Human Development in South Asia 2008

HUMAN DEVELOPMENT INSOUTH ASIA 2008

Technology and Human Development in South Asia

Published forThe Mahbub ul Haq Human Development Centre

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ABBREVIATIONS

ADB Asian Development BankAIDS Acquired immune deficiency syndromeCAD Computer-aided designCAM Computer-aided manufacturingCNG Compressed natural gasDFS Double Fortification of SaltDSL Digital subscriber lineFDI Foreign direct investmentFM Frequency modulationFOI Freedom of InformationGAIN Global Alliance for Improved NutritionGDP Gross domestic productGIS Geographic information systemGMO Genetically modified organismGNP Gross national productGNI Gross national incomeHIV Human immunodeficiency virusHYVs High-yielding varietiesICDDR International Centre for Diarrhoea Disease

ResearchICT Information and communications

technologyIDA Iron deficiency anaemiaIDD Iodine deficiency disordersIGAs Income generating activitiesILO International Labour OrganizationIP Internet protocolIRRI International Rice Research InstituteIT Information technologyITU International Telecommunication UnionJICA Japan International Cooperation AgencyLCD Liquid-crystal displayMI Micronutrient InitiativeMIS Management Information SystemMNCs Multinational corporations

MMS Multimedia Messaging ServiceNGOs Nongovernmental organizationsOECD Organization for Economic Cooperation and

DevelopmentORS Oral rehyderation saltORT Oral rehyderation therapyPDAs Personal Digital AssistantsPPP Public-private partnershipR&D Research and developmentRTI Right to InformationS&T Science and technologyS&E Science and engineeringSCI Science Citation IndexSIMs Subscriber Identity ModulesSMEs Small and medium enterprisesTFP Total factor productivityTRIPS Trade-Related Aspects of Intellectual

Property RightsTVET Technical and vocational education and

trainingUN United NationsUNCTAD United Nations Conference on Trade and

DevelopmentUNDP United Nations Development ProgrammeUNICEF United Nations Children’s FundUS United StatesUSAID United States Agency for International

DevelopmentVMD Vitamin and mineral deficiencyWFP World Food ProgrammeWLL Wireless local-loopWHO World Health OrganizationWIPO World Intellectual Property OrganizationWTO World Trade Organisation

This Report on ‘Technology and Human Development in South Asia’ has been a difficult one to prepare because of several reasons. The first reason is the usual one—lack of adequate data and research in this area in the region. Except India, other countries in the region have hardly any data on adoption and diffusion of technology and the impact of technology on human well-being that one can analyze and make some assessment. Even in the case of India, although a lot of data is available on the diffusion of technology and the impact of technology on economic growth and employment, we could not find enough analytical work on the technology-human development nexus. Secondly, in a region of over 400 million illiterate people how can we judge the impact of technology on all people by only looking at a few technology hubs, upscale knowledge-creating and disseminating institutions, and techno-logically sophisticated healthcare services for the rich? Yes, the new information technology is bringing change to South Asia in every nook and corner of its diverse, urban and rural societies, but is it improving people’s lives? Are enough people benefiting from its reach and promise? In 1998, in the second South Asia Human Development Report on The Education Challenge, Mahbub ul Haq had lamented that ‘while many developing countries are seeking technologies of the future, several countries in South Asia are stuck with technologies of the past.’ Since then the situation has changed, especially in India where the application of technology in many areas has increased the country’s outputs and productivity, and improved employment prospects of the educated and the skilled population. Globalization has changed the face of

South Asia. Many good things are happening, from more and better schools, hospitals, roads, to employment oppor-tunities in many new fields. Most countries can now boast of technological institutes/universities and exportable income from outsourcing activities. But this new South Asia has left many people behind—those who are illiterate, out of school, in poor health, in poor areas and without income. These are the ones we would like to focus in this Report—to see how much their lives have improved due to technological advancement in the region. The chapters of this Report look at technological advancement from various perspectives—from the perspective of political and governmental commitment as reflected in the policies for technological advancement in different countries; from the perspective of the country which has gone farthest in using technology for the progress of the country; and from the perspective of how much technology has improved public service delivery and governance in South Asia. All these chapters are written with full recognition that our analyses and conclusions may not be as robust as we would have liked these to be because of the constraints we faced in data availability and published analytical work in the area. The Report contains six chapters, in addition to the Overview. Chapter 1 presents and analyzes the technological policies in South Asia, covering education, telecommunications, patents and copy-right laws, to energy and environmental issues. Chapter 2 describes the profile of technology and human development in India. Chapter 3 analyses the economic dimension of technological advancement. Chapter 4 explores the application of new technology in technical and vocational education and higher levels of professional

Foreword

education. Chapter 5 analyses the role of technology in the economy and public service delivery in Bangladesh. Finally, Chapter 6 looks at technology for healthcare and governance in South Asia. The Report suggests that to improve the productivity of the economy and the well-being of all people, rapid adoption and diffusion of technology through quality educational and research institutions are an imperative for South Asia in this highly competitive world. I would like to put on record my very grateful thanks to the Royal Norwegian Embassy for supporting the preparation of this Report. Without Norway’s consist-ent support, it would not be possible for the Centre to carry on this work. I would also like to acknowledge the contribution of the UNDP Regional Bureau for Asia and the Pacific, particularly the Regional Centre in Colombo. The small research team at the Centre worked hard to complete this Report. I must thank Sadia Malik for supervising

the research and supporting me in completing this Report. The research team, consisting of Ali Shan Azhar, Arif Naveed and Nazam Maqbool Cheema collected and compiled data, prepared background papers, and helped put the Report together. I thank each one of them for their untiring efforts. I am always grateful to my South Asian friends who are always there to help out the Centre. This year they were: Vinish Kathuria of the Indian Institute of Technology, Bombay ; Naeem Chowdhur y o f Bangladesh, and Mohammed Kaykobad of Bangladesh University of Engineering and Technology. My sincere thanks to all of them for preparing the country papers on technology and human development in India and Bangladesh, respectively. I thank Taha Mustafa for composing and designing the Report, and Malia Asim for handling the administrative details.

Khadija Haq

Islamabad12 January 2009

Foreword v

Team for the preparation of the 2008 Report

Coordinator and lead author: Khadija Haq

HDC Research Team Consultants

Sadia Malik Naeem Chowdhury (Bangladesh) Ali Shan Azhar Mohammad Kaykobad (Bangladesh) Arif Naveed Vinish Kathuria (India) Nazam Maqbool Cheema Taha Mustafa

With the assistance ofMalia Asim

The preparation of this Report owes a great deal to many individuals and organisations. The financial support for the Report was provided by the Royal Norwegian Embassy, and UNDP Regional Bureau for Asia and the Pacific, in particular the UNDP Regional Centre in Colombo. We would also like to thank the United Nations Information Centre (Pakistan),

Acknowledgements

and the librarians of the ILO, World Bank and PIDE libraries in Islamabad for their kind assistance. We are always thankful to the Oxford University Press, Pakistan for the profes-sional manner in which they handle the publication of our report. We wish to thank particularly Ameena Saiyid for her own special commitment to this project.

Under the umbrella of Foundation for Human Development in Pakistan, Mahbub ul Haq Human Development Centre was set up in November 1995 in Islamabad, Pakistan by the late Dr Mahbub ul Haq, founder and chief architect of UNDP Human Development Reports. With a special focus on South Asia, the Centre is a policy research institute and think tank, committed to the promotion of the human development paradigm as a powerful tool for informing people-centred development policy, nationally and regionally. The Centre organises professional research, policy studies and seminars on issues of economic and social development as they affect people’s wellbeing. Believing in the shared histories of the people of this region and in their shared destinies, Dr Haq was convinced of the need for cooperation among the seven countries of the region. His vision extended to a comparative analysis of the region with the outside world, providing a yardstick for the progress achieved by South Asia in terms of socio-economic development. The Centre’s research work is presented annually through a Report titled, Human Development in South Asia. Continuing Mahbub ul Haq’s legacy, the Centre provides a unique perspective in three ways: first, by analysing the process of human development, the analytical work of the Centre puts people at the centre of economic, political and social policies; second, the South Asia regional focus of the Centre enables a rich examination of issues of regional importance; and third, the Centre’s comparative analysis provides a yardstick for the progress and setbacks of South Asia vis-à-vis the rest of the world. The current activities of the Centre include: preparation of annual reports on Human Development in South Asia; a multi-year research project on improving the outcome of education in Pakistan; preparation and publication of an intellectual biography of Mahbub ul Haq; publication of a collection of unpublished papers of Mahbub ul Haq; preparation of policy papers and research reports on poverty reduction strategies; organisation of seminars and conferences on global and regional human development issues, South Asian cooperation, peace in the region and women’s empowerment.

Board of Governors Board of AdvisorsKhadija Haq (Chairperson) Sartaj Aziz (Pakistan)Usman Aminuddin (Vice-chairman) Fateh Chaudhri (Pakistan)H. U. Beg Kul Gautam (Nepal)Shahid Javed Burki Jayati Ghose (India)Tariq Hassan Pervez Hasan (Pakistan)Sibte Hassan Javed Jabbar (Pakistan)Ishrat Husain Gustav Ranis (USA)Sahabzada Yaqub Khan Wasim Sajjad (Pakistan)Amir Muhammed Frances Stewart (UK)Hafiz Pasha M. Syeduzzaman (Bangladesh)Saeed QureshiFarid RahmanNafis SadikQaiser Ahmad Shaikh

PresidentKhadija Haq

Mahbub ul Haq Human Development Centre42 Embassy Road, G-6/3, Islamabad, Pakistan.

Tel: 92-51-2271228 Fax: 92-51-2822794e-mail: [email protected] website: www.mhhdc.org

About Mahbub ul Haq Human Development Centre

Overview 1

Chapter 1Policies for Technological Advancement in South Asia 13Education policies 13Telecommunications policies 22Trade policies 30Patent/Copyright laws 32Strategies for energy security and environmental management 35

Chapter 2Technology and Human Development in India 42Technology and public service delivery 43Technology and economic development 50Information and communications technology 54The state of technical, vocational and higher education 57Policies for technological advancement 62Conclusion 66

Chapter 3Technology and Economic Development in South Asia 68Sources of technological progress 68The diffusion and adoption of technology by sectors 71Technology and agricultural productivity 71The economic gains of ICTs in South Asia 75The road ahead 77

Chapter 4Technology and Education in South Asia 79Technology and basic literacy 80TVET in South Asia 80Status of higher education in South Asia 87R&D in South Asia 93Conclusion 96

Chapter 5Technology and Human Development in Bangladesh 98The role of technology in Bangladesh’s economy 98The growth of ICT in Bangladesh 101Technology and public service delivery in Bangladesh 102Policies to promote ICTs in Bangladesh 104Conclusion 109

Chapter 6Technology for Healthcare and Governance in South Asia 111Technology for healthcare 112Technology and the governance of public service delivery 119Conclusion 125

Contents

Contents ix

Notes 126References 130Human Development Indicators for South Asia 138Key to Indicators 155

x Human Development in South Asia 2008

Boxes1.1 Vocational education at secondary level in India 171.2 The HEC: how far is it assisting Pakistan’s technological advancement through R&D? 201.3 National Chemical Laboratory, Pune: an icon of chemical and biotechnology research 221.4 Dichotomy in telecommunication regulation: the case of Pakistan 231.5 Telecommunications policy and regulatory reform in India 241.6 Which broadband adoption strategy is the best? 261.7 Prerequisites for successful e-governance 291.8 Increasing usage of CNG as transport fuel in South Asia 362.1 The CBFL method in India 472.2 Computerized milk collection centres in Gujarat, India 542.3 Technology from grass root—modified pulley 673.1 Grameen Bank initiatives: using ICT as a tool for poverty reduction 784.1 Thailand SchoolNet—a successful attempt at ICT integration in school education 814.2 Promoting literacy by using ICT in India 824.3 Use of technology to improve TVET system 864.4 Reversal of brain drain: some evidence 934.5 Brain circulation and Silicon Valley: lesson for South Asia 946.1 A major breakthrough in the treatment of diarrhoea and cholera 1126.2 The Electronic Helpline on HIV/AIDS in Rajasthan, India 1156.3 DFS technology: a novel technology adopted by the National Institute of Nutrition, Hyderabad 1166.4 Chile’s fight against corruption in healthcare through e-procurement: lesson for South Asia 1196.5 Indus Hospital in Karachi, Pakistan: exploiting the potential of ICTs in healthcare 1206.6 The status of the RTI Acts in South Asia 1216.7 Technology serving the nation—NADRA in Pakistan 1236.8 Sachivalaya Vahini or e-Governance in the Secretariat in Karnataka 124

Tables1.1 Policies and initiatives to promote IT in school education in South Asia 142.1 Important initiatives in education in India: employing ICTs 462.2 Performance evaluation of BHOOMI (an e-governance project of Karnataka) in India 482.3 Performance evaluation of e-Seva (an e-governance project of AP government) in India 482.4 Multiplier effect of IT/ITES industry on other sectors in India, 2005–06 532.5 Trend in info-state in India and China, 1995–2005 562.6 Trend in revenue generation (US$ billion) of IT industry in India, 2004–08 562.7 Enrolment in higher education in India 1985–2004 572.8 Teaching staff composition in higher education sector in India, 1998–2004 582.9 Percentage distribution of personnel by type of employer in India, 1998–2000 592.10 Number of papers published by India as seen from SCI, 1980–2005 59

Contents xi

3.1 Trends in trade and FDI, 1990–2006 693.2 Trends in trade in high-technology goods in South Asia and other regions, 1994–2004 693.3 High-technology exports (percentage of manufactured exports), 1994–2006 703.4 Technology achievement index: South Asia and the comparative countries 703.5 Labour productivity (value added per worker at US$ 2000) by sectors, 1990–2005 713.6 Trends in cereal yield per hectare: South Asia and other comparative countries, 1961–2007 733.7 Public R&D spending in agriculture as percentage of agriculture value added, 2000 744.1 Enrolment in TVET at tertiary level as percentage of total tertiary enrolment, 2002 834.2 Ratio of female to male enrolment in TVET at secondary level in South Asia, 2005 834.3 Female teachers and students as percentage of total in South Asia, 2005 834.4 Share of workers trained by skill group in South Asia, 2002–04 844.5 Percentage of firms providing in-service training by firm size, ownership, sector and exports in South Asia, 2002–07 854.6 Trends in gross tertiary enrolment rate, 1965–2005 884.7 Trends in gender parity index for tertiary level enrolment, 1965–2005 894.8 Female teachers as percentage of total teachers in higher education, 2005 894.9 Percentage distribution of enrolment by field of study, 2005 894.10 Expenditure on R&D as percentage of GDP, 2000–05 95A4.1 Open Universities and the use of ICTs for distance learning in South Asia 975.1 Trends in the production of staple crops in Bangladesh, 1995–2008 995.2 Trends in Growth rates of GDP, manufacturing output, and population in Bangladesh, 2001–07 1005.3 The relative share of low-, medium- and high-technology manufacturing industries in Bangladesh 1015.4 Bangladesh Telephone and Telegraph Board services 1025.5 Trends in penetration of fixed- and mobile-telephony in Bangladesh, 1974–2005 1025.6 ICT installations within the GOB 1065.7 Telephone growth in Bangladesh, 2001–06 1075.8 Trends in usage statistics of telephone, computers and Internet in Bangladesh, 1999–2006 1086.1 Country-wise micronutrient deficiency in South Asia 1156.2 Goitre prevalence and iodine use in South Asia 1166.3 Ranking of South Asian countries in terms of e-Participation Index 125

Figures1.1 Merchandise trade as percentage of GDP, 2006 301.2 Average annual growth in merchandise trade as percentage of GDP, 1996–2006 311.3 Trends in simple mean tariff in South Asia, 1990–2006 311.4 Trends in the composition of imports of Pakistan, 1990–2007 32

xii Human Development in South Asia 2008

2.1 Internet and mobile penetration in India 442.2 Marginal internal rate of return to agriculture research by type of investment in India, 1956–87 512.3 Trends in index (1993–94 = 100) of total and high-tech manufacturing production in India, 1994–2007 512.4 High-tech goods exports in India, 1996–2007 522.5 Trends in contributions of IT/ITES to GDP in India, 1997–2007 522.6 Trends in exports earnings and direct employment generation in India, 1997–2007 522.7 Trends in FDI inflow and R&D intensity in India, 1990–2005 542.8 Trends in Internet use and personal computers per 100 inhabitants in India, 1998–2007 552.9 Personal computers and Internet penetration in India, 2000–07 552.10 Internet penetration by region in India, 2000–07 552.11 Category-wise Internet penetration in India, 1999–2008 562.12 Trends in R&D expenditure (at 1993–94 prices) and R&D to GDP ratio in India, 1980–2004 582.13 Researchers and technicians in R&D activities in India, 1998–2000 592.14 Doctoral degrees awarded in India and China, 1984–2004 602.15 National R&D expenditure by sector in India, 2000–05 613.1 Trends in average mean tariff rates in South Asia, 1990–2006 683.2 A regional comparison of average mean tariff rates, 2006 693.3 Annual growth rate of cereals yield per hectare in selected South Asian countries, 1961–2007 733.4 Growth of telephone mainlines in South Asia, 2000–05 753.5 Mobile telephone subscribers in South Asia, 2000–05 763.6 Annual growth rates of mobile telephone subscribers and Internet users, 2000–05 764.1 Enrolment in TVET at secondary level as percentage of total secondary enrolment, 2005 804.2 Enrolment in TVET at secondary level as percentage of total secondary enrolment in South Asia, 2005 824.3 Ratio of female to male enrolment in TVET at secondary level by region, 2005 834.4 Firms providing formal in-service training to their workers, 2007 844.5 Firms providing formal in-service training to their workers in South Asia, 2002–07 844.6 Trends in number of tertiary students and population in South Asia as percentage of world, 1975–2005 884.7 Student-teacher ratio in tertiary education, 2005 904.8 Tertiary education spending as percentage of GDP, 2005 914.9 Trends in emigration rates with tertiary education, 1990–2000 924.10 Researchers per million population, 2000–05 954.11 Share of female researchers in total researchers 2000–05 964.12 Trends in share of South Asia, developing and developed countries in world S&E articles, 1990–2005 96

One of the greatest challenges that South Asia faces today even in the midst of rising economic growth is the vast human deprivations that continue to prevail in the region relegating it to one of the poorest, the most malnourished and the most illiterate regions in the world. In our annual Report on Human Development in South Asia 2007: A Ten Year Review, we stated that despite some improvements that were observed in most human development indicators over the past 10 years, South Asia’s position defined with reference to the absolute number of deprived people in terms of adequate income, health and education has not improved. The region continues to be home to about one-half of the world’s illiterate adults and about an equal proportion (47 per cent) of the worlds’ poor defined on the basis of people living below US$1 a day. Health indicators portray an equally dismal picture. Around 60 per cent of the births in South Asia as a whole are not attended by skilled health personnel. Hunger and malnutrition continue to pose a serious challenge to the region with 43 per cent of the South Asian children under-five as malnourished. These indicators call for urgent action not only from the perspective of human rights (as access to basic public services such as health and education are increasingly being recognized as basic human rights), but also from the point of view of sustaining the recent economic growth and thereby uplifting the status of South Asian countries in the global arena. Both conventional as well as unconventional approaches must be adopted towards this end. Technology, in its various forms, offers unique solutions to these problems and has a great potential to be harnessed for human development. Often, the role of technology is perceived from the point

of view of increasing national income rapidly so as to enable countries to achieve the status of global economic power within a short span of time. Seldom has the role of technology as an instrument to reduce poverty and enhance human capabilities been articulated or appreciated. This Report fills this critical gap by examining ways in which technology can be harnessed for greater human develop-ment in the context of South Asia. It also looks at the current status of technology and how it is being exploited to improve income, health, education, and the overall system of governance in South Asia. There are several important ways in which technology in its various forms may assist countries in achieving better human development outcomes. Medical tech-nology for instance helps fight diseases that were not curable earlier. The invention of vaccines and drugs to prevent and cure diseases have no doubt led to a tremendous improvement in health outcomes, espe-cially in the developing world where the prevalence of diseases is much higher than that in the developed world. The advancement in medical technology not only helps in introducing drugs and vaccines to treat diseases but often these advancements help in offering medical solution that are much more cost-effective and are better suited to local conditions. The oral dehydration therapy (ORT) for instance is a much more cost-effective solution to treat diarrhoea than the old injectable vaccine. Malnutrition and hunger is one of the most serious challenges facing the entire South Asian region at present. There are several important ways in which the application of technology can help fight this menace. The application of technology in agriculture such as the one that resulted in the historical green revolution leads to

Overview

2 Human Development in South Asia 2008

a higher production of food and helps fight malnutrition and hunger. With limited availability of land and unfavour-able climatic conditions in many areas on one hand, and the growing requirement to feed an ever increasing number of food-insecure people on the other hand, the application of appropriate technologies to increase agricultural yields seems to be the only solution. Increasing the nutritional content of food through food fortification techniques is also an effective solution to reduce malnutrition in the region. The provision of safe drinking water through the application of water filtration techniques helps reduce the occurrence of infectious diseases that are mostly water borne in South Asia. One of the root causes of poor human development indicators in South Asia is the low availability of, and access to, public services such as health and education particularly in rural and remote areas. Since the poor lack purchasing power, they rely exclusively on public services and when states fail to provide adequate public services to their citizens, the result is poor human development outcomes. Information and communications techno-logy (ICT) provides innovative ways to improve the availability and access to both health and education. Telemedicine, for example, can offer basic health services to remote areas whereas ICT in the form of television (TV), radio, Internet and mobile phones can help in the dis-semination of important health- and hygiene-related information to people in their local languages. The use of these devices also aids in literacy campaigns and distance education. The availability of online research resources greatly enhances the capacity of educationists, researchers and students. It gives them access to knowledge and ideas that are being created in every corner of the world and empowers them with an ever-expanding wealth of knowledge and information. By enhancing the productive capacity of all factors of production, whether it is land, labour or capital that is involved in the production of aggregate output, the

overall rate of economic growth and per capita incomes is increased. By improving the productivity of labour and by raising agricultural yields to which the fate of the majority of South Asian poor is connected, technology has a great potential to reduce poverty as well. ICT in particular, empowers the poor and enhances their capabilities by fulfilling their need for information and communication. Each group of population has separate needs for information that must be fulfilled. Educated youth, for instance, needs information on where and how to find gainful employment. Mothers need information on health and hygiene of their infants. Traders need information on markets and prices and on ways to expand their trade networks. Farmers need information on how to get reliable seeds and how to apply efficient and cost-effective farming techniques. They also need information on market price of their produce, the lack of which often results in their exploitation by the mediators offering them much lower price than the market. Meeting all these information needs in an effective manner through ICT can have tremendous impact on the overall well-being of the population. Above all, technology in the forms of printing press, TV, radio and Internet helps inform citizens about their rights and entitlements and mobilize politicians and policy-makers to deliver on their promises. It helps create a more humane system of governance by increasing the awareness of the masses and by creating pressure groups in order to hold politicians more committed, accountable and trans-parent. Technology in the form of computerization and improved manage-ment techniques also helps in improving the efficiency of public service delivery by cutting down costs, eliminating corruption and improving services. These are some of the important channels that we have identified in this Report through which the efficient use of appropriate technologies can improve the well-being of the South Asian population. However, it must be kept in mind that technology by itself

Overview 3

does not result in wonders. It has to be accompanied with an educated and skilled population as well as basic infrastructure. In the absence of these basic prerequisites, technology may not result in desired outcomes.

Recognizing the significance of techno-logical advancement in order to meet multiple goals in the present era and to compete with the rest of the world, South Asian governments have formulated a number of public policies and articulated elaborate strategies that range from the general as providing quality education and trade openness to the more specific such as incentives for promoting the use of ICT. However the gap between promise and action in this area remains huge in most South Asian countries due primarily to the lack of realistic goals and the absence of an effective implementation and a follow-up strategy.

Policies for technological advancement in South Asia broadly relate to promoting the use of information technology (IT) in core education; strengthening technical and vocational education and training (TVET) so as to facilitate the adoption of technology; promoting research and development (R&D) at the tertiary level; privatization of the telecommunication sector so as to encourage the use of ICT; providing broadband incentives and facilitating interconnection; promoting e-commerce and e-governance; liberalizing trade so as to facilitate the diffusion of technology; enacting copyright laws to encourage innovation; and specific strategies for energy security and environ-mental management. Most policies and strategies formulated recently in all South Asian countries in the area of education emphasize the need to provide computer literacy and impart basic computer operational skills to children. However, despite the policy backing, actual initiatives for integration of ICT in school education remain few

and far between. Far from playing their part in producing a computer savvy generation, most public schools continue to grapple with the non-availability of basic essentials such as drinking water, toilets and electricity. The policy documents for ICT dissemination in schools have in many cases not been translated into action with continued pedagogical focus on outdated textbooks and minimal curricular resources. In order to promote the effective use of ICT in basic formal schooling in South Asia, there are three key policies that we recommend in addition to larger financial allocations: (1) the use of ICT must be complemented with satisfactory standards of school education in General Science, Mathematics and English; (2) provision of greater opportunities for teachers and trainers to update themselves with the use of ICT particularly for pedagogical purposes; (3) and greater focus on e-education and distance learning. South Asia also needs technical expertise and professional skills so as to be able to use and adopt technology in a successful manner. With the exception of India, which has made efforts to establish a credible National Technical Manpower Information System, there has been a lack of meaningful manpower planning in South Asia. The TVET systems in most South Asian countries have failed to check the menace of growing unemployment and have also not adequately contributed towards enhancing professional compe-tence and technological know-how. There are two key areas in this context that need urgent attention. First, technical and vocational certificates/diplomas are not accepted as a ‘formal’ educational quali-fication and thereby carry an inferior status with the holders suffering automatic disqualification from higher education/training as well as from most competitive examinations for entry into government services. Steps must be taken for enhancing the social prestige and economic acceptability of TVET. Second, the TVET system is non-responsive to the job market culminating into inadequate economic


dividends for the graduates. It is important to upgrade the TVET system according to the changing requirements and to integrate it with the job market. R&D at the tertiary level is also essential to promote innovation and develop indigenous technologies. Many South Asian countries including Pakistan have established commissions to promote higher education and research. However, too often governments have invested in poor quality research at high costs, undermining both efficiency and equity aspects of research expenditures. Moreover, the weak linkage of academic institutes with the industry results in mismatch between the demand and supply of educated workers and professionals. In order to promote the use of ICT, most governments in South Asia have liberalized the telecommunication sector, which has resulted in a massive increase in telecommunication, particularly mobile phone subscription rates. The provision of basic telephone services however remains the monopoly of government agencies that, in most cases, do not have much incentive to extend the outreach, enhance the quality, and reduce the cost of services. Although the privatization of state monopolies in the telecommunication sector has resulted in improvements in service quality and options, the process has sometimes created a highly concentrat-ed oligopoly market structure. This must be countered by strong regulatory frame-work and mechanisms to manage competition. Deregulation by itself does not ensure that the market is conducive to competition. Some regulatory agencies have recently been formed in South Asia, yet they remain more or less incapable of checking market power due to the existence of asymmetric information and the lack of qualified staff that is well-versed in the dynamics of competition in the telecommunication sector. The national ICT policies of most South Asian governments emphasize the need to promote e-commerce. However, there are financial, legal and market access problems in the promotion of e-commerce.

Moreover, people need to be assured that the telecommunication network is secure and reliable, and there are effective methods to protect the information system as well as effective means for authentication and ensuring confidentiality. While many South Asian countries, such as India and Bangladesh, have provided legal recognition to transactions through electronic data interchange, they fail to tackle the issue of effective IT security from both technological and legal angles. As far as e-governance is concerned, the policy documents of most South Asian countries recognize the necessity to implement ICT systems to provide nationwide coverage and access by every citizen to the government databases. However, there are some prerequisites for successful implementation of e-governance such as large scale computerization and changing the mindset of government functionaries. Most South Asian govern-ments remain weak in meeting many of these prerequisites. Trade and market liberalization are essential to facilitate the diffusion of technology from abroad. Beginning from the early 1990s, most South Asian countries have pursued policies that promote trade liberalization to expedite integration into the world economy. However the region’s export and import composition indicates a negligible share of high-tech goods. In order to motivate technological progress, the enforcement of copyright laws is absolutely essential. The Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, which came into effect on 1 January 1995, is a comprehensive multilateral agreement on intellectual property. Relevant legislation has taken place in most South Asian countries following the TRIPS Agreement. However, despite the enactment of laws, South Asia has failed to adequately enforce patents, copyrights, and trade-marks due to the lack of a functioning central regulatory/enforcement body, an underdeveloped judicial system and widespread corruption.

Overview 5

Given the growing shortage of energy, South Asia needs innovative policies to ensure energy security while protecting the environment at the same time. At present, South Asian countries rely heavily on biomass sources of fuel—wood, twigs, crop residue and animal waste—for meeting the bulk of their energy needs. Unfortunately, with the dwindling forest cover in South Asia, biomass fuel has been rendered increasingly unreliable and expensive and their consumption beyond the sustainable limits has myriad adverse implications for the environment in South Asia. The gigantic potential of renewable resources like wind and sunlight remains severely underemployed. Exploiting these sources is not economically viable for the private sector and the government needs to come up with suitable financial mechanisms such as providing rebates and tax credits on investment in renewable technologies along with easy loans and technical support.

India is an important country within South Asia that has made an effective use of technology in terms of boosting economic growth and delivering public services in a much more transparent, efficient and swift manner. However there is a lot of potential associated with the use of technology in India that remains untapped due to the shortage of skilled and technical labour force and some infrastructure bottlenecks particularly in rural areas.

India offers many examples and case studies for the application of technology to deliver education, healthcare and other public services in an innovative, trans-parent, cost-effective and efficient manner. It is among the few countries in the developing world that is making use of different ICTs like satellite technology, open source software, local language interface, digital libraries and easy to use computer-human interface. Community service centres are being set up throughout the country to promote e-learning. Some

private initiatives such as the Computer-Based Functional Literacy (CBFL) method developed by the Tata Consultancy Services and the Telecommunication and Networking group at the Indian Institute of Technology, Madras, have also proved to be effective in delivering tangible results within a short period of time. CBFL uses ICT to build basic reading and comprehension ability so that many people have been made capable of reading a newspaper within 8-10 weeks. As of now, over 90,000 people have been made literate with the programme, which is active across 1,400 centres in the states of Andhra Pradesh, Uttar Pradesh, Tamil Nadu, Maharashtra, and Madhya Pradesh. In terms of e-governance, there are several examples that have enhanced access to information and improved public service delivery for the poor in terms of increasing transparency, efficiency and the speed with which these services are made available to the people in India. The computerization of land records widely known as Bhoomi implemented by the state of Karnataka has resulted in a huge reduction of cost (from INR500 to INR25) and time (from one week to less than 10 minutes) to process requests for land registration. E-Seva is another successful e-governance project launched initially in the twin cities of Hyderabad and Secunderabad in December 1999 by the Andhra Pradesh government. It now runs across the state. The project offers a wide spectrum of citizen-friendly services to save citizens the trouble of running around different departments. Starting with 10 centres in 2001, the project now has 210 centres spread across the state providing a one-stop venue for 55 services such as payment of utility bills—electricity, telephone and water, property, commercial and income taxes, registration and transfer of ownership of vehicles, registration and issue of birth certificates, filing of passport applications, registration of documents (and stamps), sale of bus tickets, and collection of small savings. The perform-ance evaluation of the project indicates a


high level of transparency, accountability and responsiveness to the needs of the people. Another programme known as Lokvani, an outcome of public private partnership and implemented by the District Administration of Sitapur in Uttar Pradesh offers services such as online submission of grievances that are forwarded to the local government. People do not have to travel to the government offices. The programme also serves as an effective tool to monitor the performance of various government departments. Although these examples of e-govern-ance are few and far between, given the huge size of the country, yet the outcomes of these projects are inspiring many other states within India to adopt them. It is not hard to foresee the expansion of e-governance in India within a short period of time provided India takes concrete steps towards meeting some of the prerequisites to adopt ICT such as expanding access to basic education and developing its infrastructure. ICT penetration in India as reflected by the use of computers, Internet and mobile phones has registered a phenomenal increase, particularly after the economic reforms of 1991. The mobile subscription base has increased from 13 million in 2003 to nearly 185 million by 2007, reflecting over 90 per cent annual growth in the last five years. Internet penetration has also grown tremendously, from 5 million in 2000 to 46 million in 2007. It is encouraging to note that smaller and non-metro towns in India are now catching up in terms of Internet penetration with their share rising from 10 per cent in 2000 to 41 per cent in 2007. India has also carved out a place for itself as a leading provider of IT outsourcing services with an increasing supply of English speaking, technologically-educated, and low-cost workers. In the last two decades, the IT and IT-enabled services industry has contributed signi-ficantly to the growth of Indian economy in terms of gross domestic product (GDP), foreign exchange earnings, and employment generation.

Although market and trade liberalization have resulted in a substantial inflow of foreign direct investment (FDI) and multinational corporations, yet there are concerns that without an adequate base of skilled and educated work force, enhanced competition through MNCs may not work in the right direction. At present, India faces a shortage of skilled workers: only 5 per cent of the youth between the age group of 20-24 possess vocational skills in India, while this figure is 28 per cent in Mexico, 78 per cent in Germany, 79 per cent in Canada, 80 per cent in Japan and 96 per cent in Korea. The government of India has recently undertaken a number of schemes recently to enhance the skill levels of the workforce. Policies have also been formulated in the area of patents and copyright laws, particularly to the advantage of the growing pharmaceutical industry in India. The government of India is also aware of the risks associated with the use of several technologies such as biotechnology, Internet and even mobile phones, and has undertaken a number of steps to minimize them.

The economic reforms of the 1990s have exposed South Asian markets to foreign technologies and also encouraged innovation through greater competition with both domestic as well as foreign firms. However, the region is still grappling with meeting some of the prerequisites for a successful adoption of technology such as the presence of an educated and skilled population as well as adequate infrastructure particularly in rural areas.

Openness to foreign trade and cross border mobility is the major source of technological diffusion and skills transfer. South Asia has already opened up and has reduced its trade barriers to a significant extent as part of its liberalization policies, thereby setting the stage for technological diffusion. However, technological diffu-sion through trade liberalization is not

Overview 7

enough to increase productivity unless there is a domestic capacity to absorb and adopt technology. Human capital in the form of a skilled and educated work force is the crucial prerequisite for a successful adoption of technology. South Asia’s performance on the human capital front is not very impressive. Enrolment rates remain low and the region is far from achieving universal literacy. Enrolment in technical, vocational and higher education also remains lower than any other region in the world. Successful diffusion as well as adoption of technology also depends upon a conducive business environment that is characterized by low-cost of doing business, enforcement of property rights and rule of law. In 2008, many countries in South Asia such as Pakistan, Bangladesh and Nepal were marked by political in-stability, often followed by macroeconomic instability. Corruption, inefficient bureau-cratic procedures and poor enforcement of contracts and property rights are common problems across most South Asian countries undermining the business climate. Because of the unfavourable business climate and the lack of a proper foundation of basic education and literacy, South Asia is not able to exploit fully the benefits of globalization and technological transfer. South Asia’s share in high-technology trade as a percentage of GDP is low compared to other regions, even though FDI as percentage of GDP increased substantially over the past decade in almost all South Asian countries. The diffusion of technology today not only occurs through trade liberalization and FDI but also through ICT that in turn increases the productivity of firms and improves business practices. The production of ICT-related goods and services also aids in overall economic growth and employment. South Asia is witnessing an information and communi-cation revolution at present. The use of ICT-related goods such as computers, Internet and mobile phones has registered outstanding growth primarily due to the liberalization and deregulation of the

telecommunication industry. India’s per-formance stands out in the region particularly when it comes to the IT component of this sector. The contribution of this sector to India’s exports has been quite encouraging with IT exports going up from US$0.25 billion in 1991 to US$8.04 billion in 2002. A major chunk of these exports consist of software and the IT-enabled services. Such a rapid growth in ICT sector over the past one decade has economic potential in terms of increasing the overall rate of GDP growth. The services sector that is now the largest sector in terms of its contribution to GDP has been the major beneficiary of such an outstanding growth of IT in South Asia. Exports have been diversified to include services particularly in India. The benefits have also started reaching the manufacturing sector in India that has entered into the production of ICT-related goods such as software and hardware as well as mobile phones and even the semiconductor devices that are used in the production of these phones. Despite the tremendous growth of this industry and its significant contribution to GDP, particularly in India, there are concerns that the benefits of this growth have been limited to the services sector and to educated and well-qualified people. Moreover, it is mostly the urban areas that are the hub of such IT-led growth. Also, there are concerns about the growing digital divide and the low penetration rates of Internet in the rural areas. The digital divide is rightly seen by many as a reflection of a much deeper divide that exists in terms of human and economic development amongst various states/provinces and amongst the rural and urban areas. Amongst all ICT-related goods, mobile phones are relatively cheaper; do not rely on a permanent supply of electricity; and can be used by people who cannot read or write. They can also be rented out to generate income for the poor. An example is the Grameen Phone in Bangladesh that has handed out mobile phones to women in order to generate income.


Apart from generating economic growth, technology has a great potential for reduceing poverty by increasing labour productivity (and thereby real wages) in both manufacturing and agricultural sec-tors. Poverty is mostly a rural phenomenon in South Asia and most of the rural poor in the region draw their sustenance from the agricultural sector. The adoption of technology in the agricultural sector can reduce poverty directly by raising the wages of the labour involved in agriculture and indirectly by reducing food prices. South Asia has shown remarkable gains in agricultural yields during 1960s-80s as a result of its adoption of the green revolution. However during the past one decade, agricultural yield of particularly, food crops has either become stagnant or very low. Moreover, there are many lagging regions which have not exploited their full agricultural potential and in some parts, the gap between the actual yield and those attainable for their agro-ecological endowments is significant. Agricultural R&D is the key to technological progress in agriculture. However, most South Asian countries continue to under invest in this sector and private sector involvement remains extremely low as compared to the developed world.

It is unthinkable to reap the benefits of technology without an educated, technical ly trained and ski l led workforce. The enrolment in TVET in South Asia remains the lowest in the world and the system is fraught with problems such as outdated curricula that have little relevance with the contemporary demands of the labour market; a low prestige associated with it; and the lack of social and academic acceptance of this form of education and training.

In order to reap the benefits of technology and to use it as an engine of economic growth and human development, a well-trained manpower that is equipped with

the relevant skills and technical education is a must. At present, South Asia has the sad distinction of having the lowest enrolment in TVET. It also happens to be the only region in the world where female enrolment in TVET is one-third of male enrolment. This is in contrast to other regions such as East Asia and Pacific where perfect gender equality holds in terms of TVET enrolment. The TVET curriculum in South Asia is not only irrelevant to the skills required in the market but is also not updated regularly to reflect the changing requirements in the labour market. This has resulted in a mismatch between the type of skills demanded in the labour market and those supplied by the TVET system. Unemploy-ment among TVET graduates is high and even those graduates who do find employ-ment do not secure very high wages. The success of TVET depends upon the availability of qualified teachers as well as equipped laboratories and other instructional tools and materials. Most South Asian countries face a serious shortage of TVET teachers, particularly in rural areas. Even if some teachers have some teacher training and know-how about the use of learning materials, they do not have the proper instruments. Studies for Pakistan and Sri Lanka, for instance, show that a large number of teachers knew how to develop learning materials, use audio visual aids and design various workshop projects during the staff development programme, but materials and equipments were often not available for these activities. University education produces highly skilled people who enhance the national capacity to innovate, adopt and operate modern technology. The state of higher education as reflected in the enrolment rates is not very encouraging. The gross tertiary enrolment in South Asia is one of the lowest in the world, higher only than Sub-Saharan Africa. Although the overall enrolment rates in tertiary education increased over the period of time from 4.2 per cent in 1965 to 10.5 per cent in 2005, yet many other regions such as Latin

Overview 9

America and the Caribbean and Middle East and North Africa that had lower tertiary level enrolment rates than South Asia in 1965 have made significant advances over the period of time and have surpassed South Asia in 2005. Apart from low enrolment, it is also important to note that amongst those who enrol for higher education in South Asia, not many opt for science and technology—a field that is absolutely crucial for technological creation and absorption. In East Asia, 40 per cent of the students at tertiary level are enrolled in science and technology; in contrast, only 21 per cent of the tertiary level students in South Asia go for science and technology fields. Moreover, the quality of higher education in South Asia is not up to the mark and one of the major hindrances in this context remains the shortage of well-qualified and compe-tent teachers. In recent years, the higher education system in South Asia has seen a tremendous growth of private sector participation stimulated primarily by the policy frame-work of governments in the region that encouraged the private sector to participate in the provision of higher education. The degree of involvement and quality of education provided by the private sector however, varies among South Asian countries. Moreover, these institutions are expensive; their access is limited to higher income groups. They are mostly located in developed areas and urban centres and mostly provide education in job-oriented and professional fields like medical, engineering, computer science, commerce and business. Distance learning has proved to be an efficient tool for raising enrolment rate and to improving gender equality. The flexible learning system of the open learning facilities provides a great incentive for those who cannot continue their edu-cation in conventional institutions due to various reasons. The incorporation of the ICTs (such as radio, TV, Internet, video/digital technologies and satellite tech-nology) in distance learning has greatly increased the outreach, contents and

quality of distance-based education. Currently, there are a number of Open Universities and distance learning insti-tutions providing education across South Asia. The recent wave of globalization and revolution in ICT has resulted in an increase in the worldwide demand for highly educated people. Between 1990 and 2000, a significant amount of brain drain of professional people has occurred in South Asia. This is in sharp contrast to other Asian countries such as Indonesia, South Korea, Malaysia and Singapore where emigration rates of highly educated people have fallen over time. The out-migration of highly educated people has created a great threat for tertiary insti-tutions and research centres in South Asia, besides causing a serious loss of public resources. The emigration rates for science and technology personnel have been much higher than for recipients of general education, which clearly indicates a significant loss of resources as the provision of education for these disciplines is much higher than that for general education. A variety of factors are responsible for such a massive exodus of qualified manpower from South Asia. These include better employment opportunities, health and education facilities, work environment, recognition of effort, institutional stability, research facilities, learning opportunities, and importance of work experience in developed countries. The transformation of brain drain into brain gain requires a stable social, economic and political set up. Besides these factors, it requires an effective education policy focusing effectively on tertiary education in general and science and technology in particular. In order to adopt as well as develop new technologies compatible with local needs, R&D plays a crucial role. South Asia spends about 0.65 of its GDP on R&D, which is less than one-half of what East Asia and the Pacific region spends and one-fourth of the outlay made by developed countries. Besides having the lower R&D spending, South Asia also has the lowest stock of R&D individuals. It is


the region that has the lowest number of researchers per million inhabitants in the world, second only to Africa. The region definitely needs to invest in improving both the enrolment as well as quality of both TVET and higher education. It also needs to invest more in R&D activities.

Bangladesh is an important country within South Asia that is harnessing technology both for economic growth and human development. The govern-ment as well as the civil society in Bangladesh have taken steps to encourage the use of technology in all spheres of life. Some of the initiatives such as those taken by the Grameen Bank to use ICT to empower the poor may serve as exemplary measures to be replicated elsewhere in South Asia.

For a country like Bangladesh that has limited resources and a large population, it is absolutely essential to reap the benefits of technology in terms of increasing productivity and improving the delivery of public services including health and education. The trade and market liberalization of Bangladesh’s economy in the 1990s has resulted in a spectacular growth of ICT-related goods such as telephone, computers and Internet connectivity etc. It has also resulted in an impressive growth in the manufacturing output. Over the past 10 years, the real manufacturing output has registered an annual growth rate of more than 15 per cent. The emergence of the ready-to-wear apparel has fostered human development in Bangladesh by making millions of young women with rural background more valuable in the marketplace. More than 1.5 million workers, mostly young single women in their teens are employed in the industry. Macroeconomic stability is crucial to sustain such a growth momentum in the industry. The monetary policy in Bangladesh has sought to ensure, and until 2007–08, has been largely successful in ensuring low and stable inflation. The

rate of inflation in Bangladesh has averaged around 6 per cent between 1998 and 2007. However, despite the impressive growth of the manufacturing industry, the technological rating of Bangladesh’s industrial sector tends to be poor: only 0.2 per cent of the number of Bangladesh’s manufacturing establishments, and some 2.3 per cent of Bangladesh’s manufacturing employment, could be passed off as technologically advanced. In the agricultural sector, adoption of high-yielding varieties has brought about increase in per capita agricultural production over time. This has led to a positive impact on rural poverty reduction in Bangladesh. The penetration of ICT in rural areas has led thousands of rural women to buy mobile handsets using their credit from Grameen Bank and then use the sets to sell phone services and earn income. Apart from these benefits, the diffusion of ICT in remote areas of Bangladesh has also resulted in an improved access to health facilities through telemedicine. It is heartening to note that the government of Bangladesh is aware of the significance of technology in all spheres of life and has taken a number of measures at the policy level to promote the use of ICT. These include the formulation of a national ICT policy, adoption of e-governance initiatives in selected areas, formation of a National Task Force on ICT and biotechnology; amendment of the Copyright Act 2000; and Legislation of the ICT Act.

South Asia has started exploiting the immense potential of technology in terms of improving the availability, access and quality of public services. However, the region still lags behind other regions. Many of the initiatives such as e-governance, telemedicine, and the use of technology to monitor and administer public service delivery are still few and far between primarily because of the lack of adequate infrastructure and the lack of a technically qualified

Overview 11

and literate population to operate ICT properly.

Technology has a great potential to improving the availability and quality of public services by increasing the trans-parency, and efficiency with which these services are delivered. In the area of healthcare for instance, many parts of Bangladesh and India are exploiting the potential of telemedicine to provide basic healthcare to people in far flung and remote areas while eliminating the need to travel huge distances. The Grameen Bank of Bangladesh, for instance, has launched this project and is operating successfully. The Bank has also launched Healthline which is a 24 hour call centre manned by registered physicians to extend basic health information and consultation. These innovative initiatives in South Asia are however few and far between, but they hold great potential to expand access to healthcare services in a region that suffers from poor healthcare infrastructure and dismal health indicators. Technology, particularly ICTs in the form of radio, TV, Internet and even mobile phones are playing a great role in awareness campaigns regarding health and hygiene. Radio broadcast, in particular, is assisting in terms of communicating important information related to the prevention and basic treatment of diseases. Telephones are also being used innovatively in some parts of the region to transmit such information that helps in the prevention of diseases. One such innovative initiative is the Electronic Helpline on HIV/AIDS in Rajasthan, India. Advancements in medical technology are helping a great deal to cure diseases that were incurable earlier, in a much more cost-effective manner One example of such a major breakthrough is the development of ORT that is much more cost-effective in the treatment of diarrhoea. The development of this technology by the International Centre for Diarrhoea Disease Research in Bangladesh has greatly reduced the number of deaths due to dehydration across the world. The

Centre has also developed orally provided cholera vaccine that is much more cost-effective than the old injectable vaccine. Diagnostic technologies such as radiology and pathology are helping to diagnose diseases far more accurately whereas the computerization of patients’ records in hospitals is assisting the healthcare pro-viders in improving their diagnosis and treatment of patients. However, most of these advanced technologies in South Asia are concentrated in urban areas, district headquarter hospitals and tertiary care centres. They have yet to be expanded to rural areas where the majority of the South Asian population, particularly the poor, resides. Technology in the form of food forti-fication techniques can also be used to fight against the challenge of malnutrition in South Asia. Various programmes for salt iodization have been implemented in every country of the region. The govern-ments in South Asia are also realizing the need to fortify flour as an effective means to fight malnutrition and have started taking some initiatives. India, Pakistan and Bangladesh have also started fortifying foods with vitamin A. In India, cows’ milk is being fortified and in Pakistan cooking fat is being used as a vehicle for the provision of vitamin A. Bangladesh has recently launched a national pro-gramme for the fortification of edible oil. The information and communication revolution being witnessed in South Asia also holds great promise in terms of making their citizens better informed and in terms of improving the accountability and transparency in public sector organiz-ations. Electronic media and Internet are playing a great role in helping citizens’ access information, thereby helping them make informed decisions about their national lives. The media is also helping in mobilizing politicians and policy-makers to deliver on their promises. The creation of websites by various public agencies is helping citizens to get informa-tion about a wide range of issues relevant to their everyday lives. Various plans and


programmes of public departments are advertised on their websites, and the processes and procedures are explained. In certain cases, various forms can be made available on websites and can be directly accessed by individuals without visiting the office of public agencies. The true impact of ICTs in informing citizens is however tied to the freedom of expression and the freedom to have access to all kinds of information. South Asia has progressed over the passage of years in terms of increasing these freedoms, yet access to complete information about government functioning at all levels is still not available for many South Asians. It is encouraging to note that the Right to Information Act is already in place in India but in other countries such as Pakistan Bangladesh, Nepal and Maldives, such an Act has yet to be passed. Technology in the form of computeri-zation and improved management techniques also helps in improving the efficiency of public service delivery by cutting down costs, eliminating corruption and improving services. The computeri-zation of land records in Karnataka for instance has resulted in a huge reduction in cost and time to register and access land records. The computerization of other records such as those related to national identity also offers immense benefits and efficiency gains. The National Database and Registration Authority in Pakistan for instance has issued computeriz-

ed national identity cards to more than 62 million people so far, and the database is now being used to identify the poor households in order to provide them with cash grants under the Benazir Income Support Programme. In the state of Andhra Pradesh in India, electronic cards are being used by the people to receive payments under income support programmes. All of these initiatives have increased transparency and improved efficiency in the disbursal of public funds. The use of technology also helps in improved management of public sector organizations. The government of Karnataka in India has recently imple-mented an e-governance project that has innovative features to increase the effi-ciency of public sector departments. However, apart from these few initiatives South Asia lags behind other regions in terms of e-governance. The e-Governance Readiness Index as developed by the UN ranks South Asia below most of the other regions including East Asia and Southern Africa. This is primarily because of the lack of adequate telecommunication infrastructure and shortage of a technically qualified and literate population to operate ICT properly. It is time that South Asia equips its population with proper skills and education so as to enable them and the society at large to reap the benefits of technology in terms of improved governance.

Technological progress in developing regions like South Asia is predominantly mediated by national policies. In the context of the ‘technology-human development nexus’, the national policies in South Asia have a crucial role to play in creating an environment conducive to technology creation and technology diffusion. What are the prime areas of focus for the public policy in South Asia in the science and technology (S&T) sector? Public policies to stimulate technological development in South Asia range from the general, such as quality education and trade openness, to the specific, such as incentives for providing information and communications technology (ICT) services. The chapter endeavours to capture the broad vision supported by national plans to promote S&T.

Education policies

IT in core education

It is imperative that the introduction to basic concepts and skills of information technology (IT) at school level constitutes an essential component of the education policy framework in South Asia. Some might argue that providing computers to schoolchildren is too expensive a policy option to be realistically considered, given the paucity of financial resources. But such an approach fails to take into account the numerous benefits, and hence the necessity, of utilizing ICT at school level. Indeed, the avenues opened by ICT to improve the quality of education yield benefits that by far exceed the cost of employing ICT. In fact, ICT integration can assist South Asia in sustaining rising recurrent costs associated with ever-expanding education services. Meeting

this challenge calls for new ways of organizing education in order to take advantage of new technologies and research on best practices for improved learning. A critical mass of well-educated and adequately-trained workforce can be created successfully in the South Asian region only by taking cognizance of the rapidly changing stock of ICT and incorporating it adequately in the school curricula. School education must be geared towards enhancing the capacity of the people to utilize modern technology and absorb new knowledge. For the purpose, the South Asian region should aim at a flexible education system with basic formal schooling in general and secondary education in particular providing the foundation for technical skills. Simultaneously, there is much potential in South Asia to employ new technologies to upgrade the education system itself. The expansion and qualitative development of both primary and secondary education programmes can receive a huge boost from technological innovations. ICT offers opportunities for expanding the horizons of learning for both students and teachers and makes available additional learning resources as a complement to textbooks and libraries. Policy-makers in South Asia have generally taken strides towards suggesting the realignment of the school curricula to bring them more in sync with the need to provide computer literacy and impart basic computer operational skills to children (table 1.1). However, despite the policy backing, actual initiatives for integration of ICT in school education remain few and far between. Far from playing their part in producing a computer savvy generation, most public schools continue to grapple with the non-

Chapter 1

Policies for Technological Advancement in South Asia

National policies in South Asia have a crucial role to play in creating an environment conducive to technology creation and technology diffusion


Table 1.1 Policies and initiatives to promote IT in school education in South AsiaCountry Policy/initiative Strategy/action planIndia Tenth Five Year Plan (2002-07)

National Policy of Education• Computer connectivity for 140 government senior secondary schools.• Programmes of computer literacy to be organized on wide scale from the school stage

Pakistan White Paper for New National Education Policy

• Early education to make children computer friendly in a controlled manner.• Use of computers and Internet in all middle schools which have electricity currently available.

National Education Policy (1998-2010)

• Computers to be introduced in secondary schools.• Software development, the information superhighway, designing web pages etc. to be part

of school curricula.• Crash programme for the training of teachers with the assistance of computer science

departments in the universities.• Software development competitions for students at national level.• Computer laboratories for 1,000 secondary and vocational institutions with appointment of

1,500 teachers for computer education.• Secondary schools to be provided with access to electronic libraries via the Internet.

Bangladesh Initiative by Ministry of Science and ICT

• Assistance to nongovernmental organisation (NGO) secondary schools for introducing computer courses through distribution of 2,000 computers and peripherals for labs and organizing training for teachers in computer applications.

• Introduction of computer training and Internet facilities for rural secondary and higher secondary institutions.

• Development of Secondary School Certificate (ICT) and Higher Secondary Certificate (ICT) curricula in 128 schools and colleges in 64 districts.

• Introduction of Olympiad competitions for primary, secondary and university levels in science and ICT.

• One school and one college in each district to be provided with complete lab and Internet facilities.

ICT Policy (2002) • Encouragement to donor agencies, NGOs and other development partners to promote ICT education and computer aided education in primary schools and Madrasahs (religious seminaries).

• IT capacity-building of the teacher training institutes also introducing periodic training programmes in the area of ICT.

• Deployment of virtual teachers (wherever possible) and encouragement of compact disc (CD) and web-based courseware development and usage at all levels of education.

• Using the potential of ICT for delivery of distance education to ensure quality education to all.

Nepal Tenth Five Year Plan (2002-07) • Computer literacy at all levels of education.• Teaching of ICT-related subjects in schools.

IT Policy (2000) • Formulation of a long-term programme for ‘Computer education to all by 2010’.• Computer education to be offered as an optional subject in some public secondary schools

and to be made a compulsory subject in phases.• Computer education to be made compulsory for all newly-recruited teachers.• All in-service teachers to be provided with computer education in phases using various means

including distance education.• Internet facility to be made available free of cost to public schools for four hours a day.• Distance learning systems (through Internet and Intranet) to be adopted and networking

systems like school-net to be developed.• Educational institutions situated in areas where electricity services are unavailable to be

encouraged to use IT-enabled services through solar power systems. Sri Lanka Six Year Development Plan of the

Ministry of Education• IT literacy for all government school teachers.• A student-computer ratio of 40:1 to be attained in all schools.• Necessary textbooks and multimedia for IT education to be developed.• 800 Computer Learning Centres with 16,000 computers to be set up under the SEMP.

Bhutan ICT White Paper • Provision of basic IT literacy to all.Education Sector Strategy • All primary schools to be connected to Internet by 2010.

• Primary level curriculum to include orientation to IT and designed to utilize the vast array of learning materials available on CD and other media.

• Computer literacy to be an essential feature of teacher training.• Advanced IT-related studies to be part of curricula at the middle and higher secondary

levels.• Sufficient number of teachers to be trained in IT skills through a system of modular in-service

programmes as well as pre-service training.

Policies for Technological Advancement in South Asia 15

availability of basic essentials such as drinking water, toilets and electricity. The policy documents for ICT dissemination have in many cases not been translated into action with continued pedagogical focus on outdated textbooks and minimal curricular resources. For instance, despite the praiseworthy vision for ICT integration in basic formal schooling (as outlined in table 1.1), the advancement on ground in Pakistan has been negligible while the actual achievement in Bhutan is so far limited to the introduction of computer education in five high schools with classes XI and XII. Sri Lanka does, however, constitute an exception. Under the Six Year Development Plan of the Ministry of Education, 72 Computer Resource Centres and 80 ICT Centres have been set up while teacher training has also been initiated in National Colleges of Education and Resource Centres. In addition, under the Secondary Education Modernization Project (SEMP), Computer Learning Centres have been constructed in 210 schools. Apart from larger financial allocations, key policy thrust and serious policy follow-up is needed in three areas for effective utilization of information-based technologies in basic formal schooling. First, having highly trained personnel, including engineers, scientists and IT experts, is inconceivable without the use of ICT, complemented by satisfactory standards of school education in General Science, Mathematics and English. On the average, Indian schools offer the best education in Science and Mathematics in South Asia.1 This has greatly aided India in developing IT export services that have moved up from simpler back office functions and call centres to software design and innovation services. Sri Lanka has also shown progress and the government is undertaking a project, funded by Japan International Cooperation Agency (JICA), for improving the quality of Science and Mathematics education in primary and secondary schools. Education standards elsewhere remain abysmally low. Deficiency in Mathematics and English

education, therefore, remains a serious bottleneck in attaining higher standards of ICT education in South Asia. Second, the success of ICT programmes at school level is critically dependent on the availability of well-trained teachers with computer expertise. The shortage of such trained teaching staff is a serious hindrance to human resource development in the ICT sector in South Asia. Opportunities must also be created for the teachers and trainers to update themselves about the latest technological progress and ICT developments. For a rapid take-off, it might be worthwhile to converge resources on training a cadre of selected teachers and students in the initial phase. In the later phase, this core group could aim at supporting the learning of basic computer/IT skills by all students and teachers. Third, the strategic focus on e-education and distance learning is largely missing. The relevance of such learning/education cannot be underestimated in South Asia in the presence of the widely dispersed (and sometimes inaccessible) population in a number of regions. There is great potential to add Internet/satellite-based educational delivery mechanisms to the more traditional radio/television-based distance education programmes. E-learning obliterates the need for the learners and the instructor to be present in the same physical location. ICT also facilitates access to resource persons. With the Internet and the World Wide Web, a wealth of learning material in every conceivable discipline can be accessed from anywhere at anytime by an unlimited number of people. ICTs are also a potentially powerful tool for extending educational opportunities, both formal and informal, to population sections in South Asia beset with social, cultural or f inancial hindrances in acquiring education. This also offers an opportunity to address the distance and isolation of remote schools (where teachers are often far from their peers) and to secure the benefit of professional support-services.

Policy documents for ICT dissemination have in many cases not been translated into action


There is much to learn from successful initiatives for ICT dissemination in core education in South Asia in particular and in the developing world in general. In India, Tata Consultancy Services has developed a Computer-Based Functional Literacy Programme (already piloted successfully in Andhra Pradesh). The project uses a mixture of methods—teaching software, multimedia present-ations, and printed materials—to teach an uneducated person to read within a span of 30 to 45 hours spread across 10 to 12 weeks. The outcome is a vocabulary of 300–500 words to meet everyday requirements, such as reading destination signs on buses, straightforward documents, and even newspapers (See Chapter 2 on India). As things stand, the continued failure to meet the challenge of ICT integration into school curricula in South Asia implies a further widening of the knowledge gap between the haves and have-nots, thus reinforcing the existing socio-economic chasm. ICT integration is therefore an absolute must in South Asia for developing human resources with technological capability that can be competitive in the wake of the ‘knowledge edge’ enjoyed by the developed world.

Technical and vocational education

For South Asia’s transformation into a region where people are equipped with the required technical skills, the national governments need to invest in developing these skills. Reforms in the system of technical and vocational education (TVE) based on a sound policy framework are a prerequisite for helping people acquire the latest skills that can enable them to adapt to the shifting employment patterns. Such reform efforts have been made by most national governments in South Asia.

India

India leads the way in South Asia in conceiving and implementing viable strategies for promotion of TVE. The

Community Polytechnics Scheme which started in 1978-79 made substantial contributions towards transfer of advanced technologies at low-cost to the rural population and drawing up cost-effective strategies to upgrade skills. To strengthen industry-institute linkages, the Eighth Five Year Plan launched Technology Development Missions in Indian Institutes of Technology (IITs) and Indian Institutes of Science in the areas of food processing, engineering, material technology, genetic engineering, biotechnology etc. A number of technologies developed by the project were successfully transferred to industry. During the Eighth Plan period, the scheme for ‘Vocationalisation of Secondary Education’ was also devised (box 1.1). Technical institutions in India have benefited directly from the schemes of Modernisation and Removal of Obsoles-cence in the Seventh Plan and ‘Thrust Areas in Technical Education’ launched by the Ninth Plan. A National Programme of Human Resource Development (HRD) in IT, targeting mainly IT education at the degree level and beyond, was also initiated in January 2000. The outcome of these efforts has been the upgrading of computing facilities and connectivity, faculty development initiatives and more use of technology in the teaching/learning process in the IITs. The Ninth Plan period saw a phenomenal increase in the number of institutions in the technical education sector in the country mainly through private initiatives. There has also been a corresponding increase in the enrolment of students to meet the growing demand for quality technical manpower, especially in IT and IT-related fields. Quality concerns have now taken the front seat among policies for promotion of TVE in India. In 2002, the Technical and Engineering Education Quality Improvement Programme was initiated with World Bank assistance to support production of high-quality technical professionals through reforms in the technical/engineering education system. The Programme’s focus is on governance and financing of institutions, promotion

Continued failure to meet the challenge of ICT integration into school curricula in South Asia implies a further widening of the knowledge gap


of excellence through competitive funding, networking of institutions for better utilization of resources, closer interaction with the local community and economy and improved capacity of education system management. The Programme has now gone into effect in 13 states, which have agreed to implement major systemic and institutional reforms. A total of 130 eligible institutions have been selected to date on a competitive basis for financial support. The Tenth Five Year Plan addresses some critical dimensions of strategic planning and management to further improve the quality of TVE in India:

• The Regional Engineering Colleges with sufficient potential will be expanded, modernized, given full academic and administrative autonomy, and converted into National Institutes of Technology, with a ‘deemed-to-be-university’ status in most cases or as colleges with full academic autonomy with power to award degrees.

• An Electronic Management Information System (EMIS) Scheme is to be implemented by the All India Council for Technical Education (AICTE) in selected lead institutions for the co-ordinated development of the technical education system. The information collected through the EMIS will be available online and will provide an effective real time decision support system to central and state governments for effective planning, development and monitoring. It would also support other stakeholders in making informed decisions and choices.

• The National Technical Manpower Information System (NTMIS) will be further strengthened and expanded. Availability of a comprehensive technical manpower profile would assist central and state governments and the AICTE in monitoring any mismatch between supply and demand of technical manpower, thus facilitating improvements in the technical edu-cation system.

Pakistan

The National Education Policy of 1998 lays down a comprehensive strategy for both qualitative improvement and quanti-tative expansion with emphasis on strengthening and consolidating of the existing TVE facilities. The ‘National Council for Technical Education’ is proposed to be created as the pivot for implementation of the suggested reforms. The Council is conceived as a statutory body which would work in the realm of TVE for constant revision of curricula, overcoming shortage of textual material, strengthening institution-industry linkages and encouraging private sector parti-cipation for more self-reliance. The National Education Policy also recommend-ed a stream of Matric (Tech.) parallel to the Science and Humanities groups in secondary schools. Unfortunately, these recommendations have remained confined

A government-sponsored scheme for ‘Vocationalisation of Secondary Education’ was initiated in India in February 1988. The main objectives of the scheme are to enhance individual employability, reduce the mismatch between demand and supply of skilled manpower and provide an alternative for those pursuing higher education without particular interest or purpose. The Ninth Five Year Plan provided an outlay of PKR1,000 million for the scheme which was raised to PKR3,500 million in the Tenth Five Year Plan. In the formal sector, the state governments/union territory adminis-trations are implementing the scheme through approximately 6,700 schools. More than 150 courses are being offered in six major disciplines: Agriculture, Business and Commerce, Engineering and Technology, Health and Para Medical Services, Home Sciences and Humanities. Funding of the various programmes in the scheme is shared by the centre and the states. In the non-formal sector, assistance is

being provided to NGOs for taking up innovative programmes for promotion of vocationalisation of education on a project basis. A total of 168 NGOs have been financially assisted since the initiation of the scheme for taking up these projects which help rural unemployed youth and school dropouts. The Vocationalisation of Secondary Education Scheme has met with partial success in tackling unemploy-ment by raising enrolment in voca-tional education at the secondary school stage. Evaluation reveals some problem areas which are yet to be fully tackled. Foremost is the reluctance of state governments to appoint full-time teachers perceiving it as a liability in the long-term. Moreover, the majority of vocational courses have been offered in the manufacturing sector. There is need for a serious re-think, given the flourishing services sector and the weak industrial base in a number of regions where the scheme is being implemented.

Box 1.1 Vocational education at secondary level in India


to the official files. The government of Pakistan did establish the National Vocational and Technical Education Commission as recently as November 2006. However, the Commission is evidently planning/working in divorce from the overall educational policy planning. This disconnect and divorce is detrimental to the incorporation of TVE in the main secondary education stream as suggested by the National Education Policy. Consequently, despite marginally higher enrolment, the system of TVE in Pakistan remains afflicted by dilapidated infrastructure, poor quality of teachers, inequitable access for women and rural inhabitants, limited private sector involvement and insufficient budgetary allocations. In a survey in 2005, the Asian Development Bank (ADB), ranked a paltry one-eighth of the programmes at vocational and polytechnics institutions in Pakistan as good.2

Bangladesh

It is a stated policy/goal of the government to substantially increase post-primary enrolment in TVE. There is a specific target of increasing the proportion of participants in TVE to 20 per cent of the students enrolled in the secondary stage by 2020—from the present proportion of below 2 per cent. The strategy to expand the TVE programme comprises the introduction of double shifts in the technical institutions, setting up poly-technic institutions exclusively for girls and a special stipend programme for women’s education in science and TVE. A study is also being carried out presently for assessing the employers’ requirements in the job market for subsequent alignment of vocational skills being imparted with their actual demand.

Nepal

TVE is a key instrument to materialize the long-term policy vision in Nepal to ‘supply basic and medium-level skilled, technical human resource’ as enunciated

by the Tenth Five Year Plan. The Plan aims at imparting regular (full time) training to 7,100 persons and short-term training to 23,555 persons by establishing two additional technical institutions and two poly-technical colleges. On the basis of feasibility studies, Annex programmes with additional classes are being conducted in community schools of 15 districts to provide secondary level skill-oriented education. The goal is to further expand these programmes by mobilizing the participation of local elected bodies and the private sector. Skill certification of technicians is being annually done to help them find jobs in the domestic market as well as in foreign markets through overseas employment agencies. Moreover, 3,500 trainees based in different districts are being imparted training in health education and animal health under a Community Service Programme.

Bhutan

In Bhutan, a National Technical Training Authority (NTTA) has been established to provide impetus to the development of an effective TVE programme in the country. Quite a few steps have been taken for the purpose as mentioned below:

• A Basic Skills Development Programme has been introduced in a limited number of lower and middle secondary schools. Progress made so far includes training of teachers to provide instruction in vocational skills and the establishment of workshops in schools. An identically designed Village Skills Development Project is also envisaged to focus on the training of villagers in generic skills and traditional arts and crafts.

• Beginning in 2000, the NTTA has initiated an Apprenticeship Training Programme with a few selected indus-tries. The Programme will be further developed and expanded to cover an increasing number of trades. For the purpose, a viable framework of defined responsibilities and benefits is being established for private industries’ active


participation in the design and delivery of the programme.

• The curricula of the existing NTTA training institutes will be reviewed and improved. If required, capacities of some existing courses shall be expanded. Depending on the needs of industries, new courses leading to a variety of diploma and graduate options shall be offered within these institutes.

• Thirteen new training institutes are to be created at national and regional levels for a wide range of professional fields such as construction, tourism, business and administrative skills and automobile repair.

Summing up, despite policy reform efforts, the TVE system in South Asian countries has failed to check the menace of growing unemployment and has also not adequately contributed towards enhancing professional competence and technological know-how. To discover the underlying factors, we can refer to the Report on Human Development in South Asia 1998.3 As the Report argued, three major reasons can be pinpointed for TVE not emerging as a worthwhile education option for the aspiring youth in South Asia:

• First, technical and vocational certi-ficates/diplomas are not accepted as a ‘formal’ educational qualification. Technical diplomas, therefore, carry an inferior status, with the holders suffering automatic disqualification from higher education/training as well as from most competitive examinations for entry into government services.

• Second, the plight of TVE is largely the outcome of the non-responsiveness of the system to the job market, culminat-ing in scanty economic dividends for the graduates. There is a vicious cycle in operation; poor quality and in-appropriate skill-building limits the employment options and the limited job opportunities in turn demotivate the students from entering the technical stream.

• Lastly, with the exception of India, which has made efforts to establish a credible NTMIS, there has been a lack of meaningful manpower planning in South Asia. The TVE system in most South Asian countries seems to be operating in a vacuum due to data scarcity and weak machinery for plan formulation.

Evidently, policy-makers in South Asia have not adequately focused on tackling the long-standing issues which are seriously undermining the quality and efficacy of TVE. It is essential that the design and implementation of future TVE programmes in the region are informed by consistent review and continuous analysis of the labour market and the latest technological developments. The policy-makers also need to take steps for enhancing the social prestige and economic acceptability of TVE.

R&D at the tertiary level

The capacity to adopt and disseminate rapid technological advances is critically dependent on an adequate system of tertiary education propelled by high-quality research. Country experiences from the developing world indicate that designing the right policies to promote research and development (R&D) at tertiary level for technology creation and technology diffusion is far from easy. Too often governments have invested in poor quality research at high costs undermining both efficiency and equity aspects of research expenditures. The national poli-cies for promotion of R&D in the South Asian region have to be examined from this perspective. Pakistan has taken some strides towards technological advancement by setting up the Higher Education Commission (HEC). The largest challenge for HEC has been to design appropriate work environments and compensation packages that will attract talented young people to take up careers in academia (box 1.2). Alleviating constraints on the availability

Summing up, despite policy reform efforts, the TVE system in South Asian countries has failed to check the menace of growing unemployment


The HEC was created in Pakistan in 2002 to rescue the tertiary education sector from the low expenditure-low quality trap. With essential political backing and substantial budgetary allocations, HEC embarked on an extensive reform process identifying certain key areas for improvement. HEC’s programme agenda has a strong potential bearing on enhancing the national capacity to assess, adapt and apply new technologies.

Local and foreign scholarships for students: Indigenous Doctor of Philosophy (PhD) funding schemes have been initiated with Engineering Sciences, Pharma-ceuticals, Biotechnology, IT, Basic Sciences and Agricultural Sciences as priority research areas. In addition, hundreds of scholars have proceeded to China, Thailand, Germany, Austria and France (countries with low tuition fees) to help create a strong national research base with highly skilled and well-motivated scientists/technical experts.

Strengthening of R&D infrastructure: To promote scientific research in basic and applied sciences, funding is being provided for the upgradation of research laboratories through the purchase of spare parts and repair/maintenance of sophisticated equipment and instru-mentation. Internet access to latest technological developments and international journals/databases has also been extended to the universities.

Faculty development: Recognizing the faculty members as the key determinants of research quality/direction, a ‘Post-Doctoral Fellowship Programme’ has been launched. The Programme provides an opportunity to 700 university teachers and researchers (already holding PhD) at public and private universities and R&D organizations to work at top universities and to interact with renown-ed researchers/professors.

Research accreditation: HEC has made public the ranking of Pakistani universities on the basis of a number of criteria one of which is the extent of research being carried out and whether it is finding a place in quality journals.

Pak-US Joint Academic & Research Pro-gramme: A limited number of cooperative programme projects are being annually financed by USAID and HEC. The Programme is aimed at enhancing the ability of Pakistan’s (S&T) community to positively contribute towards social and economic development.

Industrial Liaison Secretariat: An Industrial Liaison Secretariat has also been set up for effective cooperation between academia and industry to capitalize on the ever increasing international demand for products and processes. The secretariat is to serve as a catalyst for university-industry partne-rship to outline new technical challenges, find their solution and assist in the launch of new programmes in the academic institutions.

HEC appears to be banking heavily on the scholars currently working towards their PhD to later join local universities and R&D organizations and hence elevate faculty standards. It is too early to assess whether and to what extent the HEC-funded scholars studying abroad will be able to fulfil the expectation. However, those enrolled for PhD at local universities are facing serious problems due to the paucity of able supervisors. The ‘Faculty Hiring Schemes’ of HEC have neither been able to impart a more progressive outlook to the current research output nor have they managed to enhance the relevance of such research to Pakistan’s need for technological progress. In fact, very few foreign experts and eminent national scholars have responded to HEC’s hiring offers. While HEC has been successful in adding up impressive figures of PhD

enrolment, the highly qualified faculty members are clearly over-burdened and often unable to meet the minimum standards of able research supervision. At the very least, the situation demands the devising and strict imple-mentation of research standards at PhD level to ensure that the HEC scholarship programme stays on track to meet its objectives. A quality deficit, therefore, continues to persist which militates against the establishment of a sound ‘research culture’ that could stimulate meaningful technological advancement with the active participation of tertiary education institutions. The deficit is reinforced by the lack of headway made by the Industrial Liaison Secretariat. There is very little observable outcome so far to firmly suggest that the University-Industry Technology Support Programme has fostered tangible coop-eration between academia and industry. Moreover, management transforma-tion and governance reforms are acutely required to enhance the quality of research, teaching, learning and insti-tutional operations at university level. Decentralization of financial planning/control is also desirable. University faculty members have to be mobilized for an active role in the process of change. For the purpose, HEC needs to work more closely with university administrators and faculty members and develop an effective communications strategy for improved information flows to the stakeholders. In the final analysis, it might well be instructive for HEC to nurture certain departments from every university as centres of excellence. The priority can be established by conducting a need assess-ment. Material and human resources can then be invested heavily in selected disciplines at every university. Presently, it is felt that the limited resources are being sprayed thinly into too many channels, culminating in mediocre research standards at the cost of quality outcomes.

Box 1.2 The HEC: how far is it assisting Pakistan’s technological advancement through R&D?


of ‘research-inclined’ faculty in academic institutions is also the cornerstone of the ‘Education Sector Strategy’ of Bhutan. The development of a higher education programme of excellence under the overall umbrella of an autonomous National University (NU) is central to the achieve-ment of the Strategy’s ‘Vision 2020’. However, the plan envisages a gradual implementation process and acknowledges that it will take several years for a critical mass of qualified professionals to become available. The strategy lays maximum stress on human resource capacity-building with every tertiary institution required to prepare an HRD master plan consistent with the projected academic programme. The South Asian policy-makers have much to learn from the emergence of Bangalore and Pune in India as dynamic city clusters with corporate offices, venture capitalists, business start-ups, and university and research labs. With the large number of quality academic institutions located in these cities, a variety of linkages has developed between industry and academia with a hierarchy of institutions satisfying a hierarchy of local demands ranging from skills to new technologies. The survey data of electronics and ICT firms in Bangalore and Pune (as compared with firms in non-cluster regions) indicates the clear advantages they get by locating their operations in these cities.4 The firms rate access to skilled labour as the most important advantage of locating in these cities. The survey results strongly recognize the role of academic institutions as key suppliers of labour in the market especially in the knowledge intensive sectors of ICT and electronics. Besides, cluster-associated firms found the advantage of having access to specialized services like training and R&D services/facilities to be quite high. Admittedly, not all tertiary education institutions in Bangalore and Pune possess the knowledge base to undertake high-end knowledge networking activities with the various businesses taking root in these

urban centres. Even fewer institutions have systems in place to undertake formal knowledge transfer. But some, like the Indian Institute of Science and the Indian Institute of Information Technology, Bangalore, and National Chemical Laboratory (NCL), Pune, have played roles that were instrumental in the evolution of Bangalore and Pune as innovative clusters. NCL is a representative case of an academic institution in South Asia that has utilized public funding to conduct R&D activities strongly linked to the market needs (box 1.3). Exceptions not withstanding, South Asian policy-makers need to identify a mix of institutions and policies that can enable the emergence of more technology hubs premised on tertiary education institutions. A central task is to forge insti-tutional frameworks that can strengthen higher education while foster ing university-industry linkages. For the purpose, university-industry technology support programmes must be launched with active involvement of the private sector to bring together intellectual capital and emerging technologies. Reliable databases of indigenous technological expertise and R&D programmes can be helpful for better flow of information between the academic and enterprise sectors. There ought to be sustained interaction stemming from one-to-one linkages between academic institutions and local industry/firms. Even after technology transfer, the academic institutions should support industry in the absorption and upgradation of technology. There is massive scope in South Asia to strengthen through research the funda-mental scientific and engineering founda-tions on which new design/production practices and methods may be based. This is not possible unless research priorities are shaped in consultation with actual employers. It would be beneficial if industry representatives and private sector professionals are accorded some repre-sentation in the governing boards of universities. The mobility/exchange of

The South Asian policy-makers have much to learn from the emergence of Bangalore and Pune in India


personnel between industry and tertiary education institutions should be facilitated through short-/medium-term adjunct appointments. Industrial engineers and professionals can bring industry’s perspective and integrative skills to the academia. The interdisciplinary university-industry teams can execute long-term projects which address generic research within an intellectual envelope shared by the industrial partner. None of the South Asian governments have adequately utilized various incentive mechanisms to stimulate enterprise R&D. In all countries more can be done to set up special mechanisms and institutions to foster greater technology spin-off from public research labs and universities. In addition, there are very few major research grant schemes directed at private sector enterprises. Even in an economy as large

as India, the private sector is mostly aided by research loan schemes.5 There is need to utilize a range of policy options including matching R&D grants, tax subsidies for increases in R&D, and grants earmarked to foster collaboration between public R&D labs, private firms, and universities.

Telecommunications policies

The inter-country differences observed in the use of IT and the presence of technological haves and have-nots (often referred to as ‘the digital divide’) largely stem from institutional differences. Insti-tutional safeguards condition the size and the quality of telecommunication services. Credible and effective governance is needed to provide an institutional environ-ment conducive to the development of

NCL, Pune is part of the Council for Scientific and Industrial Research system of publicly funded research laboratories set up by the Indian government. The research profile of NCL essentially focuses on chemical and biotechnologies with a vibrant PhD programme. There are many inter-disciplinary research centres with interests in polymer science, organic chemistry, catalysis, materials chemistry, chemical engineering, biochemical sciences and process develop-ment. On the average, the Institute annually publishes 450 papers and files 30 Indian and 90 foreign patents. Contract research, consultancy and technical services form a large part of NCL’s business interactions with external industries. The contract research services principally help in the generation of intellectual property, whereas others provide either professional advice to industry or help firms by using facilities available at the labs. Besides, NCL has conducted various training programmes for industry personnel on a range of topics. NCL is currently developing an ‘Inno-vation Park’ spread over 10.6 acres in the

main Pune city. The facility would support the birth, growth and expansion plans of research and knowledge-based business entities through critical stages of their growth by providing ready-to-occupy space, with easy access to knowledge centres, knowledge workers, business networks and other resources. The NCL Innovation Park will house Venture Centre—a business incubator—that will provide fully serviced space, technology and business support for the start-up companies. NCL has also entered into academic collaboration with research institutes within India and abroad. Researchers at NCL are working closely with local academic and public research institutions in the city. About 24 per cent of NCL’s publications over the period 2003–05 had co-authors from other local institutions. Overall, various entities (including firms and other research institutions) in the Pune cluster (and outside) have been able to exploit the research capabilities of NCL to tap the emerging entrepreneurial and research opportunities.

Box 1.3 National Chemical Laboratory, Pune: an icon of chemical and biotechnology research

Sources: Basant and Chandra 2007 and NCL 2008.


new ICTs. The policy-makers in South Asia find themselves in an advantageous position because most South Asian countries are the beneficiaries of a late entry into digital mobile telephony. The earlier adopters (mostly from the developed world) have already carried the burden of accumulating global critical mass and resolving uncertainties related to standards and dominant designs. There is powerful global evidence to justify liberalization in the telecom sector.6 Current reform efforts in South Asia clearly favour privatization and increased competition for their ability to attract the massive amount of capital necessary to meet the needs of growing telecommuni-cation networks. Bhutan, however, does remain a notable exception. In the Eighth Five Year Plan, the Bhutanese government recognised the key socio–economic role of telecommunications in facilitating equit-able development across the country. To this end, the government viewed the Rural Telecommunications Network Project as a priority. However, the project was never implemented and the telecom-munications industry remains embryonic

in many respects. Bhutan Telecom remains the sole supplier of telecommunications services even though the regulatory authority has been willing to license competitors. The small size of the domestic market and sparsely distributed population inevitably reduce the attractiveness of the Bhutanese market to foreign investors. On the other hand, domestic companies lack the necessary resources and skills to be able to enter the market. The enabling conditions for increased ICT penetration have been created in South Asia at a fast pace. Provision of basic telephone services, however, con-tinues to be the monopoly of government agencies. Private players have not come forward adequately to provide these services, and public sector enterprises have no incentive to extend the reach, enhance the quality, or reduce the cost of services delivered to customers. The monopoly profits openly accruing to Pakistan Tele-communication Company Limited (PTCL) in Pakistan despite the looming presence of a regulating authority offer an intriguing case study (box 1.4).

The government of Pakistan claims that the Regulator Pakistan Telecommunication Authority (PTA) has followed ‘open and consistent business centric policies’. The belief would appear justified given the astronomical growth in the cellular phone sector characterized by lower tariffs, expanded networks, customized packages and high-tech services. Warid and Telenor who entered the market as late as 2005 have been successful in drastically curtailing the market share of Mobilink (which was as high as 64 per cent in 2004) to 39 per cent at present. The total subscription base of mobile cellular companies has expanded to an impressive 80 million. The picture, however, is strikingly revers-ed in case of the fixed line services with the incumbent operator, PTCL accounting for more than 98 per cent of the subscribers. A

handful of fixed local loop companies are providing extremely limited network coverage in the largest urban centres. Taking advantage of its near-total dominance of the fixed/land line services, PTCL hiked the local call tariffs by a whopping 150 per cent in the year 2008. Pakistan has an elaborate deregulation policy for the fixed line telecommunication sector formulated in 2003. The policy establishes the rights and obligations of the licensees and lays down the price regime that ‘PTA will continue to regulate PTCL’s rates and services in the public interest’. ‘Public interest’ in practice does not appear to be enough of a priority as the ‘technological advancement’ being materialized by PTA is not sympathetic to public needs as opposed to those of the relatively well-off.

Box 1.4 Dichotomy in telecommunication regulation: the case of Pakistan

Source: GOP 2007a and 2008c.


By and large, however, the telecommuni-cation sector in South Asia has registered rapid growth since the early 1990s, spurred by reforms aimed at opening up the market and introducing greater competition in the sector. Box 1.5 traces the evolution of Indian telecommunication policy. Many domestic and international private sector entrants are now providing consumers in the region with high-quality services at low prices. The movement from state monopolies to privatized telecommunications firms and the introduction of competition have created opportunities not previously available in South Asian countries. State monopolies did not adequately expand and improve basic service. Liberalization has mitigated

these undesirable characteristics by bring-ing many more customers and service suppliers into the market, which has been rendered much larger and more responsive to changing conditions. Privatization of state monopolies in South Asia has resulted in improvements in service quality and options, but there are concerns. The process has sometimes created highly concentrated oligopoly market structures, connoting limited benefits with many accompanying and continuing problems. The proposed benefits of the telecommunications sector reform, especially privatisation, are essentially the expected benefits of competition. In a study of 30 African and Latin American countries between 1984 and 1997, privatisation of telecommuni-cations by itself was found to be negatively related to main line penetration and connection capacity.7 The presence of a strong regulator and competition, however, resulted in increases in lines and decreases in the prices of local calls. The international experience hence shows that privatisation should not be associated with a reduced role for the state in the telecommunications sector. Deregulation by itself will not ensure that the market is conducive to competition. The state has to lay down a strong regulatory framework and set in place mechanisms to manage competition. National regulatory policies in South Asia should also consider the dynamic aspects of competition in the telecommuni-cations industry.8 Telecom prices are a crucial component of any policy initiative to foster growth, enhance efficiency and impart dynamism to the sector. Generally, price regulation can affect the innovative activities by altering industry profits and hence the incentives to innovate. Licensing policies might also be designed at national level in South Asia to allow or encourage the introduction of new technologies that offer enhanced features or functionality. However, the main focus of governments trying to develop an information infrastructure in South Asia is rightly on increasing access to telecommunications,

The Department of Telecom was the sole provider of all telecom services and sector deregulation in India only started in 1984. Telecommunications policy and regulatory reform passed through various phases during the 1990s. The telecom policy, passed into law in 1994, sought to open a number of services to private com-panies. Allowing or encouraging the entry of multiple Indian private sector operators with foreign partners in different regions and market segments was a central component of the strategy pursued by the Indian government. Significant facilitators for private entry were provided by the National Telecom Policy 1999 that even now serves as a blueprint for ongoing reforms. The Policy relaxed conditions on private participation in telecom services by changing the then existing annual license fee to a one-time entry fee and an annual revenue share. The creation of the Telecommunications Regulatory Authority of India (TRAI) introduced a new form of governance to regulate telecommunications. In 2003, TRAI moved towards a unified access license, allowing for the existing

licensees to provide either fixed or cellular services under the new regime, thus ensuring similarity across the two licenses. Indian licensing policy for basic wired telephone services, cellular services and wireless in local loop services has included performance requirements to serve populations in high density, medium density and low population density areas in each licensing zone. The license areas or telecom circles are divided into four groups. The first group comprises the four largest metropolitan areas in the country; the second (A Circle) is a group of five large states; the third (B Circle) and the fourth (C Circle) groups cover smaller states. Companies providing fixed line and cellular services are required to serve both urban and rural regions within the telecom circle. In addition to per-formance requirements, the different licensing approaches—whether fixed fee, percentage of revenue, or first-come first-served—have tried to balance the achievement of public objectives with the need to provide investment incentives to private providers.

Box 1.5 Telecommunications policy and regulatory reform in India


given the low levels of provision in the region. The private sector will character-istically focus on the more profitable areas of the markets even though services may be needed for the local economic development of depressed areas. The regulatory and licensing packages hence need to balance carefully the incentives necessary to attract firms to make investments in networks, on one hand, and the obligations on those firms to meet certain performance requirements (such as covering specific geographic regions). Effective regulation, however, remains the Achilles’ heel in more respects than one in South Asia. For desirable regulation, the regulator must have access to information about the industry and the firms. But significant information asymmetries exist in most South Asian countries. The regulatory authorities in the region need to be equipped with skilled employees for regular flow of all relevant information including that relating to the latest technological develop-ments. Scarce human capital, and the inevitable lack of experience in South Asia has sometimes led to the introduction of new distortions in the market in the form of regulatory failure. Though nominally an independent body, the Bangladesh Telecommunications Regulatory Com-mission is monopolized at the senior decision-making level by nominees from the incumbent Bangladesh Telegraph and Telephone Board. The South Asian governments must recognize the need for reforms in regulatory bodies by infusing a corporate management culture through institutional reforms. Besides ensuring that the competent personnel are attracted by the regulator, adequate training facilities and a framework of research and information service need to be developed. A team of research institutes could be identified for specific tasks in this regard. National Planning Commissions could themselves be part of such a network. Many newly formed regulatory agencies in South Asia have, to the customer’s detriment, been incapable of effectively controlling incumbent market power.

State-owned infrastructure monopolies o f ten d i scr iminate aga ins t the i r competitors by not giving them proper access to the infrastructure. Regulatory agencies do not necessarily have to be independent from government to be effective but the exercise of discretion should be accompanied by transparency and accountability. Sometimes, the regulatory agencies in South Asia have been burdened with duties and obligations that do not reflect their institutional capabilities. Resultantly, the credibility of telecommunication regulatory agencies in South Asia is being increasingly questioned. This has been a major impediment in technological advancement in the telecommunications sector.

Providing broadband incentives

The most prevalent modes of high-speed, or broadband, connection to the Internet comprise the cable modem, digital subscriber line (DSL), fixed wireless and the satellite broadband connection. Access to broadband networks and to high-speed Internet with its next generation of information services is considered a necessary precondition for technological advancement. The diffusion of the broad-band Internet infrastructure is shaping the nature of traditional ICT sectors such as information, entertainment, communi-cation and media as well as the society and the economy as a whole. In recent years, it has generally been accepted that the development of broadband as a means of promoting new interactive and advanced applications is supposed to be the basis of what are referred to as knowledge-based economies and societies. Broadband has the potential to offer improved quality of education and health services, improved connectedness of government with society, and to provide jobs and prosperity. The potential benefits at the national, individual and organizational levels contribute towards building up a strong case for conducive public policy for broadband width. There is a wide range

The regulatory authorities in the region need to be equipped with skilled employees for regular flow of all relevant information


of policy alternatives available for broadband deployment and adoption (box 1.6). In recent years, most govern-ments in South Asia have put into practice public policies to give impetus to broadband deployment and adoption. Both India and Pakistan announced their Broadband Policies in 2004. Prime considerations guiding the Indian policy include:

• Affordability and reliability of broad-band services.

• Incentives for creation of additional infrastructure and employment oppor-tunities.

• Introduction of the latest techno-logies.

• Encouragement of a competitive en-vironment in order to reduce regulatory interventions.

Three types of public broadband stra-tegies with reference to the degree of government involvement in broadband infrastructure deployment can be roughly distinguished; soft intervention strategies, medium-intervention strategies and hard intervention strategies. Soft intervention strategies are char-acterized by low government involvement in broadband infrastructure deployment as they rely on market forces to ensure broadband supply. The actions put into place in the framework of these strategies tend to create the appropriate conditions for market development. On the supply side, the actions are usually regulatory and aim at fostering competition and open telecommunications markets by means of infrastructure-sharing rules or eliminating normative barriers to private investment. On the demand side, the actions may consist of financial incentives for users, improving government usage, educating people in the use of new technologies, promoting broadband applications, ensuring a secure environ-ment for transactions, etc. The main arguments for this approach are that when the development of broadband infrastructure is still at an early stage, excessive government involvement may distort competition and affect future market development. In addition, strong market competition is considered to be an essential requirement to ensure efficient supply of services and techno-logical innovation. Medium-intervention strategies are characterized by more proactive govern-ment involvement in broadband infra-

structure deployment to complement market functioning in geographic areas where there is a lack of broadband infrastructures. The rationale for these strategies is that, under market condi-tions, there are certain areas that are scarcely populated such as rural or remote areas which might remain underserved in broadband services. The lack of incentives for private investment is mainly due to the high fixed cost of deploying infrastructures and the low revenues associated with these areas. Medium-intervention strategies that consider public funding for infrastructure supply in these areas are more suitable for a balanced broadband coverage in the whole territory. Consequently, medium-intervention strategies include both supply-side actions to assist in the establishment of broadband networks and demand-side actions to promote broadband service adoption. There are mainly two types of supply-side actions, the financial support of private telecommunications providers and the construction and leasing of public infrastructure to private telecommuni-cations providers. It is claimed that, in the absence of market incentives to invest, public funding of open access infrastructure appears to be the solution that is most conducive to effective competition. Despite this, there are those who argue that these strategies may distort commercial incentives to invest and waste public resources. They consider that government investment in network infrastructure is hard to justify except in exceptional circumstances.

Hard intervention strategies are char-acterized by very proactive government involvement in broadband infrastructure deployment. The results of an empirical analysis with regard to the main constraints and motivators for broadband supply, demand and adoption provide some useful insights into the assessment of the effectiveness of the different broadband policy alternatives. For public policies to promote broadband supply, empirical analysis results certainly support the foundations of the soft-intervention strategies that are based on the assumption that the most effective policy for accelerating broadband deployment is to promote technological competition between DSL and cable networks. Moreover, considering that some types of public support initiatives could be oriented to foster technological competition, medium-intervention strategies can be considered an effective broadband policy in the light of the empirical analysis. For public policies to promote broadband demand, empirical analysis results suggest that soft inter-vention strategies to increase people’s predisposition and skills for using new technologies and to promote relevant local content could be effective. For public policies to promote adoption, the empirical analysis results allow the conclusion that both supply side and demand-side initiatives should be put into place to effectively promote broadband and the pre-eminence of one type or the other should be based on a detailed study of the specific situation of each territory.

Box 1.6 Which broadband adoption strategy is the best?

Source: Cava-Ferreruela and Alabau-Munoz 2006.


• The creation and growth of infra-structure through various coexisting access technologies, such as optical fibre technologies, digital subscriber lines on copper loop, cable television network, satellite, and terrestrial wire-less technologies.

The Indian policy sets a goal of 20 million broadband subscribers and 40 million Internet subscribers by the end of 2010. The government of Pakistan in contrast specified the modest goal of 200,000 broadband subscribers by 2007. Despite adopting a liberal licensing regime, Pakistan could barely make it to the half way policy benchmark. The ‘language barrier’ is one of the chief causes of the underachievement. The Broadband Policy of Pakistan recognizes that increased bandwidth speeds and cheaper access would count for little because the majority of the population is not literate in English—the lingua franca of the World Wide Web. The policy thus recommends a series of training workshops to teach the mechanics of developing Urdu language websites. This has remained but a recommendation and the large pool of trained individuals for developing local language content on the web has never materialized in practice.

Facilitating interconnection

The tremendous growth of cellular services in South Asia and the accompany-ing competitive challenges to fixed line operators (usually the incumbent) have bought interconnection issues to the forefront. The regulatory framework has to facilitate interconnection agreements and fair access of the new entrants to the incumbent’s infrastructure. South Asian telecom environment is characterized by factors such as public monopoly incumbent, low network penetration, inadequate regulatory capacity and unclear separation of policy/regulation and operations, leading to interference and overriding of regulation. In such a con-

text, the regulators are facing innumerable challenges with respect to determining interconnection costs or prices. While the Indian government set up TRAI as an independent body, its role was limited since it could not enforce interconnections and only had limited regulatory capability. As a consequence, judicial and political intervention in India has played a critical role in settling contentious interconnection issues hence delaying the regulatory process with implications for network growth. The lack of a systematic interconnection regime has severely constrained the calls between mobile networks in Bangladesh. Subscribers commonly maintain accounts from multiple providers to access one network from another. Mobile competitors are compelled to conclude bilateral inter-connection agreements with no minimum performance/service quality, network availability or pricing obligations formally imposed by the government. Tariff rebalancing and terms of network interconnection thus need continued attention in South Asia. Fair and timely interconnection is a prerequisite for ensuring smooth functioning of the multi-operator telecommunications’ market and to render it truly contestable. In the absence of a fair interconnection agree-ment, the firm with the largest subscriber base may simply refuse to entertain incoming phone calls from customers of other firms compelling many smaller players to pack up. Milder but effective tactics like setting prohibitively high cost of interconnection might also be employed by large telecom companies. Hence, the telecommunications law and the regulator have crucial roles to play in South Asia, making interconnection privileges available to all at affordable rates. At the very minimum, the national telecommunications policies must stipulate that incumbent service providers and all those who join later must offer low price interconnects to all clients.

Despite adopting a liberal licensing regime, Pakistan could barely make it to the half way policy benchmark


Promoting e-commerce

While e-commerce is on the rise in the world and it affords vast opportunities to South Asia to diversify export products/destinations, concrete policy steps are yet to be implemented. The IT Policy of Nepal stresses strategies for promotion of e-commerce in particular the creation of necessary legal infrastructure. An e-commerce wing is proposed to be set up in the Ministry of IT in Pakistan to formulate and implement strategies for e-fraud prevention, verification of com-pany authentication certificates and reliable services such as money back guarantees. The National ICT Policy of Bangladesh has given importance to early initiation of e-commerce by introducing Government-to-Government transactions under its purview. The initiative will then be extended to Government-to-Business transactions. This prioritization is a useful policy option for all South Asian countries for promoting e-commerce. However, there are financial, legal and market access problems in the promotion of e-commerce: A legal framework comprising guiding principles for e-commerce and a secure electronic inter-banking payment system is an absolute prerequisite. Payments through Internet remains a precarious option in South Asian countries. There are question marks over the participants’ ability to achieve a reasonable degree of certainty about their exposure to liability for any damage/injury resulting from their actions. Inconsistent local laws coupled with uncertainties regarding jurisdiction may substantially increase litigation and create unnecessary costs. If the Internet users do not have the confidence that their communications/data are safe from unauthorized access and modification they are not likely to use Internet for commercial purposes. They need to be assured that the telecommuni-cation network is secure and reliable, there are effective methods to protect the information system and effective means for authentication and ensuring confi-

dentiality. While regulation and standard-isation are necessary to prevent Internet fraud, they must not limit market access for any participant. Technical standards are critical to the long-run commercial success of the Internet as they allow diverse products/services to work together. However, they can also be employed as de facto non-tariff trade barriers to ‘lock out’ businesses from particular national markets. In India, the IT Act 2000 does suggest the basic regulatory framework for IT industry in the country. The Act inter alia provides legal recognition to transactions through electronic data interchange. However, it fails to tackle the issue of effective IT security from both techno-logical and legal aspects. It also does not clarify all the issues regarding taxation of electronic transactions. In particular, there is confusion about indirect taxation of goods/services delivered electronically. The issue of cyber crime control is also not completely addressed by the IT Act since the offences defined in the Act are not exhaustive. It is evident that a major jump is required before South Asia can achieve ‘anytime-anywhere’ connectivity and reach the stage where enhanced Internet penetration translates into high volumes of online commercial transactions. There is dire need to formulate a cohesive e-commerce vision by consulting all stake holders at the policy formulation stage.

Implementing e-governance

Policy documents in most South Asian countries recognize the necessity to implement ICT systems to provide nation wide coverage and access by every citizen to the government databases to improve efficiency, reduce wastage of resources, enhance planning and raise the quality of services. Box 1.7 mentions the prerequisites for successful e-governance. The South Asian countries are way short of fulfilling these prerequisites:

While e-commerce is on the rise in the world and it affords vast opportunities to South Asia to diversify export products/destinations, concrete policy steps are yet to be implemented


• Though some steps have been taken by the government of India during the Ninth and Tenth Five Year Plans, the process of e-governance has so far failed to assume the shape of a syste-matic national programme. Actions to the end have been driven primarily by individual initiatives rather than insti-tutional thrusts. The programme of e-governance is so far largely restricted to the efforts of the National Informatics Centre. The emphasis has been on providing connectivity, networking, technology upgradation, selective delivery systems for information and services and a package of software solutions.

• The Broadband Policy of the govern-ment of Pakistan claims that ‘the government is proactively working on the introduction of e-government applications’. In practice, however, the ‘National e-Government Council’ set up under the chairmanship of the prime minister of Pakistan has done very little to oversee the e-government initiatives aiming at automation and e-communication. The automation of tax and revenue collection and electronic bill payment facility for all major utilities is a dire need but has not been sufficiently pursued. The policy suggestions for conducting e-procurement and e-recruitment have also not been translated into adequate action.

• The National ICT Policy of Bangladesh has the ambitious aim of networking all government departments and Union Parishad offices to a ‘National Data Re-source Centre’ in the shortest possible time. The Centre is envisioned as a system of national databases having capacity to store and supply rapidly all necessary information on the economic, cultural and social situation of the country. As in other parts of South Asia, however, the actual adoption of e-governance has left a lot to be desired. Most government ministries and auto-nomous organizations have set up web sites but these are seldom updated.

Avoiding the ill effects of the digital divide in South Asia necessitates the adoption of some standardized and uniform pattern/pace of computerization and introduction of e-governance. A serious look is now necessary at the re-engineering of procedures and rules which form the core of any effective programme of e-Governance. At present, policy documents and information relevant to the public are often not posted on the web making mockery of the very concept of e-governance. The national budgetary estimates for the year 2007–08 were never made available on the web by the government of Pakistan, rendering the budget virtually inaccessible to all except the insiders. For sustainable e-governance schemes, South Asian countries are in dire need of a clearly focused vision with well-defined objectives. E-governance pro-grammes must be interactive with the range/standards of delivery of information and services to the people defined with time-frames within which they are to be attained. In many cases, policies for promotion of telecommunications and IT in South Asia have articulated elaborate strategies sans serious follow-up. Broad principles and long-term goals have been outlined while concrete roadmaps have not been provided. In Bangladesh, for instance, the

• Large-scale computerization.• Capability to use local languages in the

IT systems.• Changing the mindset of government

functionaries.• Creation of adequate and appropriate

infrastructure.• Standardisation in data encoding,

application logic, user interfaces, etc.• Knowledge networking.• Creation of public key infrastructure

and certification authorities.• Making e-governance fully relevant to

the needs of the people.

Source: GOI 2002a.

Box 1.7 Prerequisites for successful e-governance


Telecommunications policy of 1998 has not been updated while its modest target of teledensity was never achieved. It is clear that South Asian countries must invest more in building their information infrastructure. This includes not just developing the basic telephone and telecommunications services, but also ensuring that these services are provided at the lowest cost, as well as promoting the application of ICTs to facilitate improved delivery of economic and social services. Furthermore, South Asia must not overlook the role of human capital as the chief determinant of IT diffusion. Special attention must be given to new investments in upgrading the skills and competencies of workforces for the effective usage of ICTs. South Asian governments must formulate policies to positively influence the human capital stock available if narrowing the digital divide with the developed world is their priority. Although South Asia has been exhibiting a fast rate of growth in network development this does not necessarily imply that the digital divide is going to disappear. First, ICTs are characterized by network economies, where absolute numbers matter. Secondly, the proper use of these technologies depends on complementary factors such as education level and infrastructure. As things stand, the vast majority of people

in South Asia have neither the skill nor the awareness to derive benefits from latest technology. Consequently, under-standing the factors which contribute to different levels of technology diffusion and taking remedial steps remains the key for formulating viable telecommunications and ICT policies in South Asia.

Trade policies

Overall orientation of the trade policy regime

Open trade policies are essential for drawing upon the technology flowing through world markets by promoting deep market linkages. There is substantial evidence of international knowledge spillovers which motivate knowledge diffusion under an open trade regime. The trade-technological advancement nexus has evidently strengthened with the passage of time. Over the last two decades, the share of high-technology goods9 in world merchandise exports has doubled to 21 per cent.10 On the other hand, the proportion of primary products has declined by 5 percentage points from 26 per cent in 1990.11

Beginning from the early 1990s, the South Asian countries have pursued policies that promote trade liberalization to expedite integration into the world economy. Does South Asia offer a more open trading environment today than ten years back? A simple and extensively used measure of trade policy orientation is the ‘trade dependency ratio’ or the ‘trade-to-GDP ratio’. Figures 1.1 and 1.2 employ this measure to gauge the outward orientation of the South Asian economy. The rate of trade integration has been satisfactory at 4.3 per cent per annum since 1996. In absolute terms the picture for South Asia’s trade integration is less promising. Merchandise trade of South Asia was a mere 34.4 per cent of the GDP in the year 2006. This is much below the average for low-income countries even if we overlook the ratio for Sub-Saharan Africa (close to 61 percentage points).

Source: World Bank 2008i.

Figure 1.1 Merchandise trade as percentage of GDP, 2006

South Asia Low income Sub-Saharan Africa countries

(%)34.4

44.1

60.8


The declining trade barriers in South Asia are, however, evident from the lower average tariff rates (figure 1.3). The mean tariffs for the major South Asian countries were among the highest in the world till the beginning of the 1990s. The tariff rates have declined rapidly throughout South Asia and currently range between 11 per cent in Sri Lanka to 16.8 per cent in India. The most dramatic reduction has been for Bangladesh where the mean tariff rate was as excessive as 106.5 per cent in 1990. The tariff reduction in Nepal has been rather modest over this period. However, it had a much lower average tariff rate to begin with when compared with its regional counterparts. Nepal’s mean tariff rate is thus only ahead of Sri Lanka at present. However, the tariff rates in South Asia (and particularly those for India) are still somewhat steep considering the fact that the average tariff in developing countries has fallen below 12 per cent.12

Export of technology products

The export of technology products is generally deemed as an indicator of technological progress in the economy. As evidence quoted earlier depicts, high-technology exports have better future growth prospects and possess the potential of imparting the latest knowledge/skills for stimulating further production activity. Access to markets for high-technology exports may also motivate better quality control, higher knowledge investment and other process improvements in the exporting economy. South Asia’s global share of high-technology exports is estimated at a negligible 0.3 per cent.13 In fact, less than 4 per cent of the manu-factured exports from the South Asian region fall in the category of high-technology products.14

It is hence appropriate to claim that the policy-makers in South Asia have thus far failed to diversify the exports from South Asian countries by making an attempt to meet global market standards by adopting up-to-date technology. A number of measures need to be an integral component

of the trade policies in the region to promote technology exports. These measures comprise tax incentives and export finance schemes. Besides, there is the dire need to follow international quality management standards for pro-duction of goods and services. Conforming to global benchmarks of design and quality is essential for creating a niche in export markets.

Technology transfer through imports

Technologically sophisticated imports provide critical exposure to foreign

Figure 1.2 Average annual growth in merchandise trade as percentage of GDP, 1996–2006

Source: World Bank 2008h and MHHDC staff computations.

South Asia Low income East Asia & Pacific countries

(%)

4.3

3.5

4.2

Figure 1.3 Trends in simple mean tariff in South Asia, 1990–2006

Note: *Data refers to the years, 1995 for Pakistan, 1989 for Bangladesh and 1993 for Nepal.Sources: MHHDC 2007 and World Bank 2008i.

Sri Lanka

Nepal

Bangladesh

Pakistan

India

0 20 40 60 80 100 120(%)

1990* 2006


technology. Learning original product designs invented elsewhere enhances productivity by adding to domestic technological expertise. A steadily rising share of capital goods among imports generally denotes technological upgrad-ation of the production structure. How far have the national trade policies in South Asia been able to encourage the import of capital goods (like machinery and equipment) to enhance the techno-logical capacity in the region? Between the years 1994 and 2004, the ratio of capital goods’ imports in South Asia rose from 3.1 per cent to 3.8 per cent of the GDP.15 This is by far the lowest share among world regions. Figure 1.4 traces the percentage share of capital goods in Pakistan’s total imports. The proportion of capital goods has evidently been stagnant and has not displayed any upward trend. As already noted, South Asian countries still have what may be termed as ‘relatively closed’ economies. The ability to draw on cost-effective foreign inputs in general and capital goods in particular has there-fore remained limited. Greater import liberalization is necessary for regional firms to gain access to equipment and technology embodying foreign knowledge.

In the absence of competition from technologically superior imports, the domestic suppliers in South Asia have not been successful in employing the latest production technologies. The very know-how of many technological developments is absent. In fact, bearing the initial cost and risk of investing in new technologies in the absence of competitive pressures is not often a viable option. A more liberal trade policy hence remains the key priority for most South Asian countries.

Patent/Copyright laws

Intellectual property rights (IPRs) such as copyrights and patents provide the holder with the exclusive right to sell or license the right to use the work. It has been argued that the enforcement of these rights motivates technological progress by encouraging creativity, R&D, competition and investment. The Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, which came into effect on 1 January 1995, is a compre-hensive multilateral agreement on intel-lectual property. The areas of intellectual property that it covers are: copyright; trademarks including service marks; geo-graphical indications; industrial designs;

Figure 1.4 Trends in the composition of imports of Pakistan, 1990–2007

Source: GOP 2008c.

45

40

35

30

25

20

15

10

5

0

(%) s

hare

of c

apita

l goo

ds

1990 1992 1994 1996 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007


patents; the layout-designs of integrated circuits; and undisclosed information including trade secrets and test data. In respect of each of the main areas of intellectual property covered by the TRIPS Agreement, the Agreement sets out the minimum standards of protection to be provided by each Member. The Agreement also lays down certain general principles applicable to all IPR enforce-ment procedures. It establishes a mecha-nism for consultations and surveillance at the international level to ensure compliance with IPR standards by member countries at the national level. The protection of IPRs is becoming critical in the increasingly knowledge-based world economy. Their significance is driven by the mounting costs of R&D for new products/processes, shortening of the product life cycle, rapid growth in international trade in high-tech products, and internationalization of the research process. Relevant legislation has taken place in most South Asian countries following the TRIPS Agreement:

• India passed a new patent regime on 1 January 2005 in a move toward adhering to the intellectual property norms under TRIPS. The Act has evoked much criticism for pricing most medicines patentable in 1995 or later beyond the reach of the great majority of people in India. The previous practice had been to allow pharma-ceutical patents only on the manu-facturing processes used to produce drugs, not on the end products them-selves—a system designed to ensure medicine availability at affordable prices.

• For TRIPS compliance, Bangladesh has in place the ‘Copyrights Law 2000’ which provides for a maximum of four years’ imprisonment and/or fine of BTK200,000 for violating the copy-rights of writers, artists, filmmakers, musicians, producers, publishers and computer software companies. The law does not go far enough in the sense that it does not prohibit artistic works

from being reproduced sans permission for non-commercial purposes.

• Pakistani law has a maximum punish-ment of three years imprisonment and a fine of PKR100,000 for violating copyrights. Pakistan developed its Trademarks Ordinance in 2000, which provides for the registration and better protection of trademarks and for the prevention of the use of fraudulent marks. The Ordinance has been enforced since April 2004 with the enactment of implementing rules. Pakistan also promulgated a patent law in 2000 that protects both process patents and product patents in accordance with its World Trade Organization (WTO) obligations. Under this law, both the patent-owner and licensees can file suit against those who infringe. Unfortunately, the 2002 Patent Ordinance weakened the 2000 Patent Law by eliminating use patents, restricting patent filings to single chemical entities, limiting protection for derivatives, introducing barriers to patenting biotechnology-based inventions.

Despite enactment of laws, South Asia has failed to adequately enforce patents, copyrights, and trademarks due to the lack of a functioning central regulatory/enforcement body, an underdeveloped judicial system and widespread corruption. Patent theft is exacerbated by the fact that it often takes one or two years to register drugs in South Asian countries. During this registration process, the government also sets prices—often at a level that does not reflect the cost of developing the product. Despite the presence of an Intellectual Property Organisation (IPO) in Pakistan, the actual implementation has been limited to sporadic crackdowns on piracy infrastructure with no subs-tantive outcome. Pakistan has in fact emerged as a major exporter of pirated optical discs with rough estimates indicating that 230 million illegal discs were produced in 2004.


The world total of patent filings doubled between 1991 and 2006.16 South Asia has been lagging behind very evidently. Only two applications are being made annually in Bangladesh for every million inhabitants.17 The ratio drops drastically if we only take into account the filings by actual residents. In India for instance four-fifths of the patent activity is carried on solely by the non-residents.18

The policy-makers in South Asia must adopt a two-pronged strategy to tackle the IPR issue. First, there is need to recognize that South Asia requires progressive patent laws and a robust IPR regime to move ahead in the global innovation race. Despite the stringent requirements of TRIPS from a policy perspective, lobbyists have successfully campaigned to strengthen the existing forms of intellectual property and to create new ones. The ‘Digital Millennium Copyright Act’ employs criminal law to prevent circumvention of software used in enforcing digital rights management systems. Given such an environment, counterfeiting of trademarks and brands of established companies can only serve to erode South Asia’s credibility as a trading partner as well as an investment destination. Adhering to those standards is necessary to get access to foreign technology through foreign direct invest-ment and technology transfer and to get access to foreign markets through trade. IPRs are also important in stimulating the domestic creation of knowledge in South Asia as the region strengthens its human and technological capabilities. Accordingly, the policy-makers in the region may consider the following steps:

• There is need for manpower planning for IPR protection and making IPRs a compulsory subject in college law courses and in universities. This calls for setting up a number of patent training institutes. For a simple comparison, China has some 5,000 patent training institutes.

• More public awareness about the nature and impact of IPRs is direly needed in South Asia. As things stand,

only a minority actually knows that copying a movie, photocopying a book or replicating products with bogus labels constitutes an infringement of the IPRs. Even fewer people are able to appreciate the repercussions of piracy.

• Legal and technical expertise must be adequately employed to draft legislation which helps implement TRIPS flexibilities (compulsory licensing, parallel importation, limits on data protection, use of broad research etc.). A report by the World Health Organization (WHO) found that many developing countries have not incorporated these flexibilities into their legislation to the extent authorized at the Doha Ministerial Conference in November 2001.19

Second, South Asia must participate actively in evolving international agree-ments on IPRs and biodiversity. The aim would be to motivate IPRs regimes that try to attain the delicate balance between the private incentives for the creation of knowledge and the social benefits from its dissemination. Article 66.2 of the TRIPS Agreement requires developed countries’ governments to provide incentives for their companies to transfer technology to least-developed countries. There is little evidence in practice of the provision of these incentives. Hence, there is every likelihood that TRIPS may end up virtually blocking the developing world out of the dynamic knowledge sector by rendering technology transfer more expensive. South Asia can receive a boost from some important breakthroughs achieved in the past by developing countries in seeking favourable reviews of the TRIPS Agreement. WTO ministers issued a special declaration at the Doha Ministerial Conference in November 2001 to ensure that patent protection for pharmaceutical products does not prevent people in poor countries from having access to medi-cines—while at the same time maintaining the patent system’s role in providing incentives for R&D into new medicines.

South Asia must participate actively in evolving international agreements on IPRs


The Conference agreed that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. They underscored countries’ ability to use the flexibilities that are built into the TRIPS Agreement. And they agreed to extend exemptions on pharmaceutical patent protection for least-developed countries until 2016. The ongoing efforts to help evolve a regime of intellectual property protection ought to be directed by the realisation that the levels of patent protection to be achieved by South Asian countries has to be in keeping with their development needs. Undoubtedly the capacity of the South Asian countries to take advantage of the patent regimes bears a relationship with their stage of development. The current stage of their technological development requires lesser level of patent protection as compared to the developed countries. Indeed the developed countries adopted relatively ‘weak’ patent regimes during the earlier stages of their techno-logical development and it was only after they had achieved a certain level of technological capability that they opted for a ‘strong’ patent system. South Asian countries accordingly need to work together as a united negotiating bloc and present alternative frameworks to the provisions of the TRIPS agreement to strengthen their bargaining positions in pushing for change. They can benefit from consultation and cooperation to create model laws besides collaborating in training public officials. Creating more awareness about the intellectual property issues at stake is also important in build-ing coalitions among national interest groups and regional organizations in South Asia.

Strategies for energy security and environmental management

Energy policies

Energy security focuses on the demand and supply of energy, its use patterns, availability, energy reserves and the

attainment of energy efficiency. Hence, energy security is not merely the function of providing the energy demanded. Rather, it is profoundly related to the costs incurred in accessing energy and the ensuing health/environmental impacts. South Asian countries rely heavily on biomass sources of fuel—wood, twigs, crop residue and animal waste—for meeting the bulk of their energy needs. Unfortunately, with the dwindling forest cover in South Asia, biomass fuel has been rendered increasingly unreliable and expensive. Moreover, the biomass fuels are usua l ly be ing consumed beyond sustainable limits, which has myriad adverse implications for the environment in South Asia. More than 680 million people in South Asia do not have access to electricity.20 The situation is much bleaker if one was to focus on the rural areas alone. Moreover, serious power shortages are adversely affecting all sectors of the South Asian economies:

• India faced a shortfall of 11.2 per cent in meeting its peak energy requirement in 2003–04.21

• Since 2007–08 Pakistan has been afflicted with massive electricity shutdowns which have made life miserable even in the biggest urban centres and virtually crippled industry and businesses.

• Bangladesh is estimated to loose economic output worth US$1 billion annually owing to power outages and unreliable energy supplies.22

The existing power generation capacity in South Asia comprises a mix of hydro, coal-based thermal, oil-fired thermal, gas and nuclear sources. The gigantic potential of renewable resources like wind and sunlight remains severely under-employed. About three-fourths of the power generation in India (by far the largest economy in South Asia) is thermal-based, using coal predominantly.23

The current approach towards the energy sector in South Asia—with


consistent expansion in oil, gas, coal and thermal power plants—is creating numerous economic, social and environ-mental issues and raising serious questions about the sustainability of ongoing energy usage patterns. Vehicle conversion to compressed natural gas (CNG) in both Pakistan and Bangladesh denotes a step in the right direction (box 1.8). There, however, remains an acute need in South Asia to formulate and implement national policies to reduce dependence on non-renewable and environment threatening energy sources. This can be made possible by restructuring the energy sector so as to build energy supplies around renewable resources. South Asia is rich in the avail-ability of sunlight, wind and biomass.

Solar energy

The South Asian region as a whole exhibits an excellent solar climate making it possible to harvest solar energy throughout the year. Photovoltaic cells convert sunlight directly into electricity. Latest scientific breakthroughs in solar cell technology, using low grade silicon material have drastically cut the cost of solar energy generation. It is also possible to concentrate the sun’s rays to heat any fluid to temperatures sufficient to drive a turbine. Nepal is a rare example of successful implementation of solar power develop-ment programmes in South Asia. An Alternative Energy Promotion Centre has been set up to provide support and advice to the government in devising policy on alternative energy promotion. A Rural Energy Fund is also operating under APEC. There has been significant expansion in domestic solar electricity system for supply in rural areas which are not yet connected with the national electricity grid. Under the Ninth Five Year plan, 23,570 domestic Solar Photovoltaic Systems (of 36/50 peak-watt capacity) were installed and hundreds of solar dryers and cookers were distributed. The solar pump, which is used to pull groundwater, has played an important role in overcoming the scarcity of drinking water in the rural areas. In most South Asian countries, however, there have been serious shortfalls in the targets for solar thermal power. Indeed the economic viability of solar thermal plants for commercial applications is yet to be established in the region. The policy-makers in South Asia need to understand either approach towards solar energy generation and to devise a feasible strategy for consuming solar energy.

Wind energy

Wind power can be used in a variety of applications like water pumping, food grinding or producing electricity. The Ministry of New and Renewable Energy

The government of Pakistan is promoting the use of CNG to reduce pollution caused by vehicles operating on motor gasoline and to improve the ambient air quality. The CNG Policy 2007 aims at achievement of the following major objectives:

• To encourage CNG as substitute to liquid fuel to reduce import bill.

• To provide cheaper and environ-ment friendly fuel.

• To enforce better industry disci-pline and safety culture in the CNG sector.

• To introduce CNG technology for import of natural gas.

• To use CNG for town gasification where supply of pipeline gas is not viable.

The policy has been successful in the transport sector and currently 1.7 million vehicles in Pakistan stand converted to CNG. To facilitate vehicle owners, the price of CNG has been maintained at half of Petrol’s price and also at a level significantly below that of diesel. Ten large urban centres are taking the lead in phasing

out diesel vehicles in favour of CNG buses for intra-city transportation. The federal government is providing incentives in the form of payment of mark-up (either complete or partial) of the loans acquired to purchase these buses. The National Trade Policy 2008-09 allowed the import of CNG buses from India. In Bangladesh, the Government has been encouraging private sector participation for installation of CNG re-fuelling stations. In fact, 165 CNG re-fuelling stations and 108 conversion workshops have already been set up and 1.1 million vehicles are now using CNG. Efforts are underway to convert more vehicles to CNG mode and to install more re-fuelling stations to ensure the uninterrupted supply of CNG to the converted vehicles. Accordingly, the government has liberalized the import of CNG conversion kits and cylinders. There is an ongoing project to provide 100 CNG buses to private entrepreneurs through commercial banks/leasing companies. It has been estimated that Bangladesh can curtail its oil import bill to the tune of US$385 million by tapping the full potential of CNG.

Box 1.8 Increasing usage of CNG as transport fuel in South Asia

Sources: GOB 2008a and GOP 2008c.


in India has done commendably in developing generation capacity through wind energy. By the end of the Tenth Five Year Plan, India had achieved an installed capacity exceeding 7,000 MW for electricity generation through wind power aided by the active participation of the private sector. The size of wind turbine generators has been enlarged tenfold, evidently enhancing productivity. Pakistan is another country in South Asia with tremendous potential of wind energy. The coastline of Sindh has been identified as having wind power potential worth a whopping 50,000 MW. The government plans to electrify almost 8,000 remote off-grid villages in Sindh and Balochistan provinces utilizing wind energy technology by year 2030. However, the progress has been rather lacklustre so far. There is no certainty that the modest goal of installation of 700 MW wind power by the year 2010 would be achieved.

Biofuels

Biomass, particularly dung and crop residues, can easily be converted into better quality fuels like biogas and can be used either directly for heating and cooking, or indirectly by producing electricity first. This conversion signi-ficantly improves the overall utilization efficiency of these resources without any adverse environmental impacts. There have been sporadic attempts in South Asia to capture the benefits of biofuels:

• Nepal installed 60,000 biogas plants under the Ninth Five Year plan. Currently, emphasis has shifted towards suitable and relatively smaller-size plants.

• The Alternative Energy Development Board in Pakistan is undertaking a pilot project of using Ethanol as an alternative fuel for vehicles. Biodiesel is also being used for village electrification albeit at a very small scale.

However, the potential of biofuels remains largely unexploited. India, for instance, has the capacity to install 19,500 MW electric power through biomass conversion. A mere 381 MW of this potential has been tapped so far. For biofuel production to assume a significant role, there is need to install community-based biomass gasifier and biogas plants to meet the energy needs in rural areas.However, the replication of such pro-grammes on a national scale would depend on effective community mobiliza-tion and adequate collection of user charges. It ought to be kept in view that the usage of biofuels involves the role of different actors such as producers, pro-cessors, distributors and consumers. Well-defined national biofuel policies have to be finalized that afford compatible incentives to all actors in the chain. The above glance at the efforts in South Asia to capture the benefits of alternative energy technologies makes evident that very little has been done for the integration of these sources into national energy supplies. In the absence of a concrete plan to the effect, the efforts to utilize renewable technologies remain piecemeal and incoherent and thus have failed to create sustainable markets for these technologies. There is need to strategically guide the development and deployment of renewable technologies in applications where they can more realistically compete with conventional energy conversion techno-logies and their superior features can be exploited to the advantage of the masses. Policy-makers need to tackle the issue from the following standpoints to ensure meaningful contribution of renewable technologies towards provision of energy security in the region:

• Even the simplest direct energy con-version systems based on renewable technologies entail such heavy initial costs that it is hard to see them emerging as commercial successes. In addition, subsidization of diesel and kerosene fuels has not allowed market competition at equal footings.


• The weak institutional set-up and the preoccupation of energy planners with immediate operational concerns did not permit adequate experimentation with innovative technologies.

• Adequate scientific and technological infrastructure for pursuing R&D in alternative energy does not exist in South Asia. Most renewable techno-logies entail a more rigorous site analysis and resource availability study than is generally required for their more conventional counterparts.

To boost renewable energy technologies, the South Asian governments need to come up with suitable f inancia l mechanisms. The mechanisms ought to be devised keeping in view that investment in capital intensive and commercially untested renewable technologies is a high risk capital venture for most private enterprises. For instance, following the manifold demand growth, the wind energy equipment is short in supply at international level. Furthermore, being based on intermittent sources, alternative energy technologies entail storage/backup systems to ensure uninterrupted supply. Hence, potential investors will continue to shy away unless the governments provide rebates and tax credits on investment in renewable technologies along with easy loans and technical support. The ultimate solution may in fact lie in domestic production of the equipment needed for generating electricity from alternative energy sources. For the present, however, the viable option for South Asian governments is to enter into technology transfer agreements with foreign manufacturers.

Solid waste management

Inadequate waste collection and outdated waste management systems are the cause of serious urban pollution and health hazards throughout South Asia. Municipal solid waste production continues to grow in tandem with more affluent lifestyles and is increasingly voluminous and non-

degradable. The ever-piling waste heaps contribute to the spread of infectious diseases in addition to blocking urban drainage channels. The proportion of hazardous industrial waste and that from medical clinics also continues to increase. Due to the practice of illegal dumping and improper disposal, hazardous wastes frequently leak into water supplies rendering them seriously contaminated. Effective steps for waste collection and waste management in South Asia have been rare and diffused:

• The Jawaharlal Nehru National Urban Renewal Mission in India covers programmes for urban waste disposal. The Ministry of New and Renewable Energy has formulated a National Programme on Energy Recovery from urban and industrial waste. The scheme of Balanced Use of Fertilizer under the Ministry of Agriculture strengthens the soil-testing programme in the country and encourages efficient fertilizer use and composting of urban biodegradable waste.

• With the support of the JICA, Dhaka City Corporation has undertaken a 20-year master plan for waste management. The plan is premised on a strategy for the reduction, re-use and re-cycling (3R) of waste.

Far from upgrading technological infrastructure to tackle the menace, the efforts for waste management in most South Asian countries are being hindered by inadequate administrative and managerial support. Under the Municipal Solid Waste (Management and Handling) Rules, all local bodies in India are expected to undertake segregation of waste and its collection, storage, trans-portation, processing, and disposal. A mere handful of local bodies are reported to have taken initiatives to set up waste processing and disposal facilities and even in these cases treatment is not a priority. The situation is not much better in Pakistan. Under the Local Government Ordinance 2001, sanitation service

To boost renewable energy technologies, the South Asian governments need to come up with suitable financial mechanisms


provision has been devolved to the Tehsil tier of local government while the responsibility for strengthening collective action has been devolved to the union tier of local government. However, the requisite administrative and financial support from the provincial government has not been forthcoming to truly empower local governments to deliver improved sanitation services. The treatment and disposal of hazardous and biomedical waste continues to be overlooked throughout South Asia. In India, the government has provided assistance for installing Transport, Storage, and Disposal Facilities for management of hazardous waste generating industrial clusters. So far, six such systems have been supported with the average unit capacity of 1–1.2 lakh tonnes per annum. Healthcare facilities in India are availing the services of Common Biomedical Waste Treatment Facilities. In Bangladesh, many hospital and clinics in Dhaka city have developed management systems of waste disposal by receiving consultancy support from the Department of Environ-ment. However, institutional mechanisms are required to be put in place in South Asia to ensure that issues related to handling of industrial, hazardous and biomedical wastes are dealt with effectively. Outdated methods of solid waste disposal need to be replaced by latest techniques like incineration and recycling processes comprising physical reprocessing, bio-logical reprocessing and energy recovery. The segregation of garbage into non-biodegradable and biodegradable is rare. Segregation is the major step for viable utilisation of waste energy and recovery of recyclable materials. There is also need to use proper technology for digesters that would maximise recovery of biogas and would meet most of the running cost of the sewage treatment plants.

Air and water quality monitoring

In South Asia, the enormous problem of contamination of water from disease-bearing human wastes manifests itself in

the poor and deteriorating surface water quality in all countries. Industrial effluents are frequently discharged into local water bodies without treatment. Intensification of agriculture through the increasing use of chemical fertilisers, fungicides and pesticides has meant increasing seepage of agro-chemicals into the soil. Many areas in South Asia are increasingly facing groundwater quality problems. Prominent among these are that of groundwater salinity and the presence of fluorides, nitrates and/or arsenic in groundwater aquifers.24

Urban air pollution levels in the region are also amongst the highest in the world, producing serious human health impacts and affecting aquatic and terrestrial ecosystems. The South Asian region is experiencing unacceptable air quality on account of three broad sources:

• Mobile sources (vehicles)• Stationary sources (use of fossil fuels in

industries and thermal power plants)• Indoor sources (burning of biomass)

Barring India, one comes across very few examples in the region where the latest technology is being utilized to monitor water/air quality standards and to fight environmental pollution:

• Under the National Environment Action Plan of Pakistan, the Green Industry Programme was launched in the year 2006 with the support of United Nations Development Pro-gramme (UNDP), to make industries responsible for systematic monitoring and reporting of their environmental performance. The key attribute of this programme is the provision of flexibility to the industries to choose cost-effective environmental solutions by promoting pollution control measures and assisting in the identification of regulatory and non-regulatory impediments.

• A continuous Air Quality Monitoring Station has been set-up in Dhaka under the Air Quality Management Project with the financial assistance of

Urban air pollution levels in the region are amongst the highest in the world


the World Bank. From this station vehicular emission is being monitored regularly against different parameters to procure information about the status of air quality. The project also envisages air quality monitoring stations at Khulna and Rajshahi. Two mobile air quality monitoring stations are also being procured to monitor local air quality regularly.

• For enforcing the National Ambient Air Quality Standards, monitoring centres are functioning at six different places in Nepal.

The Central Pollution Control Board (CPCB) in India has identified 2,301 medium and large-scale polluting industrial units under 17 highly polluting categories. The requisite pollution control devices are reported to have been provided in most of these units. CPCB also monitors ambient air quality at 308 stations covering 115 cities/towns to determine the status and the trends in ambient air quality on significant parameters like sulphur dioxide, Respirable Suspended Particulate Matter, benzene and polyaromatic hydrocarbons. A programme for real time air quality monitoring for cities with population of more than one million was also started during the Tenth Five Year Plan. The CPCB, under the Ministry of Environment and Forests, has also established a nationwide network for water quality monitoring comprising 1,019 stations in 27 States. The monitoring is done on a monthly or quarterly basis for surface water and on a half-yearly basis for groundwater. The monitoring network covers 200 rivers. In all 86 polluted stretches have been identified and action plans for improving the water quality in them are being prepared under the National River Conservation Plan. CPCB has also carried out limited water quality monitoring of wells in different states. Over the years, South Asian countries have adopted almost all environmental protection Acts and rules enforced in developed countries. But environmental

degradation continues despite the existence of long-standing policies and legal framework for environmental protection. The need for reducing the gap between principle and practice, by putting institutions and infrastructure in place cannot be over-emphasized. While the water/air quality standards have been identified, there is a need for much stronger monitoring and enforcement of these standards through utilization of technological advancements.

* * *

The chapter discusses the contribution made by national plans/initiatives in South Asia towards strengthening the nexus between technology and human development. The analysis emphasizes the policy gaps in technological progress in the region and also documents the constraints to effective and wholesome translation of the policy vision into practice. The constraints can be overcome by a dynamic and flexible policy capable of harnessing the latest advances in S&T. Foremost, a concerted strategy is necessary to infuse dynamism into the region’s S&T institutions. The financial and human resources available to research/academic institutions demand substantial aug-mentation if these institutions are to serve as the pillars of a vibrant agenda for technological development. High priority must be accorded to the adoption/development of technologies that are oriented towards human develop-ment. These include technologies that provide creative and cost-effective solutions to long-standing issues pertaining to education, health/sanitation services, nutrition, housing, population manage-ment, natural hazards, environment, water/energy resources and their integrated management for sustainable development. Indeed technological advancement can play an instrumental role in transforming the teeming millions of South Asia into a valuable human resource. Technical training and skills can help develop entrepreneurship and promote self-


employment. Regional cooperation and collaboration within South Asia for technological advancement can be highly beneficial. Collaborative programmes (including participation in mega science projects) between academic institutions and laboratories need particular encourage-ment. Common goals can be effectively

addressed by pooling together the material and intellectual resources of the South Asian region. The policy initiatives, discussed in this chapter, to use technology for human development in South Asia have been used very successfully by one country, India. Chapter 2, discusses briefly the India story.

Technology is all-encompassing, as all the sectors of the economy employ it and all segments of the society are influenced and affected by it. Moreover, technology acts as an interface between production and employment, between economic system and eco-system.1 This implies that to navigate the development path the country must choose appropriate technology and ensure its adequate supply. In this context, it is important to note that technology has a much different role to play in the development of India than what it has played in other countries at the same level of development in the course of their industrialization.2 This is because India’s problems are different as it has to provide basic needs to a population of over 1.1 billion and there is nothing in social or economic history that can act as a guidepost for the course India should take. In fact, countries like India can make use of technology, especially advanced technology, to leapfrog their way to the level of the already developed countries. The growth of Indian software industry is a case in point. Technology has played a key role in the development of a number of rich and middle-income countries. The accumu-lation of physical capital—a machinery, roads, buildings—explains less than 30 per cent of the variations in growth rates around the world over the past 40 years. Much of the growth is accounted for by differences in the attainment of edu-cational opportunities, and in the diffusion and application of knowledge.3 Forty years ago, Ghana and the Republic of Korea had virtually the same income per capita. However, today, Korea is approximately six times richer and more than half of that gap can be attributed to

Korea’s success in acquiring and using knowledge. In a knowledge society, each stage of the knowledge cycle—the generation, acquisition, absorption, and communi-cation and dissemination, has significant importance. Generating knowledge requires both creativity and working from scratch, whereas technology can be acquired in-house through own research and development (R&D) efforts or from outside through licensing, foreign investment and so on. However, knowledge absorption necessitates guaranteeing universal primary education, investment in secondary and support for tertiary education, especially in science and technology (S&T).4 Once knowledge is available, it can be communicated and disseminated through electronic or print or mobile media. All these aspects and various stages of knowledge cycle are dealt in different sections of this chapter. This chapter presents a critical overview of the current state and recent trends in technology in India and its impact on human development. It also explores whether the potential of technological progress is being fully harnessed for better human development outcomes. The chapter is divided into the following five sections: section 1 discusses how technology is affecting the management and delivery of public services, especially in the healthcare system, education and public sector administration. This is followed by the role of technology in economic growth in section 2. The impact of technology is discussed for all the three primary sectors—agriculture, industry and the services sector. The section also discusses the impact of globalization, especially the role of multinational

Chapter 2

Technology and Human Development in India*

* This chapter has been contributed by Vinish Kathuria from Indian Institute of Technology Bombay.

Countries like India can make use of technology, especially the advanced technology, to leapfrog the already developed countries

Technology and Human Development in India 43

corporations (MNCs) in the creation and disseminat ion of knowledge and production technique. With globalization, knowledge has become the fundamental driver of improving productivity and global competition. In this context, diffusion of information and communicat ions technologies (ICTs) acts as a base for building up and applying knowledge in the private and public sectors. Section 3 looks at the current state and trends of various ICT indicators at the national level. Since India is not the only country riding on this knowledge wave, the demand for ICT professionals has increased in other developed and developing countries. The section also investigates the likely impact of the increase in international demand for ICT professionals on the economy and society. Since knowledge economy cannot function without the availability of skilled manpower, section 4 analyses the quantity and quality of technical, vocational and higher education and the relevance of such education to the labour market and employment opportunities. Any building of skilled manpower has an implication on R&D inputs and outputs both for private and public sector. The chapter concludes with a critical review of national policies to encourage technological advancement. Since the benefits of some of the new technologies like mobile, Internet and biotechnology are not unidirectional; there are some harmful effects too. The paper ends with a discussion on the regulator’s efforts to minimize these harmful effects.

Technology and public service delivery

Technologies, especially, ICTs are powerful tools for stimulating economic growth and social change. However, the access to and quality of information is pivotal to the successful application and use of ICTs by society. ICTs cut across all traditional sectors: health, education, gender, community development and economic

growth. ICTs can help the society in a broad range of activities. They can: a) provide access to improved education and health in remote and/or inaccessible areas through distance learning, telemedicine and interactive training; b) expand and improve services to citizens by providing online access to government/public services; c) enable individuals and commu-nities to make informed choices in the decision making process; and d) reduce business costs while granting access to new markets through e-commerce.5

This section discusses how technology (in the form of organizational and mana-gerial knowledge as well as e-governance) is affecting the management and delivery of public services in the healthcare system, education and public sector administration. Before going into specificity of technology for public service delivery, it needs to be mentioned that with the advent of ICT, the delivery mechanisms have changed. Earlier it was only the state or the government that was primarily the delivery agent. Now, other modes of delivery have appeared requiring public-private parti-cipation or entirely private or educational institute initiatives. Computer-Based Functional Literacy (CBFL) method developed by The Tata Consultancy Services (TCS) and the Telecommunication and Networking (TelNet) group6 at the Indian Institute of Technology (IIT) Madras are examples of private and edu-cation institute initiatives respectively. In terms of use of technology for public service delivery, there are three distinct channels: radio, Internet and now mobile phones. Radio as an information delivery mechanism has several inherent advantages: (a) it is among the cheapest form of mass media leading to a high radio density and accessibility vis-à-vis other mediums prevalent in developing countries; (b) regardless of literacy, or educational level and visual impairment, any individual can receive information within the listening distance of a radio set—this implies that the radio can penetrate remote geographical regions; and (c) rural radio provides region-specific information, incorporates local

ICTs are powerful tools for stimulating economic growth and social change


concerns and feedback and can operate in a local language.7 Radio programmes have been used widely to promote issues and practices in health, to spread literacy, and to support activities such as gender training or drought mitigation programmes. Of late, mobile services are emerging as the new trend in public service delivery, also termed as m-government. This emerging trend is part of a broader phenomenon of mobile-enabled develop-ment or leveraging the mobile revolution to enable development impact. The use of mobile is primarily for those who are unable (or unwilling) to access public services through the Internet or who simply prefer to use mobile devices. This new trend would make the government more accessible and citizen-centric by extending the benefits of remote delivery of government services and information. In theory, many government services can be now made available on a 24 hours a day basis at any place in the world covered by mobile networks. According to an estimate, approximately 50-60 per cent of government services in India can be delivered via mobile channel.8

Mobile technology takes electronic services and makes them available via mobile devices such as mobile phones and Personal Digital Assistants (PDAs), thereby bypassing the need for traditional

physical networks. As more advanced mobile devices become more common, and faster rates of data transfer become possible, more useful and higher value added mobile services will be possible and expected from all levels of governments (especially municipal), in different areas and sectors. According to the ITU, the total number of mobile users worldwide as of late 2006 was about 2.7 billion and the number of Internet users was merely above 1.1 billion. This means that there is at least 23.6 per cent of world population and 22.2 per cent of developing countries’ population who already use mobile phones but do not have access to the Internet. This suggests the possibility of m-opportunity. Figure 2.1 illustrates this ‘m-opportunity’ at the world, developing countries and India’s level. It is estimated that more than 60 per cent of the population in Asia and the Pacific region lives in rural or mountainous areas and the majority of them are poor without access to basic services such as clean water and sanitation, basic healthcare services, primary education and agriculture extension services. In some cases, where these services are available, the quality is questionable. There exist many reasons for this poor dysfunctional delivery service, but they often relate to lack of accountability, transparency and commitment in making services work for poor and marginalized citizens. Inadequate targeting of the poor, supply driven planning, elite capturing of programmes, lack of voice of the poor, their inability to reach the government and service providers and the prevalent corruption9 are among the most common reasons. Thus, a key issue for public services delivery is the design and implementation of a system that holds the service provider accountable for the services rendered. Technology, especially, the application of ICTs and e-governance fill this gap and can hold both policy-makers and service providers accountable for a sustained

Figure 2.1 Internet and mobile penetration in India

Sources: Financial Express 2007; ICube 2007 and ITU 2006.

45

40

35

30

25

20

15

10

5

0

(%)

Internet connectivity Mobile connectivity

Worldwide Developing countries India

41

32.4

17.4

10.2

5.4

13


supply of services. Viewed in this way, e-governance applications through ICTs represent a mechanism for delivering services more directly to poor people with a sufficient scope for them to provide feedback.

India healthcare delivery project: improving access to healthcare10

ICT can improve healthcare delivery to the poor. Telemedicine and PDAs are two such ICTs. Telemedicine can reduce the cost and hardship of commuting long-distance for medical attention and diagnosis. Since the vast majority of health workers in rural India lack research and technological facilities, medical list-serves can deliver the recent medical findings at minimum cost. The backbone to healthcare services to the rural poor is the auxiliary nurse midwives (ANMs), who administer immunization, offer advice on family planning, educate people on mother-child health programmes, and collect data on the rural population’s growth, birth and immunization rates. Since each ANM has to serve 5,000 people, living in hamlets or different villages spaced several kilometres, they usually spend 15-20 days per month in data collection and registration. Handheld computers or PDAs facilitate data collection and transmission, thereby saving nearly 40 per cent of ANMs’ work time. These gains in efficiency multiply the impact and reach of limited resources, thereby expanding access to basic services.11 The freed time is then used to expand access and improve healthcare delivery. The whole procedure works in the following fashion. The PDAs are used to record the information about the health conditions of the village. The information server—the publ ic heal th centre computer—collects this information from the PDAs and develops a database. From the database, the system generates reminders for immunisation, ante- and post-natal care, family planning and various other scheduled programmes. The

schedule so generated helps the ANMs to know which households need to be visited that day. She can find out at a glance which households have persons at-risk who need immediate attention. She receives the latest instructions from the district headquarters, transferred into her system during the regular data exchange with the server at her immediate supervisor’s site, for a particular type of ailment or a new method, either on demand or at a time when it is needed. From the district health centre, the data enters the existing state and national health data systems, through a National Informatics Centre Network.12

Similarly, in the Madurai district of Tamilnadu, 30 telecentres have been created which provide villagers links to doctors from Madurai Medical College. Besides telemedicine, several other web-based services are being provided to the villagers.13

Use of technology in education

Education sectors in many developing countries including India suffer from three major problems: (a) poor accessibility due to infrastructure, geographical, linguistic and socio-economic barriers; (b) poor quality of teachers and infrastructure; (c) low allocation of budget. For instance, against an international norm of 6 per cent, the allotted outlay in India is only 3.5 per cent.14 All these systemic problems result in not only a large number of illiterate population but also inferior quality of education. The data shows that India has nearly 200 million illiterate adult population. Though illiteracy is declining at the rate of about 1.5 per cent per year, it is estimated that using conventional methods of learning from alphabets to words that require 200 hours of instructions, India would need a minimum of 20 years to reach a literacy level of 95 per cent.15 ICT has the potential to remove all these barriers. ICT can be used as a tool to overcome the issues of cost, inadequate number of teachers, and poor quality of education,


as well as can circumvent the problem of time and distance barriers.16

The various kinds of ICT products available and having relevance to education are teleconferencing, e-mail, audio and video conferencing, television (TV) lessons, radio broadcast, interactive radio counselling, audio and video cassettes, and CD ROMs. These have been used in education for various purposes. India is among the few countries in the developing world that is making use of different ICTs like satellite technology, open source software, local language interface, digital libraries and easy to use computer-human interface. Community service centres have been started to promote e-learning throughout the country.17 Table 2.1 gives

some of the important initiatives in spreading education in India that make use of ICTs. Many of the initiatives like CDEEP or NPTEL as enumerated in Table 2.1 have become possible because of successful launch of an exclusive satellite for educational services, EDUSAT, by the ISRO on 20 September 2004. As regards what is mentioned above, that in the traditional mode a minimum of 200 hours of instructions is needed to make a person functionally literate, F.C. Kohli and his team at TCS have developed the CBFL method in 2001, which has reduced this to nearly 50 hours (box 2.1).

Table 2.1 Important initiatives in education in India: employing ICTsInitiative Commenced Technologies used Remarks

Indira Gandhi National Open University (IGNOU)18

From 1992 onwards

Radio, TV, Internet and satellite

Various initiatives making use of ICT

National Programme on Technology Enhanced Learning (NPTEL), funded by Ministry of Human Resources and Development

3 September 2006

Internet and TV Concept similar to open courseware initiative of Massachusetts Institute of Technology and caters to all Engineering students.

Eklavya Initiative January 2003 Internet and TV Joint initiative between IITs and IGNOU to promote distance learning. Channel dedicated to technical education and runs programmes generated at different IITs. In 2007, 25 programmes were transmitted.

Brihaspati, IIT Kanpur (supported by Ministry of Communication and Technology)

January 2003 Open source e-learning platform

a) Posting of lecture notes, handouts and reference materials to support classroom teaching. b) already deployed at over 75 universities/colleges.

E-learning network of Amrita Vishwa Vidyapeetham (AVV)

May 2004 Real time interactive satellite technology

Jointly run by Amrita University and Indian Space Research Organization (ISRO), the initiative uses satellite technology to seamlessly connect four AVV campuses at Amritapuri, Bangalore, Coimbatore and Kochi.

Centre for Distance Engineering Education Programme (CDEEP), IIT Bombay

January 2008 Real time interactive satellite technology (student interactive terminal, liquid-crystal display (LCD) projector, personal computer (PC), microphone)

Transmitting of nearly 50 IIT Bombay courses.

University Grants Commission (UGC)-Infonet

January 2004 Internet Electronic access to scholarly literature in all areas for university sector.

Gyan Darshan January 2000 TV Exclusive higher education TV channel.


E-governance

E-governance has been playing a pivotal role in re-engineering and re-designing organizations by integrating ICTs within the existing administrative and manage-ment systems.19 The ultimate aim of e-governance is to improve citizens’ access to government information and services. Apart from technology, a number of other enabling conditions are required for the success of e-governance. These include: commitment from the political leaders (political conditions); changes in institutional arrangements (organizational conditions); attitude, requisite knowledge and skills (human resource conditions); high initial upfront costs (financial conditions); understanding by al l stake holders (communication environ-ment); and lastly, data and information system.20

There are several examples of e-governance that have enhanced access to information and have improved public service delivery for the poor people.21 Some of these include: Akshaya in Kerala, Bhoomi in Karnataka, e-Seva in AP and Lokvani in UP. Since the success of any e-governance programme is judged by the t ransparency, accountabi l i ty, responsiveness, reduction in time and costs that collectively impacts the lives of the stakeholders, some of the schemes initiated are examined through these indicators.

Bhoomi22

For nearly two-third of India’s population that depends on agriculture, land or Bhoomi is the primary asset. The ownership rights of farmers on the land depend on the land records maintained by the Revenue Department. The farmer being mostly illiterate would be clueless if there were any tampering with the document. This concern resulted in thinking by the government at various levels to provide better management of land records with the help of information technology (IT).23 Thus, computerisation

of land records, widely known as Bhoomi is implemented by the Department of Public Administration and Revenue (DPAR), government of Karnataka with the state unit of National Informatics Centre (NIC) as the technical provider in the year 1999. In Karnataka, there are 17 million land record documents covering 20 million farmers living in 29,000 villages.24 The land record document has valuable information including ownership, tenancy, cultivation, irrigation, tree, liabilities, crop and soil details, apart from the details of government lands. This is known as the Record of Right Tenancy and Cultivation (RTC). Earlier these records were maintained by 9,000 village accountants. Under the Bhoomi project, DPAR makes available a computerized RTC to all landowners at a kiosk in the taluka office on payment of INR15 per RTC. As mentioned, a number of indicators can be used to gauge the performance of

The CBFL method focuses on reading ability and is based on theories of cognition, language and communi-cation. In this method, scripted graphic patterns, icons and images are recognized through a combination of auditory, and visual experiences using computers. The method emphasizes learning words instead of alphabetical letters. While the focus is on reading, it also sparks the desire to learn to write. The method thus, by using IT and computer, aims to build reading capability. The experiment was first conducted in Medak, a village near Hyderabad, Andhra Pradesh (AP). Without a trained teacher, the women of the village were able to read newspapers in 8-10 weeks. Learning from the success of the experiment, the team carried out additional experiments in six other states. Between 2002 and 2004, 40,000 adults from these states were made literate. As of now, over

90,000 people have been made literate with the programme, which is active across 1,400 centres in the states of AP, Uttar Pradesh (UP), Tamil Nadu, Maharashtra, and Madhya Pradesh. The team developed these lessons to run on Intel 486s and early versions of Pentium PCs that were modified to display multimedia. Estimates exist that there are nearly 200 million such PCs, which have been discarded as obsolete. By using these PCs, the cost of making one person literate would be less than INR100 (@US$2.4). Using the CBFL method, literacy can be increased to 90-95 per cent within 3-5 years, provided there is a national literacy mission using the method. The technology is already in use in many countries, including Fiji, Yemen, Nigeria, and Tunisia, to name a few, and it has been licensed to manufacturers in India, Brazil, China, South Africa, and France.

Box 2.1 The CBFL method in India

Sources: Mashelkar 2008 and Nasscom-Deolitte 2008.


e-governance. Table 2.2 gives the performance of Bhoomi in terms of transparency, accountability and time taken for services as found out in a survey.25

From table 2.2, one can infer that the project has high transparency and accountability. Land registration is a cumbersome process in India that requires field survey, documentation, preparation of sketches and issuance of RTC. Earlier, the whole process used to take not less than 180 days, which after the imple-mentation of Bhoomi has come down to 35 days. In the manual system, the timeframe taken for registration was anywhere between a week to a month. In the Bhoomi system, it takes less than 10 minutes to register lands and not more than 30 minutes for cross-verification (table 2.2). Apart from the time saving, Bhoomi has had a significant impact on people in terms of cost savings in concluding a deal. In the manual system, people used to incur expenditure from INR100 to INR500 apart from the registration fee. This cost has come down to less than INR15 as over 85 per cent of the users said that they are now spending

only INR15 for their work, whereas remaining 15 per cent have put the cost at INR25, thereby reflecting a cost saving of 75 to 95 per cent. The use of IT has changed the way the revenue administration functions at the grassroots level, the ultimate beneficiaries being the farmers who have a relatively high satisfaction level (now approximately 73 per cent).26 The huge success of Bhoomi has inspired other states like Haryana and Himachal Pradesh to computerize the land records. In fact, the Department of Land Reforms of the central government is planning to launch a Comprehensive Modernization of Land Records system for Indian farmers.

E-Seva

E-Seva (electronic services) project was initially launched as a pilot project in the twin cities of Hyderabad and Secunderabad in December 1999 by the AP government. It now runs across the state. The project offers a wide spectrum of citizen-friendly services to save citizens the trouble of running from one department to another. Starting with 10 centres in 2001 and a portal (http://www.esevaonline.com), the project now has 210 centres spread across the state. It provides a one-stop venue for 55 services such as payment of utility bills—electricity, telephone and water, property, commercial and income taxes, registration and transfer of ownership of vehicles, registration and issue of birth certificates, filing of passport applications, registration of documents (and stamps), sale of bus tickets, and collection of small savings.27

A study28 has evaluated the performance of e-Seva using a survey of 252 users in the twin cities and in nine other districts. Table 2.3 gives the performance of e-Seva in terms of transparency, accountability and time taken for services as found out in the survey. From table 2.3, one can infer that the project has not only high transparency and accountability, but also responsiveness. More than 90 per cent of respondents said

Table 2.2 Performance evaluation of Bhoomi (an e-governance project of Karnataka) in India

Transparency Accountability Time taken for services

Yes 227 (96.2) 218 (92.4) Within 10 minutes

178 (75.4)

No 9 (3.8) 18 (7.6) Within 30 minutes

58 (24.6)

Notes: *A survey of 236 farmers (88 per cent male), who used Bhoomi, was carried out in 10 districts of Karnataka; **: Figures in parenthesis are the percentage of the total.

Source: Paradhasardhi and Ahmed 2007.

Table 2.3 Performance evaluation of e-Seva (an e-governance project of AP government) in India

Transparency Accountability Responsiveness Time taken for Services

Yes 236 (93.7) 219 (87.0) 228 (90.5) Within 10 minutes

244 (96.8)

No 16 (6.3) 18 (13.0) 24 (9.5) Within 30 minutes

8 (3.2)

Notes: *: A survey of 252 users (73 per cent male) was carried out in Hyderabad, Secunderabad and 9 other districts of AP; **: Figures in parenthesis are the percentage of the total.

Source: Paradhasardhi and Ahmed 2007.


that the project is receptive towards their suggestions and needs—in terms of scaling up service delivery and adding new basic services. Two other key indicators of the e-Seva project are reduction in the time and cost of securing service. Earlier, people used to spend half to full day and at a cost of INR50 to INR100 to secure a govern-ment service. This has reduced to merely 10 minutes with nearly 85 per cent spending INR15 only and the remaining 15 per cent spending only INR25. Thus, use of IT has changed the way services can be delivered to the public. The project seems to have rejuvenated the most crucial task of the governance with a high level of transparency, efficiency and speedy delivery of services at reasonable cost and integration across departments. This is well-supported by a relatively high satisfaction level as found in the survey (over 79 per cent highly satisfied). To some, e-Seva is the most successful among all e-governance projects in India that have reached people with essential services of the government, municipality and also utility companies, all under one roof.29

Lokvani

Lokvani is a public-private partnership (PPP) programme by the District Administration of Sitapur in UP and the NIC of government of India (GOI) that has attempted to empower citizens and local government. Lokvani serves 3.6 million citizens of Sitapur, out of which 88 per cent live in rural areas and only 38 per cent are literate. The programme, which was initiated in November 2004, provides online public services, besides acting as a channel to influence local decision-making by submitting grievances and petitions. The online services offered are submission of grievances; single window services of birth, death, caste, income and domicile certificate; tendering service; and status of arm license applications among others.30 The service allows citizens to submit their petition online or by mobile phone. These petitions or grievances are then forwarded to the respective local

government officer. The programme serves two important purposes: a) without physically going to the government offices, citizens can now avail several government services at different levels—local, block and town levels, from existing cyber cafes; b) acts as an effective tool to monitor the performance of various governments. To make the government officers more responsive to people in disposing of the complaints, a colour scheme exists comprising of four different colours. In the scheme, all disposed-off complaints are shown in green, complaints that are overdue or pending are shown in red, complaints that are to become red in next four days are shown in yellow and the complaints having time for resolution are shown in white. Learning from the success of Lokvani, the UP government mandated all districts to replicate it.31

Different examples indicate that technology has played a decisive role in the success of e-governance or in health or education delivery systems. Setting up of IT infrastructure, drafting appropriate cyber laws for protecting data integrity, and enhancing the performance of back-end systems are possible only with technology only. It is to be noted that open source software have been used for several of these e-governance projects. Generation of software applications for e-projects from open source not only gives greater flexibility to the governments at the state level, but also generates lot of employment opportunities for local communities. It is to be noted that ICTs and e-governance do not result in wonders that can turn bad governance into good governance.32 ICTs are necessary but not sufficient to ensure good governance. If ICTs are to result in successful e-governance, several enabling conditions have to be addressed first. These include: pro-poor policies, decentralized decision making, and education and basic infrastructure.33 In the absence of these factors which create an enabling environment, use of ICTs will probably lead to sub-optimal outcomes.

Technology has played a decisive role inthe success of e-governance or in health or education delivery systems


Technology and economic development

Technological advancement is considered one of the vital factors in achieving a high level of economic growth. The endogenous growth models consider generation of new knowledge through investment in R&D as the major source of technical progress and hence growth.34 In the case of newly industrialised economies, technology was found to be an important catalyst in fostering their spectacular growth.35 Developing countries like India have been striving hard to promote technological advancement through indigenous R&D efforts as well as through technology imports.36

This section examines the role of technology in economic development in the following key areas: agricultural productivity; industry and trade parti-cularly manufacturing and the share of high-technology exports in total exports); the services sector (in particular the ICT boom being experienced) and, lastly, the globalization (in particular the role of MNCs in the creation and dissemination of knowledge and production tech-niques).

Agricultural productivity

Technology can enhance the agriculture productivity through four different channels: (a) public research; (b) inter-national agricultural research centres; (c) international technology transfers; and (d) private research investment. In the Indian case, the increase in productivity has been governed by all these four avenues. Despite increase in population by 424 million people between 1963 and 1993, there was a complete turnaround in food production from severe food crises in the early 1960s to food surpluses in the 1990s. It has been argued that much of this growth was the result of the new technology that was disseminated throughout India during the Green Revolution.37

A study38 using production data for 1956-57 to 1987-88 in 271 districts of India in 13 states on five major foodgrains—pearl millet, sorghum, maize, rice, and wheat; and 14 minor crops39 found that gains in agricultural productivity were highest during the early period of the Green Revolution (1966-76) and highest in wheat and rice producing regions, though the productivity increased in every district in India. The study also found that during the maturity phase of the Green Revolution (1977-87), research continued to have a substantial impact on total factor productivity (TFP). The share of growth from high-yielding varieties (HYVs), however, declined in the mature period primarily because HYVs were included in the public research expenditure variable as farmers switched from internationally developed varieties to those developed through Indian research. Imported technology and private research often complement each other. For example, if research is needed to adapt foreign technology to local conditions, private research is likely to fill the gap. In agriculture, the private sector usually concentrates on this gap manage-ment and processing technologies, on the other hand, public research laboratories like the Indian Council of Agricultural Research and the state universities work on plant breeding. Although the returns from private research are often thought to accrue only to the private sector, private R&D in the farm machinery and farm chemical industries has contributed significantly to the agriculture TFP during the period. Internal rates of return to private research are more than 30 per cent as given in figure 2.2. As Indian research is slowly shifting with a greater emphasis on biotechnology, the private sector and foreign suppliers of technology are assuming larger roles in research than in the past.

Technological advancement is considered as one of the vital factors in achieving a high level of economic growth


Industry and trade

The two indicators reflecting the role of technology in the manufacturing sector are the share of high-tech goods (comprises of chemicals, machinery and equipment and transport equipment) in the total output of the country, and the share of high-tech exports in the total exports from the country. In the index for total manufacturing, high-tech manufacturing has a weight of 35 per cent. Figure 2.3 gives the trend in index of total manufacturing production and that of high-tech production over the past 12 years. From figure 2.3, one can see that growth in high-tech production is much higher than that of total manufacturing output over the period.40 With respect to the share of high-tech goods in total exports from the country, as given in Figure 2.4, the share has risen from nearly 16 per cent in 1996–97 to nearly 20 per cent in 2006–07. In fact, for the 11-year period, the average annual growth rate (AAGR)41 of high-tech exports is higher than that of the total exports from India (16.6 per cent vis-à-vis 14.2 per cent).

Services sector

In the last two decades, the IT and IT-enabled services (IT/ITES) industry has contributed significantly to the growth of Indian economy in terms of gross domestic product (GDP), foreign exchange earnings, and employment generation. The contribution of IT/ITES to the country’s GDP has increased steadily from

Figure 2.2 Marginal internal rate of return to agriculture research by type of investment in India, 1956–87

Source: Evanson et al. 1999.

60%

50%

40%

30%

20%

10%

0% Extension Public research Imported HYVs Private R&D

Figure 2.3 Trends in index (1993–94 = 100) of total and high-tech manufacturing production in India, 1994–2007

Source: GOI, National Accounts Statistics (various issues).

350

300

250

200

150

100

Index of industrial production (IIP) of total manufacturing

Index of industrial production (IIP) of high-tech industries

1994

-9519

95-96

1996

-9719

97-98

1998

-9919

99-00

2000

-0120

01-02

2002

-0320

03-04

2004

-0520

05-06

2006

-07


1.2 per cent in 1998 to 5.2 per cent in 2007 (figure 2.5). The industry has significantly contributed to the foreign exchange reserve of the country. Against US$1.8 billion exports in 1998, the figure has swelled to nearly US$40 billion indicating an AAGR of 36.4 per cent. With respect to employment generation, the data shows that direct employment in the IT/ITES sector is expected to touch the two million mark by the end of financial year 2008, making it the largest employer in organized private sector in the country,42 whereas indirect employment generation comprising catering, transport and housekeeping, and security etc. is estimated to be nearly 6.5 million.43 (See figure 2.6) It has been acknowledged that the growth of IT/ITES has a considerable impact on the output in the economy. Estimates suggest that every INR1 spent by the IT/ITES sector, (on domestically sourced goods and services), results in a total output of INR2 in the economy.44 This multiplier effect is primarily driven by derived demand from two channels: (a) firm-level spending (capital expenditure as well as operating expenses); and (b) high level of consumption spending by professionals employed in the sector. Table 2.4 gives the multiplier effect of IT/ITES industry on other sectors of economy for the year 2005–06.

Globalization—role of MNCs

Of late, many countries have acknowledged foreign direct investment (FDI) as the main channel of technology transfer. It is based on the realization that FDI brings superior technology that is previously unavailable in the host country. The presence of foreign firms can also create positive externalities in the form of spillover effects to the domestic firms.45 FDI often brings in new technology, improved managerial practices, efficient processes and better products; all these in turn facilitate improvement in the competi-tiveness of the industries.46

Figure 2.4 High-tech goods exports in India, 1996–2007

Source: GOI, Statistics of Foreign Trade of India (various issues).

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0

1996

-9719

97-98

1998

-9919

99-00

2000

-0120

01-02

2002

-0320

03-04

2004

-0520

05-06

2006

-07

High-tech goods exports (billion)High-tech exports/total exports (%)

Total exports (billion)

25

20

15

10

5

0

US$

bill

ion

(%)

Figure 2.5 Trends in contributions of IT/ITES to GDP in India, 1997–2007

Note: Figures for the year 2007-08 are estimated.Source: Nasscom-Deolitte 2008.

5.5

5

4.5

4

3.5

3

2.5

2

1.5

1

1997

-9819

98-99

1999

-0020

00-01

2001

-0220

02-03

2003

-0420

04-05

2005

-0620

06-07

(%)

1.2 1.41.8

0.62.8

3.2

3.6

4.1

4.7

5.2

Figure 2.6 Trends in exports earnings and direct employment generation in India, 1997–2007

Note: Figures for the year 2007-08 are estimated.Source: Nasscom-Deolitte 2008.

45

40

35

30

25

20

15

10

5

0

1997

-9819

98-99

1999

-0020

00-01

2001

-0220

02-03

2003

-0420

04-05

2005

-0620

06-07

US$

bill

ion

2007

-08

2.5

2

1.5

1

0.5

0

Export earnings (billion) Direct employment generation (million)

US$

mill

ion


Among other roles of MNCs, spending on R&D is one of the crucial roles. At the global level, MNCs expenditure on R&D is very high. However, in India the bulk of R&D spending is by the government. Of the total 1,400,000 million spent on R&D during 1995 to 2005,47 the share of government is nearly 80 per cent. The MNCs have spent nearly INR60,000 million (≈ US$1.5 billion)48 between 1998 and 2003. However, the MNCs spend the money more judiciously and efficiently resulting in generating more patents per unit of rupee spent. Out of the top 50 patents during 1995 to 2005, 44 were from MNCs, and four from government laboratories and two from private Indian industry. A conservative calculation comparing the patent generation efficiency for these three categories for these 50 patents indicates that a government laboratory patent costs 100 times more and a private Indian industry patent costs 40 times more than that of a top 50 MNCs patent.49

FDI also influences R&D activity undertaken in an economy. There are views50 that technology import comple-ments in-house R&D efforts, whereas an opposite view51 proposes that technology import reduces the need for developing

countries’ enterprise to undertake their own R&D efforts. Since the production processes, factor intensities and raw materials available in the host country are not the same as those in the developed countries from where FDI originates,52 the foreign technologies may not suit local conditions.53 Hence, some amount of adaptive R&D has to be undertaken to modify such technologies to suit local conditions. Since foreign firms have access to the technology of their parent firms, the only way a domestic firm can compete is by acquiring similar technology. This it can achieve either by investing in its own R&D or buying technology from foreign firms to compete with MNC affiliates. Given budget constraints, usually one of the two is undertaken and R&D becomes the less favoured option as it involves uncertainty, risk and a gestation lag.54 Thus, firms often opt for purchase of technology from abroad. As a consequence of this shift in demand of technological activities, FDI may substitute domestic R&D efforts. In India in the post-1991 period, a large number of MNC subsidiaries have set up operations in R&D intensive industries like electrical, electronics,

Table 2.4 Multiplier effect of IT/ITES industry on other sectors in India, 2005-06Sector Spending by IT sector

(US$ billion)Output impact (US$

billion)Output multiplier

Other Services 5.45 10.48 1.9Construction / Housing 3.15 6.18 2.0Transport Services 1.28 2.77 2.2Furnishing / Clothing 0.73 1.59 2.2Communication 1.0 1.59 1.6Food Items 0.56 1.38 2.5Entertainment/Travel 0.63 1.3 2.0Consumer Durables 0.43 1.12 2.6Health / Insurance 0.58 1.01 1.7Fuel and Power 0.42 0.95 2.3Hotels/Restaurants 0.45 0.95 2.1Education/Research 0.62 0.76 1.2Automobiles 0.27 0.66 2.5IT Infrastructure 0.2 0.43 2.1Printing/Publishing 0.09 0.19 2.2Total 15.83 31.34 2.0

Source: Nasscom-Deolite 2008.


pharmaceuticals. Having access to the centralized research laboratories of their parent firms, these subsidiaries may not be carrying out the bulk of the R&D. Any R&D expenditure would be primarily to adapt products to the local market, which may not be very high. Lastly, the data shows that a significant proportion of FDI in recent times has taken place through the merger and acquisition (M&A) route. For example, a study55 found that of the total FDI approved during 1996–99, 40 per cent came in the form of M&A. This suggests that it may not be very profitable for the remaining firms competing with large foreign firms in a single product space to invest in

R&D, given their reduced market shares. Thus, indigenous development of technology may have contracted after the 1991 reforms. This is very much reflected in Figure 2.7, which gives the FDI inflow and R&D intensity of India since 1991.

Information and communications technology

The World Development Report 2000–0156 has identified three key areas for reducing poverty. These are: increasing opportunity, enhancing empowerment and improving security.57 The use of ICTs58 can carry out all these three functions. As discussed in the first section, the use of ICT application can augment poor people’s opportunities by improving their access to markets, health and education. ICT can empower the poor by their increased use of government services, and lastly reduces risks by widening access to microfinance.59 Thus, diffusion and spread of ICTs has specific relevance for countries like India. ICTs are especially useful for small entrepreneurs, farmers and artisans espe-cially in rural areas. This is because these people lack access to information about prices, availability of raw materials, data on crops, weather conditions, credit faci-lities and market opportunities. ICT can circumvent these information asymmetries and stimulate poor people’s entrepreneur-ship by better connecting them to markets.60 Box 2.2 illustrates this in the case of computerized milk collection centres in Gujarat.

State of India’s ICT

The three main indicators reflecting the growth of ICT in a country are per capita PCs, use of Internet, and mobile ownership. Figure 2.8 gives the growth of Internet use and PCs per 100 inhabitants in India since 1988. From figure 2.8 one can see that both are showing a sharp increase in the last 10 years with Internet users having much higher growth. Figure 2.9 gives the penetration of PCs and Internet since

Figure 2.7 Trends in FDI inflow and R&D intensity in India, 1990–2005

Sources: GOI, SIA Statistics (various issues) and GOI 2002b and 2006b.

250

200

150

100

50

0

1990

-91

(%)

1991

-9219

92-93

1993

-9419

94-95

1995

-9619

96-97

1997

-9819

98-99

1999

-0020

00-01

2001

-0220

02-03

2003

-0420

04-05

FDI inflow (billion) R&D/GDP (%)

1.000.900.800.700.600.500.400.300.200.100.00

Year

INR

bill

ion

In Gujarat, computerized milk collec-tion centres equipped with integrated electronics weights, electronic fat test-ing machines and plastic card readers are ensuring fair prices for farmers who sell milk to dairy cooperatives. Traditionally the fat content in milk was calculated through a cumbersome measurement process hours after the milk was received. Although farmers delivered milk on a daily basis, the

payment used to be made every ten days and the farmers were to trust the cooperative staff ’s calculations of the quantity and quality of the milk. Farmers often alleged underpayment and malfeasance, though these allegations were difficult to prove. Computerized milk collection centres have increased transparency, led to faster processing, shorter queues and immediate payment to farmers.

Box 2.2 Computerized milk collection centres in Gujarat, India

Sources: Bhatnagar 2000 and Cecchini and Scott 2003.


2000. The gap which was nearly 11 million in 2000 rose to 37 million in 2004, and thereafter decreased to 19 million in 2007. With respect to the mobile subscriber base, the data shows that starting with 13 million base in March 2003, the base increased to nearly 185 million by June 2007 reflecting over 90 per cent AAGR in the last five years.61

A relevant indicator from the digital divide point of view is how quickly the use of Internet is spreading to the smaller towns and cities. Figure 2.10 gives the Internet penetration in India across regions for the period 2000 to 2007. It can be seen from figure 2.10 that smaller and non-metro towns are catching up with Internet penetration, as their share has raised from 10 per cent in 2000 to 41 per cent in 2007. The exact penetration in terms of numbers is given in Figure 2.11. From figure 2.11, it is clear that Internet penetration growth of smaller towns and smaller metros is much higher than that of the top eight cities. Against an AAGR of 24.13 per cent for the top eight metros, it is 47 per cent for other metros, 61 per cent for towns with population 0.5-1 million and 72 per cent for towns having population 0.2-0.5 million. As mentioned, the higher AAGR has implication for digital divide in the future.

Figure 2.8 Trends in Internet use and personal computers per 100 inhabitants in India, 1998–2007

Source: ITU 2007.

7

6

5

4

3

2

1

0

1988

2007

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Per

100

inha

bita

nts

Internet users Personal computers

Figure 2.9 Personal computers and Internet penetration in India, 2000–07

Source: ICube 2007.

70

60

50

40

30

20

10

0

Mill

ion

2000 2001 2003 2004 2006 2007

PC literacy Internet penetration

15.8

5

30.8

9

42.2

12

52.9

16

59

32

65

46

Figure 2.10 Internet penetration by region in India, 2000–07

Source: ICube 2007.

100

90

80

70

60

50

40

30

20

10

0

(%)

2000 2001 2003 2004 2006 2007

Top 8 metros Other metros0.5-1million population cities 0.2-0.5 million population cities

620 20 19 29 294

7 7 6

10 12

13

15 19 20

20 21

77 58 55 55 41 38


All the above indicators reflect a phenomenal increase in the use and penetration of ICT in India. However, these measures are partial in nature, as they look into one or few aspects of ICTization. Info-state is a more compre-hensive measure, which quantifies the state of ICT use and penetration. Since ICTs have a dual nature, i.e. they are used both as productive assets and consumables, ‘info-state’ includes both the stock of existing ICTs (labour and capital) and the consumption flow of ICTs. The former is

termed as ‘info-density’ and the latter is called as ‘info-use’. A country’s ICTization or ‘info-state’ is the geometric aggregation of the two given by (info-density x info-use).1,2 Table 2.5 indicates that starting with a value of 7.07 in 1985 and an AAGR of 18 per cent, the ICTization in India reached a figure of 37.99. Though these figures are impressive, they are insignificant vis-à-vis China as indicated in table 2.5.

Implication of increase in demand of ICT professionals

India has carved its place as leader in providing IT outsourcing services with an increasing supply of English speaking, technologically-educated, and low cost workers.62 These advantages are being reinforced with a rapidly improving telecommunication infrastructure leading to wider diffusion of ICTs. These factors along with an early adoption of international software quality standards ensure that India will continue to be software service provider in the years to come.63 This is very well-substantiated with increase in revenue and exports in the last five years, which have shown an AAGR of over 31 per cent (table 2.6). A high degree of providing outsourcing services also has implication for India.

Figure 2.11 Category-wise Internet penetration in India, 1999–2008

Source: ICube 2007.

18

16

14

12

10

8

6

4

2

0

Mill

ion

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

0.2-0.5 million population citiesOther metros

0.5-1 million population citiesTop 8 metros

Table 2.5 Trend in info-state in India and China, 1995–2005Country 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 AAGR (%)

India 7.07 9.55 11.88 14.42 17.65 21.82 27.19 30.95 33.74 35.78 37.99 18

China 9.55 13.35 17.67 24.11 34.78 43.39 52.78 64.43 73.44 77.30 80.16 24

Source: Oh and Kathuria 2008.

Table 2.6 Trend in revenue generation (US$ billion) of IT industry in India, 2004–082004 2005 2006 2007 2008* GR

Total software and services revenue 16.7 22.5 30.3 39.5 52 32.84Export component 12.9 (77.2) 17.7 (78.7) 23.6 (77.9) 31.3 (79.2) 40.3 (77.5) 32.95Total IT industry (including hardware) 21.6 28.2 37.4 48 64 31.20Export component 13 (60.2) 18.2 (64.5) 24.2 (64.7) 31.8 (66.3) 40.8 (63.8) 33.10

Notes: *: For year 2008, figures are estimates; **: Figures in parenthesis are percentage of the total in that category.

Source: NASSCOM 2008.


Given the fact that the US accounts for about 61 per cent of the Indian software and outsourcing market, any slow-down of the US economy would affect India’s IT/ITES. To hedge against this, the industry is steadily increasing its exposure to other geographical areas. Apart from UK which forms 18 per cent of IT-ITES exports, Europe has witnessed an AAGR of over 55 per cent in the last three years.64

Another implication for India’s growing IT/ITES sector vis-à-vis increased demand for IT professionals worldwide would be increased mismatch between demand and supply. The number of IT/ITES pro-fessionals employed in India has grown from less than 200,000 people in 1998 to over 1.6 million in 2007. At current levels of employability, India has the largest pool of required offshore talent, accounting for 28 per cent of the total suitable pool available across all offshore destinations. There are estimates that India would be needing 2.3 million professionals by 2010, this would leave a supply gap of 0.5 million skilled knowledge workers. The gap would widen up if other outsourcing destinations like China, Malaysia, the Czech Republic and Singapore grow and attract Indian ICT professionals.65

The state of technical, vocational and higher education

The section analyses the quantity and quality of technical, vocational and higher education and the relevance of such

education to labour market and employment opportunities. Specifically, the section examines the enrolment levels; the quality of teachers and curricula; R&D expenditures; researchers and technicians in R&D; articles in scientific/technical journals and patents; and private versus public effort in R&D.

Enrolment levels and quality of teachers and curricula

Table 2.7 gives the enrolment levels in higher education for some selected years since 1985–86. It is heartening to note that the share of S&T disciplines which was around 29 per cent for most of the period from 1985–86 till 1999–2000 has increased to 31.5 per cent in 2003–04. In fact, it is the enrolment in Engineering/Technology discipline that has increased drastically in these years. The AAGR for the category is the highest among all the categories. Regarding the quality of teachers in different educational institutes, there is a lot of divergence. Several National Assess-ment and Accreditation Committee reports have pointed out the inadequacy of infrastructure, lack of funds to meet recurring expenditure on laboratories and libraries, and unfilled teacher-vacancies are the main reasons for the low quality of higher education.66

With the growth of autonomous colleges and involvement of college teachers in the board of studies in universities, the teachers are now playing

Table 2.7 Enrolment in higher education in India 1985–2004Course of study 1985-86 1991-92 1996-97 1999-00 2003-04 AAGR

Science 700,991 [19.4] 1,033,614 [19.6] 1,341,149 [19.6] 1,537,666 [19.1] 2,035,059 [20.4] 6.1Engineering/Technology 176,540 [4.9] 258,028 [4.9] 335,287 [4.9] 402,530 [5.0] 716,652 [7.2] 8.1Science and Engineering/Technology

877,531 [24.3] 1,291,642 [24.5] 1,676,436 [24.5] 1,940,196 [24.1] 2,751,711 [27.6] 6.6

Category A 1,051,975 [29.2] 1,542,905 [29.3] 2,004,881 [29.3] 2,334,676 [29.0] 3,138,758 [31.5] 6.3Category B 2,553,054 [70.8] 3,722,981 [70.7] 4,837,717 [70.7] 5,715,931 [71.0] 6,814,748 [68.5] 5.6Total (A+B) 3,605,029 5,265,886 6,842,598 8,050,607 9,953,506 5.8

Notes: *: Figures in brackets are percentage of the total; **: Category A consists of Science, Engineering/Technology, Medicine, Agriculture and Veterinary Science. Category B comprises Arts (including oriental language), Commerce, Law, Education and Others.

Sources: GOI 2002b and 2006b.


a vital role in curriculum development. This implies that the quality of education can be improved if we ensure teacher efficiency and accountability. A low student-teacher ratio is an indication of quality of teaching. However, the accountability will be better reflected if the ratio of different categories of teachers is as per the norms. Table 2.8 gives the

composition of teaching staff in higher education sector for 1998–99 and 2003–04 respectively.

R&D expenditure

Figure 2.12 gives the trend in R&D expenditure at constant prices and the ratio of R&D expenditure to GDP. Though in absolute terms the R&D expenditure has shown an increasing trend with an AAGR of over 7 per cent over a 23-year period, the R&D expenditure as a percentage of GDP has hovered around 0.8 per cent during 1990s. The AAGR for the last 13 years is however even less, i.e. around 5.8 per cent since the year 1991, when India initiated its liberalization process. A low R&D to GDP ratio is a cause for concern for the growth and catch up, as it is much below the international recognized norm of two per cent.

Researchers and technicians in R&D

The Department of Science and Tech-nology (DST) has been collecting information on the personnel employed in the R&D institutions and in-house

Table 2.8 Teaching staff composition in higher education sector in India, 1998–2004

1998-99 2003-04

Professors 18,143 [5.17]

39,745 [8.7]*

Readers/Senior lectures

141,079 [40.23]

181,615 [39.8]

Lecturers 185,594 [52.93]

218,713 [47.9]

Tutors / Demonstrators

5,848 [1.62]

16,669 [3.6]

1:2:3 1: 7.8: 10.2 1: 4.6: 5.5

Total 350,664 456,742

Notes: *: The figures are for both the categories—university departments / colleges and for affiliated colleges. For affiliate colleges, principals and senior teachers are considered equal to professors; **: Figures in parenthesis are the percentage of the total.


Figure 2.12 Trends in R&D expenditure (at 1993–94 prices) and R&D to GDP ratio in India, 1980–2004


12,000

10,000

8,000

6,000

4,000

2,000

0

INR

cro

re

1980

-8119

82-83

1984

-8519

86-87

1988

-8919

90-91

1992

-9319

94-95

1996

-9719

98-99

2000

-0120

02-03

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0.0

(%)

R&D expenditure (INR crore) R&D/GDP (%)


R&D units of public and private sectors since 1973. The personnel employed in R&D units are either engaged in R&D work or extend technical support for R&D (termed as auxiliary personnel) or provide administrative support for research activities. This implies that the first two categories are mostly S&T qualified with the former as the main researchers and the latter as the technicians. Figure 2.13 gives the distribution of personnel in R&D activities for 1998 and 2000. From figure 2.13, one learns that researchers and technicians form over 60 per cent of the total workforce in different R&D labs and their share has not changed much over the period. Employer-wise details as given in Table 2.9 indicate that in the industrial sector, R&D personnel form half of the employees, whereas in the institutional sector, it is the administrative staff that fills the most of the posts. The distribution is nearly the same for both the years respectively. Interestingly, the focus in the industrial

sector is on having more researchers and less of the other two categories, whereas in institutions most posts are filled with administrative staff. This however, has implications for patents generated and products commercialized etc. (See section on globalization).

Articles in scientific/technical journals and patents

The achievement made in basic S&T by a country is measured internationally in terms of research papers published. As per the Science Citation Index (SCI), the number of papers published by India has increased steadily since 1990. Table 2.10 gives the number of papers published for some selected years. In 1990, India published 10,103 papers which increased to 19,448 in 2005. Incidentally the figure for the whole of 1980s and 1990s is below what India produced in 1980 itself. It is to be noted that the performance of India is quite poor vis-à-vis its competitors. For example, South Korea, which had just 136 articles in 1980, published 27,397 research papers in 2005. Brazil has also moved from 1,638 to 17,086 and Taiwan from 434 to 16,503.67

In terms of share in the total world research output, it has increased from 1.56 per cent in 1995 to 1.92 per cent in

Figure 2.13 Researchers and technicians in R&D activities in India, 1998–2000

Sources: GOI 1999, 2002b and 2006b.

199836.4% 30.9%

32.6%

R&D personnelAuxiliary activityAdministration

200037.9% 31.7%

30.4%

R&D personnelAuxiliary activityAdministration

Table 2.9 Percentage distribution of personnel by type of employer in India, 1998–2000

1998 2000

Institutional Industrial Institutional Industrial

R&D personnel 25 50 24 65Auxiliary activity 33 31 33 19Administration 42 19 43 16Total 100 100 100 100


Table 2.10 Number of papers published by India as seen from SCI, 1980–2005

1980 1985 1990 1995 2000 2005 AAGR

Total papers in SCI

14,983 11,222 10,103 11,084 12,127 19,448 …

AAGR … -5.6 -2.1 1.9 1.8 9.9 1.0

Source: Satyanarayana and Jain 2004.


2005. In 2005, US ranked 1st, China 5th, India 14th while Brazil and Pakistan ranked 16th and 19th respectively in terms of the number of scientific papers published.68

A nation’s scientific prowess however cannot be solely judged by the quantity of research papers. The quality of research papers, the quality of its education, particularly the enrolment in science, the extent of Internet and computer spread, the number of patents filed, the level of technology absorption by firms, are some of the other factors that also reflect its scientific prowess. In terms of quality of publications, two indicators are commonly used: publication in prestigious journals and the impact factor. In 1995, Indians published five articles in the prestigious Journal of American Chemical Society (JACS) against just 2 for China, it was 34 versus 14 in the Physical Review of Letters (PRL) and 9 versus 2 in the Journal of Biological Chemistry (JBC). However, China’s quality has improved significantly. In 2005, against India’s 4 publications, China produced 22 research papers in JACS, 28 in PRL against India’s 8 articles and 13 in JBC against India’s 2. With respect to the impact factor (which is based on the impact of each journal and

then arriving at a weighted impact factor for each country), given the rise in the number of Chinese authors in journals of the JACS-type, the Chinese impact factor is computed at 0.59 against India’s 0.4 and the US’s 4.74. The differences in impact factors are a reflection of how relevant is the quality of research. Recently, a multiple factor criterion comprising of quality of education, quality of faculty, research output and size of institution was used to rank universities around the world. Despite having a large number of enrolment and publications, only ‘Engineering Technology and Computer Science’ of Indian Institute of Science Bangalore came in the top 100.69

There is often a clear one-to-one relation between the number of articles published and the doctoral degrees awarded. Figure 2.14 gives the doctoral degrees awarded in total and in Science and Engineering (S&E) for India and China respectively since 1985. Starting with over 7,400 PhDs in 1985, India registered a growth of 3.5 per cent and awarded nearly 14,000 PhDs in 2003. The growth and number look pale if we compare them with those of China, for which the AAGR was 27 per cent and the number of degrees swelled from 234

Figure 2.14 Doctoral degrees awarded in India and China, 1984–2004

Source: NSB 2008.

25,000

20,000

15,000

10,000

5,000

0

Num

ber

of d

egre

es

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

Total China China S&E Total India India S&E


in 1985 to 18,806 in 2003. The situation is roughly the same in all S&E doctoral degrees and only engineering doctoral degrees.

Private versus public effort in R&D

Figure 2.15 gives the sector-wise R&D expenditure for two years—1998–99 and 2002–03 respectively. From the figure, there does not emerge any trend over the period. However, the following points emerge. Central government, including the public sector industry account for over 67 per cent of total R&D expenditure in these two years. The private sector which was accounting for 21.6 per cent of national R&D expenditure in 1998–99 has suffered a decline in share to 20.5 per cent in 2002–03. If one considers the industrial sector as a whole comprising both public and private sector, the share of industrial sector in the total national R&D expenditure has decreased consistently over the past six year period. The share has decreased from 28.1 per cent in 1997–98 to 26.6 per cent in 1998-99 to 24.8 per cent in 2002–03.70

An important aspect of R&D expendi-ture in India is its skewness against the industrial sector. The share of the indus-trial sector in the national R&D expenditure in developed countries is over 50 per cent, whereas in India as shown by the data, it is hardly 25 per cent. A sizeable share is by the institutional sector comprising of centre, state and academic sector. It is to be noted that generation of technology has important implications for the bargaining position of a country. In the early 1980s supercomputers were denied to India, even though they were to be used only for weather forecasting. India took it as a challenge and decided to enter the field via the alternative route of parallel processing. India’s journey from 1986 onward shows how indigenous innovation changes the control regime. In fact, the long voyage in high-performance computing was not a smooth sail. It was impeded by several obstacles.

These included embargoes on critical components, debates on architectures, make versus buy dilemmas, loss of key talent to MNCs and above all, bureaucratic hurdles.71 The current prowess in super-computing is partly an outcome of India having no options but to build indigenously. Two examples substantiate this: when the idea of building supercomputers using parallel processing gained ground in 1985, Germany launched a DM100 million project called ‘Suprenum’ and gave its scientists five years to build parallel processing-based supercomputers. How-ever, the project was shelved midway as there was no driving force behind it. Similarly, after US declined supercomputers to India, Russia offered the same in 1988. However, the Indian team visiting Russia was not impressed with the performance of the Russian supercomputer and did not buy it; instead India decided to build its own. Interestingly, since the early 1990s, Russians have been importing Indian supercomputers.72

In another instance of indigenous innovation from government laboratories, the Central Leather Research Institute of

Figure 2.15 National R&D expenditure by sector in India, 2000–05


1998-99

62.5%

2.9%5.0%8.0%

21.6%

Central governmentState governmentsHigher education sector

Private sector industryPublic sector industry

2002-03

62.7%

4.0%4.5%8.5%

20.3%

Central governmentState governmentsHigher education sector

Private sector industryPublic sector industry


the Council of Scientific and Industrial Research, demonstrated an improved bag tanning process to the artisans of Athani-Miraj-Nippani belt of Maharashtra and Karnataka producing Kolhari chappals (Indian ethnic footwear). The improved process resulted in reduction process time from 35 days to 15 days, improved quality through uniform product, leading to 30 per cent higher yield.73

With several developed countries including US, Japan and Europe experienc-ing a demographic shift with their aging population and workforce, India can emerge as the global innovation hub. This is because of a large proportion of working and talented young people. Given its huge talent pool of world class technical manpower produced and nurtured by over 250 universities, 1500 R&D units and 6 IITs and several engineering colleges, India’s advantages will be in both cost and competence. Apart from this India has the world’s largest chain of publicly funded R&D institutions.

Policies for technological advancement

Since India’s problems are different, the technological solutions to these problems might be different from the ones employed by highly industrialized countries used. However, this necessitates a different kind of S&T policy. This section presents a critical review of national policies formulated to encourage technological advancement keeping India’s problems in mind. The policies covered deal with the following issues: patents and copyright laws; enhancement of education and skills of the people to enable them to use technology in an effective manner; and reduction of harmful effects associated with new technology.

Patents and copyright laws

The implementation of the WTO agree-ment on the Trade-Related Intellectual Property Regime (TRIPS) had led to considerable policy changes in the Indian intellectual property rights (IPRs) regime.

Three amendments, in March 1999, June 2002 and April 2005 on the Patent Act 1970 were carried out to bring the Indian patent regime in harmony with the requirements of TRIPS. This new IPR regime has extended patent protection to products in drugs, food and chemicals sectors, besides increasing the duration of a patent’s term to 20 years. The burden of proof has been reversed in the case of a process patent where the patent owner may not produce the product locally. The flexibility of granting compulsory licensing has been reduced greatly. As a consequence of this new IPR regime, the technological strategy of imitation, reverse engineering and adaptation as followed by Indian firms in the past is no longer feasible. This is specifically so for new drugs patented internationally after 1 January 1995. The IPR regime has evoked considerable debates among politicians and academicians. Many studies based on the experience of other countries cite that a strong patent regime acts as a conduit for innovative activities.74

R&D is a key to the strength of phar-maceutical industry especially in this new product patent regime. In 2001, the global pharmaceutical industry spent US$30.4 billion on R&D. The R&D intensity by the Indian pharmaceutical industry is low (1.9 per cent) as against 10-16 per cent for the global giants.75 With transition into the new regime, many Indian companies are mobilizing their resources with an increase in their R&D budget. GOI encouraged the R&D in pharmaceutical companies by extending a 10-year tax holiday to this sector. Besides, the Planning Commission had earmarked US$34 million for the drug industry’s R&D promotion fund in the tenth plan. Post-1995 not only the amount of R&D expenditure has gone up, there has also been a change in the structure of R&D activities of the Indian companies. While in the past they were primarily engaged with development of new processes for manufacturing drugs, now they are also involved in R&D for new chemical entities and modifications of

Since India’s problems are different, the technological solutions to these problems might be different than the ones which highly industrialized countries used


existing drugs to develop new formulations and compositions. Patenting by the Indian pharmaceutical companies has also gone up significantly. Since a large segment of the pharma-ceutical sector comprises the small-scale units, it is argued that these small firms are adversely affected in the new regime. This is because they do not have the financial resources to undertake R&D investment required for product develop-ment.76 However, small firms can make use of the large number of generics which have gone off patent since 1995. For this purpose, the government can provide support to the small firms in the form of technology support and increasing their linkages with government-run laboratories and research institutions. Thus, strengthen-ing of internal R&D efforts with provision of external sources of technology is the most crucial strategy for small pharma-ceutical firms to remain competitive. The Pharmaceutical Research and Development Support Fund (PRDSF), which was set up in 2004, should give priority to the needs of the small-scale pharmaceutical enterprises.77

It has been observed that very little R&D is devoted for developing drugs that are relevant to the needs of the developing countries—for example, for the treatment of tuberculosis and malaria. Almost all such research is carried out by government-funded development insti-tutions or by the military. For these drugs, the introduction of product patents in India could create a substantial incremental increase in profits and encourage more commercial interest in their discovery and development.78

With respect to the copyright laws, in July 2006, India moved closer to amending its archaic 1957 Copyright Act. The amendment includes, among other things, the concept of digital rights management (DRM). DRM involves technologies used by publishers to control access to digital data like software, music, movies, apart from hardware.

Policies that enhance education and skill of the people to enable them to use technology in an effective manner

In the era of rapid technological change, firms across countries employ the latest technology, develop new product varieties, introduce organizational changes, provide new services, prepare new market strategies, use IT extensively and so on. Indian industries comprises of both—traditional industries like textiles and modern industries like IT, biotech and automobiles. Both types of industries have to keep pace with technological change. The technological and organizational changes brought about as a result of international competition have far reaching implications for labour force in India. Through integrated production systems and the new emerging services sector, the national labour force is integrated into the global labour market. The challenge for the policy-makers is how the profitability of the firms can be sustained by employing skilled labourers.79

According to government estimates, as given in the draft National Employment Policy, nearly 457 million people in the labour force need to acquire new skills or upgrade their skills. The current capacity of the government-run technical and vocational education and training (TVET) programmes is 2.5 million, while each year 12.8 million are added to the total workforce. Of these 12.8 million, almost 10 million of the workforce, do not possess any skills. This implies that only five per cent of the youth between the age group of 20-24 possess vocational skills, while this figure is 28 per cent in Mexico, 78 per cent in Germany, 79 per cent in Canada, 80 per cent in Japan and 96 per cent in Korea.80 This shortage of skills has serious implications on country’s produc-tivity and GDP growth. In order to enhance the skill levels of the work force, the Ministry of Labour and Employment (MLE) in collaboration with ILO has initiated the process for National Skills Development Policy. It will address demand and supply, equity

The technological and organizational changes brought about as a result of international competition have far reaching implications for labour force in India


related issues; and ensure access to skill development that is inclusive in terms of gender, social divide, schedule caste and schedule tribe and minorities and other backward classes. Vocational training under the Direc-torate General of Employment and Training (DGE&T), MLE, has two flag-ship schemes to enhance the skill levels of the workforce. These are: (i) Craftsmen Training Scheme (CTS) and (ii) Apprentice-ship Training Scheme (ATS). The CTS provides institutional training whereas ATS is a combination of institutional training as well as on the job training in which trainees are exposed to real life industrial environment. Through these schemes, DGE&T imparts training to over one million persons every year. CTS training in 107 trades is available in 5,114 Indian Training Institutes. Training is also being imparted in 153 trades under the ATS by utilizing the existing infrastructure of more than 20,000 establishments. The MLE has also embarked on upgrading ITIs for meeting the emerging market needs. Around 500 ITIs have been upgraded through PPP during the Tenth Plan. Another, 1,396 ITIs are being upgraded during the 11th Plan with 300 ITIs each year. The upgraded ITIs to be known as ‘centres of excellence’ will produce workers with requisite skills to enable them to compete in the global labour markets. The new ITIs will provide multi-skilled courses during the first year of training followed by specialised advanced modular courses in the second year. The trainees will have the multi-entry and multi-exit options to upgrade their skills as and when the situation demands. Another important aspect of the modernisation is the PPP which is being ensured through greater involvement of industry in all aspects of training. Keeping in mind the larger objective in mind of sustaining a knowledge economy, the GOI has also announced the creation of 30 new central universities, five new Indian Institutes of Science Education and Research, eight new IITs, and 20 new Indian Institutes of Information Techno-

logy to improve the quality of engineering professionals. There are new national missions in nanotechnology and bio-technology and new institutions in these fields too.81 Thus, various initiatives of training and upgrading the knowledge and skills of the youth will considerably enhance the number of employment opportunities as well as the standard of living of the workforce. To enlarge the pool of scientific man-power and foster research in science, a programme titled ‘Innovation in Science Pursuing High Inspired Research’ (INSPIRE) has been launched in 2008. The programme will serve one million students and provide attractive science innovation scholarships.82 The main features of the INSPIRE are:83 (a) Scheme for Early Attraction of Talents for Science (SEATS) providing science innovation scholarship of INR5,000 for a total of one million young learners of the age group 10-15 years once in their school career, and mentorship through global science leaders including Nobel Laureates and Indian leaders in science at a summer camp for the top 1 per cent performers in the class X examination every year for a period of five years; (b) Scholarships of INR0.1 million per year for Higher Education (SHE) for the age group of 17-22 years for continuing science education at Bachelor of Science and Master of Science levels for 10,000 candidates; and (c) Assured Opportunity for Research Careers (AORC) for 1,000 young researchers in the age group of 22-32 years for five years to pursue doctoral research in science, backed by an assured career opportunity scheme for another period of five years on completion of their PhD. Specific education programmes are also being launched in strategic sectors such as nuclear and space sciences at the school level.

Policies to reduce harmful effects associated with new technologies

The analysis in this section has so far discussed how different policies being adopted can harness the use of new

Various initiatives of training and upgrading the knowledge and skills of the youth will considerably enhance the number of employment opportunities as well the standard of living of the workforce


technologies. Since the benefits of some of the new technologies like mobile, Internet and biotechnology are not unidirectional; concerns have been raised about their harmful effects. This subsection discusses in brief some of the concerns and the regulator’s efforts to minimize these harmful effects.

Biotechnology

The last few years have witnessed significant advancement of S&T in the employment of modern biotechnology tools for the production of foods, feeds and drugs. These include the cultivation of genetically modified (GM) crops, such as Bt cotton and Bt brinjal, use of genetically modified organisms (GMO), especially recombinant bacteria and development of transgenic animal models. In the Indian context, the cultivation of GM crops developed for both food as well as industrial purposes assume greater significance.84

Though GM plants have the potential to improve agriculture production, food quality, nutrition and health, uncertainties abound regarding safety of these foods, apart from ethical and socio-economic issues.85 The uncertainties are caused by, (a) limited scientific evidence regarding their toxicity or health risks; (b) the methodology used for assessing the risk not being robust; and (c) molecular and generic effects of the technology being unpredictable in nature.86 Another key socio-economic concern has arisen because modern agriculture biotechnology is subject to intellectual property protection and is often developed by companies in the private sector, e.g., the development of Bt cotton by Monsanto.87 This may result in reduced competition, monopoly of profits and exploitation of small farmers, thereby leading to widening income disparities. In order to address these concerns some policy initiatives have already been taken. These include involvement of a number of ministries and departments such as Ministry of Environment and Forests, Department of Biotechnology and Ministry of Agriculture to deal with

the regulatory aspects on GM foods, especially those pertaining to introduction of GM crops. Some of the initiatives are sector oriented, thereby indicating the need for a holistic approach. Setting up of a ‘National Gene Technology Regulatory System’, with the complete mandate of regulating the use of biotechnology products would be one such step. Another step would be putting in place an implementation mechanism for food control. This is essential since some of the imported GM foods are marketed, also some GM crops/foods, grown without undergoing a proper approval process, can have catastrophic health implications. The Ministry of Health and Family Welfare with its vast network of food control infrastructure already in place along with state governments and union territories, can effectively leverage this to control GM foods.88

Internet

Although access to Internet and mobile phones technologies has assisted people in connecting with their peer groups quickly and establishing strong social support networks, it has also raised concerns about the vulnerability and security of young people. Child abuse resulting from engage-ment with the Internet and Internet chat rooms and the exposure of young people to pornographic and other offensive material are the issues of concern.89 Sexual exploitation of children and the risk of creating psychological dependence and addiction among young people are the two issues that have dominated in the recent past.90

Similarly, the portability of Internet tools through the mobile phones has significantly increased the exposure of children to unwanted material on the Internet such as pornography, sexual chat and commercial online chat services. Though filtering technology has proved useful in protecting children against prohibited Internet content, its use is yet to pick up in India. Similarly, lawmakers

Though GM plants have the potential to improve agriculture production, food quality, nutrition and health, uncertainties abound regarding safety of these foods, apart from ethical and socio-economic issues


in India are yet to frame a law for online content.91

At present, the only provision of the IT Act, 2000, that deals with online content is Section 67, which specifies that an offence has been committed if an obscene material is (a) published (b) transmitted or (c) caused to be published. Section 79 of the Act however gives the exception to the liability under Section 67 by stating that network service providers are not to be held liable for any third party information or data if it can be proven that the offence was committed without the knowledge of the service provider or that the service provider exercised all due diligence to prevent the commission of such an offence. It is difficult to give ‘due diligence’ when there are millions of Internet users worldwide. It is to be noted that even without any debate on regulating online content, the Indian government has made—the Indian Computer Emergency Response Team—responsible for blocking a website. To some, the technical and legal feasibility of blocking websites is so full of flaws that it might as well not be seen as having any role in regulating online content.

Mobile

The first section has indicated that of the two technologies, spread of mobile technology has been more rapid in India. Its use and diffusion may accelerate further with growing importance of m-government. In the last few years, however concerns have been raised about mobile phone radiations and their health impacts. It is being argued that the mobile phones use electromagnetic radiation in the microwave region, which are harmful to human health.92 These concerns have induced a large body of research, both epidemiological and experimental, on humans as well as on animals.93 Health-related concerns have also been raised about other digital wireless systems, such as data communication networks. Since no conclusive evidence exists on these health hazards,94 the WHO is yet to come

up with recommendations about mobile phones. However, in countries like Austria, France, Germany and Sweden, the national radiation advisory authorities have recommended to their citizens some measures to minimize the exposure. These measures include: using hands-free sets to decrease the radiation to the head; keeping the mobile phone away from the body and not using telephone in a car without an external antenna.

Conclusion

All these policy initiatives should be geared towards only one objective, providing technical solutions to the problems of poor people. This is because a sizeable portion of the Indian population falls below the poverty line. The various technologically priority areas for poor people include, among others, modern seed varieties and other inputs for growing food, solar powered motors to run pumps, farm machinery, and vehicles that transport produce to market (in areas where animal traction or human leg power are no longer the main means); electricity, vaccines, antibiotics, and other medicines, radio, TV and Internet connectivity.95

Often the problems of the poor are identified by themselves as in the case of pulleys to draw water, but it is the subsequent intervention of the formal S&T systems that makes the vast difference (see box 2.3). Thousands of such small innovations are occurring throughout the country, and to capture, improve, scale and spread them, the National Innovation Foundation was established by the GOI to perform several key functions. These include scouting and documenting nationwide grass-root innovations, completing the value chain by supporting the improvement through R&D linkages with formal institutions such as Council of Scientific and Industrial Research, Indian Council of Medical Research and IITs, and lastly, providing added value, business develop-ment, IP management and dissemination, and IT management support.

The portability of Internet tools through the mobile phones has significantly increased the exposure of children to unwanted material on the Internet


While drawing water from wells, women sometimes need to rest and catch their breath. But during that period of rest, they must continue to hold the rope with a water-filled bucket tied to it. A momentary loosening of the grip would result in the bucket falling into the well. The communities although have devised ways to retrieve the bucket, doing so demands more effort. An artisan has solved this problem by attaching a small lever to the pulley. The lever does not get in the way while the rope is

being pulled, but the moment the rope’s tension is slackened, the lever presses against it and arrests its downward movement, thereby bringing the water-filled bucket to a standstill. With this system in place, the women at the well may avail themselves of some moments’ rest before resuming their work. Thousands of such pulleys are installed all across Gujarat villages and being installed elsewhere.

Box 2.3 Technology from grass root—modified pulley

Source: Mashelkar 2008.

In the current era of information, com-munication and knowledge creation, both economic growth and development critically depend upon how countries assimilate knowledge and adopt techno-logy. By enhancing the productive potential of all factors of production, be it land, labour or capital, technology has a great potential to increase overall economic growth and reduce poverty. In this chapter we examine whether this potential is being exploited in South Asia in various sectors and what are the key prerequisites for a successful adoption of technology.

Sources of technological progress

Technological progress in developing countries depends upon two key factors: (1) diffusion of technology and skills transfer through various channels and (2) a successful adoption of technology according to local needs and conditions. Technological diffusion and skills transfer

is generally facilitated by exposure to foreign technology through trade, foreign direct investment (FDI), or through contact with skilled and highly educated diaspora. But, mere exposure to foreign technology is not enough unless there is a skilled, educated and technically trained workforce that is able to adopt and modify technology according to local needs. Let us examine how South Asian countries fare in terms of each of these factors that are a prerequisite for technological progress in these countries.

Prerequisites for technological diffusion

Openness to foreign trade and cross border mobility is the major source of technological diffusion and skills transfer. South Asia has already opened up and has reduced its trade barriers to a significant extent as part of its liberalization policies thereby setting the stage for technological diffusion. Today South Asia is much more open and much more integrated with the rest of the global economies than it was 15 years ago. Between 1990 and 2006, mean tariff declined substantially in all South Asian countries. In India, Pakistan, Bangladesh and Sri Lanka mean tariff rates declined by two thirds or even more, during this period, indicating fast pace integration into the rest of the economies. (See figure 3.1) Trade-to-GDP ratio for the region as a whole more than doubled over the past one and a half decade suggesting that South Asia is much more exposed to foreign products and technology than it was 15 years ago. Despite these positive changes that occurred in the backdrop of trade and market liberalization policies of South Asia, average mean tariffs still remain high, higher than in any other region in

Chapter 3

Technology and Economic Development inSouth Asia

Figure 3.1 Trends in average mean tariff rates in South Asia, 1990–2006

Sources: World Bank 2003 and 2008i.

Bangladesh

India

Pakistan

Sri Lanka

Nepal

South Asia

0 20 40 60 80 100

2005-06 1989-95

Technology and Economic Development in South Asia 69

the world (see figure 3.2) and merchandise trade that is the major source of techno-logical diffusion remains low at 34.6 per cent of the GDP in the year 2005 (see table 3.1). South Asia’s share in high-technology trade as a percentage of GDP is also low compared to other regions. The share of high-technology imports is much higher than that of exports. This is in contrast to East Asia and Pacific where the share of high-technology exports is more than twice the share of related imports (see table 3.2). The share of high-technology exports in South Asia is a mere 0.3 per cent of GDP. India however remains an exception to the region as a whole by adopting techno-logy in a dynamic manner, particularly in the area of software industry. India’s software industry, considered to be high-technology and knowledge intensive, grew by 50 per cent in the second half of the 1990s and accounted for 2.9 per cent of GDP in 2000–01.1 Table 3.3 shows that within South Asia, high-technology exports of India as percentage of manufactured exports is 4.8 per cent, the highest in South Asia. However, this percentage is still much lower than the corresponding figure for East Asia and Pacific (32.7 per cent); Latin America and Caribbean (11.9 per cent) as well as Middle East and North Africa (4.7 per cent). FDI is another important source of technological diffusion (see Chapter 2). It enhances the technological capacity of domestic firms. Multinational corporations are a major source of financing research and development (R&D) and in-service training. Workers acquire training and experience and apply them even when they move on to domestic firms or set up their own enterprise. This generates technological spillovers that are beneficial to the host countries. Table 3.1 shows that even though FDI as a percentage of GDP increased substantially over the past decade in almost all South Asian countries, yet the proportion of it is still the lowest in the world.

Table 3.1 Trends in trade and FDI, 1990–2006 (as % of GDP)

Trade of goods and services

Merchandise trade

FDI, net inflows

1990 2006 1990 2006 1990 2006

India 15.7 48.8 13.1 32.4 0.1 1.9Pakistan 38.9 38.6 32.8 36.9 0.6 3.4Bangladesh 19.7 44.2 17.6 45.1 0 1.1Nepal 32.2 45.3 24.7 32 0.2 -0.1Sri Lanka 68.2 74.8 58.1 63.6 0.5 1.8Bhutan 56.7 76.8 … … 0.5 0.6Maldives 88.4* 124.4 … … 2.6 1.5South Asia 19.6 47.5 16.4 34.6 0.1 1.9East Asia and Pacific 47.3 87.5 48.8 75.7 1.6 2.9Europe and Central Asia 45.4 80.1 28.7 66.2 … 5Latin America and Caribbean 31.5 49 23.2 43.1 0.7 2.4Low and middle income 39.8 67.2 34.6 59.4 0.8 3.2Middle East and North Africa 58 .. 45.4 59.8 0.3 4.2Sub-Saharan Africa 52.1 71.8 41.2 60.8 0.4 2.4

Note: *: Data is for 1995.

Sources: ADB 2008a and World Bank 2002 and 2008h, i.

Figure 3.2 A regional comparison of average mean tariff rates, 2006

Sources: World Bank 2003 and 2008i.

16

14

12

10

8

6

4

2

0

South Asia (15)

Middle East and North Africa (8.9)Sub Saharan Africa (7.9)

Developing countries (5.6)Europe & Central Asia (4.6)Latin America and Caribbean (4.5)East Asia and Pacific (4.4)

Table 3.2 Trends in trade in high-technology goods in South Asia and other regions, 1994–2004

High-technology imports as % of GDP

Share of high-technology exports in world

1994-96 2002-04 1994-96 2002-04

East Asia and Pacific 5.9 8.4 9.9 19Europe and Central Asia 3.2 7.2 1.0 2.7Latin America and Caribbean 2.4 3.8 2.1 3.4Middle East and North Africa 2.5 3.6 0.1 0.2South Asia 1.4 2.1 0.2 0.3Sub-Saharan Africa 3.2 4.5 0.1 0.1

Source: World Bank 2008d.


Trade and FDI are not the only mechanisms for technological diffusion. Exposure to foreign technology may also occur through contact with a highly educated and skilled diaspora. South Asia has an extremely talented and an enter-prising workforce, which is making its mark in all fields worldwide. Although a major proportion of the migrants from South Asia do not return to their home countries, yet those who do return transfer skills, technology and entrepreneurship. Those who do not return also contribute to technology transfer by strengthening research networks as well as trade and investment linkages. Within South Asia, India has made an effective use of this channel and as a result the country is now an important destination for outsourcing business from US and other developed countries. Skilled diaspora is also a source of transferring resources in the form of remittances and thereby financing investment in technology.

Prerequisites for a successful adoption of technology

Technological diffusion on its own is not enough to increase productivity unless there is the domestic capacity to absorb and adopt technology. Human capital in the form of a skilled and educated workforce is the crucial prerequisite for a successful adoption of technology. An empirical study conducted for 57 developing countries suggests that the positive effects of FDI on the productivity of nations are not direct but through human capital.2 Although South Asian countries are much more exposed to foreign technology through trade liberalization, yet its performance on the human capital front is not very impressive. Enrolment rates remain low and the region is far from achieving universal literacy. The average years of schooling in South Asia also remain dismal. Chapter 4 shows that enrolment in technical, vocational and higher education also remains low-lower than any other region in the world. Moreover, TVET curriculum remains

outdated and irrelevant to the contemporary demands of the labour market. The successful adoption of technology is also aided by the creation of knowledge and its dissemination through higher education and R&D. Because of the low education base in terms of both enrolment and quality, most South Asian countries, apart from India and Sri Lanka, are ranked as marginalized in terms of technological achievement index constructed by the UN3 (see table 3.4). A successful diffusion of technology in South Asia is therefore not only contingent upon trade liberalization and the inflow of FDI, but also upon the foundation of basic education and literacy as well as technical and vocational skills of the population. If South Asia does not take urgent steps on this front, it may not be able to reap the full benefits of globalization and increased integration with the rest of the global economies. Finally, successful diffusion as well as adoption of technology depends upon a conducive business environment that is characterized by low-cost of doing busi-ness, enforcement of property rights and rule of law. Interestingly, some studies show that it is the ‘pro-business’ rather than ‘pro-liberalization’ strategy of the government that raises productivity levels. For instance, a study4 on economic growth in India shows that the surge in the growth in the 1980s was brought about by a remarkable rise in productivity that was triggered by the pro-business (rather than pro-liberalization) approach of the govern-ment’s policies. If the business climate is not conducive, businesses will suffer and so will the growth in productivity levels and technological innovation. Many countries in South Asia such as Pakistan, Bangladesh and Nepal are marked by political instability that is often followed by macroeconomic instability. Corruption, inefficient bureaucratic procedures and poor enforcement of contracts and property rights are other common problems across most South Asian countries undermining the business climate.

Table 3.3 High-technology exports (percentage of manufactured exports), 1994–2006

1994-97

2003-06

India 4.8 4.8Pakistan 0.1 1.4Bangladesh 0.0 0.3Nepal 2.9 0.1Sri Lanka 1.2 2.3South Asia 3.7 3.9East Asia and Pacific

26.4 32.7

Europe and Central Asia 7.5 9.3Latin America and Caribbean 9.5 11.9Middle East and North Africa 1.3 4.7Sub-Saharan Africa 5.3 3.7

Source: World Bank 2008h.

Table 3.4 Technology achievement index: South Asia and the comparative countries

India 0.201Pakistan 0.167Nepal 0.081Sri Lanka 0.203China 0.299Korea 0.666Malaysia 0.396Indonesia 0.211

Source: UNDP 2001.


The diffusion and adoption of technology by sectors

The extent of technological diffusion and its adoption in three important sectors, agriculture, industry, and services is the backbone of any economy and together make up the overall GDP of a country. In particular, the trends in labour productivity in each of these sectors need to be explored in order to assess the current and potential role of technology in South Asia in terms of raising productivity and output. Table 3.5 shows that the level of labour productivity as defined by output per worker varies a great deal among various sectors. It is the lowest in agriculture due to some obvious reasons. The agricultural products, in general in South Asia, are not of high-value, and agriculture still contains surplus labour as evident from the fact that the sector’s share in employment has not fallen along with the decline in its share in GDP. However, many empirical studies investigating the sources of labour productivity by sectors point to the overwhelming influence of technology and its adoption. So a large part of the difference in labour productivity amongst various sectors could be explained by the differential diffusion as well as adoption of technology. Industry has benefited the most through trade liberalization. Total factor productivity went up and many studies attribute it to the liberalization

policies of 1991 that include trade and market liberalization.5 Table 3.5 shows that labour productivity in industry has registered a sharp increase after the 1990s. The annual percentage change in labour productivity between 1990 and 2005 has been 4 per cent in India, 7.5 per cent in Bangladesh and 2.7 per cent in Pakistan. Education, in particular secondary education, has been found to be associated with improved labour productivity in all sectors. A study examining inter-state disparity in labour productivity across sectors in India found a clear negative association between initial education and labour productivity.6 The study indicates that states such as Punjab, Maharashtra and Kerala that register higher enrolment rates in secondary level education as compared to the rest of the states are also the ones that report higher labour productivity in both agriculture and manufacturing.

Technology and agricultural productivity

Most South Asian economies are pre-dominantly based on agriculture. Although the share of agriculture in GDP has declined significantly over the past years, yet its share in employment has not fallen in relative terms. Agriculture continues to employ close to 50 per cent of the workforce in South Asia whereas its share in GDP has declined to 18 per cent.

Table 3.5 Labour productivity (value added per worker at US$ 2000) by sectors, 1990–2005

Agriculture Annual change Industry Annual

change Services Annual change

1990 2003-05 1990 2001-05 1990 2001-05

India* 324 392 1.5 1,771 2,158 4.0 2,268 2,310 0.4Pakistan 594 696 1.2 1,808 2,684 2.7 2,613 2,909 0.7Bangladesh 254 338 2.2 903 2,326 7.6 1,781 1,710 -0.3Nepal 192 209 0.7 3,191 990 -10.1 1,026 1,160 1.1Sri Lanka 679 700 0.2 1,691 2,589 3.1 2,453 3,470 2.5China 254 401 3.6 1,275 5,020 12.1 2,824 4,809 4.5Indonesia 484 583 1.4 9,510 14,527 2.9 6,157 8,290 2.0Korea, Republic of 5,679 11,286 5.4 6,986 14,931 5.2 5,051 5,788 0.9Malaysia 3,803 5,126 2.3 10,839 17,677 3.6 5,793 8,043 2.4

Note: *: values for India correspond to 1995 instead of 2001-05.Sources: ILO 2008a; World Bank 2008h and MHHDC staff computations.


Agriculture in South Asia therefore, continues to be the source of sustenance to the majority of its population. Increasing agricultural productivity in South Asia has therefore far reaching welfare consequences that extend from raising incomes of the rural poor to ensuring food security and fostering employment and GDP growth. As the Human Development in South Asia 20027 Report documents, poverty is mostly a rural phenomenon in South Asia with the majority of the poor residing in rural areas and dependent upon agriculture directly or indirectly for their employment and well-being. Empirical studies across the world have shown substantial impact of growth in the agriculture sector on poverty reduction. It reduces poverty directly by raising the wages of the labour involved in agriculture and indirectly by reducing food prices. In China for instance, it has been shown that it was the rapid growth in agriculture that was largely responsible for a substantial reduction in poverty from 53 per cent in 1981 to 8 per cent in 2001. An empirical study of rural Bangladesh shows that the adoption of agricultural technology reduces poverty directly by enhancing the productive capacity of small farmers.8

The adoption of technology has an important role in raising agricultural productivity, particularly in the face of resource constraints imposed by the scarcity of land and water. With the rapid increase in population and growing urbanization in South Asia, cultivable land is getting scarce, whereas the requirements for food are expanding as is evident from the growing number of food insecure people in the region. In such a scenario where the cultivable land is limited and the need to feed a growing number of food insecure people is gaining urgency, South Asia has to raise agricultural yields through the adoption of appropriate technology. The adoption of agricultural technology under the Green Revolution doubled the production of cereals in Asia between 1970 and 1995 by increasing the land

area devoted to cereals by only 4 per cent. Today, scientists see potential gains in adopting biotechnology not only in terms of raising agricultural yields but also in terms of cutting down the cost of production through the minimum use of inputs such as fertilizers and pesticides (see section on biotechnology). Other technological advancements in agriculture such as zero tillage that minimizes or eliminates tillage, also reduce the cost of labour and energy. In South Asia, zero tillage farming has shown to reduce costs by up to 10 per cent and the use of water by up 20-35 per cent.9 It is also shown to improve soil structure and reduce the incidence of weeds and some pests. Zero tillage with wheat succeeding rice is also shown to conserve resources. Further research on zero tillage is estimated to yield substantial returns. An important challenge for South Asian countries is to reduce the growing regional disparity in terms of income and human development. One important source of regional disparity, particularly from the point of view of agriculture is the gap in productivity between the favoured and less favoured (e.g. rain fed) regions. Technology is needed here too to promote resilient agricultural systems that are more tolerant of pests, diseases, droughts and floods. New varieties of rice, for instance, that survive flooding have already been identified. Biotechnology also holds promise in terms of creating drought and flood resistant varieties. Productivity gains through the adoption of technology is also the key to address problems of low availability as well as access to food, which are the two major causes of food insecurity. It not only yields dividends in terms of enhancing agricultural productivity, and thereby increasing the availability and price of food and other crops, but is also an effective way to raise the average incomes of the rural poor so as to enable them to access food. The nutritional content of food can also be enhanced through the adoption of appropriate technologies and can therefore contribute in reducing


widespread malnutrition in the region. An increase in agricultural yield is also essential to attain food self sufficiency in the region and to save precious foreign exchange that many South Asian countries spend to import food from abroad. How do South Asian countries fare in terms of their agricultural productivities as compared to other countries? Is there any difference between the actual and potential agricultural yield in these countries? What are the sources of agricultural productivity in South Asia and what is the role of technology and R&D? These are some of the central questions that we address in this section.

Trends in agricultural productivity

South Asia showed remarkable gains in agricultural yields during 1960s–80s due to the adoption of Green Revolution. However during the past one decade, agricultural yield particularly for food crops has either become stagnant or very low. Figure 3.3 shows that the annual growth rates of cereal yield per hectare in most South Asian countries have tapered off, particularly after the 1990s. The pro-duction and per hectare yield of com-mercial crops have however registered a sharp increase during the same period.10

It is often argued that the benefits of the Green Revolution in terms of increasing yields have been attained and the yields of certain crops such as rice and wheat have reached a plateau. However there are many lagging regions which have not exploited their full agricultural potential. In some states in India, for instance, the gap between the actual yield and those attainable for their agro-ecological endowments is significant. States such as Uttar Pradesh and Madhya Pradesh have agricultural yields that are half of their maximum attainable yields.11 Similarly in Bangladesh, there is a substantial scope to bridge the gap between the actual and the potential yields in the production of rice, wheat and other crops. One study indicates that there is a 47 per cent gap between the actual and

potential yield of wheat and a 71 per cent gap in the same for onion in Bangladesh.12 Moreover, as table 3.6 shows cereal yield per hectare in most South Asian countries is still half or even less than those in China, Indonesia and Korea.

Sources of agricultural productivity and the role of technology and R&D

Studies show that the major factor behind rapid agricultural growth in Asia and the developing world was the increase in productivity rather than expansion of land for agriculture. In fact, many studies have ranked agricultural R&D as the topmost public investment among alternative in-vestments (such as infrastructure, educa-tion and health) for both agricultural

Figure 3.3 Annual growth rate of cereals yield per hectare in selected South Asian countries, 1961–2007

Sources: FAO 2008 and MHHDC staff computations.

5.0

4.0

3.0

2.0

1.0

0.0

-1.0 1961-70 1970-80 1980-90 1990-2000 2000-07

India Pakistan Bangladesh Nepal

Table 3.6 Trends in cereal yield per hectare: South Asia and other comparative countries, 1961–2007

1961 1970 1980 1990 2000 2007

India 9,472 11,348 13,500 18,912 22,935 25,287Pakistan 8,563 12,296 16,130 17,664 24,078 27,545Bangladesh 16,811 16,661 20,057 24,905 33,843 38,284Nepal 18,466 17,825 16,871 19,200 21,363 22,180Sri Lanka 17,654 21,546 25,010 29,650 33,381 38,216Bhutan 14,408 14,367 14,249 11,171 14,412 23,377Maldives 8,882 8,921 8,500 10,000 8,000 39,166China 12,110 21,431 29,487 43,227 47,563 54,328Indonesia 15,417 20,007 28,656 38,002 40,263 44,460Korea, Republic of 31,971 37,200 40,558 58,529 64,357 61,057Malaysia 20,970 23,829 28,358 27,403 30,395 33,731

Source: FAO 2008.


growth and poverty reduction.13 Improved varieties that were the outcome of R&D were found to be responsible for 53 per cent of total factor productivity gains in the (Pakistan) West Punjab from 1971 to 199414. Of course there are some environmental costs associated with the use of modern technology and the overall gains could have been higher if these environmental costs could had been avoided. The average rate of return to investment in agricultural R&D is estimated to be 43 per cent in developing countries.15 Rates of return to agricultural research may even be higher depending upon the type of crop. In India, for instance, the rate of return to agricultural research for the production of rice have been estimated to be 65 per cent and in Pakistan, the corresponding rate of return for the production of wheat have been estimated to be 58 per cent.16 Yet developing countries, including South Asia, continue to underinvest in this sector (see table 3.7). Private sector involvement in agricultural R&D is also low as compared to the developed world. Outreach of agricultural research through effective extension services is equally important. It helps farmers to increase their productivity by making use of technology and better production techniques. The use of information and communications technology (ICT) is helping a great deal in disseminating information to farmers. Given the wide-spread and rapidly expanding use of mobile phones, the potential to dis-seminate research through this channel can be further reaped.

How safe is agricultural biotechnology?

This question is being asked by many consumer advocates around the world, so much so, that during the last few years organically grown food has become very popular in the developed countries. The recent advancements in agricultural biotechnology have opened up numerous possibilities for raising agricultural yields

even under unfavourable climatic conditions, reducing the cost of production and improving the quality of agricultural produce. In the Human Development in South Asia 2002 Report we have tried to address this issue in detail. Modern technology, especially the creation of genetically modified organisms (GMOs), is often presented as a magic solution for the problems of poverty, inadequate access to food and nutrition, and even environmental degradation in the world. On the other hand, there are others who present the picture of major human health hazards being created by science that interferes with the long-term natural processes of transgenic evolution. The reality, however, is far more complex. Farmers, especially in developing countries, face many problems which biotechnology does not address, much less solve. These include lack of infrastructure, poor market access, volatile input and output prices, and so on. It is true that transgenic plants can offer a range of benefits which are above and beyond those that emerged from more traditional innovations in cultivation. It i s suggested that agr icultura l biotechnology offers more effective pest resistance of seeds and crops through genetic control mechanisms that also reduce the need for using pesticide; leads to improved yields; improves tolerance to biotic stress; and also offers nutritional benefits. Additionally, it is argued that this technology can reduce adverse environmental impact. But there is controversy over Bt cotton seeds, which have significantly raised the output in India and China, but have not produced good results in Pakistan, reportedly due to Pakistan’s harsh weather conditions and shortage of water. But the basic question is whether the new GMO technology is safe for human health and for environmental protection. This is critical since the side effects of this technology may only be known many years later. So the jury is still out on this matter. From the human development perspective, we advocate for land redistri-

Table 3.7 Public R&D spending in agriculture as percentage of agriculture value added, 2000

2000

India 0.34Pakistan 0.24Bangladesh 0.44Nepal 0.27Sri Lanka 0.64China 0.43Indonesia 0.21Korea 1.73Malaysia 1.58

Source: World Bank 2008j.


bution to small farmers; better access to water, fertilizer and seeds to small farmers; and supporting agriculture with better policies for infrastructure, market access and domestic R&D.

The economic gains of ICTs in South Asia

In this era of knowledge economy the creation, dissemination and the use of knowledge is recognized as the engine that drives modern economic growth. The ICT fuels the knowledge economy. The speed with which knowledge and information travels today from one part of the world to another is amazing and reminds us of the fact that the world is increasingly becoming a global village. The diffusion of technology today not only occurs through trade liberalization and FDI but also through ICT that in turn increases the productivity of firms and improves business practices. The production of ICT-related goods and services also aids in overall economic growth and employment. South Asia is witnessing an information and communication revolution at present. India, in particular has registered an outstanding growth in the ICT industry particularly after 1991. At present, the communication sector is the fastest growing sector in the Indian economy, contributing around 10.51 per cent in the GDP growth.17 The growth of the communication sector is evident from the remarkable increase in the number of telephone subscribers—an increase that is unmatched by any other country except China. According to one study, the number of telephone subscribers in India increased from five million subscribers in 1991 to over 233 million subscribers in 2007. As far as the growth of information technology (IT) component is concerned, the total output of this industry increased by 28 times between 1990 to 200218 and its contribution to GDP increased from 0.38 per cent in 1991 to three per cent in 2001–02. The contribution of this sector to India’ exports has been quite encourag-

ing with IT exports going up from US$0.25 billion in 1991 to US$8.04 billion in 2002. A major chunk of these exports consists of software and the IT-enabled services (see Chapter 2). In other South Asian countries as well, the growth in the telecommunication industry has been outstanding primarily due to the liberalization and deregulation of this industry. Figure 3.4 shows that between 2000 and 2005 all South Asian countries witnessed a significant increase in the number of telephone mainlines per 1,000 population. The growth has been particularly outstanding in the case of mobile phone subscribers. In Bangladesh for instance, from close to no subscription to mobile telephones in 1994, the number of subscribers reached 7.5 million in 2004–05. Similarly in Pakistan, the average growth rate of mobile telephone subscription over the last four years has been more than 100 per cent. As of December 2007, the total mobile phone subscribers have reached 76.9 million whereas it was 34.5 million in 2006 and 12.7 million in 2005.19

Figure 3.5 shows that with the exception of Nepal, all South Asian countries have witnessed rapid expansion in the number of mobile telephone subscribers between 2000 and 2005. The growth has been particularly impressive in Maldives. Starting with virtually no telecommuni-cations infrastructure outside its capital 10 years ago, today Maldives has establish-

Figure 3.4 Growth of telephone mainlines in South Asia, 2000–05


120

100

80

60

40

20

0

Per

1,00

0 pe

ople

Bangladesh Bhutan India Maldives Nepal Pakistan Sri Lanka

2002 2005

4 8

23

51

3245

8498

1117 22

3440

63


ed a robust telecommunication infra-structure including a telecommunication backbone spanning the whole country. Telephones are now available on all inhabited islands. It enjoys the highest teledensity for both fixed and mobile telephone in the South Asian region. Residential lines are available in the capital and on a few other islands where the size of the population can support a commercial service. The situation varies drastically across South Asian countries, with 98 telephone mainlines per 1,000 people in Maldives at one end and only eight in Bangladesh on the other. The rest of the countries lying between these two increased their coverage considerably between 2000 and 2005. Overall, South

Asia has emerged as the fastest mobile telephone and internet penetrating region. Between 2000 and 2005, the mobile telephone subscribers in South Asia grew at more than 90 per cent annually, making it the fastest growing mobile market (see figure 3.6). Such a rapid growth in the telecom-munication sector over the past one decade has potential economic gains in terms of increasing the overall rate of GDP growth. The services sector that is now the largest sector in terms of its contribution to GDP has been the major beneficiary of such an outstanding growth of IT in South Asia. Exports have also been diversified to include services, particularly in India. The benefits have also started reaching the manufacturing sector in India that has entered into the production of ICT-related goods such as software and hardware as well as mobile phones and even the semiconductor devices that are used in the production of these phones. Despite the tremendous growth of this industry and its significant contribution to GDP, particularly in India, there are concerns that the benefits of this growth have been limited to the services sector and to the educated and well-qualified people. Moreover, it is mostly the urban areas that are the hub of such IT led growth. Concerns about the growing digital divide and the low penetration rates of Internet in the rural areas are also obvious. In Maldives for instance, the country with the highest telecommuni-cation penetration within South Asia reflects high geographical disparity with respect to telephone penetration. The capital Male’ enjoys a teledensity of one fixed telephone for every four people against one telephone for every 32 people in the rural areas.20 Similarly in Nepal, the Kathmandu valley alone accounts for two thirds of the total number of telephone connections in the country. Rural areas remain almost totally isolated, without access to telephones and other basic communication services. The latest teledensity figures for rural and urban

Figure 3.5 Mobile telephone subscribers in South Asia, 2000–05


500

400

300

200

100

0

Per

1,00

0 pe

ople

Bangladesh Bhutan India Maldives Nepal Pakistan Sri Lanka

63

2000 2005

59 82

466

82

171

2 0 4 260 2 229

Figure 3.6 Annual growth rates of mobile telephone subscribers and Internet users, 2000–05

Sources: World Bank 2007d and MHHDC staff computations.

0 20 40 60 80 100

Internet users Mobile telephone subscribers

Sub-Saharan Africa

South Asia

Middle East and North Africa

Latin America and Caribbean

East Asia and Pacific

Per 1,000 people


areas in Nepal stand at 0.16 and 16.63 respectively.21

This digital divide is in fact a reflection of a much deeper divide that exists in terms of human and economic develop-ment amongst various states/provinces and amongst the rural and urban areas. Backward areas face infrastructure bottle-necks that include poor connectivity. Moreover, most ICT-related goods such as computers and Internet connectivity are expensive and often unaffordable for the poor whose urgent needs are proper food, safe water and basic healthcare rather than computers. The poor, very often, also lack the capacity to operate many of these devices that use English and in many cases lack local content.

ICT and poverty reduction in South Asia

The significance of ICT is often seen against the backdrop of countries striving to achieve competitiveness in the inter-national markets and to gain benefit in terms of economic growth. Seldom is the role of ICT recognized adequately in terms of poverty reduction and human development despite the fact that it has a tremendous potential in terms of empowering the poor and enhancing their capabilities. The ICT can be used as an important tool to meet the information needs of all population groups. Educated youth needs information on where and how to find gainful employment. Mothers need information on health and hygiene of their infants. Traders need information on markets and prices and on ways to expand their trade networks. Farmers need information on how to get reliable seeds and how to apply efficient and cost-effective farming techniques. They also need information on market price of their produce, the lack of which often results in their exploitation by the mediators offering them a much lower price than the market. The mediators who exploit these farmers often have monopoly power that exists precisely because of the lack of

information amongst farmers regarding the actual market price. Meeting all these information needs in an effective manner through ICT can have tremendous impact on the overall well-being of the population. Traditional media and other modes of transmitting information and communi-cation such as the Internet have played an important role in disseminating inform-ation in far-flung areas. For instance, rural radio is playing a major role in South Asia in terms of communicating agricultural research to farmers and other important information related to health and hygiene to mothers in their local languages. Similarly, telecentres in some of the rural communities in India are playing their part in facilitating rural communities in gaining access to information specific to the needs of various groups of people. ICT-related goods and services such as mobile phones, computers and Internet connection may also be rented out and generate income for the poor. An example is the Grameen Phone in Bangladesh that has handed out mobile phones to women in order to generate income (see box 3.1). Mobile phones do not rely on a permanent supply of electricity and can be used by people who cannot read or write. ICT is also being used innovatively in other parts of South Asia to hand out micro credit and other public services so as to reduce the transaction costs involved (see Chapter 2).

The road ahead

In the present era, economic growth of any country depends less on physical resources such as the quantity of land, labour and capital but more on the productivity of these physical resources. Technology in the form of improved production techniques and the use of improved means of information and communication is the only route to enhancing the productive potential of these resources and increasing per capita incomes. The economic reforms of the 1990s have exposed South Asian markets to foreign technologies and also


encouraged innovation through greater competition with domestic as well as foreign firms. Today, South Asian economies are much more exposed and much more integrated with the rest of the world than they were 15 years ago. But technological diffusion through greater contact with the outside world is not sufficient. A successful adoption of technology is equally important. This is an area where South Asia is faced with serious bottlenecks in the form of (a) lack of an educated and skilled population that is able to adopt and use technology and (b) poor infrastructure particularly in rural areas. In a region, where 43 per cent of South Asian population cannot read or write and where many rural areas lack telephone connectivity and electricity supply, reaping the full benefits of technological innovation requires funda-mental reforms particularly in the area of education and infrastructure.

Grameen Bank is known more for its pioneering work on micro credit and less for its groundbreaking contri-bution in using ICT as a tool for poverty reduction. The Bank has taken a number of ICT-related initiatives to empower the rural poor in Bangladesh. The most prominent among them is the mobile telephone programme called Grameen Phone. The programme facilitates the rural poor, particularly women, to utilise micro credit to acquire cellular phone and subsequently sell phone calls and phone services within their villages. This provides the poor, including women, an opportunity to earn a good income. Today, there are around 280,000 village phone ladies selling phone services across the rural areas in Bangladesh. Grameen Phone

programme has also extended its services to other ICT sectors by, for example, setting up of Internet kiosks in villages in Bangladesh. At present, Grameen Phone has around 400 Community Information Centres that provide high speed Internet access and other information-based services such as telemedicine, access to governmental forms, and employ-ment information. The Grameen Phone has also launched Healthline which is a 24 hour call centre manned by registered physicians to extend basic health information and consultation. Healthline is accessible to all Grameen Phone subscribers and is an innovative way to provide basic health services in a country where there is only one physician available for 3,000 people.

Box 3.1 Grameen Bank initiatives: using ICT as a tool for poverty reduction

Source: Grameen Bank 2008.

The discussions in previous chapters have shown clearly how technology is increas-ingly becoming a sine qua non of not only economic growth but also human development in South Asia. However, in order to reap the benefits of technology and to use it as an engine of economic growth and human development, a well-trained manpower that is equipped with the relevant skills and technical education is a must. Recent economic theory and the related empirical evidence suggest that one of the major reasons why some countries find themselves in poverty traps is differences in the endowment of knowledge and in the capability of poor countries to absorb new knowledge. The only way to break out of these poverty traps is the successful absorption of technology through a technically trained and highly educated manpower. There are at least five compelling reasons for why South Asia today needs technical, vocational and higher education more than ever before: First, in the backdrop of globalization, South Asian countries are striving to integrate in a highly competitive world through the adoption of technology. This has raised the demand for skilled workers and professionals. In India, a micro level study shows that the firms’ adoption of information and communications techno-logies (ICTs) accounts for 50 per cent of the average increase in the share of skilled labour.1 The record of many South Asian countries in terms of meeting this demand is not very encouraging and the deficit in skills remains one of the major obstacles to successful technological diffusion. According to the Investment Climate Surveys conducted by the World Bank, around 25 per cent firms in Bangladesh and 21 per cent of those in Sri Lanka

have identified labour skill level as a major constraint.2

Second, the rise in demand for skilled labour and professionals has pushed up the wages of skilled labour and profes-sionals relative to the unskilled ones, creating a significant wage gap. In many countries, the contribution of wage inequality to total inequality is quite significant. For instance, in China the contribution of wage inequality to overall income inequality was one-third in 1988 and rose to about one-half in 1995.3 A similar trend is observed in South Asia. The rise in income inequality in South Asia following the liberalization policies has been a matter of great concern lately. One effective way to reduce such dis-parities is to equip the labour force with the right skills so that they can be gainfully employed. Third, a successful technical and vocational education and training (TVET) programme that produces graduates with the right kind of skills demanded by the job market has the potential to reduce unemployment. Fourth, all South Asian countries are currently passing through a unique phase of demographic transition that is charac-terized by an increase in the working age population: a phenomenon that is termed as the ‘demographic dividend’. In order to make sure that this demographic dividend turns into an asset rather than a liability, the labour force must be fully equipped with relevant skills so as to be gainfully employed. And last, but not least, by enhancing the productive capacity of individuals and their incomes, TVET can be a powerful mechanism to reduce poverty. TVET should therefore be an integral part of any poverty reduction and economic growth/employment strategy.

Chapter 4

Technology and Education in South Asia

In order to reap the benefits of technology and to use it as an engine of economic growth and human development, a well-trained manpower that is equipped with the relevant skills and technical education is a must


Technology and basic literacy

As it has been repeatedly highlighted in previous Human Development in South Asia Reports, almost two-thirds of the world’s illiterate population resides in South Asia. Illiteracy has severe constraints on human development in the region. Illiteracy perpetuates numerous inter-locking social, economic and political deprivations. The advancement in ICTs across the world has put the region at a significant advantage for fighting against the massive illiteracy. Today, there are numerous technologies available to support the massive movements for enhancing literacy levels. An intelligent mix of various ICT tools can target a very large number of audiences irrespective of their age, gender, profession, geography and social class. These ICT tools can augment the delivery of innovatively designed, learner-focused contents and enable masses to read and write within a short period of time. The integration of ICTs in the edu-cation system can greatly enhance students’ learning. The use of computers and multimedia can facilitate teachers in delivering lessons. Technology transforms the role of the teacher from a traditional instructor to a facilitator thus providing a friendly environment for learners. As teachers always need to update their knowledge and skills to transfer the knowledge, the online resources provide them with excellent opportunities to learn through a rich resource base. The establish-ment of digital libraries can provide students access to enormous learning resources. The creation of the subject specific websites, containing a large quan-tity of high-quality resources, may help students to deepen their understanding of each subject. The case study from Thailand provides an excellent case of the use of ICTs in schools (see box 4.1). South Asian countries can improve their education system by adopting such initiatives. How far South Asia has exploited the benefits of ICTs for educating its people? There are numerous examples where

various innovative approaches have been introduced in the region. These initiatives, supplemented by ICTs, are aimed at making people literate, semi-literate or functionally literate. However, most of the ICT and literacy-related innovations in South Asia have been introduced by civil society organizations/NGOs, with limited audience and geographical coverage. Such experiments have been closely linked with the presence and strength of a dynamic civil society and NGOs, as well as the presence of a reasonable infrastructure for ICTs. However the research about such initiatives in the region is very limited and does not encompass all activities undertaken by various stakeholders in the process of development. There are, however, some celebrated projects implemented in India that have gained due attention from donors and international organizations and policy-makers (see box 4.2). These small scale interventions provide interesting examples of the use of ICTs in the fight against illiteracy.

TVET in South Asia

Where do we stand? Current status and trends in TVET

Enrolment in formal TVET

At present, South Asia has the sad distinction of having the lowest enrolment in TVET. While the global average for TVET enrolment is around 10 per cent, only 1 per cent of the students in South Asia opt for TVET: a clear indication of the failure of the TVET system and planning in the region. (See figure 4.1) While some countries such as Maldives and Bhutan rank relatively better in the region with TVET enrolment of 3.4 and 2.4 per cent respectively, other countries such as India and Nepal show a dismal situation (see figure 4.2). This is despite the fact that the recent increase in employ-ment generation opportunities particularly in technical, managerial and professional occupations at the global level has given rise to an increase in demand for TVET

Figure 4.1 Enrolment in TVET at sec-ondary level as percentage of total secondary enrolment, 2005

Sources: UNESCO 2007b and MHHDC staff computations.

Central and Eastern Europe (19)

20

18

16

14

12

10

8

6

4

2

0

North America and Western Europe (15.1)Arab states (12.7)East Asia and Pacific (12.3)Latin America and Caribbean (10.2)

World (10.0)Developing countries (8.4)

Sub-Saharan Africa (6.2)Central Asia (5.6)

South Asia (1.1)

Technology and Education in South Asia 81

graduates at the tertiary level.4 While countries in Oceania, Europe, North America and South America have responded substantially to this challenge as is evident from the high enrolment in tertiary level TVET in these regions, the

situation in South Asia is not very encouraging. (See table 4.1) In addition to poor enrolment, the TVET system in South Asia is also characterized by substantial gender gaps in enrolment. While other countries have

The Thailand SchoolNet Project aims at providing all school students in Thailand with access to the Internet, so as to enable learners to benefit from the information available online, to increase exchange of knowledge and resources and to improve the quality of school education. SchoolNet Thailand was initiated in 1995 by the National Electronics and Computer Technology Centre—a science and technology (S&T) development agency under the Ministry of Science and Technology. The early network was based solely in Bangkok; schools outside the capital city had to shoulder the high cost of long-distance telephone calls or leased circuits to get connected. As a result, only a few schools outside Bangkok participated in the early SchoolNet Thailand Project. A specially designed nationwide Internet protocol (IP) network for schools was created in February 1998. The project was called SchoolNet@1509 to signify the low-cost telephone number ‘1509’ which could be used anywhere in Thailand to access the network. With the cooperation of the Telephone Organization of Thailand, the number of telephone lines was increased and the speed of dial-up access was improved. Given the restricted number of dial-in-lines available, a timetable system was developed whereby schools took turns to access the Internet and were limited to 40 hours of Internet access per month. To maintain reliable network access with acceptable quality of service, the Internet activities of schools were classified into two categories: web browsing and web development. Internet accounts with different privileges and quotas were provided for each category:

• A web browsing account does not provide e-mail or disk space on SchoolNet servers. This type of account is mainly used in the library/classroom so that students can explore the web and participate in group activities under a teacher’s guidance.

• A web development account comes with e-mail and three megabyte of disk space for hosting a school’s home page. These accounts are for school users who are responsible for a school’s home page development as well as for instruction and learning in the class.

Initially, each school in the Project receives one web browsing account and a maximum of two web development accounts. Besides the provision of Internet access, SchoolNet Thailand has placed much emphasis on the training of teachers and content development in the local (Thai) language to minimize the language barrier that may discourage Internet use in the first place. In September 1998, the SchoolNet Content Development Project named as the ‘Digital Library’ was initiated to provide a new resource that would encourage teachers to exchange ideas. It was also intended to pave the way for the creation of educational websites featuring major academic subjects in Thai for secondary school students. A new web-portal was set up in 2003 which contains a database of teaching and learning resources in the Thai language. Training courses, especially Internet use and web develop-ment, have been designed to help teachers and students to make the best

use of the Internet, manage their own information as well as serve as trainers for other schools in their respective provinces. To enhance the system, NECTEC also developed a Linux School Internet Server in the Thai language which was simple for the users to operate. Teachers and students in the SchoolNet also have an opportunity to learn how to collaborate and develop project management skills through ThinkQuest—the largest and fastest growing Internet-based non-profit education programme in the world. ThinkQuest contests challenge learners of all ages to create high-quality, innovative and content-rich websites that are made freely available to others via the Internet. SchoolNet Thailand has immensely contributed to the promotion of ICT use as a learning tool in school education. This increasing use of ICT is reflected in the rapidly growing number of computers in schools, the professional development of teachers, and the availability of more Thai content on the web. According to the latest estimates, 34,000 schools in Thailand are targeted by SchoolNet. These schools are expected to develop their own content, manage their own web pages and make use of existing knowledge to produce new knowledge. Hence, despite the limited availability of network resources, SchoolNet@1509 has been able to survive and prosper owing to political will and immaculate planning premised on technical foresight.

Box 4.1 Thailand SchoolNet—a successful attempt at ICT integration in school education

Sources: NECTEC 2007 and UNESCO 2007a.


adopted the strategy of enhancing girls’ access to better job opportunities through the provision of quality TVET, it seems that South Asia has not utilized this option for gender empowerment. South

Asia is the only region in the world where female enrolment in TVET is one-third of male enrolment (See figure 4.3 and table 4.2). This is in contrast to other regions such as East Asia and Pacific where perfect gender equality holds in terms of TVET enrolment. Gender disparity in South Asia is prevalent not only in terms of TVET enrolment but also in terms of teachers. Only 24 per cent of the total teachers in formal TVET in South Asia are women. Some countries in the region such as Maldives provides a much better picture in this regard. Maldives has 43 per cent female teachers, but other countries such as Bangladesh show an extremely low percentage of female teachers in TVET. (See table 4.3)

The M.S. Swaminathan Research Foundation (MSSRF) is providing functional literacy to poor rural women using a combination of modern ICT with the traditional methods. The MSSRF has implemented this project in Dindigul District of Tamil Nadu state. It has established computer-based knowledge centres known as Village Knowledge Centres, connected with the Internet. These centres are managed by the local community, ensuring access to all, regardless of age, class, gender and caste. These centres create the need-based contents on the basis of need assessment and the feedback from local community. Based upon a community-centred approach, this project combines ICTs with the curriculum that is locally relevant and acceptable, easy to learn and sensitive to individual learners’ interests. It places the objective of achieving functional literacy in the socio-cultural context of the community. This project acknowledges the role of family and society as supportive factors for learning, and identif ies the importance of the learner’s previous

knowledge in the development of learning content. Before designing the literacy programme, a comprehensive literacy needs’ assessment of men and women was conducted. The assessment showed that men need literacy mainly to perform the following functions: to read information and transaction material while selling agricultural produce in the market, to keep a track of their wage accounts, to read and sign property lease and other legal documents, to count money, to read signboards while travelling, and to use instruments like weighing and watches. Similarly, women need literacy mainly to perform the following functions: to read the ration cards of Public Distribution Systems while buying groceries and other available items, to help their children in their education, to read children’s progress reports given by their schools, to buy various items from local shops, to read sign boards while travelling, and to read various documents particularly credit documents, etc. The participants of this literacy programme (usually women from socially and economically disadvantaged

background) were first trained to use the digital camera. They prepared visual material and appropriate local phrases/wording for this visual material. With the help of facilitators, each learner converted their visual learning material into power point slides and prepared compact discs (CDs). The animators perform the animation of various visual objects in the learner-prepared lessons. This material is a self learning material as the words and simple sentences appear slowly with the visuals as well as voice in the background. This kind of material helps learners to situate the learning material in their social and community context thus encouraging them to relate the contents with their previous knowledge. The combination of digital camera and computers with touch screen has not only helped in the development of contents but also accelerated the learning of individuals. The Computer-Based Functional Literacy Programme of the Tata is another excellent example where ICTs are applied to enhance literacy in India (see Chapter 2).

Box 4.2 Promoting literacy by using ICT in India

Source: MSSNRF 2007.

Figure 4.2 Enrolment in TVET at secondary level as percentage of total secondary enrolment in South Asia, 2005


Maldives

Bhutan

Pakistan

Bangladesh

Nepal

India

0.0 1.0 2.0 3.0 4.0

(%)

3.4

2.4

2.1

1.6

1.1

0.8


In-service training

The incidence of in-service training in South Asia is the lowest in the world (see figure 4.4) This clearly indicates weak technological absorption capacity of South Asian enterprises—a factor contri-buting to the low competitiveness of South Asian producers in the global market. Within South Asia, Pakistan has the lowest incidence of in-service training (figure 4.5) and as table 4.4 shows it is mostly the professionals and managers who receive most in-service training. Apart from Sri Lanka, training amongst workers, particularly non-production workers, is quite low. Overall, the low incidence of in-service training in South Asia may be attributed to the small size of firms and low export orientation of the products produced. Table 4.5 demonstrates that the incidence of in-service training in South Asia is higher amongst large firms, those owned by foreign firms, those in the services sector, and those that have a high export orientation. The high incidence of in-service training among large-size firms, compared to small- and medium-size firms is clearly due to their access to finance, scale

Figure 4.3 Ratio of female to male enrolment in TVET at secondary level by region, 2005

Sources: UNESCO 2007 and MHHDC staff computations.

1.0

0.8

0.6

0.4

0.2

0.0 South Asia Central and Central Arab states North Sub- World Developing East Asia Latin Eastern Europe Asia America and Saharan countries and Pacific America and Western Africa Caribbean Europe

Ratio of female to male

Table 4.1 Enrolment in TVET at tertiary level as percentage of total tertiary enrolment, 2002

India 1Pakistan 2Bangladesh 9South Asia 2Africa 4Asia* 10South America 19North America 27Europe 28Oceania 35

Note: * Asia includes 50 countries including those in South Asia.

Sources: UNESCO 2006a and MHHDC staff computations.

Table 4.2 Ratio of female to male enrolment in TVET at secondary level in South Asia, 2005

Ratio of female to male

India 0.3Nepal 0.3Bangladesh 0.4Maldives 0.4Pakistan 0.5Bhutan 0.6


Table 4.3 Female teachers and students as percentage of total in South Asia, 2005

Teachers Students

Bangladesh 19 27Bhutan 31 34India 24 16Maldives 43 30Nepal 20 22Pakistan 23 25South Asia 24 18

Note: The values in the second column are for the time period 2002-05.

Sources: UIS 2008; UNESCO 2007b and MHHDC staff computations.


Quality of TVET in South Asia

The TVET system in South Asia can be analyzed in terms of curriculum, the availability of qualified teachers and other instructional tools and material, and internal efficiency in terms of rates of dropout and gradation of students.

CURRICULUM: For any TVET system to succeed, it must be based on a curriculum that is relevant to the contemporary demands of the labour market. The TVET curriculum in South Asia is not only irrelevant to the skills required in the market but is also not updated regularly to reflect the changing requirements in the labour market. Several plans to enhance the quantity and quality of TVET have been implemented in South Asia. However, few were based upon a comprehensive analysis of man-power demand and supply in the market. This has resulted in a mismatch between the type of skills demanded in the labour market and those supplied by the TVET system. Many TVET programmes such as the one in Tamil Nadu in India known as the Rajaji experiment, and the Handessa Rural Education Scheme in Sri Lanka failed simply because they were not based on skills required by the market.6 A World Bank study conducted in Karnataka found that the graduates produced by the Indian Training Institutes (ITIs) did not meet the industrial requirements and did not have sufficient scientific and technical understanding of industry.7 According to another survey conducted for 55 enterprises in India to assess the quality and relevance of TVET, about 45 per cent of the respondents identified that TVET institutions were not aligned to ground realities whereas 43 per cent stated that curriculum in TVET institutions had not been developed to meet the industrial demands.8 The result of the irrelevant and outdated curriculum is that most TVET graduates do not find employment. According to a study,9 in three states of India (Orissa, Andra Pradesh and Maharashtra) more than 50 per cent of

Figure 4.4 Firms providing formal in-service training to their workers, 2007*

Note: * : Values are for 2007 or the latest year available.Sources: World Bank 2008b and MHHDC staff computations.


East Asia and Pacific

Eastern Europe and Central Asia

OECD

All countries

Sub-Saharan Africa

Middle East and North Africa

South Asia

0 5 10 15 20 25 30 35 40 45 50

(%)

44

4343

42

39

36

30

19

Figure 4.5 Firms providing formal in-service training to their workers in South Asia, 2002-07

Source: World Bank 2008b

Sri Lanka

Bangladesh

India

Pakistan

0 5 10 15 20 25 30 35

(%)

33

16

16

11

Table 4.4 Share of workers trained by skill group in South Asia, 2002–04

Managers Professional Production workers

Non-production workers

India 6.0 7.3 7.0 2.9Pakistan 2.0 3.5 3.3 0.4Bangladesh 1.9 3.0 1.2 0.4Sri Lanka 10.4 11.3 22.4 6.0South Asia 5.2 6.5 6.2 2.4

Sources: World Bank 2007c and MHHDC staff computations.

economies in training provision, education level of workers, managerial capabilities and more exposure to new production techniques.5 Similarly, more investment in in-service training by export-oriented firms reflects the motivation to become competitive by raising labour productivity through training.


the TVET graduates were found to be unemployed. Another study in India indicates that even after three years of completion of TVET more than 60 per cent of the graduates were unemployed.10 In Bangladesh, only 30 per cent of the TVET graduates found jobs within one to two years of their graduation.11

Even those graduates who do find employment do not secure very high wages. According to Pakistan Employment Trends,12 the real wage rate in skilled occupations increased by eight per cent between 1999 and 2006, compared to 12 per cent raise in unskilled occupations during the same time period. In many cases, a mismatch has also been observed between the skills attained and the students’ own labour market objectives. A study13 of graduates of apprenticeship carried out in six Indian states (Andra Pradesh, Delhi, Madhya Pradesh, Maharashtra, Tamil Nadu and West Bangal) concluded that although a majority of the trained persons were employed, about two-thirds were employed in the trade for which they were not trained. This highlights another problem, which is the lack of guidance and counselling offered to students both before and after training.

TEACHERS AND INSTRUCTIONAL MATERIALS: The success of TVET depends upon the availability of qualified teachers as well as equipped laboratories and other instructional tools and materials. Most South Asian countries face a serious

shortage of TVET teachers, particularly in rural areas. In Bangladesh for instance, 74 per cent of the public sector polytechnics have no principal, 53 per cent are without a vice-principal and 55 per cent posts for instructors are vacant.14 In Pakistan, 30 to 40 per cent posts for teachers are vacant in TVET institutions.15 This is mostly due to low social status of the TVET teachers relative to the general education, poor working conditions, lack of career advancement opportunities, and poor reward structure. The teachers have more career advancement opportunities in general education institutions, compared to TVET education. In Pakistan for instance, the Higher Education Com-mission (HEC), in the last one decade took bold initiatives to raise the incentive structure for faculty development in universities but no fruitful step was taken in terms of providing incentives to teachers in TVET institutions. In many cases, the TVET teachers are not even provided sufficient employment security. According to the National Council of Educational Research and Training,16 the state governments in India were reluctant to appoint TVET teachers as full-time staff as they did not want to incur long-term commitment in their case. As a consequence, the part-time teachers who are currently working are neither trained nor have industry experience. In Bangladesh, according to a survey, only 40 per cent of TVET teachers had some teacher training and 10-15 per cent had some industrial experience which was

Table 4.5 Percentage of firms providing in-service training by firm size, ownership, sector and exports in South Asia, 2002–07

By firm size By ownership By sector By exports

Small Medium Large Domestic Foreign Manufacturing Services Exporter Non-exporter

Bangladesh 1.7 11.6 32.3 15.4 90.5 16.2 … 30.3 10.9India 8.2 17.2 37.2 15.1 55.6 15.6 100.0 25.1 13.8Pakistan 7.3 9.2 32.0 10.1 61.1 8.0 66.7 23.8 6.2Sri Lanka 2.3 21.2 46.5 29.4 47.4 32.6 … 50.9 21.4South Asia 4.9 14.8 37.0 17.5 63.7 18.1 83.3 32.5 13.1Low-income countries 19.4 32.6 60.0 28.4 47.3 31.8 53.7 48.9 27.5

Sources: World Bank 2008b and MHHDC staff computations.

The result of the irrelevant and outdated curriculum is that most TVET graduates do not find employment


limited to 2-3 years.17 Similarly, a survey conducted for ITI teachers for 14 Indian states showed that only 39 per cent of TVET teachers had more than 12 years of schooling and only one-third had some industrial experience, with most having less than two years of experience.18 In

Pakistan, around half of the TVET teachers are without any professional teacher training and without any industrial experience.19 The situation is even worse among commerce teachers in Pakistan where only 23 per cent have some professional teacher training and only 24 per cent have any industrial experience. In Sri Lanka where the situation is relatively better, with 79 per cent of TVET teachers in public sector institutes are trained, but only 13 per cent have some industrial training.20

Even if some teachers have some teacher training and know-how about the use of learning materials, they do not have the proper tools. Studies for Pakistan and Sri Lanka, for instance, show that a large number of teachers knew how to develop learning materials, use audio visual aids and design various workshop projects during the staff development programme, but materials and equipments were often not available for these activities.21 Even practical exercises were not conducted most of the time due to either the shortage of operational equipment or lack of consumable equipment. Besides serving as an input for adoption and development of technologies like ICT, biotechnology and nanotechnology, TVET can itself be improved by the use of technology in South Asia (see box 4.3).

Financing of TVET in South Asia

TVET is generally more expensive than general education due to the relatively high cost of specialized buildings, workshops, equipments, consumable materials and high wages of skilled and experienced teachers. Obviously, it requires more funds. In South Asia, government is the major funder for the TVET system. However, since government has limited resources and has competing needs among various levels of education, there is a need to explore alternative sources of funding especially in order to meet the high financial cost of TVET. There are a number of options that can be explored. However the cost recovery option may

ICT can improve the TVET system by a f fec t ing adminis t ra t ive mechanism, programme design and development, learning assessment, control of technical systems, information search and retrieval, career education and guidance, placement of graduates, and easing the access for the disabled. ICT has the potential for improving access, teacher training and market relevant curriculum development in South Asia. There are a number of examples for use of ICT in the TVET system:

• In Latin America and the Carib-bean, TVET institutions have served as a source for pedagogic, curricular and instructive inno-vation for other educational institutions.

• Digital video training has been effectively used in demonstrating farming techniques in Jamaica and food processing methods in Ghana.

• The Onkaparinga Institute of Technical and Further Edu-cation in South Australia used interactive CD-ROMs as a learning tool for students enrolled in various training pro-grammes. These CD-ROMs encapsulated both practical and theoretical components of the course material, which were presented using text, audio, graphics and video.

• The learning centre for Com-puter-Based Trades and Tech-nology at Okanagan University College in Kelowna, Canada has developed courses that use

audiographics technology where the graphics are delivered via a computer and modem link to the instructional sites. Typically, groups of students share a com-puter and speakerphone. The students at all sites can view the material simultaneously.

• Worldwide Instructional De-sign System is a software designed in the US. It offers a consistent framework for the design of course and programme outlines, learning plans, con-tent, and assessment tasks.

There are also some examples of ICT usage in the TVET system in South Asia:

• Women in India used new technologies to develop skills in ICT. They improve their economic and social status by use of e-commerce.

• India has created an education and research network to provide Internet connections services to educational and research institutions for the easy access of teaching and learning support materials. In addition, India has used ICT for teacher training, as International Business Machines Corporation (IBM) knowledge factory in Bangalore has developed five e d u c a t i o n a l m u l t i m e d i a resource centres for curricula development. Similarly, Intel and Microsoft are also working on electronic-based content development in India.

Box 4.3 Use of technology to improve TVET system

Sources: UNESCO 2003 and World Bank 2005b.


pose a challenge particularly in South Asia where the returns to TVET are not very high due to poor quality and poor labour market outcomes. Also the students who opt for TVET mostly belong to low income groups, therefore the option of cost recovery becomes a problem on equity ground. In many countries such as Botswana, the Philippines and Vietnam, TVET insti-tutions have tried cost sharing through income generating activities (IGAs). This has proved to be quite successful in these countries with significant amount of funds raised through this channel. IGAs serve the double purpose of increasing funds for TVET institutions and making the TVET curriculum relevant to industry through exposure of students and teachers to market demand. Public-private partnership (PPP) could be another viable option for the provision of TVET. Many successful countries in the area of TVET have opted for this.22 In Japan computer colleges were established to meet the growing demand for skills in computer sciences and information technology (IT). Public sector provided the funds, whereas, the private sector provided managerial skills to run these institutions. Similarly, in Chile the PPP programme was adopted on similar lines as in Japan, and as a result the enrolment in TVET institutions increased from 97,000 to 400,000 between 1980 and 1994. The success of the TVET system in East Asian countries is also based, to a great extent, on the PPP. Within South Asia, Bangladesh provides a successful example of PPP in terms of increasing enrolment. Until the 1990s the private sector’s contribution in Bangladesh in the provision of TVET was negligible, but during 1998 and 2005 the share of students in private sector TVET insti-tutions increased from 40 to 61 per cent, whereas institutions’ share rose from 71 to 86 per cent during the same time span. The government contributes in financing the salaries of the teachers which is one of the major costs of TVET, whereas the private sector runs these institutions. The

enrolment rates in TVET institutions in Bangladesh are comparatively higher than the South Asian average. In particular, the enrolment of TVET as a percentage of tertiary level enrolment is unusually high at 9 per cent as against the South Asian average of 2 per cent (refer to table 4.1). In Sri Lanka, out of 920 registered TVET institutions, 27 per cent is in private sector and 12 per cent is in the NGO sector.23 However, since private sector TVET institutions in Sri Lanka are expensive and are situated in Colombo, the enrolment is quite low at 15 per cent. In India, a survey, conducted in eight states of India, which comprise almost half of the country’s population, 35 per cent of all institutions are in the private sector with 22 per cent of the total enrolment.24 In Pakistan out of 1522 registered TVET institutions only 288 are in the private sector.25

Status of higher education in South Asia

University education produces highly skilled people who enhance the national capacity to innovate, adopt and operate modern technology. Improvement in higher education system in developing countries is beneficial in two ways. First, it produces scientists and engineers who contribute to appropriate solutions in areas such as the prevention and treatment of diseases, industrial expansion, and infrastructure improvement. And second, it produces social scientists for the knowledge-based globalized world. The state of higher education as reflected in the enrolment rates is not very encouraging. The gross tertiary enrolment in South Asia is one of the lowest in the world, second only to Sub-Saharan Africa (table 4.6). Although the overall enrolment rates in tertiary education increased over the period of time from 4.2 per cent in 1965 to 10.5 per cent in 2005, yet many other regions such as Latin America and the Caribbean and Middle East and North Africa that had lower tertiary level enrolment rates than South Asia in 1965

Public-private partnership (PPP) could be another viable option for the provision of TVET


have made significant advances over the period of time and have surpassed South Asia in 2005. Today, the tertiary level enrolment in these countries is well above of South Asia: 22 per cent in Middle East and North Africa and 29 per cent in Latin America and the Caribbean. Even in East Asia, the gross tertiary level enrolment rate was quite close to that in South Asia up till 1995 (7 against 6.4 per cent for South Asia). However, in just a matter of 10 years, East Asia has managed to increase its tertiary level enrolment by more than three times (from 7 to 24 per cent) whereas South Asia has only managed to increase its tertiary level enrolment by four percentage points (from 6.4 to 12.5 per cent). Another way to compare the tertiary level enrolment in South Asia with the rest of the world is to compare the share of South Asia in world population with that of its share in global tertiary level enrolment. Figure 4.6 shows that South Asia accounts for more than one-fifth of the world’s population but it contains less than one-tenth of its tertiary education students. The national averages do not reflect the true picture of public access to higher education. Huge disparities exist on the basis of income, religion, caste, area of residence and gender. While other countries have achieved gender parity over

time in terms of tertiary level enrolment, South Asia has still a long way to go in order to achieve that. Table 4.7 shows that some gender disparity existed in all regions of the world till 1965. However over the period of 40 years, all regions have eliminated gender disparity apart from South Asia and Sub-Saharan Africa. Gender disparity exists not only in terms of access to higher education but also in terms of job opportunities in higher education system. Table 4.8 shows that in South Asia, female teachers account for 37 per cent of the total number of teachers as compared to 45 per cent in Latin America and the Caribbean and 50 per cent in Europe and Central Asia. Apart from low enrolment and socio-economic disparity in access to higher education, it is also important to note that amongst those who enrol for higher education in South Asia, not many opt for S&T—a field that is absolutely crucial for technological creation and absorption. In East Asia, 40 per cent of the students at tertiary level are enrolled in S&T. In contrast, only 21 per cent of the tertiary level students in South Asia go for S&T fields (see table 4.9). Distance learning has proved to be an efficient tool for raising enrolment rate and improving gender equality. The

Table 4.6 Trends in gross tertiary enrolment rate, 1965–20051965 1975 1985 1995 2005

Bangladesh 1 2 5 6 6India 5 9 9 7 12Nepal 1 2 5 5 6Pakistan 2 2 5 3 5Sri Lanka 2 1 4 5 …South Asia 4.2 7.5 8.1 6.4 10.5Sub-Saharan Africa 1 1 2 3 5East Asia and Pacific 5 5 4 7 24Europe and Central Asia 9 14 13 32 49Latin America and Caribbean 4 13 16 18 29Middle East and North Africa 3 7 11 15 22Low- and middle-income countries 4 7 7 10 18High-income countries 20 33 37 58 67World 9 14 13 18 24

Sources: UIS 2007b and 2008; World Bank 2000 and 2007e and MHHDC staff computations. Figure 4.6 Trends in

number of tertiary students and population in South Asia as percentage of world, 1975–2005

Note: The inner circle is for 1975 and the outer circle shows the values for 2005.

Sources: UIS 2007b and 2008; World Bank 2000 and MHHDC staff computations.

Gross tertiary enrolment

8%9%9%10%

92%91%

91%90%

South Asia

Rest of world

81%80%

79%78%

22%21%20%19%

Population

South Asia

Rest of world


flexible learning system of the open learning facilities provides a great incentive for those who can not continue their education in conventional institutions due to various reasons. The incorporation of the ICTs (such as radio, television (TV), Internet, video/digital technologies and satellite techno-logy) in distance learning has highly increased the outreach, contents and quality of the distance-based education. There are many advantages of the open and distance learning: it increases productivity of training and education, reduces time and cost as compared to formal education, enhances the capacity to accommodate many people, is receptive to addition of more students and teachers without involvement of huge costs, and maintains consistency of training. Distance education disseminates lectures to a vast number of students, is accessible from students’ home and work place, provides opportunities to students to collaborate and network with others, is student-centred as students have more control over the pace, style and sequence of interaction, and lastly it provides easy access to learning resources and experts. Currently, there are a number of Open Universities and distance learning insti-tutions providing education across South Asia. Annex 4.1 presents a list of a few of these universities and their use of ICTs for providing distance education.

Quality

A number of factors affect the quality of the higher education system. These include the faculty, curriculum, internal efficiency, research environment, infrastructure, and accountability mechanism. Despite some efforts to improve the quality of education in recent years particularly in Pakistan and India, the quality of higher education in South Asia is still not up to the mark. One of the major hindrances in improving the quality of higher education in South Asia is the low availability of well-qualified and competent teachers. The expansion of the higher education system in South Asia has

increased the demand for highly qualified teachers in recent years. But the supply has not been forthcoming because there are not enough highly educated and competent postgraduate teachers available; and secondly, there has been a parallel expansion in the economic sector of the region, creating a lot of employment opportunities for the highly educated. In India for instance, there is a severe shortage of teachers in central universities with even sanctioned positions not being filled. A report26 has identified that the higher education system in India is finding difficulty in appointing qualified teachers due to competition from the private sector. There is also a severe shortage of competent and creative research personnel in universities. Due to low availability of teachers, the student-teacher ratio is higher in South Asia, compared to other regions of the world (see figure 4.7). As opposed to the private sector, public sector higher education institutions are unable to hire top level faculty due to

Table 4.7 Trends in gender parity index for tertiary level enrolment, 1965–2005

1965 1995 2005

Sub-Saharan Africa … 0.4 0.7South Asia 0.3 0.5 0.7East Asia and Pacific 0.8 0.7 1.0Middle East and North Africa 0.3 0.7 1.0Low- and middle-income countries 0.4 0.8 1.0World 0.5 1.0 1.1Europe and Central Asia 0.7 1.2 1.2Latin America and Caribbean 0.5 1.0 1.2High-income countries 0.6 1.1 1.2

Sources: World Bank 2000 and 2008a and MHHDC staff computations.

Table 4.8 Female teachers as percentage of total teachers in higher education, 2005

Sub-Saharan Africa 28South Asia 37Low- and middle-income countries

40

World 41Latin America and the Caribbean

45

Europe and Central Asia 50


Table 4.9 Percentage distribution of enrolment by field of study, 2005Science and

technology fields Other fields Not known or unspecified

India 20 53 27Pakistan 24 43 33Bangladesh 20 64 15Bhutan 18 82 …South Asia 21 53 26East Asia 40 60 0World 24 59 17



shortage of funds. As a result, most of the time they hire inexperienced, lower qualified and part-time teachers just to run the systems. In Pakistan for instance only 25 per cent of the university teachers have PhD.27 In Bangladesh, the promotion of ranks among teachers has been observed since 1980 as a result of rules devised by universities to appoint teachers at higher ranks from internal candidates. The curriculum in higher education in South Asia is also outdated and has a poor linkage with industry. Even if some insti-tutions have good contents of curricula, there is shortage of faculty who can understand and teach it. As a result, the majority of graduates face difficulty in finding jobs due to poor quality of education as well as limited information about job opportunities. In Pakistan, a survey based on interviews with employees, parents, students and graduates showed that the quality of the graduates produced was less than adequate and that graduates exhibited poor communication skills, poor reading habits, narrow vision and a limited world view.

Private sector participation

The higher education system in South Asia has seen a tremendous growth of private sector participation in recent years stimulated primarily by the policy frame-

work of governments in the region that encouraged the private sector to participate in the provision of higher education. The degree of involvement and quality of education provision by private sector however, varies among South Asian countries. In India for instance, the private sector accounts for 43 per cent of the higher education institutions (with 43 per cent of colleges and 20 per cent of the universities) and caters to 32 per cent of higher education students.28 In 1960, it accounted for only 15 per cent of the students enrolled in engineering colleges and 6.8 per cent of medical colleges. The corresponding values went up to 86 per cent and 41 per cent in 2003. The role of the private sector in higher education in Pakistan started in 1983 with the establishment of the Aga Khan University. The growth of the process however remained slow till 2002. It has showed tremendous progress since 2002 with the replacement of the University Grants Commission (UGC) with HEC. Today, the private sector accounts for 47 per cent of the universities and degree awarding institutions and contains 24 per cent of the total students. The corres-ponding figures are 31.5 per cent and 8.9 per cent in case of colleges, offering under-graduate and postgraduate programmes. In Sri Lanka, about 54 per cent of the tertiary level students are studying outside

Figure 4.7 Student-teacher ratio in tertiary education, 2005

Source: UIS 2008.

Latin High-income World East Asia Low- and South Asia Sub-Saharan America countries and Pacific middle- Africa and Caribbean income countries

25

20

15

10

5

0

13 13 1416

18

2124

The curriculum in higher education in South Asia is also outdated and has a poor linkage with industry


the public university system. These students are enrolled in private sector institutions, in a variety of courses like IT, Management, Accounting, Marketing, Law, Business and Finance. The higher education system consists of 50 private institutions, 17 public universities and 13 public postgraduate and specialized institutes. The contribution of the private sector in higher education is also on the rise in Nepal. Currently, it accounts for 7 per cent of total tertiary level enrolments. The situation is somewhat different in Bangladesh, which contains a large number of private universities but the enrolment in these institutions is limited, compared to other countries of the region. At present, 65 per cent of the universities are in private sector (54 out of 83 total universities) and this large number of universities contains only nine per cent of the students enrolled in all universities. There are three features of private sector providers of higher education in South Asia that are more or less specific to this region: First, they are expensive and their access is limited to higher income groups. Second, they are mostly located in developed areas and urban centres. In India for instance, the contribution of private sector is highest in the Southern states and lowest in states like Bihar and West Bengal. In Pakistan, 43 per cent of the private sector universities and degree awarding institutions are located in Karachi, 28 per cent in Lahore and 29 per cent in the rest of Pakistan. Third, these universities and colleges mostly provide education in job-oriented and professional fields like Medicine, Engineering, Computer Science, Commerce and Business. As far as the quality of education imparted by these institutions is concerned, only a handful of universities provide world class education. According to the HEC of Pakistan, 20 per cent of the private universities and degree awarding institutes meet the HEC regulatory framework, 43 per cent had minor shortfalls and 20 per cent are seriously deficient.29

Funding

As mentioned earlier, South Asia has one of the lowest gross tertiary enrolment rates in the world. Increased allocation and efficient utilization of funds is absolutely crucial to increasing the enrolment at this level so as to increase the regional capability for technological development. The current allocation of funds to this sector is insufficient, keeping in view the low enrolment rates. Tertiary education spending as a percentage of gross domestic product (GDP) in South Asia is 0.8 per cent, which is low, compared to 2.2 per cent in Cuba, 1.7 per cent in Malaysia and 1.1 per cent in Hong Kong. (See figure 4.8) According to Global Education Digest 2007, public expenditure per student in purchasing power parity dollars is $2,712 in India, $1,009 in Bangladesh, $990 in Nepal. These are significantly lower compared to other countries in the neighbourhood such as, $18,884 in Hong Kong and $7,310 in Malaysia. Although government spending on higher education has been rising in nominal terms over time in most South Asian countries, the rate of increase has not been enough to offset the rising inflation and to provide for increase in student enrolment. In India,30 expenditure on higher education as a percentage of total expenditure on education rose rapidly from 8 per cent in

Figure 4.8 Tertiary education spending as percentage of GDP, 2005

Sources: UNESCO 2007b and World Bank 2007b.

Cuba

Malaysia

Hong Kong

Bhutan

India

Sri Lanka

Bangladesh

Pakistan

Nepal

0 0.5 1 1.5 2 2.5(%)

2.2

1.7

1.1

1

1

0.5

0.4

0.4

0.3


the First Plan (1951-56) to 28 per cent in the Fifth Plan (1974-79), but it decreased dramatically to 6 per cent in the Tenth Plan (2002-07). Higher education spend-ing has been poor in Pakistan during the last several decades, but has improved significantly since 2002,31 by 340 per cent between 2001-02 and 2005-06. A parallel rise in student enrolment resulted in a 40 per cent increase in per student higher education spending during the same time period. Merely increasing the financial alloca-tions is not enough unless the money is utilized efficiently. A huge part of the budget is spent on salaries, in particular the salaries of non-teaching staff, leaving little for capital expenditures that are vital for quality improvement. In Pakistan, two-third of the higher education budget is spent on salaries. Similarly, in Sri Lanka, 70 per cent of the recurrent higher education budget goes towards salaries.

Brain drain

The recent wave of globalization and revolution in ICT has resulted in an increase in the worldwide demand for highly educated people. The developed countries with better institutions, better research facilities and better incentives have been able to attract a large number of qualified people from South Asian

countries. In US32 for instance, spending per researcher is two and half times higher than the average for developing countries. Countries like Australia, Canada, and EU members are competing in the global markets to attract highly qualified people by offering scholarships, easy visa pro-cessing and other schemes. Between 1990 and 2000, a significant amount of brain drain of professional people has occurred in South Asia (See figure 4.9). This is in sharp contrast to other Asian countries such as Indonesia, South Korea, Malaysia and Singapore where emigration rates of highly educated people have fallen over time. The out-migration of highly educated people has created a great threat for tertiary institutions and research centres in South Asia, besides causing a serious loss of public resources. The emigration rates for S&T personnel have been much higher than for those who chose the general education route, which clearly indicates a significant loss of resources, as the provision of education for the S&T disciplines is much higher than for general education. In India, emigration rate for graduates of the Indian Institutes of Technology was found to be five to seven times higher than for people with general tertiary education during the 1980s and 1990s. Similarly, about half of the graduates of All India Institute for Medical Sciences, India’s best medical institute, emigrated in the 1990s.33

A variety of factors are responsible for such a massive exodus of qualified man-power from South Asia. These include better employment opportunities, health and education facilities, work environment, recognition of effort, institutional stability, research facilities, learning opportunities, and importance of work experience in developed countries. Often students who go abroad for foreign education do not return after the completion of their studies. In Canada for instance, about one-fifth of the foreign students do not return after completing their studies. The corresponding ratio is more than one-fourth in UK. The situation is even more disturbing in case of

Figure 4.9 Trends in emigration rates with tertiary education, 1990–2000

Source: Docquier and Marfouk 2004.

Bhutan

Maldive

sNepal

India

Bangladesh

Pakistan

South Asia

Indonesia

South Korea

Malaysia

Singapore

1990 2000

25

20

15

10

5

0

(%)


South Asian students studying abroad. In India, only one-sixth of the doctorate holders in Science and Engineering returned back from US in 2001.34 Proper incentives offered to these graduates in their home countries can result in a brain gain benefiting their own countries in several ways. They can gain through the return of well-educated individuals, and through their contact with a technically sophisticated diaspora. The transformation of brain drain into brain gain requires a stable social, economic and political set up. Besides these factors, it requires an effective education policy focusing effectively on tertiary education in general and S&T in particular. Developing countries that have experienced successful brain gain have done this not through simple return migration programmes but through long-term and sustained efforts to build the national infrastructure. (See box 4.4 and 4.5)

R&D in South Asia

R&D activities provide the potential for an economy to imitate as well as develop

new technologies compatible with local needs. These technologies can be used to achieve some broader objectives like: pov-erty reduction, employment generation, health improvement, quality and quantity enhancement of basic, technical and higher education, industrial growth, agri-cultural productivity improvement, and improvement of the overall economic and political system. According to a study, a one percentage point increase in R&D expenditure raises the GDP growth rate of developing countries by 0.78 per cent.35

Agriculture, the mainstay of most South Asian countries, can benefit immensely through the use of technology. A study conducted in India found the rate of return to investment in agricultural R&D in excess of 50 per cent.36 Agricul-tural R&D can not only increase the incomes of the poor living in rural areas but also those living in urban areas by way of reducing food prices, as the poor tend to spend a major share of their income on food items. There are a number of factors that determine the effectiveness of R&D

In 1991, the Colombian government set up ‘Red Calas Network’, the first diaspora network, which succeeded in establishing joint research activities by domestic researchers and Colombian foreign scientists through a number of programmes like: workshops and symposiums, joint research programmes, visiting researchers, scientific events, research papers, and research and training opportunities. Taiwan and Korea launched intensive recruiting programmes to locate the professionals and offered them incomes comparable to overseas earnings, improved working environment and children’s health and education facilities. As a result, in Taiwan, oversees engineers worked closely with policy-makers to establish a venture capital industry. Taiwan established ‘the National Youth Commission’ to reverse the brain drain, which acted as an intermediary between returning scholars looking for jobs,

and employers. Similarly, Korea upgraded research institutes like the Korea Institute for Science and Technology, to attract the Korean researchers working in developed countries. In addition to focus on physical return, both countries worked to attach their diasporas with national technological networks. In China, Hong Kong and Singapore, international links between universities were established, which contributed significantly to the research quality of the local universities. China’s plan to construct 100 top level universities is expected to attract a number of researchers, scientists and engineers working in developed countries. China established the ‘Office for Returned Chinese Overseas Students’ that offers opportunities to these students in China. Other countries also planned successfully to attract the students back in the home countries after the completion of their higher level studies.

Box 4.4 Reversal of brain drain: some evidence

Sources: UNDP 2001 and World Bank 2007a and 2008d.


in economic as well as human development. These include R&D expenditure, availability and quality of researchers, technicians and other supporting staff, reward and incentive structure for R&D personal, and an improved technical, professional and higher education system producing R&D personnel.

Public Spending on R&D

South Asia spends about 0.65 per cent of its GDP on R&D, which is less than one-half of what East Asia and the Pacific spends and one-fourth of what is spent in developed countries. The situation varies among South Asian countries with the highest research spending in India and the lowest in Sri Lanka. (See table 4.10)

As far as the sources and destination of R&D funding is concerned, there are three main players: the business sector, the public sector and higher education institutions. Each one of these has its own importance and the success of any R&D system depends upon the collaboration among them. Usually, universities are involved in basic research, while business sector research concentrates on the applied side. In developed countries, as well as in East Asia and Pacific, the business sector—that includes both domestic firms as well as multinational corporations (MNCs)—is the main player in R&D activities. The situation is totally reversed in case of South Asia where the private sector has a limited role, indicating poor linkage of the private

Much of the movement of highly educated individuals from developing to developed countries during the last two decades of the 20th century has involved migration to the Silicon Valley (US)—the largest and most sophisticated market as well as a leading source of new technologies. It was found later on that the individuals working in the Silicon Valley benefited their home countries directly, by transferring technology and know-how when they returned home to work for or to start businesses, as well as indirectly, by influencing the formation of policy. As in the early 1980s, returning immigrants began to transfer the Silicon Valley model of investing to Taiwan and Israel. In addition to capital, they brought technical and operating experience, knowledge of new business models, and networks of contacts in the US. The same pattern was observed in China and India. The leading Indian technology firms specialize in exporting software services to American and European corporations. In China, the government has invested substantially to develop an urban infrastructure. Further-more, the selection of IT industries as a

national priority in China has triggered investments in research and development (R&D), technical education, the adoption of IT in both public and private sectors, and the construction of a seemingly unlimited number of science parks. Regions like Hsinchu, Bangalore, and Shanghai have co-evolved with the Silicon Valley economy by providing low-cost skill and by developing specializations that add distinctive new value to electronic products and systems. Taiwan was known in the 1980s for its cheap PC clones and components; today it is recognized for the flexibility and efficiency of its ICT and electronic systems producers. Today the Chinese producers are poised to play a lead role in developing wireless technology. In the 1990s India was a provider of labour-intensive software coding and main-tenance; today local companies are managing large-scale software services projects for leading global corporations. Israel was a low-cost location for research in the 1980s; since then, local entre-preneurs have pioneered sophisticated Internet and security technologies.

The new technology regions have all become high wage, high cost locations in their national economies, yet they continue to attract new firms. Silicon Valley technology producers are benefiting directly from the development of these specialized technology regions. They now look to their counterparts in Taiwan, China, India and Israel for co-development of products and compo-nents. These collaborations deepen the capabilities of each of the partners and over time can support a process of reciprocal innovation and upgrading in the respective regions. But this does not mean that all developing economies are benefiting from brain circulation. This opportunity is rewarding for only those developing countries that have invested heavily in higher education, typically technical education, and are politically and economically stable. The lesson for South Asia is that if it wants to avail the technological benefits, it will have to be politically, economically and socially stable, and will have to make its higher education system compatible with that of the developed world in terms of quality.

Box 4.5 Brain circulation and Silicon Valley: lesson for South Asia

Source: Saxenian 2005.


sector with universities and public sector R&D organizations. A study conducted in Delhi found that almost all public sector R&D organizations and universities had mutual collaboration but they hardly had any formal partnerships with the business sector.37 The situation is not different in Pakistan, where the higher education system has improved a lot after 2002 as a result producing some quality research but there is no application of that research in the industrial sector of the country. Overall, universities and R&D organizations in South Asia lack an effective institutional mechanism for technological transfer and commercialization of research.

R&D personnel in South Asia

The quantity and quality of R&D personnel depends on a strong system of technical and higher education system of a country. With a low budget for R&D spending, South Asia also has the lowest stock of R&D individuals. It is the region that has the lowest number of researchers per million inhabitants in the world, second only to Africa. The situation differs among South Asian countries with the highest proportion in Sri Lanka (141), followed by India (111), Pakistan (80) and Nepal (59).38 (See figure 4.10)

Not only is the overall involvement in R&D lower, there is also a wide gender disparity in R&D organizations in the region. Figure 4.11 shows that South Asia is the region in the world where the involvement of women in R&D activities is the lowest. The ratio of female re-searchers to the total number of researchers is one-half the average for developing countries. Besides low involvement in R&D activities, females are engaged at low rankings in R&D organizations. In Nepal, for instance, female researchers account for only 13 per cent of the total researchers, out of which 95 per cent are engaged in routine work of analysis and other service activities.39

Table 4.10 Expenditure on R&D as percentage of GDP, 2000–05R&D expenditure by sector of performance (% share) by sector of funding (% share)

as % of GDP Business enterprise Government Higher

educationBusiness

enterprise Government Higher education

India 0.69 19.8 75.3 4.9 19.8 75.3 4.9Pakistan 0.44 … 67.6 32.4 … 87 11.9Sri Lanka 0.19 5.5 61 33.6 0.6 67.5 …South Asia 0.65 17 74 9 17 77 5.7East Asia and Pacific

1.44 62 22 14 54 35 2.3

Europe and Central Asia

0.94 43 29 20 38 54 0.5


0.56 29 27 33 33 37 27

High-income countries

2.45 63 13 27 49 34 2.1

Sources: UIS 2008; World Bank 2008d, i and MHHDC staff computations.

Figure 4.10 Researchers per million population, 2000–05

Sources: Decquier and Marfouk 2004.

2,000

1,500

1,000

500

0 Africa South Asia Developing Latin East Asia World Europe countries America and Pacific and and Central Caribbean Asia

2,019

894704

39237410673


Research publications

Research publications indicate the output of R&D effort. Researchers use published research work to report the research output and gain status in their fields. Furthermore, research articles published in internationally recognized and peer reviewed journals indicate the quality of research conducted in academia. Although the higher education system has improved significantly in South Asia over the years, yet the output of research shows a disappointing picture, compared to other developing countries. South Asia contains more than one-fifth of the world’s population, but accounts for only 2 per cent of the world science and engineering (S&E) articles output (see figure 4.12). The developing countries share in world research output has increased significantly during the last one and half decade but the situation in South Asia has been almost stagnant. The published number of scientific and technical journal articles published varies among South Asian countries, with the highest annual growth in Pakistan (4.4 per cent), followed by Bangladesh (3.5), India (3.1) and Sri Lanka (1.7) between 1990 and 2005.40 The research perform-ance is relatively better in Pakistan but it is low, compared to 19.2 per cent in South Korea, 13.4 per cent in China, 13.1

per cent in Singapore and 10.4 per cent in Thailand.

Conclusion

In the backdrop of globalization and the ever increasing compulsion on the part of South Asian countries to integrate in the highly competitive world, it is not hard to see the significance of technical, profes-sional and higher education. Not only is it essential for the enhancement of the national capacity to innovate and adopt modern technology, it is also a passport to better employment opportunities and poverty reduction. Given the current demographic transition in South Asia that is characterized by a bulge in the working age population and the obligations that flow from this transition in terms of pro-viding adequate employment opportunities to all, the significance of good quality technical, professional and higher education is seen more than ever before. But in order to achieve these objectives and to reap the potential of technically professional and higher education, it is important to promote a system based on a curriculum that is relevant to the contemporary demands of the labour market and is taught by a well qualified and a competent team of teachers.

Figure 4.12 Trends in share of South Asia, developing and developed countries in world S&E articles, 1990–2005

Sources: World Bank 2008i and MHHDC staff computations.

2.2 162.0 6

92

82

1990

2005

South AsiaDeveloping countries(excluding South Asia)Developed countries

Figure 4.11 Share of female researchers in total researchers 2000–05

Sources: UIS 2007a and 2008 and MHHDC staff computations.

Central Asian States


South East Asia

Africa

World

South Asia

0 10 20 30 40 50

Women as a percentage of total researchers

50

43

41

31

28

13


Annex 4.1 Open Universities and the use of ICTs for distance learning in South AsiaCountry University Overview Technology useIndia Indra Gandhi

National Open University (IGNOU)

Established in 1985, the IGNOU is meeting the educational needs of some 1.8 million students in India and 32 other countries. The IGNOU has 21 Schools of Studies and runs its programmes through 58 regional centres, 108 study centres and 49 overseas centres. With its massive outreach, the IGNOU enrolls the 10 per cent of total students enrolled in higher education in India. It also serves as the National Resource Centre for open and distance learning and is a recognized centre of excellence for the Commonwealth of Learning.

The IGNOU provides a multimedia learning system that consists of audio, video, radio, TV, teleconferencing, radio counseling, Internet-based learning as well as the face to face learning. It also offers certain programmes online through its telelearning centres. It adopts following ICT tools:

• Regular two-way audio and one-way video teleconferencing.• By using 134 Satellite Interactive Terminals of the EDUSAT, the

IGNOU has established two-way audio and two-way video networks to enable students interact with faculty in virtually distributed classrooms.

• By using 186 radio stations across the country, the IGNOU broadcasts interactive phone-in counseling every Sunday, students participate through toll-free telephone.

• It coordinates the network of educational TV channels with the name of Gyan Darshan. Various TV channels are used for telecounseling, telelecturing, and teletraining through live programmes.

• It also coordinates the Gyan Vani, a Radio Cooperative exclusively used for educational purposes, consisting of 21 fully operational frequency modulation (FM) radio stations.

B. R. Ambedkar Open University (BRAOU)

Established in 1982, the BRAOU has a strong network of 200 study centres in the state of Andhra Pradesh.

The BRAOU uses multimedia teaching-learning approach. It uses the self-learning material that is supported by the audio/video lessons. The lessons are broadcasted by the All India Radio and the Doordarshan (regional TV channel).

Madhya Pradesh Bhoj (Open) University (MPBOU)

Established in 1991 in Madhya Pradesh, the MPBOU claims to be the second largest Open University of India. Through its headquarter in Bhopal, 11 regional centres and 1049 study centres, it is providing education at all levels. It is specially targeting the disadvantaged such as rural and tribal population.

The MPBOU uses digital electronic classrooms by using the EDUSAT. A satellite interactive terminal is established at headquarter to use the EDUSAT for disseminating lectures. It has established the Gyani (FM channel) in collaboration with the IGNOU.

Bangladesh Bangladesh Open University (BOU)

Established in 1992, the BOU is the only public university providing distance education in the country. The BOU expands education to all levels in science, agriculture, humanities and social sciences. The BOU aims to expand the education opportunities to individuals from every class and improve the quality of education.

The BOU uses both print media (for books and reading material) and electronic media (for audio visual materials) to deliver the education and training contents. It uses radio and TV programmes as well as Internet and geographic information system (GIS) and plans to start videoconferencing and teleconferencing to enhance the interaction between learners and teachers.

Pakistan Allama Iqbal Open University (AIOU)

Established in 1974, the AIOU is the first Open University of Asia. With 36 regional campuses and centres across the country, it serves the educational needs of a huge number of people across Pakistan and Middle East. It provides education from basic to doctoral level in a wide range of disciplines.

The university uses printed material for education that is largely supplemented by audio visual material created by the in-house experts and broadcasted through educational channel of Pakistan TV Network and Radio Pakistan. The University also hosts an FM radio station. The ICT department of the AIOU is also working on the development of a TV channel. It also plans to increase the use of e-learning facilities such as teleconferencing.

Virtual University (VU)

Established in 2002, the VU is the first ICT equipped virtual university of Pakistan. It is aimed to provide world-class education to students at highly affordable cost. Currently, the VU is operating in 60 cities of the country in association with more than a 100 affiliated centres. The VU also enrolls Pakistani students residing other countries.

The VU is equipped with modern ICT tools and uses a combination of free-to-air TV broadcasts with the Internet. The VU courses are developed by renowned experts in the country and recorded in professional studios. The courses are broadcast over free-to-air TV and the multimedia CDs are also provided to students. Moreover, the lectures can also be made available as streaming media through the VU servers. Along with textbook and multimedia CDs, learning material is also provided through comprehensive learning management system hosted on VU servers. The LMS also hosts an online question answer board where students can post questions and lecturers/experts can provide answers. Assignments are also handed over through the LMS.

Sri Lanka Open University of Sri Lanka (OUSL)

Established in 1978, the OUSL is the only distance learning institution of the country. It serves the heterogeneous population of Sri Lanka that is spread all over the island by increasing their access to higher education without any discrimination.

In order to deliver the contents of the curricula, the OUSL uses the audio visual materials produced by in-house experts to supplement the printed material. Moreover, it also uses virtual class rooms to provide high-quality, online education.

Sources: AIOU 2008; BOU 2008; BRAOU 2008; IGNOU 2008; MPBOU 2008; OUSL 2008 and VU 2008.

The role of science and technology (S&T) in shaping up human civilization can hardly be exaggerated. Every technological revolution contributed to the leapfrogging of our civilization. Nations that visualized the potential of the technology and realized it, developed at a faster pace than those that could not visualize the potential. For a country like Bangladesh with its insignificant natural resources, small piece of land and an unmanageably large population, national development is a pipe dream unless the country benefits from technology and increases its overall productivity. This chapter discusses the role of technology in human development in Bangladesh. The type of technology that will be the focus of this chapter is the one that is relevant for human development and poverty reduction—that is the technologies that have a demonstrable effect on increasing the productivity and income of the poor as well on improving the provision of public services such as health and education. The forms of technological interventions that are most relevant here relate to information and communications technologies (ICTs). Of all the technological revolutions that human civilization has witnessed, ICT is the most versatile and most revolutionary. In a pace of only half a century it has changed the way people live at almost any economic strata of society. It has even empowered the deprived segments of the society and helped them access resources. Almost all major advances in areas other than ICTs are heavily patented and proprietary, and therefore tend to be elitist, to varying degrees. The benefits from such advances are priced to exclude

most of the poor out of the benefits that might accrue. In contrast, the open-source or non-proprietary technologies such as those that relate to ICT tend to propagate themselves among the less fortunate and less privileged people in the society. However, even elitist technologies spur skills acquisition, making a noticeable impact on economic growth and human development. Microsoft, one of the most iconic companies in computing techno-logy, is working with China’s Ministry of Informational Industry and China’s provincial governments to extend the benefits of technology to rural populations. In India also, Microsoft’s efforts to em-power digitally disenfranchised rural populations include e-health.1 Remarkable progress in the area of biotechnology is coming as a blessing for the poor. This newly emerging area of biotechnology will be an effective tool for increasing agricul-tural production, medicine and help countries like Bangladesh against food shortages and health problems.

The role of technology in Bangladesh’s economy

Agriculture

As in other South Asian countries, the agricultural sector in Bangladesh has shrunk over the past decade in terms of its contribution to the country’s gross domestic product (GDP). At present, agriculture accounts for around 23 per cent of Bangladesh’s GDP. The adoption of high-yielding varieties (HYVs), an outcome of technological development, has led to a significant increase in agricultural production over the years.

Chapter 5

Technology and Human Development in Bangladesh*

In a pace of only half a century it has changed the way people live at almost any economic strata of society

* The background papers for this chapter have been prepared by Drs Naeem Chowdhury and Mohammad Kaykobad.

Technology and Human Development in Bangladesh 99

Table 5.1 shows the growth in the production of staple crops in Bangladesh between 1995 and 2008. The production of rice increased from 17.68 million in 1995-96 to 28.37 million metric tons in 2007-08. Studies show that this growth registered in the rice economy has primarily been the result of a shift from local varieties to HYVs.2

Hybrids have also come on the scene as a result of technological developments. This is evident from the fact that the prominence of wheat in the crop mix has waned significantly ever since the late 1990s and its place seems to have been taken by maize (corn). The production of corn has risen from next to nothing in the early 1990s to a sizeable crop. The case of the rapid growth of maize in Bangladesh, which has been fuelled by a fairly rapid diffusion of maize hybrids, is a tribute to the dynamism of the private sector. The entire roll-out of maize, from the selection of ‘germ-plasm’, imitation to the implementation of agricultural extension, has been entirely driven by the private sector. Rice hybrids have also been entering into the scene, albeit much less prominently than in the case of maize. Overall the production of all staples (rice, wheat and maize combined) has grown at 3.6 per cent during the period 1996-2008. Population in Bangladesh has grown roughly at 1.6 per cent during this period. That means that per capita production of rice has registered a growth rate of some 2.2 per cent. This aspect of the performance of Bangladesh’s agri-culture must be lauded as a comparatively bright spot against the backdrop of the experience elsewhere in the South Asian region. In India, for instance, during a similar period, per capita production of staples (rice, wheat and corn), has grown at a much lower rate of 1.1 per cent annually. The improvement in agricultural yields inevitably leads to reduction in rural poverty. Agricultural research, rural infra-structure and rural electrification are among the most prolific drivers of the reduction of rural poverty in developing

Asia. The seed-water-fertilizer technology in Bangladesh has rolled back the growing season, shortened production cycles and enhanced cropping intensity, thereby increasing the productivity of land, labour and capital. The diffusion of this technology, according to some studies is a major contributor to the demonstrable decline in the poverty, in the long run.3

Manufacturing

Led by the market and trade liberalization policies of the government, the industrial sector in Bangladesh has grown rapidly over the past two decades. According to the Ministry of Finance, the contribution of the industrial sector in overall GDP nearly doubled from about 17.3 per cent in the early 1980s to 30 per cent as of 2006-07. Table 5.2 shows that per capita industrial output in constant prices has grown at a per annum rate of more than 15 per cent. It is widely believed that this momentum of the growth in industrial output will generate the rate of growth of the overall GDP to above seven per cent in the near future. Globally branded companies such as the Tata or Arcel or Mittal—the world’s largest steel group—have recently expressed active interest in investing in Bangladesh.

Table 5.1 Trends in the production of staple crops in Bangladesh, 1995–2008

(million metric tons)

Rice Wheat Maize All staples

1995-96 17.68 1.37 … 19.051996-97 18.88 1.45 … 20.331997-98 18.86 1.8 … 20.661998-99 19.90 1.91 … 21.811999-2000 23.06 1.84 … 24.92000-01 25.08 1.67 .01 26.762001-02 24.30 1.60 .06 25.962002-03 25.18 1.51 .12 26.812003-04 26.19 1.25 .24 27.682004-05 25.16 .97 .36 26.492005-06 26.53 .73 .52 27.782006-07 27.31 .74 .80 28.852007-08 28.37 .84 .90 30.11

Source: GOB, Statistical Yearbooks (various years).


Macroeconomic stability is crucial to sustain such a growth momentum in the industry. It allows businesses, individuals and the government to plan more effectively for the long term, improving the quality and quantity of investment in physical and human capital and helping to raise productivity. Large fluctuations in output, employment and inflation add to uncertainty for firms, consumers and the public sector, and can reduce the economy’s long-term growth potential. The monetary policy in Bangladesh has sought to ensure, and until 2007-08, has been largely successful in ensuring low and stable inflation. The rate of inflation in Bangladesh has averaged around six per cent between 1998 and 2007. Small and medium enterprises (SMEs) occupy a central position in the industrial sector of Bangladesh. As of 2005-06, there were some 3.71 million micro, small and medium establishments in Bangladesh with some 10.5 million workers employed in them.4 About 99.6 per cent of all units in Bangladesh belong to the SME category. The number of employees in these SMEs varies from 10 to 99 employees. The government of Bangladesh (GOB) is placing special emphasis on SMEs in an attempt to reduce poverty and to promote sustainable industrial development. Acquisition, maintenance and upgrad-ing of technology are a sine qua non for manufacturing industries. The UNCTAD has devised a classification of manufactur-

ing industries based on their technology content that range between ‘low-technology’, ‘medium-technology’ and ‘high-technology’. To this, we have added a fourth category called ‘labour-intensive’. Table 5.3 shows the type and the proportion of industries in Bangladesh that belong to each of these groups. The technological rating of Bangladesh’s industrial sector tends to be poor: only 0.2 per cent of the number of Bangladesh’s manufacturing establishments, and some 2.3 per cent of Bangladesh’s manufacturing employment, could be passed off as technologically advanced. The only industries in which the use of high-tech manufacturing processes enjoys any degree of prominence are petroleum refining, fertilizer production, ship-building and heavy-engineering. Another 15 per cent of the number of manufacturing enterprises and some 16 per cent of manufacturing employments could be treated as in medium techno-logical industries. Some nine per cent of the number of the manufacturing enter-prises and 12 per cent of manufacturing employment could be treated as in low-tech industries. The development of the ready-to-wear garments industry from the ground-level up over the last three decades in Bangladesh seems to have transformed the industrial potential of Bangladesh. Whereas in the late 1970s, Bangladesh did not boost any manufacturing capacity at all in the areas of ready-to-wear apparel, the country has gradually come to occupy a prominent place among apparel exporters. Close to three thousand manufacturing facilities, hundreds of thousands of industry-grade sewing and cutting machine dot its industrial landscape. Some of the most savvy captains of the Chinese, the Taiwanese, and the South Korean apparel industry have established footholds in Bangladesh. The South Koreans have established an entire private sector operated export processing zone, the size of some 400 acres, in the port city of Chittagong.

Table 5.2 Trends in growth rates of GDP, manufacturing output, and population in Bangladesh, 2001–07

(%)

YearGrowth rate of

real GDP

Growth rate of real

manufacturing output

Growth rate of

population

Growth rate

per capita GDP

Per capita manufacturing

output

2001-02 4.42 15.76 1.37 3.05 14.392002-03 5.26 15.97 1.35 3.91 14.622003-04 6.27 16.16 1.33 4.89 14.832004-05 5.96 16.51 1.31 4.65 15.22005-06 6.63 17.08 1.3 5.33 15.782006-07 6.51 17.79 1.29 5.22 16.5Average 5.84 16.54 1.33 4.51 15.22

Source: GOB 2008a.


The emergence of the ready-to-wear apparel has fostered human development in Bangladesh by making millions of young women with rural background more valuable in the marketplace. More than 1.5 million workers, mostly young single women in their teens are employed in the industry. Whereas in the past, these women would end up as household help typically earning very little, today they make a living.

High-technology exports

China and, to a smaller degree, India have enjoyed booms, in terms of manufacture and exports of high-technology export during the last decade or so. High tech-nology here closely corresponds to elec-tronics, telecommunications, computers and data-communications, motor vehicles and especially automotive parts, mobile phones, and high-end consumer electronics products. The closest Bangladesh comes to exporting some components of these high-tech products is when the country exported camera parts worth US$15 million in 2005-06. The corresponding exports the previous year was US$6 million.5 Apart from this, Bangladesh has also been involved in software exports. According to the figures released by Bangladesh Bank, the total amount of ‘official’ software exports increased from US$2.24 million in 2000-01 to US$12.68 million in 2004-05.6 Data on receipts from export software services (such as system integration, IT consulting, and the like) is non-existent. While good data on receipts from business process outsourcing are hard to come by, Bangladesh probably has made no more than a couple of hundred thousand dollars from setting up call centres, medical transcription, and the like.7 While the industry’s performance in terms of total exports has been gloomy, a small number of individual success stories do exist.

The growth of ICT in Bangladesh

Over the past one and a half decade, ICT, particularly telecommunication, has seen a tremendous growth in Bangladesh. This growth has primarily been triggered by the market liberalization and the favour-able policies of the government to encourage the growth of ICT (see table 5.4 and section on policies to promote ICTs). Detailed information on the penetration by all kinds of telephony, including fixed and mobile telephony is presented in Table 5.5. The number of BTTB (Bangladesh Telephone and Telegraph Board) fixed lines is also shown there. Between 1974 and 2005, this quantum grew at a rate of nine per cent annually. The third column in table 5.5 shows the number of lines provided to clients from two other licensed fixed telephony providers, namely, Bangladesh Road Transport Authority (BRTA) and Seba Telecoms. The fourth column shows the

Table 5.3 The relative share of low-, medium- and high-technology manufacturing industries in Bangladesh

% of units

% of employment

Labour-intensive 75.8 69.7Low-technology 9.0 12.0Medium-technology 15.0 16.0High-technology 0.2 2.3

Note: Labour-intensive manufacturing industries include apparel-making, toys and sports goods, wood and paper products, and food and agro processing. Low-technology manufacturing industries consist of iron and steel, fabricated metal, transport equipment other than motor vehicles, leather and footwear, and designer goods. Medium-technology manufacturing industries involve rubber, pharmaceuticals, plastics, non-electrical machinery, electrical equipment and machinery production, light-engineering production, electronics production, and modern spinning and weaving. High-technology manufacturing industries contain chemicals and fertilizer manufacturing, computer and network-equipment manufacturing, automobiles, heavy engineering and machine tools, aircraft manufacturing, optical, photographic equipment, and petroleum refining.

Source: GOB 2004.


rampant growth in the number of subscribers of mobile telephone companies. From close to no subscription in 1994, the number of subscribers to mobile telephone in Bangladesh stood at around 7,500,000 in 2004-05. The economic effect of the diffusion of mobile telephony has been simply huge. This has been reflected in the tremendous capital appreciation reaped by entre-preneurs who had invested in them. Mobile telephony’s spread has had two knock-on effects on the employment of men and women of small means. First, thousands of ‘mom-and-pop’ kiosks sprouted throughout the country to re-sell talk-time using handsets, and to sell necessary gear, accessories, prepaid cards, chords, cables and Internet pre-paid cards, etc. The second is the emergence of Village Phone (VP) ladies within the command areas where Grameen Bank is operational. These Grameen Bank’s female borrowers, who are lent money by Grameen Bank to buy the handsets and then sell phone services have become much publicized heralds of ‘information technology (IT)’ in the service of the poor. These VP ladies indicate how far the outreach of ICT is and how it is contributing to the lives and livelihoods of poor villagers in Bangladesh.

Technology and public service delivery in Bangladesh

Technology and healthcare provision in Bangladesh

With poor health indicators and poor access to healthcare services particularly in

Table 5.4 Bangladesh Telephone and Telegraph Board servicesService category 2004-05 2005-06

Telephone services

Number of telephone exchanges 698 731

Exchange capacity 1,010,009 12,03,057

Telephone connections 857,358 8,89,174

Public call office 695 695

Card phones 1,514 1,056

Telegraph and telex services

Inland telegraph office 848 848

International telegraph office 1 1

Inland telegram (messages) 177,319 104,986

International telegram (messages) 6,508 17,228

Telex exchange capacity 2,000 …

Connections (telex) 778 …

GENTEX services (office) 91 91

Internet services

Internet connection 17,344 20,848

Overseas circuits

Telephone 7,347 10,193

Voice frequency telegraphy (VFT) and data 274 294

National auto trunk

Nationwide dialing (NWD) circuits Capacity 70 68

NWD circuits working 45 47

Annual development program

Number of development projects 13 11

Allotment (BTK million) 11,370 7,004

International voice circuits 3,730 10,467

Paid minutes of international circuits 2001-2002 2005-2006

Outgoing 39,269,674 234,323,381

Incoming 355,504,881 770,879,014

Total 394,774,555 1,005,202,395

Note: The values for the international voice circuits are for the year 2002 and 2006.

Source: GOB 2008b.

Table 5.5 Trends in penetration of fixed- and mobile-telephony in Bangladesh, 1974–2005 (000 subscribers)

BTTB’s fixed telephony lines

Fixed telephony, Others*

Mobile telephony

Total lines or subscribers

Population (millions) Teledensity**

1973-74 60.0 0.0 0.0 60.0 70.8 0.08

1984-85 182.0 0.0 0.0 182.0 95.0 0.19

1994-95 344.2 6.5 2.0 352.7 118.9 0.3

2004-05 872.1 35.0 7,500.0 8,407.1 157.8 5.33Notes: *: BRTA, Seba Telecoms (fixed telephony). **: Number of connections per 100 people.

Source: Based on Author’s calculation.


rural areas, it is quite pertinent to ask how technology is playing its role in improving access to healthcare services in Bangladesh. The rapid roll-out of ICTs including mobile telephony is facilitating access to basic healthcare services in Bangladesh through innovative mechanisms such as telemedicine. Telemedicine initiatives help bridge the geographical distances between healthcare providers in cities and underserved rural patients, bringing advanced diagnostic methods and treatment to areas that currently have little access. In doing so, the programmes enhance the quality of care available, while also decreasing the overall healthcare costs. Telemedicine is a method by which patients can be examined, monitored and treated, while the patient and doctor are located in different places. The patient’s reports can be sent via text, voice, images and video and medical advice offered from a remote location. Grameen Telecom has leveraged a network centred around mobile Internet that goes by the name of Global Phone Rural Service. Typically, this network is populated by a large number of Internet-aware Subscriber Identity Modules (SIMs) that remain connected with each other leveraging the wireless modems that remain coupled with these SIMs. Data are uploaded to and downloaded from the nearby base stations that have been established by the mobile phone companies. Grameen Telecom has created a network of some 100 telecentres—nothing other than Internet-aware cyber-cafes. A telemedicine system consists of a personal computer, a modem, a network connection, a scanner and a video conferencing system. This equipment has to be deployed at both the doctor’s premises which is referred to as a Tele-medicine Specialty Centre as well as at the patient’s premises which is referred to as a Telemedicine Consultation Centre. One of the biggest benefits telemedicine provides is the reduction of unnecessary travel, expense and even strain. Once the virtual presence of a specialist is

acknowledged, a patient can access medical resources without the constraints of distance. It also solves the problem of retaining specialists in non-urban areas. Another contribution of technology in the health area is the improvement in the diagnostic sector. Up until the early 1980s, available diagnostic services were mostly of routine type involving blood, urine and stool examination, some micro-biological cultures, routine biochemical tests and X-rays etc. With the transition to the free market economy, demand for a wide spectrum of diagnostic services increased considerably. Many clinics were established in the private sector with advanced diagnostic capabilities including imaging, ultra-sonography, and tests for hormones, immunological tests and many others. Many of these newer and sophis-ticated tests became services of great public demand. Other technologies such as the manage-ment information systems (MIS) also serve as a great tool to increase efficiency and improve transparency in public health offices. The MIS is being used in Bangladesh in the offices of the Ministry of Health and Family Planning, and in the offices of public hospitals in the divisional and district headquarters with a view to enforcing transparency and accountability in the management of resources allotted to healthcare provision. Recently, the Ministry of Health and Family Welfare has been inducted into the Medium-Term Budget Framework (MTBF). The primary purpose of the MTBF is to align the budget outlays, both recurrent and the capital, with national priorities. The management of information systems helps in improved financial management and greatly facilitates the monitoring and evaluation of programmes.

Technology and the provision of education in Bangladesh

With the establishment of private universities there has been a sharp rise in enrolment. Ensuring quality of university

Telemedicine initiatives help bridge the geographical distances between healthcare providers in cities and underserved rural patients


education must be very difficult unless the country can exploit the potential of ICT tools. There has been a sharp rise in the number of polytechnic institutes indicating that technical education is able to improve employability of young people. The growth of intake for technical institutions has doubled in the last five years indicating employability of graduates with technical education. With inadequate physical infrastructure and a high student-teacher ratio, the role of ICT must be exploited both to increase access and to improve the quality of education in Bangladesh. The technology resources potentially useful in the delivery of education in Bangladesh are of the following types: Internet-portal or, what comes to the same thing, a content management system; Intranet; Extranet; computer-aided design (CAD) tools; computer-aided manufacturing (CAM) tools; and software-aided instructor-led teaching of technology and engineering subjects. The Ministry of Science and Inform-ation and Communication Technology (MOSICT) has been planning to improve efficiency, productivity, and quality of education by introducing ICT at various levels. In this context, several initiatives have already been taken and some are underway, such as: assistance to secondary schools for introducing computer courses; introduction of computer training and Internet facilities for rural secondary and higher secondary institutions; development of Secondary School Certificate (SSC) (ICT) and Higher Secondary Certificate (HSC) (ICT) curricula in schools and colleges in 64 districts; establishment of a world class research institute as a ‘centre of excellence’; introduction of Olympiad competitions for primary, secondary and university levels in science and ICT; and establishment of six IT training insti-tutions, one in each divisional head-quarters. Recognizing the importance of aware-ness among the students about computers and IT, a public-sector project has been providing assistance to nongovernmental

organizations secondary schools through distribution of computer hardware, software and peripherals for laboratories and organizing training for teachers. The government has also planned a new project to provide computer training and Internet facilities across the country and to establish a local cyber centre by providing Internet facilities in selected inst i tut ions. The programme for introducing SSC (ICT) and HSC (ICT) curricula in 128 schools and colleges in 64 districts is also underway. One school and one college in each district will be provided with complete laboratory and Internet facilities. The teachers of those schools and colleges will also be trained.

Policies to promote ICTs in Bangladesh

Countries al l over the world are increasingly becoming aware of the significance of technology not only in terms of increasing economic growth but also in terms of increasing efficiency and improving the system of governance. Countries such as China, India, Malaysia, and Thailand have enthusiastically been implementing e-governance systems that range, from railway-travel reservation systems, to systems issuing passports electronically, to automated systems for issuing and renewing trade licence, to complete computerization of the transfers of ownership titles to land. Low-income countries too are now catching up in this race. The use of ICT offers tremendous reduction in costs of maintaining large databases and has therefore driven even low-income coun-tries towards e-governance. The GOB also realizes the significance of technology in all spheres of national life. The government realizes that ICT, in particular can make an important impact on overall development by overcoming the barriers of social, economic and geographical isolation. Through greater access to information, it can also enable all people including the poor and the voiceless to participate effectively in

With inadequate physical infrastructure and a high student-teacher ratio, the role of ICT must be exploited both to increase access and to improve the quality of education in Bangladesh


national decision making. ICT is also seen as an indispensable tool in the fight against poverty and in helping the country meet vital development goals such as poverty reduction, basic healthcare, and education. Recognizing these imperatives, the GOB has been taking a number of measures at the policy level to promote the use of ICT. These include the formulation of a national ICT policy, adoption of e-governance initiatives in selected areas, formation of a National Task Force on ICT and biotechnology, amendment of the Copyright Act 2000, and legislation of the ICT Act. The National ICT Policy was formulated in 2002. The policy aims at building a knowledge-based society, an infrastructure that will facilitate empowerment of people, enhance democratic values and norms for sustainable development, governance, e-commerce, public utility services and all kinds of online ICT-enabled services. Among the specific objectives are:

• Creation of infrastructure and legal framework that will facilitate expe-ditious development of the software industry and its export.

• Promote and facilitate use of ICT in all sectors of the economy for transparency, good governance and efficiency improvement.

• Establish legislative and regulatory framework for ICT issues like intellectual property rights, data security and protection, digital signature, e-commerce and ICT education.

• Develop a large pool of world class ICT professionals to meet the needs of local and global markets.

• Enact laws and regulations for un-interrupted growth of ICT, in con-formity with WTO stipulations.

A National ICT Action Plan is being prepared based on ICT Policy 2002. The Copyright Law 2000 has been further amended. Moreover, the government has

exempted ICT-related equipment from value added tax and has been providing tax holidays to ICT-related ventures. The government is also emphasizing the allo-cation of resources to higher educational institutions to facilitate production of ICT graduates. For instance, it has pro-posed to allocate more resources to one of the S&T universities to be established in the Fifth Five Year Plan as a centre of excellence in ICT. The government has also asserted the importance of computer-based learning tools and qualified and skilled foreign teachers. The ICT Policy also aims at strengthening the MOSICT and Bangladesh Computer Council so that the nation can reap the benefits of this versatile technology. The Policy also points to the importance of deregulating the telecommunication sector and connection to fibre optic submarine cable network. It also aims at increasing teledensity and extends tele-communication facilities to rural and underserved areas to bring the greater mass into the stream of ICT activities. The importance of research and development (R&D) in ICT is also high-lighted in the Policy and the Bangladesh Computer Council is encouraged to carry out ICT-related R&D. The Policy also includes the proposal for setting up IT/ICT laboratories and resource centres in universities and other concerned insti-tutions. For assisting local software industry, the Policy asserts the importance of creating of an ICT Incubator. The Export Promotion Bureau and the Commercial Wing of Bangladesh Missions abroad are encouraged to take vigorous steps to identify and explore markets for export of software, data entry services and ICT-enabled services from Bangladesh. The Policy also emphasizes the use of ICT in healthcare, telemedicine, agriculture and poverty alleviation, social welfare, transportation, tourism, environment, judiciary and other areas of concern. MOSICT, which is tasked with imple-menting this policy is, however, one of the smallest ministries of the GOB, with a revenue budget in 2004 of only BTK7.4


million. Recognizing the lack of financial resources and execution ability in this Ministry, a Prime Minister’s ICT Taskforce has been formulated in which Professor Muhammad Yunus is also included as a member. This task force led the Ministry of Planning to adopt a project called Social ICT project at a cost of some BTK1 billion, starting from 2003. Some of the projects implemented courtesy of this project are profiled in table 5.6.

ICT Act of Bangladesh (2006)

An ICT ACT has also been enacted in Bangladesh in 2006. The Act seeks to achieve various objectives. As a general approach, the law aims to facilitate:

e-commerce transactions; e-governance; legal recognition of electronically main-tained records; electronic filing; and prevention of cyber- and computer-related crimes. The purpose of enacting the law governing electronic transactions is to provide a legal framework so that information is not denied legal effect, validity or enforceability solely on the ground that it is in electronic form. The Act gives legal effect to electronic data interchange, electronic records, electronic signatures, and electronic payment gateway system. The Act has also filled in the lacuna in the law with respect to computer- and Internet-related crimes.

Table 5.6 ICT installations within the GOBOrganization served Narrative regarding the scope and functionalities offered by the

installation in question

The Central Bank of Bangladesh Bangladesh Bank has automated a number of internal processes and developed an information-rich website.

Department of Roads and Highways, the Ministry of Transport and Communications

Department of Roads and Highways has developed an interactive website that includes features such as zonal operations, relevant contact information, searchable database of contractors, tenders, and schedule of rates.

Ministry of Local government and Rural Development

Rajshahi City Corporation has developed an Electronic Birth Registration System linked with health and schooling services provided by the city.

Ministry of Religious Affairs Ministry of Religious Affairs has developed an interactive website for Hajis that includes facilities for searching particulars of individual Hajis and their respective flight particulars, and for sending and receiving messages or death bulletins.

Ministry of Foreign Affairs (MOFA)

MOFA has developed an interactive website that contains searchable databases of Bangladeshi missions abroad and foreign embassies and missions in Bangladesh. In addition, MOFA has built a modest level of ICT infrastructure.

Parliament Secretariat Parliament Secretariat has computerized the Parliament Library, digitized various important bills and ordinances, created computer user centres for Members of Parliament, and established a well-connected Training Centre. Despite progress to date, many of these resources remain unused, and no internal processes have been automated. In addition, the Secretariat is not well-linked with other government institutions.

Ministry of Education Moving online the announcement of the results of SSC and HSC.


National Telecommunication policy

The National Telecommunication Policy was adopted in 1998. The highlights of the Policy objectives include the exchange of information; promotion of national integration; digitalization and access to new technologies; private sector develop-ment and promotion of competitive framework; liberalization of tariff policy; and setting up a regulatory framework to achieve these objectives. The Bangladesh Telecommunication Act, 2001 provides for the establishment of an independent commission for the purpose of development and efficient regulation of telecommunication systems and telecom-munication services in Bangladesh. Bangladesh Telecommunication Regu-latory Commission (BTRC) has been functioning since 31 January 2002. The broad objectives of the Commission are:

• To encourage the orderly develop-ment of a telecommunication system that enhances and strengthens the social and economic welfare of Bangladesh.

• To ensure, in keeping with the prevalent social and economic reali-ties of Bangladesh, access to reliable, reasonably priced and modern telecommunication services and Internet-services for the greatest number of people, as far as practicable.

• To ensure the efficiency of the national telecommunication system and its capability to compete in both the national and international spheres.

• To prevent and abolish discrimination in providing telecommunication services, to promote a competitive and market- oriented system.

• To encourage the introduction of new services and to create a favour-able atmosphere for the local and foreign investors who intend to invest in the telecommunication sector in Bangladesh.

With the establishment of the BTRC, private sector participation in fixed telecom services is growing and thereby increasing teledensity and teleaccess in the country. BTRC has authorized fixed line telephone services (public switched telephone network) in four regions of the country through the private sector with the objective of adding 1.2 million fixed phones in two to three years. BTRC has made it mandatory to deploy 5 per cent of the telephones in rural areas under public switched telephone network, in order to encourage growth of telecommuni-cations facilities in rural areas. It will also allow wireless local-loop (WLL) technology in remote areas to provide access at low-cost. Besides encouraging private partici-pation in the sector, the government recognizes the need for further reforms in BTTB and accordingly has been infusing a corporate culture into the BTTB management through various institutional reforms so that it can assume greater and expanding roles to meet present and future demand. This reform has already taken place with the conversion of BTTB into Bangladesh Telecommunication Ltd. (BTCL). As a result of these reforms, both telephone and mobile connections have increased tremendously over the past few years (see table 5.7). With a view to serving the ICT community in the country, BTCL’s Internet Backbone Bandwidth has been increased to 1860 Mbps duplex through Submarine cable system and 24/8 Mbps through Satellite System.8

Table 5.7 Telephone growth in Bangladesh, 2001–06

Year Type ofexchange

Number ofexchange

Exchangecapacity

Telephoneconnection

Pendingdemand

2001-2002 ManualAuto (analog)Auto (digital)

41684

168

39,29355,598

651,187

32,44945,182

528,300

21,99710,484

178,630

Grand total 668 746,078 605,931 211,111

2005-2006 ManualAuto (analog)Auto (digital)

21732

484

18,38812,600

1,172,069

11,8158,167

869,192

………

Grand total 731 1,203,057 889,174 …Source: GOB 2008b.


Expansion of Internet facilities for rural people

With a view to making Internet facilities available to the poor at a low-cost and bringing about significant improvements in their livelihoods, the GOB has initiated a number of projects and programmes. The voice over Internet protocol (VoIP) has been made accessible to the private sector to facilitate Internet expansion at a low-cost. All 64 districts have been brought under Internet coverage by BTTB through dial-up connections. The government is also exploring the possibility of establishing an alternate broadband network for large-scale data and voice transmission. The government believes that the expansion of Internet facilities to the rural areas largely depends upon the availability of fibre-optic links. Accordingly, fibre-optic links have already been established in most cities (50 out of 64 districts). Moreover, BTTB (now BTCL) has already connected Bangladesh with the information superhighway through a submarine fibre-optic cable project with the landing site at Chittagong. In recent years, with the introduction of mobile telephones and tax free import of computers and accessories, the penetration of ICT has improved tremendously. Table 5.8 indicates the progress in this regard.

Creation of a high-tech park

With a view to developing an information society the GOB has created a ‘Hi-Tech Park’. In this connection, an ICT Incu-bator has been set up in the heart of Dhaka City, which has been in operation since November 2002. The Incubator Centre has been provided with free Internet connection and enjoys a rent subsidy. The government has been working to establish a 232 acre Hi-Tech Park at Kaliakoir, 40 km north of Dhaka City. This park will be used for software and ICT-enabled service industries, electronics and printed circuit board-related equip-ment and products, telecommunications, hardware assembly/component design and manufacturing, opto-electronic equipment, biotechnology and related linkage industries. The Park will include a hi-tech institution to provide technical support and to conduct R&D activities. The Park is expected to promote and facilitate ICT and other hi-tech industries for develop-ment and business activities and is likely to play a significant role in Bangladesh’s efforts for poverty alleviation. The huge potential of business process outsourcing industry (call centres) and its related benefits for the country, in earning foreign currencies and generating employ-ment, demand government attention. To encourage and facilitate the healthy growth of this highly promising sector, it

Table 5.8 Trends in usage statistics of telephone, computers and Internet in Bangladesh, 1999–2006

Telephone lines per 100

Telephone lines and cellular subscribers

per 100

Telephone lines and cellular subscribers (in

000)

Only cellular subscribers per

100

Internet users per

100

Internet users

(in 000)

Personal computers

per 100

Personal computers (in 000)

1999 0.46 0.32 394 0.06 0.04 1 0.02 302000 0.6 0.39 488 0.12 0.08 5 0.1 1202001 0.83 0.46 582 0.22 0.14 50 0.1 1302002 1.25 0.6 720 0.4 0.15 100 0.15 2002003 1.54 0.83 1,085 0.8 0.18 186 0.19 2502004 2.59 1.26 1,681 1.0 0.22 204 0.34 4502005 7.1 1.56 2,107 2.0 0.26 243 0.78 1,0502006 14 2.63 3,613 6.35 0.31 300 1.2 1,650

Source: GOB 2008b.


is recommended that necessary facilities be created in the Hi-Tech Park to facilitate the growth of the sector.

ICT and global partnerships for development

During 27-29 May 2008 a conference was held at Palais des Nations on ‘Partnership on Measuring ICT for Development’ for creating a knowledge-based society that addressed the following major issues: the availability of more reliable and comparable information about the emerging inform-ation society and economy, the need for standardized methodologies for the collection of statistics on the use of Internet by individuals, households, businesses or schools and other social agencies, and the need for helping developing countries to produce the required information and data. The World Summit on Information Society, in its Geneva Plan of Action in 2003, identified specific targets, based on the Millennium Development Goals, which serve as global references for improving connectivity and access in the use of ICTs to be achieved by 2015. One of the targets is ‘to ensure that more than half the world’s inhabitants have access to ICTs within their reach’. Five years after the summit, some appre-ciable progress has been achieved. For example, more than 50 per cent of the mobile phone subscribers are now in the developing countries. In Bangladesh too, the penetration of mobile phones across the country and deep into the rural areas has been really significant. Nevertheless, the country has still a long way to go. As a signatory of the Millennium Declarations, Bangladesh must strive to improve its ICT indicators further in order to pave the way for the creation of an information society in the world.

Conclusion

For a country like Bangladesh that has limited resources and a large population, it is absolutely essential to reap the

benefits of technology in terms of increasing productivity and improving the delivery of public services including health and education. The trade and market liberalization of Bangladesh’s economy in the 1990s has resulted in the spectacular growth of ICT-related goods such as telephones, computers and Internet connectivity etc. It has also resulted in an impressive growth in the manufacturing output. The adoption of HYVs and other technologies in agriculture has brought about increase in per capita agricultural production over time. All these developments seem to have made their mark on raising the incomes of the poor and providing them with a source of livelihood. For instance, in the manufactur-ing sector the growth of the garment industry, in particular, has provided millions of women with a stable source of employment and income. The penetration of ICT in rural areas has led to thousands of rural women to buy mobile handsets using their credit from Grameen Bank and then use the handsets to sell phone services and earn income. The adoption of technology in agriculture has also had a positive impact on rural poverty reduction in Bangladesh. Apart from these benefits, the diffusion of ICT in remote areas of Bangladesh has also resulted in an improved access to health facilities through telemedicine. These are a few examples of the most prominent effects of technology on human development in Bangladesh. Of course, there are other more indirect benefits in terms of improved governance and increased efficiency of public departments. Technology has a great potential. It must be harnessed for greater human development in Bangladesh. It is encouraging to note that both the GOB and the civil society are aware of the tremendous potential of technology in terms of improving the lives and livelihoods of its teeming population. The GOB has adopted a concrete strategy to encourage the use of ICT in all spheres of national life. The Grameen Bank of

The trade and market liberalization of Bangladesh’s economy in the 1990s has resulted in a spectacular growth of ICT-related goods


Bangladesh has also taken impressive measures to use ICT as an effective tool to empower the poor. These measures by Grameen Bank to harness technology for

human development and empowerment of the poor may serve as exemplary measures to be replicated elsewhere in South Asia.

In our last annual Report on Human Development in South Asia 2007: A Ten Year Review,1 we argued that despite impressive economic growth that occurred in South Asia during the last decade against the backdrop of economic reforms, the region continues to face immense challenges in terms of human development. Progress in many human development indicators such as those related to health, education, malnutrition and poverty remains slow and in many of these areas, South Asia does more poorly than many other developing regions including Sub-Saharan Africa. For instance, despite a significant reduction in the number of out of school children in South Asia over the past 10 years, the present number in just two countries, India and Pakistan, remains one of the highest in the world. Hunger and malnutrition continue to pose a serious challenge to the region. According to the latest figures, 43 per cent of the children under-five are malnourished in South Asia (down from 51 per cent in 1990). Around 72 per cent of the population in India and around 73 per cent in Nepal are without access to improved sanitation.2

In short, the gap between economic performance and that of human development in South Asia is widening. What has gone wrong? There could be many factors for such a state of affairs. First, the political commitment in most countries as reflected by the budgetary allocations for social sectors is still low, particularly in view of the magnitude of the distance that these countries need to travel in order to provide a decent access to some of the basic services such as safe water, sanitation as well as basic health and education that are now increasingly being recognized as the essential human rights of all citizens. Access to these basic

services in South Asia is still far from universal. To cite just a few examples, around 40-45 per cent of the one-year olds in India are still not fully immunized against measles and DPT. Similarly, 57 per cent of the births in South Asia as a whole are not attended by skilled health personnel.3 Since the poor lack purchasing power, they rely exclusively on public services and when states fail to provide adequate public services to their citizens, the result is poor human development outcomes. Second, whatever amount is allocated in the budget for social sectors such as health and education, is either underutilized or inefficiently utilized, resulting in poor quality of services. Examples abound in many South Asian countries where there are hospitals and dispensaries without adequate number of doctors and para-medical staff and there are schools without teachers and adequate infrastructure including proper toilets and furniture. The level of citizens’ satisfaction with public services as reported by some surveys is extremely low. In Pakistan, for instance, according to Pakistan Living Standards Measurement Survey 2006-07,4 around two-thirds of citizens who have used public health services are found to be dissatisfied. Almost 38 per cent of those using education services have reported their dissatisfaction. Around 93 per cent of those who use police services in Pakistan, according to the same survey, are found to be dissatisfied. Similarly in India, according to a perceptions survey,5 only 12 per cent of the citizens are fully satisfied with paramedic behaviour in the health sector and only 9 to 10 per cent is fully satisfied with the quality and fairness of the Public Distribution System (PDS) in India.

Chapter 6

Technology for Healthcare and Governance in South Asia

Since the poor lack purchasing power, they rely exclusively on public services and when states fail to provide adequate public services to their citizens, the result is poor human development outcomes


In such a scenario, the question is, what role can technology play in improving access to and quality of public service delivery? Can it be harnessed to improve the governance of public service delivery? And how is technology, particularly inform-ation and communications technology (ICT), is currently being exploited to achieve these goals in South Asia? These are some of the central questions that we take up in this chapter.

Technology for healthcare

There are four key channels through which technology, in its various forms, results in improved public health. First, medical technology results in better diagnosis and treatment of diseases. Second, the use of ICT can greatly

improve the access to healthcare services and can also aid in awareness campaigns about health and hygiene. Third, food fortification techniques can help fight hunger and malnutrition. And last, the efficient storage of healthcare information can greatly improve the efficiency of healthcare departments as well as aid in effective planning and monitoring of public health policies. Efficient storage of patient-related information helps keep track of the medical history of patients and helps in better diagnosis and treatment. Below we look at each of these areas in the context of South Asia.

Medical technology and the fight against diseases

Perhaps one of the greatest contributions of technology to human development is the application of medical technology to diagnose and treat diseases that were not curable earlier. Medical breakthroughs particularly in vaccines and antibiotics resulted in immense health gains all over the world. Today, the use of biotechnology is greatly aiding the development of new drugs and vaccines that are useful to treat many diseases facing the developing world such as malaria and HIV/AIDS. Advance-ment in medical technology also aids in developing diagnosis that are cost-effective and are suitable to local conditions. One example of such a major breakthrough is the development of oral rehydration therapy (ORT) that is much more cost-effective in the treatment of diarrhoea. The development of this technology by the International Centre for Diarrhoea Disease Research (ICDDR) has greatly reduced the number of deaths due to dehydration across the world. The Centre has also developed orally provided cholera vaccine that is much more cost-effective than the old injectable vaccine (see box 6.1). Other technologies such as those that are used in water filtration plants are also useful particularly in view of the challenges that South Asia faces in the provision of safe drinking water to its population. It is

The International Centre for Diar-rhoea Disease Research (ICDDR), Bangladesh, is a world renowned research centre for diarrhoeal disease, vaccination science and family planning. The discovery of the Oral Rehydration Solution (ORS) to replace the injection-based treatment has been one of the greatest achieve-ments of the ICDDR that proved to be a highly efficient and cost-effective method of rehydration. It has greatly contributed to reduce the number of deaths due to dehydration across the world through cheap provision of ORS. The researchers at the ICDDR have developed tremendous expertise in the cholera research. They have demonstrated the limitations of the old injectable cholera vaccines to control and prevent cholera epidemic and developed the alternative orally provided cholera vaccine that is more effective and long lasting. This has saved a large amount of money spent on the prevention of cholera across the world, and many lives, with more

efficient treatment. During the cholera outbreak in Madras in 1992, the interdisc ipl inary team of researchers working at the ICDDR discovered the Vibrio cholera O139—Bengal pathogen and the disease it caused and the way it spread. As a result of the detailed investigation of this pathogen, anti-bodies were prepared and sent to more than 25 neighbouring countries. In 1994, after the outbreak of cholera in Rawandan refugee camps in Zaire that was claiming 2,000 lives everyday, the epidemic control team of the ICDDR was able to immediately identify the pathogen causing the epidemic and its drug resistance. This greatly improved the efforts to control the epidemic through effective treatment and saved millions of dollars from being spent on ineffective medicines. The ICDDR is also providing support to control cholera in many parts of the world including Ecuador, Peru, Cambodia and Yemen.

Box 6.1 A major breakthrough in the treatment of diarrhoea and cholera

Source: ICCDR-B 2008.

Technology for Healthcare and Governance in South Asia 113

important to note that most infectious diseases in the region such as diarrhoea are waterborne. Providing clean drinking water to the population can curb many diseases. The Sono filter is one example of a major breakthrough through which arsenic-contaminated water is treated in an efficient and cost-effective manner. Arsenic is found in ground water in many South Asian countries. For instance in Bangladesh, according to some estimates, arsenic is found in the ground water in 59 out of a total of 64 districts.6 The long-term intake of arsenic has very serious health implications. The Sono filter developed by a Bangladeshi scientist, based at the George Mason University, provides a cost-effective solution for water purification from arsenic.7

The use of technology is not only limited to the treatment of diseases but it also aids in the diagnoses of diseases, which is the foundation of healthcare. Diagnostic technologies can be broadly classified into two categories: radiology and pathology. Radiology refers to the medical imaging, primarily used to diagnose diseases but also used to treat diseases. It has a central place in healthcare. Various types of radiation technologies include; X-Rays, computed tomography (CT) scanning, ultrasound, and magnetic resonance imaging (MRI). It also includes nuclear medicine that uses radio isotopes. Pathology, on the other hand examines organs, tissues, body fluids such as blood and urine, and autopsies to diagnose disease. Most of these advanced diagnostic technologies are commonly used in South Asia. However, they are concentrated in urban areas, district headquarter hospitals and tertiary care centres. They have yet to be expanded to rural areas where the majority of the South Asia’s population particularly that of the poor reside. The rural healthcare centres that are the basic health units are mostly devoid of such facilities. In urban areas, where diagnostic technologies are available at public health facilities, it is commonly reported that patients are referred to private laboratories

for investigation. This is either because technological facilities at public health centres are insufficient to provide services to all patients, or the quality of their diagnosis is unreliable. Doctors at the public hospitals may also receive huge incentives/commissions from private businesses for recommending patients to private facilities. This adds heavily to patients’ out of pocket expenditures on health. Fees of private diagnostic facilities are extremely high and literally unbearable for the poor, who end up selling their assets or borrowing money to access these health services. In order to provide better healthcare and ensure health equity, there is a dire need to expand the access of diagnostic technologies to all citizens. Rural health facilities serving the widest majority of the population need to be equipped with diagnostic technologies. Obviously, this would also require deploying well-trained laboratory technicians at rural health facilities. This can prove to be a challenging task as there is already a shortage of trained health professionals in the region. However, there is no alternative solution. Given the poor health conditions and massive poverty, governments need to invest in diagnostic technologies at the public healthcare centres. Moreover, district headquarter hospitals and the tertiary healthcare centres need to revitalize their diagnostic centres by updating technologies, increasing the number of equipments where needed, and deploying human resources of good quality to provide reliable diagnosis. Enhanced quality of the diagnosis at public hospitals can also take care of the excessive referral of patients at public hospitals to the private diagnostic laboratories and hence reduce the out of pocket expenditure on health by the poor. Pakistan and India are also benefiting from the recent advancements in nuclear medicines in combating various diseases. The Pakistan Atomic Energy Commission (PAEC) and the various departments of nuclear medicine in India are significant contributors in this respect. The PAEC

The use of technology is not only limited to the treatment of diseases but it also aids in the diagnoses of diseases, which is the foundation of healthcare


has 13 specialized centres dedicated to the treatment of various diseases by nuclear medicines in the country. These 13 nuclear medicine centres of the PAEC provide various services relating to radio-therapy, medical oncology, and diagnostic and therapeutic nuclear medicines. Since these centres are scattered all around the country, they are accessible to a large number of people.

Technology and access to healthcare services

As mentioned earlier, public access to healthcare services in South Asia is extremely low particularly in rural and remote areas. Most of the public health facilities are concentrated in urban areas. In rural areas where there is a high incidence of infectious diseases, maternal illness and nutritional deficiencies, healt-hcare centres are few and far between. In India for instance, 54 per cent of the villages are more than 5 km away from the nearest primary health centre. Only 10 per cent of the villages have a medicine shop and only 20 per cent have a private clinic or a doctor.8 In such a scenario, ICTs can be used innovatively not only to improve access to healthcare services (e.g. through telemedicine) but also to disseminate hygiene and healthcare information to far flung areas to prevent the occurrence of diseases. In some parts of Bangladesh and India, telemedicine is being practiced successfully, eliminating the need to travel huge distances (see section on technology and healthcare provision in Chapter 5). The Grameen Bank of Bangladesh has launched this project and is operating it successfully. The Grameen Bank has also launched Healthline which is a 24-hour call centre manned by registered physicians to extend basic health information and consultation. Healthline is accessible to all Grameen Phone subscribers and is an innovative way to provide basic health services. These innovative initiatives in South Asia are however few and far between, but they hold great potential to expand access to

healthcare services in a region that suffers from poor healthcare infrastructure and dismal health indicators. Another area where technology offers an immense potential is preventive healthcare. ICTs in the form of radio, television (TV), Internet and even mobile phones can assist in awareness campaigns regarding health and hygiene. Healthcare awareness such as that related to the prevention of diseases, contraception, and infant care and immu-nization can greatly prevent the occurrence of diseases and can reduce mortality particularly among infants. Radio broadcast can play a major role in South Asia in terms of communicating important information related to health and hygiene to mothers in their local languages. Important information related to the prevention and basic treatment of diseases can also be transmitted through the use of telephones. One such innovative initiative is the Electronic Helpline on HIV/AIDS in Rajasthan, India (see box 6.2).

Technology and the fight against malnutrition

Malnutrition is one of the most serious challenges confronting South Asia today. At present, the region has the highest concentration of malnourished people living in the world including Sub-Saharan Africa. Nearly one in five people in South Asia are malnourished and this figure rises to one in three people for Bangladesh. Micronutrient deficiencies particularly in iron and vitamin A are alarmingly high in countries such as India, Bangladesh and Pakistan. (See table 6.1) The undernutrition, or ‘hidden hunger’ not only reduces the chances of survival but also affects almost every sphere of human activity. Nutritional deficiency results in irreversible mental stunting and retardation. It also leads to low intelligence quotient (IQ) levels and reduced learning capacities. Estimates from 60 developing countries suggest that iodine deficiency causes a reduction of 10-15 points in IQ.9 The nutritional deficiency also affects children’s school attendance and their

ICTs can be used innovatively not only to improve access to healthcare services (e.g. through telemedicine) but also to disseminate hygiene and healthcare information to far flung areas to prevent the occurrence of diseases


ability to concentrate. Overall, the estimates suggest that South Asian countries lose as much as one to two per cent of their GDP to micronutrient deficiencies. This alarming situation calls for all possible actions to fight this menace. Technology has a crucial role to play through increasing the production of food and through food fortification. We examine here how the application of technology for food fortification10 can be

considered as the most cost-effective and sustainable solution to the nutritional deficiencies. Through fortification, a specific amount of required micronutrients (premixes) are added to various food items (known as ‘vehicles’) through specific processes. By these processes foods are usually enriched by iron, iodine, vitamin A and a wide range of other micronutrients. In what follows there is a brief overview of the fortification of three

The ICT can play a pivotal role in the prevention of HIV/AIDS through creating awareness and disseminating information to the groups at risk and the public at large. The Electronic Helpline on HIV/AIDS in Rajasthan, run by the Health and Social Research Centre in Jaipur, is an excellent example of the use of ICTs to provide inform-ation about various aspects of HIV/AIDS to individuals. This facility is available 24 hours and is accessible through the telephone line. It provides technical information about HIV/AIDS and health-related services. While maintaining the anonymity of the callers, the Helpline software provides information about the following:

• What is HIV/AIDS, its causal factors and prevention possibilities

• Symptoms• Testing and treatment facilitators• Support available to HIV/AIDS

positive

The use of geographic information system (GIS) to map HIV/AIDS and other infectious diseases and identify the regions that are vulnerable to infectious diseases can also help greatly to plan various health inter-ventions as well as monitor the performance of healthcare programmes.

Box 6.2 The Electronic Helpline on HIV/AIDS in Rajasthan, India

Source: Srivastava and Noznesky 2005.

Table 6.1 Country-wise micronutrient deficiency in South Asia*Vitamin and mineral deficiency (VMD) Bangladesh Bhutan India Nepal Pakistan

Estimated prevalence of iron deficiency anemia (IDA) in children under-five (%)

55 81 75 65 56

Estimated prevalence of IDA in women age 15-49 (%)

36 55 51 62 59

Estimated annual number of maternal deaths from severe anemia

2,800 <100 22,000 760 …

Estimated annual number of children born mentally impaired

750,000 … 6,600,000 200,000 2,100,000

Estimated percentage of children under-six with sub-clinical vitamin A deficiency

28 32 57 33 35

Estimated number of child deaths precipitated (due to vitamin A deficiency)

28,000 600 330,000 6,900 56,000

Estimated annual number of neural tube birth defects (due to folate deficiency)

8,400 150 50,000 1,600 11,000

Estimated percentage of gross domestic product (GDP) lost to all form of VMD

0.9 1.6 1.0 1.5 1.7

Notes: *: Data on VMD are imperfect. The figures given in this table are drawn from the best information currently available. Prevalence data are based on a global review of existing surveys of VMDs. Functional consequences of VMD are calculated using a specially-designed ‘Profiles module’.

Source: UNICEF and MI 2004.


essential micronutrients: iron, iodine and vitamin A in South Asia.

Salt iodization

Salt is considered as the most important vehicle for the provision of iodine across the world. Since South Asia suffers from severe prevalence of goitre due to iodine deficiency (see table 6.1), salt iodization provides an important solution (see box 6.3). Various programmes for salt iodization are implemented in every country of the region. Nonetheless, the prevalence of goitre and the percentage of households using iodized salt differ significantly across countries in South Asia (see table 6.2). Table 6.2 suggests that the prevalence of goitre is lower in countries where a

higher proportion of households use iodized salt and vice versa. Pakistan has the lowest proportion of households using iodized salt (17 per cent) and consequently the highest prevalence of goitre (38 per cent). Contrary to this, 95 per cent of population in Bhutan has access to iodized salt resulting in the absence of goitre. These differences suggest that if every household is provided with iodized salt, goitre can be eliminated from the region. A further inquiry into the differences between countries over percentage of households using iodized salt suggests that political will plays a crucial role in providing solutions to the IDD.11 In 1989, Bangladesh government passed a law and declared it mandatory to iodize edible salt. Under this law, the amount of iodine in salt is determined and the production, marketing and selling of non-iodized salt is prohibited. Similarly, in 1997, the Indian government banned the storage and sale of non-iodized salt for human consumption. This ban was lifted in 2000 at the national level. However, only two states, rest of the states did not lift the ban. This ban was re-instated again in 2005 at the national level. Contrary to this, no legislation and national IDD control exists in Pakistan. Only two provincial governments have made it compulsory to iodize the edible salt. Moreover, in the absence of nationally prescribed iodization levels, every provincial government and every producer is following different levels of iodine in salt.

Flour fortification

Flour is the most widely used staple food in the region. Flour fortification with iron is considered as the cheapest and the most sustainable intervention with a potential to reach the largest part of the population. Governments in South Asia are now realizing the need to fortify flour as an effective means of fighting malnutrition, and have started taking some initiatives.

Table 6.2 Goitre prevalence and iodine use in South Asia*State of iodine deficiency disorders (IDD) and iodine consumption

Bangladesh Bhutan India Nepal Pakistan

Total goitre rate (%) 18 0 26 24 38

Estimated % of household using iodized salt

70 95 50 63 17

Note: *The latest data available till 2004.

Source: UNICEF and MI 2004.

Estimates suggest that Double Fortification of Salt (DFS) meets around 30 per cent of the daily iron requirement in diet. The National Institute of Nutrition, Hyderabad has developed a novel technology for the DFS with iodine and iron. Since the country suffers from severe IDD and IDA, the provision of both micro-nutrients iodine and iron is the need of the hour. Since salt is the most inexpensive and commonly used food item, it is adopted as a vehicle for fortification. The DFS is provided by the supervised feeding programmes such as the Midday Meals (MDM),

Integrated Child Development Services (ICDS) and the PDS. Evaluation studies have also proved the effectiveness of the DFS in com-bating both the IDA and the IDD. In tribal population, where the incidence of IDD is high, the intake of DFS has reduced the prevalence of goitre. Similarly, among school children, the DFS has reduced anaemia by enhancing the haemoglobin level, while also increasing their iodine levels. Thus the innovative technology produced by the National Institute of Nutrition is proving helpful in com-bating hidden hunger particularly among the poorest population.

Box 6.3 DFS technology: a novel technology adopted by the National Institute of Nutrition, Hyderabad

Source: Nair et al. 1998.


We examine below some of these initiatives and the challenges that still remain.

PAKISTAN: Pakistan launched a National Nutrition Support Programme (NNSP) in 2005 in collaboration with the Flour Mills Association, Global Alliance for Improved Nutrition (GAIN) and the Micronutrient Initiative (MI). During the first three years of this project, the capacity of 300 roller mills was planned to be built. Under the second five-year plan of the NNSP, 50,000 Chakkis (small traditional mills) will be mobilized to fortify flour with iron.12 Various donors such as the Asian Development Bank (ADB) and the Japan Fund for Poverty Reduction are supporting such initiatives. Although, the roller mills serve the urban flour consumers, the vast majority of rural population depends upon Chakkis. Moreover, the traditional mills are highly unorganized. Therefore, the challenge lies in building the capacity of these Chakkis to fortify food, to monitor their performance and compliance with the standards.

INDIA: Flour fortification in India was voluntarily started in 1998 by a flour mill and currently many international develop-ment agencies are making efforts at various fronts in this area. They include ADB, MI, United Nations Children’s Fund (UNICEF) and World Food Pro-gramme (WFP).13 The state government in Gujarat in collaboration with the Roller Flour Mills Association has started implementing a mandatory fortification of maida and atta (flour) in organized roller mills as well as Chakkis. The PDS has also started implementing the fortification policy at the state level in West Bengal districts, Andhra Pradesh and the Union Territory of Chandigarh. The Supreme Court has also recommended that the Public Distribution Programme should provide fortified flour instead of wheat to the poorest families. Similarly, the Khichri fortification programme is aimed at providing fortified khichri to 1.3

million Anganwadi Centres in seven districts of West Bengal.

NEPAL: At present, there are very few flour mills fortifying a small proportion of the flour in the country. Recently, the MI has collaborated with the Flour Mills Association and it is expected that very soon all 20 roller mills will start fortifying flour.14

Fortification with vitamin A

Both India and Pakistan have started fortifying foods with vitamin A. In India, cows’ milk is being fortified and in Pakistan cooking fat is being used as a vehicle for the provision of vitamin A. Bangladesh has recently launched a national programme for the fortification of edible oil.15 Under the collaborated efforts of government, GAIN and private businesses, this programme aims at fortifying 70 per cent of all cooking oil with vitamin A to improve the health of 90 million people by 2010 including 30 million vitamin A deficient populations.

Technology and the management of health services

The most important role that technology, particularly the ICT, can play in the management of health services is the col lect ion, s torage , analys i s and dissemination of information. Information about various aspects of healthcare such as the access to and utilization of healthcare facilities; preventive and curative services; availability, utilization and procurement of medicines and drugs; availability, functioning and use of diagnostic techno-logies; allocation of financial and human resources; incidence of various kinds of diseases and the overall quality of health-care, is the backbone of any healthcare system. This information is a prerequisite for informed decision making; efficient allocation of resources; formulation of policies responsive to citizens’ needs; as well as monitoring and evaluation of various programmes, policies and inter-

The most important role that technology, particularly the ICT, can play in the management of health services is the collection, storage, analysis and dissemination of information


ventions. Only a well-informed policy has the potential to address the problems of healthcare systems in the region. Both India and Pakistan have specialized health management inform-ation systems (HMISs) to cater to the data needs for healthcare provision. The evaluation studies of HMIS of India and Pakistan however reveal many flaws in the information systems. There are numerous parallel agencies and programmes engaged in the collection, storage and transmission of data.16 They are collecting almost similar kind of information with a slight difference of focus. In India, for example, there are four agencies at central level, Central Bureau of Health Intelligence, Director General Health Service, Family Welfare Department and Health Depart-ment in collecting data. At state level, there are four to five directorates with their own information systems. At district level, three to four agencies collect information and do the same job. Similarly there are other vertical pro-grammes such as TB Control, Malaria Control and Leprosy Control, collecting and managing their data without coordinating with each other. In Pakistan, there is a National Health Management Information System at the central level, collecting data from the provincial HMISs that further collect data from districts.17 At district office, the data is collected and recorded at the basic health facility level. In addition to this, there are at least the following eight main information systems that run parallel to each other:18 (1) Lady Health Workers Management Information System (2) National Programme for Family Planning and Primary Health Care (3) Expanded Programme on Immunization (4) Malaria Control Programme (5) National Aids Prevention and Control Programme (6) National ARI Control Programme (7) Tuberculosis Control Programme (8) National Leprosy Control Programme. With this many parallel information systems an exhaustive amount of inform-ation is generated. However, this inform-ation is hardly used in policy, planning

and management.19 There are at least four key reasons why this information is not used for planning and management: First, at the level of basic public health facility, most of the information is recorded and maintained in manual books and reports. This manually recorded data is sent to districts by person or through post. At district level, the data is compiled and aggregated and sent to the state or province. From state or provincial level, the data is sent to the central/national level through floppies or disk jackets. When this data is finally compiled at central/national level, it is already too late to be used for the policy and planning purpose. Second, the data is mostly fragmented with different departments and programmes. This results in both the replication of data as well as incompleteness and inaccuracies. In most of the cases the variables/indicators are not harmonized with similar indicators used in different districts and parallel programmes. This makes the data useless for various comparisons. Third, there is no central database to maintain the data collected through various programmes. Instead, aggregated information is maintained at the central level. This greatly affects the policy process and decision making. And fourth, there is a minimum use of computers in the HMISs in both India and Pakistan. Instead, computers are used for office functions only. Instead of running numerous parallel information systems, a single, holistic health information system can efficiently cater to all data requirements of various aspects of healthcare.20 Computerization provides the most efficient way of storing, compiling and transmitting data. With a computerized and Internet-based/web-based HMIS, pol icy-makers can immediately get information about various aspects of citizens’ access to health facilities, incidence of diseases, availability of health professionals, equipment, drugs and medicines. This can greatly improve the health policy and make it more responsive to the needs of citizens. At the same time, the continuous flow of data

There are numerous parallel agencies and programmes engaged in the collection, storage and transmission of data


can help policy managers to manage the entire process of health service delivery in an efficient and effective manner. This can also improve transparency and reduce corruption in the health sector manage-ment. In many countries in South Asia, the health systems in general and the procurement of drugs and other medical supplies in particular suffer from severe corruption, inefficiency and maladminis-tration. Drugs and medicines supplied to public hospitals are often overpriced, sur-plus being exploited by health managers. In certain cases, drugs are oversupplied because health officials receive special commission on the purchase of these drugs. Similarly, a huge amount of corruption is often reported in the purchase of various equipments, cons-truction of various health facilities and the outsourcing of various services. The appropriate use of the ICTs in public service management, combined with governance reforms and a strong political will can bring about a great change in the way public services are managed and delivered (see box 6.4).

At the level of hospitals, the storage and management of patient-related information can result in better tracking of patients’ history and can result in huge gains in terms of better diagnosis and treatment of diseases. An interesting case in point is the Indus Hospital in Karachi, Pakistan that has applied an innovative way to store all patient-related information in a central database of the hospital without using any paper. This has reduced the cost while improving the quality of healthcare. (See box 6.5)

Technology and the governance of public service delivery

Access to information is the basic human right and the foundation of a well-functioning democracy. It informs citizens about their rights and entitlements and helps them make informed decisions in their national lives. It helps them to choose the right politicians and to hold them accountable for their promise and actions. It enables them to participate in wider social, political and economic

Technology, when equipped with political reforms and social awareness, offers an efficient solution to the prob-lems associated with malpractices in health procurement. As part of its broader governance reforms, and imple-mentation of e-governance, Chile has introduced an electronic system of bidding and procurement. This system has resulted in high levels of transparency, huge savings, and availability of essential drugs to the poor with overall improved quality of health services. Chile had a traditional and centralized system of the public pharmaceutical and medical supply system from 1979 to early 1990s, known as the CENABAST (Central de Abastecimiento—the central supply agency). This system suffered from poor management, resulting in

undersupply of certain medicines and oversupply of others, drug waste due to poor storage conditions, and lack of transparency. The governance reforms of President Alywin in 1990 were aimed at making the government services more efficient and accountable. A novel idea of health procurement was introduced to reform the CENABAST. The cornerstone of these reforms was the development of an electronic bidding system. Under this bidding system, the public hospitals inform the CENABAST about their next six months drug needs. The CENABAST prepares the list of all medical products required by these hospitals and invites drug suppliers to submit their prices. The drug suppliers submit the prices of specific drugs and quantities through a computer network.

The CENABAST then provides suppliers information about the lowest bid made and asks suppliers to revise their prices. This bidding process continues until the lowest price is achieved. The transaction is then made at the lowest agreed upon prices. The new system has brought many benefits to the health system. It has enhanced the efficiency and the transparency of the health procurement in particular and the health sector in general. Medicines are now available at the lowest possible prices to the public hospitals. The new system resulted in a group of hospitals saving US$4 million in medicine procurement in 1997, a reduction of 5 to 7 per cent in the cost of supplies.

Box 6.4 Chile’s fight against corruption in healthcare through e-procurement: lesson for South Asia

Source: CENABAST 2008.


spheres of life and enhances their capability to influence the institutional arrangements. The information and communication revolution being witnessed by South Asia holds great promise in terms of making citizens better informed and in terms of improving the accountability and trans-parency in public sector organizations. The electronic media and Internet are playing a great role in helping citizens access information. The creation of

websites by various public agencies helps citizens to get information about a wide range of issues relevant to their everyday lives. Various plans and programmes of public departments are advertised on their websites, and the processes and procedures are explained. In certain cases, various forms can be made available on websites and can be directly accessed by individuals without visiting the office of public agencies. The necessity of disseminating

The Indus Hospital is a Karachi based, state of the art, tertiary care health centre. This is a privately owned hospital, however, accessible to the poor free of cost. The Hospital makes the best use of ICTs in providing efficient healthcare. It works on an entirely ‘paper free’ mode of collection and storage of patient and hospital data/record. Right from the collection of patient’s basic information and history to the investigation reports such as X-Ray images, all information is directly recorded and stored in the data-base of the hospital without using any paper sheet or X-Ray film. All admissions, appointments and discharges at the Indus Hospital are made using customized software, developed by an in-house team of computer experts. The patient record is linked with physicians. Doctors enter the patient’s history, examination and treatment using the same software. This database is also linked to the nursing reports, requests and reports of all investigations such as X-Ray, electrocardiogram (ECG) and MRI, etc. and other pathological investi-gations. This record is accessible for doctors from anywhere within the Indus Hospital. Many doctors can examine the case of a patient at the same time, using their own computers, and enter their comments and prescriptions. This has allowed for a detailed analysis and discussion of each case by the panel of doctors, wherever it is necessary. Such an easy and immediate access to the latest information about the patient has resulted in an efficient and high-quality healthcare. The computerized database keeps patient’s record in its best possible form for a very long period of time. Any patient

revisiting hospital in an emergency does not need to wait for a long time to access his previous history. The use of this database is not confined to the decision-making at the doctors’ level. Rather the Management Information System (MIS) of the hospital provides a great support for day to day managerial and administrative decision making. The auxiliary services of the hospital such as human resources and payroll, financial accounting, billing system for patient costing, purchase and inventory control, pharmacy and maintenance are also computerized. The entire process of decision-making at the hospital is backed by the continuous flow of data. The greatest challenge in the development of this entirely paperless, computerized hospital system has been the reluctance of the hospital staff to use computers for their everyday activities. However, the hospital management designed a special tailor-made computer training courses for the entire staff according to their needs. Every activity in the hospital is now carried out on computers. The paperless, ICT-aided MIS has proven to be highly cost-effective as compared to the traditional system. There are high fixed costs involved in developing software and hardware and the maintenance of the system. However, being paperless, the system saves the huge cost of paper, its filing, and the maintenance of various records. Moreover, the efficiency in accessing patient records greatly enhances the efficiency of the staff by reducing the time involved in providing care to each patient. At the top of everything, this system allows for a better diagnosis and treatment of patients.

Box 6.5 Indus Hospital in Karachi, Pakistan: exploiting the potential of ICTs in healthcare


information to the public at large also triggers the necessity of making rules simple and procedures standardized. When information about various entitle-ments, decisions and actions is dis-seminated through the Internet and mass media, and is accessible to the public at large, it creates a strong demand for rules and procedures to be adhered to by public officials. Although the media, both print and electronic, as well as Internet have expanded their services and increased their outreach in terms of transmitting information and making citizens better informed, the impact of these technologies is tied to the freedom of expression and the freedom to have access to all kinds of information. South Asia has progressed over the passage of years in terms of increasing these freedoms, yet access to complete information about government

functioning at all levels is still not available to many South Asians. It is encouraging to note that the Right to Information (RTI) Act is already in place in India but in other countries such as Pakistan, Bangladesh, Nepal and Maldives, such an Act has yet to be passed (see box 6.6). Technology in the form of the printing press, TV, radio and Internet not only helps in making citizens more informed and making politicians and policy-makers more accountable and transparent, but in the form of computerization and improved management techniques, it also helps in improving the efficiency of public service delivery by cutting down costs, eliminating corruption and improving services. The computerization of land records for instance saves time in accessing records and is a much more transparent system. In most parts of South Asia, land records

Freedom of Information (FOI) lies at the heart of good governance. Access to information by citizens can ensure trans-parency, accountability and empower citizens to participate in public affairs that affect their lives. Access to information about policies and their implementation is also vital for making the development process equitable and more inclusive and participatory. The article 19 of the United Nations Declaration of Human Rights says, ‘Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media regardless of frontiers’. As the UN has recognized the FOI as early as 1946, it is the responsi-bility of member states to provide legal arrangements for the citizens’ FOI. In India, the Freedom of Information Act was passed in 2002. However, it had severe limitations such as numerous exemptions, lack of an upper limit on costs incurred by citizens to access

information, and no penalty for non-compliance by public officials. These limitations in the Act along with the lack of effective implementation resulted in a public movement in India. The media and civil society participated actively in the movement that resulted in the effective Freedom of Information (FOI) legislation. Consequently, a refined bill was presented in the parliament and after an extensive debate and scrutiny; it was passed in June 2005 as the RTI Act 2005. The RTI 2005 eliminates the limitations of the Freedom of Information Act 2002 and ensures greater access to information by the citizens. In Pakistan, there is a FOI Ordinance 2002 in place. However, the FOI Ordinance is criticized for its contents as it provides a large number of exemptions, does not override other non-disclosure laws, is limited in scope as it does not cover state corporations and provincial governments, has weak sanctions for non-compliance, and the costs and complications involved in accessing information. Moreover, there was no

stakeholder consultation and debate about this ordinance when it was presented. The implementation of this ordinance also suffers from severe problems such as, lack of funding for implementation, lack of training for public officials, lack of awareness among the public and deficient monitoring of the implementation. The current government of Pakistan has declared that it will replace the FOI Ordinance 2002 with a better legislation. A 2008 bill was drafted by the Ministry of Information and Broadcasting.However, a greater stakeholder consulta-tion, public debate and extensive parliamentary debate are needed for further improvement of the bill. In Bangladesh, the caretaker government has issued the RTI Ordi-nance 2008 that is warmly welcomed by civil society, human right activists and the public at large. However, certain concerns are raised by the civil society regarding lack of proactive disclosure by public agencies and a large number of exemptions.

Box 6.6 The status of the RTI Acts in South Asia

Source: World Bank 2008c.


are kept under a manual system that suffers from many problems. The village accountant enjoys a monopoly over land records and farmers and other land owners have to face harassment, pay bribes, and go through complicated procedures and long delays. In case of land record mutation, people have to go through a cumbersome process that involves a great deal of corrupt practices, inefficiencies and delays. Updating land records under this manual system may take years. Moreover, land records are not open for public scrutiny. The computerization of land records can eliminate many of these problems. In the Indian state of Karnataka for instance, the computerization of land records under the Bhoomi project has eliminated complicated procedures, long delays, bribes and harassment in accessing land records (see Chapter 2). The computerization of land records is also useful for planning and implementing development programmes. In Karnataka for instance, before the computerization of land records, the record about crops, utilization of fertilizers and pesticides was only available after two to three years and now it is available on an instant basis. It also helps in monitoring government lands and preventing encroachments. Courts can use the land records database for the settlement of various cases like that of ownership, possession and culti-vation. Financial institutions also can use these databases for the approval of various loans and credits. The computerization of other records such as those related to national identity also offers immense benefits and efficiency gains. The National Database and Regis-tration Authority (NADRA) in Pakistan for instance has built a technologically advanced, efficient and transparent database of Pakistani nationals and has issued computerized national identity cards to more than 62 million people so far. The database is now being used to identify the poor households to provide cash grants under the Benazir Income Support Programme. This system of electronic identification is expected to

improve the identification and targeting of the poor (see box 6.7). The use of electronic cards to receive payments under income support pro-grammes is another application of technology to increase transparency and improve efficiency in the disbursal of public funds. The state of Andhra Pradesh in India has taken such an initiative by developing smart cards to make payments under the Rural Employment Guarantee Scheme.21 The project has shown remark-able achievement. Under this initiative, beneficiaries are given smart cards, fuelled by radiofrequency identification techno-logy, which incorporates a biometric scan of their fingerprints. The Customer Service Provider, who is a local with leadership qualities, carries the entire bank system on a special mobile phone. This mobile phone acts as branch of a bank storing the customers’ names, addresses, photographs, fingerprints and other details on its smart card. A swipe of the card gives details of the transaction. The service provider keeps cash in her office for payments. This fingerprint-based biometric identification ensures a fool-proof identification of the beneficiary. Not only does it ensure efficient payments but also leads to the financial inclusion of the poor. So far these cards in Andhra Pradesh have been used to make payments for rural employments and social security pensions. The system works so efficiently that the money is disbursed within four days after being released by the government. Such an efficient and transparent initiative of service delivery has also inspired many banks in India to adopt the branchless banking for rural areas. Banks and financial institutions can use this system for cash deposits, withdrawals, utility payments, transfer of money, micro insurance and cashless banking. There are also proposals by the state officials in India to use this system for unification of various subsidies like funding for food, power, fertilizer and others, as a single entitlement paid through smart cards. This will drastically reduce the transaction

The use of electronic cards to receive payments under income support programmes is another application of technology to increase transparency and improve efficiency in the disbursal of public funds


and administrative costs as well as improve efficiency and ensure transparency. Thus a single adoption of smart card technology is leading towards many new innovations in services delivery. Technology in the form of computeri-zation and improved management tech-niques also has an immense potential in

improving the efficiency of public sector organizations. It enhances their adminis-trative and management capacity. In South Asia, public sector organizations often have weak administrative capacities. The little amount allocated to public services is hardly spent efficiently. In many public sector organizations, spend-

The National Database Registration Authority (NADRA), Pakistan has built the technologically advanced, efficient and transparent database of Pakistani nationals. Established in 2000, NADRA is mandated to create a fact-based system of good governance to encounter un-documented population growth. It started working with the creation of computerized national identity cards backed by a computerized database. The Swift Registration Centres (SRCs) of NADRA efficiently register Pakistanis throughout major cities of the country. The SRCs are directly linked with the National Data Warehouse that is a comprehensive central depository of demographic information. NADRA has registered over 92 million citizens and issued computerized national identity cards to more than 62 million people. NADRA also issues computerized birth certificates, child registration certificates, marriage/divorce and death registration certificates at the national level. With the largest ICT resource-base in the country, NADRA has introduced for the first time in Asia, the multi-biometric e-passport for Pakistanis with unpreceden-ted security features, having full com-pliance with the worldwide accepted standards. The use of ICT has significantly enhanced the efficiency as well as the transparency of registration-related service delivery. The old manual system of issuing national identity cards, passports and birth/death and marriage/divorce certificates involved huge costs, procedural complications and tiresome documentation. The cost of storing paper-based information was also high and the security of records was always at risk. There were numerous incidents of

theft of ID cards, passports and other records. Moreover, the synchronization/integration of various records was nearly impossible. The current system of computerized database has eliminated a huge amount of paperwork, forms and documents. The issuance of identity cards, passports, and various certificates has become highly efficient. Record keeping in the computerized system is cost-effective, and records can be kept for a very long period of time. The digital security system of the database ensures the security of personal information given by individuals. The efficiency of officials is also enhanced due to the elimination of unnecessary paper work. Moreover, various records can be synchronized/ integrated through computer programm-ing that can be highly useful for various purposes such as policy and planning from the local to national level, and for verification of information. The comprehensive database develop-ed by NADRA is also being used for the provision of other services. It is conduct-ing a census of Punjab government employees for the automation of government departments, which is expected to radically improve the bureaucratic efficiency. The computerized national database has also enhanced the efficiency of the banking sector. Previously, a large amount of information and verification of documents were required for opening a bank account. The online Verisys service of NADRA, now used by all commercial banks, immediately verifies the identity of individuals from remote sites. NADRA has recently launched the online utility bills collection at NADRA Kiosk that has greatly reduced the time involved in

paying bills in banks. NADRA is also developing the geographic Information System (GIS) that can facilitate the computerization of land records along similar lines as the Bhoomi in Karnataka, India. The Benazir Income Support Pro-gramme that provides cash grants to poor households is using NADRA’s database for verification of the poor. As it is highlighted in previous Human Development in South Asia Reports, most of the poverty reduction programmes fail due to lack of identification of target groups. Consequently, allocated resources are captured by those in power. Although the Benazir Income Support Programme is still subject to the old practices as the identification of beneficiaries is assigned to politicians, the involvement of NADRA to verify beneficiaries provides some solution to this problem. Despite fact that NADRA does not have information about the economic status of individuals, it has certain filters to identify non-poor from the list of beneficiaries identified by politicians. It can ensure that only one member of a poor household receives the cash grant. Similarly, NADRA disqualifies house-holds which have any member who is serving the government or the armed forces. It also disqualifies individuals who have issued machine readable passports, NADRA Overseas Cards, National Tax Number or bank accounts (with the exception of account holders in banks which open accounts for poor). These filters will prevent the loss of resources due to power abuse. Using the NADRA database is expected to increase transparency as well as the efficiency of the programme.

Box 6.7 Technology serving the nation—NADRA in Pakistan


ing is low throughout the year but excessive and often unplanned in the last month of the fiscal year. Such tendencies greatly affect the efficiency of public sector organizations in converting resources into services. The use of techno-logy helps in improved management of these public sector organizations. The government of Karnataka in India has recently implemented an e-governance project that has innovative features to increase the efficiency of public sector departments (see box 6.8). However, apart from these few ini-tiatives South Asia lags behind other regions in e-governance. The e-governance readiness index as developed by the UN ranks South Asia below most of the other regions including East Asia and Southern Africa.22

The index measures the e-governance readiness of countries on the basis of three indicators: (a) availability of the ICT infrastructure, (b) presence of the state through national websites and the quality of information on the websites of key departments and (c) human capital (literacy rates and enrolment rates at various levels). On the basis of a wide rage of sub-indicators, the score on the e-governance readiness index reflects how ready a country is to take advantage of the opportunities provided by technological advancements for the improvement of public service delivery. The global ranking of countries on the basis of this index reveals that most South Asian countries rank poorly in terms of this index compared to other countries. There could be several explanations for this poor performance of South Asia in terms of e-governance readiness. The effective implementation of e-governance is not just a single task; rather it has a long list of prerequisites. It needs telecommunication infrastructure, building, maintenance of websites, a technically qualified and literate population to install, operate and manage ICT applications as well as to use these applications as clients of public services. South Asia ranks poorly in terms of many of these prerequisites. In particular, the low literacy levels of its population means that the majority of the population is unable to operate ICT properly. The e-participation index, also developed by the UN, measures the participation of citizens in various processes of decision making through using various ICT means.23 The ranking of most South Asian countries in terms of this index is also poor and in fact has gone down over the past three years implying that other countries have progressed at a faster rate (see table 6.3). E-governance does not necessarily need to be the Internet-based governance. Although, the Internet facilitates efficient service delivery, it may not be very useful in South Asian countries. The Internet-based governance needs high-quality telecommunication infrastructure, and

The Secretariat is the apex decision making body of the state and deals with a large number of departments. It involves an enormous amount of communication, keeping, maintaining and processing a large volume of data files. The manual creation, movement and maintenance of files involved enormous delays and inefficiencies. The government of Karnataka has recently set up a Secretariat Local Area Network by connecting 1000 computers in 40 state departments and 6000 secretariats. The National Informatics Centre of the state provided software support. The project has the following components: (a) Patra—the Letter Monitoring System. This is designed for the management of a large number of letters received in the secretariat by scanning these letters and moving them from desk to desk, or department to department; (b) Kadatha—File Monitoring System is the decision support system to monitor, track and decide/dispose the files without

delays. Through this system, electronic files are moved from desk to desk and from department to department, w i thout wa s t e o f t ime ; ( c ) Mokaddame—Court Case Monitoring System monitors the court cases in which government is the party. Cases received, petitioners/respondents details, court orders, cases put up for hearing on a particular day/type can efficiently be managed; (d) Aayayaya—Budget monitoring System helps in making budget estimates. It also monitors budget proposals once a budget is allocated to departments; (e) Sibbandi—Personal Information System maintains information about details of employees. Within a single click, the entire history of the employee can be viewed; (f ) Customer Support System provides an online system to lodge any complaints regarding Hardware, Network, and Application Software System. This s y s t em a l so p rov ide s on l ine instructions for the solutions to problems.

Box 6.8 Sachivalaya Vahini or e-Governance in the Secretariat in Karnataka

Source: PRABHU 2004.


information technology literate people. It is only successful when a large proportion of the population has access to, can understand and use the Internet. Instead, as is evident from the cases presented in the Report, e-governance can succeed with few computers, a database and few operators. Such offline arrangements can also be useful to create ‘one stop shop’ for public services, even on a single computer.24

Conclusion

One of the root causes of poor access to and quality of public services in South Asia is poor governance. The budgetary allocations for the social sector are still low, resulting in low availability of public services. Corruption and misutilization of allocated resources result in poor access and quality of these services. The ultimate results of all these factors is that economic gains at the aggregate level such as those experienced by South Asia at the backdrop of recent economic reforms, fail to be reflected in impressive gains in human development outcomes. This anomaly must be taken care of through all possible means in order to reduce the sufferings of poor people. Technology has a great potential that must be exploited to improve the availability, access and quality of public services. In the case of healthcare for instance, we discussed at least four important ways through which technology,

in its various forms, results in improved public health outcomes. First, medical technology results in better diagnosis and treatment of diseases. Second, the use of ICT can greatly improve the access to healthcare services (e.g. through tele-medicine) and can also aid in awareness campaigns about health and hygiene. Third, food fortification techniques can help fight hunger and malnutrition. And last, the efficient storage of healthcare information can greatly improve the efficiency of healthcare departments as well as aid in effective planning and monitoring of public health policies. Efficient storage of patient-related information helps keep track of the medical history of patients and helps in better diagnosis and treatment. Technology in the form of printing press, TV, radio and Internet has a great potential to inform citizens and mobilize politicians and policy-makers to deliver on their promises. It creates pressure groups from below to hold politicians more committed, accountable and transparent. Technology in the form of computerization and improved manage-ment techniques also helps in improving the efficiency of public service delivery by cutting down costs, eliminating corruption and improving services. Although South Asia has started exploiting the potential of technology in all these areas, yet it lags behind other regions and countries. Initiatives such as telemedicine and the use of technology to monitor and administer public service delivery are still few and far between. The region also lags behind in terms of e-governance because of the lack of adequate telecommunication infrastructure and the lack of a technically qualified and literate population to operate ICT properly. It is time that South Asia equips its population with proper skills and education so as to enable them and the society at large to reap the benefits of technology in terms of improved governance.

Table 6.3 Ranking of South Asian countries in terms of e-Participation Index

2005 Ranking

2008 Ranking

Bangladesh 162 142Bhutan 130 134India 87 113Maldives 77 95Nepal 126 150Pakistan 136 131Sri Lanka 94 101

Source: UN 2008b.

Chapter 1

1. World Bank 2006b.2. Aftab 2005.3. MHHDC 1998.4. See Basant and Chandra 2007.5. Mani and Kumar 2001.6. Recent work suggests that privatization and

competition have been important factors in the development and expansion of both fixed and mobile telecommunications for a sample of 172 countries over the period 1988-2001. Li and Xu 2002 and 2004.

7. Wallsten 2001.8. Though market power is an issue in South

Asia, the telecommunications area with its technological dynamism is an industry that is characterized by a high speed of innovation. Two types of innovation, namely innovation for new services and innovation for alternative network infrastructure, underlie competition in the telecommunications industry.

9. High-technology products are those with high R&D intensity, such as in aerospace, comput-ers, pharmaceuticals, scientific instruments and electrical machinery.

10. World Bank 2008h,i.11. UNDP 2007.12. World Bank 2005a.13. World Bank 2008d.14. UNDP 2007.15. World Bank 2008d.16. Computed from WIPO 2008.17. Ibid.18. Ibid.19. Correa 2002.20. UNDP 2007.21. CEA 2004.22. EIA 2008.23. World Bank 2008i.24. Nitrates are a soluble form of nitrogen.

Chapter 2

1. Parthasarathi 1991.2. According to some researchers, in 1991 India

was at the same level of development as the US was in 1776, or Japan in 1867 or the Soviet Union in 1917. Ibid.

3. World Bank 2002b.4. Mashelkar 2008.5. Ghosh and Choudhary 2007.6. TelNet has developed ICT solutions to deliver

a menu of services: such as healthcare by

telemedicine, agricultural consulting via Internet, education, communication, banking, entertainment and e-governance.

7. World Bank 2002b.8. World Bank 2008f.9. Davis 2004, gives an interesting account of

corruption in public service delivery with focus on water and sanitation in India.

10. This section builds on Cecchini and Scott 2003.

11. Bhatnagar and Schware 2000.12. CMC Limited 2008.13. UNDP 2008.14. GOI 2008d.15. Mashelkar 2008.16. McGorry 2002.17. It is heartening to note that Vadakkekara in

Kerala is set to become the first fully integrated e-learning constituency of the country. Bhattacharya and Sharma 2007.

18. For different initiatives by IGNOU, see Bhushan 2006.

19. Pardhasaradhi and Ahmed 2007.20. Ibid.21. See Prabhu 2004, for a number of case-studies

including few from outside India. Harris 2005, also gives a review of different studies after 2002, where ICTs have been used for poverty reduction.

22. See Prabhu 2004 and Pardhasaradhi and Ahmed 2007, for detailed case studies about Bhoomi and e-Seva.

23. Prabhu 2004.24. These 29,000 villages fall under 800 hoblis

(i.e., cluster of adjoining villages—formed primarily to streamline the collection of taxes and maintenance of land records) in 177 taluks of 27 districts.

25. Pardhasaradhi and Ahmed 2007.26. Ibid.27. It was planned on the lines of Singapore

Online, a well-known web-portal that gives all the information that users want to seek. See Prabhu 2004, for details about all the services available in e-Seva.

28. Pardhasaradhi and Ahmed 2007.29. Prabhu 2004.30. See Shukla and Srinivasan 2005, for a list of

all the services.31. Ibid.32. Harris 2005 and Pardhasarasdhi and Ahmed

2007.33. Harris 2005.34. Romer 1990.35. Nelson and Pack 1999.

Notes

Notes 127

36. A clear manifestation of this is increased R&D intensity (as defined as ratio of R&D to GNP) in India. At the all India level, R&D to GNP increased from 0.78 in 1991-92 to 0.86 in 2000-01. GOI 2006b.

37. It is to be noted that the Green Revolution was an outcome of an adoption of HYVs seeds developed by two international research institutes: wheat by the International Centre for the Improvement of Maize and Wheat (CIMMYT) in Mexico and rice by the International Rice Research Institute (IRRI) in the Philippines. Evanson et al. 1999.

38. Ibid.39. These include barley, cotton, groundnuts,

gram, other pulses, potatoes, rapeseed, mustard, sesomum, sugar, tobacco, soybeans, jute, and sunflower.

40. It is to be noted that this does not include high-tech services (for example, IT and financial services)—otherwise the growth for high-tech sector would have been much higher.

41. The AAGR during T year period is computed as [(Yt/Yo)^(1/T-1)-1]*100, where Yt and Yo are the terminal and initial values.

42. As per data from the MLE, IT services accounted for nearly 12 per cent of employment in organized private sector in 2004. As referred in Nasscom-Deolitte 2008.

43. These figures need to be looked at with some caution. This is because employment genera-tion is to be seen against the total available workforce. The employment generation of two or 6.5 million will look paltry against a total workforce of 495 million in the country (at the rate of 0.4 per cent). Similarly, in terms of contribution to GDP, ICT contribution of 5.2 per cent of nominal GDP reduces to only 0.8 per cent of purchasing power parity-based GDP. Agriculture and manufacturing are still the two largest contributors to India’s GDP. Iyengar 2006.

44. Nasscom-Deolitte 2008.45. Kathuria 2000.46. Ibid.47. GOI 2008c.48. ARWU 2008.49. Kailas 2008.50. Lall 1989 and Mowery and Oxley 1995.51. Mytelka 1987 and Pillai 1979.52. The data indicates that nearly two-third of

FDI originates from the six developed countries. Kathuria 2000.

53. Cassiman and Veugelers 2003; Katrak 1985 and Tomiura 2003.

54. Katrak 1985 and 1990 and Lall 1992.55. Kumar 2000.56. World Bank 2001.57. Cecchini and Scott 2003.58. ICTs are defined as the set of activities

consisting of hardware, software, networks and media that facilitates the collection,

storage, processing, transmission and display of information by electronic means. World Bank 2002b.

59. Ibid.60. World Bank 1999.61. GOI 2008e.62. The data shows that while it used to cost

US$45,000 in the US for a new software engineer to be employed in the mid-1990s, it cost only US$5,000 per annum in India. Thus, despite incurring additional overhead costs associated with offshoring, firms made substantial cost-cutting by sending work to India. In order to capture the economic benefits of even lower wages in China, Indian companies have started offshoring the work offshored to them. Balatchandirane 2007.

63. Crow and Muthuswamy 2004.64. NASSCOM 2008.65. NASSCOM 2007.66. Srinivasan 2008.67. Jain 2006.68. GOI 2006a.69. ARWU 2008.70. GOI 2002b and 2006b.71. Mashelkar 2008.72. Ibid.73. Ibid.74. Branstetter 2004.75. Sivaprakasam 2005.76. Pradhan 2007.77. Together PRDSF and Drug Development

Promotion Board under the administrative control of DST have an initial corpus of INR1.5 billion. Interest accrued on corpus will be utilized for supporting R&D projects jointly proposed by industry and academic institutions/ laboratories and extend soft loan for R&D. GOI 2008a.

78. Lanjouw 1998.79. TISS 2006.80. Aggarwal 2008.81. Mashelkar 2008.82. GOI 2008b.83. Mashelkar 2008.84. ICMR 2004.85. The use of animal genes in plants is one such

ethical issue for a vegetarian population, whereas control of seeds by a few MNCs can widen social and economic disparities.

86. See ICMR 2004, for details about these concerns.

87. Ramanna 2005, discusses India’s policy on IPR taking Bt cotton as a case.

88. ICMR 2004.89. Mubarak 2007.90. West 2001.91. In this context, it is important to know that

in 2006, when the chief executive of an auction website was arrested because a sexually explicit Multimedia Messaging Service (MMS) was posted on the site, there was a public outcry about the law enforcement agencies’


lack of awareness about how the Internet works. Unfortunately, since then, there has been no constructive initiative to examine which aspects of online content should be regulated or whether Indian law is adequate to regulate online content. Awasthi 2008.

92. Herberman 2008.93. Apart from these concerns, research has clearly

shown an increased risk of traffic accidents. It has been found that the probability of an accident increases by 3-4 times, when mobile phones (either handheld or with a ‘hands-free’ kit) are used while driving. WHO 2005.

94. For example, in 2002, a study by Finnish researchers found that radiation from cell phones causes changes in the brain. A recent study by an Australian neurosurgeon reveals that using handsets for more than 10 years can double the risk of brain cancer, while a Swedish study suggests that, using a mobile phone for over 15 minutes could lead to headaches and fatigue. On the other hand, in 2006, a Danish study found that there was no direct link between tumour risk and mobile phone usage among short-term users or long-term users. A Japanese study published in the British Journal of Cancer also came out with similar results. Sharma 2008.

95. Mashelkar 2008.

Chapter 3

1. Srinivasan 2003.2. Mastromarco and Ghosh 2009.3. Technological achievement index is a

composite index consisting of four dimensions: creation of technology as measured by patents and receipts of royalty; diffusion of recent innovation as measured by internet hosts per capita as well as high- and medium-technology exports; diffusion of old innovations as measured by telephone connections and electricity consumption; and human skills as measured by mean years of schooling and enrolment rates in Science, Mathematics and Engineering.

4. Rodrik and Subramanian 2004.5. See e.g. Pattnayak and Thangavelu 2005.6. Ramaswamy 2007.7. MHHDC 2003.8. Mendola 2007.9. World Bank 2008j.10. See e.g. Krishnaraj 2007.11. Bruinsma 2004.12. World Bank 2005c.13. Ibid.14. World Bank 2008j.15. Ibid.16. Ibid.17. Mani 2008.18. Chandrasekhar 2003.19. GOP 2008a.

20. IDRC 2005.21. Ibid.

Chapter 4

1. Harrison 2008.2. World Bank 2008b.3. Xu and Li 2008.4. SHRDC 2008a.5. World Bank 2008g.6. Tilak 1988.7. World Bank 2002a.8. FICCI 2002.9. ILO 2003.10. World Bank 2002a.11. World Bank 2006c.12. Mian 2008.13. World Bank 2008g.14. World Bank 2006c.15. SHRDC 2008b.16. NCERT 2007.17. Oxtoby 1997.18. World Bank 2008g.19. UNESCO 1994.20. SHRDC 2008b.21. ADB 1999.22. ILO 1999.23. World Bank 2005d.24. World Bank 2008g.25. GOP 2007c.26. Kumar and Sharma 2008.27. World Bank 2006a.28. Balakrishnan 2007; Kapur and Mehta 2004;

Kaul 2006 and World Bank 2007b.29. World Bank 2006a.30. World Bank 2007b.31. World Bank 2006a.32. UNESCO 2005.33. World Bank 2005b and 2008d.34. World Bank 2007a.35. IIEP 2007.36. Pal 2008.37. Sardana and Krishna 2006.38. UIS 2008.39. UNESCO 2006b.40. NSB 2008.

Chapter 5

1. For details, see Microsoft 2007.2. Chowdhury et al. 2006.3. Hossain 1988.4. Chowdhury and Rahman 2008.5. The numbers that presumably were about

export receipts in this particular document from the Export Promotion Bureau (EPB) included data labelled ‘local sales’. Such local sales accounted for a third and a quarter, respectively, of the overall ‘export’ figurers shown fo r 2005-06 and 2004-05 , respectively.

Notes 129

6. This is the combined exports of software and IT-enabled services firms that have registered with the Bangladesh Bank as ‘exporters’. They can access a certain proportion of their export receipts at the official exchange rate. Certain firms export software-services but are not registered with the Bangladesh Bank. To this extent, this estimate is most probably an under-estimate. Do Channel 2008.

7. Some of the best-qualified software companies when approached by us exercised their option not to cooperate with the survey. This includes firms such as SouthTech Softare Limited, Evonow, Spectrum Engineering, DohaTech, and some others.

8. GOB 2008b.

Chapter 6

1. MHHDC 2008.2. MHHDC 2008 Human Development Indicators

for South Asia.3. Ibid.4. GOP 2007b.5. Paul et al. 2004.

6. Saifuddin and Karim 2001.7. Hassam et al. 2008.8. MHHDC 2008.9. UNICEF and MI 2004.10. Fortification can be defined as ‘the addition of

one or more essential nutrients to a food, whether or not it is normally contained in the food, for the purpose of preventing or correcting a demonstrated deficiency of one or more nutrients in the population or specific population groups’. Darnton-Hill 1998.

11. IDPAS 2008.12. FFI 2008c.13. FFI 2008a.14. FFI 2008b.15. GAIN 2008.16. Bodavala 1998.17. GOP 2008b.18. Ali and Horikoshi 2002.19. Bodavala 1998.20. Ibid.21. Manon 2008.22. UN 2008b.23. Ibid.24. Park 2005.

ADB (Asian Development Bank). 1999. Impact Evaluation Study of the Technical and Vocational Education Projects in Malaysia, Pakistan, Papua New Guinea, and Sri Lanka. Manila: ADB.

. 2008a. Key Indicators for Asia and Pacific 2008. Manila: ADB.

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Human Development Indicators for South Asia

Contents

Note on statistical sources for Human Development Indicators 140Key to indicators 155

Table 1: Basic Human Development Indicators 141• Estimated population • Infant mortality rate• Annual population growth rate • GDP growth• Life expectancy at birth • GDP per capita• Adult literacy rate • Human development index (HDI)• Female literacy rate • Gender-related development index (GDI)• Combined first, second and third level gross enrolment ratio

Table 2: Education Profile 142• Adult literacy rate • Combined first, second and third level gross enrolment ratio• Male literacy rate • Enrolment in technical and vocational education• Female literacy rate • Pupil teacher ratio (primary level)• Youth Literacy Rate • Percentage of children reaching grade 5• Gross primary enrolment • R & D scientists and technicians• Net primary enrolment • Public expenditure on education• Gross secondary enrolment • Children not in Primary Schools• Net secondary enrolment • School life expectancy

Table 3: Health Profile 143• Population with access to safe water • Maternal mortality ratio• Population with access to sanitation • Contraceptive prevalence rate• Child immunisation rate • People with HIV/AIDS• Physicians • Public expenditure on health

Table 4: Human Deprivation Profile 144• Population below income poverty line • Malnourished children under age five• Population without access to safe water • Under-five mortality rate• Population without access to sanitation • People with HIV/AIDS• Illiterate adults • Human poverty index (HPI)• Illiterate female adults

Table 5: Gender Disparities Profile 145• Female population • Female professional and technical workers• Adult female literacy • Seats in parliament held by women• Female primary school gross enrolment • Gender-related development index (GDI)• Female primary school net enrolment • Gender empowerment measure (GEM)• Female first, second and third level gross enrolment ratio • Female earnings• Female life expectancy • Female unemployment rate• Female economic activity rate

Table 6: Child Survival and Development Profile 146• Population under-18 • One-year-olds fully immunised against measles• Population under-five • One-year-olds fully immunised against polio• Infant mortality rate • Births attended by trained health personnel• Under-five mortality rate • Low birthweight infants• One-year-olds fully immunised against tuberculosis • Children (aged 10-14) in the labour force

Human Development Indicators for South Asia 139

Table 7: Profile of Military Spending 147• Defence expenditure • Defence expenditure per capita• Defence expenditure annual increase • Armed forces personnel• Defence expenditure (as % of GDP) • Aggregate number of heavy weapons• Defence expenditure (as % of central government expenditure)

Table 8: Profile of Wealth and Poverty 148• Total GDP • Total net official development assistance received• GDP per capita • Total debt service• GNI per capita • Total external debt• GDP per capita growth • Total debt service• Gross capital formation • Income share: ratio of highest 20% to lowest 20%• Gross domestic savings • Population below $1 a day• Sectoral composition of GDP • Population below income poverty line, rural, urban• Trade • Public expenditure on education• Tax revenue • Public expenditure on health • Exports

Table 9: Demographic Profile 150• Population • Total fertility rate• Population growth rate • Dependency ratio• Population doubling date • Total labour force• Population rural • Male labour force• Population urban • Female labour force• Annual growth rate of urban population • Annual average growth in labour force• Crude birth rate • Unemployment rate• Crude death rate

Table 10: Profile of Food Security and Natural Resources 151• Food production per capita index • Forest production• Food exports • Crop production index• Food imports • Land area• Cereal production • Land use• Cereal imports • Irrigated land• Cereal exports • Dietary consumption

Table 11: Energy and Environment 152• Traditional fuel consumption • Motor vehicles per kilometer of road• Energy use per capita • The number of disaster-affected people• Total electricity production • Economic losses from natural disasters

Table 12: Governance 153• Average annual rate of inflation • Tax revenue by type• Average annual growth of food prices • Public expenditure per capita• Average annual growth of money supply • Imports of goods and services• Total revenue • Net inflow of FDI• Total expenditure • Total external debt• Budget deficit/surplus • Total debt service• Tax revenue


Note on Statistical Sources for HumanDevelopment Indicators

The human development data presented in these annex tables have been collected with considerable effort from various international and national sources. For the most part, standardised international sources have been used, particularly the UN system and the World Bank data bank. The UNDP and World Bank offices made their resources available to us for this Report.

Countries in the indicator tables are arranged in descending order according to population size. While most data have been taken from international sources, national sources have been used where international data have been sparse. Such data have to be used with some caution as their international comparability is still to be tested.

Several limitations remain regarding coverage, consistency, and comparability of data across time and countries. The data series presented here will be refined over

time, as more accurate and comparable data become available.

In certain critical areas, reliable data are extremely scarce: for instance, for employment, income distribution, public expenditure on social services, military debt, foreign assistance for human priority areas, etc. Information regarding the activities of NGOs in social sectors remains fairly sparse.

It is time for policy-makers to make a significant investment in the collection and analysis of up-to-date, reliable, and consistent indicators for social and human development. If development is to be targeted at the people, a great deal of effort must be invested in determining the true condition of these people.

It is hoped that the various gaps visible in this annex will persuade national and international agencies to invest more resources and energy in investigating human development profiles.


1. Basic Human Development Indicators

South Asia Developing India Pakistan Bangladesh Nepal Sri Lanka Bhutan Maldives (weighted countries average)

Total estimated population(millions)

— 1990 860 113 113 19 17 0.5 0.22 1,123T 4,146T— 2006 1,152 161 156 28 19 0.6 0.30 1,516T 5,373T— 2050 1,658 292 254 52 19 0.9 0.51 2,277T 7,956T

Annual population growth rate (%)— 1986-96 2.1 2.9 2.3 2.5 1.2 0.3 2.9 2.2 1.9— 1996-2006 1.7 2.1 1.9 2.2 0.5 2.5 1.7 1.8 1.5

Life expectancy at birth— 1990 59 60 54 54 70 52 60 59 63— 2006 64 65 63 63 72 65 68 64 66

Adult literacy rate(% age 15 and above)— 1990 48 35 35 26 88 38 96 46 65— 2006 65 54 53 55 91 54 97 63 79a

Female literacy rate(% age 15 and above)— 1990 34 21 22 13 84 25 96 32 55— 2006 53 40 47 42 89 41 97 52 72a

Combined first, second and thirdlevel gross enrolment ratio (%)— 1990 50 24 32 41 68 11 71c 46 46— 2005-06b 62 39 56 61 71 57 71 59 64a

Infant mortality rate(per 1,000 live births)— 1990 82 100 100 99 26 107 78 85 54— 2006 57 78 52 46 11 63 26 58 33

GDP growth (%)— 1995 5.5 4.5 5.9 4.5 6.4 10.7 16.9 5.4 1.8— 2006 9.2 6.9 6.6 2.8 7.4 8.5 23.5 8.6 7.3

GDP per capita (PPP, constant2005 international $)— 1990 1,202 1,678 696 702 1,959 1,804 2,520c 1,203 2,823— 2006 2,393 2,288 1,119 968 3,631 3,886 4,854 2,242 4,363

Human development index (HDI)— 1990 0.451 0.453 0.371 0.351 0.716 0.347 0.683 0.445 0.588— 2005 0.619 0.551 0.547 0.534 0.743 0.579 0.741 0.605 0.691

Gender-related developmentindex (GDI)— 1995 0.424 0.399 0.342 0.327 0.700 0.330 0.668 0.415 0.564— 2005 0.600 0.525 0.539 0.520 0.735 ... 0.744 0.586 ...

Notes: a: Data refer to 2004. b: Data refer to recent year available. c: Data refer to 1995. d: PPP means purchasing power parity.Sources: Rows 1, 2: UNPD 2008; Rows 3, 7: UNICEF 2007; Row 4: UNDP 1993, UIS 2008 and World Bank 2008a; Row 5: UNDP 1993, UIS 2008, UNICEF

1992 and World Bank 2008a; Row 6: MHHDC 2008, UIS 2008 and UNDP 1994; Row 8: ADB 2008a and World Bank 2008h; Row 9: World Bank 2008h; Rows 10, 11: MHHDC 2008.


2. Education Profile


Adult literacy rate (% age 15 and above)— 1990 48 35 35 26 88 38 96 46 65— 2006 65 54 53 55 91 54 97 63 79a

Male literacy rate (% age 15 and above)— 1990 62 47 47 38 93 51 96 59 75— 2006 76 68 58 69 93 66 97 74 ...Female literacy rate(% age 15 and above)— 1990 34 21 22 13 84 25 96 32 55— 2006 53 40 47 42 89 41 97 52 72a

Youth literacy rate — 1990 64 47 42 47 95 ... 98 60 82— 2006 81 69 71 78 98 76 98 79 87a

Primary enrolment (%) gross— 1990 99 42 77 82 107 25 132b 91 98— 2005-06c 112 84 109 126 108 102 116 109 103Primary enrolment (%) net— 1990 78 35 71 64 90 14 87 73 82— 2005-06c 89 66 93 78 97 79 97 87 85Secondary enrolment (%) gross— 1990 44 21 19 30 74 5 56b 39 41— 2005-06c 54 30 46 43 83 49 83 51 61Secondary enrolment (%) net— 2004-06c 49 30 41 32 96 38 67 46 54Combined first, second and thirdlevel gross enrolment ratio (%)— 1990 50 24 32 41 68 11 71b 46 46— 2005-06c 62 39 56 61 71 57 71 59 64a

Enrolment in technical andvocational education (%)— 2004-06c 2.0 3.4 1.9 1.1 ... 1.6 3.9 2.1 ...Pupil-teacher ratio (primary level)— 1990 47 43 63 37 29 37 31b 48 34— 2005-06c 40 39 51 40 22 29 16 41 31Percentage of children reachinggrade five (% of grade one students)— 1990-95c 59 48 47 52 98 83 93 57 75— 2004-05c 73 70 65 79 98 93 92 72 82R&D scientists and technicians(per 1,000 people)— 1995 0.13 0.06 0.05 0.06 0.20 ... ... 0.11 ...— 2003-05c 0.12 0.08 0.08 0.06 0.14 ... ... 0.11 ...Public expenditure on education(as % of GDP)— 1990 3.7 2.6 1.5 2.0 2.7 3.4b 3.8 3.3 3.7— 2005-06c 3.2 2.6 2.7 3.4 2.1 7.0 8.0 3.1 4.1a

Children not in primary schools(in millions)— 2004-06c 7.2 6.8 1.4 0.702 0.051 0.020 0.001 16.2T 69TSchool life expectancy (years)primary to tertiary— 2004-06c 10.0 6.5 8.5 8.9 6.5 10.3 12.3 9.4 10.1primary to secondary— 2004-06c 9.5 6.3 8.2 9.4 12.3 9.9 12.2 9.1 ...

Notes: a: Data refer to 2004. b: Data refer to 1995. c: Data refer to most recent year available.Sources: Row 1: UIS 2008, UNDP 1993 and World Bank 2008a; Rows 2, 3: UIS 2008, UNDP 1993, UNICEF 1992 and World Bank 2008a; Row 4: ADB

2008b, UIS 2008 and World Bank 2008a; Row 5: MHHDC 2008, UIS 2008, UNESCO 1993 and World Bank 2008a; Row 6: MHHDC 2008, UIS 2008, UNICEF 2006 and World Bank 2008a; Row 7: MHHDC 2008, UIS 2008, UNDP 1994 and World Bank 2008a; Rows 8, 14: MHHDC 2008, UIS 2008 and World Bank 2008a; Rows 9, 11: MHHDC 2008, UIS 2008 and UNDP 1994; Rows 10, 12, 15, 16: MHHDC 2008 and UIS 2008; Row 13: MHHDC 2008, UIS 2008 and World Bank 2008h.


3. Health Profile


Population with access tosafe water (%)— 1990 71 86 78 72 67 31 51 73 72— 2006 89 90 80 89 82 81 83 88 79a

Population with access tosanitation (%)— 1990 14 33 26 9 71 9 28 18 36— 2006 28 58 36 27 86 52 59 33 49a

Child immunisation rateOne-year-olds fully immunisedagainst measles (%)— 1990 56 50 65 57 80 93 96 57 72— 2006 59 80 81 85 99 90 97 64 79One-year-olds fully immunisedagainst DPT (%)— 1990 70 54 69 43 86 96 94 68 75— 2006 55 83 88 89 99 95 98 63 79

Physicians (per 100,000 people)— 1990-93b 48 46 18 5 15 33 7 44 133 — 2004-05b 60 80 30 21 55 5 92 58 ...

Maternal mortality ratio(per 100,000 live births)— 1990 570 340 850 1,500 140 1,600 500 585 384c

— 2005 450 320 570 830 58 440 120 450 450

Contraceptive prevalence rate(% of women aged 15-49)— 1990-95b 41 18 49 29 66 19 ... 39 56— 2000-06b 56 28 58 48 70 31 39 53 61

People with HIV/AIDSAdults and children (000)— 2001 2,700 51 7.5 56 3.0 < 0.1 < 0.1 2,818T ...— 2007 2,400 96 12.0 70 3.8 < 0.5 < 0.1 2,582T ...Adults, rate (% age 15-49)— 2001 0.5 0.1 <0.1 0.5 <0.1 <0.1 <0.1 0.4 ...— 2007 0.3 0.1 <0.1 0.5 <0.1 0.1 <0.1 0.3 ...

Public expenditure on health(as % of GDP)— 1995 0.7 0.8 1.2 1.2 1.4 2.3 4.9 0.8 1.8— 2005 1.0 0.4 0.8 1.6 1.9 2.8 10.6 0.9 2.7

Notes: a: Data refer to 2004. b: Data refer to most recent year available. c: Data refer to latest value during the time period 1990-96.Sources: Rows 1, 2: MHHDC 2008, UNDP 1994, WHO 2008 and World Bank 2008e; Row 3: World Bank 2008e; Row 4: MHHDC 2008 and World Bank

2008h; Row 5: MHHDC 2008 and UN 2008a; Row 6: MHHDC 2008 and UNICEF 2007; Row 7: UNAIDS 2008; Row 8: MHHDC 2008 and World Bank 2008e.


4. Human Deprivation Profile


Population below incomepoverty line (%)Population below $1 a day (%)— 1990-91a 45.5 47.8 35.9 33.5 3.8 ... ... 43.9 ...— 2000-05a 33.5 17.0 41.3 24.1 5.6 ... ... 31.9 ...Population below nationalpoverty line (%)— 1993-96a 36.0 28.6 51.0 41.8 25.0 ... ... 37.0 ...— 1999-2004a 28.6 32.6 49.8 30.9 22.7 ... ... 31.2 ...Population without access to safe waterNumber (millions)— 1990 249 15.8 24.9 5.4 5.6 0.38 0.11 302T 1,161T— 2006 127 16.1 31.2 3.0 3.5 0.12 0.05 181T 1,128Tb

As % of total population— 1990 29 14 22 28 33 69 49 27 28— 2006 11 10 20 11 18 19 17 12 21b

Population without access to sanitationNumber (population)— 1990 740 75.7 83.7 17.4 5.0 0.50 0.16 922T 2,653T— 2006 829 67.6 99.8 20.2 2.7 0.31 0.12 1,020T 2,740Tb

As % of total population— 1990 86 67 74 91 29 91 72 82 64— 2006 72 42 64 73 14 48 41 67 51b

Illiterate adultsNumber (millions)— 1990 280 44 42 8.2 1.3 0.60 0.017 376T 950T— 2006 270 47 48 7.6 1.3 0.20 0.006 375T 768Tb

As % of total adult population— 1990 52 65 65 74 12 62 4 54 35— 2006 35 46 48 45 9 46 3 37 21b

Illiterate female adults Number (millions)— 1990 180 26 25 4.8 1.0 0.30 0.005c 238T 600T— 2006 175 30 26 5.1 0.8 0.12 0.003 238T 511Tb

As % of total adult femalepopulation— 1990 66 79 78 87 16 75 4 68 45— 2006 47 60 53 58 11 60 3 48 28b

Malnourished children(weight for age)(% of children under the age five)— 1995 53 38 48 49 38 38 39 51 31— 2000-06a 43 38 48 39 29 19 30 43 26Under-five mortality rate(per 1,000 Live births)— 1990 115 130 149 142 32 166 111 119 79— 2006 76 97 69 59 13 70 30 76 70People with HIV/AIDSadults, rate (% age 15-49)— 2001 0.5 0.1 <0.1 0.5 <0.1 <0.1 <0.1 0.4 ...— 2007 0.3 0.1 <0.1 0.5 <0.1 0.1 <0.1 0.3 ...Human poverty index (HPI)— 1995 35.9 42.1 44.4 51.9 20.4 41.8 25.4 37.5 27.7— 2005 31.3 36.2 40.5 38.1 17.8 38.9 17.0 32.7 ...

Notes: a: Data refer to most recent year available. b: Data refer to 2004. c: Data refer to 1995.Sources: Row 1: MHHDC 2008, UNICEF 2006 and World Bank 2008h; Row 2: MHHDC staff computation based on table 3; Row 3: MHHDC staff computation

based on table 3; Row 4: UIS 2008, UNDP 1992, 1993 and World Bank 2008a; Row 5: MHHDC 2008, UIS 2008, UNDP 1992, 1993, UNICEF 1992 and World Bank 2008a; Row 6: MHHDC 2008 and UNICEF 2007; Row 7: UNICEF 2007; Row 8: UNAIDS 2008; Row 9: MHHDC 2008.


5. Gender Disparities Profile


Female populationNumber (millions)— 1990 413 55 55 9.5 8.5 0.27 0.11 541T 2,034T— 2006 555 78 76 13.9 9.7 0.31 0.15 734T 2,644TAs % of male— 1990 92 94 94 98 98 95 95 93 96— 2006 93 94 95 102 103 89 95 94 97Adult female literacy (as % of male)— 1990 55 45 47 34 90 49 100 53 73— 2006 70 58 81 61 96 61 100 70 84a

Female primary school grossenrolment (as % of male)— 1990 75 56 86 50 96 61 97b 74 87— 2005-06c 96 78 103 95 99 98 97 95 97Female primary school netenrolment (as % of male)— 1990 63 56 87 79b 96 93 100 64 94— 2005-06c 97 78 103 87 100 100 100 95 96Female first, second and third levelgross enrolment ratio (as % of male)— 1995 77 51 78 64 105 100 100 74 90— 2005-06c 88 77 100 92 102 98 100 88 87d

Female life expectancy (as % of male)— 1990 100 103 102 98 107 106 95 101 105— 2006 105 102 103 102 108 105 103 104 106Female economic activity rate(age 15+) (as % of male)— 1990 44 33 72 61 59 42 26 46 68— 2006 43 40 63 66 47 62 69 45 67Female professional and technicalworkers (as % of total)— 1991-2007c 24.9 24.8 22.1 19.8 45.7 … 48.6 20.0 …Seats in parliament held bywomen (as % of total)— 1990 5.0 10.1 10.3 6.1 4.9 2.0 6.3 6.0 10.8b

— 2007 8.3 21.3 15.1 17.3 4.9 2.7 12.0 10.5 …Gender-related developmentindex (GDI)— 1995 0.424 0.399 0.342 0.327 0.700 0.330 0.668 0.415 0.564— 2005 0.600 0.525 0.539 0.520 0.735 ... 0.744 0.586 ...Gender empowerment measure(GEM)— 1995 0.228 0.179 0.305 ... 0.286 ... 0.341 0.226 ...— 2005 ... 0.377 0.379 0.351 0.369 ... 0.437 0.375 ...Female earnings (as % of male)— 1995 34 26 30 50 55 48 55 33 48— 2005 31 29 46 50 41 48 50 33 ...Female unemployment rate (%)— 1994-96c 3.9 14.0 2.2 4.1 19.9 ... 1.3 5.0 1.3— 2000-06c 5.3 9.6 7.4 10.7 9.6 3.3 23.7 6.1 2.7

Notes: a: Data refer to 2004. b: Data refer to 1995. c: Data refer to most recent year available. d: Data refer to 2001-02.Sources: Row 1: UNPD 2008, World Bank 2008h and MHHDC staff computations; Row 2: UIS 2008, UNDP 1993, UNICEF 1992 and World Bank 2008a;

Row 3: MHHDC 2008, UIS 2008, UNESCO 1993 and World Bank 2008a; Row 4: MHHDC 2008, UIS 2008 and World Bank 2008a; Row 5: MHHDC 2008 and UIS 2008; Row 6: World Bank 2008e; Row 7: World Bank 2008h and MHHDC staff computations; Row 8: ILO 2008b; Row 9: UNDP 2007; Rows 10, 11, 12: MHHDC 2008; Row 13: ILO 2008a and MHHDC 2008.


6. Child Survival and Development Profile


Population under-18Number (millions)— 1995 385 71 56 11.0 6.7 0.80 0.14 531T 1,827T— 2006 445 71 64 12.5 5.6 0.25 0.12 599T 1,959TAs % of total population— 1995 41 51 47 50 37 50 56 43 40— 2006 39 44 41 45 29 39 41 39 36

Population under-fiveNumber (millions)— 1995 117 24 17 3.6 1.8 0.30 0.05 164T 560T— 2006 127 19 19 3.6 1.5 0.06 0.03 170T 559TAs % of total population— 1995 13 17 14 16 10 19 20 14 12— 2006 11 12 12 13 8 9 10 11 10

Infant mortality rate(per 1,000 live births)— 1990 82 100 100 99 26 107 78 85 54— 2006 57 78 52 46 11 63 26 58 33

Under-five mortality rate(per 1,000 Live births)— 1990 115 130 149 142 32 166 111 119 79— 2006 76 97 69 59 13 70 30 76 70

One-year-olds fully immunisedagainst tuberculosis (%)— 1990 66 80 86 74 84 99 99 70 82— 2006 78 89 96 93 99 92 99 82 87

One-year-olds fully immunisedagainst measles (%)— 1990 56 50 65 57 80 93 96 57 72— 2006 59 80 81 85 99 90 97 64 79

One-year-olds fully immunisedagainst polio (%)— 1990 66 54 69 42 86 96 94 65 75— 2006 58 83 88 91 98 96 98 65 80

Births attended by trained healthpersonnel (%)— 1990-96a 34 19 14 7 94 15 61 31 54— 2000-06a 47 31 20 19 97 51 70 43 62

Low birthweight infants (%)— 1990-94a 33 25 50 26 25 ... 20 33 18— 1999-2006a 30 19 22 21 22 15 22 28 16

Children (aged 10-14) in thelabour force (% age group 10-14)— 1995 14 18 30 45 2 55 6 17 16— 2004 10 14 26 40 1 48 2 13 12

Note: a: Data refer to most recent year available.Sources: Rows 1, 2: MHHDC 2008, UNICEF 2007, UNPD 2008 and MHHDC staff computations; Rows 3, 4: UNICEF 2007; Rows 5, 6, 7: World Bank

2008e; Row 8: MHHDC 2008 and World Bank 2008e; Row 9: MHHDC 2008 and UNICEF 2007; Row 10: MHHDC 2008.


7. Profile of Military Spending


Defence expenditure(US$ millions, at 2005 prices)— 1990 12,036 3,054 377 45 270 .. .. 15,782T ..— 2007 24,249 4,517 684a 132 804 .. .. 30,386T ..

Defence expenditure annualincrease (%)— 1988-98 2.6 1.3 6.0 2.9 11.3 .. .. 3.0 ..— 1998-2007 8.1 4.4 7.7b 12.6 12.9 .. .. 7.8 ..

Defence expenditure(as % of GDP)— 1990 3.2 5.8 1.0 0.9 2.1 .. .. 3.0 4.6— 2006 2.7 3.2 1.0 1.7 2.9 .. .. 2.6 2.1

Defence expenditure (as % ofcentral government expenditure)— 1990 20.6 34.7 8.6 5.9 8.8 .. .. 20.0 ..— 2007 17.7 24.7 13.6a 11.6 13.0 .. .. 17.9 ..

Defence expenditure per capita— 1990 14.0 27.0 3.3 2.4 15.8 .. .. 14.1 ..— 2006 20.7 27.7 4.4 4.7 42.3 .. .. 19.8 ..

Armed forces personnel (000)— 1990 1,270 549 102 35 22 .. .. 1,979T 18,349T— 2006 2,584 924 213 131 213 .. .. 4,065T 23,202T

Aggregate number of heavyweapons— 1995 7,770 5,400 430 50 300 .. .. 13,950T ...— 2003 10,210 5,510 580 50 560 .. .. 16,910T 210,191T

Notes: a: Data refer to 2006. b: Data refer to 1986-2006.Sources: Rows 1, 3: SIPRI 2008; Row 2: SIPRI 2008 and MHHDC staff computations; Row 4: ADB 2008a, SIPRI 2008, World Bank 2008h and MHHDC staff

computations; Row 5: UNPD 2008, SIPRI 2008 and MHHDC staff computations; Row 6: World Bank 2008h and MHHDC staff computations; Row 7: MHHDC 2008.


8. Profile of Wealth and Poverty


Total GDP (US$ billions)— 1990 317.5 40.0 30.1 3.6 8.0 0.3 0.2 400T 3,809.5T— 2006 911.8 126.8 61.9 8.9 27.0 0.9 0.9 1,138T 11,678.6T

GDP per capita (PPPa, constant2005 international $)— 1990 1,202 1,678 696 702 1,959 1,804 2,520b 1,203 2,823— 2006 2,393 2,288 1,119 968 3,631 3,886 4,854 2,242 4,363

GNI per capita (US$)— 1990 390 420 270 200 470 570 990b 379 836— 2006 820 800 450 320 1,310 1,430 3,010 778 1,997

GDP per capita growth (%)— 1990 3.4 1.8 3.5 2.0 5.2 9.7 6.4 3.3 -0.3— 2006 7.7 4.7 4.8 0.8 6.2 6.5 21.5 6.9 6.0

Gross capital formation(as % of GDP)— 1990 24.2 18.9 17.1 18.1 22.2 30.0 31.3b 22.8 25.7— 2006 33.9 21.7 24.7 26.0 28.7 55.0 35.0 31.5 27.4

Gross domestic savings(as % of GDP)— 1990 22.7 11.1 9.6 7.0 14.3 26.2 46.8 19.8 25.7— 2006 31.1 13.7 18.4 7.9 17.1 41.4 32.9 27.4 29.6

Sectoral composition of GDPAgriculture value added(as % of GDP)— 1990 29.3 26.0 30.3 51.6 26.3 36.1 11b 29.4 17.8— 2006 17.5 19.4 19.6 34.4 16.5 22.3 10c 18.2 10.1Industry value added(as % of GDP)— 1990 26.9 25.2 21.5 16.2 26.0 24.5 16.0 26.0 36.6— 2006 27.9 27.2 27.9 16.3 27.1 37.9 16.0 27.6 36.0Services value added(as % of GDP)— 1990 43.8 48.8 48.3 32.1 47.7 39.3 75.0 44.6 45.6— 2006 54.6 53.4 52.5 49.3 56.5 39.8 79.0 54.2 54.0

Trade (as % of GDP)— 1990 15.7 38.9 19.7 32.2 68.2 56.7 88.4b 19.6 39.8— 2006 48.8 38.6 44.2 45.3 74.8 76.8 124.4 47.5 67.2

Tax revenue (as % of GDP)— 1990 10.1 13.3 5.8 7.0 19.0 4.4 14.0 10.1 14.0b

— 2006 10.7 9.5 8.7 8.9 15.3 10.0 20.1 10.4 12.0d

Exports (as % of GDP)— 1990 7.1 15.5 6.1 10.5 30.2 26.5 92.7b 8.3 20.0— 2006 23.0 15.3 19.0 13.6 31.6 31.6 62.0 21.7 34.7

Continued on page 149


8. Profile of Wealth and Poverty (Continued)


Total net official development assistancereceived amount (US$ millions)— 1990 1,399 1,127 2,093 423 728 46 21 5,836T 54,511T— 2006 1,379 2,147 1,223 514 796 94 39 6,192T 105,252TNet official development assistancereceived (as % of GDP)— 1990 0.4 2.8 6.9 11.7 9.1 15.1 9.7 1.7 1.4— 2006 0.2 1.7 2.0 5.8 3.0 10.0 4.2 0.6 0.9

Total debt service (as % of exportsof goods, services and income)— 1990 31.9 21.3 25.8 15.2 13.8 8.8b 4.8 29.6 20.1— 2006 7.7 8.6 3.7 5.1 8.6 4.6c 4.9 7.3 12.6

Total external debt (US$ billions)— 1990 83.6 20.7 12.4 1.6 5.9 0.1 0.1 124.0T 1,326.6T— 2006 153.1 35.9 20.5 3.4 11.4 0.7 0.5 226.0T 2,983.7T

Total debt service (as % of GDP)— 1990 2.6 4.8 2.5 1.9 4.8 1.7 4.1 2.8 3.8— 2006 2.0 1.8 1.1 1.6 3.6 1.1 3.7 1.9 4.9

Income share: ratio of highest20% to lowest 20%— 1990-96e 4.3 4.7 4.0 5.9 4.4 .. .. 4.3 ..— 2002-05e 5.6 4.5 4.8 9.1 6.9 .. .. 5.5 ..

Population below $1 a day (%)— 1990-91e 45.5 47.8 35.9 33.5 3.8 .. .. 43.9 ..— 2000-05e 33.5 17.0 41.3 24.1 5.6 .. .. 31.9 ..

Population below incomepoverty line (%)Urban population below incomepoverty line (%)— 1993-96e 32.4 17.2 29.4 21.6 15.0 .. .. 30.1 ..— 1999-2004e 24.7 24.2 36.6 9.6 24.7 .. .. 25.6 ..Rural population below incomepoverty line (%)— 1993-96e 37.3 33.4 55.2 43.3 27.0 .. .. 38.6 ..— 1999-2004e 30.2 35.9 53.0 34.6 7.9 .. .. 32.9 ..

Public expenditure on education(as % of GDP)— 1990 3.7 2.6 1.5 2.0 2.7 3.4b 3.8 3.3 3.7— 2005-06e 3.2 2.6 2.7 3.4 2.1 7.0 8.0 3.1 4.1f

Public expenditure on health(as % of GDP)— 1995 0.7 0.8 1.2 1.2 1.4 2.3 4.9 0.8 1.8— 2005 1.0 0.4 0.8 1.6 1.9 2.8 10.6 0.9 2.7

Notes: a: PPP means purchasing power parity. b: Data refer to 1995. c: Data refer to 2003. d: Data refer to 2005. e: Data refer to most recent year available. f: Data refer to 2004.

Sources: Rows 1, 2, 4, 13, 17: World Bank 2008h; Rows 3, 5, 7, 10, 12, 15: MHHDC 2008 and World Bank 2008h; Rows 6, 8: ADB 2008a and World Bank 2008h; Row 9: ADB 2008a, MHHDC 2008 and World Bank 2008h; Rows 11, 14: World Bank 2008h and MHHDC staff computations; Row 16: MHHDC 2008 and UNICEF 2006; Row 18: MHHDC 2008, UIS 2008 and World Bank 2008a; Row 19: MHHDC 2008 and World Bank 2008e.


9. Demographic Profile


Total estimated population (millions)— 1990 860 113 113 19 17 0.5 0.22 1,123T 4,146T— 2006 1,152 161 156 28 19 0.6 0.30 1,516T 5,373T

Annual population growthrate (%)— 1986-96 2.1 2.9 2.3 2.5 1.2 0.3 2.9 2.2 1.9— 1996-2006 1.7 2.1 1.9 2.2 0.5 2.5 1.7 1.8 1.5Population doubling date(at current growth rate)— 2006 2065 2054 2058 2051 2198 2047 2064 2063 2072Population rural (millions)— 1990 641 78 91 17.4 14.2 0.51 0.16 842T 2,626T— 2006 818 104 116 23.1 16.3 0.57 0.21 1,078T 3,113TPopulation urban (millions)— 1990 219 35 22 1.7 2.9 0.04 0.06 281T 1,520T— 2006 334 57 40 4.5 2.9 0.07 0.09 438T 2,360TGrowth rate of urbanpopulation (%)— 1986-96 2.9 3.4 4.3 6.6 0.3 2.9 3.4 3.0 3.1— 1996-2006 2.4 3.4 3.5 5.9 0.1 5.8 2.5 2.6 2.5Crude birth rate(per 1,000 live births)— 1990 32 42 35 39 21 38 40 33 29— 2006 24 27 26 29 15 19 23 24 23Crude death rate(per 1,000 live births)— 1990 10 11 12 13 7 14 9 10 9— 2006 8 7 8 8 7 7 6 8 8Total fertility rate— 1990 3.8 5.8 4.3 5.1 2.5 5.7 6.0 4.1 3.4— 2006 2.5 3.9 2.9 3.1 1.9 2.3 2.7 2.7 2.7Dependency ratio— 1990 0.72 0.90 0.78 0.83 0.60 0.85 0.99 0.74 0.68— 2006 0.60 0.68 0.62 0.73 0.44 0.57 0.58 0.61 0.57Total labour force (millions)— 1990 326 35 51 7 7 0.19 0.06 426T 1,952T— 2006 438 60 71 11 8 0.29 0.12 588T 2,578TMale labour force (millions)— 1990 233 27 31 4 5 0.14 0.05 300T 1,183T— 2006 315 43 45 6 6 0.19 0.07 416T 1,567TFemale labour force (millions)— 1990 92 8 21 3 3 0.05 0.01 127T 769T— 2006 123 16 26 4 3 0.10 0.05 173T 1,011TAnnual growth in labour force (%)— 1986-96 2.0 2.2 1.9 2.2 1.6 -0.2 3.4 2.0 2.0— 1996-2006 1.9 4.0 2.3 2.8 1.4 5.5 5.2 2.1 1.8Unemployment rate (%)— 1994-96a 3.7 5.0 2.5 4.5 12.4 0.8 0.8 3.9 4.6— 2004-06a 5.0 6.1 4.2 8.8b 6.6 8.1 14.4 5.1 6.8

Notes: a: Data refer to most recent year available. b: Data refer to 2001.Sources: Rows 1, 2: UNPD 2008; Row 3: MHHDC staff computations based on Table 1; Rows 4, 5, 6: UNPD 2008 and World Bank 2008h ; Rows 7, 8:

UNICEF 2007; Rows 9, 10: World Bank 2008e; Row 11: World Bank 2008h; Rows 12, 13, 14: World Bank 2008h and MHHDC staff computations; Row 15: ILO 2008, MHHDC 2008 and World Bank 2008h.


10. Profile of Food Security and Natural Resources


Food production net per capita index(1999-01=100)— 1990 89.4 87.4 91.4 97.3 101.1 117.3 96.6 89.7 81.1— 2005 97.9 100.0 99.9 101.3 102.8 87.9 79.2 98.5 107.2Food exports(% of merchandise exports)— 1990 16 9 14 13 34 20 74a 15 17— 2006 9 12 6 21b 22 .. 99 9 9Food imports(% of merchandise imports)— 1990 3 17 19 15 19 25 24a 6 10— 2006 3 10 16 17b 12 .. 16 6 6Cereal production(1,000 metric tons)— 1990 193,919 20,957 27,747 5,847 2,579 106 0.007 251,155T 1,149,386Ta

— 2005 242,887 32,864 44,790 7,657 3,396 194 0.365 331,787T 1,356,679TCereal imports(1,000 metric tons)— 1990 131 2,048 1,538 14 945 40 27 4,742T 128,978Ta

— 2005 69 1,481 2,981 72 1,367 30 38 6,038T 161,408TCereal exports (1,000 metric tons)— 1990 652 744 0.0 0.4 0.3 0.0 0.0 1,397T 27,478Ta

— 2005 5,392 3,851 1.4 9.2 102 1.1 0.0 9,356T 46,701TForest production (1,000 cu. m)Roundwood— 1990 300,646 23,661 28,383 12,967 7,007 3,904 .. 376,568T 2,004,697Ta

— 2006 329,444 28,994 27,866 13,914 6,278 4,679 .. 411,176T 2,096,627TFuelwood— 1990 276,239 21,043 27,742 12,397 6,349 3,855 .. 347,626T 1,548,540Ta

— 2006 306,252 26,124 27,584 12,654 5,584 4,546 .. 382,745T 1,621,863TCrop production index(1999-01=100)— 1990 78 77 74 97 72 77 91 78 74— 2006 103 110 111 104 92 115 104 104 114Land area (1,000 sq. km)— 1990 2,973 771 130 143 65 47 0.3 4,129T 96,740T— 2006 2,973 771 130 143 65 47 0.3 4,129T 96,616TLand useArable land (% of land area)— 1990 54.8 26.6 70.2 16.0 13.5 2.4 13.3 52.2 10.6— 2005 53.7 27.6 61.1 16.5 14.2 3.4 13.3 50.5 11.0Permanent cropped area(% of land area)— 1990 2.2 0.6 2.3 0.5 15.9 0.4 13.3 2.2 1.2— 2005 3.4 1.0 3.5 0.9 15.5 0.4 30.0 3.3 1.2Irrigated land (as % of cropland)— 1990-92c 28 79 34 43 28 26a .. 34 20— 2003-05c 33 84 54 47 34 24 .. 41 20Dietary consumptionDaily dietary energy consumption(kcal/person/day)— 1995 2,318 2,340 2,071 2,425 2,228 .. 2,324 2,295 2,517— 2006 2,472 2,316 2,193 2,482 2,416 .. 2,557 2,425 2,668Prevalence of undernourishment intotal population (%)— 1992 25.0 24.0 35.0 20.0 28.0 .. 17.0 25.9 19.7— 2004 20.0 24.0 30.0 17.0 22.0 .. 10.0 21.4 16.1

Notes: a: Data refer to 1995. b: Data refer to 2005. c: Data refer to most recent year available.Sources: Rows 1, 4, 5, 6, 7: FAO 2008 and MHHDC 2008; Rows 2, 3, 11: MHHDC 2008 and World Bank 2008h; Row 8: FAO 2008; Row 9: World Bank

2008h; Rows 10 12: FAO 2008 and World Bank 2008h.


11. Energy and Environment


Traditional fuel consumptionas % of total energy requirement— 1995 23 20 49 91 51 81 ... 27 ...— 2003 20 24 52 93 60 88 0 25 26.3

Energy use per capita(kg of oil equivalent)— 1990 377 402 113 304 324 ... ... 351 993— 2006 491 490 158 338 477 ... ... 453 1071

Total electricity production(kwh, billion)— 1990 289.4 37.7 7.7 0.9 3.2 1.7 0.1 341T 4,230T— 2006 699.0 93.8 22.6 2.4 8.8 2.4 0.2 829T 7,682T

Motor vehicles per kilometerof road— 2000-04a 3.0 8.0 1.0 ... 9.0 ... ... 3.3 ...

The number of disaster-affectedpeople (000)— 1990 4,118 0 2,064 6 440 0 0 6,628T ...— 2000 100,173 0 2,767 51 775 0 0 103,766T ...— 2006 38,143 1,653 23,160 641 406 0 2 64,003T ...

Economic losses from naturaldisasters (US$ millions)— 1990 2,893 1 6 0 0 0 0 2,900T ...— 2000 1,496 0 500 6 3 0 0 2,005T ...— 2006 376 1,947 2,414 2 0 0 0 4,740T ...

Notes: a: Data refer to most recent year available.Sources: Row 1: MHHDC 2008; Rows 2, 4: World Bank 2008h; Rows 3: MHHDC 2008 and World Bank 2008i; Rows 5, 6: CRED 2008.


12. Governance


Average annual rate of inflation(2000=100)— 1986-96 9.5 9.1 6.0 11.0 11.8 10.0 5.5a 9.1 ...— 1996-2006 5.8 6.4 5.3 5.7 9.9 5.4 3.5 5.9 ...

Annual growth of food prices(2000=100)— 1985-95 3.2 5.0 1.7 3.5 0.8 1.6 2.1 3.2 ...— 1995-2005 2.0 2.6 3.9 2.9 0.3 -0.7 1.3 2.3 ...

Annual growth of moneysupply (%)— 1986-96 16.7 15.9 13.9 19.8 18.5 21.7 20.1 16.5 ...— 1996-2006 16.6 14.1 17.6 14.4 13.5 19.5 15.9 16.4 ...

Total revenue (excluding grants)as % of GDP— 1990 12.6 19.1 6.8 8.4 21.0 16.8 22.1 12.7 14c

— 2006 12.7 13.5 10.6 10.9 17.0 17b 43.6 12.6 12b

Total expenditure (as % of GDP)— 1990 15.7 19.8 12.4 17.7 24.6 20.3 16.6 16.0 ...— 2006 15.1 15.3 14.3 14.7 22.2 32.2b 55.5 15.1 ...

Budget deficit/surplus(as % of GDP)— 1990 -3.4 -2.5 -5.7 -7.6 -5.2 -5.8 -7.5 -3.6 ...— 2006 -2.8 -4.2 -3.3 -1.6 -7.2 -0.8 -7.7 -3.0 ...

Tax revenue (as % of GDP)— 1990 10.1 13.3 5.8 7.0 19.0 4.4 14.0 10.1 14.0c

— 2006 10.7 9.5 8.7 8.9 15.3 10.0 20.1 10.4 12.0b

Tax revenue by type (%)Taxes on international trade— 1990 35.9 44.4 ... 37.4 31.6 0.0 62.1 36.8 ...— 2006 17.4 19.3 41.9d 26.7 17.2 6.1d 71.8 18.9 ...Taxes on income, profits andcapital gains— 1990 18.6 12.8 ... 13.0 12.0 30.4 3.4 17.1 ...— 2006 46.7 30.0 15.9 15.9 18.8 58.0 3.8 40.9 ...Taxes on goods and services— 1990 44.9 42.5 ... 43.1 51.3 65.2 34.5 45.1 ...— 2006 35.8 48.7 37.2 50.4 60.5 30.6 23.1 39.4 ...Other taxes— 1990 0.6 0.3 ... 6.5 5.1 4.3 0.0 1.0 ...— 2006 0.1 2.1 5.1 6.9 3.5 4.9 0.8 0.9 ...

Continued on page 154


12. Governance (Continued)


Public expenditure per capitaPublic expenditure per capita ondefence (US$)— 1995 14.0 27.0 3.3 2.4 15.8 ... ... 14.1 ...— 2006 20.7 27.7 4.4 4.7 42.3 ... ... 19.8 ...Public expenditure per capita ondebt servicing (US$)— 1990 9.6 17.6 6.6 3.5 22.6 9.5 40.9 10.2 33.7— 2006 16.1 14.4 4.4 5.1 48.2 15.6 115.3 14.9 104.1Public expenditure per capita onhealth (US$)— 1995 2.7 4.0 3.6 2.4 10.1 13.9 78.9 3.0 19.7— 2005 7.4 2.8 3.1 4.8 22.7 36.5 269.1 6.7 49.5Public expenditure per capita oneducation (US$)— 1990 13.8 9.6 4.0 3.8 12.7 20.6 37.9 12.2 32.4— 2005-06e 23.6 20.7 10.7 10.3 25.1 91.2 247.0 21.8 76.2

Imports of goods and services(as % of GDP)— 1990 8.5 23.4 13.5 21.7 38.1 30.3 77.2c 11.2 19.8— 2006 25.8 23.3 25.2 31.7 43.2 45.2 83.3d 25.8 32.5

Net inflow of FDI (million US$)— 1990 237 245 3 6 43 2 6 542T 24,460T— 2006 17,453 4,273 697 -7 480 6 14 22,916T 367,492T

Total external debt(as % of GDP)— 1990 26.3 51.6 41.3 44.8 73.0 27.5 36.2 31.4 34.8— 2006 16.8 28.3 33.2 38.1 42.4 75.7 49.5 20.4 25.5

Total debt service(as % of GDP)— 1990 2.6 4.8 2.5 1.9 4.8 1.7 4.1 2.8 3.8— 2006 2.0 1.8 1.1 1.6 3.6 1.1 3.7 1.9 4.9

Notes: a: value is for 1994-95. b: Data refer to 2005. c: Data refer to 1995. d: Data refer to 2004. e: Data refer to most recent year available.Sources: Rows 1, 3, 8, 12, 13: World Bank 2008h and MHHDC staff computations; Row 2: FAO 2008 and MHHDC staff computations; Rows 4, 7: ADB

2008a, MHHDC 2008 and World Bank 2008h; Rows 5, 6: ADB 2008a and World Bank 2008h; Row 9: Mhhdc staff computations based on World Bank 2008h, and table 2,3,7 and 8; Rows 10, 11: World Bank 2008h.

KEY TO INDICATORS

A, B, CArmed forces personnel 7Birth rate, crude 9Births attended by trained health staff 6Birthweight, low 6Budget, public sector, as % of GDP deficit/surplus 12 expenditure, total 12 revenue, total 12Cereal, exports 10 imports 10 production 10Contraceptive prevalence rate 3Crop production index 10Children, one-year-olds fully immunized, 10 against DPT 3 against measles 3,6 against polio 6 against tuberculosis 6 in the labour force 6 malnourished 4 mortality rate, infant 1, 6 mortality rate, under-five 4, 6 not in primary school 2 reaching grade five, (%) 2

DDietary energy consumption, daily, kcal per person 10 undernourishment, prevalence 10Death rate, crude 9Debt external, total 8 as % of GDP 12Debt servicing, as % of exports 8 as % of GDP 8, 12 per capita expenditure 12Defence expenditure, annual increase (%) 7 as % of central government 7 as % of GDP 7 per capita 7, 12 total 7Dependency ratio 9Disaster, natural affected people 11 economic losses 11

EEarnings, female (as % of male) 5Economic activity rate, female as % of male 5Education expenditure, public as % of GDP 2, 8 per capita 12Electricity production 11Energy use, per capita 11

Enrolment, combined first, second and third level, gross ratio, female 5 total 1, 2 primary level, gross (%), female 5 total 2 primary level, net (%), female 5 total 2 secondary level (%), gross 2 net 2 technical and vocational (%) 2Exports, % of GDP 8

FFDI, net inflow 12Fertility rate, total 9Food, exports, % of merchandise exports 10 imports, % of merchandise imports 10 production, net per capita index 10 prices, average annual growth 12Forest production, fuel wood 10 round wood 10Fuel, consumption 11

GGDP, sectoral composition, value added %, agriculture 8 industry 8 services 8 growth rate 1 per capita growth 8 per capita, PPP $ 1, 8 total 8Gender empowerment measure 5Gender-related development index 1, 5GNI per capita 8Gross capital formation 8Gross domestic savings 8

H, I, JHealth expenditure, public as % of GDP 3, 8 per capita 12HIV/AIDS, affected number 3 adult population, rate (as % age 15-49) 3, 4Human development index 1Human poverty index 4Illiterate, adults, as % of adult population 4 number 4

Indicator Indicator table



female, as % of adult (female) population 4 number 4Immunisation, one-year-olds fully immunized, against DPT 3 against measles 3, 6 against polio 6 against tuberculosis 6Import of goods and services 12Income share: ratio of top 20% to bottom 20% 8Inflation, average annual rate 12

K, LLabour force, annual growth rate 9 child 6 female 9 male 9 total 9Land, area 10 irrigated as % of cropland 10Land use, arable (as % of land area) 10 permanent cropped area (as % of land area) 10Life expectancy at birth, female 5 total 1Literacy rate, adult female 1, 5 female as % of male 5 male 2 youth 2 total 1, 2

M, N, OMalnourished, children under age 5 4 prevalence in total population 10Money supply, average annual growth 12Mortality rate, infant 1, 6 maternal 3 under-five 4, 6Motor vehicle, per km of road 11Official development assistance received, net as % of GDP 8 total 8

P, Q, RParliament, seats held by women 5Physicians, per 100,000 people 3Population, annual growth rate 1, 9 doubling date 9

female, as % of male 5 number 5 rural 9 total, estimated 1, 9 under-five, as % of total 6 number 6 under-18, as % of total 6 number 6 urban, annual average growth rate 9 number 9Poverty, income population below $1 a day 4, 8 population below national poverty line, rural 8 urban 8 total 4Professional and technical workers, female 5Pupil-teacher ratio 2R&D scientists and technicians 2

SSanitation, population with access 3 without access, number 4 percentage 4School life expectancy, primary to secondary 2 primary to tertiary 2

T, U, VTax revenue, by goods and services 12 income, profits and capital gain 12 international trade 12 other taxes as % of GDP 8, 12Trade, as % of GDP 8Unemployment rate, female 5 total 9

W, X, Y, ZWater, population using improved with access 3 without access, number 4 percentage 4Weapons, number of heavy 7



Human Development in South Asia 2008

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