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Mobile Phones Can Help Reduce Poverty: UN Report

|October 17 2010 |market research

Policy makers in developing countries should give higher priority to the ICT sector when developing strategies aimed at reducing poverty, urged a report released by the UN. UNIC Beirut director Bahaa Elkoussy stressed the role of governments in the formulation of national policies in line with ICT requirements, "Since their increased penetration creates more job and income opportunities." Elkoussy pointed out that the rate mobile telecom penetration in the least developed countries has recently jumped from 2 percent to 25 percent. "ICTs have become accessible to all, they even permeate our daily lives and became one of the essentials."

Apart from discussing the close link between ICT, small enterprises and reduction of poverty, the report focuses on the central role of technology in improving living conditions of marginalized segments of society, especially the poor, and boosting productivity of small enterprises and businesses that sustain these segments.  The number of subscriptions in fixed-line telephones in the world reached about 1.2 billion by the end of 2009, while the figure for mobile phone users reached 5 billion this year, or 68 percent, compared to 60 per cent in 2009.The number of Internet users is estimated at about 1.8 billion at the end of 2009, of whom about 480 million are broadband users.

imagesIn her presentation, UNCTAD Economic Affairs Officer Diana Korka spoke about mobile money services, which are also one of the important applications in the ICT field. She explained that many low-income economies are under-banked; for almost all of these, existing data show a higher rate of penetration for mobile telephony than for commercial bank accounts. According to the Consultative Group to Assist the Poor, about 1.7 billion people without bank accounts will have mobile phones by the end of 2010. Korka reviewed recommendations of the report for governments in order to secure positive effects of ICTs on the reduction of poverty, such as the importance of further expansion of mobile coverage, making ICT use more affordable, and partnerships with the private sector and civil society.

Moreover Zaatari pointed out that mobile phone penetration rose six times between 2003 and 2009, reaching a rate of 68 percent in 2009. Despite great disparities in terms of mobile phone costs in the Arab region, the least developed countries, those with low gross national income, spend on these services more than developed ones, he noted. Western Asia is a consumer region of ICT, rather than a productive one. Zaatari concluded with a set of recommendations to improve the ICT sector, such as completing the liberation of all telecom sectors, especially the fixed-line telephone services and the internet. The report also recommends promoting competition, which is one of the most important factors conducive to lower costs and wider penetration.

The need to separate the ICT sector from other economic sectors at the national level is another recommendation, and finally the report urges the use of positive effects of internet services in the development process by supporting the liberation of their markets and reducing internet access fees to spread penetration to all segments of society.

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