical evidence suggests that economic growth is found to be the most
effective means to alleviate poverty (see, for example, Pernia and Quibria
2000 and Srinivasan 2001). ICTs can potentially alleviate poverty in signi -
cant ways if they lead to rapid growth in income and employment. This
income growth can occur either through some sectoral production boom
(with little or no economy-wide ef ciency spillovers) or through an
economy-wide ef ciency gain.11 A sectoral production boom may result
from the success in the export of a particular ICT product (for example,
software) and may be bereft of any ef ciency effect on the traditional
sectors of the economy. On the other hand, a successful across-the-board
adoption of ICTs may lead to economy-wide ef ciency gains akin to those
in the advanced countries.
With respect to the rst possibility, some developing countries have
found a niche in the ICT domain for promoting their export and economic
growth. One such ICT product is software for India, which has been a
signi cant stimulus of economic growth for the economy. The total soft-
ware exports in India reached US$4 billion in 1999. The Indian IT indus-
tr y has grown at a compounded annual growth rate of 40.5 per cent
between 1994 and 1999 and constitutes about 1.5 per cent of the economy
(NASSCOM–McKinsey 1999). A widely cited recent study by NASSCOM
299
and McKinsey suggests that if India can continue this momentum of

growth, the countr y can expect to earn about US$87 billion from export
of software by 2008, and employ 2.2 million more workers (above the
280,000 workers in 1999).12 But if these economic projections are realized,
software exports may turn out to be the main engine of growth for the
economy and hold the key to the future transformation and modernization
of the countr y. Such growth is likely to have a salutar y impact on poverty
reduction through its various linkage effects in production and consump-
tion.
Another area where developing countries are likely to excel because of
their putative comparative advantage is IT-enabled services or teletrade.
These types of activities cover a broad range of services such as data entr y;
transcription or digitalization; correspondence of different types like insur-
ance claim processing; preparation and collation of research materials (i.e.
legal or medical); marketing functions using direct mail and e-mail; design
and maintenance of websites; publication activities such as compilation of
abstracts and typesetting; handling of large volumes of telephone com-
munications with existing or potential customers (call centers); and tech-
nical support centers (Ramani 2000; The Asia Foundation 2001). Data
processing work is extremely labor-intensive and requires modest education
(not much more than the secondary level) and familiarity with English.
Many multinational companies have been using offshore services from such
diverse countries as India, the Philippines, Sri Lanka, China and the
Caribbean. In 1999, such services in India employed about 46,000 people
and contributed about half a billion dollars to export earnings. They are
expected to contribute about US$17 billion in export earnings in 2008 and
generate more than 1 million more jobs. During the 1998–99 period, the
majority of this workforce was employed in back-of ce operations (includ-
ing revenue accounting, data entr y and data conversion). This situation is
expected to change in the future as it is projected that the bulk of employ-
ment will be generated by activities related to content development
(NASSCOM–McKinsey 1999). A few examples of companies involved in
teleworking are wholly owned subsidiaries or networked companies of
multinational corporations such as CSI Software and ALLTELL India, both
located in Mumbai. Subsidiaries of airline companies undertaking back-
of ce functions can be found at the Santa Cruz Export Processing Zone in
Mumbai (Mitter 2000).
The Philippines is considered one of the largest producers of IT services,
second only to India. Exports of this industr y increased from only US$60
million in 1993 to US$250 million in 1997. In fact, the growth in the exports
of IT services during the period was much higher than the growth of the
country’s exports of IT products (Austria 2000). Aside from multinational
corporations, other organizations like the National Library in Paris had taken
advantage of the country’s pool of computer-literate workforce (Ng 1998).
300
There are also a few back-of ce occupations demanding relatively

advanced knowledge and skills such as the activities contracted by the
Chemical Abstracts journal said to be involving around fty Ph.D. quali ed
personnel in Mumbai as well as the typesetting arrangements contracted in
India by the publishing houses Macmillan and McGraw-Hill (Ramani 2000).
Some minimal skill-enhancement training is likewise required in telework-
ing, including oral and written communication, customer care, familiarity
with accents (in terms of transcription work), and interpretation of legal or
medical terminologies, among others. It is expected that with further inte-
gration of the global economy and the improvement of the telecommuni-
cations infrastructure in developing countries, a large chunk of the
business-related data-processing services would move to developing coun-
tries. These IT-enabled services, which are growing at a ver y rapid pace, can
potentially play a role for the poorer countries in their economic trans-
formation in the post-industrialization era similar to what labor-intensive
manufacturing such as textile, garments and footwear did in the earlier
round of industrialization in East Asia. The potential could be fully realized
if the appropriate regulatory framework is put in place alongside the expan-
sion of infrastructure. There should exist clearly de ned rules covering
intellectual property rights, security, privacy and data protection, and regu-
lations on content, which are regarded to be critical for facilitating teletrade
within and between countries. Countries in the region such as the Philip-
pines, Thailand and Malaysia were said to have made efforts at addressing
these issues (Mitter 2000).
Finally, another potential route to enhance growth in developing coun-
tries – and thereby reduce poverty – is through a comprehensive adoption
of the new ICTs throughout the economy, a strategy of economic leapfrog-
ging. No doubt, the comprehensive adoption of ICTs will help modernize
their economies and help accelerate growth if successfully implemented.
The US and a number of other advanced economies have apparently suc-
ceeded with the help of ICTs in overcoming the ‘speed limits’ set by the
historical growth rates trend. While the contribution of ICTs to the growth
of these economies is now universally acknowledged, the precise extent and
nature of this contribution has been subjected to some contention. In
particular, the contribution of ICTs to an economy-wide productivity in the
US has been the subject of a good deal of recent empirical studies.13 These
productivity studies are fraught with many conceptual and data dif culties.
Keeping this caveat in mind, the important empirical nding that emerges
from these studies is that the rapid pace of the US economy in the second
half of the 1990s was made possible through the rise in labor productivity
induced by ICTs.14 In particular, several of these studies note that, for the
US economy, IT contributed between 44 and 73 per cent of the accelera-
tion in labor productivity, which is estimated at between 0.7 and 1.5 per
cent, in the second half of the 1990s. For the whole economy, total factor
301
productivity (TFP) due to production of new technologies is estimated to

have contributed between 0.2 and 0.3 per cent to the increase in produc-
tivity growth. These studies nd some spillover TFP effect outside the IT
sector with the notable exception of Gordon (2000) (see Table 1 for various
productivity estimates for the US economy). While many other advanced
economies experienced similar measures of productivity growth, accelera-
tion in labor productivity growth has been most pronounced in the US.
However, this growth in the US and elsewhere was made possible through
signi cant changes in the skill composition of the labor force, managerial
practices as well as the organizational structure of the rms. These changes
were able to accommodate the advantageous features in the new tech-
nology.15 However, the changes involved a signi cant time lag between the
introduction of the new technology and the yields in productivity.
It is suggested that developing countries would also experience a similar,
even a greater, shift in productivity if they incorporate ICTs across the
board in their production structure. How realistic is such an idea? As data
on ICT diffusion indicate, the diffusion rates in most poor developing
economies remain abysmally low to make such a transition to the new-
technology regime feasible in the immediate future (Quibria and Tschang
Table 1 United States: sources of the acceleration in labor-productivity growth,

1974–99 (per cent)
Study 1 Study 2 Study 3 Study 4 Study 5
Jorgenson Oliner and Whelan Council of Gordon
and Stiroh Sichel (2000) Economic (2000)
(2000) (2000) 1974–95/ Advisors 1972–95/
1990–95/ 1990–95/ 1996–98 (2000) 1995–99
1995–98 1995–99 1973–95/
1995–99
Acceleration in 0.90 1.00 1.00 1.50 0.70
labor productivity
Of which:
Capital deepening 0.30 0.50 ... 0.50 0.30
IT sector 0.20 0.50 0.50 ... ...
Other sectors 0.10 0.00 ... ... ...
Labor quality –0.10 –0.10 ... 0.10 0.10
Total factor 0.70 0.70 ... 0.90 0.30
productivity
IT sector 0.20 0.20 0.30 0.20 0.30
Other sectors 0.50 0.50 ... 0.70 0.00
All other factors ... ... 0.30 ... 0.00
Memorandum
% of acceleration 44 64 73 ... ...
in labor
productivity
related to IT
Source: IMF (2000).
302
2001). Diffusion would require substantial investments in related physical

infrastructures as well as human capital, much beyond the present capaci-
ties of many developing countries. Even if such resources were available,
the impact would be far from immediate. These economies would need a
considerable amount of time to assimilate the technology, reorganize their
production structures, recon gure the organizational structure and adjust
management practices in line with the new technologies. In the transition
period, there are likely to be substantial adjustment costs in terms of pro-
duction disruptions and labor unemployment.
In short, the idea of technological leapfrogging, though tantalizing,
would require a radical development strategy that is embedded on the wide-
spread use of ICTs in the economy. However, such a strategy may not be
feasible or desirable for all developing countries at various stages of
development. 16 It may not be feasible because it may entail changes in skills
and organizational structures of these economies much beyond their
present capacities. It may not be desirable because many of these activities
entail substitution of one medium from another with different implications
for labor demand. Many of these substitutions would reduce the demand
for unskilled labor that may not be desirable for a country struggling with
a large unemployment problem. This is not to denigrate the important role
ICTs are likely to play in the future economic transformation and
modernization of the poor economies. The process needs to be carefully
sequenced with due consideration of their various social, economic and
other constraints.
4. C ONC LUDING REMARKS

The foregoing discussion suggests that ICTs can be potentially an import-
ant instrument of poverty reduction in poor countries. ICTs can directly
help improve the welfare of the poor through its many innovative appli-
cations in the areas of health, education, dissemination of market infor-
mation and creation of new employment opportunities. ICTs constitute the
new genre of general-purpose technology and can potentially contribute
toward improving productivity and economic growth, which will have a
bearing on the welfare of the poor. In this regard, two important features
of ICTs are worth emphasizing. First, unlike many previous technological
innovations, the ICT technology has a ‘leapfrogging’ property. It can
enable countries to skip technological stages (Negroponte 1998). Second,
ICTs are likely to broaden the geographical scope of national labor markets
and contribute toward a more ef cient integration of these markets into a
global labor market. While the forces of globalization are rapidly breaking
down trade and investment barriers, ICTs are facilitating relocation of
service and manufacturing industries more in line with comparative advan-
tage across the world through rapid dissemination of market information
303
as well as the ef cient deliver y of services. This process will gradually bring
about a more seamless integration of the global labor markets – including
those for unskilled workers – and elimination of absolute poverty.
However, the bene ts of the ICT revolution may not be uniform nor
automatic across the countries. For the developing countries, success in
ICTs depends on their social and physical infrastructure as well as the exist-
ing legal and regulatory framework. The countries that have the favorable
social and physical infrastructure as well as the legal and regulatory frame-
work – or, the countries that are willing to undertake the necessar y invest-
ments as well as the reforms – will bene t more from it. Those that will be
reluctant or unable to take the necessar y measures will fall behind.
Addressing the above constraints is fundamental not only for the ICT
revolution but also for the process of economic development. Unless these
constraints are adequately addressed, only investments in computerization
and Internet access may be counterproductive. Indeed, these investments
may turn out to be a recipe for nancial disasters, given the better use of
scarce investible resources elsewhere in the economy.17 It is therefore
extremely critical that rather than swayed by the rhetoric and glamour of
ICTs, developing countries approach the new technology adoption in a
careful, sequenced manner.
Asian Development Bank
Singapore Management University
Philippine Institute for Development Studies
ACKNOW LEDGEMENTS
An earlier version of this paper was presented at the High Level Symposium
on Alternative Development Paradigms and Poverty Reduction at the ADB
Institute, Tokyo, in December 2000, as well as at a number of other
seminars in the region. It has bene ted immensely from the comments of
participants of these seminars. In particular, we would like to acknowledge,
without implicating, the helpful comments and suggestions of Anne
Krueger, Kirit Parikh and Muzzammel Huq. Also acknowledged with grati-
tude are helpful discussions with Ramesh Adhikari, Liu Li-Gang, Heather
Montgomer y, Terry Morrison, Sang-Woo Nam, Arvind Panagariya, Steven
Parker and Meredith Woo-Cummings. However, we are most grateful to
T. N. Srinivasan and M. Yoshitomi for their help in conceptualizing the
paper as well as valuable comments, and to Muhammad Yunus for his
encouragement. The research assistance of M. Arif Al-Mahmood, Mathurot
Chuladul and Thuy Thu Lee is gratefully acknowledged.
304
NOTES
1 The case studies are discussed in Quibria and Tschang (2001).
2 The term ‘leading sector’ owes to Schumpeter (1939). Leading sectors experi-
ence rapid productivity growth that leads to concomitant shifts in production
and consumption, but such effects are often limited to a small segment of the
economy. Examples of such leading sectors include railroads in the 1870s,
organic chemicals in the 1890s, automobiles in the 1920s, televisions in the
1950s and airplanes in the 1960s.
3 An important advantage of CAD/CAM over conventional designs is its ability to
transfer information regarding designs easily, rapidly and accurately across
organizational and national boundaries without distortions, something that is
not feasible in conventional designs. The use of CAD/CAM has become so
pervasive that the workforces in small and medium enterprises in Singapore had
to be retrained in three-dimensional CAD design technology so as to remain
relevant to the needs of multinational enterprises.
4 The literature exploring the interlinkages between ICTs and poverty is a sparse
one. The previous efforts in this regard include Mansell and Wehn (1998),
Talero and Gaudette (1995) and World Bank (1998). However, none of the
above provides a systematic analysis of how ICTs can provide information
services that affect the poor at the project level nor do they explore their macro-
economic implications.
5 The full economic bene ts of such innovative projects need to be systematically
evaluated. However, such an exercise is not simple as many of the bene ts are
not easily quanti ed. These include aspects of social bene ts that accrue from
the learning of various analytical and other skills, improved access to infor-
mation that enhances the quality of life for people (e.g. the access to infor-
mation about crops or training programs), and the development of an ‘IT
culture.’
6 However, experience suggests that even uneducated persons can be induced to
learn the use of modern tools if they nd suf cient bene ts in them. The rapid
spread of electronic pocket calculators among uneducated shopkeepers in many
developing countries and the rising demand of cellphones among the illiterate
women in Bangladesh are cases in point.
7 It is presumed that where illiteracy predominates, literate users would serve as
bridges to the rest of the user group. This is indeed the underlying assumption
behind the Development of Women and Children in Rural Area (DWCRA)
programs in Andhra Pradesh. Some projects such as the MSSRF Pondicherry
use secondary school-educated volunteer staff to assist users in their information
centers. However, to undertake more sophisticated higher ‘value-added’
employment, greater educational preparation becomes necessar y. Thus, for
positions in IT coding and software development occupations, vocational and
university-level certi cations become essential.
8 This Internet-based information system, which connects vocational institutions
dispersed over many thousand islands of the country, facilitates exchange of
information on curriculum and website development as well as helps transmit
academic concerns government administrators.
9 In Andhra Pradesh, how these efforts at e-government will affect the poor will
depend on the quality of the information provided by the system as well as the
success with which the government can eliminate red tape and corruption in
the system. In addition, the effectiveness of electronic governance (as well as any
other applications) will improve signi cantly if the poor had adequate
educational attainments.
305
10 A recent survey in Andhra Pradesh, which compiled the perceived level of

corruption in various government agencies, found the electricity board the
worst. Incidentally, this was also the rst agency whose data were computerized.
The information was supplied by the of ce of the Special Secretar y for IT,
Andhra Pradesh.
11 ICTs have been classi ed as ‘general purpose technologies (GPTs).’ These GPTs
are a form of drastic technological innovations that are used in a wide range of
sectors that dramatically change their existing modes of operations (Helpman
1998).
12 These projections are predicated on a number of optimistic assumptions such
as unconstrained availability of skilled labor (requiring massive reforms of the
educational system from the basic to the highest research university level)
existence of corporate capabilities for imaginative yet risky projects and a strong
domestic user base. In addition, the traditional conditions for growth, such as
good infrastructure, social and political stability, should satisfy.
13 These productivity studies were largely spurred by Nobel Laureate Robert
Solow, who in a 1987 book review, famously stated: ‘You can see the computer
age everywhere but in the productivity statistics.’ The failure of massive invest-
ment in information technology to boost productivity growth has now come to
be known as the productivity paradox.
14 The recent work by Paul David (1999) shows that productivity growth did not
accelerate until forty years after the introduction of electric power in the early
1880s. It was not until 1920 that the adoption rate for electricity reached half of
the US industrial machinery. Industries required time to reorganize their
factories around electric power to reap the ef ciency gains. By contrast, half of
the population in the US already uses a personal computer, fty years after the
invention of computers and only thirty years after the invention of the micro-
processor. The Internet recently achieved a 50 per cent diffusion rate in the US,
only thirty years after it was invented and seven years after it was launched
commercially in 1993.
15 There is a lively debate in the US whether the ‘new economy,’ embodied in the
ICT innovations, measures up to a second industrial revolution that encom-
passes electricity, automobile and air transport, radios, motion pictures and
indoor plumbing. On the one side of the spectrum are economists like Gordon
(2000) who thinks that these ICT innovations ‘fail the hurdle test as a Great
Invention.’ He goes on to argue:
Internet sur ng may be fun, but it represents a far smaller increment in
the standard of living than achieved by the extension of day into night
achieved by electric light, the revolution in factor y ef ciency achieved by
the electric motor, the exibility and freedom achieved by the automobile,
the saving of time and shrinking of the globe achieved by the airplane, the
new materials achieved by the chemical industry, the rst sense of live two-
way communication achieved by the telephone, the arrival of live news and
entertainment into the family parlor achieved by radio and then television,
and the enormous improvements in life expectancy, health, and comfort
achieved by urban sanitation and indoor plumbing.
On the other side are such economists as Cohen et al. (2000: 66) who posit:
modern information technologies . . . magnify and focus our brain power
in a way analogous to the way the tools of the Industrial Revolution
magni ed and focused muscle power. . . . Information technology is the
most powerful tool-set yet: in addition to enabling wholly new things (e.g.,
306
bio-technology, wireless communication), information technology signi -

cantly enhances the power and nesse of all previous tools.
16 In India, anecdotal evidence suggests that the operations of certain industries,
such as nancial services, automobile manufacturing and textiles, have experi-
enced productivity gains due to the application of ICTs. Yet labor productivity
continues to remain low in a large majority of rms in traditional manufactur-
ing where the use of new technology is virtually non-existent.
17 A recent study by Pohjola (2000) investigated the relationship between IT invest-
ments and growth in thirty-nine countries over the period 1980–95. It found
that, whereas such investments boosted growth in developed economies, they
were not so bene cial in developing countries that lacked complementary
policies.
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NEW INFORMATION AND

Some evidence from developing Asia

M. G. Quibria, Ted Tschang and Mari-Len Reyes-Macasaquit

I think that information technology can make unprecedented con-

Journal of the Asia Pacic Economy 7(3) 2002: 285–309

2. DEFINITION AND TYPES OF ICTs

(c) Internet-enabled communications and computing

3. HOW CAN ICTs HELP REDU CE PO VER TY?

(a) Direct impacts of ICTs

improve the availability of market information, create new economic

Information centers A number of such information systems exist in India.

Electronic marketplaces In India, the Internet is being used to market the

substantially reducing transaction costs by eliminating the layer of inter-

Farmers’ task managers In some parts of Jammu and Kashmir in India,

population with access to a variety of information services. However, for

(ii) ICTs for creating new employment opportunities

developing country to assist in the creation of village telephone service busi-

upon the existence of adequate infrastructure. Moreover, this could ver y

(iii) ICTs for educational and learning opportunities

synchronous nature, this may be more suited to traditional or formal forms

projects are mostly being carried out in established educational institutions

facilities, it is highly unlikely that these countries would be able to sustain

(iv) ICTs for healthcare

(v) ICTs for good governance

(vi) ICTs for empowerment

(b) Indirect impact of ICTs

and McKinsey suggests that if India can continue this momentum of

There are also a few back-of ce occupations demanding relatively

productivity (TFP) due to production of new technologies is estimated to

Table 1 United States: sources of the acceleration in labor-productivity growth,

2001). Diffusion would require substantial investments in related physical

4. C ONC LUDING REMARKS

Asian Development Bank

Singapore Management University

Philippine Institute for Development Studies

10 A recent survey in Andhra Pradesh, which compiled the perceived level of

bio-technology, wireless communication), information technology signi -

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Journal of the Asia Pacic Economy 7(3) 2002: 285–309

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