Oct 20 - 26, 2003 



The term ICTs refers to the Information channels, Communication channels, Hardware and software, Information channels such as the World Wide Web, online databases, electronic document, management and accounting systems, intranet and others, and Communication channels such as e-mail, electronic discussion groups, electronic conferences, the use of cell phones, and many others. Hardware and software are used to generate, prepare, transmit and store data, such as computers, radio, TV and computer programmes.

The varieties of technologies are incorporated under the term "ICTs", for Convenience and in modern terms ICTs are Telecommunications & Internet. These technologies operate differently and have unique effects based on the manner in which they are used. Nevertheless, their relationship to economic and social development stems from several basic characteristics related to improved information production and sharing. ICT's are tools that facilitate the production, transmission, and processing of information.

Information and Communication Technologies (ICTs) are increasingly seen as vital to the development process. ICTs and Economic Growth are intimately linked up together. It does not only connects people of the country together but also provide a lot of other facilities like improving government services, information accessibility by general public, and bringing social developments and others good prospectuses in the country. Speedy promotion of IT can be the key to the solution of various problems being faced by a country.

Perhaps the efficient use of such ICT's in the development process depends on the access and use of this technology, that what number of people can avail this facility? How many users are there? And whether it is utilized properly or not? This is a general approach on the other hand how Government is going to utilize this option? And Government should take initiative to improve current status of ICT's in the country.

So, how do ICTs aid in the development process? We can say Sharing Knowledge is the most important benefit associated with access to new ICTs that also increase in the supply of information. Reducing the cost of producing and transmitting information increases its availability and accessibility, which in turn reduces uncertainty. Reduced uncertainty will generally lead to better decision-making and allow for new forms of organizational innovation, thus reducing transaction costs and inefficiencies. Therefore, productive capacity no longer relies solely on investments in plants and labor, but rather on adapting new technologies and organizational forms into existing forms of economic activity.


1. The use of ICTs increases productivity through the creation of new models for turning inputs into products and/or services. As organizations learn and adapt to new technologies. Labor can be re-deployed to more efficient tasks, discrete components of a system can be better coordinated, and raw information can be more effectively manipulated to assist decision making. This in turn results in more innovation, leading to a "virtuous cycle," in which the initial adoption of new technologies snowballs into increased profits at the firm level and beyond.

2. ICTs can overcome geographic boundaries, creating an efficient global marketplace. As buyers and sellers are increasingly able to share information on process, specifications, and delivery times, production processes can be spread across national borders, and comparative advantage can be more efficiently realized. For developing countries, this can lead to larger markets and increased access to global supply chains. Networking and information-sharing also lead to demands for greater Openness and transparency. Whether this means learning the true cost of a widget in Taiwan, the decision-making process on a government agency, or the status of a central bank's foreign exchange reserves, ICTs are a powerful tool of empowerment



3. Telecommunications services can be a substitute for other forms of communication (mainly postal service and personal travel) and are often more effective, quick and cheaper. A reliable telecommunications system generates new communication partly because it interacts directly and indirectly with numerous production and distribution functions; Markets are critically dependent on information flows, especially the generation and productive exploitation of new information.

4. Having accessible and reliable telephone service removes some of the physical constraints on organizational communication, permitting increased productivity through better management in both the public and private sectors, making it possible to adopt different structures and locations, and aiding the evolution of increasingly complex organizations.

ICT is critically linked with goods and services and the transactions costs of business, and capital accumulation and investment. ICTs allow firms to spread component manufacturing across a wider array of countries, increasing the variety of service related activities that can be outsourced. This fosters efficient supply chain management and diversification and improves the logistics of moving goods and services across national borders, and results in new opportunities for large and small firms to increase their sales range and tap into the global market. The development of ICTs and the liberalization of national trading regimes could be a major factor in sustainable economic development. In 1999, global e-commerce revenues exceeded US$ 150 billion and are predicted to climb as high as US$ 3 trillion by 2003. The ability to reach a global audience, obtains instant market information, and conduct electronic business transactions and will increase economic efficiency and will open markets for goods and services from the country.

5. E-commerce is another and most strong aspect of ICT and is expected to benefit economic development in several ways: i.e. trade in products, through allowing local businesses access to global markets; by providing new opportunities to export a wider range of goods and services; and by improving the internal efficiency of LDC firms. The rapid obsolescence of new technologies has caused many IT firms to emphasize the development and marketing of new products, outsourcing physical production to more cost effective environments. This has created a comparative advantage for SMEs in the developing countries, where lower costs for facility construction and quicker retooling create a more competitive manufacturing environment.

ICTs not only open up more trade in physical goods, but also present new opportunities for LDCs to benefit from trade in services. As new ICTs reduce the cost of information transfer, it is increasingly easy and cost effective to outsource information-intensive administrative and technical functions. Trade in services can be broken into two distinct categories: data entry and software development, in which firms parse the labor intensive aspects of information management and program development to low cost environments; and back-office support such as inventory management, legal advice, accounting, marketing, distribution, and research and development. Both areas have witnessed rapid growth in recent years, as improved communications networks make it easier and cheaper to outsource these activities.

6. ICTs revolutionize efficiency and the culture of business in such a way that it provides better intra-firm communications E-commerce applications make it possible for businesses to better coordinate different departments and systems. Electronic interchanges can help firms not only better manage their inventories but also reducing inventory costs.

7. ICTs are the backbone of capital accumulation and management. Now a days finance networks have become digital. And ICTs have allowed the expansion of banking services in developing countries to previously underserved groups. In South Africa, for example, "AutoBank E" system is very popular, with 2.6 million depositors and 50,000 more being added each month ICTs not only improve the ability of the poor to access financial services, but also are central in attracting investment to economies.

8. ICTs can also play an important role in attracting private portfolio and venture capital to developing countries in three ways. The basis of market efficiency is access to information. Modern financial systems rely on computerized information processing and settlement mechanisms to move money through global electronic networks. As a result, the world's financial markets have been integrated to an unprecedented degree. Broadly stated, ICTs have contributed to this trend by ensuring wider dispersion of market information to investors, reducing transaction costs in order-routing and execution systems, and increasing confidence in the supervision and regulation of emerging markets.

9. ICT can also be used for development of rural areas; the Internet offers a cheap and versatile mechanism connecting users with a global repository of information. The economic and productivity benefits of rural ICT access including access to the Internet can be generalized as follows: access to information and markets, access to information on techniques and environmental conditions and increased business opportunities.



10. ICTs make it possible to have Access to Market Information from anywhere, even in rural areas if Internet facilities are there. ICTs offer great opportunities for the poor in rural areas to expand earnings potential and improve access to services; their relative scarcity amongst these same groups suggests the possibility of greater inequality. Farmers and other rural businesses can obtain the highest possible price for their goods and bypass intermediaries through access to ICTs. In addition, supplies and other equipment can be found for the lowest possible price. A recent Asian Development Bank study found that the introduction of telephones in rural Thailand allowed farmers to regularly check prices in Bangkok, which significantly increased profits. "One village chief . . . reported that farmer's income in his village where a telephone was installed . . . doubled".

11. The spread of ICTs into the developing world will likely enable a more efficient functioning of agricultural markets and boost profits in that sector. Communications are integral to knowing what, where, when, and how to plant crops. In particular, global-positioning-satellites are increasingly being used to map soil productivity in areas as small as two hectares. This data can be instantly fed through a remote computer, which analyzes output and can make suggestions regarding which crops to plant and which fertilizers and pesticides might be needed. Similarly, satellite imagery and Internet communications can be used to transmit data on emerging crop infestations, track weather patterns, and monitor expected yields. ICTs increase the business opportunities, efficiency and also create the jobs. Entrepreneurs can increase their sales range, resulting in increased production and hence employment.

12. ICTs can lead to better governance and government services at all levels from the local to the national and identifies some of the key trends shaping the future of ICT take-up in support of improved governance and government services especially health, education and the environment. Access to telephones can significantly improve the provision of government services.

14. Improving Education Outcomes, turning to the particular sector, ICTs have long been an integral part of education systems, computers, radio and TV in particular have important roles to play. ICTs are also playing an important role in the learning process, offering powerful tools for expanding educational access and improving skills and knowledge. Remote information access and knowledge sharing is possible now. On-line databases maintained by governments, private companies, and universities contain enormous amounts of readily accessible information. E-mail allows students with similar interests and ideas to share knowledge and collaborate with other students around the globe. Taken together, these technologies are fundamentally transforming the nature and reach of education. Educational systems that ignore ICTs will fail to produce a technically literate population and hinder a country's ability to compete in the global economy.

15. Improving Health Outcomes, a healthy population is a basic component of sustainable development. Unfortunately, the availability and quality of health care varies dramatically throughout the developing world. Access to medical equipment and supplies, pharmaceuticals, and trained professionals are lacking, and practitioners find it difficult to obtain information on diagnostic and treatment advancements. ICTs can play an increasingly important role in improving healthcare delivery to the world's poor population. According to the WHO, the process of exchanging information takes up 40% of medical systems costs and these costs can be significantly reduced with the use of ICTs. The information sharing and management functions of ICTs can benefit the health-care sector in several important ways. These can be Storage and transmission of data generally referred to as "Telemedicine," this process uses ICTs to transmit medical images, records, and diagnoses to remote locations in order to overcome shortages in regional healthcare providers. Technologies include Internet related applications (E-mail, satellite transmissions, etc.), audio-visual conferencing, and standard as well as VHF and other forms of radio-telephony. ICTs trends should be introduced to nurses and doctors also.



16. ICTs can contribute to environmental stewardship in several important ways. Improved communication mechanisms can be used for environmental information sharing between researchers, government agencies and NGOs. It should also be noted that ICTs are inherently an energy efficient component of economic activity, and as their share of economic output increases, relative energy and raw material inputs can be expected to shrink correspondingly. Communication between governments, business, and citizens is vital if environmental remediation programs are to meet their objectives in an efficient and equitable fashion. ICTs can help to include affected parties in the decision making process and ensure that traditional forms of environmental knowledge are communicated to a broader audience, and can allow citizen monitoring and enforcement of environmental threats.

The revolution in ICTs has profound implications for economic and social development. The key issue for governments is to ensure that ICT access reaches even the most marginalized groups, while at the same time ensuring that ICT projects meet the needs and demands of the target the use of ICTs in improving social services, governance and empowerment of the poor. It also effects on service provision and governance and the particular potential impact on education, health and the environment.


It should be pointed out that the increasing role of ICTs in global trade and investment does present challenges to developing countries that, at least theoretically, might see their growth prospects diminished. So, let's have a profound look what kind of challenges ICT brings for developing countries like Pakistan.

For proper utilization of ICT Public Access is necessary. In particular, poor countries will never be able to afford "one person, one phone" let alone an Internet enabled computer per person. Of course, the solution to this problem is not complex. It is to provide public access, which allows multiple individuals to share the fixed cost of ICT provision. Basic sector reform alone is not enough to ensure access to public call centers let alone the Internet either, however. It must be complemented by a web of regulatory and policy initiatives if that goal is to be achieved. Regulatory mechanisms to help ensure faster rollout. Below, we discuss a second potential tool, the Tele-center. These programs can be divided into two categories: privately owned centers where local operators cater to business demand for limited services such as phone, fax, and photocopying, and multi-purpose, community-oriented initiatives that seek to provide a larger set of economic, technological, and/or educational and cultural services as the ITU notes, the growth of these centers may signal an important shift away from the "universal service" goal of bringing a telephone into every household to a more realistic and cost-effective goal of universal community access.

E-commerce is computer and network intensive, requiring skilled programmers and applications-development personnel. Furthermore, as the majority of Internet content and programming languages are English-based, intensive language training is necessary. Educational systems that cannot provide sufficient technical training will hinder a country's ability to adapt to e-commerce. In addition, for B2C e-commerce and government services online to succeed, consumers also require both basic literacy and computer skills.

Prioritization is also vital, given the difficulty, cost, and time taken to introduce new systems. Priority should be given to the government sectors where better information processing has the highest return, and the risks of exclusion are lowest. This is likely to be in back office functions such as the processing of tax and land records rather than use contact with service consumers, who might not yet have access or the knowledge to use that access.

Widespread consultation and participation of users and stakeholders is necessary during the design process. Access should precede service rollout, especially as governments begin to move toward directly providing services to citizens online. The government should establish the Information and Decision Support Center (IDSC). The organization is mandated to assist policy-makers at the national, ministerial, and regional levels with developing information and decision support systems and encouraging informatics projects in support of managerial and economic development. A number of organizational innovations within IDSC ensure that the program maximizes the effectiveness of outputs and minimizes the likelihood of project failure. Various departments have been tasked with prioritizing information needs, matching user needs with appropriate systems, ensuring human resources development, controlling project costs and expenditures, and remaining up to date on international IT developments that might be integrated into the program.

There is possibility that the Internet might act as a technology of divergence, because the growing digital divide suggests that the rural poor are especially vulnerable, and might be left behind in the race to build an 'Internet economy.' Implementing reform of the ICT sector, and using ICTs as part of a reform program in other sectors, is very complex and prone to failure. Given these issues, the Internet should be seen as a potentially helpful tool, rather than a cure all.



Those countries without a strong ICT sector might well be left behind in attracting capital for investment. One recent estimate suggested that as much as one-half of the difference between Africa's manufactured exports as a share of GDP and East Asia's share could be accounted for by the weak state of communications networks in Africa. As we see, the level of ICT provision in a country is highly correlated with income per capita. If there are threshold effects at work, and a certain minimum level of ICT provision is required to benefit from the global opportunities offered by the Internet, then some developing countries might fall into a poverty trap of not being able to provide such a level of services.

The development of telecommunications and the Internet rides on the back of a range of network and scale economies. For example, a larger online community makes the development of Internet content a more attractive commercial and social proposition whilst the development of more attractive Internet content encourages the growth of a larger Internet community. But while scale economies suggest the opportunity for explosive growth, they also threaten the risk of the poverty trap. A consistent finding of surveys of users and providers in developing countries is that the lack of local language and locally relevant content are a major barrier to its increased use. Unless there is a concerted effort to overcome these constraints, Internet growth in some developing Indian, Chinese, Thai, and Malaysian currencies averages US$ 500 to 800 million per day and is growing. In Pakistan the growth is 40% to 50% per year.

Beyond access, citizens in LDCs face a number of challenges in harnessing the benefits of ICTs for development. This is especially true in the new area of e-commerce. Given limited technical capacity and resources available for e-commerce development, policy frameworks must be driven by a clear vision of desired ends and sequenced interventions in order to maximize benefits and minimize project redundancy and failure. A broad array of technical, legal, and international governance considerations need to be addressed if e-commerce is to succeed in raising incomes and trade flows in the developing world. In addition, multilateral issues of governance need to better incorporate developing country concerns in the emerging e-commerce trade regime. Thus, developing countries need to focus their efforts in two areas beyond access: capacity, and international governance.

The financial systems in many countries require significant upgrading and regulatory changes in order to meet the demands of e-commerce. Business and consumer trust in electronic forms of payment need to be enhanced through effective supervision and technical capacity. In particular, national banking systems will need to upgrade their infrastructure to accommodate electronic payments and settlements. In addition, due to cultural constraints, inadequate financial infrastructure, and low incomes, most countries lack a critical mass of credit-card equipped consumers who can buy goods over the Internet.

The digital transmission of goods and services will render traditional customs procedures and domestic taxation systems archaic and/or obsolete. Through work in the OECD, the United States and Europe have adopted the position that crosses broader e-commerce flows should be entirely market-driven and have proposed a moratorium on e-commerce taxes. Ignoring for the moment the issue of how to collect taxes on digital goods and services (i.e. whether authorities are even aware that the transaction is taking place), countries must consider the revenue implications of tax-free transactions if e-commerce reaches the order of magnitude that many analysts predict.



The digitization of information, combined with ability to make it available to a mass audience at small marginal cost, has raised concerns that global trade rules do not protect information producer's rights to own and profit from their work. As a result, many countries are seeking to discuss the impact of electronic commerce on the areas of copyright and related rights, trademarks, patents, domain names and unfair competition within the framework of the WTO's Trade in Intellectual Property (TRIPs) agreement. Differences have emerged, however, over balancing the needs of information and content providers with ensuring equal access to new technologies and methods. Stronger rules on TRIPs could potentially reduce developing country access to new tools and technologies. Developing countries also have the problem of finding the finance to support "lumpy" investments, such as satellites. Indeed, for two decades the only satellite services in the developing world were supplied by treaty organizations such as Intelsat. Such information and credit constraints also apply at the local level the poor have limited access to credit, and the institutions are not always in place to assist in the aggregation of demand for lumpy investments such as a computer or the first telephone line into a village.

Concluding the topic we can say that ICTs appear to have an important role in a range of social services that can also be to the benefit of economic growth as well such as health and education, and e-commerce, trade in services. ICT's revolutionize efficiency and culture of business. Governments can use ICTs to increase capital investment and helps to improve the quality and efficiency of public services, to strengthen government information flows internally, to promote accountability and transparency, to procure goods and services fairly and efficiently, and to raise quality standards for information technology suppliers. ICT's can also be used for rural development, helps agriculture sector in selling their products at fair prices. It helps to have access to market information from any where. At the same time, there are significant risks: institutional failure, expense, poor design, and low levels of consumer access. A number of lessons should be kept in mind.

Evolutionary approaches should be preferred over revolutionary reforms. Introduction is complex and expensive training and support costs, such as operations and maintenance, for computers can add up to as much as five or ten times the cost of equipment, and this does not allow for the wider institutional reforms that are a necessary part of computer introduction. Demands on scarce technical capacity are also high. This suggests that the costs of failure are very high-and the risk and cost of failure grow with the increasingly radical nature of reform.

Pakistan is in the initial stages for adopting Information and Communication Technologies (ICT). ICT development is on the top of the agenda in present government. About Rs 2.6 billion programs for promoting electronic-governance in the country is approved by the federal cabinet. Under the program, the government would spend Rs one billion, while the private sector would invest Rs 1.6 billion. To increase the number of IT expert the government would be offering a number of incentives, which include scholarships for those undertaking Ph.Ds in information and computer sciences. Currently in Pakistan people have Internet facility in more than 520 cities, towns and villages across the country. Currently government is restructuring Central Board of Revenue. But still we are lacking in skilled IT people.

Pakistan's government increased 500% in Science & Technology budget from Rs. 120 million to Rs. 6 billion. Most of the funds (75% of Science & Technology budget) are utilized for IT education and capacity building. 7 new IT universities are established. A virtual university is established and linked to 137 remote study centers throughout Educational Optical Fiber backbone. Virtual university makes Direct Information Access: possible, about 60 universities, colleges and 2500 schools will be established. Up to 10,000 institutions linked via dial up intranet for communication.

Now last but not the least, the Government of Pakistan is emphasizing on formation of e-Commerce Task Force simultaneously working on framing of IT Law consistent with IT policy. Ministries and Government department's web sites are being developed. At present 70% of these web sites are developed. Government needs equal participation of public sector in ICT infrastructure development. Liberalization and De-regulation can also bring new investment to the country. There are other government targets for ICT initiative like; Increasing Tele-density by expanding the existing telecommunication network and by encouraging the new telecom companies.