ADB Provides $21M to Develop ICT in South Asia | Asian Development Bank

ADB Provides $21M to Develop ICT in South Asia

News Release | 17 December 2007

MANILA, PHILIPPINES - The Asian Development Bank (ADB) is providing $21.2 million for the development of information and communication technology (ICT) in Bangladesh, Bhutan, India and Nepal by enhancing the availability of affordable broadband Internet connections, skilled manpower and local content and Internet applications in line with efforts to promote inclusive growth and reduce poverty.

The South Asia Subregional Economic Cooperation Information Highway Project is estimated to cost $24 million. ADB will provide a $4.7 million grant to Bhutan, another $9 million grant to Nepal and a $3.1 million loan to Bangladesh for the project. The governments of the four member-countries of the South Asia Subregional Economic Cooperation (SASEC) will finance $7.2 million of the total project cost.

ADB will also extend a $4.4 million grant to increase technical and business skills in developing local ICT and Internet applications particularly for the poor. The technical assistance will help reshape the role of the ICT research institutes in knowledge development and capacity building for community and business development.

The project will establish a SASEC regional network with fiber-optic and data interchange capacity directly connecting the four member-countries. It will also set up a SASEC village network to expand broadband access to 110 rural communities in the SASEC countries and provide direct connections among the communities for local networking and local information sourcing. The project will establish a SASEC research and training network to build technical and business skills in developing local ICT content and Internet applications that serve the needs of the poor in particular.

"Cross-border connectivity among SASEC countries is considered a critical area in need of regional cooperation, as the development of information and communication technology infrastructure across borders has been fragmented and often outdated," said Dong-Soo Pyo, principal financial analysis specialist of ADB's South Asia Department.

"ICT is essential infrastructure for economic growth as road and rail networks, and telephone and power systems are. The quality and usefulness of ICT infrastructure in the SASEC region determines the efficiency of the economy and the potential for economic growth of the SASEC countries individually and as a group," added Hyunjung Lee, ICT specialist of ADB's Knowledge Management Center of Regional and Sustainable Development.

Internet traffic in the South Asia region often goes through third parties and depends on satellite transmission. Regionally integrated and high-quality broadband capacity would do away with third party connections, optimize the cost of interconnection within the region, help bring down the prices of ICT services, and boost ICT use across borders.

Bridging the urban-rural divide in ICT is another area for regional cooperation. Commercially driven ICT development has left rural people behind and widened disparity between urban and rural areas. Rural community Internet centers have been tested and have proven effective in addressing the matter.

The need for more high-quality training and literacy in ICT has been raised by SASEC member countries including India, where its development has created millions of jobs over the past few decades. At present, except in certain public and private institutions, many ICT training initiatives do not meet international quality standards.

The SASEC initiative was launched in 2001 with ADB assistance to support and facilitate regional cooperation initiatives in six priority sectors: energy and power; environment; information and communication technology; tourism; trade, investment and private sector cooperation; and transport. It provides a venue for policy dialogue, information sharing and confidence building among participating countries to enable better economic cooperation.

The project will mark a new milestone in the regional cooperation and integration in South Asia. It is the first subregional investment project under the SASEC program, participated by all four countries, after a decade-long joint effort for regional cooperation and integration. It will help further catalyze delivery of physical investment projects by demonstrating tangible benefits reaped by SASEC countries.