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11/1/2011
Contents
ABSTRACT ............................................................................................................................................................... 2 INTRODUCTION ...................................................................................................................................................... 3 PROBLEM FORMULATION ........................................................................................................................................... 4 PURPOSE OF THE STUDY ............................................................................................................................................. 5 BACKGROUND AND SIGNIFICANCE ............................................................................................................................. 6 POVERTY EXPLAINED ...................................................................................................................................................... 6 POVERTY REDUCTION STRATEGIES ................................................................................................................................. 7 ICT AS POVERTY REDUCTION TOOL................................................................................................................................. 9 SIGNIFICANCE OF THE STUDY ....................................................................................................................................... 14 APPROACH /METHODS AND PROCEDURES ...................................................................................................15 RESEARCH PLAN AND COST .............................................................................................................................16 WORKS CITED ............................................................................................................................................................17
ABSTRACT
Ethiopia being one of the poorest countries in the world, has been striving towards poverty reduction over the past many years. In the effort to alleviate poverty, the country has considered as a potential tool ensuring access to information, financial services, and income generation and distribution mechanism for the poor. However, the effort to be made is in light of the potential areas that other countries have used ICT for poverty reduction while also considering the challenges. The purpose of this research is to identify the prospects and Challenges of adopting ICT for poverty reduction in Ethiopia. In this research we intend establish the causal relationship between the poverty level and ICT so that we identify the potential areas where ICT could be used in the poverty reduction effort. In addition to the documentary review, interviews with various stakeholders will be used as data collection tools.
INTRODUCTION
Globally nearly majority of the world population lives in poverty. Poverty is seen as the opposite of well-being. Beyond a lack of income, the multidimensional concept of poverty also refers to disadvantages in access to land, credit and services (e.g. health and education), vulnerability (towards violence, external economic shocks, and natural disasters), powerlessness and social exclusion. It is with the understanding of the extent and impact of poverty that almost all governments and other stakeholders have geared their visions and strategies towards reducing poverty in their respective countries. Among various strategies adopted in the effort of reducing poverty, recent trends show that most countries have considered using Information and Communication Technologies (ICT) as enabling factor in light of the increasing availability of ICT with continuously declining cost. ICT, having different scope, has played various role in terms of creating income generation potential, cost reduction in producing and delivering various public and private products and services in many countries. Nevertheless, it is not without challenges that such multifaceted benefits of ICT has been realised. Ethiopia being one of the poor countries, having nearly 39% UNICEF2009 of its population under international poverty line, has also great potential for adopting ICT in its effort to reducing poverty. Accordingly, the government of Ethiopia has envisioned using ICT in its Growth and Transformation Plan which is expected to be implemented in the years 2010-2015. The prime minister of Ethiopia, Meles Zenawi said,
We did not believe serious investment in ICT had anything to do with facing the challenges of poverty that kills. Now I think we know better. We recognise that it is a vital and essential tool for fighting poverty for beating poverty that kills and ensuring our survival (Zenawi cited in Farrell, G., and Isaacs2007.
The government and other stakeholder have been implementing various ICT oriented programs in an attempt to unlock the potential of ICT in their poverty reduction effort. Lessons learnt from various countries show that adopting ICT requires formulating poverty reduction strategies and policies which consider the level and nature of poverty, the relationship between ICT usage and poverty cases. Hence, in the case of Ethiopia it is imperative that policy makers and implementers for poverty reduction understand the potentials and challenge of ICT in alleviating the level of poverty in the country.
PROBLEM FORMULATION
Ethiopia is one of the poorest countries in the world with a total population of nearly 80 million out of which only 17% residing in urban and semi-urban areas. It has a per capita GNP of only $ 330 UNICEF2009. According to UNDPs Human Development Index(HDI) which aims at measuring the wellbeing of a country, in 2007 Ethiopia has HDI of 0.414, which gives the country a rank of 171st out of 182 countries with data UNDP2007. Having 39% of its population under international poverty line Ethiopia is faced with complex poverty, which is broad, deep and structural. Thus, poverty reduction was and is the central development agenda of the government that guides its development activities. In addition to the government many donor communities and other stakeholder have aligned their core activities towards poverty reduction with such programs like Millennium Development Goals (MDG). Poverty reduction involves setting and achieving goals that are geared towards creating more education opportunity, enhancing economic development and ensuring fair income distribution among other things. Achieving such goals require using infrastructures and resources which are or could be accessible to majority of population. ICT is increasingly being used as a tool of development due to its growing trends in diversity and usage coupled with continuously declining cost of design and implementation ICT infrastructure. It is argued that ICT, if supported with the right policies and with cross-cutting and holistic approaches, will complement and strengthen other multi-sectorial efforts that are required for poverty reduction, including those meeting basic needs. Among the developing countries at least India, Jamaica and South Africa have given a high priority to policies aimed at promoting the use of ICT for development. In Ethiopia as well the availability of ICT is exhibiting significant growth manifested in the growth of mobile subscribers. Hence, if the role of ICT for poverty reduction effort of Ethiopia is indisputable it is imperative that stakeholders comprehend what role ICT can play in alleviating poverty given the specific understanding of the nature, level and cause of poverty. Nevertheless, it must be understood that unlocking the potential of ICT comes with various uncertainties around designing and implementing policies that focus on ICT as development tool.
Poverty has multiple and complex causes. The poor are not just deprived of basic resources. They lack access to information that is vital to their lives and livelihoods: information about market prices for the goods they produce, about health, about the structure and services of public institutions, and about their rights. They lack political visibility and voice in the
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institutions and power relations that shape their lives. They lack access to knowledge, education and skills development that could improve their livelihoods. They often lack access to markets and institutions, both governmental and societal, which could provide them with needed resources and services. They lack access to, and information about, income earning opportunities. P. Marker2002
Poverty stems from a situation where gross inequality of assets persists because of vested interests and entrenched power structures. Markets can provoke collusions that block the potential benefits of competition to the poor, and the disadvantaged can easily fall outside distributional coalitions. Markets can thus be biased in favour of more affluent and powerful social groups and against poor and disadvantaged groups Leyshon Andrew and Nigel Thrift1997. Such biased coalitions are considered as the most significant cause of inequality within societies. The level of the playing field is not even for the poor. Even under otherwise ideal market conditions, the poor may end up paying more, earn less, and they face a number of constraints, to an extent not experienced by others Wealth Inequality, Market Exclusion, and Economic Performance1999 . At national as well as at local levels economic gains may be captured by elites that may form patronage and clientele networks for the redistribution of benefits. Lack of good governance and inadequate legislation or its enforcement may further reinforce such capture Kelles-Viitanen Anita1999.
Combat HIV/AIDS, malaria and other diseases Ensure environmental sustainability Develop a global partnership for development
According to the International Monetary Fund (IMF), the Poverty Reduction Strategy Papers (PRSP) was conceived by the IMF and the World Bank in 1999, mainly for heavily indebted lowincome countries so that governments in these countries could prepare their own poverty strategy papers in a participatory process together with different domestic and external stakeholders IMF 2011. It is a national plan aimed at pulling the poor out of poverty and bringing sustainable economic growth. A PRSP describes the macroeconomic, structural and social policies and programs that a country will pursue over several years to promote broad-based growth and reduce poverty, as well as external financing needs and the associated sources of financing. Different countries have their own version of PRSP WORLD BANK2005, Rwanda for example has PRSP (2002-2005) and Economic Development Poverty Reduction Strategy (EDPRS) (2008-2012). Nigeria has the National Economic Empowerment and Development Strategy (NEEDS) (20032007), and draft NEEDS 2 (2008-2011). Mozambique has PARPA I (2001-2005) and PARPA II (2005-2009). Most of these PRSPs are done in participatory process and the Ministry of Finance for each country normally takes the responsibility for coordinating the processes. In Ethiopia the MoFED is in charge of this task. According to the MoFED the PRSP in Ethiopia started in 2000 in collaboration with other stakeholders (donors) and evolved into the Sustainable Development and Poverty Reduction Program (SDPRP) in 2002, which covered the three-year period 2002/03-2004/05 MOFED2006. The Plan for Accelerated and Sustained Development to End Poverty (PASDEP) represents the second phase of the PRSP which covers the five-year period 2005/06-2009/10. The PASDEP defines the national strategy for development, lays out directions, and outlines the major policies in the major sectors with the main objective of eradicating poverty within this time frame. As stated above, different stakeholders take part in policy formulation, implementation, monitoring and evaluation, and intervention. In other words, a coordinated and well organized mechanism between stakeholders such as different government ministries, NGOs, Community and faith based organizations, donors, UN, and financial institutions such as IMF and the World Bank, development agencies, and the people is required at the various stages of the process of preparing the PRSP and its implementation.
Old ICTs: Newspaper, books, libraries, Radio, television, land-line telephones and
telegraph fall into the Old ICT category. They have been in reasonably common use throughout much of the world for many decades. Traditionally, these technologies have used analog transmission techniques, although they too are migrating to the now less expensive digital format In most PRSP information and Communication Technologies (ICTs) have been expected as a powerful tool for development. According to the Ethiopian PRSP-Growth and Transformation Plan (GTP) 2010/112014/15 ICT is envisaged to play significant role in ensuring sustainable development, poverty eradication, human resource development, capacity building and good governance through a well-developed and all inclusive capacity augmenting communication technology interventions. Similarly many countries have considered ICT as an enabler in poverty reduction.
However, in 1996, Wresch wrote that the poor are excluded from much of the worlds information and no one has even begun to outline a solution to the problem Wresch1996. In his view, one of the biggest ironies of the information age is that the rich get their information almost free, while the poor have to pay dearly for it, in the case for instance of the price poor people have to pay to make a simple telephone call. The role of ICT in the so-called digital divide has been hotly debated: whether it contributes to poverty reduction, or whether it just reinforces existing divisions between the rich and the poor. No one can deny the fact that the digital divide exists. Judged by Internet connections, the Middle East is the least developed region in the world, followed by Africa. The most developed region, judged by the same standard, is North America, followed by Europe. There are digital divides also within the regions. In South-East Asia, for example, the higher the HDR rank, the higher the ICT indicator value. The higher the human poverty index, the lower the number of ISPs, telephone lines, PCs and TV sets per 1000 persons. The higher the value of ICT indicators (as in the case of Singapore, Brunei and Malaysia), the lower the poverty rank ICT and Poverty :The indisputable Link2001 .
There is an on-going view that IT is totally irrelevant for the poor who are generally illiterate; IT is too expensive for them to reach out to; the poor don.t need fancy IT, they need food. These are the voices of the skeptic. Now in three years there are more than 5000 Telephone Ladies in Bangladesh villages doing roaring business selling telephone service. Mohammed Yunus
2001 It is argued that ICT, if supported with the right policies and with cross-cutting and holistic approaches, will complement and strengthen other multispectral efforts that are required for poverty reduction, including those meeting basic needs. ICT, as a sector, can create some employment opportunities directly to the poor both in the manufacturing of hardware and software. Because of the low educational levels and skills of the poor, we can expect that there are more employment opportunities in the service sector. Grameen Bank in Bangladesh is a good example of this. With the exception of China and the Philippines most of manufacturing is also taking place in the more developed countries such as Malaysia or Taipei Jha Sailesh K.2002. Using ICT in pursuit of development goals allows countries to achieve a wide diffusion of benefits from ICT, which, in the end, will benefit broad-based economic growth, too UNDP 2001 b. In the interest of direct poverty reduction, ICT plays a more important role in enhancing the activities of the poor and increasing their productivity: by increasing their access to market information or lowering the transaction costs of poor farmers and traders. Furthermore, ICT can also help in increasing revenue, efficiency, competitiveness and market access for developing country firms. ICT can also play a major role in helping to monitor food security related issues (weather, droughts, crop failures, pests etc.), and to inform government on impending food scarcities and famines. According to Amartya Sen (1981) and Jean Drze (1999), information plays a key role in preventing food scarcities from turning into famines. Another important goal for ICT use relates to alerting on natural disasters that often lead to major human tragedies. There are many successful examples of the role of ICTs to promote health and education of the poor and preventing poverty that can originate from poor health. In Brazils urban slums, the Committee to Democratise Information Technology (CDI) has created 110 sustainable and selfmanaged community based .Computer Science and Citizenship Schools using recycled technology, volunteer assistance, and very limited funds. CDI schools train more than 25,000 young students per year in ICT skills that give them better opportunities for jobs, education, and life changes. CDI also provides social education on human rights, non-violence, environmental issues, health and sexuality. CDI cites many cases in which participants have developed renewed interest 11
in formal schooling, resisted lure to join drug gangs, and greatly increased their self-esteem World Bank2001. ICT also plays significant role in e-government applications by promoting democracy and increasing participation of the poor in addition to assisting the government in the administration process. According to the Okinawa Charter on Global Information Society everyone, everywhere should be enabled to participate in and one should not be excluded from the benefits of the global information society. Participatory democratic institutions are important for poverty reduction. Often the poor know their problems well, but they lack knowledge of larger socio-economic context of their poverty as well as various options to improve their situations. Development planners, too, need to have direct contact with the poor so as to link the development programs to the realities on the ground. The role of ICT in assisting governments in the creation and continuity of good governance is worth mentioning. The quality of governance is critical to poverty reduction. Good governance facilitates pro-poor policies as well as sound macroeconomic management. It ensures the transparent use of public funds, encourages growth of the private sector, promotes effective delivery of public services, and helps to establish the rule of law. For the poor, getting access to even the most common type of government information or documentation can be a nightmare requiring multiple visits, waste of time and bribes. Top-down provision of information is not sufficient, without an opportunity for feedback. Citizen feedback to government provides a check on bureaucratic abuse and corruption, alerts the government to citizen s needs and concerns, and gives citizens a sense of having a voice in society. Anita Kelles-Viitanen, argued that ICT can contribute to poverty reduction, if it is tailored to the needs of the poor and if it is used in the right way and for the right purposes. It can also boost economic growth, but it is unlikely to lead to poverty reduction in countries where there are persisting and fundamental socio-economic inequalities Kelles-Viitanen Anita1999. Like all technologies, ICT offers tools and applications but no solutions. It is a means to an end. The solutions to the problem of poverty are what they have always been: economic growth, enabling infrastructure, the creation of livelihoods, education and healthcare, and sufficiently democratic government to ensure that economic benefits are not cornered by the powerful elites. By providing cheap and efficient tools for the exchange of information, ideas and knowledge, ICT can become an enabling tool for wider socio-economic development. When properly used, it can greatly increase the ability of the poor to benefit from economic development and from development programs meant to help them. 12
Despite the multifaceted benefits of ICT in poverty reduction strategies, many attempts to implement ICT failed owing to the fact that in some cases ICT was that focus of the decision rather than, the poverty reduction programs. The focal point must be poverty reduction and not ICTs. A reasonable approach is to ask what needs to be done to reduce poverty, and then ask if or how ICTs can help. That being said, when a new technology becomes available, it is understandable that one would want to ask how it can be used to attack poverty. This approach can lead to innovative and effective uses of new technologies, but such projects must be viewed with a healthy dose of scepticism Alan Greenberg2005. Furthermore, ICT projects are challenged due to the fact that technology is generally difficult for the poor. Despite the wide availability and use of technology in the developed world and despite falling unit costs in many areas, good technology implementations are often difficult and costly. Although the outcomes are rarely announced as such, many projects fail and many that are successful far exceed their original budgets. Given these general characteristics, in developing countries where funds and skills are often in short supply, it is unlikely that the overall track record will be significantly better. Moreover, as technology is pushed out to those with few ICT skills, one must overcome the normal fear of the unknown and timidity that goes along with first-time users Alan Greenberg2005. Therefore, if ICT is a means, not the ultimate solution, to alleviate poverty, what could be the characteristics of good ICT in the context of poverty reduction? Defining these characteristics will not only help in determining the availability of such technology in the country but also help formulating ICT strategy that will help in alleviating poverty. According to Alan-Greenberg, for poverty reduction, good uses of ICT must obviously have a positive impact on one or more aspects of poverty. However, as a target for the investment of scarce development funds, there are several additional criteria similar to those criteria applied in most cooperative development projects. ICT should be Alan Greenberg2005 Affordable Affordable means that the project has a reasonable price given the benefits and the funding available. It is easy to find examples of projects which would have poverty reduction benefits, but where the costs far outweigh the benefits or where funding is unattainable on a large scale. Scalable
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Scalable means that if successful, the project can be widely replicated to help many more people. Non-scalable projects often cannot be replicated because the initial conditions are unique, or replication would require other non-financial resources which are in short supply. Self-sustaining The self-sustaining criterion is related to the previous two, but implies that ultimately, the project can continue to help people without external financial or staffing support. Sensible If a project is sensible, it accepts the realities of the environment in which it is operating. As a trivial example, if you are going to deploy PC-based computers, it would only be sensible if you knew that technical support people would be available. Exceptions The previous criteria are, in essence, a rather simple-minded recipe for the successful use of ICT to help alleviate poverty. It is very important to note that projects which do not meet all of the criteria can and will be successful. Because they do not meet one or more of the criteria, they have a somewhat higher risk of failure. This risk can be off-set by other factors which make the project particularly desirable.
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Description
Laptop Rental EVDO internet usage in order to dig resources Stationary materials Questionnaire Interview government officials over a meal Transportation Report Prepartion and printing Sub Total Contingency (20%) Grand Total
Estimated Cost
5000 1600 2000 3000 2500 3000 2500 19600 3920 23520
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WORKS CITED
Alan Greenberg ICTs for Poverty Alleviation:Basic Tool and Enabling SectorMontreal,Cananda Sida2005 Amartya Sen and Jacques Drze Omibus Comprising Poverty and Famines, Hunger and Public ActionIndiaOxford Univesity Press1999 Asian Development Bank Fighting Poverty in Asia and the Pacific: The Poverty Reduction StrategManilaAsian Development Bank1999 Drew, E., and F. G. Foster Information Technology in Selected CountriesTOKYOUnited Nations University press1994 Economic Commission for Africa (ECA) An Overview of ICT Trends and Policy in Africa.' May 1999ADDIS ABABAUNECA1999 Farrell, G., and Isaacs Survey of ICT and Education in Africa: A SummaryWashington, D.C infoDev/World Bank2007 ICT and Poverty :The indisputable Link Flor Alexander C.BangkokAsian Development2001 Reginal Economic Cooeration in Asia and the Pacific on Third Asia Development Forum IMFIMF Poverty Reduction Paper[Online]2011[Cited: 18 november 2011
]http://www.imf.org/external/NP/prsp/prsp.asp Jha Sailesh K. ICT and Economic Growth in AsiaHelsinkiUNU WIDER2002 Kelles-Viitanen Anita Employment of Women in Uganda: From Disabling to Enabling Environment. Employment Generation and Poverty Reduction in UgandaAddis AbabaILO 1999 Leyshon Andrew and Nigel Thrift Money/Space. Geographies of Monetary
Transformation.London and NeyorkRoutledge1997 Mansell and Silverstone Communication by Design: The Politics of Information and Communication TechnologiesOXFORDOUP1996 MOFED A Plan for Accelerated and Sustained Development to End Poverty (PASDEP) ADDIS ABAMOFED2006 Mohammed Yunus Key Note Speech for the Conference on Making Globalisation Work for the Poor the European ContributionSwedenKramfors2001 P. MarkerK.McNamara and L. Wallace The significance of information and communication technologies for reducing povertys.l.DFID2002
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ShahAnupCauses of Povertyglobalissues.org[Online]2011[Cited: 18 NOMEMVER 2011 ]http://www.globalissues.org/issue/2/causes-of-poverty UNDPUNDP Millennium Goals[Online]2006[Cited: 21 november 2011
]http://www.un.org/millenniumgoals/ UNDP Creating a Development Dynamic: Final Report of the Digital Opportunity
Initiative.[Online]2001 b[Cited: 12 November 2010]www.opt-init.org/framework/ pages/es.html UNDPHuman Development Index report[Online]2007[Cited: 18 NOVEMBER 2011
]http://hdrstats.undp.org/en/countries/profiles/ETH.html UNICEFUNICEF COUNTRY STATISTICSUNICEF[Online]2009[Cited: 21 november 2011 ]http://www.unicef.org/infobycountry/ethiopia_statistics.html Wealth Inequality, Market Exclusion, and Economic Performance BowlesSamuels.l.Deutsche Stiftung fr Internationale Entwicklung1999 A Paper presented at the Villa Borsig Workshop Series on Poverty and Development World Bank Information and Communication Technologies and poverty (C. Kenny, J. NavasSabater, C. Qiang. Web draft2001 WORLD BANKCountires PRSP[Online]2005[Cited: 18 November 2011
]http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/EXTPRS/0,,contentMDK WreschW. Disconnected: Haves and Have-Nots in the Information AgeNew Brunswick Rutgers University Press1996
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