I would like to thank Secretary Kerry for convening this important meeting today.
With more than 4 billion people without internet access and 90 percent of them living in developing countries, it’s clear that we have a lot of work to do to bridge this digital divide. That’s why today’s meeting is so important – it’s time for a pragmatic conversation about how we are going to make this happen.
Access to the internet has become a vital development tool – especially as we embrace what the World Economic Forum has described as the Fourth Industrial Revolution. The First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. And now we are seeing the fourth revolution - a digital revolution, which is characterized by a fusion of technologies that’s blurring the lines between the physical, digital, and biological spheres. This is the revolution that will require universal and reliable digital access – and without it, many developing countries will not be able to participate in an increasingly mobile and internet-based economy.
I’m particularly pleased to see Ministers of Finance here today. Your active participation in this agenda is crucial. This is about providing the people who are still lacking access to the internet a powerful, new means of escaping poverty.
Today’s discussion is timely and important for three reasons:
- First, our 2016 World Development Report on Digital Dividends showed that digital technologies, primarily mobile phones and the internet, have contributed to considerable growth in many countries.
- Second, the World Bank Group, along with partners like the United States, is embarking on new efforts to further support countries on this agenda, notably through the new Digital Development Partnership which brings together the private sector, development partners and other stakeholders to help countries reach digital dividends.
- And third, with an estimated investment cost of $450 billion dollars required to reach the Global Connect Initiative’s target of 1.5 billion people added to the internet by 2020, the support of Ministers of Finance is vital.
For its part, the World Bank Group has provided support to connectivity through lending and policy advice.
Over the last 10 years, the World Bank invested around $3.1 billion dollars in ICT sector reforms and broadband infrastructure, while total IFC investments amounted to $4.1 billion dollars. We have provided support for policy and regulatory reforms, and catalytic funding for telecommunications infrastructure under PPP financing schemes.
The results of these investments have been remarkable in terms of improving internet access and lowering costs.
- For example, in West Africa, we helped seven countries that were not linked to the global fiber optic networks connect to the Africa Coast-to-Europe submarine fiber optic cable (ACE). As a result, the price of internet access in Africa has been cut dramatically, by more than half in most cases, allowing more schools, households, and SMEs to connect to good quality internet. In the Gambia alone, the wholesale price for internet access is less than a fifth of previous levels.
Going forward, we are focusing our efforts on expanding digital connectivity by enabling competitive, private-sector friendly, ICT environments, and supporting the development of digital platforms for e-government. Competition in the sector is key to bring prices down. Shared infrastructure solutions can lower investment costs, and fair taxation keeps the sector dynamic and attractive for investors. We are helping our client governments develop the next generation of regulation that will enable the new digital economy.
If we are to bring these sorts of benefits to all countries - and to achieve SDG targets - we have to increase our efforts exponentially.
Ministers of Finance can contribute in three ways:
First, fair telecom taxation. Governments in many developing countries have taxed the ICT sector at rates significantly higher than other services. Governments need to ensure more reasonable and predictable tax levels.
Second, the use of universal service funds to expand the digital economy. These funds are intended to bring telecom services to remote areas but too often remain unspent or diverted elsewhere.
Third, mainstreaming ICT throughout government. Many administrations still have fragmented information technology systems, with each line ministry or agency separately creating its own databases. Finance Ministers can help promote the creation of inter-operable e-platforms and core modules, such as digital identification and mobile payment systems.
The World Bank Group has the operational experience and country presence to help client governments on the digital infrastructure side as well as on the policy, regulatory and institutional complements needed to reap the benefits of digital investments. And, through our Digital Development Partnership, we can help mobilize additional financial and technical resources.
I look forward to seeing internet connectivity reach all corners of the world, and to make digital technologies a catalytic force for poverty reduction and shared prosperity.
We can and must provide internet access to all.