Asian Forum on Information and Communication Technology Policies and e-Strategies, 20-22 October 2003

Document Actions

Session Summary

Session VIII - Public Private Partnerships and Financing ICT Developments

Chair: H.E. Keheliya Dissanayake Bandana Rambukwella, Minister of Science & Technology, Sri Lanka
Resource Person: Mr. Paul Ulrich, Consultant, Hong Kong
Panel/Discussants:

1.	Dr. Tan Chin Nam, Permanent Secretary, Ministry of Information, Communications and the Arts, Singapore
2.	Mr. Silvio Cattonar, Director, Special Projects, Mekong Department, ADB, Manila, Philippines
3.	Mr. Thanongsinh Kanlagna, Chief Executive Officer, Data Com, Lao PDR
4.	Haji Mahmud Haji Mohd Daud, Director of Information Technology and State Store Department, Ministry of Finance, Ministry of Finance, Brunei Darussalam

Note: The Roundtable was assisted by a facilitator who posed 11 "Key Questions and Issues" to all the participants.

POINTS AND ISSUES RAISED

-	Definitions of public and private are far from clear: state-owned enterprises, publicly listed firms, private and public universities, government-organized NGOs, and private donors all blur the distinction between public and private.
-	Transparency is important not just for governments, who are responsible to their constituents, or businesses accountable to their shareholders, but also for partnerships to ensure the fair tendering of public contracts or other arrangements by which the government enlists participation from the private sector.
-	There are few studies on public-private partnerships (PPP), but we can examine private-private partnerships and alliances to understand what are typical success factors.
-	ICT industries on average have more alliances among themselves and deeper integration of those alliances than other sectors of the economy.
-	In business, looser arrangements of alliances have a greater chance of success than tighter bonds of joint ventures or mergers and acquisitions whereby the acquirer or partner has little choice but to inherit the weaknesses as well as the strengths of the closely tied partner.
-	After partner selection and commitment by senior management, having clearly understood roles and clear communication between partners figure as the most frequently cited factors for success. ICT can facilitate better communication but only if the organizational environment permits it.
-	Public-private partnerships inevitably involve negotiations, but getting to "yes" can be easier than may at first seem. Even if the two (or more) parties have diametrically opposed views on key points of negotiation, so long as they place differing priorities to the interests in contention, there is a good deal of scope to reach an agreement, combining the top few priorities of each and a blend of those that rank equivalently in importance between them.
-	Two prominent forms of PPPs involve (1) incubators-as a means to spur growth and (2) extending rural access to telecommunications as a way to enhance equity. The need to generate economic growth without compromising societal equity illustrates two potentially competing priorities for policymakers.
-	Incubators and high-tech parks are a relatively recent phenomenon in Asia but are growing rapidly. Most Asian countries have at least some of these and several have hundreds of high-tech zones and incubators, with special tax incentives to encourage specific ICT sub-sectors like software.
-	Research from the U.S. and OECD have shown that publicly supported incubators can double the chance of a start-up's surviving its infancy and that incubators also generate a lot of employment in surrounding communities. Some believe that the physical proximity of companies, which encourages the sharing of knowledge and resources, accounts for this success.
-	Studies from the Massachusetts Institute of Technology (MIT) have shown that successful high-tech start-ups typically have founders between the ages of 30 and 36-old enough to have experience and contacts, but not so old to have become averse to risk. The findings also advocate that such companies have at least several founders, up to about five. It is rare that one or even two persons can have the requisite variety of skills from technical aptitude to marketing, management, and accounting needed by a start-up company.
-	The proliferation of wireless technology and retailing innovations like pre-paid calling cards, which provide savings to users and lower administrative costs for operators, have made a wider geography of rural areas economically viable for service.
-	However, supportive policies-shifting from receiving party pays to calling party pays, allowing higher rural tariffs to cover costs, and asymmetric interconnection rates for terminating rural calls-are also necessary to enable rural operators to make money from the often substantial incoming telephone traffic to rural areas.
-	Private participation in ICT development can free-up government resources for other social services, improve the efficiency of ICT use, and un-bundle activities and risk to those best able to bear it.

THE WAY FORWARD: SHARED EXPERIENCES/ PROPOSED SOLUTIONS

-	The success of PPPs depends on creative design, conducive policies, and constant re-assessment of the partnership to ensure that the PPP is meeting the partners' objectives.
-	To attract foreign direct investment, governments should provide fewer incentives like tax holidays, which merely start a competitive race to the bottom with neighbours vying for the same business.
-	Investors rank access to markets as their top priority followed by the policy environment, production costs, workforce competence and level of education.
-	While large countries like China can lure FDI with huge internal demand, others-particularly small countries-must focus on the policy environment and the quality of their workers. Conducive policies must include a transparent legal framework, good governance, and accountability.
-	PPPs are particularly draining on management resources so governments must have capacity to fulfill their obligations.
-	To promote rural telecom operators, governments can look to the examples of Chile, Bangladesh, Nepal, and (soon) Sri Lanka to see how policies and innovations like "least-cost" subsidies can make rural operations viable and even profitable.
-	Smart subsidies are targeted and are no larger than necessary. Governments might try, for example, issuing pre-paid calling cards to previously identified poor people in rural or urban areas for use in payphones.
-	It is important to experiment with new ideas but also, since you cannot manage what you cannot measure, implementers need to develop indicators to measure progress.
-	Good candidates for PPPs have clear feasibility studies, business plans, and legally binding contracts defining terms, responsibilities, and recourse should any partner fail to fulfill its commitments.

Last modified 2004-05-25 03:31 PM