E-Initiatives in the GCC region
The digital divide between the IT haves and have-nots is alarmingly wide at the international level. In Europe, investment in IT is 1000 times higher than the Arab world and World Bank figures show that the entire MENA region has about the same number of Internet hosts as Poland. But many countries in the Middle East are scrambling to become e-commerce hubs, aware that IT brings not only investment from the outside, but with it the potential to shake up the economy from within. The UAE is undoubtedly leading the Arab world in this race, followed by Lebanon and Kuwait. Egypt, the most populous Arab nation, has only six per cent of the region's Internet hosts.Multinational vendors report very steep growth rates from this region. According to independent market researcher Dataquest, six among the top ten countries that report the highest growth rates in the world are in the Middle East and the UAE ranks second only to China. Qatar, Saudi Arabia, UAE, Oman, Kuwait and Egypt, along with China, were the world's fastest growing PC markets in the world in 1998. The number of Internet users increased by over 50% (to 2 million) and the number of Internet account holders increased 62% between May 1999 and April 2000. The number of Internet users in the Middle East is projected to surpass 12 million by the end of 2002. All this suggests that IT has indeed arrived in the Arab World and it's only a matter of time before it becomes a way of life here.
However, there are considerable obstacles to the spread of IT technology. Industry watchers name regional economies of scale, what the population and the infrastructure will allow, and changing the mindset of the people. Sound collaboration and cooperation of agencies and programs, and investment in equipment and human resources are the needs of the hour. Eqbal Al Yousef, President of Al Yousef IT Companies, an e-business solutions provider in the Gulf, believes that "to move from vision to reality, such a transformation needs a committed leadership, a sound strategy, a seamless cross-coordination between various agencies and organizations as well as the know-how."
Across the Middle East, governments are announcing projects to woo IT investments. The conventional wisdom is that, in the words of Said Adnan Kassar, chairman of International Chamber of Commerce, "globalization and technological advances are a cure for economic woes." While there are a number of new regional examples of the information age and the digital economy, like Dubai's internet free zone and the Bahrain UNIDO exchange, an electronic platform to help bridge the divide between the industrial stakeholders and those in the developing world requiring access to electronic business and technological opportunities, there still remain bottle necks which have to be tackled.
Analysts peg the lack of infrastructural developments as the biggest impediment to IT penetration. Large-scale investments have to be made in fiber optic cables, internet related hardware and human resources to keep pace with the growth in numbers of Internet users.
It still remains to be seen how the information age and the digital economy will change the way governments operate, but rapid change is underway. Eqbal Al Yousef commented that "the government sector has realized the potential of internet and e-business in facilitating business processes, not only for the customers who are the recipients of these services but also to providers which are the governments themselves."
Mohammed bin Rashid al Maktoum
Of all the governments in the region, UAE has sprinted ahead in the e-race. Dubai's crown prince and UAE defense minister Sheikh Mohammed bin Rashid al Maktoum, has launched his own web site, http://www.sheikhmohammed.co.ae, as a platform for Internet technology and digital medium for facilitating contact between the leader and his people. "The singular advantage of this medium is that it is two-way", explained Jamal Al Huwairib, the site's general manager. The people of Dubai have a direct link to news and information about their leader and his activities and projects, as well as a way to submit their suggestions, concerns and problems. "By embracing the Internet, Dubai is clearly demonstrating that it is not only companies that benefit from technology, but ordinary citizens as well", said Craig Taylor, Gulf regional manager for Cisco Systems.
Sheikh Mohammed has set October 2001 as the deadline for establishing Dubai's fully functional "e-government." His goal is "to re-invent Government as an efficient and effective public service provider to businesses and individuals within the next 18 months." To achieve this, he is encouraging government departments to use "the Internet and other technology solutions to re-design government processes and service offerings."
To shorthand like B2B and B2C (for business-to-business and business-to-consumer electronic commerce respectively), Sheikh Mohammed has added G2C (government-to-citizen), G2B (government-to-business) and G2G (government-to-government). These electronic government relationships, he said, must be improved by increasing the accessibility and quality of services. Sheikh Mohammed wants "an end to frustrating red tape, public queues and long, inefficient processes in government offices." If successful, Dubai will be the first country in the world to have a government that makes public services available on a 24/7 basis via the Internet.
The Middle East has for a long time relied on international analysts and experts to provide knowledge transfers to the region. Should Sheikh Mohammed's plans come to fruition and meet the challenging deadlines he has set, Dubai will have built the world's first e-government, one of the first business-to-business portals, and an Internet city on a scale like no other.
"Dubai already has many of the ingredients required to create a right environment for New Economy businesses. We have a strong business culture, a world-class urban infrastructure, the high-tech infrastructure (underway through the Dubai Internet City initiative) and we have a can-do attitude," said His Highness. Other governments already have projects or are proceeding with their own plans to make interaction with their citizens possible through the Internet, but nobody else has as yet announced an all-encompassing plan like that of Sheikh Mohammed. The scale of this daunting project would be multiplied many times over if the size of the population were larger than Dubai's. It may also be that delivering public services through the Internet may, as it has in the commercial sector, have unintended consequences.
There are other issues that may likewise crop up because of e-government. In recent years both Oman and Bahrain have amended their law to abolish the statutory requirement of exclusivity for local sales agents. Other Middle Eastern countries are likely to follow suit. The country with the strongest reputation for free trade, the UAE, currently has the most stringent dealer protection law in the region.
The availability of information on the Internet, particularly for tenders, increases the transparency of their activities--something that may not be as desirable to other governments. Once started, moreover, it may be difficult to justify which interactions between government and citizen should not be put online.
Since he's thinking in terms of improving the efficiency and quality of public services, Sheikh Mohammed has no such qualms. "The Internet revolution is creating a New Economy and nobody can afford to ignore it. The New Economy is global, intensely interlinked and it favors ideas and knowledge. The Internet revolution and the New Economy will benefit all but those who resist it." In fact, the schedule has been plotted down to the number of weeks allowed for design, piloting and implementation. Any government head who drags his heels or is without a plan has been threatened with sacking.
Of course, the UAE is not the only Arab state developing its digital strategy. Over the last six months, a growing number of initiatives have been developed by regional governments. Qatar was actually the first to announce an e-government strategy and is planning to migrate to e-government in the next two and a half years to reduce administrative costs and decrease bureaucracy. Egypt has its own answer to Dubai's Internet City and is planning to build a media city as well as three "smart villages" before the end of the year. The project envisions numerous smart villages, all linked together to create IT communities across Egypt, as part of a government drive that aims at turning the country into an advanced technology hub. Egypt's IT and Internet blueprint includes plans for a 300-acre village project in the Sixth of October City. Activities in this village will include software development, information and telecommunications training. Egypt also has a natural wealth that the UAE doesn't: a large IT literate population.
An Egyptian company, Nile Online, is building what might become the fastest Internet connection anywhere in the developing world. It has recently completed phase one of a fiber-optics project to provide 210 megabit per second (mbps) Internet access for up to five million subscribers. Egypt's geographical location and the new infrastructure, in addition to its proximity to most international fiber-optic cables, would make it a major gateway for the Internet in the Middle East.
Jordan is also getting techno savvy. IT is already the country's third largest source of revenue after phosphate/potassium exports and tourism. It has set itself the goal of $550 million in IT exports and inward investment of $150 million from overseas sources. Syria--still the most expensive place to connect to the Internet in the Middle East--is in the process of rapidly upgrading its telecommunications infrastructure, while the Kingdom of Saudi Arabia wants to establish an IT hub and science park in Jeddah, and has relaxed both its laws and taxation on foreign business to encourage greater international trade.
Abdullah Mansoor, Under Secretary of Bahrain's Ministry of Commerce and Industry spoke about his government's commitment to converge to e-commerce. "In this region, the success of e-commerce depends heavily on the role of government as a facilitator with minimalist regulatory framework." Providing free or low cost portals for small-medium size enterprises, harmonizing the laws relating to telecom, broadcasting and e-commerce and encouraging e-banking were some of the points he stressed at an e-commerce symposium held in Muscat, Oman.
Oman is also going full throttle on its IT plans. The Minister of Commerce and Industry has said that the country is taking steps to establish an IT park, increase the output of Omani graduates in software and related disciplines, as well as other initiatives. Iraq is the only Arab country that does not offer public access to the internet through an ISP. Saudi Arabia allowed net access to its citizens only recently, and since then the number of users has risen at the rate of 160% per year. But the inadequate infrastructure may slow the pace of penetration in the future. The users and the country's internet service providers (ISPs) are clamoring for the government to make the necessary improvements.
Unless these infrastructural deficiencies are eliminated, the surge in Internet users in the Arab world will definitely cause problems. Abdul Kader Kamli, editor in chief of Internet Arab World, has warned that demand in Internet access will probably exceed infrastructure development, leading to network bottlenecks and reduced growth in the number of users. After 2002, the growth rate could very well decline since infrastructural development in most Arab countries is lagging behind demand.
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