G O 9, 2001 Project name: Information and Communications Technology Project number: GY-0066

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Page 1

ROFILE

UYANA

CTOBER

9, 2001

Project name:

Information and Communications Technology

Project number:

GY-0066

Project team:

Kirk Jones, Donna Harris (COF/CGY), Iwan Sewberath-Misser

(RE3/OD6), Francisco J. Proenza (SDS/FAO), Juan Carlos Pérez

Segnini (LEG/OP3), Rosario Londono, Vera Lucía Vicentini,

María Rosa Sosa and Juan A. B. Belt (RE3/FI3) Team Leader

Date of Profile I:

April 27, 2001

Borrower:

Government of the Cooperative Republic of Guyana

Executing agency:

Information and Communications Technology Unit (ICTU) of

the Office of the President

Counterpart:

US$4.5 million

IDB (FSO):

US$18.0 million

Co-financing:

US$ 0.0 million

Financing Plan:

Total:

US$22.5 million

Next Mission:

October 2001

Analysis Mission:

November 2001

Tentative dates:

Board:

December 2001

PTI:

No.

SEQ:

During further project preparation, the Project team will examine

whether the Project qualifies as a SEQ.

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I. I

NTRODUCTION

1.1

Implementation of an Information and Communication Technology (ICT)

Strategy or Connectivity Agenda, has been identified as a national priority by the

Government of Guyana (GOG). The National Development Strategy (NDS)

views ICT as a pivotal tool to improve governance, accountability and

transparency, generate employment, develop human potential, and strengthen

national unity. The proposed Project will provide resources to: strengthen the

recently created Information and Communications Unit (ICTU) in the Office of

the President; modify the legal/regulatory framework to facilitate E-transactions

and enhance Guyana’s attractiveness as a site for E-service exports; increase

public sector efficiency and transparency, and facilitate citizen access --

especially for the poor -- to needed public services by making them available

online (e-Government); community outreach to enable low-income individuals to

gain access to the opportunities for communicating, learning and identifying

employment opportunities through the Internet; promotion of E- service exports to

encourage economic diversification and to create new jobs, particularly for the

young; network connectivity to lower unit costs and to benefit from network

externalities; and human capital development, with emphasis on enhancing the

skills of the youth. Total Project costs have been estimated at US$22.5 million, of

which US$18 million would be financed by a Bank FSO loan.

II. B

ACKGROUND

Economic Framework

2.1

Guyana is an open and predominantly agricultural economy. For the two decades

after the 1966 independence, it followed statist economic policies, and several

important enterprises in the sugar, rice and bauxite sector were brought under

government control. A massive outflow of Guyana’s citizenry started during this

period, and the tide has yet to be stemmed. No hard data is available, but it is

widely believed that the there are more Guyanese residing abroad – mainly in

North America - than in the homeland.

2.2

Beginning in 1988, a number of measures were implemented to liberalize the

economy and to give a greater role to the private sector. The improved policy

framework had highly positive effects beginning in the early 1990s. From 1991 to

1997 real GDP grew at an average rate of over 7%, the public sector deficit

declined sharply, and inflation was reduced. Reductions in agricultural production

associated with the effects of El Niño-induced drought and forest fires, combined

with deterioration in the terms of trade, resulted in a temporary setback in 1998

National Development Strategy (2001-2010) A Policy Framework - Eradicating Poverty and Unifying

Guyana / A Civil Society Document

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and real GDP declined by 1.7% that year. In 1999 GDP growth was again

positive, about 3% for the year, and is expected to be 2.5% in 2001. Continued

economic expansion will depend on a consolidation and deepening of economic

and institutional reforms. The greatest challenge facing the authorities is the

modernization of the state, to enhance its capacity to provide public services,

encourage foreign investment and facilitate the creation of employment

opportunities in Guyana for the country’s eminently young population (about 35%

less than 15 years old).

The Information and Communications Technology (ICT) Sector

2.3

Guyana has many attributes necessary to develop the Information and

Communications Sector (ICT) sector, including affordable labor costs; linguistic,

cultural and time zone affinities with major markets in North America; and an

open environment for private investment. This potential has yet to be realized.

While Guyana has relatively high teledensity for a country of its income level

development of the ICT sector has been hindered by the high costs of

international telecommunications services, both dial-up and leased lines, and by

an ambiguous regulatory framework for data transmission. Additionally, the costs

of local broadband connections are very high, a result of limited competition.

2.4

The ICT sector can be described as small, underdeveloped and a user of software

products. Several small ISPs

have started in the country, mostly in the

Georgetown area, to serve consumer Internet connection demand. A number of

commercial telecenters are also in operation, generating most of their income

from the sale of computer time to make telephone calls abroad using voice over

Internet Protocol (VOIP)

as an alternative to the high price for conventional

international telephone calls. Rates paid by individuals at commercial telecenters

range from US$1.60/hour for dial-up connections to US$3.60/hour for broadband

access.

The University of Guyana and a few NGOs and private firms have also

established telecenters offering training in basic computer skills and office

applications. Some firms also offer network technical training. Several businesses

have established their own local area networks and the Ministry of Finance has

succeeded in automating the public sector payroll. GT&T has set up a large call

center to provide ICT back-office services to the North American market. A

number of foreign investors have expressed an interest in developing similar ICT

export centers, but find the present costs of communications and lack of trained

personnel are important limiting factors.

In 1999, there were seven lines per 100 inhabitants.

Internet Services Provider: a value added services business aimed at provided retail access to the Internet

and Internet.

An Internet-based way of digitizing speech to enable its transmission over the Internet.

In Peru and Colombia, for example, rates are under US$1.0/hour.

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The ICT Strategy

2.5

In February 2001, a Government team supported by Industry Canada and the

Bank

prepared a Draft Guyana ICT Policy Paper. This document defines the

following objectives: greater efficiency and transparency in the public sector;

enhanced access to public information by citizens; greater access to technology,

training and communications for the disadvantaged; and economic diversification.

The document calls for the creation of a “lead Agency”, or Information

Technology Authority (ITA) within the Government of Guyana, as a driving force

that would lead a concerted effort to move Guyana into participation in the global

knowledge-based society. An advisory committee, composed of advisors from the

public and private sector, and from the NGO community was also proposed by the

National ICT Strategy to ensure full participation and support of all stakeholders

in the process of strengthening ICT policies and coordination mechanisms.

Progress to Date on ICT

2.6

The implementation of some elements of the Draft Guyana IT Policy has started.

The GOG is committed to a process of consultation with the private sector and

civil society on all aspects of the development of an ICT strategy. To further this

objective, an informal working group has been established under the

chairmanship of the Office of the President (OP) that has developed some

preliminary priorities for ICT development in Guyana. Furthermore, during

project preparation, an ICT Unit (ICTU) has been established in the office of the

President and it is expected that it will eventually evolve into an Information

Technology Authority. A highly qualified and experienced coordinator for the

ICTU has been selected to function as the Chief Information Officer of

Government (CIOG). Also, a small number of investors have established or are

planning to establish ICT export-oriented operations in Guyana. The

International Youth Foundation is considering supporting a training program in

Guyana under the MIF “Program for Youth Employment: Technologies in the

Workplace Program.”

Bank Support for Telecommunications Reform

2.7

In July of 2000, the MIF approved an operation for Guyana, “Modernization of

Telecommunications”, with the objective of introducing competition in

telecommunications. An international lawyer hired under the project has prepared

a consultation paper that has been issued to the public to help advance a dialogue

on telecommunications reform in the country. The MIF operation will fund the

drafting of a new law and regulations to support competition in

telecommunications, negotiations to modify the license of the leading carrier, and

the establishment of an independent regulatory agency.

Using C&D funds assigned to the Country Office Guyana.

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Bank Strategy for the ICT Sector

2.8

Modernization of the public and private sectors is one of the major challenges

facing Guyana. The Bank’s strategy in this respect is focussed on creating an

enabling environment to encourage foreign and local private investments, lower

restrictive trade practices, policy and regulatory reforms (including the

telecommunication sector), and privatization and increased competition in the

local market place. A key element of this strategy is the modernization of the

state. The proposed Project will support the Bank strategy through the

improvement of efficiency and effectiveness in the provision of services,

promotion of private sector initiatives and business opportunities in the ICT

sector, and by increasing access of distant communities to public services and

low-cost access to the Internet. Efforts will utilize ICT as a primary element in

reform planning from the outset, not as a secondary consideration in the

restructure of processes and relationships.

Bank and Other Donor Experience in the ICT Sector

2.9

Bank experience has been mostly limited to the introduction of ICT in projects,

for example, in modernization of the state, education or social development

programs. An example of a Bank project with a strong ICT component is the

Barbados Education Sector Enhancement (BA-0009). Other Donor experience

with ICT programs has been similar to the IDB’, i.e. having ICT as a component

of a project. Until now, neither the World Bank nor USAID have implemented

integrated ICT projects. USAID has designed an integrated ICT project in Egypt,

and implementation is just getting underway. The World Bank is also in the

design stage of integrated ICT projects in Eastern Europe.

Lessons Learned

2.10 The Final Report of the Digital Opportunity Initiative (DOI) of July 2001:

“Creating a Development Dynamic”

contains a thorough analysis of the

considerations that should be taken into account in the design and implementation

of ICT programs. A key conclusion is that a comprehensive and holistic

approach is the most effective way to promote synergies and maximize the

impact of ICT. According to the Final Report, interventions should include

building human capacity; creating incentives for the private sector, particularly

for E-exports; developing appropriate local content; and increasing competition,

especially among telecommunications and Internet-related businesses. The

design of the proposed Project is fully consistent with those recommendations.

2.11 Other conclusions drawn from analyzing experiences with ICT programs are:

Accenture, the Markle Foundation and UNDP sponsored the Final Report of the Digital Opportunity

Initiative (DOI). It is a result of extensive cooperative work between DOI and the International

Telecommunications Union (ITU), the Organization for Economic Cooperation and Development (OECD),

the United Nations Educational, Scientific and Cultural Organization (UNESCO), and developing

countries.

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Success in promoting a greater use of ICT in the public and private

sectors requires support at the highest political level, as shown by the

experiences of Ireland, the United Kingdom, Colombia, Costa Rica Chile and

Uruguay.

A number of public sector automation projects have failed. One of the

reasons has been that they have used very sophisticated applications that

require intensive participation of foreign consultants without building local

capacity. Besides the high costs of installation, these systems require

continuing high-cost maintenance and reliance on foreign skills. Therefore, it

may be more cost-effective and less risky to use simpler applications that can

be developed and maintained locally.

Commercial telecenters have been successful mainly in urban areas where the

cost of connectivity is affordable. The impact of purely commercial ventures

on the poor and on rural areas tends to be minimal, as services are limited and

the costs of connectivity prohibitive. Public sponsored telecenters have been

successful when subsidies are well-focused and concentrated in start-up costs

and training, and when they rely on local initiative and foster business-like

operators that recognize the need to recover recurrent expenditures.

E- service exports can provide employment opportunities for young people

with a wide-range of skills, beginning with call centers and moving up to

fairly sophisticated software development. Initial activities at the low end can

develop into higher value-added services as the business environment and

human capital endowment improve and markets are developed.

Francisco J. Proenza, Roberto Bastidas-Buch and Guillermo Montero, Telecenters for Socioeconomic and

Rural Development in Latin America and the Caribbean , FAO, ITU and IDB, May 2001.

III. T

ROJECT

Objectives

3.1

The goal of the proposed Project is to increase competitiveness in order to

accelerate economic and social development. The purpose of the project is to

increase the use of ICT in the private and public sectors through well-targeted

interventions. The Project consists of five distinct components: support to the

ICTU in the Office of the President; improvement in the legal framework;

increased use of ICT in the public sector (E- Government); community outreach;

and promotion of ICT service Exports. Two types of activities will span and

support the five distinct components: network connectivity and human capital

development. These components have been chosen to promote synergies. Within

each component, the activities that will be financed have been dimensioned to

ensure cost-effectiveness.

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3.2

The project can be represented schematically as follows:

Project Components

Support for the ICT Unit (ICTU) in the Office of the President

(US$ 2,200,000)

3.3

This component will enhance the capability of the ICTU to refine and implement

the ICT development strategy. The ICTU (Office of the Presidency) will be

responsible for finalization and implementation of the ICT strategy and for the

implementation of this Project. An ICT Advisory Board will be formally set up to

help oversee policy and strategy implementation. This Board will be chaired by

the ICTU coordinator, and will be comprised of a small number of advisors from

the public and private sectors and NGOs. A monitoring system will be established

to measure the Project’s progress as well as other ICT initiatives sponsored by

Government and other donors. This monitoring system will use the network as a

main tool to measure use of the different Project provided services. The ICT

Unit will be staffed by a small group of highly qualified Guyanese, and supported

by an internationally recruited firm that will provide two long-term expatriate

staff and specialized short-term consultants.

Legal /Regulatory Reforms (US$ 400,000)

ICTU

Strategy formulation

Monitoring

Dialogue with civil society

Legal framework reform

E Government

Putting relevant content on WEB

On-the-job training

E-Exports

Training

Connectivity

Community outreach

(telecenters)

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3.4

This component will help identify the laws that need to be revised in order to

enhance the enabling environment for ICT development in Guyana, and will

provide legal assistance in the drafting of new laws as appropriate. The

possibility of enacting a law based on the UNCITRAL

model law will be studied.

Improvements in the legal and regulatory environment for E-service Exports are

also envisaged, including strengthening of the legal framework for the protection

of Intellectual Property Rights (IPRs) as they pertain to ICT. The Bank loan will

finance the services of international and local specialists.

E-Government (US$ 3,100,000)

3.5

This component will seek to use ICT judiciously to improve communications

between government agencies, and between Government and citizens and

businesses, and to increase efficiency and effectiveness in the delivery of public

services as well as broaden access

. Government “owns” significant content that

is useful to citizens and making it readily available online will significantly

increase the value of this content and reduce transaction costs. In selected

agencies, automated processes and data bases will be developed using basic

solutions that can be developed and maintained locally at low cost. The activities

financed include:

Crosscutting activities, including improving the web pages of all agencies

and making the most common government forms, and instructions, available

on line.

Establishing a Guyanese based capacity to reliably operate and maintain

networks and systems.

Providing three computers and networking hardware and software to about 45

Post Offices, to allow them to serve as a main interface between citizens and

government for obtaining forms, applying for services and making payments.

The Post Office, throughout its decentralized network of outlets, today

receives payments on behalf of the Government and the main utilities, and

provides money transfer services to citizens. Presently, the payment tracking

system is not automated, and the Project will provide resources aimed at

automating it.

Providing selected ministries and other agencies (not to exceed five) with the

hardware and software to network existing computers (Local Area Network or

LAN), as well as providing each entity with a maximum of three computers

that will be made available in a central location to all employees in the

ministry or agency and providing each employee with an E Mail account.

Agencies will be selected on the basis of the internal capability to manage a

Local Area Network (LAN), on the “business plan” to use the technology and

on the commitment to provide adequate resources for maintenance and

equipment renewal.

Financing a centralized help desk to support ICT users.

United Nations Commission on International Trade Law.

This component is being coordinated very closely with the Bank’s Public Sector Improvement Program

(PSIP), presently being designed.

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Simple ICT solutions to improve the processes of selected agencies,

including the General Registrar’s Office (GRO), Revenue Authority, Tender

Board, Health, Traffic Section of the Police and Ministry of Agriculture.

These solutions will include digitizing (through imaging) the records of the

GRO (birth, marriage and death); putting the customs tariffs schedule on-line

and updating rates as soon as they are modified; developing a process and data

base to streamline issuance of tax compliance certificates; putting on-line

procurement notices and awards by the Tender Board as well as other

information of value to potential bidders

; studying the possibility of

introducing E-procurement in the future; disseminating health, drug and care

information to regional health care workers with capacity to exchange clinical

advice with experts; providing simple processes and data bases to the Police

(traffic section) to certify ownership, licensing and identity for vehicle stops;

and providing farmers with information on markets, prices and agricultural

production practices.

Community Outreach (US$ 3,000,000)

3.6

There is presently very limited access to the Internet by citizens, particularly in

areas outside Georgetown. This component will promote the use of the Internet

by individuals. It will finance:

An expansion in Guyana’s telecenter network and its capacity to serve the

needs of secondary students and neighboring communities. The connectivity

backbone will stimulate a market driven expansion in commercial telecenters,

mainly in high profit areas in Georgetown. The Outreach component will

provide for an additional expansion in telecenter facilities in rural areas. It will

provide investment funding to independently run institutions that operate in

the service of communities – i.e. IPED, and Learning Centers, to help them

establish approximately 20 small (3-computer) telecenters. The program will

also help secondary school students gain access to ICTs.

A program of small grants to help finance social, economic and ICT export

development initiatives that improve the welfare of communities through the

use of ICTs. This will be accomplished through a program that will award

small matching grants (US$ 5 000 – 30 000 each) to NGOs, grass roots

organizations and community groups, to foster effective use of ICTs. Possible

projects include: training of youth in web page making/computer repair for

well defined market, long distance learning, community radio, training service

workers for call centers or, for instance, as medical transcriptionists. Detailed

eligibility criteria will be developed during further Project design.

Promotion of ICT Service Exports (US$2,000,000)

Support to improve the procurement process will be coordinated closely with Bank-wide efforts to

introduce E-procurement in member countries.

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3.7

The market for ICT service exports is growing rapidly. The purpose of this

component is to increase the attractiveness of Guyana as a site E-service exports.

These exports range from low value added services such as call centers to fairly

high value added services such as programming. Initially, it is likely that most

activities will be concentrated a the low end. The project will finance the services

of a firm that will evaluate the environment for Guyana for E-service exports, will

develop a plan to market Guyana as a site for E- service exports and will help

implement that marketing plan. These activities will be coordinated by GO-

INVEST, the government agency charged with increasing foreign investment in

Guyana. A number of investors considering Guyana as a site for establishing E-

export facilities have encountered difficulties finding adequate sites for

establishing facilities. The development of sites and services (streets, electricity,

water connections, drainage and broadband connectivity) to encourage the

establishment of export-oriented ICT park or parks will be studied during Project

preparation, but a preferable option would be to refurbish an existing building at

an university. An initial pilot program will be financed within or in the

immediate vicinity of university. Possible locations include Georgetown (next to

the University of Guyana), Berbice Region (next to the Berbice Campus of the

University of Guyana) and Linden. Additionally, resources would be provided to

design a mechanism to encourage private sector investment in export-oriented

ICT parks.

Connectivity (US$ 4,300,000)

3.8

This component will offer connectivity to all Project activities at reasonable –

international standard - costs. The component will capitalize on the significant

economies of scale and density, as well as network externalities associated with

ICT infrastructure development.

The proposed Project will also provide

connectivity to teacher training centers in support of BEAMS and of the CIDA-

funded teacher training program and also to schools.

3.9

The project will establish an Internet based network as well as a

technology/network management capacity to sustain the network and support e-

government efforts.

3.10 Distribution points, from which multiple local groups can be served, have been

identified on the basis of population density and proximity to secondary schools

and Post Offices, but every region in the country will have at least one

distribution point, regardless of population density. Based on this criteria, the

Network externalities occur because each additional computer connected to the net increases the value of

the connection for all computers already connected. Metcalf’s Law posits that the value of a network

increases in proportion to the square of the number of nodes in the network.

Given the potential synergies between the proposed Project and BEAMS, the design of both projects is

being coordinated closely.

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following distribution points have been chosen in consultation with GOG and

civil society representatives:

Georgetown. Fifteen distributions point

in the Georgetown area connecting

government ministries, agencies and the University of Guyana.

Coastal region. Thirty five distribution points with about four to five service

points each including typically a Post Office, a school, a telecenter and when

applicable a University of Guyana site or a teacher’s college site.

Interior. Six distribution points connected with four to five service points

each.

3.11 The Project will pay for connectivity service fees for a period of four years. The

firm that will provide connectivity will be selected under ICB (see paragraph 6.1).

Human Capital Development (US$ 3,800,000)

3.12 All project components require a variety of training and educational support that

will be geared towards people with very different backgrounds, qualifications and

demands. The objective of this cross-cutting activity will be to provide demand-

driven training and educational services in support of all Project components.

The following training will be financed:

Awareness campaign for the public and private sector on the benefits of using

ICT and on the importance of protecting IPRs.

Support for the ICT academic programs at the University of Guyana (UG),

including the establishment of links with a university with a sound ICT

training program.

Support for the non-academic ICT programs at the UG, including support for

computer labs and connectivity, and improvements in the data base at the

library.

Establishment of a campus network to serve the university community.

Non-academic training for government officials on web page design, data

base programming and network management. This training will be offered

both at the UG and at local training institutes.

With MIF financing, the International Youth Foundation (IYF) is considering

supporting training geared at E-export development. This will be carried out

in partnership with local or NGOs and/or the UG. The Project is expected to

finance additional training using similar mechanisms.

Training to enable about 100 secondary school teachers to acquire and

practice fundamental computer and Internet skills.

3.13 This component will be closely coordinated with other IDB and donor funded

projects to prevent duplication of efforts, especially those that deal with the

training of teachers and students in ICT.

The number of sites and their locations are based on preliminary estimates. Distribution points are hubs

that connect a series of service points. Each service point could serve a WAN.

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Project Costs.

3.14 Project costs are summarized in the table below (in US$000):

COMPONENT

BANK

GOG

TOTAL

ICTU

2,000

200

2,200 9.8

Legal reforms

300

100

400 1.8

E-Government

2,000

1,100

3,100 13.8

Community Outreach

3,000

3,000 13.3

Promotion of ICT Exports

1,000

2,000 8.9

Connectivity

2,500

1,800

4,300 19.1

Human Capital Development

3,500

300

3,800 16.9

Subtotal

14,300

4,500

18,800 83.6

Physical and price contingencies

3,000

3,000 13.3

Fees

700

700 3.1

Total

18,000

4,500

22,500 100%

Project Implementation

3.15 Project implementation will be the responsibility of the Information and

Communications Technology Unit (ICTU) that has been established in the Office

of the President. Given the need for close coordination between numerous

ministries and autonomous agencies and institutions such as the University of

Guyana and the Post Office, placement of the ICTU in the Office of the President

is expected to enhance that coordination. The Project Document will include an

Annex detailing the types of activities that will be financed. The ICTU will be

supported by a high level advisory board, and by a small team of expatriate

advisors.

3.16 Efforts will be made to bundle Project activities in a small number of contracts

that would attract bidders that would be selected under an International

Competitive Bidding (ICB) process. At this juncture in project preparation, two

main contracts are envisaged, one to provide connectivity and another one to

manage the Community Outreach component. During Project preparation,

detailed guidelines for the implementation of the Community Outreach

component will be developed to ensure that grants to NGOs and other institutions

are based on technical and sustainability criteria. In developing the Procurement

Plan for the other Project activities, efforts will be made to bundle purchases to

maximize the use of ICB. It is expected that running the VPN and hosting the

servers that will contain the information of the E-Government component will be

hosted by an Application Service Provider (ASP) selected under ICB procedures.

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Contracting for the E-Government, connectivity, E-service Export and community

outreach components will be conditioned upon a prior liberalization of the market

for data transmission. This condition will be a contractual clause.

3.17 Given the close relationship between the proposed Project and other Bank

projects such as the Basic Education Access, Management and Support Program

(BEAMS), Systems of Bankable Property Rights, Public Sector Modernization

Program, and Unserved Areas Electrification Program, coordination mechanisms

will be established to ensure coordination and maximization of potential synergies

between different Bank projects.

IV. E

NVIRONMENTAL AND

OCIO

-E

CONOMIC

SPECTS

4.1

The Project inputs are basically technical assistance, training and the provision of

connectivity. It is expected that connectivity will be provided essentially using

wireless technology, but the bidding documents to select the firm that will provide

these services will ensure that environmental specifications will be defined, if

necessary, and included in the terms of reference of the civil works.

4.2

The Project gives particular emphasis to providing connectivity and training to

low-income individuals, principally outside Georgetown. Additionally, the E-

government solutions proposed would help make government services more

readily available to low-income citizens, especially those residing in outside

Georgetown. The Project team will examine during further Project preparation

whether the Project qualifies as a SEQ.

4.3

During the next Project preparation phase a consulting firm will be hired to carry

out feasibility studies of an export-oriented ICT park. These feasibility studies

will include an environmental and social impact assessment.

V. E

CONOMIC

EASIBILITY

5.1

Guyana is a low income-country with a small population of about 800,000 people.

Access by the population to information and communication technologies is

presently quite limited. This is partly due to the low income of the population, as

well as to institutional constraints preventing greater development of the country’s

connectivity and ICT service infrastructure. Guyana has nevertheless important

advantages that could be seized to bring about a significant turnaround on

relatively short notice. First, about 90% of the country’s population are

concentrated along mostly flat lands along the coastal areas of the country in

Regions 2 through 6, thus making infrastructure development potentially low cost.

Second, it is estimated that there are more Guyanese abroad than in Guyana. This

creates a large potential demand for communications between residents of Guyana

and the expatriate Guyanese, and is in a sense the “killer application” that can

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promote a high level of demand for connectivity. Third, being an English

speaking country, Internet content is readily available and opens up numerous

opportunities to supply labor services virtually to the North American market.

Fourth, the country’s population also has a relatively good basic educational

profile and therefore training efforts would be high returns if targeted to the

development of skills geared to a broadened job market now opened up virtually

and online. Fifth, the time zone in Guyana coincides with major markets in the

eastern seaboard of North America, and thus enhances the attractiveness of

Guyana for some E-export services such as call centers. Sixth, the country's

population is quite young. An estimated 35 % of its people are less than 15 years

old, compared for example, to an average 21% for the U.S. and 19% for Canada.

The youth of Guyana’s population is a tremendous asset as it will facilitate the

introduction of ICTs and make for a longer return horizon associated with

investing in human capital.

5.2

The E-government component is expected to reduce government costs but more

importantly to reduce the costs faced by citizens as they transact with

government. For example, use of ICT in the General Registry (where birth, death

and marriage certificates are obtained) will reduce the operating costs of the

registry and improve the level of service by reducing the backlog. At the same

time, citizens will be able to apply for and pay for their certificates at a local Post

Office without the need to travel. Similarly, putting forms on line will reduce

printing costs for the GOG but more importantly it will make those forms

available to citizens at any Post Office or telecenter (see paragraph 3.13).

VI. R

ISKS

6.1

Regulatory risk. Presently, Internet broadband connectivity rates are very high.

The project envisages an International Competitive Bidding Process (ICB) for

providing connectivity, and this is expected to reduce costs to level that would

make the Project financially viable and sustainable. Before contracting for the E-

Government, Community Outreach, E-service exports and Connectivity

components, the Government must clarify the regulatory environment and

liberalize the market for data transmission. This will include issuing licenses for

international connectivity to any existing or future ISP using simple and

transparent procedures.

6.2

Brain drain of ICT graduates. This is a serious risk facing the project. It cannot

be addressed solely by this project. People will continue to migrate as long as

local services are deficient, poverty is ubiquitous and employment opportunities

and income earning possibilities for young people are limited. The project will

help mitigate this risk by creating job opportunities for young people in Guyana

through its Outreach Program and ICT Export Development component.

Additionally, some redundancy in the training program has been introduced,

especially in key information technology positions, to allow for expected turnover

of staff.

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6.3

Sustainability. The proposed E-government services are relatively rudimentary.

These consist mainly of the provision of information and online display of forms.

The skill requirements for these services are not overly burdensome and do not

require a major reorganization of operational flows currently in place.

Furthermore, the project will provide training at all levels in those Ministries and

agencies that will participate in the e-government component. As a contribution

to counterpart, the GOG, the Post Office, and the private telecenters will pay all

operating costs of connectivity, including network management.

6.4

Outreach program becomes politicized and telecenters and other activities

financed are unsustainable. An Outreach Program Board comprised of well-

respected members of the community - e.g. including representatives from the

major church groups and the private sector - will have independent final decision

over small grant approval. Grass roots organizations will receive assistance in the

preparation of viable and self-sustaining proposals for funding. During project

preparation, detailed guidelines for the implementation of this component will be

developed.

6.5

Technical. To avoid technical risks and to ensure sustainability, the technologies

proposed are commercial, off-the shelf, and proven in the market. There are very

good models of successful e-government services, primarily in North America,

that the project can imitate. The public Internet will be used for data transmission

under management of a Virtual Private Network (VPN), a technology proven to

maintain privacy over the Internet.

VII. S

TATUS OF

ROJECT PREPARATION

7.1

Funding has been requested from the Japan Consultants Fund for a TC that will be

used to develop the more detailed design, including the preparation of bidding

documents for all Project components. This TC is expected to be approved in

October 2001. A course for the main stakeholders on the Logical Framework

methodology that will conclude with a refinement of the Logframe for this Project

is planned for November 2001.