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PROFILE

MALIK AZEEM AHMED

COLUMN FOR THE RECORD
SPECIAL REPORT GLOBAL INFRASTRUCTURE FOR TRADE FACILITATION
INFORMATION TECHNOLOGY GOING BEYOND GREAT PEOPLE
 
GLOBAL INFORMATION INFRASTRUCTURE FOR TRADE FACILITATION

 

 

By YOUSAF HAROON
Asst. Prof., NPGI&I
Oct 13 - 19, 2003
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As mankind starts its journey into the new millennium we notice the two major forces shaping up the future of this world, reducing geographic boundaries, bringing cultures and societies closer to each other are Globalization and Information Communication and Technology (ICT) creating a paradox of wealth and poverty; bridging gap between individuals and isolating them at the same time; creating simultaneously the information haves and information have-nots; empowering people contribute and restricting communities to participate. On one hand, despite many steps forward in social and economic conditions around the world in recent decades, there remain huge disparities in the quality of human existence. We are now at a critical juncture of time and place where unprecedented global flows in information, products, people, capital and ideas offer great potential for radical improvements in human development, but left unabated, they may also serve to worsen and entrench the spiral of poverty which already exists in many communities and countries limiting people to unleash the prowess of ICT revolution and creating gaps of income generation, information access, technology transfer, generation, urban-rural, demographic, and literacy.

WAVES OF CHANGE

For centuries the general principal has been that practice has abided and followed law. But in the new millennium, patters have reversed. Now, technological development is overwhelmingly fast. It accelerates in quantum. In our day, practice leads law. The speed of with which practice accelerates is due to the sheer pace of developments in communication and technology. The world today dreams about ICT and WTO! These dual forces of change, one technological and other legal, are responsible for a miracle which the world has never witnessed before, yes, the phenomenon of Globalization: making time and space irrelevant, transforming physical realities into virtual images instantly at the speed of light!

The world is putting its faith in these dual forces of Information Communication Technology (ICT) and World Trade Organization (WTO). Every nation dreams to be the world leader, and every individual dream to become resourceful, by exploiting the potential these opportunities offer. The phenomenon is generating so much attention that all national policies today revolve around these words of magic i.e.: ICT & WTO!

There is great sense of unanimity that technology and trade, if combined together can overcome all odds, and can make our world more equitable, reducing the gap between the developed and the developing, and bringing the haves and the have-nots closer, sharing both power and prize of the modern age. Let it be, biotechnology, genetic engineering, artificial intelligence, space exploration, multimedia virtuosity, nanotechnology the adventures of science and art, invention and innovation, theory and practice in every subject from physics, chemistry, biology, astrology, astronomy, psychology, philosophy, anthropology, architecture, engineering to medicine take quantum leap forward to revolutionize the world offering a promise for bringing great wealth and pleasure to mankind ever heard of before. There is a need to understand the forces of globalization, information technology and trade liberalization not merely as creators fortune and power, but also, as enablers of development and sustainability. WTO and IT create more opportunity than pose threat having deeper implications for every aspect of life and realms of business creating a development matrix for all to leap forward in the race for better future. A new economy is in the making bringing with it the age of abundance, where information is the most important factor of production dominating land, labour, and capital for an entrepreneur in contrast to traditional economics.

At the end of 20th century, globalization phenomenon thorough movement of goods, services, people and information across national boundaries, has resulted into opening up of economies and societies accelerating global integration of economies through the flow of capital and trans-border production. Information, Communication and Technology (ICT) fueling the globalization process clearly demonstrated that the world is no longer a collection of relatively autonomous neighborhoods that are only marginally connected. Information and ideas can be accessed in all corners of the globe at the click of a mouse button. The international economies are becoming more and more interconnected via Internet and telecommunication technologies.

The global integration of countries has brought not only opportunities of economic growth but challenges of development. These challenges like poverty, issues of food security, water scarcity, aging population, cultural loss, and environmental degradation must be confronted with forces that reshape the development perspective today: innovations in technology, the spread of knowledge, the growth of population, the financial integration of the world markets. Technological advances in communication have made it possible to travel around the world through a computer window, doing business, learning, playing, and sight seeing, chatting, banking and learning all for a fraction of cost. Here arises an important question: How can advancements of ICT today can provide the bridge between the global disparities existing today? Or these will multiply the gulfs!

THE DEVELOPMENT CHALLENGE

Poor countries and poor people not only differ from rich not only because they are less resourceful but also less knowledge has today become the fundamental factor increasing the gap in between them. Poor people live today without fundamental freedom of action and choice that the rich take for granted. Poor lack adequate food and shelter, education and health, deprivations facing extreme vulnerability to ill health, economic dislocation and natural disasters. Today, among 6 billion people of the world, 3 billion live on less than $2 a day, and 1.2 billion live on less than $1 a day, with 44% living in South Asia. This destitution persists even though human condition have improved more in the past century than in the rest of the history global wealth, global connections, and technological capabilities have never been greater but the distribution of global gains remain unequal. The average income in the richest 20 countries is 37 times the average of the poorest 20 a gap that has increased over the years to the extent that it has doubled in the last 40 years. The rich countries benefit more from the opportunities of the global economy because of many reasons that are state-of-the-art technology, human capital, modern means of communications, better infrastructure.

Whether national or international development policy is to create sustainable improvements in the quality of life for all people through raising per capita incomes and consumption is part of that goal at one end and on the other reducing poverty, expanding access to health services, and increasing educational levels as a comprehensive approach to development. The evidence of the past demonstrates that there are no easy approaches to gain sustainable development but efforts to achieve are worth while. These approaches should be multidimensional involving all the stakeholders of the community and society at large, venturing public and private partnerships.

Keeping in view the paradigm shifts which are taking place at the international and local levels it is observed that the panacea of socio-economic challenges which the world today faces requires a comprehensive rapprochement of mobilizing the forces of future let it be adoption of ICT and governance.

 

 

THE KNOWLEDGE DYNAMIC OR DIGITAL DIVIDE?

Knowledge is electrifying like light. Weightless and intangible easily traveling the world, enlightening the lives of people everywhere. Due to the phenomenon of globalization and development of ICT the world has taken a paradigm shift to enter into the knowledge-led era of economic prosperity and opportunity. Yet billions of people still live in the darkest of poverty unnecessarily. Poor are at greater disadvantage and differ from the rich not because of income levels but because of lack of knowledge. Yes, knowledge is often costly to create, and that is why much of it is created in industrial countries. But developing countries can acquire knowledge overseas and at home by encouraging local initiatives and awareness programs. Knowledge illuminates every economic transaction, revealing preferences, giving clarity to exchanges, informing markets. And it is lack of knowledge that causes markets to collapse, or never to come into being. Approaching development from a knowledge perspective that is, adopting policies to increase both types of knowledge, know-how and information of technology can improve the beleaguered gaps which exist in between the developed and developing worlds today known as knowledge gaps. Closing these gaps is not easy. Developing countries are pursuing to over come but the dynamic of knowledge gap is that gap in the capacity to create knowledge. In order to live and to see a better tomorrow, to improve health, better education, and to reduce human disparities is only possible through provision of equitable and meaningful access of knowledge resources. For countries in the vanguard of the world economy, the balance between knowledge and resources has shifted so far toward the former that knowledge has become the most important factor determining the standard of living. Today's most technologically advanced countries are truly knowledge-based generating new wealth from their innovations, creating millions of knowledge related jobs in an array of disciplines that have emerged.

Here the most important matter of fact which enabled the phenomenal economic advancement is not merely creation of knowledge but movement of knowledge through integrated networks with in the country and around the globe. Looking closer, one would find a definite congruence of the velocity of knowledge transfer, and scientific and economic developments. As information has become the lifeblood of knowledge economies the ability to acquire and transfer knowledge have created a great gulf between the information halves and information have-nots promulgated as the Digital Divide.

GII GIS

Global Information Infrastructure (GII) has often been described as the necessary ingredient without which the benefits of the third industrial revolution (that of information and information technologies) would remain out of reach for a large part of the world's population, which also lies true for Pakistan as well.

The concept of global information infrastructures-global information society (GII-GIS) encompasses the development and integration of high speed communication networks, and a set of core services and applications in digital format, into global integrated networks capable of seamless delivery. Such networks provide fully interactive access, to network-based services within countries and across national borders. These services may be traditional voice services, data, video services, or more sophisticated combinations of these services (multimedia services) destined for business, government and residential users, as well as for social purposes. The physical infrastructure of GII-GIS is not limited to any one technology; on the contrary implicit in the GII-GIS concept is the interconnection and interoperability of a range of competing and complementary infrastructures, applications and services made possible by digitalization. Communication and computing technologies form the basis of GII-GIS, but hardware, software, multimedia skills, content and information also play a key role. A harbinger of GII-GIS is the explosive growth of the Internet.

 

 

The concept of GII-GIS also encompasses the notion of the transformation of existing economic markets to a market place where communication networks bundling together transport, access and market transactions will play a major role. The driving forces behind economic growth and development in such a networked economy will not be natural resources or physical goods but based on information viewed as providing the foundation for the transformation of existing social and economic relationships. While the GII-GIS will ultimately benefit all users, including individuals, governments and business, it is primarily the business sector which may be expected to provide initial stimulus and investment for the GII's development. Financial institutions, for example, have already developed ubiquitous and sophisticated infrastructures for the transfer of money and the conduct of financial services on a global basis. Other examples of networking accomplishments spearheaded by the private sector, include the travel industry, which has developed state of the art infrastructures, and the manufacturing sector, which has developed the ability to manufacture and source on a world-wide basis. As business continues to build and merge these structures to achieve its own goals, the benefits will spillover to individuals and governments. Underlying the notion of information infrastructures, and service delivery based on these infrastructures, is the fact that all information flows will, from the view point of transmission, be undifferentiated because they are digital in form. Further, information infrastructures and applications can by the nature of the technology, provide services and be accessed on a global scale. In most cases, geographical and political boundaries do not pose barriers to these technologies. As a result, the legal, economic and social frameworks in which GII-GIS developments take place needs to be global in perspective. On the other hand national restrictions can have negative implications for investment and national development of applications and services.

TRADE FACILITATION DIMENSIONS OF GII-GIS

As trade in services (and, in particular, information-intensive services) increases, and as trade in both goods and services becomes itself more dependent on international information flows, telecommunications play an increasingly important role in the process of globalization of international trade creating a Global Trade Efficiency Model.

This hierarchy can be described as a "one-two-three model" in which one sector (telecommunications) appears as an infrastructure for two other trade efficiency sectors, namely business information (which cannot be collected, transmitted or handled efficiently in the absence of adequate telecommunications) and trade facilitation (which greatly benefits from advances in information technologies, as is clear from the gains made by the enterprises and countries that have adopted "paperless" ways of trading). In turn, benefits realized in these two "intermediate" sectors will benefit the remaining three, namely customs, transport and financial services (banking and insurance).

In the 1980s, many analysts and trade policy makers came to realize that the traditional approach to "economic development" (whereby a country would gradually develop its production structures from agriculture and raw materials to industry and ultimately to services) did not apply to trade: in an increasing number of instances, services had become a prerequisite for the conduct of international trade.

 

 

Considering telecommunications as an infrastructure service, allows the emergence of trade-supporting services which in turn will enable trade in goods and services has important policy consequences. In particular, it underlines the importance of the concept of trade efficiency (defined as a strategy to generate synergies among trade-supporting services) as a vital element of any trade policy aimed at enhancing national competitiveness on international markets. It also has significant consequences regarding the dynamics of multilateral trade negotiations, since it suggests that those countries which are ready to participate in the kind of "global trade" which information technologies now allow will give high priority to liberalizing trade in telecommunications services, as well as trade in the goods and services which allow the production of such services.

LIBERALIZATION BEYOND GOODS, FOR SERVICES

Although WTO's key objective is to raise global standard of living by increasing income levels, exploiting trade opportunities, boosting domestic production not only for local consumption but international consumption as well, supervising international trade framework on equitable basis, resolving disputes amiably, providing trade facilitation to less developed yet, the framework has inbuilt pros and cons. In economic terms, when WTO projects theory of comparative advantage on the belief that ultimate competition can only be the final good for mankind, making this globe into a market of consumers and produces.

Originating from GATT (General Agreement on Trade and Services), WTO came into being as a multilateral organization on single undertaking rule. Traditionally, the negotiations in GATT/WTO where focused on trade related aspects of Goods only, and only later GATS (General Agreement on Trade and Services) has been framed.

This all has been done without having the vision or knowledge that the world moved from industrialization to knowledge-led economic system, where not products but human skills are most required, which are trade-able over telecommunication networks using internet and ICT technologies. Therefore, digital networks provide excellent opportunity to exchanging new and old ideas, designs, concepts which today brings another dilemma of Intellectual Property.

Trade in services provides great opportunity to the whole world specially WTO members who can offer better and more services. Ideally WTO members having more population can provide these services a lot more. Though there are four (4) modes of trade-able services as identified under GATS, these four modes provide a comparative advantage to populous countries, by offering all kinds of services such as accounting, healthcare, education, business, trade-facilitation, intermediary, and consultancy services.

 

 

GATS AGREEMENT ON TELECOMMUNICATION FOR LIBERALIZING GII

While different regulatory and institutional solutions will suit different countries depending upon varying legal and political traditions, the globalization of information infrastructures and services is creating pressures for international co-operation and co-ordination of essential safeguard and access principles. The demand for market access in telecommunication is indispensable for trade facilitation both from the accessing foreign markets and liberalizing domestic markets in reciprocity. The inclusion of basic telecommunications services and networks in the framework of the WTO, in the form of GATS Agreement on Basic Telecommunication Services, has resulted in the development of a set of common regulatory principles on access rules which would be accompanied by relevant market access commitments. Furthermore, new services such as digital satellite and Internet defy territorial boundaries so that purely national solutions likely will become increasingly inadequate.

The development and liberalization of GII-GIS is expected to transform existing economic markets to a marketplace where communication networks, bundling together transport, access and market transactions, will play a major role. The driving force behind economic growth and development in such a networked economy will be based on information.

The development of a network-based information economy to capitulate international and domestic trade potential requires:

*the availability and diffusion of high speed interactive infrastructures;

*non-discriminatory access to and use of infrastructures for both customers and service providers;

*the interconnection and interoperability of infrastructures and services;

*growth and development of on-line services, especially digital applications across all sectors including multimedia services;

*safeguards which provide for universal service, and ensure privacy, confidentiality of

*information, and security of payments, and protection of intellectual property.

EMERGENCE OF INTELLECTUAL ECONOMY

With GII in place, the world destines to reach the level of intellectual economy where services and ideas can be traded by all WTO members/nations not only requires a legal framework in terms of GATS but also require digital networks to be in place globally. Therefore, where the questions are raised on IPR (Intellectual Property Rights) basis for digitizing products over digital networks, there is also felt the need for market reform and liberalization to be in place, as digital exchange of products and services can also provide great potential for economic surge.

Therefore, to understand GATS which also cover liberalization of digital networks/telecommunication services under WTO Agreement on Telecommunication is the first step towards achieving global economic prosperity. The way progress of international trade and liberalization of telecommunications are intertwined, there is an immediate need to analyze the current market reforms and policies regarding competition and regulation of telecommunication markets in WTO countries.

Key indicators like investment levels in telecommunication, transparency measures, regulatory reforms, market access commitments, tele-density, difference of incoming vs. outgoing tele-traffic, multi-sector convergence preparations, value-added services, adoption of tele-services in main-stream business, level of knowledge and information management and distribution will essentially determine a country's ability to take a lead in telecommunication services boosting the level of trade-able services by and large!.