ICT in the Budget

By Andre Griffith

We examined information technologies and job creation last year (Development of the ICT Sector – In pursuit of Job Creation August 15 2008 and Development of the ICT Sector – in pursuit of sustainable competitive advantage August 22, 2008).  We therein noted that the creation of IT parks such as that budgeted for in the 2009 estimates can partially offset some of the limitations to small operators due to the inadequacies of basic infrastructure.  Essentially the argument was that in the absence of adequate provision of certain types of public infrastructure goods such as telecommunications, electricity and security, the economies of scale associated with self-provision of these services and infrastructure tend to favour large producers, putting smaller producers at a disadvantage (Eifert 2007).  Consider for example, the costs per kilowatt-hour of self-generation for a 100kVA diesel-powered plant, versus those for a 10MW plant powered by fuel oil.

One call centre operation is unlikely to require facilities on a sufficient scale, however, 100 such operations might.  Sharing of the facilities therefore makes sense from this perspective thus the usefulness of ICT parks in our circumstances.  We also noted that while information technologies will on one hand lead to reduction in clerical workforces by automation of certain tasks, we also saw that ICT’s facilitate the creation of jobs by making it feasible for certain tasks to be outsourced to locations physically distant from the main operations.  The examples included small claims processing in the insurance industry, medical transcription and other services.

The interventions in the 2009 budget were framed against the national ICT4D strategy (2006) which contained a number of recommendations, some of which we will address below.  The specific selection of the information technology park for funding at this time is possibly based on a feeling that it is the most likely out of all of the initiatives in the ICT4D strategy to provide a short term return in terms of job creation, by providing the facilities for the call centre trade.  The big question is whether we have missed the boat.  That is to say, are there going to be a significant number of new jobs (over and above those we have already captured to date) available in the current circumstances of global recession?  I think it might be more appropriate to say that while we may not have missed the boat, we have likely missed much of the previous wave and have to wait a while for the next big one.  To be specific, it is hard to see growing demand for outsourced services at this time.

The short to medium term outlook on these activities is bleak with the world financial crisis and the increasing turns to protectionism and populism the world over.  In the US President Obama ran in part on a populist platform that argued against shipping jobs overseas.  To be realistic, most politicians publicly adopt such a stance while privately acknowledging the need for free trade but we are beginning to see evidence of the reverse happening, that is, politicians make the right noises at global meetings but quietly push populist policies at home.

The “Buy American” clause in the US stimulus package although neutered and watered down is an indication of the current sentiment in that country that will in some manner constrain its policies regardless of any free trade inclinations of the political leadership.

Our potential benefit from the outsourcing trade will depend on the balance struck between creating jobs and having affordable products/services in the primary client states.  Suffice it to say that job creation in those countries is probably going to trump efficiencies.  All this is not to say that we do not need to invest in initiatives such as the ICT parks, it just means that our resolve to stay the course and stick with the ICT4d strategy is going to be severely tested in coming years.  It also raises the questions of refining the strategy, and implementing it in a coherent and effective manner.  The budget speech itself exemplifies the need for these considerations for within it, (and presumably within the line items), the various ICT initiatives were not all in one place but appeared throughout the document under various initiatives in different ministries and agencies.

These included an Internet portal for the Deeds Registry, one for Go-invest, and an integrated crime information system for the GPF and the Ministry of Home Affairs.  Included specifically under standalone ICT initiatives are the development of e-commerce legislation, and an e-learning project which were presented along with the initiative for a technology park.  This organisation of ICT initiatives in the document is understandable since it reflects administrative structure of government, and illustrates the cross-cutting nature of the technologies.

It would have been useful however, for a section in the budget speech that consolidated the planned ICT initiatives encompassing all the agencies in order to communicate the coherence of the overall strategy and consistent with the stated strategic role of ICTs in government’s policy agenda.  If development of ICTs is to be pursued in a truly strategic manner despite the inherent need for implementation across sectors, there must be some agency with the institutional capacity to ensure that the individual departments of government do not pursue their own interests to the detriment of the overall strategy.  This “development silo” phenomenon was identified by the government’s lead person as a critical problem in the public sector at the very beginning of the ICT4D planning process and I have had the experience subsequently of seeing initiatives in individual state agencies that run directly counter to some central planks of the ICT4D strategy.  In this regard, I once again make reference (as I have in previous pieces) to the institution that exists precisely for this coordinating function (among others) and that is the National Data Management Authority.   Created by Act #9 of 1983, the Act itself is described as “AN ACT to establish an authority responsible for data processing and information systems in the Public Sector”.  Among the functions of The Authority are:

“To advise the Minister on any matter pertaining to data processing and in particular to promote and facilitate the orderly development of data processing in accordance with the objectives of the Government by such means as the Authority may consider requisite, or convenient for that purpose”. [Section 5(a)] and
“To monitor and review all plans prepared by the data processing centres in the public sector and to give guidance advice and direction to these centres”. [Section 5(g)]

With respect to refining the strategy, a “final draft” of the ICT4D strategy is online at www.ict4d.gov.gy.  Recognising that the strategy was still to be completed, the document states that an ICT unit will be created within the office of the president and that the ICTU “will be vested with responsibility for finalisation of this strategy and preparation of the Plan of Action to implement the strategy”.   While I am aware that some attempt to continue work on the strategy after the departure of the government’s point person to take up higher office, the document requires finalisation and there needs to be a “living process” as we seek to continually adjust to national and global changes.  Although its remit as originally conceived was restricted to the public sector, with requisite support from Cabinet, the NDMA is best placed to take the ICT strategy forward until we have something better.

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