A Digital Leap for the Arab World
February 5, 2014
The science behind the fiber optic cables that form the backbone of today’s high speed internet has its origins in the Middle East. A long trajectory of discovery and innovation can be traced to the ancient Egyptians and Assyrians, who introduced the first lenses to the world. This led ancient Greek philosophers to develop the first theories of optics. The works of Plato (c.428-348 BCE), Euclid (c. 330-275 BCE)and Ptolemy (c. 90-168 CE) in turn became the source material for Muslim scientists and philosophers, including the philosopher Al-Kindi (801–873 CE),mathematician Ibn Sahl (c.940–1000), and the scientist and philosopher Ibn al-Haytham (c.965-1040 CE), considered the father of modern optics. Eventually, supplemented by electromagnetic theory and the evolution of modern physics, the fundamental ideas were adapted for the use of optical fibers for communications. An invention that has had tremendous impact, allowing knowledge to travel instantaneously around the globe thanks to broadband networks. It is now time for the region where the seed was first planted to put this transformative technology in the hands of all its citizens and let it become an engine of growth.
Broadband internet is a catalyst for development. It means bringing education to the fingertips of a little girl, quite literally. It also, crucially, can link marginalized communities with opportunities and give them a platform on which to raise their voices. For the Middle East in particular, broadband presents an opportunity to bridge the gap in competitiveness and trade integration with more advanced regions. At the moment, however, the region lags far behind others in high speed internet penetration which puts these multiple benefits out of reach. This is not due to either a lack of human talent or resources. The costs of broadband access are simply too high. For over half the population of Morocco, a mobile broadband subscription would cost as much as 26 percent of monthly income. This is in a country that is doing well compared to the rest of the region, where the cost of a broadband subscription can be a multiple of monthly income. The respective national markets tend to be dominated by a few players which removes any incentive for lowering prices or improving quality. The region is already crisscrossed with hundreds of miles of fiber optic cables. They belong to the energy and transport utilities and are only used at a fraction of their capacity. Algeria, for example, has over 20,000 km of fiber assets owned by utilities and energy. An impressive asset, which, with adequate regulatory provisions, could position Algeria as a new, regional player. This untapped potential coupled with a more competitive environment could unlock the inherent advantages of broadband internet and propel the region forward.
Eastern Europe and Asia have shown that countries that create and strengthen open markets for broadband infrastructure, networks, services, and digital content, are able to leapfrog more advanced countries. That approach could also work in the Arab world. It will take a commitment to opening markets and implementing deep regulatory reforms. The gap between the Middle East and other regions is mainly a gap in market structure and competition, and a gap in governance. This can be changed by introducing measures to strengthen competition, eliminate monopolies, license more operators, tackle dominant positions, and lower explicit and regulatory barriers to entry. The under-utilized fiber optic networks owned by the utilities should be leveraged to strengthen domestic and international connectivity in a competitive environment. The urbanized, young population of the Middle East will exert tremendous pressures on demand for broadband on the one hand and real estate development on the other. Better coordination of civil works and innovative modes of infrastructure supply could meet both these demands simultaneously, with the aim of ensuring that building up broadband capacity is an integral part of the construction of new housing. Telecommunications has long attracted capital in the region, and has in fact been the driving force for foreign direct investment in most countries over the last decade. If the appropriate regulatory framework at the national and regional levels is introduced, a quick expansion of broadband networks can be funded, laying the foundations for broadband- and mobile-led innovation and growth.
The Arab world has an opportunity to create a vibrant competitive framework, in which multiple broadband operators serve the booming demand of a young, technology-savvy population. This would kick start growth. Studies have shown that every ten percent increase in broadband subscribers leads to a 1.4 percent increase in GDP growth and a 4.3 percent rise in exports. Every job created in building a network generates up to three more jobs in the rest of the economy. Equally important for the region, the telecommunications sector has opportunities for women and young people, a segment of the population that suffers very high levels of unemployment. These are all the potential dividends of the legacy of Ibn al-Haytham, it is a question of creating the right environment for the people of the Middle East to start collecting.