GLOBAL IMPACT OF THE INTERNET: WIDENING THE ECONOMIC GAP BETWEEN WEALTHY AND POOR NATIONS?

["Irfan Khan" <khania2@super.net.pk>]

[from ELDIS ICT REPORTER (14 July 2003)]


GLOBAL IMPACT OF THE INTERNET: WIDENING THE ECONOMIC GAP BETWEEN 
WEALTHY AND POOR NATIONS?

Author(s): Lucas, H.C.; Sylla, R.

Produced by: Robert H. Smith School of Business, University
 of Maryland (2002)

Does the Internet have the potential to accelerate
development in poor nations? Or is it an innovation that
will widen the gap between wealthy and poor countries?
This paper places the internet in a framework of major
innovations in modern economic history that have
contributed to increased global economic inequality.

To study whether the internet has the potential to do the
same, this paper investigates the determinants of internet
diffusion and explore differences between developed and
developing nations.

Findings:

* developing countries are being left behind as the
  transformation to the 'new economy' takes place in
  wealthier countries

* if this trend continues, it may have dire consequences
  for world economic inequality and political stability, as
  did great innovations of earlier eras

Policy measures that might diffuse more rapidly the
benefits of internet technologies throughout the world:

* a sustained attempt by the UN and wealthier countries to
  build the most appropriate communication infrastructures
  in developing countries

* the dedication of sufficient satellite transponders for 2
  way internet access for poor countries using technology
  now available from DirecPC and Starband

* an internet corps within the UN or individual countries
  modelled on the Peace Corps. This group of aid workers
  would have its primary responsibility establishing
  connectivity and training people in less developed
  countries on how to access the internet and how to build
  websites. Part of the aid would be devoted to developing
  native language websites and content

* funding and assistance for poor countries to establish
  internet access points, for example, in libraries,
  schools, town halls and post offices. In many places individuals
  would not be able to afford computers to access the
  internet, but people could share more than one community
  computers

* a concerted effort by aid agencies to encourage
  government policies in developing countries that favour
  innovation, venture capital, investments in research, and
  education about technology

* a $1 surcharge on the internet use of every user in
  wealthy countries to fund the activities above, similar to
  the surcharge on US phone bills to connect schools to the
  internet and to provide service to low income subscribers

* a 1% tax on all electronic commerce dedicated to
  expanding internet use in developing countries

* an international Developing Countries Venture Capital
  Fund to allocate the capital raised in steps 5 and 6
  above; some of the capital should be applied to infrastructure,
  and some to new ventures that involve the internet

Available online at:
http://bmgt1-
notes.umd.edu:8080/Faculty/KM/papers.nsf/66117572fd72b906852
56a5600767089/fd1838f26759cabe85256d0c006b9ed1/$FILE/prometheus.pdf