part one introduction

P

ART

ONE

I NTRODUCTION

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Information and Communication Technology - Policy and Strategy for Nepal

Chapter

1

Information and Communication Technology for National Development

1

I NTRODUCTION

There is no question that information and communication technology (ICT) is an important component of sustainable development strategies. A guiding principle in formulating such strategies should be the adoption of a people-centred approach to developing policy and programmes for issues confronting a country like Nepal. Given that 42% of the population live below the poverty line, the overriding objective of development is poverty alleviation. It is therefore imperative that our collective vision and plans are directed at alleviating poverty, a concern amply reflected in the periodic plans prepared by the National Planning Commission of His Majesty’s Government of Nepal. Thus, the Ninth Periodic Plan has set the objective of achieving a high economic growth rate and reducing the percentage of people living below the poverty line to 10% within the next 20 years. One salient feature of poverty is the lack of access to information and knowledge for the general public. Thus, if equal access to information were to be ensured for a vast majority of Nepalese, significant headway in poverty alleviation initiatives would be achieved. In addition, recent technological advancements in the information technology (IT) domain have opened up avenues of economic opportunities on which Nepal could capitalise. These broad perspectives have guided the development of Nepal’s ICT policy and strategy. Mass communications’ media can be used to provide information and knowledge to a wider section of the population in the remote as well as the more easily accessible areas of the country. Although radio, television, and newspapers continue to be the vital means of disseminating information in the country, these are essentially non-interactive media. The evolving information and communication technologies, in contrast, provide interactive means of communication so crucial for a country that has inherent disadvantages of accessibility and availability of transportation and communication infrastructure. A host of technological advancements, including the Internet, has improved the prospects of achieving social and economic developmental targets by leveraging the benefits offered by these technologies.

It is important to address all three aspects of information and communication technologies simultaneously, namely, education, access, and application, in order to achieve social and economic development objectives. Any approach that fails to address these three aspects in an integrated and holistic manner will fail. Nepal, thus, has the formidable challenge of developing strategies that can succeed in strengthening and integrating education or human resource development, provision of access to technologies, and the identification of application areas. Only such an approach can ensure that Nepal benefits from the potentials offered by the ICT sector. The realisation of this goal, however, requires the involvement of the public, the government, and civil society. The Ninth Periodic Plan emphasises the development of the IT sector to achieve overall development targets. Among other things, this will entail the creation of an environment that ensures extensive access to information technology, development of human resources to exploit the benefits offered by the technology, and the identification of areas that can benefit substantially from the application of these technologies. 2

EMPLOYMENT

OPPORTUNITIES AND DEVELOPMENT OF KNOWLEDGE-BASED

INDUSTRIES

The main objective of developing information and communication technology in Nepal is to support the national economy and to achieve the goals of poverty alleviation by allowing wider access to these technologies and harnessing them for the effective delivery of social services and also to enhance good governance initiatives. Clearly, social and economic development will not be possible in a society that does not give priority to information and knowledge. The creation of a knowledge-based society may be possible by incorporating computer education into the curricula from the school level onwards to providing Internet access at the Village Development Committee (VDC) level. The power of the technologies can also be exploited to create knowledge-based societies through the use of formal and non-formal methods of education. Given that IT industries worldwide are growing at an unprecedented rate, it is important to create a conducive environment for the proliferation of IT industries in Nepal if we are to exploit opportunities spawned by the growth of this sector. We cannot afford delays in putting in place the requisite infrastructure and embarking on focused and results-oriented human resource development initiatives in the IT sector. 3

COMPONENTS

OF INFORMATION AND COMMUNICATION TECHNOLOGY STRATEGY

At its fundamental level, the immediate objective of a comprehensive ICT strategy is to ensure that communities have access to information. It is therefore important to devise a policy and strategy framework that would address the information needs of people while exploiting development potentials of a strong ICT sector. As stated, the formulation of an ICT policy and strategy is based on three important components, namely:

• • •

4

ensuring that a large section of society has equal access to information and communication technology, developing human resources needed to implement and sustain these technologies, and identifying and prioritising activities that can benefit most from the application of information and communication technology in the context of Nepal’s socioeconomic realities. Information and Communication Technology - Policy and Strategy for Nepal

The National Planning Commission has prepared six papers on these thematic areas. The paper on information and communication infrastructure deals with the issue of providing access to information, while the paper on human resource development discusses all the aspects of developing technical expertise required to add value to ICT tools. The paper on e-commerce and e-governance covers applications and services. The strategic policy implications of these papers are the following. 3.1

Provision of access to information and communication technology

The advent and development of information and communication technology have changed the society in a fundamental way. These technologies are increasingly redefining efficiency and competitiveness as well as opening up opportunities hitherto unimagined. As knowledge and information continue to be powerful tools with a direct result on economic and social well-being, it has become imperative for individuals and nations to engage in ways that ensure that these technologies are integrated to national economies. It should be borne in mind, however, that information rather than the means of delivering it are of prime significance. Viewed thus, our focus should be on disseminating information to a larger section of society through appropriate media. This does not only refer to electronic media. The use of media depends on a host of factors such as literacy level, availability of utilities like electricity, penetration of particular media, and the type of information and size of the target population. The choice of media depends on the type of community the communication initiative seeks to serve. Media can be delivered in the form of wall newspapers, a community audio tower, FM radio stations, cassette players, and local TV stations. The use of alternative media may also be better suited to local conditions. The fact that Dhankuta District has 20 monthly wall newspapers is illustrative. Similarly, audio towers initiated first by women through community-based efforts in Palpa were popular and have been replicated in some village development committees (VDCs) of Dhankuta and Makwanpur districts. Frequency modulation (FM) stations are operating in Madanpokhara of Palpa District and Manigram of Rupendehi District. In addition, the local broadcast of Ratna Cable Television (TV) in Palpa hints at another effective media for developing local content. The paper on universal access to information advocates the need for continual development and sustenance of alternative media while extending the scope and outreach of information and communications technologies. Nevertheless, state-of-the-art information and communications’ technologies often offer distinct advantages over traditional media. These technologies facilitate interactive demanddriven modalities in terms of retrieval and delivery of information, thus opening up opportunities ranging from tele-medicine to e-commerce. Therefore, from the point of view of a broad policy of providing access to information and strengthening communications infrastructure, it may be more important to develop information and communications technologies within the country and to take steps to ensure that a large section of society has access to these technologies. One of the main prerequisites of ensuring the growth of the IT sector in the country is the development and expansion of the outreach and scope of telecommunications’ infrastructure. This is important to capitalise on the potential of the Internet as an effective medium of information dissemination. Developing content best suited to our local conditions is another important step. With the establishment of a type ‘A’ earth station and the digitalisation of a telecommunication switching and transmission system, significant headway in this sector has been achieved in the last decade. We still have much to do in the way of extending the scope and outreach of the telecommunications’ infrastructure. Chapter 1— Information and Communication Technology for National Development

5

Teledensity within the country remains abysmal. Telecommunications’ services are only available in 1,567 VDCs out of 3,913 VDCs or 40% of the total VDCs in Nepal. The quality of installed telecommunication infrastructure in terms of their suitability for IT intensive usage is another issue. This underscores a need to further intensify efforts aimed at expanding telecommunications’ infrastructure within the country to ensure access to information and IT-enabled services for a larger section of society. As this entails substantial resource commitments, it will be necessary to mobilise private and public sector resources within and outside the country in the provision and strengthening of telecommunications’ services. It is essential to create a competitive environment in the telecommunication sector. Privatisation is one possible solution, but it does not negate or exclude other options. The paper on universal access to information forwards the concept of working out financing schemes for the expansion, strengthening, and sustainability of the telecommunication sector by earmarking a certain percentage of GDP for the purpose. Considering the socioeconomic reality of the country, it will also be necessary to provide grants to ensure that communities have access to ICT, especially those in rural areas. Recent commitments by the heads of eight developed countries suggest that those countries may be willing to increase support in expanding ICT technologies, increasing access to those technologies, and in building human resources in the developing and least developed countries. We should do our part to respond to such opportunities by proactively engaging in identifying our priority areas in the ICT sector and mobilising internal as well as external resources. 3.2

Human resource development

The development of human resources is another vital component of ensuring the development of the country’s ICT sector. As the ICT sector and its applications continue to become specialised and knowledge intensive, human resource issues become prominent. While working out a strategy for human resource development, it will be necessary not only to focus on IT education per se but also on how the general education system can be strengthened and made effective by integrating IT components and resources. The power of the Internet can be used effectively to complement the conventional education system, because a person with basic literacy is able to use the Internet. It would be worthwhile to devise a means that complements focussed IT education and the general education system to hasten the development of both sectors. One obvious way in which information and communications’ technologies can contribute to the general education sector is through distance learning. This is separate from other aspects of pedagogy that could benefit significantly from new developments in information technologies. Distance learning initiatives in Nepal are so far limited to the use of radio. The paper on human resource development examines the technical possibility of using Internet technologies for implementing distance learning activities. Introducing Internet technologies should enhance the delivery of education in science and technology — which is traditionally weak. Providing focused IT education is of immense significance. It is important to encourage academic institutions to introduce IT courses at various levels. Some sort of control mechanism should also be in place to maintain quality in IT education. This is important for the opportunities unleashed by the IT revolution in terms of the high-value job creation connected with software development. Without quality manpower at par with international standards, 6


our efforts to position ourselves in the mainstream IT revolution will not be successful. Considering the increasing trend on the part of developed countries to outsource IT activities to areas with relative comparative advantage, it is necessary for Nepal to take steps to develop human resources to meet the global IT demand and to support the development of the sector within the country. We should, however, refrain from the idea of developing every educational and academic institution related to IT within the country. That would not be feasible in the foreseeable future and would require substantial capital. It will also be unrealistic to depend on exports alone and to compete globally if we fail to create a competitive environment within the country. Without initiatives aimed at creating a competitive environment within the country, such efforts will only result in low-value job creation. Software prices continue to be one of the impediments to both human resource development and software development initiatives for Nepal. This has resulted in unscrupulous practices and has given rise to some instances of infringement of intellectual property rights. Thus, one solution could be differential pricing based on ‘Versioning,’ as recommended by the renowned IT expert, Professor Verian . 3.3

Identifying services that can be delivered through ICT and the development of applications

ICT essentially derives its value from applications. Viewed from a macro perspective, the main components that stand out in the major application area are e-commerce and egovernance. Given the rapid convergence of information and communications’ technologies and the subsequent development and proliferation of the Internet, e-commerce is fast becoming one of the major applications holding promise for increased economic development. It should be borne in mind, however, that e-commerce is more about business strategy than about the technology that enables it. The development of e-commerce will energise the trade and commercial sectors both within and outside the country. The increased exposure that business entities obtain through the Internet will result in export promotion and will most likely increase the range of exportable commodities, both products and services. Businesses dealing in tourism, carpets, handicrafts, Pashmina production, and ready-made garments stand to benefit hugely from e-commerce. One key area of e-commerce that any policy and strategic recommendation should address is the issue of trust and legality that governs business transactions. In this regard, there is a need to build relationships with globally recognised certification authorities, and a need for legal sanction to transactions carried out electronically, including the recognition of digital signatures. E-governance is another important component, as far as the application of IT is concerned, that will be of considerable significance for a country like Nepal. The entry-level activity that needs to be undertaken in this regard will be the dissemination of information of public interest and concern through the creation of websites. Government agencies and other public entities should create individual websites with proper content in order to provide citizens with access to information. Starting with one-way communications, these websites should gradually be interactive and facilitate services like the filing of tax returns or applying for passports or driving licenses. This medium can also be used effectively to disseminate information on the price of agricultural commodities. The gradual evolution of e-governance initiatives will also entail the development of a portal that can provide single entry to a host of government-related information and services, modelled along the lines of the e-Citizen Centre in Singapore and the Max-e in Australia. However, e-governance is not only about creating websites. Rather, e-governance initiatives should be premised around the concept Chapter 1— Information and Communication Technology for National Development

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of delivering good governance with the primary aim of increasing productivity and transparency, thereby contributing significantly to the strengthening of democratic governance. The infrastructure and other factors that form the conditions for the development of ecommerce will also be helpful in the promotion of e-governance. Among the many applications, Internet procurement and the setting-up of payment mechanisms will be significant for e-governance. 4

I NSTITUTIONAL

DEVELOPMENT

Institutional development is indispensable for the full exploitation of benefits offered by evolving information and communication technologies. Institutional development at the level of policy formulation and implementation is a prerequisite for using the benefits offered by information and communication technology effectively for development. 5

THE

PROCESS OF DEVELOPMENT AND IMPLEMENTATION OF INFORMATION AND

COMMUNICATION POLICY AND STRATEGY

While developing a comprehensive ICT policy and strategy that cover provision of access to technologies, human resource development, and development of applications, the government must involve the private sector and civil society. Any exercise aimed at formulating strategies for people-centred development should focus on vision and a plan of action and not get bogged down in bureaucracy or the issues of command and control. The development of a vision as well as a plan of action should aim at achieving ‘goal congruence’ through a participatory approach involving the important stakeholders. This approach stands a better chance of bringing about a convergence in the isolated efforts of the government and the private sector for the overall development of the ICT sector. It was in this context that professionals with domain knowledge on various areas of IT were commissioned to produce position papers on the six thematic areas: Universal Access to Information, Communications’ Infrastructure, Software Development, Human Resource Development, E-Governance, and E-Commerce. These papers were posted on the Internet on the www.nepalnews.com website for comments from within and outside the country. The feedback, comments, and suggestions were received from experts as well as from a larger group of stakeholders. A workshop was organised at which the papers were reviewed, and focused discussions were held on their various aspects. This workshop proved vital in generating many suggestions and comments that give more substance to the ICT policy and strategy formulation exercise (Please refer to Annex 1 for a description of the Project Implementation Process). The position papers and the comments and feedback of stakeholders formed a basis for the formulation of Nepal’s IT policy and strategy. In addition to the position papers, the experiences of other countries in the region were also analysed and provided meaningful inputs to the national policy formulation exercise. 6

I NFORMATION

TECHNOLOGY POLICY

The recently announced Information Technology Policy (2057) has embraced the vision of positioning Nepal on the global IT map within the next five years. The policy has the broad objective of enhancing employment opportunities and creating a knowledge-based society and knowledge-based industries by ensuring that a large section of society has access to information technology. The policy has adopted a 15-point strategic framework that includes human resource development, promotion of foreign and local investments, legal recognition 8


for e-commerce transactions, and the introduction of e-governance initiatives. The announcement of the IT policy has come as a relief to Nepali entrepreneurs who have been engaged in the sector for nearly 20 years now. The policy outlines the institutional mechanisms necessary for the development of the IT sector in the country. Certainly, an IT policy alone will not ensure the development of the IT sector in the country. Institutional and legal infrastructure will be of utmost importance in ensuring the effective implementation of these policies. To this end, work has already begun on the drafting of acts and bye-laws to support IT development initiatives. 7

CONCLUSION

Given the vast potential of information and communications’ technologies in enhancing the prospect of sustainable development, there is a need for concerted efforts aimed at creating a favourable and conducive environment for the full and widespread development and application of these technologies. Private efforts in this area must be complemented by government-led initiatives as the issues involved often transcend national boundaries, cut across various domains, and require coordinated and resolute responses. To this end, the government of Nepal undertook the challenge of formulating a comprehensive policy and strategic framework for the development of the IT sector in the country and introduced the National IT Policy, 2057. Finally, the challenge of developing the IT sector will be to match state-of-the-art developments in the field worldwide. In Nepal’s case, the communications’ infrastructure still lacks quality and scope. Also lacking are human resources: an important national priority. Nepal must be committed to take steps to remedy these shortcomings or else face the prospect of lagging further behind.

Chapter 1— Information and Communication Technology for National Development

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10


P

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TWO

BACKGROUND P APERS

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Chapter

2

Universal Access to Information

1

BACKGROUND

1.1

Introduction

Information is power, and the democratic path that Nepal has embarked upon seeks to empower people with information. Nevertheless, it is a stupendous challenge to deliver information to the Nepalese so as to enable them to exercise their democratic rights and develop themselves. At the dawn of the new millennium, the technology to disseminate information is available. Unfortunately, a majority of Nepalese have not been able to access it. Nepal entered the modern age some 50 years ago with a political change from a closed to an open society, from family rule to democratic dispensation. Over the 50 years, experiments in democracy underwent a period of trial and error before a parliamentary form of government was installed in 1990 in the wake of the people’s movement against the king’s direct, authoritarian rule. The history, culture, and mindset of a people steeped in feudal and traditional values of obedience and conformism are finally changing. Such changes can be accelerated by the effective use of various means of information and communication. Nepal is presently in this process of democratic experimentation amidst constant social and political conflicts. Under the newly emerging scenario, it is not only liberal education but also conflict resolution that are gaining precedence in the national agenda. Both these goals can be attained through an effective use of information and communication at the grass roots’ level. Information and communication can play a critical role in the country’s development. Nepal’s recent political changes, such as the National Referendum of 1980 and the People’s Movement of 1990, can, to a great extent, be attributed to people’s exposure to global information

following the introduction of modern audio-visual technology in Nepal. Radical change at the grass roots’ level is possible if the power and potential of information and communication can tapped. Information technology will have distinct comparative advantages for Nepal. It can help Nepal overcome the geographic impediments of being landlocked. With new technologies like Very Small Aperture Terminal (VSAT) and the Internet, people can easily communicate with any part of the world and benefit from the exchange of information. Computer technology has emerged as a strong means for developing concepts and services such as tele-medicine, tele-education, e-commerce, e-trade, e-governance, and so forth. It offers the possibility of undertaking activities unthinkable not too long ago. In Nepal, it is heartening to find the private sector participating and investing in the information technology sector. Email and Internet businesses have blossomed in the last decade, though this growth is retarded by the inadequate telephone infrastructure. Only 5 in 100 people have telephone connections. On the media side, the coverage of Nepal Television is confined to only 40% of the country, but the number of actual viewers is low because only 16% of the area is electrified. Television access is extremely restricted, especially for the poor in rural areas because of the high cost of TV sets. In the national context, information and communication can be immensely valuable in curbing existing social and economic exploitation. Villagers can benefit by getting rid of intermediaries and receiving fair prices for their products and services. Access to information can help narrow the gap between producers and consumers. Easy access to markets and fair prices for commodities are essential for increased production and economic development. Information has, thus, emerged as an important base not only for strategic economic planning but also for poverty alleviation. Accurate information is the key to the success of strategic planning and programming. One of the biggest problems for planners in a developing country like Nepal is the lack of accurate, adequate, timely, relevant, and precise information about socioeconomic indicators such as health, education, drinking water, trade, income, and others. In the absence of an effective application of information technology, planners and policymakers often lack timely and accurate information about the socioeconomic conditions of rural people. This has adversely affected the implementation of programmes targeted at the poor. Access to information technology is, therefore, all the more important for development in a liberalised and globalised economy. 1.2

Objectives

The major objectives of this study are as follow. 1. 2. 3. 4. 5. 6.

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To help create a knowledge-based society in Nepal To help economic growth using information and communication technology To help people participate in the democratic process and development work To help people participate in the mainstream of international information and communication To review the current situation and analyse the changes taking place as a result of the introduction of new information technology in the rural areas To identify an agenda for action in order to use information technology as a tool for economic development of the rural population and also to identify the areas in which the technology can be used for poverty alleviation Information and Communication Technology - Policy and Strategy for Nepal

1.3

Methodology

The relevant literature was reviewed at the central level to evaluate the policies and programmes in relation to universal access to information. In addition to the provisions made in the periodic plans of the country, sectoral and sub-sectoral policies and programmes were studied to assess the present situation from the policy point of view. The study used field-based information collected during visits to different areas of the country for rapid assessment of peoples’ access to information. The areas selected for field visits represent various geographic areas of the country, namely, the mountains, hills, and the Terai. The four sites were Jumla in the Karnali Zone of the MidWestern Development Region, Palpa, and Rupandehi in the Western Development Region representing the middle hills and the Terai, respectively, and Mustang in the Western Development Region representing the mountain districts. In the short period available for field visits, the existing state of information access was identified. The introduction of new technology and the application of innovative ideas and approaches were recorded to see what impact they had made. The interviewees were from different segments of the society and included farmers, labourers, teachers, businessmen, officials, and representatives of civil society organisations. The findings of the field visits were reviewed, analysed, and discussed by the Advisory Committee and a draft report was prepared. An advisory group made up of experts from the media and information technology was formed. This advisory group reviewed the study process and provided inputs to the field study team. It also deliberated and commented on the draft report and provided suggestions for its improvement. A meeting was held to review the study findings before finalising the report. 2

ANTECEDENTS,

CURRENT STATUS AND TRENDS

The history of mass communication in Nepal is rather short. It was only after the dawn of democracy in 1951 that radio broadcasting was introduced and the development of the private press was encouraged. In the 50 years of Nepal’s modernisation efforts, the mass media has made a considerable contribution. However, it has yet to play a satisfactory role in support of the country’s democratisation and development. The people’s movement of 1990 represented a watershed in the political development of Nepal. Its impact on the mass media was equally significant. The Constitution of the Kingdom of Nepal, promulgated in 1990, upholds full freedom of the press and the right of every citizen to be informed, but the right to information is still largely confined to principle rather than practice. Until a Right to Information Act is passed by parliament and translated into practice, the letter and spirit of the constitution will remain unattained. There has been a tremendous development of both print and electronic media in the recent past, with both positive and negative aspects. 2.1

Print media

When democracy was introduced in Nepal in 1951, the newspaper industry represented a distinct development. The Gorkhapatra, which started in 1901 as an official mouthpiece of the then oligarchic regime, first as a weekly and then as a bi-weekly, was published as a daily in 1961. In the private sector, there were many daily and weekly newspapers being published with more political bias and propaganda than development information. Today, the print media might suffer from a lack of credibility, but it has greatly helped the flow of information in Nepalese society. Chapter 2 — Universal Access to Information

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The government records show that, in 1999, there were 1,398 newspapers in Nepal. Of these, 200 were registered as daily, 11 as bi-weekly, 994 as weekly, and 193 as fortnightly publications. In Kathmandu Valley alone, 728 newspapers were registered—108 daily, 2 biweekly, 513 weekly, and 105 fortnightly. Half of the country’s newspapers were published in the capital. There are newspapers in a number of languages—94% in Nepali, 3.5% in English, 1% in Newari, 1% in Hindi, and 0.5% in other languages. Clearly, most of the newspapers with relatively large circulations are published and mostly circulated within the confines of Kathmandu Valley. Newspapers published in the various districts outside Kathmandu generally have less circulation, but nonetheless wield considerable influence on local affairs. It should be noted that half of the 75 districts in the country have no newspapers. Newspapers from Kathmandu can reach 25 districts within 24 hours. Still many districts in remote areas do not receive any newspapers. The existing distribution system is too poor and inadequate to cover the whole country. Since newspapers from the capital tend to reach only the urban areas from which local newspapers are also published, it can be safely stated that many of the country’s rural areas are without newspapers. 2.2

Radio

Radio is by far the most effective means of mass communication in Nepal. A 1997 study done by Radio Nepal estimated that there were 1.7 million radio sets in the country. The short-wave and medium-wave broadcasts of Radio Nepal with its relaying facilities can reach much of the country. Ever since its establishment in 1951, Radio Nepal has functioned as a government monopoly with the Ministry of Information and Communication effectively controlling its functioning. However, in recent years it has started using its regional centres for broadcasting programmes in different languages. The news is now broadcast in 17 languages, and Radio Nepal has also diversified its programmes. Following the formulation of a communication policy that sought to liberalise broadcasting, the government has, since 1998, started granting licenses for local broadcasting. Accordingly, licenses were given to a number of commercial and public service stations, although Radio Nepal itself first started broadcasting on the FM Band in 1995. It leases out broadcast time to independent agencies such as Aatma Jyoti FM, Hits FM, Music Nepal FM, Classic FM, Image FM, and Swarnim FM. Independent private broadcasting started in Nepal with the establishment of Radio Sagarmatha, which became the first independent, non-commercial public station in the whole of South Asia when it received its broadcasting license in May 1997. The ownership of the station belongs to the Nepal Forum of Environmental Journalists (NEFEJ) , which was the first group to apply for a license from the government. By mid-2000, FM radio licenses were issued to 12 private groups and six were already broadcasting programmes of various durations. Kantipur FM began broadcasting on Oct. 14, 1998 and became the first independent commercial radio to go on the air. It broadcasts 24 hours every day. Another commercial radio is KATH 97.9 FM operated by Image Channel. Metro FM, owned and operated by the Kathmandu Municipality, is also on the air. Metro FM represents another first in Nepal. It is run by the Kathmandu Municipality, perhaps the first radio station in South Asia run by local government. There are two other community radio stations currently broadcasting outside the Kathmandu Valley. One is owned and operated by Madan Pokhara VDC of Palpa District and the other by the Information and Communication Cooperative in Rupandehi District. The former, 16


located in Madan Pokhara, broadcasts four hours a day. The latter, located in Manigram, near the industrial town of Butwal, broadcasts six hours a day. These developments are significant in that Nepal has become the first country in South Asia to allow private sector broadcasting and the first with stations owned and operated by village communities. 2.3

Television

Nepal Television is perhaps one of the youngest television stations in Asia. It started as a project in January 1985 and started broadcasting regular programmes from December of the same year. There were only 400 TV sets in Kathmandu then, and the majority of these were used for watching videos. With the help of powerful antennas some watched programmes broadcast by India’s Doordarshan. Currently, Nepal Television (NTV) covers 44% of the country’s population and 35% of the land area. With the extension of NTV’s network, transmission hours have been increased to 61 hours per week. In the last 12 years its audience has grown from 2,000 viewers in the capital to approximately 2.5 million viewers across the country, spread mostly in the southern plains and urban areas. The fact that 75% of the country consists of hills and mountains limits the reach of Nepal Television. In light of the country’s difficult terrain, it is impossible for NTV to reach the entire population without the use of a satellite. NTV is actively preparing to transmit its programmes via satellite as early as possible. This would not only enable NTV to cover the entire country but also make it available to Nepalese living abroad. As in the case of radio broadcasting, licenses have been granted to the private sector for operating cable services and television broadcasts, one of which has permission to uplink programmes and broadcast via satellite. News remains a monopoly of Nepal Television and Radio Nepal. In recent years, private companies have purchased NTV’s air time to telecast their own programmes. These do not include news and programmes on current affairs. 2.4

Telephone

It has been proved that the telephone is an extremely useful medium of communication for villages in a country like Nepal. With the installation of digital telephones in many districts, communication with rural Nepal has become much easier and has helped to break their traditional isolation. The telephone has also opened up prospects for the use of modern information technologies like email and Internet in rural areas. Before telephone services were introduced, a wireless system was installed to link the district headquarters for both official and public communication. Tele-communication services first started in Kathmandu in 1913. Before 1955, there were only 350 telephone lines in Nepal and the only trunk services were between Kathmandu-Dhulikhel and Palpa-Bhairahawa-Kathmandu. The development of systematic telephone services followed the establishment of the Telecommunication Department in 1959. To begin with, the Department made telephone services available based on an earth-satellite communication system and an automatic telex and telefax for international communication. Today, direct international telephone linkage has been established with 131 countries around the world. Eight hundred and forty-two circuits are made available for the purpose of international communication. Among these, Public Call Offices (PCOs) are operated in Chapter 2 — Universal Access to Information

17

1,502 places by private institutions and in 174 places by Nepal Telecommunications’ Corporation (NTC). NTC has a total installed capacity of 255,795 telephone lines, with 110 operational exchanges in 60 districts. The service is available in all 75 districts. It has 45 C-DOT exchanges, 12 Japanese International Cooperation Agency (JICA) rural stations, 693 Multiple Access Radio Telephone Systems (MARTS) subscriber terminals, 790 very high frequency (VHF) / ultra high frequcncy (UHF) single lines, and 7 VSAT terminals operating in rural areas. The ratio between telephone lines and the population stands at 1:2,000 people. Presently, NTC has about 10,000 lines that cover 1,676 VDCs throughout the country with standard trunk dialing (STD) and international standard dialing (ISD) facilities. Currently, various telecommunication services have been introduced with the participation of the private sector. The following services are provided by Nepal Telecommunication’s Authority (NTA): email/Internet, fax-mail, audio text, VSAT (Data Communication), audio-conferencing, pay phone, pre-paid calling card, local data network, radio paging, and trunk mobile radio. Licenses have been provided to 11 Internet (including Email) Service Providers, 4 VSAT Networking Service Providers, and 13 VSAT Networking Users in the private sector. A separate license has been issued to NTC, for the Global System of Mobile Communication (GSM) and cellular mobile telephone system. Licenses have been provided to 5 radio paging service providers, 3 fax mail providers, and 1 for video conferencing. Cellular mobile telephones are currently operating in Kathmandu with a capacity for distribution of 6,000. Biratnagar, Birgunj, and Pokhara will have 1,200, 1,400 and 1,400 lines, respectively. 2.5

Computer, e-mail and Internet

At present a variety of information media are operating in Nepal. Computer, e-mail, and the Internet are becoming increasingly popular. Some important information media operating in Nepal are discussed below. Computer, e-mail, and the Internet are all aspects of information technology. The computer was first introduced in Nepal by HMG/N for processing census data in 1971. The private sector began its activities in this area in the early eighties. Mercantile Office System initiated the country’s Internet service in 1993-94. But it was only after three ISPs (Internet Service Providers) were already functioning that the government announced the ISP Regulations in October 1997. The government amended the Intellectual Property Rights Act in 1998. There are now an estimated 9,000 Internet subscribers in the country, mainly in the capital. The number goes up to 25,000 to 30,000 if those with email facilities are also included. Soon after Mercantile Communications began providing Internet services, Worldlink Communication followed suit. A year after the government made it compulsory for Internet Service Providers (ISPs) to have a license, the number of ISPs has risen to 11. Internet Service Providers, however, contend that the number of people using the Internet could rise immediately with the right government policies in place. The ISPs are facing stiff competition that is most of the time unfair. Given the size of the market in Nepal, the number of ISPs seems too large. Despite such competition, the cost for the Internet consumer is still very high in Nepal compared to that in India and other countries. Along with competition among ISPs, the cost of using the Internet has decreased considerably. Beginning with monopolistic prices, the Internet service in the country is now available for as low as 42-44 paisa per minute. The ISPs also provide unlimited access to the Internet at fixed rates. 18


The development of information technology in Nepal remains rudimentary compared to developed countries. The growth rate in the private sector is slow due to the small size of the market, inadequate investment, lack of support from the government, and a lack of technical knowledge. Although some urban areas succeed in accessing information even under the present circumstances, most rural areas cannot use information technology due to its exorbitant cost, its inaccessibility, and lack of other infrastructure such as electricity. 3

COMMUNICATION

PROFILES OF FOUR DISTRICTS

The communication profiles of four districts have been prepared on the basis of field surveys undertaken in connection with this study. These districts have been selected, as explained in the methodology, to represent different geographic regions of the country and various levels of development in the communication field. They are Palpa, Rupandehi, Mustang, and Jumla. The profiles represent the overall picture of each of these places with their past experiences, current status, and future possibilities in terms of communication development with implications for their holistic development. 3.1

Profile of Palpa district

Palpa is a prominent district with a high literacy level. It is composed of hills and mountains with a few fertile valleys. It lies in the western part of Nepal. It is surrounded by Nawalparasi in the east, by Arghakhanchi and Gulmi in the west, by Syangja, Tanahu, and Gulmi in the north, and by Rupandehi, Nawalparasi, and Kapilvastu in the south. The population, according to the 1991 census, is 236,313, with a male population of 110,325 and a female population of 125,988. There are 64 Village Development Committees (VDCs) and one municipality, Tansen. Palpa is mainly agricultural with some tourist attractions. Tansen stands out as an important educational and health centre. Nineteen VDCs and one municipality have electricity. Seventeen VDCs and the only municipality have access to telephone facilities through MARTS (7 VDCs), VHF (9 VDCs), and the Palpa exchange services. Telephone services were available in Palpa back in 1949 through the open-wire system, i.e., copper lines. These copper lines were connected from Palpa to Bhairahawa, and from Palpa to Pokhara and Kathmandu. After some years, these lines were abandoned as the copper was taken away by villagers. Later, in 1978, telephone services were provided by Nepal Telecommunication Corporation through a new technology, i.e., the CB system. Now, 930 lines are distributed by NTC through the Palpa exchanges. Madanpokhara VDC has two types of telephone facilities— VHF 2 and Palpa exchange 12. Of these, 6 telephone sets have STD and ISD facilities. In Tansen, there are more than 15 STD and ISD service providers. The NTC fax facility existed for only two years, but, in the private sector, fax machines have been used for more than 10 years. Presently, there are about 15 fax machines in Tansen alone. In Palpa, since the telephone lines are in the C-DOT system,the lines are subject to disturbances. The Digital System has been in operation since 1985. The demand for telephone lines far exceeds the supply. On average, 10 to 20 persons per day use STD and ISD facilities at NTC, and STD and ISD facilities are used by 3 to 7 persons per day at each of the private STD and ISD service providers. Table 2.1 gives the current status of facilities. Chapter 2 — Universal Access to Information

19

Table 2.1: Current status of communications’facilities in Palpa Means of communication

Starting Date

Present Availability

No. of Users

No of Service Providers

Telephone Fax

1949/1978+ -

Yes -

930 lines -

1 (NTC) -

Nepal Television Private/Cable Tv Satellite Channel

1996/94 2049 -

Yes Yes -

400 -

1 -

Computer E-Mail/Internet

1996 1997

Yes Yes

50 15

2

Radio Nepal Community Radio FM Radio

Before 1950 April 15 +

Yes No

1

Audio Tower Local Newspaper National Newspaper Wall Newspaper

1996 Before 1958 NA NA

Yes Yes Yes Yes

90 % population Around 12

Table 2.2 in the next section, which is based on field surveys, shows the purposes for which telephones are used. Reasons for using the telephone

5 6 12 +

First Provider

Remarks

Mohan Aakashvani 2 Local Businessmen Pooja Computer Pooja Computer Rana PM Madan Pokhara VDC Kasheni VDC NA NA NA

+ New Tech. 2036

+ Coming Baishakh 1

+ Different VDCs, Schools

Table 2.2: Reason for using the telephone Purpose No. of Persons Personal Information 70 40.9% Health and education 21 12.2% Business 10 5.8% Political 30 17.5% Others 40 23.3%

The above table shows that the telephone is used mainly for personal information. Source: Group discussion among respondents Telephone use for business information constitutes only 5.8%, while political information supersedes information about education and health.

It is observed that use of telephones is substituting for personal correspondence. It has proved especially useful for those working outside the country. People from this district are working in India, Malaysia, and the Arab countries. For them, the ISD service has been of great use during emergencies. Television was introduced in Palpa in 1985. It received mainly the Indian channel, Doordarshan. Nepal Television could be watched only from 1993. There are about 700 satellite TV channel users in Palpa, mainly in Tansen. In Madan Pokhara, about 30 households use satellite TV channels. Zee TV is the most popular channel in Palpa. The National Geographic Channel is gaining popularity among young people, particularly students, however. Nepal Television’s poor reception discourages people from tuning in to the channel. It is for this reason that NTV has much less appeal than the satellite TV channels. An analysis of viewers’ interest in NTV programmes presents the following picture.

20


Viewership of NTV programmes The above findings show that news is the biggest attraction of the NTV programmes. The next attraction is entertainment. Health and education programmes have very low audience rates. Entertainment programmes have a limited audience. A majority of the educated people watch NTV for news and special programmes (mainly educational). Uneducated people give more priority to films and serials than to news, health, and educational programmes. There are more than 2,000 TV sets in Palpa (mainly in Tansen and Madan Pokhara) and more than 12 TV maintenance services, but there are only two TV suppliers. Only 19 VDCs and one municipality have electricity. Hence the area covered by TV broadcasts is only 25% of Palpa District. Poor people have limited access to TV. Either they do not own television sets or they do not have electricity. They are likely to watch TV in the homes of better-off neighbours. Srinagar Cable Service (formerly known as Ratna Cable) is a local cable television service that supplies a number of satellite TV channels to about 400 households. Significantly, it also supplies one hour of local programmes every Saturday. All such programmes are locally produced and presented and are very popular among the local people. They consist mainly of local news and programmes related to culture, religion, and education (Table 2.3). Table 2.3: Viewing preferences Programmes

Number and percentage of viewing population 40 28.5% 51 36.4% 22 15.7% 9 6.4% 18 12.8%

Entertainment (mainly films and serials) News Health programmes Educational programmes Others Source: Group discussion among respondents

Since the cost of producing these local programmes is high, the question of sustainability arises. Srinagar Cable Service issues shares among local people to raise funds for it. The number of shareholders is now more than 20. The survey also included the radio listening pattern of people since radio as a medium of communication was popular in Palpa long before the introduction of television. The table below shows the radio listening pattern of the people of Palpa. Radio listening pattern in Palpa The above findings show that entertainment commands the highest number of listeners, followed by the news from Radio Nepal. It is, however, heartening to find that agricultural programmes are not far behind. The programmes on human rights, health, co-operatives, and good governance have low listenership. Most of the uneducated people tune in to entertainment programmes, whereas most literate people listen to the news. Farmers are interested in the agricultural programmes. The problem with the centrally produced agricultural programmes is that they are often not related to either cultivation or harvesting due to the climatic variations in different parts of Nepal. Since the cultivation and harvesting as a result of climatic variations in different parts Chapter 2 — Universal Access to Information

21

of Nepal. Since cultivation and harvesting times are not uniform in all areas of Nepal, the agricultural programmes broadcast by Radio Nepal do not appeal to all listeners equally. Radio Nepal’s Regional Broadcasting Service, broadcast from Pokhara, is also available in Palpa. But it is neither popular nor effective because of its heavy bias towards Pokhara. Most people say they turn off their radios when the regional programme starts. They say they want to listen to their own news and programmes, which are not available so far. Broadcasts by All India Radio can be heard clearly, and most people listen to it. In Bauhaus Pokharathok, Kantipur FM, from Kathmandu can also be heard. People also listen to the BBC (Nepali and Hindi) and Voice of America, especially those interested in the news. Radio Nepal’s news coverage is considered inadequate Table 2.4 gives a break down of listening preferences..

Table 2.4: Listening preferences Programmes Number and percentage of listening population Agriculture 65 21.5% Human rights 25 8.3% Good governance 15 4.9% Health 30 9.9% Awareness programmes 20 6.6% News 70 23.2% Entertainment 76 25.2% Sources: Group Discussion among respondents

Madan Pokhara VDC is presently broadcasting programmes six hours a day on Frequency Modulation (FM) band. The construction of a small studio and installation of an antenna was completed some time ago. The FM uses a 106.9 FM Band. The people of Madan Pokhara are excited and hope that the FM station can help in the social and economic development of large parts of Palpa District that have access to its signals. Their programmes, also broadcast in the Magar language, are designed to help local development. Other broadcasting Mobile audio towers are also available, mainly in Palpa’s 11 VDCs. The audio broadcasting service is provided once a month from one VDC. The programmes of the audio tower are mainly related to women’s empowerment. The mother’s club and women’s organisations operate the mobile audio tower. Their programmes are effective and the poor also find them worthwhile. There are problems to do with finance and management that need to be solved to operate them sustainably. Presently, there is no regularity in the operation of the audio tower. Newspapers Local newspapers are also published in Palpa. Currently, six weekly newspapers are published in the district. Deurali is the rural development-oriented newspaper, which is most effective. All newspapers give top priority to local news. These newspapers mainly focus on local events, women’s empowerment, health, and entertainment. According to editors, people read newspapers for knowledge rather than for entertainment. Wall newspapers are also available in Palpa. In all, 12 wall newspapers are published mainly in the schools and rural areas. One Hawaipatra (newsletter) is published once a month. Poems, stories, and local news are published in the newsletter. Only 100 copies of the newsletter are published and sent out to readers regularly. The national daily, and the weekly, fortnightly, monthly, quarterly newspapers and magazines, especially those published in Kathmandu, are available in Palpa. The impact 22


of newspapers is believed to be positive, but there are concerns about the quality of their content. People want the newspapers to focus on development and rural orientation and not on propaganda. Computer services In Palpa computer services have been available since 1996 with a steady increase in the number of computer users. The two computer training institutions — Pooja Computers and Becon Computers - train about 300 persons each year. Many people believe computer training is necessary but cannot afford it. Women are particularly interested in computer training and believe that computer knowledge is essential for finding work. Only one government office is using a computer, although there are about 40 computers in the district. All the computers are in the private sector. Some of them are used by nongovernment organisations (NGOs) such as Redd Barna Nepal, Helvetas, and the United Mission to Nepal, among others. There is neither a computer maintenance service nor a supply centre in Palpa. While the presence of computers is considered a positive development, these are beyond the reach of the general public both economically and technically. E-mail/Internet facilities have been available for the past two years, provided by Star Computer, Butwal, which is a branch of WorldLink, a Kathmandu-based company. Because of telephone disturbances, however, the quality of email and Internet services are not satisfactory. E-mail/ Internet facilities are available for the general public at institutions like Pooja Computers and Becon Computers. According to them, the main purpose of using e-mail/Internet is to send and receive messages. Most of the users are foreigners, so the content and use of e-mail/ Internet facilities are limited. The difficulty in obtaining a lease line from the Telecommunication Corporation is the main problem in developing an efficient email/Internet service in the district. E-commerce and e-medicine are presently beyond the capacity of the people. 3.2

Profile of Rupandehi district

Rupandehi is a district in the Terai that borders India and is a commercial centre of western Nepal. It is well connected by transportation facilities. Butwal and Bhairahawa are the two principal towns of this district. The following table presents the communication facilities in this district. Current status of the means of communication There are telephone facilities in 35 of the 67 VDCs and in 2 municipalities. The telephones in the district use the VHF and MARTS Systems and the Lumbini exchange. Telephone facilities were available in Butwal even before 1949 through the open-wire system. In 1977, about 200 lines were made available through the LB exchange system, and the Microwave system was introduced in 1979. Since 1986 the digital exchange system has been available. There is a capacity for 6,000 telephone lines but only 5,500 telephones have been distributed. When the digital facilities became available, fax machines were used by the private sector. Palpa and Bhairahawa use the RLU (Remote Line Unit) system and Butwal the BTMC system. The table below (Table 2.5) shows the status of communications’ facilities in Rupandehi.

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Table 2.5: Status of communications’facilities in Rupandehi Means of Starting Present No of No of communication Date AvailaUsers Service bility Providers Telephone Fax

Yes -

Nepal Television Private/Cable Tv Satellite Channel Computer E-Mail/Internet Radio Nepal Community Radio Fm Radio

1949/1978 + 1990 NA 1993 1997 Before ‘50 April 15 +

Audio Tower Local Newspaper National Newspaper Wall Newspaper

NA Before ‘58 NA NA

NA Yes NA Yes

Yes NA Yes Yes Yes NA

5500 lines -

1 (NTC) -

400 100 90% popul. NA

8 2 NA 1

NA NA NA NA

NA 10 NA 5+

-

First Provider Mohan Aakashvani Star Computer Star Computer Rana Ruler Madan Pokhara VDC NA NA NA NA

Remarks

+ New Tech. 2036

+ Coming Baishakh 1

+ 1 VDCs and mainly Schools

Reasons for using telephone Butwal (Rupendehi) is a commercial centre, and there is greater use of telephone for business communication followed by use for personal communication, than for political and social communication (Table 2.6). About 150 STD/ISD service providers function in Rupandehi District with an average of 5 to 10 persons using STD/ISD services every day. NTC Butwal plans to provide mobile telephone facilities to the people of Butwal Municipality.

Table 2.6: Reason for using the telephone Purpose Number and percentage of users Business information 61 29.1% Personal information 51 24.8% Political information 40 19.1% Health and education information 26 12.4% Others 31 14.8% Source: NTC, Butwal

Television Television signals have been available in Butwal since 1985 mainly in the form of Doordarshan broadcasts from India. NTV and satellite TV channels are also available now. Most people watch ZEE TV and NTV in almost equal proportion. Entertainment programmes like ‘Hijo Aajaka Kura’, ‘Gitanjali’, and the tele serials are most popular. Most of the educated people watch news on NTV. The teleserial ‘Chetana’ is very popular among housewives. In rural areas, programmes like ‘Devi’ and ‘Chetana’ are very popular and their impact appears to be positive. Satellite TV channels seem to create both negative and positive impacts. Radio Radio broadcasts are easily available and listened to in Rupandehi. Most of the uneducated people listen to entertainment programmes. When they have more time, they also listen to 24


programmes on human rights including ‘Janajati’ and ‘Hakahaki’. But most of the educated people listen to radio for information on national and international affairs. The people of Rupandehi are not interested in listening to regional broadcasts from Pokhara because of the problem of language and programme quality. All India Radio, British Broadcasting Corporation (BBC), and Voice of America (VOA) can be heard clearly. Lumbini Information and Communication Cooperative in Manigram has been operating an FM radio for some time. Although at an experimental stage it broadcasts three hours in the morning and three hours in the evening. It has introduced a programme in the Tharu language. Newspapers Many local newspapers are published in the district, principally in Butwal and Bhairawa. About 10 daily and weekly newspapers are published on a regular basis. The content of these newspapers is focussed on local events. Editors and reporters agree that there is no problem of markets for newspapers. Their main problem seems to be a lack of adequate investment in this sector. They lament that they can easily get information from the USA through the Internet but cannot get information from rural areas. Local newspapers are published in Nepali, and wall newspapers are published in private schools. Computer facilities Computer facilities have been available in the district since 1995. Star Computers were the first to introduce computers and initiate computer training. There are now 8 computertraining institutions. On average, each institution trains about 350 persons per year and that number is increasing. There are an estimated 400 computer sets in Rupandehi, located in institutions, banks, businesses, schools, NGOs, international non-government organisations (INGOs), and government offices. Most private offices have computers, while only a few government and value-added tax (VAT) collecting offices have computers. Most of the computers are used for word processing, some for business programming. According to the Chamber of Commerce and Industry, most business people believe computers are necessary for business, but they cannot afford them or do not have the technical knowledge to install them. Nevertheless, the popularity of computers seems to be increasing day by day, with 12 private schools teaching computer science. There is no computer supplier, retailer, or maintenance centre except for Star Computers. According to the Chamber of Commerce and Industry, the main hurdle to computer use in Butwal (Rupendehi) is the lack of technical knowledge, financial constraints, and appropriate training institutions. They are therefore planning to establish a computer training institution in the near future. Star Computers do not agree that standard computer institutions are lacking, however. The company believes the problem to be the lack of technical knowledge about software and hardware. Women are reportedly more keen to learn computer skills and make up more than 50% of those enrolled in computer training institutions. Email-Internet facilities have been available in Butwal since 1997. Star Computers was again the first user of email/Internet. Now there are two email/Internet service providers — Star Computers and the Chamber of Commerce and Industry – that are linked to World Link (WLINK) and MERCANTILE. There are an estimated 50 Internet and 100 email subscribers in Rupandehi. Most of the Internet and email users in Butwal are students, business people, teachers, and foreigners. The main purpose of using the Internet is admission Chapter 2 — Universal Access to Information

25

to foreign universities, business activities, and tourism. Star Computers supply email/Internet services in Jumla (Hello Communication), Palpa (Pooja Computers), Bhairahawa, and Lumbini. They also plan to establish VSAT in Butwal. According to Star Computers, no one knew about email/Internet when they began offering training in their use. Since then the number of email/Internet users has increased dramatically. Tourism development, through the email/Internet, has become possible in Lumbini, Bhairahawa, Butwal, and Palpa. A website introduces Palpa as a tourist destination on the Internet now. Similarly, an introduction to Lumbini and Butwal is also available on the Internet. 3.3

Profile of Mustang district

Mustang is the northern-most district of Nepal, lying on the Tibetan plateau. It is one of the most difficult and remote districts, not accessible by vehicular transport. It can be reached either by foot, which takes days, or by an air service that is subject to weather conditions in Jomsom. The following chart provides a communication profile of the district. Current status of the means of communication Table 2.7 gives the status of facilities in Mustang. Table 2.7: Status of communications’facilities in Mustang Means of Start- Present No of Users No of First communication ing AvailaService Provider Date bility Providers Telephone Fax

1996 NA

Yes Yes

Around 4,000 9 + Govt. offices No

Nepal Television Private/Cable Tv Satellite Channel

No No 1985

No No Yes

Computer E-Mail/Internet Radio Nepal Community Radio Fm Radio Audio Tower Local Newspaper National Newspaper Wall Newspaper Source: Survey

NA No 1969 No No No No NA No

Yes No Yes No No No No Yes No

No No Around 100 families Around 20 * No NA No No No No Around 200 + No

Remarks

No No 1+

NTC + Jomsom only Govt. offices * * Used for General Election No No + Jomson only Oms home

No No NA No No No No 6 No

NA No Radio Nepal No No No No Gorkhapatra No

* ACAP office only

Telephone services Like transportation, communication is also difficult in this district. Telephone services in Mustang were started only in 2052 B.S. Before the introduction of telephone services, the only means of communication were telegram, postal service, and oral exchanges. Travellers carried news and information. Nepal Telecommunication Corporation (NTC) has distributed 13 telephone lines in Jomsom, 3 in Marpha and 3 in Kagbeni VDCs through the MARTS system. The telephone lines at the 26


Chief District Officer’s (CDO’s) Office, the Local District Office (LDO) Office, and the Police and Army Barracks are used for official purposes and the rest are for commercial purposes such as ISD/STD services. The NTC office in Jomsom has no direct access to ISD services but must go through the Kathmandu Exchange Office for international calls. There is no radio paging service, cellular mobile phone or E-mail/Internet facilities. Out of the 16 VDCs, 8 have telephone facilities with a limited number of lines. They cover about 25% of the population. After the installation of telephone facilities, access to information has become easier and faster. Public awareness has increased and the local people have benefited in information sharing, product development, and marketing. The tourism sector has especially benefited from these facilities. The telecommunication service is not reliable and the capacity of the existing system (MARTS) is very limited. The VSAT system, with 3 lines, is also available in Jomsom and is directly linked to the satellite, so the system is more powerful and reliable. But it is expensive and unaffordable for the local people. People have to pay Rs 24 per minute, whereas in the MARTS system they have to pay Rs 12 per minute. Nobody appears interested in using the VSAT line. The major problem with the telephone service is its unreliability. Telephone lines are interrupted frequently and maintenance is a major problem. It takes 7 to 10 days to repair the line. The distribution of telephone lines is alleged to have been unfair. Political leaders and their relatives are said to have got most of the lines. Even Mustang Hospital and the school have no telephone lines. Radio Radio is a popular and effective medium of communication in this district. The reception of Radio Nepal is not clear, however. The quality of reception is poor during the day and relatively good in the morning and evening. People sometimes listen to the regional programme of Radio Nepal from Surkhet but do not listen to broadcasts from Pokhara. The reception for BBC and All India Radio is better than Radio Nepal, though most people prefer to listen to Radio Nepal. Next come the BBC Nepali Service, BBC Hindi Service, and All India Radio in that order of preference. The Voice of America, Radio Beijing, and other radio services can also be heard in Mustang District, but most people are not interested in these. Nepali and Hindi are the languages radio listeners prefer. Most villagers do not listen to radio because they do not have their own radio sets. Most of them are poor and illiterate and do not easily understand even the Nepali language. The young listen to songs instead of the news or other information programmes. They thus prefer tape recorders to radio for their entertainment. Television The signals of Nepal Television do not reach Mustang District, nor is there any private or cable television. Satellite television channels first appeared in Mustang in 1985. About 100 families in 16 VDCs like Tukuche, Marpha, Jomsom, Kagbeni, Jharkot, and Muktinath view these channels. The most popular channels are Zee TV, Zee News, Star TV, Star Sports, SONY, BBC, CNN, Star Plus, and PTV. Television is mainly a source of entertainment than of information. Chapter 2 — Universal Access to Information

27

Irregular supply of electricity and the unavailability of repair and maintenance services for TV sets are the problems of television viewing in Mustang District. For any repair work, they have to be taken to Pokhara. The demand for Nepal Television is high in Jomsom. People expect to get NTV broadcasts but no one knows when that will happen. They say that satellite broadcasting may be the only way NTV programmes can cover Mustang District. Computer In Jomsom there is a computer in the Annapurna Conservation Area Project (ACAP) office, and one in the District Development Committee (DDC) office. Since the staff that operated the computer at the DDC office was transferred the computer is not being used. There are two fax machines in the HMG offices, one in the CDO’s office, and another in the DDC office. The general public has no access to fax service. Jomsom Resort Hotel, a new fivestar hotel, also has a computer and a fax machine for its own use. Newspapers The circulation of national newspapers and magazines in this district is limited. It is difficult to get newspapers on time. If a Pokhara-Jomsom flight is cancelled, newspaper distribution is delayed. Of the 75 district headquarters of Nepal, Jomsom is situated at the highest elevation of 2,700 metres, with snowfall for about 4 months of the year, during which Jomsom airport is not usable. Newspapers are unavailable for those winter months and are irregular even in the good months due to interruption of flights. Government offices and hotel and lodges are the main subscribers of newspapers. The newspapers with the highest subscription are Kantipur, The Kathmandu Post, Himal (Nepali), and other weekly papers such as Bimarsha, Dristi, Deshanter, and Chhalphal. The one stationery shop located in Jomsom is not willing to sell newspapers because nobody buys them. There is no printing press and all printing is done in Pokhara. Not surprisingly, the means of communication indicates the economic status of people. Those who have access to it are richer than those who have none. The ‘urban’ population living along the trail to Jomsom, Marpha, and Kagbeni even looks different from the villagers. They are rich, educated, and have access to radio, TV, and newspapers. 3.4

Profile of Jumla District

Jumla is a poor food-deficit district in the far western part of Nepal. One of the most beautiful regions, Jumla is commonly referred to in public discussions as remote, mountainous, and inaccessible. Because of that it has received a lot of public attention, and the government has given priority to developing transport, communication, and other social services in the district. There are regular air services to Jumla from Nepalgunj and the route is a profitable one. The government has been supplying food grain, fertilisers, and other agricultural inputs at heavily subsidised rates in this district. The following table indicates the communication status of Jumla District. Current status of the means of communication Table 2.8 gives the status of communications’ facilities in Jumla district.

28


Table 2.8: Current status of the means of communication Means of Starting Present No. of Users No of Communication Date Availability Service Providers Telephone 2051 B.S. Yes 161 60-70 Fax NA Yes 4 1 Nepal Television No Private/Cable Tv No Satellite Channel 2043/44 Yes 103-150 disc+ NA Computer 2053 B.S. Yes 8 Offices NA + Email/Internet 2054 B.S. Yes 5 Offices NA*

NTC NA NA KCST KCST

Radio Nepal Community Radio FM Radio Audio Tower Local Newspaper National Newspaper Wall Newspaper

NA No NA No No NA Campus

2023 B.S. No 2056 B.S. No No NA 2054 B.S.

Yes No Testing phase No No Yes Yes

50% of popul. NA No No NA NA No No No No 700 copies per 3 week 1 Campus family

Reasons for using the telephone Telephones were introduced in Jumla in 2051 BS, that is, six years ago. At present 158 telephone lines have been distributed to government offices, NGO/INGOs, and the public. C-DOT and VSAT telephone systems are also operating in Jumla.

First Provider

Remarks

+ Jumla headquarters' area only *+ Now local provider not available but coming soon. For emergency cases they provide these facilities to the public. FM Band is eing tested

Table 2.9: Reason for using the telephone Purposes Number and percentage of users Personal information 50 Business 15 Political 10 Official 15 Others 10 Source: Field Survey.

Table 2.9 shows that half of the use is for personal information. Business and official communication share 15% each of the transactions, and political information occupies 10% of the total usage. Television and types of programme watched Television was introduced in this remote district more than 10 years ago and yet NTV is not available in Jumla. Satellite TV channels are available in three VDCs, including the district headquarters. The distribution of satellite TV channels started in 2043/44 B.S. The 150 households that have these channels Table 2.10: Types of programme watched watch TV mainly for entertainment, as the Programmes % of total number following survey shows. News occupies of viewers only 10% of the total viewing. The most Agriculture popular satellite TV programmes are ZEE Health TV, BBC, ZEE Cinema, and Awareness Programmes News 10 Doordarshan.Table 2.10 gives a break Entertainment 90 down of the types of programme watched. Sources: Field Survey

Computers The use of computers started in Jumla in 2053 B.S. There are only 14 computers in Jumla District. Only 8 offices use computers. E-mail and Internet facilities are generally available Chapter 2 — Universal Access to Information

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in the NGO and INGO offices. Due to the C-DOT system of telephone line, e-mail and Internet facilities cannot be used effectively. Radio Radio is popular in Jumla. Radio Nepal, BBC, Voice of America, and All India Radio transmissions can be heard in this region. Radio Nepal is heard only on medium wave, but the reception is poor during the day and in the evening. Thus, the coverage Table 2.11: Times and quality of broadcasting Time Quality of of Radio Nepal is small and its impact Broadcasting is minimal. People listen to radio 7:00 p.m. to 6:00 a.m. Normal primarily for entertainment – mostly 6:00 a.m. to 9:00 a.m. Noisy music programmes and games - and 9:00 a.m. to 5:00 p.m. Bad not for information. Table 2.11 gives 5:00 p.m. to 7:00 p.m. Noisy the times and quality of broadcasting. Source: Field Survey Newspapers There is no local newspaper. A few national newspapers, such as Kantipur, Nepal Samachar Patra, and Gorkhapatra are available. There is no audio tower in Jumla. The Jumla Campus publishes one wall newspaper. 4

V ISIBLE

IMPACT OF COMMUNICATION

Modern communication has had a visible impact on the life and development of people in different parts of Nepal. Case studies have been documented in some districts during the field survey for this study. They reveal the importance, usefulness, and potentia of communication tools in rural Nepal. Case 1: Radio In Ward No. 9 Barangdi of Palpa, there is a family with an orange farm. The farmers were not harvesting good quality oranges. Fortunately, they listened to the agricultural programmes over the radio, and learned how to protect their oranges from disease. They sprayed the pesticide prescribed in the radio broadcast and protected the blossoms. The result was a better harvest. Case 2: Newspaper In the same village, an incident occurred several months ago. About seven local leaders – all men – forced a woman, Sumitra Basyal, to walk around the village nude on the allegation that she was a witch. This incident was repeated. The episode was published in a local newspaper and, because of this publicity, the abuse and exploitation of this village woman stopped. Case 3: Telephone In Bhairabsthan- 4, Masure, Palpa, a young man, Netra Prasad Khanal, went to Malaysia to look for work but was not successful. His visa problems landed him in jail. Fortunately, he succeeded in calling his home in Palpa. His parents were able to pay the Malaysian government to enable Khanal to return home. The telephone made this possible. Such cases are commonly heard of in Palpa. 30


Case 4: Telephone In Bakamalang - 3, Palpa, Sher Bahadur Thapa was happy to contact his son in India over the telephone. His son had gone to India to look for work 10 years ago and had never written letters home. His parents were worried about his whereabouts. By chance, Sher Bahadur got the telephone number of his son and telephoned. Hearing his son’s voice, he was joyful. Sher Bahadur recounts this to emphasise the importance of the telephone. Case 5: E-mail/Internet In November 1998, at the opening ceremony of a hospital in Butwal, which was donated by Japan, some visiting Japanese reporters of the ‘Mainichi Shimbun’ wanted to send news and photos to their papers in Japan. They had digital cameras, however. Fortunately, Star Computers were able to provide them with a connection to Kathmandu and they succeeded in sending their material via the Internet. The Japanese appreciated this facility in a rather distant part of Nepal. Case 6: Radio A villager of Jumla said, “According to my parents, when democracy was introduced in Nepal nobody in my area knew about it. This is because there was no radio or telephone at that time. Information was coming to our region only through the government officials. It was only after five years in 2012 B.S., when new officers from Kathmandu arrived, that people came to know about democracy.” Case 7: Radio A young man recounted his appreciation of listening to the radio in the following words. “It was 2046 B.S. The whole country was enthusiastically involved in the democratic movement against the Panchayat regime. People in Jumla also joined the movement. I was one of the activists. Along with my other friends, I was arrested; a few days later we were all set free one evening. We were surprised by our sudden release. A curfew was still in force, so we stayed indoors. At about 11:15 p.m. I accidentally switched on the radio. I was astonished that Radio Nepal was broadcasting even at that late hour. After some time we heard on the radio that all political parties were now free to function. We were so excited. We immediately started celebrating, thanks to the information on the radio.” Case 8: Fax Tribhuwan University in Kathmandu announced the results of an examination. Students in Jumla who had taken the test did not get the results. Moreover, the last date for filling in forms for further studies was nearing. The students called Kathmandu several times for the results but were unable to get them. This information could reach Jumla quickly only by plane, but flights had been cancelled for several days. The students tried the STD service, but to no avail. Someone then noticed a ‘Fax’ sign on a shop window and requested the university to send the results by fax. The results arrived the next day, and they could fill in the forms on time. Case 9: E-mail E-mail started in Jumla in 2054 B.S. The local people received this new technology with great interest and curiosity. Once a local gentleman wanted to send a letter by e-mail. It was Chapter 2 — Universal Access to Information

31

typed on the screen and sent. Told that his letter had been sent and asked to make the payment, he protested. “I can still see my letter on your screen. How can you tell me that it has gone?” When he was told how e-mail works, he was impressed. People want to know more about it and want to use it. Case 10: Television An incident in Jumla reveals the power of television, though at times negatively. Two young boys, who were sons of a local blacksmith, broke into a shop and stole sweets, biscuits, marbles, and money. The police arrested them. They confessed to the police that they had cut the lock with a metal saw. They got the idea from a television programme that showed such a burglary. Case 11: Television Another episode is horrifying. Incited by a television programme, three boys from the Jumla Orphanage stole some money eight years ago. They hid the money in a secret place and started spending it on video shows. In a video they saw the burglars kill their teammates to increase their share of the loot. Duly influenced, two of the boys devised a plan to kill the third. They hid behind masks and killed him with a khukri. They were arrested by the police but were set free as they were under age. Subsequently, the birthdates on their citizenship certificates were altered and they were declared adults and sentenced to life imprisonment. Case 12. Alternative media In the village of Palung in Makwanpur District, the villagers have stopped playing cards and other local gambling games. They are genuinely afraid that their activities will be broadcast from the audio tower installed in the village. Even the level of alcohol consumption has declined. Village children keep themselves busy preparing cultural activities that the local communication unit holds every week. Case 13. Local broadcast In the Madi village of Palpa, a news broadcast on the local audio tower created a stir. It reported a man marrying a second time because his first wife gave birth to a baby girl instead of a son. From then nobody dared to marry a second time for fear of being publicly exposed, and women found they could listen to the news while attending to their household chores or working on the farm. Case No. 14. Audio tower Palung residents have evidently benefited from information on vegetable prices in Kathmandu Valley as a bulk of their produce is supplied to that market. Prior to the operation of the audio tower, the middlemen got away by paying the villagers too little. Case No. 15. Wall newspaper In Dhading District, the villagers keep track of community forestry activities through a woodenslate wall newspaper. The paper reports violators of the rules and the penalty imposed on the perpetrator. The wall newspaper also informs villagers of the threats faced by wildlife and advises them on how to protect the forests and the wildlife. 32


Case No. 16. Audio tower In Chidipani Village of Palpa, when a house caught fire, it was immediately broadcast over the audio tower. The villagers rushed to the spot and saved it from being gutted. Case No. 17. Print media In Dharan, a high school student wrote about a local drug addict who spent all his money on drugs and had nothing left to pay for his children’s education on a wall newspaper. The drug addict physically assaulted the young journalist. Undaunted, the journalist continued to report not only on drug addicts but also on the alcoholics. 5

NATIONAL

VISION AND FUTURE PLANS

Clearly, Nepal has realised the importance of information and communication for national development. The government has established a separate Ministry of Information and Communication, which is headed by a senior or influential member of the cabinet. Even during the Panchayat era, it received special attention and a national communication plan provided it greater priority and restructured the official communication agencies. In continuation of the high priority assigned to information and communication, the Ninth Plan (1997-2002) provides for the following. 1.

As the information sector remains a dynamic sector, a cell will be formed within the National Planning Commission to formulate a contemporary information-technology policy framework to cope with the advances in this field at the global level. This cell will formulate and implement policies and programmes in coordination with the government agencies using the information technology and systems in areas such as education, health, agriculture, finance, communication, and commerce.

2.

In order to provide information to the common people in an easily accessible manner, a liberalisation policy will be adopted in the information and communication sector. In this process, the national communication infrastructure will be developed and expanded through the use of modern communication technologies such as optical fibre, satellite, and ATM.

3.

Information systems will be initiated and developed to enhance the working capability and competence of various related institutions. In order to ensure the availability of information to the common people, a networking system will be built to which agencies involved in study, research, and development activities will be integrated.

4.

With a view to developing competent human resources required for the Information Age, the education policy will soon be updated and put into effect.

5.

As there will be a wider use of computers while developing information systems, facilities will be provided to manufacture computers and software within the country. Through this measure, the private sector will be encouraged to build such infrastructure as Virtual Park and IT Park, for example. For the purpose of supplying skilled human resources for software production and development, a software institute will immediately begin operating in the private sector and involve the government sector as well.

6.

Legal recognition will be rendered to the business activities conducted through such instruments as intellectual property rights and electronic media, which are considered necessary for the sufficient production, development, and export of software.


33

5.1

Computer policy and software development

In consonance with its national policy the government announced the following strategy for the development of computers and software in the budget speech of fiscal year 1999-2000. “The policies related to information technology and enactment of Cyber Laws will be enforced for its development and expansion. Telecentres will be established in the five development regions with Internet and Intranet facilities extended in all those regions. A computer development programme will be initiated. Computer education will be encouraged in the universities and schools. Likewise, a simplified legal and policy framework will be adopted by software experts.” 5.2

Telecommunications policy

With the above vision in mind, the government has formulated a telecommunications policy to promote development of telecommunications both in the public and the private sectors. The telecommunication sector has been granted full autonomy for development and management. The following measures have been initiated to accomplish the objectives of the national vision and strategy. 1.

Operation of Land Mobile Communications Services: Recently the Ministry of Information and Communications (MIC), HMG, gave permission to Nepal Telecommunications Corporation to operate Land Mobile Communication Services. As personal mobile-satellite services are becoming more widely available and the equipment is getting smaller and cheaper, NTC has decided to expand its services using the Inmarsat terminal. The use of this service will enable people to communicate with any part of the world. The system offers very reliable means of communication from anywhere in the world and does not depend on the local network or terrestrial communication. The system is very useful during natural disasters or when important news is breaking.

2.

Internet Service: In today’s world of information technology, the Internet has become an integral part of people’s lives. In the near future, NTC will offer an Internet service as a hub for ISPs and for its own internal use. With the completion of this project, local ISPs can have direct international links via the NTC’s network at a reasonable rate. Consequently, ISPs will benefit from the reduced price, and make Internet service less costly to end users.

3.

Pay phone service: In response to the customers’ needs for easy access to telephone services, NTC has decided to introduce public pay phones in the major cities like Kathmandu and Pokhara. After completion of the project, telephone services for people who don’t have their own telephones will become easily available. Installation of these smart pay phones will provide the advantages of convenience, accessibility, security because of use of the smart card, simple and quick maintenance, and rapid installation.

4.

Satellite Trunk Network Project: At present there is no provision for an alternative route from the national trunk network of NTC. Because of a number of reasons, transmission links have been disrupted a number of times in the past, causing breakdowns in communications. It has become essential to increase the reliability of the trunk network from a security as well as a financial point of view. In order to avoid such interruptions in the future, NTC is setting up a satellite-based trunk network as an immediate solution. After completion of this project, Biratnagar, Bhairahawa, Pokhara, and Nepalgunj will

34


be connected to Kathmandu by the satellite medium, thereby increasing the reliability of the National Trunk Network. 5.

5.3

Private sector participation: The government will also call on the private sector to operate basic telephone services like those of Nepal Telecommunications Corporation. The government does not plan to protect NTC at the cost of efficiency in public services. The private sector has already been invited to operate telephone services under the WLL (Wireless Local Loop) system, which requires private operators to rely on NTC’s exchange system. Print media

In line with the freedom of the press granted by the constitution of Nepal, the government has adopted policies to help the print media develop in an effective way. There has been no interference in the organisation and operation of the private press. The government continues to grant special customs’ discounts to publishers while importing computers and printing equipment for publishing newspapers. It has reiterated its commitment to grant full autonomy to the state media in its management and development. The government plans to grant increased autonomy to the state-owned electronic media and to proceed with privatisation of the Gorkhapatra Corporation. 5.4

Television

Considering the difficult terrain of the country, it is almost impossible for NTV to reach the entire population without satellite transmission. In keeping with the pace of development, NTV is planning to use a satellite channel in transmitting its programmes in the near future. This will not only cover the entire country, but also make its signals available to Nepalese living abroad. The issue of satellite transmission has been incorporated in the Ninth Five-Year Plan (19982002) of Nepal. The first two years would be devoted to making such preparations as network planning, studio design, maintenance centre and calibration lab, research on the possibility of participation from the private sector, and equipment purchase. Transmission, programme production, updating, evaluation, and so forth would be carried out in the following two years. A channel will be dedicated solely to distance education. NTV is now making these preparations and will use state-of-the-art equipment. Programmes have been planned accordingly and a training centre will soon be established. 6

OPPORTUNITIES

AND CONSTRAINTS

Information technology has taken a giant leap forward around the world. With a telephone and a computer, one can access any kind of information available in the world. The twentyfirst century has many miracles to unfold in this sphere. Mankind stands at the threshold of an undreamed of revolution. As far as Nepal is concerned, only a handful of privileged people has access to such information and the capacity to use it for development purposes. As in many developing countries, the vast majority of Nepalese are untouched by this phenomenon. In rural areas, the only printed materials available are children’s textbooks, labels and commercial wrappers, and posters and pamphlets during elections. It would be naive to expect people in the rural areas to enter this new arena in the imminent future. Chapter 2 — Universal Access to Information

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During the past five decades, considerable resources have been pumped into the development sector with the hope that they would raise the living standards of people. Through this long and tedious process, it has become clear that whatever the merit of development targets, nothing is achievable without people’s empowerment and their active participation. Knowledge or information is key to empowerment, and communications is the vehicle to impart this tool to the people. The year 1990 was a watershed as it introduced a fully-fledged parliamentary democracy with the full freedom of expression in Nepal. The underprivileged segment of society living mostly in villages, however, continues to be deprived of the practical means to use these freedoms. Admittedly, the mass media have not played a full role as agents of change and development. The government continues to retain its grip on the powerful electronic media and the two large newspapers. An extremely low literacy rate and transportation bottlenecks prevent the growth and popularity of the print media. In comparison to television, which is a new and costly medium, radio broadcasting has wide coverage, but it is far from becoming an effective medium. Meanwhile, linguistic and ethnic diversity reduces the usefulness of a centralised mass media system. A comprehensive review of the means of communication indicates clearly that modern communication has already made its debut in Nepalese society. The question at this stage is not whether Nepal should adopt modern information technology but how to make it more accessible to the people at an affordable cost. Serious attention needs to be given to measures that lead to the fulfilment of the vision and strategy the government has adopted for this sector. The policies and programmes incorporated in the periodic plans of the government are found to be in tune with the needs of the time, but implementing them to achieve the desired objectives remains the challenge. Serious thought must also be given to the possibility of developing alternative media that not only complements the mainstream media but also independently serves as a strong communication tool for local development. 6.1

Alternative media

The concept of an alternative media, to put it simply, is to use the traditional as well as modern means of communication to meet the needs of local communities. It can be considered a communication system of the community, by the community, and for the community. It neither competes with nor contradicts the goals of the mainstream media. Its justification lies in its power to meet citizens’ needs at the local level and in its ability to empower them. In the unfolding Nepalese context, the alternative media would promote traditional means of communication such as street drama and community singing, the more modern FM radios, and other innovative methods of communication. The following experiments in community communication are being tried in Nepal with varying degrees of success. Wall newspapers A wall newspaper is a paper printed on one side only with big letters and pasted on walls of public buildings and teashops for the benefit of the general public. It contains information relevant to the population of a specific area. The concept of wall newspapers has spread to different parts of Nepal. Twenty such newspapers come out every month in the district of Dhankuta alone. Similar publications are appearing in Dhading and Morang districts. 36


Community audio towers In this case, community broadcasting is carried out with amplifiers, microphones, and speakers using poles or trees as towers. Using a number of speakers it is possible to reach different wards of a Village Development Committee. It started in the Madi Valley of Palpa on the initiative of local women for the first time in Nepal. It has since been replicated in the Danda Bazar in Dhankuta, Palung in Makwanpur, and some villages of Morang District. These community broadcasting units have played an effective role in the dissemination of information and inculcated a sense of self-dependence and self-esteem among villagers. Cassette magazine A cassette magazine consists of materials of special interest to villagers recorded on a small cassette. It is a new means of communication that was introduced for dissemination of news and other useful information to villagers. The magazine also provides light entertainment music, jokes, and titbits. The programme is named Ukali- Orali (ascent and descent); more than 12 programmes have already been produced and distributed. FM broadcasting The Nepalese government has opened up a new vista of possibilities in the area of mass communication by agreeing to grant licenses to private agencies for FM broadcasting. There are already 6 stations broadcasting programmes in Kathmandu Valley, one in the public sector and five in the private sector. The Madan Pokhara Village Development Committee in Palpa District has also started broadcasting four hours day and an FM station in Manigram of Rupendehi District broadcasts six hours a day. These stations operated by local people are considered more relevant and more effective in promoting development. Participatory video A participatory video is an audio-visual programme that is produced by the local people themselves. The programme was launched in Surkhet District in the 1980s, followed by Madan Pokhara village of Palpa and Palung of Makwanpur District. The programme allowed village women to ventilate their views and grievances and contributed to empowering the downtrodden. Local television Local television is a small broadcasting facility for a local community, of which Ratna Cable Television of Palpa is a good example. The residents of Tansen watch a 2-hour long locally – produced programme every Saturday. The service is continuing with the cooperation of some local volunteers. With some technical and financial support, this service can make a greater impact in promoting the flow of information through audio-visual means. Ratna Cable’s experience can be replicated in other areas of the country. Street drama Street drama is a traditional communication tool used in Nepal. At a time when no modern means of communication existed in Nepal, street drama served as the only effective means of message delivery. It is refreshing to see this phenomenon making a come back with a number of artists’ groups promoting and practising it. Chapter 2 — Universal Access to Information

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7

RECOMMENDATIONS

As far as formulating the correct policy for the development of communication and information is concerned, there is no doubt that the Ninth Five-Year Plan has given full expression to the objectives of the government. One basic recommendation that can be made in this respect is that the government tries its best to implement them. In this context, the following targets set by the plan should be attained within 5 years of the plan period. NPC cell A cell has been proposed within the National Planning Commission with a view to formulating a contemporary information technology system that keeps abreast of advancement in this field at the global level. This cell will formulate and implement policies and programmes in coordination with the government agencies dealing with education, health, agriculture, finance, communication, and commerce, among others. Infrastructural expansion In order to provide information to the common people in an easily accessible manner, the plan has pledged to adopt a liberalisation policy in the information and communication sector. To some extent, it has already done so. This process of liberalisation should continue in earnest. In this process, the plan speaks of national communication infrastructure. For this purpose, the use of modern communication technologies such as optical fibre, satellite, and arynchronous transfer mode (ATM), among others, should be facilitated. Human resource development The plan has also pledged to initiate information systems to enhance the institutional capability and competence of various organisations. It has also pledged to build up a network that will integrate agencies involved in study, research, and development activities in this sector. For developing human resources required for an Information Age, it has specified the improvement of the education system. As these ideas are in tune with today’s needs, they should be carried out in earnest and without delay. Hardware and software development As there will be a wide use of computers in developing information systems, the plan states that facilities will be provided to manufacture computers and develop software within the country. Accordingly, the private sector will be encouraged to build infrastructure such as the Virtual Park and IT Park, among others. For the purpose of supplying skilled human resources for software production and development, a fully fledged and well-equipped software institute will be operated immediately in the private sector with government support. As these measures are considered timely, they should be undertaken immediately. Mobile phones The government, on its part, has made several commitments in this sector in consonance with the stated policies. The Ministry of Information and Communications has given a green signal to Nepal Telecommunications Corporation to operate Land Mobile Communication 38


Services. This service enables people to communicate with any part of the world, no matter where they are. The system offers a highly reliable means of communication globally without going through the terrestrial network. It represents a big leap forward and keeps pace with the globalisation process. Internet service Today, the Internet has become an integral part of people’s lives. To promote its more extensive use, NTC is offering Internet service as a hub for ISPs and for its own internal use. With the completion of this project, local ISPs can have direct international links via the NTC’s network at reasonable rates. Consequently, the cost of this service will come down drastically. This is a step in the right direction. Public pay phone In providing easy access to telephone services, NTC has decided to introduce the public pay phone in major cities like Kathmandu and Pokhara. The completion of this project will make telephone services easily available for those who don’t have their own telephone lines. It will offer convenience, accessibility, and security for users. There is no reason why it should not be implemented immediately. New trunk network NTC is also setting up a satellite-based trunk network to avoid the frequent interruptions that users are experiencing. The completion of this project will link Biratnagar, Bhairahawa, Pokhara, and Nepalgunj with Kathmandu through satellite, thereby increasing the reliability of the National Trunk Network. This will enhance efficiency and communication. Cyber laws The government announced a computer development policy during the budget speech of the Fiscal Year 1999-2000. The policy related to the formulation and enactment of Cyber Laws for the development and expansion of information technology. Accordingly, the government pledged to establish tele-centres in the five development regions with Internet and Intranet facilities. These measures deserve to be implemented to bring the far-flung regions of the country under the umbrella of modern communications. Computer education The government also promised to encourage computer education programmes in the universities and schools to cope with the growing demand for proper training. The survey of four districts has clearly pointed to the acute lack of training facilities in computer technology despite a high public awareness of its usefulness. Private sector involvement The government has formulated a policy to break the monopoly of the Nepal Telecommunications Corporation in providing telecommunication services to the people. It has already taken some measures to involve the private sector in operating basic telephone services. Consequently, the private sector has shown keen interest in joining this sector and Chapter 2 — Universal Access to Information

39

is already engaged in the WLL (Wireless Local Loop) system. The government should continue to provide incentives and encouragement to the private sector to get more involved in the business of information technology. Liberalisation of electronic media The government is committed to granting increased autonomy to the electronic media, Nepal Television, and Nepal Radio. Similarly, it has gone on record as being in favour of privatising the Gorkhapatra Corporation. Not only should the government encourage more private sector involvement in the electronic media but it should also detach itself from operating newspapers in keeping with the democratic spirit of a parliamentary system. Satellite broadcasting Considering the difficult terrain of the country, it is not possible for NTV to reach the entire population with the terrestrial network. It is for this reason that NTV plans to go satellite for transmitting its programmes. This will boost Nepal’s international image and provide support to tourism. The government should view this measure seriously as it has remained pending for years in spite of the political commitment. The alternative media Going by the experiences gained in many parts of the country relating to grass roots’ communication, it is highly recommended that alternative media be taken up for using the power of information and communication to consolidate democracy and development. The potential of this media has already been explained. The activities in this field are taking place in a fragmented manner. They can be brought under a comprehensive umbrella to make them more accessible all over the country, especially in the rural areas. 8

SUMMARY

AND CONCLUSIONS

The present study is the first of its kind in examining and assessing the access to information in the rural areas of Nepal. The study must be considered timely because it comes when the communication revolution is sweeping the world. Even people in the remotest parts of the world cannot remain unaffected. That has certainly been the case in Nepal. The study examines some very remote areas of Nepal and reveals a growing interest of people in the new information and communication technologies, as well as an awareness in official circles of the need to expand and strengthen communication infrastructures to become globally competitive, and the possibilities of using modern information technologies in alleviating poverty. That remains the principal concern for Nepal. What then are the main issues confronting Nepal when considering the possibility or the inevitability of providing people universal access to information? On the more philosophical side of this question lies the responsibility of the government to provide the people their right to information, a provision contained in the constitution. It specifically mentions that people have the right to demand information on any matter of public importance. The government is presently formulating a bill to make this provision feasible, but it must restructure the information-providing mechanism within the bureaucracy to establish a democratic culture of openness. On the technical side, the study has clearly pointed out that Nepalese society, especially the rural segment, is in the very preliminary stages of the communication age. Most of the districts surveyed are just beginning to use modern information and 40


communication technologies: there are not enough telephone lines, computers have just begun to appear, and even radio and television signals are not reaching many areas of a country with problems of accessibility, a society in which illiteracy is widespread and the print medium has a very limited role. While the development of information and communication infrastructure is an issue that deserves priority, equally important is the question of media content. It is evident from the present state of the mass media and modern technology that much of what they offer is of little relevance to the lives of a majority of Nepalese. This is especially so because more than 50% of the newspapers are published in the capital and the rest in the urban centres. Both broadcasting stations, Radio Nepal and Nepal Television, are located in the capital, from which most of the daily programmes are broadcast. The regional stations of Radio Nepal do very little programming and function more as relay stations than independent producers of locally or regionally relevant programmes. The content of both the print and electronic media must be made relevant to the local situation; more priority must be given to broadcasts in local and regional languages to make the media content useful and effective. Extending this question of relevance to modern information and communication technologies, due priority must also be given to developing relevant and universally compatible software. Much needs to be done to make it possible to transfer information in the Devnagari script. It has already been stated in this report that the private sector is fully involved in the field of information and communication technology development. The government should go beyond encouraging greater involvement of the private sector by introducing new schemes that provide attractive incentives and security for increased investment. Given that digital economy is gaining prominence worldwide, increased investments and concerted effort in the development of the ICT sector will have ramifications that transcend national boundaries. Keeping in mind the growing number of Internet users within the country, the creation of websites by various government ministries and departments will also be a step in the right direction. On the brighter side, there is growing awareness in society that information and communication are key to social and economic development. The Ninth Plan spells out specific goals to be achieved to make Nepalese society more competitive in an age when globalisation has become a reality. Among the recommendations made in an earlier chapter is one that relates to the need for implementing the programmes chalked out in the Ninth Plan document. It is also heartening to find that the private sector has come forward as the principal investor in information technology and in providing information and communication services such as email and the Internet. In fact, the NGO sector, representing civil society, appears better equipped to cope in an age in which being without modern information technology is unthinkable. NGO projects, even in remote districts like Jumla and Mustang, are using computers and email. The need now is for a well thought out programme to expand the telecommunication infrastructure and introduce modern communications to parts of the country where possibilities exist. The present study indicates these are possible even in remote districts. Formulating plans and programmes, important as they are, is not enough. Many elements incorporated in the Ninth Plan have not been implemented and some of them may need review to see if they are even appropriate at this stage of the information revolution. The government must take concrete steps to identify those activities that will be effectively implemented and set aside an adequate budget to undertake them. What should the priority be then? This question needs to be addressed given the very scarce resources available to the government and the private sector for investing in an area that is Chapter 2 — Universal Access to Information

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expected to produce results in the long run. While considering the impact of various mass media, it is clear that the print medium has a very limited role because of massive illiteracy and insurmountable distribution problems. Television, too, seems to have a limited role because of its cost and the need for electricity, which is presently available to only 15% of the population. The priority, therefore, has to be given to radio, which is inexpensive, easy to operate, extremely portable, and transcends the barrier of illiteracy. What is recommended in the document is the establishment of community radio stations, which can discuss local problems, use local languages, become highly interactive, and prove to be of educational value. It would be worthwhile for the government to consider setting aside some resources for promoting and establishing such stations in those parts of the country where active communities are ready to own and operate them. They have the prospect of becoming effective tools in development. Two instances of women operating audio towers as a medium of communication in different sections of the village are cited in the report. These communication media are effective instruments for women’s empowerment and should be used as such. As one of the most disadvantaged groups in the country, the involvement of women in the operation of community media appears to be a step in the right direction. The present survey also indicates that a majority of those enrolling in computer training courses are women. A conscious effort to involve women in modern information and communication should set a healthy trend in the effective use of media in education and entertainment. The present study has, for the first time, highlighted the possible role of community media in speeding up the process of social and economic development. Undoubtedly, communication is already considered an integral part of the development process, but it is the ownership and operation of these media by local communities that will ensure their sustainability and effectiveness. This concept is beginning to show results. Community-owned radio stations, audio towers, or wall newspapers have attained a popularity and credibility that should enable them to play an effective role in educating people. Small, cost-effective, and easily manageable media will, with their nation-wide establishment, not only play an important role in local communities but can also become part of a network that shares and uses information for the public good. What has begun, albeit in a small way, must be considered the starting point of a new comprehensive information and communication policy.

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Annex 1 Regional distribution of newspapers Regions

Periodicity Language Total Daily Weekly Nepali English Newari Hindi Bhojpuri Mountains Hills 1 26 27 27 Terai 22 141 160 2 1 163 Kathmandu 23 97 102 11 5 2 120 Valley Total 46 264 289 11 5 4 1 310 % 14.84 85.16 93.23 3.55 1.61 1.29 0.32

% 8.71 52.58 38.71

100.0

Source: Mass Media and Democratisation, IIDS, 1996

Annex 2 Regional comparison of the status of mass media Communication/ 1000 people Daily newspaper Radios TV sets Telephone

Year

India Pakis- Bangla Nepal Sri Bhutan Maldives tan -desh Lanka

1994

31

21

6

8

25

n/a

12

1994 1994 1994

81 60 11

88 20 15

47 10 2

35 2 4

201 70 10

17 n/a 7

118 40 48

South Asia (weighted avg.) 25

Developing Countries (excluding South Asia) 45

79 50 10

184 145 34

Source: Human Development in South Asia, 1998


43

Annex 3 Radios licensed up to November 1999 Licensee/Station

FrequPower ency (Watt) Radio Nepal 100 1000 Radio Sagarmatha 102.4 100(20) Kantipur FM (P) Ltd 96.1 500 Image Channel (P) Ltd* 97.9 500 Kathmandu Municipality 106.7 100 Hits FM (P) Ltd 90.4 500 Himalayan Broadcasting Co. 94.5 500 Birat FM (P) Ltd 96.0 500 Madanpokhara VDC 106.9 100 Lumbini I&C Co -op** 96.8 200 Mankamana FM +++ 92.9 250 Koshi FM (P) Ltd 95.3 500

Approved Licensed on Launched Hours on 17 hours 28/11/2052 30/07/2052 24 hours 05/02/2054 05/02/2054 24 hours 06/11/2054 23/08/2055 18 hours 06/11/2054 17/08/2055 24 hours 25/11/2054 01/06/2056 08/05/2055 18 hours 08/05/2055 17/05/2055 18/09/2055 20/09/2055 16/07/2056 01/08/2056

* Its call sign is K.A.T.H. 97.9 ** Lumbini Information and Communication Cooperative +++ Licensed to Creative Multimedia and Entertainment (P) Ltd, Manakamana FM is the call sign Source: Ministry of Information and Communication (MOIC)

Annex 4 Nepal television broadcasting system (PAL B, CCIR standard) S. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

44

Transmitting Station

Channel

Vision

Phulchowki Jaleswor Namje(Bhedetar) Murti Danda(Ilam) Daunne Sarangkot Tansen (Palpa) Chamere Danda (Nepalgunj) Hetauda Butwal Kakani(Nuwakot)

5 11 5+(off-set) 12 12 7 5 5

175.25 217.25 175.25 224.25 224.25 189.25 175.25 175.25

4 7 11

67.75 MHz 62.25 MHz 189.25 MHz 194.75 MHz

MHz MHz MHz MHz MHz MHz MHz MHz

Audio Carrier Frequency 180.75 MHz 222.75 MHz 180.75 MHz 229.75 MHz 229.75 MHz 194.75 MHz 180.75 MHz 180.75 MHz

Remarks Carrier Frequency Mother Station Receive Phulchowki Receive Jaleswor Receive Namje Receive Phulchowki Receive Phulchowki Receive Sarangkot Not Connected to National Network of Phulchowki Receive Phulchowki Receive Daunne Receive Phulchowki


Annex 5 Nepal telecommunication corporation at a glance SN Title 1. Telephone exchanges in operation a) Locations b) Districts c) Number of exchanges 2. Telephone lines a) Installed capacity b) Distributed lines 3. Total number of waiters 4. Classification of exchanges a) S-1240 b) E10B c) SIEMENS d) J. Rack e) DTI f) C-DOT g) DIAX h) DMS – 10 5. Target of tel. distribution within this fiscal year a) Tel. distribution up to this month (F/Y) (by exch) b) Total tel. distn. up to this month including mobiles (F/Y) c) Tel. line distribution in this month only (by exch) d) Total tel. distribution in this month including mobiles e) Target of this month’s tel. distribution f) Monthly achievement of tel. distribution in % g) Achievement of tel. distribution % (F/Y) 6. Home country direct service available country 7. STD and ISD services available a) Zone b) Districts 8. Countries to which ISD is available 9. International telephone circuits in operation (including microwave circuits with India & Bangladesh) 10. Telegraph services available stations 11. Telex services available a) Locations b) Districts c) Telex capacity d) Telex distributions e) International telex circuits in operation 12. Rural telecommunications services a) Rural stations (JICA) b) JICA subscriber (PCO-10, Subs-150) c) HF d) MARTS terminals e) MARTS repeater f) MARTS subscribers g) VHF subscriber h) VDC coverage by telephone

Marg 2056 115 65 119

No Exch. 17 19 21 4 56 1 1

274430 236816 262801 Capacity 47748 23386 138289 52907 10620 480 1000 38614 1495 16786 2148 2578 3635 70.92 43.47 5 14 75 131 854 10 10 9 768 206 60 9 160 5 615 99 3113 789 1535


45

13. Wireless services available a) Electricity b) Solar power 14. Bureaufax services available a) Districts b) Countries 15. Outgoing collect call services available a) Countries 16. Packet switched subscriber 17. Leased circuits a) National b) International 18. Domestic microwave channels a) Total installed channels b) Total working channels c) V-SAT stations d) V-SAT capacity e) V-SAT used cct. 19. Inmarsat-services a) Rental b) Service Source: NTA

46


5 1 4 9 7 3 18 23 9 33978 20175 7 18 15 32 10 22

Annex 6 Companies that provide services to the different communication sectors (VSAT, e-mail internet, radio paging and fax mail (Up to Feb. 2000 ) A)

Network Operators i) Nepal Telecommunications Corporation, Pulchowk, Lalitpur

B)

Service Providers i) VSAT Network Providers a) Mercantile Office Systems Pvt. Ltd., Durbar Marg, Kathmandu b) Worldlink Communications Pvt. Ltd., Jawalakhel, Lalitpur c) Communications and Communicate Nepal Pvt. Ltd., Jyoti Bhawan, Kathmandu d) Global Internet Services Pvt. Ltd., New Baneshwor, Kathmandu ii)

Internet E-mail Service Providers. a) Mercantile Communications Pvt. Ltd., Durbar Marg, Kathmandu * b) Computerland Communications’ System Ltd., Ram Shah Path, Kathmandu c) WorldLink Communications Pvt. Ltd., Jawalakhel, Lalitpur d) Capital Online Pvt. Ltd., Kathmandu Plaza, Kathmandu e) HTP Communications Pvt. Ltd., Kalikasthan, Kathmandu f) Everest Net Pvt. Ltd., Jawalakhel, Lalitpur g) Global Internet Service Pvt. Ltd., Kathmandu Plaza, Kathmandu h) Himalayan Online Pvt. Ltd., Samakoshi, Kathmandu i) INFOCOM Pvt. Ltd., Hattisar, Kathmandu j) Unlimited Numedia Pvt. Ltd., Khichhapokhari, Kathmandu k) Network Technologies Pvt. Ltd., Kamaladi, Kathmandu

iii) Radio Paging Service Providers a) Nepal Radio Paging Pvt. Ltd., Bhatbhatini, Kathmandu b) City Paging Pvt. Ltd., Kalikasthan, Kathmandu c) KAT Easy Page Pvt. Ltd., Pako New Road, Kathmandu d) Agni Paging Pvt. Ltd., Lazimpat, Kathmandu e) Digital Telecom International Pvt. Ltd., Tripureshwor, Kathmandu iv) Fax Mail Service Providers. a) Mercantile Communications Pvt. Ltd., Durbar Marg, Kathmandu b) Computerland Communications’ System Ltd., Ram Shah Path, Kathmandu c) Worldlink Communications Pvt. Ltd., Jawalakhel, Lalitpur Note: Internet access points in Nepal up to Jan 2000 -Nepalgunj, Butwal, Pokhara, Bharatpur, Hetauda, Kathmandu, Birgunj, Dharan, Biratnagar Source: Nepal Telecommunications Authority (NTA)


47

Annex 7-1 Jumla district: special rural telecommunication programme No. of VDCs 30 Existing Services C-DOT 1 MARTS 3 Proposed Services VSAT in 057/058 - 14 VDCs VSAT in 058/059 - 15 VDCs SN

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Village Development Committee (VDC) Chandanath Mahatgaun Talium Chunchaur Dillichaur Guthichaur Patarasi Depalgaun Gajyangkot Kartikswami Haku Lamra Tamti Tatopani Kudari Lihi Mahadev Malika Badaki Kalika Mahabe Dhap Khanigaun Narakot Birat Kanakasundari Pandavagupha Bumramadichaur Malikabota Patmara

Existing Services C-DOT MARTS

1 1 1 1 1 1

MARTS

1 1 1 1 1 1 1 1

MARTS 1 1 1

1 1 1 1 1 1 1 1 1 1 1 Total 4

48

Proposed VSAT Services 057/058 058/059

14


1 15

Annex 7-2 Mustang district: special rural telecommunication programme No. of VDCs Existing Services MARTS System Proposed Services VSAT in 057/058 VSAT in 059/060 SN 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

16 8 8 VDCs 8 VDCs

Village Development Committee (VDC) Jomsom Marpha Chhusang Kagbeni Charang Dhami Sanjung Lomanthang Chhosera Surkhang Jhong Muktinath Kunzo Lete Kowang Tukuche

Existing Services MARTS/VSAT MARTS MARTS

MARTS MARTS MARTS MARTS MARTS Total

8

Proposed VSAT Services 057/058 059/060 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 8 8


49

Annex 7-3 Palpa district: special rural telecommunication programme No. of VDCs Existing Services Proposed Services VSAT in 059/060 WLL in 057/058 WLL in 058/059 WLL in 059/060

65 17 -

SN Village Development Committee (VDC) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38

50

Bakamalang Gandakot Jhirabas Mityal Sahalkot Archale Darchha Galdha Khaliwan Rampur Siluwa Birkot Gejha Haklang Hungi Phoksikot Bahadurpur Devinagar Jalpa Jyamire Rahabas Ringnaihar Chidipani Humin Pipaldanda Tanhu Gothadi Jhadewa Kasauni Koldanda Roopse Barangdi Chappani Chirtungdhara Darlamdanda Khanichhap Khanigaun Nayamamatales

31 VDCs 16 VDCs 7 VDCs 9 VDCs Existing Services

VHF

VHF

MARTS

VHF

MARTS

Proposed Proposed VSAT Services VSAT Services 059/060 057/058 058/059 059/060 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

PALPA EXC. 1 1 1 MARTS


1

39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65

Pokharathok Yamgha Dobhan Madanpokhara Masyam Telgha Bandipokhara Bhairabsthan Deurali Khasyauli Argali Bodhagumba BK Khyaha Somadi Bhuwanpokhari Chhahara Mujhung Siddheshwor Kusumkhola Palungmainadi Phek Timure Baldengadhi Juthapauwa Kachal Satyawati Total

1 1 1 MARTS/VHF VHF EXC.

1 1 1

MARTS

1 1

MARTS VHF

MARTS VHF VHF

1 1 1 1 1 1 1 1 1 1 1

VHF

1 1 1 1 1 1 1 17

31


51

Annex 7-4 Rupandehi district: special rural telecommunication programme No. of VDCs Existing Services Proposed Services WLL in 057/058 WLL in 059/060 SN

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38

52

69 37 -

Village Development Committee (VDC) Chhotki Ramnagar Devdaha Karahiya Kerwani Makahara Siktahan Badabar Chhipagadha Dhakadhai Pajarkatthi Patakhauli Pokharavindi Aaanandavan Gangoliya Shankarnagar Hatti Pharsatikar Madhubalia Tikuligadha Basantapur Chilhiya Padsari Bagaha Saimalar Khadwa Bangain Motipur Parauha Manmateriya Manpakadi Sauraha Pharsatika Aadarshaamuwa Harmaiya Mainihawa Dudharakshya Gajadi Rudrapur Saljhandi Bishnupara Dhamauli

32 VDCs 20 VDCs Existing Services

Proposed VSAT Services 057/058 1

MARTS MANGALAPUR EXC. VHF MANGALAPUR EXC. VHF

059/060 1 1 1

1 1 MARTS

1 1 1 1

MANGALAPUR EXC. MANGALAPUR EXC. MANGALAPUR EXC. 1 MANGALAPUR EXC. MANGALAPUR EXC. BHAIRAHAWA EXC. 1 BHAIRAHAWA EXC. 1 MARTS

1 1

VHF MARTS

1 1 1

MARTS MARTS MARTS

1 1 1 1

BHAIRAHAWA EXC. VHF VHF VHF MARTS


1 1 1 1 1 1

39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69

Jogada Sadi Suryapura Dayanagar Ekala Khudabagar Masina Tanuhawa Aaama Bhagwanpur Lumbini Madhuwani Sipawa Betarueya Karauta Pharena Rohanihawa Semara Thumhapiparahawa Asureni Bagauli Bogadi Majhagawa Rayapur Silautiya Bairghat Gonaha Hattiwangain Kamahariya Maryadpur Pakadi Sakron Total

1 1 VHF MARTS LUMBINI EXC. LUMBINI EXC.

1 1

1 LUMBINI EXC. 1 LUMBINI EXC. LUMBINI EXC. 1 1 1 1 1 1 1 VHF

1 1 1 1

MARTS VHF

1 1 1 1

BHAIRAHAWA EXC. BHAIRAHAWA EXC. VHF

37

1 1 1 32

20


53

54


Chapter

3

Information and Communication Infrastructure

1

HISTORICAL

BACKGROUND

Telecommunications services were introduced relatively recently to Nepal. Magneto sets were introduced in 1914 in the form of Private Branch Exchange (PBX) and long distance communication in the form of open wire lines the following year. Modern telecommunications began with the USassisted introduction of an automatic telephone exchange in 1963.

Telecommunications Development in Nepal Important Milestones Automatic Exchange (PABX) HF simplex wireless First Public Exchange (CB) First Automatic Public Exchange First International Radio Link (HF) Telex introduced National microwave backbones Satellite Earth Station Digital exchange International Gateway Exchange Internet services Network digitalisation complete Radio paging

Year 1936 1951 1951 1963 1965 1972 1975 1983 1984 1988 1995 1997 1999

Consistent telecommunications’ development programmes started with the First Phase of World Bank (WB) Credit Assistance in 1969. Since then, and until 1997, the WB has assisted Nepal Telecommunications’ Corporation (NTC) in telecommunications’ development through five Source: Nepal Telecom Corporation: Past and successive credit assistance programmes. Present, BS 2056

Many countries and multilateral agencies have also assisted the telecommunications’ development programmes of NTC. Some significant contributions in the sector are as follow. Japan

Rural Telecommunication Network Development

UK

Earth Station Project

Finland

East-West Microwave Link, optical fibre links in Kathmandu; establishment of NTC’s own Electronic Data Processing (EDP) Centre, computerisation

Denmark

Local cable network, establishment of a GIS facility, computerisation

Norway

Digital microwave links and optical fibre systems

Belgium

Digital switching

France

Digital switching

ITU

Human resource development, including establishment of a training centre

APT

Human resource development.

NTC has been able to establish a viable telecommunications’ network that provides services of 250,000 telephone lines in 75 districts. It has built a national expertise capable of designing and constructing networks of its own, employing more than 4,600 employees, and earning pre-tax profits of US$ 35 million annually. The Nepal Telecommunications Corporation (NTC) came into existence in 1975 under the Telecommunication Corporation Act 2028, after several ‘incarnations’ - from being known as the Wireless Head Office, the Telephone Head Office, the Telecommunications Department to becoming the Nepal Telecommunications Board (NTB). The NTC secured the monopoly for providing all telecommunication services for the entire country under the Telecommunications’ Act 2019. The new act, viz., the Telecommunications Act 2053, promulgated in 1997, ended this monopoly. Under that act, the Nepal Telecommunications’ Authority (NTA) was established as a telecommunication regulator to issue operating licenses and regulate the sector. The new Telecom Policy adopted in 1999 intends to create an environment conducive to development and expansion of the telecom services in a fair, competitive atmosphere with private sector involvement. The services are classified as basic telephone, mobile telephone, and value-added services. Basic and mobile services will be opened to a limited number of service providers: two licenses will be issued for each of the basic and mobile services, including one to NTC. Value-added services, however, are fully liberalised and any number of licenses may be issued. Tariffs will be based on costs and no cross subsidies will be allowed after 2004. A Rural Telecommunications Development Fund (RTDF) has been created to extend financial assistance for universal access in rural areas where financial viability may be difficult to achieve. All telecom operators are obliged to contribute 2% of their gross revenues to this fund. All services will be opened to full competition by 2004 and the policy may be revised that same year. NTC is still the only operator providing basic telephone and mobile services. The situation will change, however, with the arrival of a new operator for basic telephony, expected some time in 2001. By 2004, there will be competition in all the basic services. Internet services were started by a number of private companies, namely, Mercantile Office System (MOS) in 1995 and World Link in 1997. Since value-added services were opened for private competition in 1999, several ISPs (including NTC) and paging companies have begun to offer services. 2 2.1

CURRENT

TRENDS

International

The situation of global telecom is best depicted by the following figures for 1999 (for countrywide details, see Annex-1 Global Telecom scenario). 56


Fixed telephone lines

900 million

Mobile users

400 million

Internet users

250 million

There has been a remarkable development in the information and communication sector in the last few years. Not only has telecommunication access increased but even remote areas now have the possibility of communication earlier thought too costly. New access technologies such as macro- and micro-cellular systems consist of the global system for mobile communication (GSM), code division multiple access (CDMA), AMPS, digital enhanced cordless telecommunication (DECT), PHS, Point to Multi Point (PMP) radio systems, and satellite-based systems. Global Mobile Personal Communication Systems (GMPCS) and Very Small Aperture Terminals (VSAT) have opened new opportunities not only for urban areas but also for remote and isolated locations. Internet provides global connectivity and has opened new horizons for communications and transactions. Distance is no more an obstacle, and voice is not the only interactive medium of information transport electronically. The development in telecommunication has brought about profound changes. These changes may be considered in terms of the services offered, the technologies deployed, and their economic impact. Wireless and mobile telephony is fast catching up with fixed telephony and may surpass the latter by 2003. The worldwide web is becoming the lingua franca for business communication. Data traffic surpassed voice traffic by 25% in 1999 and will surpass voice by over 100% by 2001. The growth rates for mobile telephones and Internet have been greater than 50% and 25% per annum respectively. Thanks to the Internet, a new type of business is emerging in the form of e-commerce and entertainment. Multimedia services, such as interactive video, distant learning, tele-medicine, amongst others, have also emerged. The services are expanding at such a fast pace that there is always a shortage of bandwidth. With advances in technology, the mobile Internet is also becoming a reality. The changes in service patterns are changing the infrastructure. Copper loops are being challenged by wireless, fixed services by mobiles, and circuit switching by packet switching. The conventional Telcos’ way of transporting data over telephone networks is being challenged by a new generation of Telcos that transport voice over data networks at much lower cost. Accordingly, instead of the circuit switched networks, networks based on data switching on a packet basis are being deployed. New infrastructure platforms, such as Transmission Control Protocol/Internet protocol (TCP/IP), asynchronous transfer mode (ATM) for data transport, wireless access protocol (WAP), and general packet radio services (GPRS) are being deployed to offer mobile Internet. High-speed transport systems are now available in a variety of broadband satellite systems, transoceanic optical fibre links, and synchronous digital hierarchy (SDH) microwave radio relay links. The need for high-speed data transport down to the end user is demanding larger bandwidths in the local loop also. The average bandwidth requirement of local loops is increasing by 33% per annum1. This demand is satisfied by XDSL technology for copper loops and a passive optical network (PON), based on wave length division multiplexing for a fixed network. A third generation (3G) mobile network is being developed for high speed access for mobile subscribers. The information and communications technology revolution has created an information economy, with the software industry developing at a rapid pace. The possibility of outsourcing 1

Internet access growth rate as mentioned by the International Engineering Consortium’s (IEC) web page.

Chapter 3: Information and Communication Infrastructure

57

information processing beyond national boundaries has created opportunities for developing countries to generate employment, on one hand; and, on the other, the collape of the international accounting regime and Internet Protocol (IP) telephony is robbing developing countries of their traditional telecom revenues. The absence of Internet content in developing countries has aggravated the situation, resulting in a net flow of revenue from developing to developed countries. As a result of technological developments, infrastructure costs in large economies are decreasing from around $ 1,000 per main telephone line a decade ago to less than $ 300 per main line now (see Annex 1 World Telecom Indicators). In terms of costs, wireless and mobile services are becoming competitive with wire-line services. Telecom revenues as a percentage of gross domestic product (GDP) are 2 to 7% in developed economies and 1.5 to 2% in developing economies (the percentage is higher for countries with larger information industries). The role of the state is changing vis-à-vis telecommunications. The need to adopt fastchanging technologies, to meet ever-increasing demand for services, and the willingness of the private sector to satisfy demand at competitive prices have necessitated private participation. The role of the state has shifted from that of a service provider to that of an arbitrator. Governments now manage competitions and regulations rather than services. State monopolies are being dismantled, competitive environments created. 2.2

Regional

The South Asian region is considerably behind other regions in infrastructural development, as is evident in Table 3.1 Table 3.1 Indicators

India

Pakistan Nepal

Telephone penetration (main lines /100 population)

2.20

1.94

1.06

Cellular penetration (cellular phones /100 population)

0.12

0.14

0.02

Rural access (villages having access to a phone)

NA

NA

40%

Internet users/100 population

0.05

0.04

0.11

Internet hosts/10,000 population

0.13

0.22

0.07

Telecom revenue as % of GDP

1.42% 1.67%

1.51%

Source: India and Pakistan as shown in Annex 1 Nepal: NTC for telephony and ISPs for Internet estimates

In order to satisfy the big demand, countries in the region have decided to open the sector to private participation. Sri Lanka, India, and Bangladesh have liberalised mobile services. As a result, mobile service is expanding very quickly. Bangladesh has been able to expand services to rural areas with the help of mobile telephony. Nepal has fully liberalised the value-added services. As a result, Internet services have become very competitive, and Nepal offers one of the world’s lowest Internet log-in costs (Ref Annex 8 Internet Log-in Costs). India also recently fully liberalised its Internet service. License fees for Internet Service Providers (ISPs) are to be abolished for a period of 15 years. The resulting competition is 58


expected to drive prices lower and increase the quality of the Internet, which will propel Internet expansion in India. The booming software industry will greatly benefit from this situation. Besides, India plans to implement Voice over Internet for local and long distance telephony in the major cities. These developments will reduce the cost of telephone services by up to 30%. Nepal’s National Planning Commission (NPC) has set objectives to achieve a telephone penetration of 3% by 2002 and universal access in rural areas by the same year. To achieve this, Nepal intends to fully liberalise the telecom sector by 2004. The government plans to privatise the incumbent monopoly - the Nepal Telecom Corporation (NTC) - and to introduce competition. The regulatory authority - the Nepal Telecommunications’ Authority (NTA) plans the following calendar of activities. • • • • • • •

Issue of license to a second mobile operator Competition in Local Loop (issuance of license to a private WLL operator) Issue of license to a private Rural Telecom Operator for the Eastern Region Nepal Telecom Corporation (NTC) converted to the Company Act Competition in long-distance services to be opened Divestiture of NTC Competition of international telephone services

Jul 2000 Jul 2001 Jan 2001 Jul 2001 Jul 2001 Jul 2002 Jul 2004

Cost-based tariffs will be effective from 2004. 3

CURRENT I NFORMATION

3.1

Background

AND

COMMUNICATION I NFRASTRUCTURE (ICT)

Nepal started its modern telecommunications’ development relatively late. Telecommunication services have been growing at an average rate of 18% per annum for the last decade. Supply has been able to meet only 50% of the demand. 3.2

Key indicators

Presently, the information infrastructure in Nepal consists of a public switched telephone network, data service infrastructure, radio paging, radio broadcasting, TV broadcasting, and cable TV network. The key indicators are shown in the Tables 3.2 and Table 3.2a. 3.3

Public switched telephone network (PSTN)

PSTN is owned and operated by the government monopoly, the Nepal Telecommunications’ Corporation (NTC). Nepal has a fully digital Public Switched Telephone Network consisting of:

• • •

124 digital switches (including 66 C-DOT) including remote line units and two gateways with a total of 273,000 lines, microwave inter-exchange links, and standard A type earth station for connections to overseas’ countries.

Annexes 2, 3, and 4 show the urban exchanges, rural exchanges, and transmission links respectively. Chapter 3: Information and Communication Infrastructure

59

Table 3.2 Key indicators of the information infrastructure Basic indicators

Description Population (millions) Total GDP ($bn) Total (Klines) Per 100 inhabitants Total Klines Total lines (minutes per subscriber/month) (per main line $ per annum)

Data 22.5 4.7 250 1 265 4,000 45

Source NPC Estimates NPC Estimates NTC

314 970 10,000 25,000 160 7,000 50,000 35,000

Radio broadcasting

(per main line $) Accounts Users Hosts (with "np" domain) Total in use (total in country) Houses Terminated with Cable MMDS connected houses Population covered

NTC Financial Report FY55/56 Analysis Estimates Estimates Estimates Estimates Estimates Estimates

TV Broadcasting

Population Covered

39 %

Main telephone lines Telephone Waiting list Cellular Mobile Outgoing telephone Traffic Total telecom revenues Telecom investment Internet

Pagers Computers Cable TV

3,000 90 %

NTC MIS Report NTC MIS Report NTC Data analysis

Estimates RN Listeners Survey Report NTV Estimates

Table 3.2a: Direct exchange lines (DELs) in Nepal Fiscal Year DELs

89/90 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 98/99 41,810 51,931 62,613 67,335 70,575 73,321 82,603 109,066 147,528 180,361 227,416

Source: NTC historical data

The network also includes a small fibre optic link, a small packet switch, and an SPC telex exchange. Recently, a GSM network was introduced in four major cities, one of which was the capital, Kathmandu. The exchanges are interlinked by digital microwave and optical fibre links based on E1 carriers. All exchanges operate with CCS N7 and R2 signalling systems. Newer exchanges offer CCS7 and integrated services digital network (ISDN) capabilities. Rural areas are served with Multiple Access Radio Telephone Systems (MARTS), based on 32 Kb/s DPCM voice coding, and analogue Single Channel Radio Telephone Systems (SRTS) operating in VHF/UHF frequency bands. A small number of VSATs (seven stations) and Point to point (PP) microwave radio links with pulse code modulation (PCM) subscriber multiplexing are also used to provide services in some areas. Although the penetration is 1%, the distribution is uneven. Kathmandu has a penetration of 20%, whereas it is only 0.1% for rural areas. Only 1,528 Village Development Committees (VDCs) out of a total of 3,913 have access to telephone services. The mean distance to access telephone services in rural areas is 10 km. Some districts in mountain areas are served by a single telephone line. Dolpa District has one line serving a population of more than 25,000 spread over an area of more than 7,800 sq. km. 60


The quality of service is reasonable in urban centres: Grade of Service (GoS) of 2%; fault rates of 7 faults/100 subs/month, and an average service restoration time of 48 hours. The service is poor in rural areas: GoS of 10% or more and availability of 80% or less. International communication is based on more than 800 voice circuits on terrestrial microwave/optical fibre links to India and Satellite Earth Stations to link 30 destinations. Overseas’ destinations are based mainly on Intermediate Data Rates (IDR) consisting of low rate encoding (LRE) and digital speech interpolation (DSI). NTC provides leased lines for corporate users. Some 100 customers are served with leased lines presently. The ongoing NTC programme will provide 300,000 additional lines, including more than 20,000 lines in rural areas. Its objective is to attain a telephone penetration of 2.5% and provide at least two telephone lines to each of the VDCs by 2002. An east-west optical fibre link and a new gateway exchange with a new earth station outside the valley and an ATM switch will be added to the network to provide broadband switching and bandwidth on demand in the future. The Special Rural Telecommunications Development Programme (SRTP) has been launched with an objective of providing at least two telephone lines to each Village Development Committee by 2002 (see Annex – 5 SRTP) using a DAMA-based VSAT network and WLL systems. One thousand VSATs and a WLL network for the western development region are in the process of being procured. PSTN has the capability of:

• • • •

high speed transport (E1 level) dedicated links between district headquarters, major exchanges, and international destinations; high speed local access in exchange areas through the deployment of XDSL technology; low-speed local accesses for mobile, rural, and proposed wireless and customers; and narrow-band (64 Kb/s basic rate and 128 kb/s narrow-band ISDN) switching capability between major exchanges.

The cost of telephone service, excluding government taxes, is around US$100 per year. A new cellular and wireless license will be granted to a private operator in 2001. This will add 100,000 telephone lines to the network. 3.4

Data communications infrastructure

The PSTN network, although fully digital, provides only dial-up services. A combination of leased lines from PSTN and a limited overlay wireless network (radio links and VSATs), constructed by private operators, are the only data transmission networks. The network supports low-speed Internet services. A number of Internet Service Providers (ISPs) offer Internet/e-mail, web hosting, and web design services in Nepal. All the ISPs are based in Kathmandu. Some have Points of Presence (POP) in four other major cities: Biratnagar, Birgunj, Butwal, and Pokhara. ISPs offer dialup access and have narrow-band backbones typically of 128 Kb/s downstream and 64 Kb/s upstream although some offer 512Kb/s and 128 Kb/s backbones (see Table 3.3).


61

Table 3.3: Gateway capacity of some ISPs ISP Name Downlink Uplink

NTC 2 Mb 2 Mb

Wlink 2 Mb 128 Kb

Mercantile 5 Mb 2 Kb

CCSL InfoCom 64+240 Kb 240 Kb 32 Kb 64 Kb

e-net 128 Kb 64 Kb

Source: Survey of ISP's

There are an estimated 10,000 Internet accounts and 25,000 e-mail accounts in the country. A total of 160 Internet hosts with a ‘np’ domain are currently available; many more hosts are believed to be operating without a ‘np’ domain. There is little local content available, though. There are few national databases that could be connected to the Internet. There are few high-speed Internet customers. About 10 customers have dedicated 64kb/s accesses to overseas’ networks. The local access is based either on copper lines leased from NTC or on private wireless links. Few of the ISPs are interconnected directly. A liberalised environment has enabled the establishment of more than 11 service providers. The deregulation of the Internet backbone service has led to the construction of backbone links to international gateways by four private VSAT Network Providers. This has resulted in increased access speed and a surge in usage, with a growth rate of more than 40% per annum. Competition has seen a significant reduction in the Internet charges. The cost of 20-hour ‘wee hour’ logging on to the Internet is around US$ 14.00 (ref. Annex 6). The major constraints of Internet growth are:

• • • • • • • • • •

IT industry in its infancy, absence of local content, language barrier, with the Nepali Font not yet standardised, low computer penetration ( around 50,000 in the entire country), low telephone penetration and long waiting time for connections, limited points of presence of ISPs, high up-front costs (computer costs over $ 700 and a new phone line over $130), low-level of computer education, little public awareness about the Internet, and computer illiteracy.

Computer applications have been undertaken mostly by private enterprises. Computer vendors, computer training centres, and limited small-scale software development enterprises are the main computer enterprises in Nepal. Most government departments have been slow in introducing and using computer applications. 3.5

Radio paging network

There are four radio paging networks with a total customer base of about 10,000. All of them offer an alphanumeric display (with some in Devanagari script) and some provide email and voice-mail services. However, these networks are not interlinked. Although one operator has a license for nation-wide paging services, all the services are limited to Kathmandu Valley. 62


None of the operators has concrete plans to construct both-way paging. Paging services are offered at US$ 3.70 (Rs 250) per month. The scheme requires the customer to have his/her own pager. In addition to the above there is a host of broadcast services ranging from radio broadcasting to TV. 4

KEY QUESTIONS

4.1

Meeting the demand for telecom service

The telephone is the most important information infrastructure, but Nepal has met only 50% of the expressed demand. The demand is registered only for serviced locations, which means only the urban areas. No record, especially for rural areas, is maintained (Table 3.4). In Kathmandu, where registered demand is the largest, only 60% of those on the waiting list responded to calls by NTC for new connections. At other locations, demand far exceeds supply, resulting in a waiting time of 3 to 5 years. This is the result of over-emphasising Kathmandu Valley’s requirements and neglecting demand in other areas. Demand should be considered at price. The expressed demand is, therefore, at the prevailing telephone tariff, which is based on a cross subsidy of local services by international services. How will properly priced telephone services affect demand? Analyses are offered, based on the percentage of GDP that can be spent on telecom services (1.5%~3%), the expected annual GDP growth rate of 7.2%, and the cost of providing telephone services decreasing from the present value of $800 to $400 per line, mobile services are expected to constitute 25% of the fixed telephone services. Provisioning costs of mobile and fixed services are assumed to be equal. For the sustainability of the project, a payback period of 3 years has been assumed. 2 Based on these assumptions the demand for telephone services is estimated to be between 4.5~5.0 million by 2017 leading to a penetration between 10 ~ 15%. Nepal needs to invest US$ 2.3 billion between 2000 and 2017 - or US$135 million annually - in telecommunications. By the end of 2017, 10% of the telephone subscribers (approx. 400,000 customers) may be connected to the Internet. 4.2

Gearing telecommunication infrastructure to new requirements

Telecommunication networks will carry more data than voice traffic in the future. Besides, there will be demands to provide bandwidth on request. All this should be available at competitive prices, and a fresh look at infrastructural development is needed. The infrastructure may be divided into three main components or sub-networks, viz., Local Access, Service nodes and Backbones. Local access is made up of physical wires, cable, or wireless links that connect the end user to the service provider’s node. Service nodes are router or switch that route the traffic, on a demand basis, to destination, e.g., to

2

If we consider, the depreciation and interest on capital each to be 10% of the investments, and an operating cost of 13% on investment, annual revenues that need to be earned for self sustenance of the undertaking adds up to 33% of the investment leading to a payback period of 3 years.


63

local access or to another node. Backbones transport traffic from one node to another. Emerging information and communication technology (ICT) requirements exert various demands on these sub-networks. The cost of service nodes and backbones are rapidly decreasing as a result of technological innovations. The time required to deploy them has Table 3.4: Demand for telephones Year Population (million) GDP ($ bn) Telephone line cost ($) Telephone Lines (including mobiles)

1999 2002 22.5 24.13 4.73 5.82 800 700 271,553 523,876

2007 27.04 8.24 600 1,133,000

20012 30.23 11.67 500 2,414,929

20017 33.71 16.52 400 4,645,158

also diminished. There is fierce competition in these areas worldwide, but little competition has been observed in the local loop, though that possibility remains. Even if there is competition, customers will in all likelihood have a limited number of local accesses. 4.2.1

Local access

Different types of services are delivered to customers over the local access on a shared basis. This makes local access the most significant sub-network of the information infrastructure. However, it has been the weakest link in the infrastructure. Currently, there are five local access technologies in use in Nepal, namely, copper loop, wireless, mobile, cable TV, and multipoint microwave distribution system (MMDS). PSTN has been the most widely used for local access for telephony and data. Copper loops have been installed extensively for telephony. Data can be delivered over these twisted copper pairs at a maximum speed of 56 Kb/s on voice band analogue modems. Higher speeds of 2 Mb/s to 6 Mb/s may be delivered on asymetric digital subscribers’ line (ADSL) over distances of from 3.7 km to 6.3 km. Copper loops can, therefore, deliver comfortably high-speed data, including moving picture experts’ group (MPEG-3) standard video, the present-day standard of interactive multimedia. This network should, therefore, be extended and maintained properly. Wireless Access: Besides voice, presently available wireless local loop technology can support data at speeds of 9.6 Kb/s (GSM, CDMA), 32 Kb/s (DECT), or 64 Kb/s (PHS or PMP). For higher speeds and/or for remote or isolated locations, dedicated systems such as point-to-multipoint radio, point-to-point radio, or VSATs could be deployed. Wireless will play a significant role in providing services in rural areas over long distances from rural service points (most of which are located in the hilly or mountain regions) to the service node located in the southern plains or in the valleys. The intervening difficult terrain and the low customer density in rural areas make wire-line access difficult and costly in these areas. Cable TV and MMDS: These technologies are presently used only for TV, but they have a great potential as a high-speed local access technology. This potential needs to be used. Since cable TV usage is increasing, future improvements through the adoption of an optical fibre network can offer real multimedia services in major cities. 4.2.2

Switching (service node)

At present, telephone switches installed by NTC are based on circuit switching. Some of the 64


switches have basic rate ISDN capability, offering access speeds of up to 128 Kb/s. Although the demand for higher speeds is not currently significant and can be met with dedicated connections up to ISP routers, the demand will increase in future. The infrastructure should, therefore, be capable of providing bandwidths on demand at least in the major cities. The current trend in switch technology has reduced prices drastically. The technology has a very compact hardware design and offers more services and features, low power consumption, ease of operation and maintenance, and it provides better security features. All these are encouraging and they open up appreciable possibilities for the development of communications. Along with these qualities, modern switches come with special provisions for data communications and the Internet, with features such as:

• • •

integrated packet switch for data along with conventional circuit switch, interface for connecting Internet servers, and SDH interfaces integrated into the switch.

Internet supplementary services The capability of connecting Internet servers to a switch possibly offers a host of new features called the Internet supplementary services such as the following.

•

• •

•

E-mail waiting indication - This informs the user of an incoming e-mail by stuttered dial tone or a terminal with a lamp or a terminal with a display. This is done with an IP interface in the switch to the mail server for indicating to the subscriber that an e-mail is waiting. Call Waiting Internet – Informs a subscriber during an Internet session that another subscriber is calling. The subscriber can accept the call via the click of a mouse and, if accepted, can be delivered to the phone. Call completion Internet – This is the possibility of receiving incoming telephone calls on the personal computer (PC) while working on the Internet. The in-built capability of the switch allows conversion between the Voiceover Internet Provider (VoIP) and PSTN telephone. VoIP gateways in the switch – provision of telephone services at very low cost.

The currently available switches in Nepal do not have these capabilities, but in future versions will be equipped with them. ISDN Although ISDN for conventional use has not been very successful, it is gaining popularity for high speed Internet accesses. It offers a bandwidth of at least 128kbps and is much faster than conventional modems. All major exchanges in Nepal are ISDN-capable. If they are not already equipped with ISDN lines, they can be equipped with ISDN capability at minimal cost. Hybrid switch based on TCP/IP platforms This has a capability of integrating voice and data. It reduces redundancies in voice and frees the network during idle times. The result is a reduction of bandwidth requirements for voice transmission by a factor of 12 to 15. Consequently, an E1 stream can support 360 to 400 simultaneous conversations, thereby drastically cutting down long distance transport Chapter 3: Information and Communication Infrastructure

65

costs. Although there are no carrier grade IP telephony solutions yet, voice over IP is already a reality and has brought great benefits to customers. Such switches should be introduced in the network. In order to provide guaranteed access at reasonable costs throughout the country, such switches must be installed at least at each district headquarters. 2.2.3

Backbones

These make up the inter-node transmission links within national or international boundaries. Backbones are required at times to provide local access to distant nodes. A high transmission capacity and quality service, in terms of error free performance and availability, are the requirements of backbones. Redundancies are required sometimes to assure availability. Microwave radio relay and optical fibre systems based on SDH (Synchronous Digital Hierarchy) with a route diversity may provide the necessary backbones within national boundaries. Inter-district SDH backbones, with add/drop multiplex, need to be constructed to provide inter-nodal connectivity as well as bandwidth on demand. Satellite and/or optical fibre systems may provide international backbones. Although satellite solutions can cater to Nepal’s requirements, problems associated with round trip delays or double hops may also necessitate backbones based on optical fibre. 4.3

Telecommunications pricing

The pricing of telecommunication services, especially of local telephone services, has always been a contentious political issue in Nepal. There is a desire to make telephone service affordable so as to achieve a higher penetration level. Nevertheless, there is a necessity to make telecom services sustainable and therefore cost-based. 4.3.1

Telephony service

The present tariff structure for telephone services has been based on a heavy subsidy from long distance services to local services. As a result, there is a huge disparity between costs and prices, as evident in the table given (Table 3.5). The present situation is not rational for two reasons. One, local access quality has not been satisfactory and has created a long waiting list, which, if satisfied fully, will make telecom services non-sustainable. Two, rural services are neglected as they require higher investments. Hence, the objective of higher penetration with lower costs is self-defeating: more than 60% of telephones are concentrated in Kathmandu, 99% of the population has no telephone, and 60% of all villages have no access at all. As long as a single authority offers telecom services, cross subsidies could be continued to keep prices low for local services while maintaining corporate financial health. But the competitive environment automatically breaks this regime: more lucrative services lure the investors. It is already visible: Voice over Internet (VoIP) and refiling are taking over PSTN overseas’ voice calls and may overtake other PSTN long distance calls, thus depriving the very sources of cross subsidies. Nevertheless, administrative approaches cannot and should not control VoIP as it offers large benefits to the public. The only way to remove this anomaly is to introduce cost-based tariffs. Although HMG has directed that cost-based tariffs be introduced gradually and completed by 2004, it may have 66


Table 3.5: Disparity between investments and revenues Description Local Services Long distance International services Services Investment 66% 20% 14% Revenues 18% 21% 61%

Total 100% 100%

Source: NTC Tariff Study, 1998

to be done sooner, perhaps by 2002. This will allow the unbundling of three services, viz., local, national long distance, and international services, and therefore competition in all three sectors. One way of pricing long distance national calls could be to remove distance barriers as is done for international calls. For determining prices, national averages could be worked out on the basis of cost and traffic. This method of pricing, together with the implementation of marketing policies of bulk-sale and wholesale, should increase the calling rate and payable minutes, thereby increasing resource utilisation efficiently. 4.3.2

Internet Pricing

Pricing has always been on the basis of cost as this service has from the beginning been provided by the private sector. The recent deregulation of backbone services through VSAT has seen a dramatic drop in prices due to competition. The cost, however, remains significantly higher than that for local telephone services, whereas, internationally, it is much lower than for telephone services. The smallness of the market has been one deterrent to price reduction. A viable way of reducing Internet logging cost is to add values to the services: advertising, web hosting, data hosting, and application hosting. ISPs should be encouraged to provide value-added services of public information posted on new websites. 4.4

Universal access obligation

Historically, universal services comprise of voice telephony. Voice telephony should be extended to e-mail and then the Internet over time. The services could be started with a Public Call Office (PCO), which could be converted to a Community Tele-Centre (CTC) offering all the telecommunications’ services as well as information-related support. CTCs may also be equipped with a local TV transmitter and FM radio transmitter to provide broadcasting services to the community. Cost-based tariffs may conflict with universal access obligations to serve the disadvantaged communities or remote regions, but the Rural Telecom Development Fund (RDF) at NTA can provide safety nets for them. RDF may also be used to address the problem of regional disparity. 4.5

Computerisation

The computer and associated IT resources have been essential tools for enterprises worldwide. A broad range of business and financial activities, collectively called the New Economy, has emerged, thanks to evolving information and communication technologies. This has opened up new opportunities for economic and social development. For a landlocked country, such as Nepal, this may be the path to poverty alleviation and development. Businesses Chapter 3: Information and Communication Infrastructure

67

spawned by this economy can range from software development and export, tele-medicine, to distant learning and e-commerce. While private enterprises have been receptive to using computers, limited computerisation has been achieved in the government sector, public schools, hospitals, and local government institutions. Computerisation should aim not only at the provision of computer hardware and software but also on computer expertise and building databases, systems, and networks to assist in the business. Even more important is computer awareness. Unless computers become essential work tools and a means of communication and access to databases, no tangible benefit can be achieved. As the private sector in Nepal is still very small, computerisation will be slow and opportunities lost unless government agencies make a sustained effort. 4.6

Content development for Internet

The main beneficiaries of the Internet in Nepal have been researchers and consultants, graduate students looking for opportunities abroad, computer vendors, ISPs, and international content providers. The reason for this limited use of the Internet is primarily a lack of local content. For a majority of the public, what matters most is information about opportunities in the country. The commodity may be a piece of information, or a product or service that can be acquired or sold, but unless the web offers this possibility, widespread Internet use will not occur. Without widespread Internet use, e-business cannot take place. Sustained efforts towards content development are also necessary for international consumption. The Nepalese would then be able to do business in global markets. Content development will also resolve, to some extent, the information asymmetry between Nepal and the outside world. It would help reduce the net out-flow of revenue from Nepal, which often happens on the Internet. One way to initiate content development may be to create databases for government departments. All the data, procedures, forms, and notices for public consumption can be made available on the web. This will serve as a catalyst for content development. As usage increases and reaches a certain level, the agency may begin to charge users a price for access to databases. Thus, the entire undertaking would become self-sustainable. To begin with, private service providers may be contacted to host databases. ISPs currently have the capacity to provide hosting facilities. With increasing demand, however, new service providers are certain to emerge. In the beginning, government agencies only need access terminals and some level of computer expertise, and so start-up costs may be minimal. Databases for inter-agency consumption can also be hosted in the same way. Such actions will stimulate content development by the private sector and trigger a chain reaction. Experience shows that the government has played this catalytic role in a number of industries. 4.7

Creating an environment for a new economy

Opportunities opened up by the Internet could be exploited with the right conditions. Global connectivity, although essential, is not adequate. Interventions that can help create the environment may include, among other things, education and awareness building, establishment of IT Park, assistance in e-business start-ups, and creation of a one-window policy for software import/export.

68


4.7.1

Establishment of an IT park

An IT cluster village, popularly called an IT Park, with state-of-art computing and communication facilities for lease at concessional rates to entrepreneurs, could be significant in the development of the IT industry. Basic facilities to be provided in the park are reliable power supply and state-of-the-art communication infrastructure, easy vehicular access, library, office accommodation, living spaces, canteens, banks, and sound security systems. Given that the private sector seems unwilling to undertake the project, the government should take the steps to establish it. 4.7.2

Assistance to e-business start-ups

Starting a new business is always a challenge, requiring expertise, knowledge, and resources. While large businesses can hire experts and arrange funds to undertake a feasibility study or implement a project, it is much more difficult for small businesses like the Small Office/ Home Office (SOHO) entities. Developing countries like Nepal have to rely heavily on SOHO, based on information technology, for self-employment opportunities. In recognition of the importance of assisting e-business in developing countries, the World Bank and Soft Bank of Japan recently set up a fund of $500 million to assist e-business start-ups in developing countries. Other agencies may also fund such projects. 4.7.3

Creation of a one-window system for e-transaction

Software export/imports face numerous problems. They do not receive the same treatment as other commodities when it comes to export. Clearances from many departments and ministries are required for payments. A single window for document processing is, thus, essential to facilitate the IT export sector and to enable it to play an important role in the national economy. As such, the government needs to formulate policies to promote and facilitate e-business. 4.8

Financing

Financial requirements for the IC infrastructure building are summarised below in Table 3.6. Internal resources are limited and may cover 50% of the total requirement. External financing is, therefore, essential. Table 3.6: Infrastructure for the telecom sector Description US$ Million Telecommunications 2,300 million Computerisation 675 million HRD and school computers 250 million IT Park and institutional framework 125 million Total 3,350 million

Support of international agencies can be sought. Donor agencies, international financial institutions, such as the World Bank (WB), Asian Development Bank (ADB), the Soft Bank of Japan, and so forth, have policies to assist developing countries in the IT sector. The formulation of national policies will help to explore these prospects for obtaining such assistance. Chapter 3: Information and Communication Infrastructure

69

Various NGOs/INGOs, international agencies (United Nations Development Programme [UNDP] and its affiliated organisations), bilateral agencies (Japanese International Cooperation Agency [JICA],the Danish [DANIDA], and the Finnish [FINNIDA]) aid agencies have shown interest in IT development areas. They can provide technical assistance, training, and physical facilities (computers) to schools, hospitals, and local governments. The Government has shown that it is, in principle, interested in creating a suitable environment for the private sector to participate in infrastructural development. Accordingly, the sector is being liberalised. As a result, the local private sector is participating in the development of the Internet, paging, and FM broadcasting. Investors, both national and international, may be willing to participate in the development of infrastructure if a sufficiently credible environment is created. 4.9

Institutional framework

An institutional framework exists for the telecom sector. There is a well-defined operator, a line Ministry (MOIC) and the Regulator (National Telecommunication Authority), but there are no defined institutions for the IT sector. Efforts so far have been largely ad hoc. Various agencies are involved such as the Ministry of Information and Communication (MOIC), the Ministry of Science and Technology, the Royal Nepal Academy of Science and Technology (RONAST), and the National Planning Commission (NPC). Their activities, however, have no clear-cut boundaries. What is essential for the IT sector is an institutional framework with the highest authority responsible for IT policy, strategy, project implementation, and international relations. That is the need based on the experience of many countries that accord high priority to the IT industry. Such an authority could be the Nepal Information Technology Board (NITB), as suggested to the NPC by UNDP consultants Mr Bertrand Bidaud and Mr Rajesh Upadhyaya in their draft assessment and recommendations, ‘IT Strategy for Nepal, Kathmandu, May 1999’. 5

NATIONAL

VISION

The purpose of the policy should be to establish a modern, globally-linked national information and communication infrastructure that offers state-of-the-art information and communications services to foster interaction between people in the country as well as in the world for economic purposes and development. The Long Term Policy Framework for [the] Information and Communication Sector 2055, envisions the development of the information and communication infrastructure by 2017 as:

• • • • • • 70

extending existing telecom services, introduction of new services, and enhancement of the quality of services through private participation in a competitive environment; equipping and empowering the regulatory authority to foster healthy competition and to protect consumers’ interests; providing a telephone penetration of 15%; establishing modern global connectivity with the objective of making Nepal an international communication hub; establishing an information and communication infrastructure to assist all-round development of all sectors, viz., agriculture, tourism, health, education, commerce, postal services, and so on; and adopting a strategy suitable for mobilising financial capital for sector development. Information and Communication Technology - Policy and Strategy for Nepal

To fulfil the purposes, policies should aim to:

• • • • • • • • • •

provide telephone and Internet services on demand in any part of the country on a cost basis, provide mobile services on demand along highways and in all major cities, provide universal access to telephone and e-mail services in each Village Development Committee (VDC), develop the information and communications network for an export-oriented software industry, ensure protection of consumers’ interests by providing a choice of service providers and cost-based pricing, ensure service quality for customer satisfaction by 2007, establish an IT-based software industry to generate export earnings of at least US$ 0.5 billion annually by 2001, establish a network of national databases accessible from the Internet, provide telemedicine to major health centres, and establish and extend distance learning capabilities to all higher secondary schools.

The targets for achieving the objectives are the following.

• • •

Telephone switches with data capabilities in all district headquarters and municipalities with a total capacity of more than 5 million lines by 2017 STM1 backbones to all regional headquarters by 2002; at least E4 backbones to each zonal centre and at least E2 backbones to each district centre by 2007 Internet nodes in regional centres by 2002 and in district headquarters by 2007

6

OPPORTUNITIES

6.1

Opportunities

6.1.1

• • • •

AND CONSTRAINTS

Business

Software Industry Electronic commerce Marketing Foreign contracts in data processing

The projected tangible benefits from the business in a period of 10-15 years can amount to US$ 1.25 billion annually from telecom revenue and software export. 6.1.2

• • • •

Employment

Local e-business Jobs in infrastructure Foreign jobs Education


71

Direct employment in the telecom and IT sectors will be more than 132,000 full-time, including 50,000 specialists, in the ICT sector (20,000 in IT and 30,000 in the telecom sector). The ICT infrastructure offers other benefits in the following areas.

• • • • • • •

Education Tele-medicine Efficient management and coordination of activities among people, government agencies, and business, and social organisations Better social service delivery Prompt response to emergencies Social interaction Entertainment

6.2

Constraints

6.2.1

•

• •

Financial Constraints

During the 17-year period, a total investment of US$ 3.35 billion for the ICT sector ($2.3 billion for the telecom sector and $ 1.05bn for the IT sector) is necessary. This means that an annual average of US$ 200 million ($ 135 million for telecom and $ 65 million for the IT sector) is necessary. National sources may finance at best only one-half of the total resource requirements. Financing for the other half needs to be explored.

6.2.2

Human Resource Constraints

The infrastructure requires at least 50,000 ICT specialists during the period, or 3,000 annually. The present status is not satisfactory.

•

There is inadequate human resource development.

Colleges and training institutes/centres produce around 500 graduates/diploma-level specialists annually. There may be 100 more that received advanced training overseas. Thus, an annual shortfall of about 2,400 specialists has to be met.

• • •

Opportunities for postgraduate studies are not available. The quality of the manpower developed by the existing computer training centres is not up to requirements. Brain drain: qualified specialists leave the country for better opportunities abroad.

6.2.3

Policy framework constraints

Telecom • The policy framework for the telecom sector is well defined and conducive to the growth of telecommunications in general, but it has the effect of constraining some services. • Fees and royalties are too high, especially for pay phones. There is a heavy taxation on service (telephone service taxes: 21%, ownership one-time tax of Rs. 1,000; mobiles 72


•

discouraged by income tax rules) and revenues (4%+2% on gross revenues). Although these generate funds for the government, they slow down sector growth by dampening demand and discouraging investment. It allows IP service bundling (Internet and backbone service may be bundled, thereby allowing backbone providers to have competitive advantage over others).

IT industry The IT industry in Nepal is almost non-existent, even though there has been some exemption in custom duties and taxes (10% charged) on imports of computers and accessories. Software development and software application-oriented businesses are treated as service-oriented consultancy businesses. It does not, therefore, receive the benefit of businesses that have an industry status, which results in the following.

•

It does not get any benefits as an industry, and has not been designated as a ‘thrustsector’.

•

Although the government has announced a tax exemption on export-oriented software companies, the same procedural formalities are expected as in the export of other physical commodities. The export of software through electronic media is not recognised as a business by the concerned departments and as such is not eligible for tax exemption.

• •

Export earnings are taxed as personal incomes. Export/import permits are necessary to open letters of credit (L/C) required from multiple authorities.

7

RECOMMENDATIONS

7.1

Telecom sector

7.1.1

Attain a telephone penetration of 15% by 2017

The penetration should be achieved and fixed lines and mobiles provided on demand. 7.1.2

Universal service obligation (USO)

•

Provide a Public Call Office (PCO) with one telephone per Village Development Committee by 2002,

•

Develop the PCO into a Community Tele-Centre (CTC) by equipping it with e-mail service and databases necessary for the rural community by 2004,

• •

Equip the CTC with Internet service by 2007, and The CTCs should also be equipped with a local TV transmitter and FM radio transmitter to provide broadcasting services to the community. The current Rural Development Funds may be applied to support this.

7.1.3

•

Provide ISP nodes in zonal centres by 2002 in important cities and in district headquarters by 2004

This will enable the provision of Internet service on demand based upon a uniform price structure in the country. Chapter 3: Information and Communication Infrastructure

73

7.1.4

•

Make available data connections to zonal centres with speeds of at least 64 kb/s by 2001

Where the market does not support it, special IT funds may be used.

7.1.5

Define a guaranteed minimum quality of service (QoS) for all telecom services

Guaranteed QoS is necessary to protect the customer’s interest. Presently, the quality of telephone service is generally satisfactory in urban areas but is poor in rural areas. Internet service quality has not been specified by ISPs. Services are charged on a per minute basis. The transmission rates are not guaranteed, however, and customers are not protected at all. The QoS may be defined follows. Telephony

• • • • •

Fault rate/month/100 sub Maximum duration of a single outage Answer seizure ratio Number of billing complaints/month/subs Maximum duration of billing complaints’ clearance

Internet

• • •

Availability Maximum duration of service unavailability Guaranteed throughput rate

7.1.6

Reduce license fees, royalties and taxes to foster sector growth

Telecom is an infrastructure service. The cost of telecom services is transferred to other sectors in the form of increased prices of commodities. Although these are a good source of revenue for the government, ultimately they increase the cost of services. High costs, however, deter consumption and lead to decreased investment and, therefore, decreased sources of revenue to the government. Some of the categories in question are as follow.

• • • • •

74

Telecom services are taxed at a rate of 27% including VAT, service taxes, royalties, and contributions to the Rural Development Fund. All the taxes are based on revenue and not on income. VAT is applied on penalty fees, which is wholly unjustified, License fees /royalties should be low for fully liberalised services in order to promote them. For operators reselling services, particularly voice, fees and royalties should be kept low to attract investors. Royalties should be put into development funds for ICT sectors.


7.1.7

Transfer spectrum management function to NTA

This function presently lies with the MOIC. A single authority for issuing licenses would cut bureaucratic red tape and use the spectrum efficiently. Present policies and control mechanisms do not favour efficient use of the spectrum. 7.1.8

Install optical fibre over ground wires in new major power transmission lines

High-speed transmission capacities can be provided over these systems very economically and, therefore, their introduction should be mandatory. 7.1.9

Continue present telecom policies in other aspects

Other telecom policies may be continued until 2004 when they are scheduled for revision. 7.2

IT Sector

7.2.1

Constitution of a high-level IT board – Nepal IT Board (NITB)

The IT sector should be recognised as a thrust industry and be given proper priority. Bureaucratic obstacles must be removed. The Board headed by the Prime Minister can accord the priority necessary to streamline all efforts and reduce bureaucracy. It is recommended that a permanent secretariat work for the Board. Such a secretariat could monitor the execution of the directives of the commission and report to the commission. 7.2.2

Creation of a special IT fund (SITF)

The fund is necessary to help computerisation in schools, start up IT industries, provide web hosting for organisations, set up an IT park, and improve HRD. The contribution of funds may be from:

• • • •

software industries (1~4% royalty from export earnings), grants from donor agencies, government grants, and credits/loans from international banks.

7.2.3

Establish IT cluster villages (IT park) by 2002

This will act as an IT development centre. The Village should have physical facilities for software industries and provide a platform for software testing and RandD work. 7.2.4

Create lending schemes by commercial banks in the IT Sector.

Commercial banks need to be directed to give loans to the IT sector on soft terms on a compulsory basis. Such schemes will boost IT investments. 7.2.5

Fiscal incentives for IT industry

In order to attract investments to the IT sector, tax incentives should be provided. Chapter 3: Information and Communication Infrastructure

75

• • •

Minimal customs’ duties and sales’ taxes on the import of IT hardware and software Foreign exchange facilities Tax exemptions on software export for a period of 10 years.

7.2.6

Standardised Nepalese font by 2001

The absence of a standard Nepalese language font has hindered the sharing of electronic documents in the Devanagari script. A standard Devanagari font will encourage document sharing and serve as a catalyst to popularise computerisation. 7.2.7

Complete computer networking of government ministries and departments by 2005

Computerisation will increase efficiency in the functioning of agencies. It will also act as a catalyst for content creation by other agencies. 7.2.8

Use the Internet as a powerful information dissemination tool

Public information of all public agencies should be provided on a web page by 2002. It will create an environment for content creation by the public and by individuals. By 2001, information dissemination through Internet could include the following: information regarding land tax data, job opportunities, training opportunities, market information about products with their prices and locations, agricultural data, e.g., cereals, vegetables, and livestock and banking support. 7.2.9

Take steps aimed at developing human resources in the IT sector in the country

Educational institutions and human resource development outfits should be supported and strengthened to produce high-level human resources in the IT sector.

76



77

78



79

EWSD, s12 Hosts and Remote units in Kathmandu Valley, Total 168190

Annex 2: Urban and semi-urban exchanges installed as of January 2000

Annex 3: Rural exchanges installed as of January 2000 80



81

Annex 5:

Special Rural Telecommunication Development Programme

His Majesty’s Government of Nepal has decided to launch a Special Rural Telecommunications Development Programme (SRDP). The objective of the programme is to provide at least two telephone lines in each of the total of 3,913 Village Development Committees within the period from 2000 - 2003 (F/Y 1999/2000 - F/ Y 2002/2003). Nepal Telecommunications Corporation with financial support from His Majesty’s Government will implement the programme. The main features of the programme are as follow. 1.

Scope of Work

1.1

At present Nepal Telecommunications Corporation (NTC) provides services to 1,528 Village Development Committees (VDCs). Within the programme period, services will be provided to the remaining 2,385 VDCs. Very High Frequency (VHF) radio and Multiple Access Radiotelephone System (MARTS) based services will be gradually replaced by new technology.

1.2

Schedule of Service Delivery. It will be as per Table 1 below.

1.3

Regional basis of new technology deployment will be as shown in Table 2 below.

Table 1- Service Delivery TimeTable Technology \ FY New VHF Services New MARTS (Indian C-DOT) MARTS/VHF Relocation VSAT Wireline from Exchanges New WLL System Total

1999/200 0 165 6

2000/200 1

10 1 23 205

2001/200 2

2002/200 3

Total 165 6

20 200

250

500

30 951 23

230 450

650 900

330 830

1,210 2,385

Table 2: Regional Basis of Service Delivery Table 2. Regional Basis of Service Delivery Development Region Far Western Mid Western Western Central Eastern Total 82

FY2000/2001 VSAT WLL 50 50 26 40 34 200

230 230

FY 2001/2002 VSAT WLL 50 50 20 60 70 250

69 100 150 81 250 650

FY 2002/2003 VSAT WLL 50 80 150 120 100 500


40 55 60 125 50 330

Total VSAT WLL 150 180 196 220 214 950

115 180 440 175 300 1,210

FY2000/2001 Development Region VSAT WLL Far Western 50 50 Mid Western 50 50 Western 26 230 20 Central 40 60 Eastern 34 70 Total 200 230 250

FY 2001/2002 VSAT WLL 69 50 100 80 150 150 81 120 250 100 650 500

FY 2002/2003 VSAT WLL 40 150 55 180 60 196 125 220 50 214 330 950

Total VSAT WLL 115 180 440 175 300 1,210

2.

Financing of the Programme

2.1

Funding Requirements and Sources The total programme cost is estimated at US$ 70 million, including local cost component. The funding sources will be as follow. NTC’s own internal sources: US$ 30.0 million NTA’s Contribution: US$ 19.6 million Soft loans/credits through HMG:US$ 24.6 million Total US$ 70.0 million

2.2

NTA’s Contribution Nepal Telecommunications Authority (NTA) has a Rural Development Fund (RDF) to which each of the operators is obliged to contribute 2 % of its annual revenues. HMG has decided that 4% of the annual revenues that each operator pays to HMG as royalties will be transferred to the RDF fund throughout the programme period. NTA will reimburse, through the RDF, the cost of the equipment purchased by NTC through International Competitive Bidding (ICB) for the Special Rural Telecommunication Development Programme. The payment will be made only for the equipment purchased before July 15, 2003.

2.3

Tariff Rebalancing NTC may, in consultation with the NTA, rebalance the present telecommunications’ tariff structure. Monthly telephone rentals will not exceed Rs 450 by the year 2004. It is expected that this will allow the realisation of cost-based tariffs by the year 2004 and generate funds for NTC to invest in the rural sector.

2.4

Concessions VSAT and other radio equipment for rural service will be exempt from frequency fees. HMG has agreed to reduce the customs’ duties to 5% on all equipment imported to provide telecommunication services to rural areas.

3.

Private Participation in Rural Telecommunication HMG will continue to seek private participation in the sector in the following ways.

3.1

Private Operator for the Eastern Region NTA will invite bids in December 1999 from private operators for a license to provide rural services in the Eastern Development Region. If NTA is successful in the selection of a private operator, the components of the special rural telecommunications’b development programme for the Eastern Chapter 3: Information and Communication Infrastructure

83

Region will be undertaken by the private operator and NTC will be relieved of its obligation in this area. 3.2

84

Local Participation in the Rural Telecom Sector. HMG has authorised NTC to enter into joint ventures with local individuals or institutions to install and operate rural exchanges or rural radio services on a cost and revenue-sharing basis.


Annex 6: Internet Logging Costs for 20 wee hours

Malaysia

0.53

7.89

8.42

Total with Line Rental US$ 13.68

India

12.77

0.00

12.77

17.25

Indonesia

8.63

5.75

14.38

16.57

Russia

20.00

0.00

20.00

23.42

Singapore

15.22

5.28

20.50

25.73

Taiwan-China

20.92

1.23

22.15

23.54

HongKong, China

17.83

5.12

22.94

31.84

South Africa

17.42

8.15

25.58

35.35

Korea

11.99

14.39

26.38

28.38

Mexico

24.16

3.02

27.18

40.06

Israel

25.00

2.55

27.55

34.00

Philippines

30.54

0.00

30.54

41.21

Turkey

25.00

8.87

33.87

35.92

Poland

14.40

19.59

33.99

37.07

Brazil

33.21

3.21

36.42

50.26

Chile

32.22

6.61

38.83

52.68

Czech Republic

25.00

14.75

39.75

42.70

Argentina

30.02

11.31

41.32

54.27

Hungary

23.83

20.42

44.25

49.24

Thailand

24.93

33.24

58.16

60.93

China

39.26

26.09

65.36

N/A

Venezuela

27.58

39.30

66.88

73.61

Nepal

8.82

2.94

11.76

13.97

Country

ISP Charge (US$)1 Call Charge (US$)2

Total US$

Notes: 1. 2.

ISP monthly dial-up access charges for 20 hours of use. Local telephone call charges for 20 hours’ Internet access at off-peak rates. ISP connection charges are not included.

Source:

For all except Nepal: CI Nov 1999- Net Access for Village Peoples, by Rohan Samarajiva Nepal : Calculated based on ISP charge of Rs 0.5/min, telephone call charges at Rs 1 for 6 minutes, and l ine rental Rs 150/month. All charges exclusive of government taxes.


85

86


Chapter

4

Human Resource Development

1

I NTRODUCTION

Human resources are among the most important of all natural resources. The material development of a country is less dependent on its natural resources than on the quality of its human resources. Increasingly, it is brain power that brings prosperity to a country. Efforts should, therefore, be directed to developing brain power to achieve development objectives in a short span of time. The development of human resources should be viewed from this perspective. Education is key in human resource development, especially in science and technology, which are vital for bringing prosperity and material progress. One area of science and technology that has risen to visible prominence in recent years is information science and communication technology. Information and communication technologies are developing so rapidly that it is difficult to predict with accuracy their evolutionary path. The pace of development notwithstanding, we must be prepared to accept the challenges of mainstreaming IT in our development efforts and to leverage its potential for national development. We should develop our human resources to this end. Given the ever-increasing role of IT in all facets of human activities, ICT technologies will continue to have a profound impact on society. Nothing substantive will be possible in future perhaps without electronic devices and systems and applications built around these tools. As human resources will continue to be central to the development of the ICT sector, the pace of adopting these technologies will largely be dependent on the number and quality of human resources available in the country. In order to formulate a programme for human resource development in the ICT sector in Nepal, we will need to take stock of what we have achieved and to chart out a future course of action. With the available infrastructure in telecommunications and modest numbers of skilled and semi-skilled manpower in the IT domain, Nepal should consider catering to the needs of both internal and external markets. Upgrading of the current infrastructure as well as the

production of required manpower should be carried out simultaneously. Our strategy should aim to capitalise on the potentiality existing in the national and international ICT markets. 2

I NFORMATION TECHNOLOGY

FOR

NATIONAL DEVELOPMENT

Widespread application of information and communication technologies is having a profound impact on almost all aspects of human activities. These technologies have affected all aspects of modern society such as communications, trade, business, culture, education, services, entertainment, research, information, and knowledge. These technologies are opening up new dimensions and vistas of opportunities and possibilities; globalisation is sweeping the world at a breathtaking pace, thanks to their synergistic effects. Geographical boundaries are vanishing and knowledge and information are creating new economic superpowers. The ICT sector may help Nepal mitigate some of the geographical impediments of its difficult hilly terrain. Information technology might enable Nepal to become prosperous and selfreliant. Nepal could advance rapidly in various fields through the widespread use of IT. Knowledge and experience in IT could help Nepal modernise its infrastructure and ensure its economic survival in this competitive age. The proper utilisation of IT could open up new avenues of trade and international economic opportunities. Nepal should thus aim at building a knowledge society, become IT aware, and work towards developing human resources that can make best use of information and communication technologies to meet its current and future development challenges. His Majesty’s Government of Nepal has recognised the potential of IT and intends to bring IT into the mainstream of national activities to enhance economic opportunities and accomplish development goals. However, the government realises that merely introducing IT is not enough. Without substantive changes in every aspect of its activities and governance in terms of the way the government, the public, and the private sectors function, Nepal cannot exploit IT’s full potential. Information and communication technologies can only be a means to an end. It is essential, therefore, for IT to be fully integrated into every aspect of the nation’s affairs to improve the quality of life of common people, in terms of productivity gains and the delivery of goods and services. Industries based on information and communication technologies are people-centred. An information and communication technology industry that can cater to the needs of both internal and external markets requires a significant number of skilled and semi-skilled manpower. Nepal’s Human Resources’ Development (HRD) strategy should go beyond the more tempting notion of capitalising on the general shortfall of ICT professionals worldwide. The rapid growth that the industry is experiencing, even within the country, is expected to continue. Consequently, there will be an increased demand for adequately qualified human resources within the country. This is indeed crucial for the sustained development of the ICT sector in Nepal. The dearth of IT professionals in the developed and developing countries suggests that much can be gained from concerted efforts to develop human resources in the ICT domain. 3

HISTORICAL BACKGROUND

The history of human resource development in the IT sector of Nepal can be traced to 1971, when HMG used a second-generation mainframe computer (IBM 1401) for the first time to process the national census data. About 15 staff members were trained in operating 88


the machine. Subsequently, in 1974, a separate organisation, the Electronic Data Processing Centre (EDP), was established, and it later became the National Computer Centre (NCC) in 1980. His Majesty’s Government brought another mainframe computer (ICL 2950/10) for the national census of 1981. The British Government provided computer education and training to 20 professional staff members of NCC in different areas of IT application from 1982 to 1987. Of the 20 staff, 12 received MSc degrees and 8 received diplomas in computer science from universities overseas. This marked the beginning of focused initiatives aimed at developing human resources in the IT domain. In addition, five senior NCC staff had received basic computer training in the UK and advanced courses in the USA in 1980. This first batch of Nepalese to receive advanced training in computing was responsible for processing the national population census data in 1980. The participation of the private sector in HRD initiatives began with the introduction of an outfit dealing in Apple micro-computers in 1982. This was the first time a private sector company was involved in computer application and training. Around the same time NCC began providing basic training in computing and electronic data processing to about 1,000 mid-level management people per year. Meanwhile, some Nepalese professional staff of the first joint venture IT company in Nepal (Data Systems International) received advanced training in the U.S. The private sector began to use micro-computers in the early 80s. The NCC started its operations in the mid-80s. It expanded its activities in 1990 by procuring a mini computer. The National Computer Centre was in many ways a pioneer in Nepal’s ICT sector. Many of its engineers, managers, and programmers now hold high-level positions in various companies and organisations. Some have set up their own ventures, mainly in IT education/training and software development. Although the history of technical education in the country can be traced back to the early 40s, technical courses in electrical engineering, for example, were introduced only in the mid-60s. In the early 90s the Institute of Engineering (IOE) introduced Bachelor’s-level courses in electronics and electrical engineering. The same decade saw the beginning of ICT education in Nepal. Private sector participation also increased as academic institutions were established offering B.E. courses in electronics and computer engineering. Kathmandu University offered a B. E. degree in computer engineering in 1994, and the IOE followed suit in 1998. Private schools too introduced computer subjects in the 90s. 4

NATIONAL

SCENARIO

There has been a rapid proliferation of information and communication technology tools in the capital city and other urban areas of Nepal in the past two decades. Young talents are attracted to this fascinating field with the hope of getting attractive jobs within the country or abroad. Several training institutes in urban areas offer various short- and long-term courses in IT. With the tremendous growth of such training institutions in the private sector, there has been intense competition among young people to acquire IT skills to enhance their job prospects. The quality of training provided by these training institutes, however, does not always meet the requirements of national and international markets. There is a lot of room for improvement in both training delivery and content that is in tune with the constantly-evolving technology. They generally offer skills-oriented programmes but very little theory. Training programmes are usually implemented by these institutes without any coordination from any quarters and with no mechanism for quality control. Chapter 4 — Human Resource Development

89

Today, the business and industrial sectors are increasingly using computers. The application of computers is also expanding in different ministries and departments of HMG. Others using the computers are the Nepal Electricity Authority (NEA), NTC, travel agencies, airlines, hotels, banks and private institutions, private schools, campuses, universities, and hospitals and nursing homes. This has increased the demand for professionals of various levels. With the emergence of private sector training institutions, the development of human resources in the IT sector has acquired a new impetus. Until its dissolution in 1998, the National Computer Centre (NCC) played a crucial role in the development of the country’s human resources, particularly in the urban areas. The closure of the National Computer Centre occurred just as it was beginning to acquire relevance. Restructuring the institution would have been the answer; but then, perhaps, the government bureaucracy never appreciated the full potential of a strong ICT sector. The qualitative and quantitative national IT HRD scenario: About 7,0001 persons work in different fields of ICT such as hardware, software, networking, Internet, data processing, training, education, and DTP. The current number of ICT-related mid-level operators is about 3,0002 whereas the number of ICT-related graduates might exceed 1,000. 3 IT education and training programmes in Nepal are found to be of six different categories as follow. Formal

• • • •

School-level education Polytechnic diplomas Bachelor’s degrees Post-graduate diplomas

Non-formal

• •

Industrial qualification (local and global) On-the-job training

4.1

Formal IT education

More than 4.6 million4 students are studying in different schools in Nepal. Schools in 35 districts offer computer studies as an optional subject and about 8,000 students appearing in the School Leaving Certificate (SLC) examination choose computer studies as an elective subject. About 200 high schools all over Nepal offer computer studies as an optional subject or an extracurricular activity. Likewise, about forty 10+2 schools offer computer education as an extracurricular activity. Fewer than ten 10+2 schools offer computer courses as an optional subject. High school graduates have limited opportunities to study computer engineering and computer science in higher levels in Nepal. Although four universities have already started ICT-related graduate programmes in computer engineering/application and computer science, the number of students graduating remain below 100 per year.

Gaurab Raj Upadhaya, Himal Khabar Patrika Jan 2000 Educational Statistics of Nepal at a Glance, Ministry of Education (MOE) ,1997

1, 2, and 3 4

90


The Institute of Engineering of TU, Nepal’s first engineering institute, has been producing an increasing number of graduates in subjects like electrical and electronics in academic programmes at the Polytechnic and Bachelor’s levels for some time. The institute began offering a B. E. programme in computer engineering in 1999. The private sector participation in ICT-related engineering programmes got underway following the establishment of Kathmandu University, which became the first private university in Nepal to introduce a B.E. (Bachelor of Engineering) in computer engineering. Kathmandu University has turned out about 50 computer engineering graduates to date. It is also producing ICT-related engineering graduates in fields other than computer engineering. Pokhara University also offers Bachelor’s-level courses in computer engineering and electronics engineering. As such, the scope for studying computer science at the Bachelor’s level is growing in Nepal. In addition, two private and one public college affiliated to TU offer a Bachelor’s degree in computer science. More than 60 students are expected to graduate this first year. Similarly, Purwanchal University (Eastern University) and its affiliates introduced a Bachelor’s degree in computer application in 1999. Affiliated campuses of Kathmandu University also offer Bachelor’s level courses in IT. There is presently no opportunity to continue higher ICT education in Nepal, however, except for the PGDCA course offered by Nepal Engineering College (NEC) for students with Bachelor’s degrees in any discipline. Tribhuvan University plans to introduce a Master’s and a PhD programme in computer education in the near future. Computer education, the backbone of a robust ICT sector, is thus gaining momentum in Nepal. The private sector has been active in responding to market demands by launching all sorts of training programme packages, mostly in urban areas. These programmes are generally oriented towards vocational skills, whereas school and university programmes aim to strengthen both theoretical and practical knowledge of ICT and are thus knowledgeintensive. The contributions made by the private and public sectors in computer education are reflected in the manpower development shown below.

• • •

Lower level - ~ 7,000 short term-courses Middle level - ~ 3,000 intermediate + computer application Higher Level - ~1,000 Bachelor’s and above

Total number of IT operators produced in Nepal until now Formal sector Polytechnic graduates in Energy and Electronics from the Institute of Engineering (IOE) of Tribhuvan University (TU)

600

Bachelor’s of Engineering (BE) graduates in E and E from the IOE of TU 86 BE graduate in electronics from Kathmandu University (KU)

24

BE graduates in Computer Engineering (CE) from KU

24

Non-formal sector National Computer Centre until 1998

More than 10,000

Private training institutes

More than 50,000 Chapter 4 — Human Resource Development

91

The number of IT students studying in foreign countries is not available. Most of the manpower produced by the National Computer Centre (NCC) is computer literate. 4.2

Expected production of IT manpower from formal education sector by 2003 5 Institution

IOE KU TU affiliates Pokhara Univ. and its affiliates

Polytech E&E 550

Pur. Univ. and its affiliates

B.E. CE 160 100 150 150

Electrical 160

Electronics 120 100 150 150

Other Bachelor’s Postgraduate Courses

250 Com. Sc. 90 Diplomas in Com. Apl. Graduates 250 Com. Apl.

In addition the number of 10+2 and SLC graduates opting for computer education is estimated to be around 2,000 and 30,000 respectively. *

In addition to the in-country programme of ICT, a large number of Nepalese students are studying computer engineering and computer science and related subjects in foreign countries. Basically, the computer professionals working in Nepal received advanced training in countries such as India, Russia, Thailand, and the Philippines. A large number of Nepalese (about 3,000-4,0006) study computer science and computer engineering in India. The number of Nepalese studying computer science in the US, the UK, and Australia is increasing every year. The enrolment of Nepalese is believed to have doubled in the last two years in the US. In 1997, undergraduates in engineering, mathematics, and computer science numbered 937 in the US, while graduate students numbered 4637. 4.3

IT training

Computer training in Nepal is relatively recent. With the dismantling of the National Computer Centre (NCC) in 1998, there has been no computer training institute in the government sector. HMG seeks to bring all vocational training programmes, including computer training, under the umbrella of the Centre for Technical Education and Vocational Training (CTEVT), which offers its own computer training programme. Although HMG initiated IT training in Nepal, the majority of IT personnel have been trained by private institutes, which have proved to be the backbone of human resource development initiatives in the IT sector. There are about 1,000 computer-training institutes in Nepal, including five companies which are in collaboration or have franchise arrangements with foreign IT training agencies. Online test facilities and distance learning programmes are also available. 5 6 7

92

Approximation only IT for Nepal’s development in the 21st century-Bijaya K. Shrestha and Gajendra Bora, 1999. Institute of International Education, USA


5

REGIONAL HRD

SITUATION AND TREND

The IT scene in the developing countries is not uniform. India has a high growth rate of IT industries in consonance with the size of its domestic market. In Southeast Asia, Malaysia and Singapore have vibrant IT industries matching their rapid industrial growth in the last decade. Nepal suffers from a pittance of resources, a limited domestic market, and a small economy. India, Malaysia, and Singapore have developed indigenous IT industries with a vast network of computer installations. They are able to assemble PCs indigenously so that these machines are affordable and accessible. They have emerged as newly industrialised nations for which the main revenue comes from hardware and software exports. 5.1

India

India’s scientific manpower is among the largest in the world. More than 1,670 educational institutes train about 55,000 students annually. The number of IT professionals in India was 140,000 in 1995. Private institutions are still carrying out most of the training programmes in IT. The Indian Government introduced the concept of providing free Internet access to students. It launched a pilot project named CLASS for schools in 1983. Computer education is disseminated through TV, the Internet, multimedia, and formal classes. The country earns more than US$2.5 billion per year from software export. Cities like Bangalore and Hyderabad have become the silicon valleys of India. No of IT professionals in India8

5.2

Degree/Diploma

Number

PhD

95

MTech

2,050

BTech

14,060

MSc

2,250

PG Diploma

2,700

Diploma

16,200

BSc.

2.600

ITI/Certificate

15,000

Malaysia

Malaysia has given topmost priority to IT education, with a yearly enrolment of IT students at universities expected to increase by 15-20%. The number of IT graduates in 1998 was 1,500. A multimedia university has been set up to educate more than 4,000 students per year by 2001. It has developed a special IT city named Cyberjaya and launched a multimedia corridor.

8

National Association of Software Service Companies (NASSCOM) 1995

Chapter 4 — Human Resource Development

93

Nearly 75% of the training is undertaken by the private sector, which is encouraged to consider national requirements through incentives such as tax and customs’ exemption in the import of multimedia equipment. 1998-2005 IT Human Resources (Supply-Demand) of Malaysia9 Profile

Supply

Demand

Tech support

32,500

34,500

Programmer

2,000

22,500

43,000

26,000

500

10,500

26,000

14,500

104,000

108,000

Bus/Sys analyst Software (Master’s) System and hardware engineer Total 5.3

Singapore

In 1997, the Singapore Government commissioned an IT Education Master Plan which stressed that IT should be fully integrated into the education curricula. It set ambitious targets such as:

• • • •

all students must have hands-on usage of computers for 30% of their curricular time; a 2:1 ratio of students to computers must be maintained; all schools in Singapore will adopt IT usage to plan, teach, and assess academic lessons; and the estimated investment required to implement the six-year Master Plan is S$2 billion.

Teachers are given grants to buy computers. 5.4

Comparison with the Nepalese situation

According to the World Indicator of Development of 1998, Nepal’s public expenditure in education as a percentage of Gross national Product (GNP) is the lowest in South and Southeast Asia. Nepal spends 2.9% of its GNP (1995), whereas countries in the region have invested more than 3.5% of their GNP in the field (see table below). Scientists and Engineers in R and D10 Country India

10

94

Public expenditure in education,% of GNP 1995

1,45,111

3.5

506

2.9

Malaysia

1827

5.3

Thailand

10553

4.2

Pakistan

7398

Nepal

9

Number

N. A.

UNDP Report 1999 Source: World Indicator of Development 1998


The number strength of scientists and engineers involved in RandD is the lowest in Nepal. It stands dismally low at 506, whereas India has the largest number (145,111) of scientists and engineers involved in RandD. Thailand and Pakistan have 10,553 and 7,398 scientists and technologists, respectively. Even though the manpower situation is not uniform in the region, these countries have a high growth rate of IT industries. There is rapid industrial growth in Singapore and Malaysia but unsatisfactory growth in Nepal, which is landlocked, poor in natural resources, and has a limited domestic market. Nepal’s small economy and its inadequate and ill-prepared manpower does not even fulfil the demand of its internal IT market, whereas India, Singapore, and Malaysia have well-developed IT capabilities for assembling PCs and developing software and have earned substantial amounts of foreign currency from IT-related exports. Nepal only recently began assembling PCs and making forays into the development of computer software applications. While countries in the region have given topmost priority to IT education and IT industries, Nepal is still in the stage of defining its aims and objectives and formulating a comprehensive national policy and strategy for the ICT sector. Whatever Nepal has achieved has come as a result of the awareness created by the private sector. It should be remembered that India, Singapore, and Malaysia began using IT tools and applications in the 80s, the same time Nepal did. Compared to their progress, Nepal’s has been modest. That is said without undermining the contribution made by the NCC, which trained more than 10,000 persons in various areas of IT. The dissolution of the Centre undoubtedly affected the HRD situation. Although the private sector has taken some initiatives, it is up to His Majesty’s Government to develop manpower and set up IT industries. A glance at the IT programme in India and Malaysia reveals that private institutions are carrying out the major task of IT training and human resource development. Such private participation in delivering quality IT training could be possible in Nepal too, with the right conditions for growth and quality. Countries like India, Pakistan, and the Philippines have established information and documentation centres to provide the latest information on science and technology. Organisations such as INSDOC (Indian National Scientific and Documentation Centre), NSTIS (National Science and Technology Information Centre), PASTIC (Pakistan National Science and Technology Information Centre), and the NSTII (National Science and Technology Information Institute) of the Philippines have been in operation for several years. India even has a separate Ministry of Information Technology. These countries clearly place importance in the IT sector, with an emphasis on developing human resources. Nepal’s response has so far been extremely modest. It only has a small advisory committee in the NPC called the “National Committee on Information Technology.” In view of the progress made by others in the region, there is a need to take appropriate measures for the rapid development of human resources in Nepal. The acute shortage of manpower can be solved only through the combined efforts of HMG and the private sector, with the help of regional and international cooperation. The responsibilities of these three sectors should be as follow. i) HMG

•

Take appropriate steps in creating a conducive environment for the development of the IT sector by formulating a national IT policy - focusing on the development of human resources - that seeks to promote the sector, introduce and implement cyber laws, and embark on e-governance initiatives. Chapter 4 — Human Resource Development

95

• • • •

Build the capacity of educational institutions to produce quality manpower in the ICT field. Coordinate and facilitate ICT-related technology transfer initiatives. Introduce long-term and short-term IT plans. Establish National Information and Communication Technology Board (NICTB) and National Centre for Communication and information Technology (NACIT).

ii) Private institutions

• • • • •

Sustain efforts to provide quality-controlled and skill-oriented IT education with curricula designed to keep up with state-of-the-art development in information and communication technologies. Establish software export industry. Develop and maintain IT culture. Support the government in its IT endeavours. Carry out activities in conformity with the national ICT policy and cyber laws.

iii) International agencies

• • •

Provide support in the field of human resource development in the ICT sector. Provide consultative and advisory support. Help establish the IT industry in collaboration with Nepalese counterparts.

6

I SSUES

TO BE ADDRESSED IN THE NATIONAL

HRD

INITIATIVE IN THE

ICT

SECTOR

6.1

Constraints faced in the development of human resources in the IT domain

Nepal is a landlocked country with rugged mountainous terrain, the northern belt of which lacks modern communication facilities. Most rural areas have no access to electricity, telephone, computers, TV, and motorable roads. The public schools are in a pitiable condition and lack of physical facilities and educational materials. There are huge disparities in access to infrastructure between the rural and urban areas. The programme of His Majesty’s Government in providing universal basic and primary education has been of limited success. About 30% of all school-going children are deprived of the opportunity of primary education because of extreme poverty. Parents cannot afford to send their children to school; school attendance is seasonal. The state of education in rural Nepal, especially in the hills and mountains, in no way compares with that in urban areas. The striking disparities between urban and rural areas is also reflected in training opportunities in the IT sector, which is predominantly in urban areas. This poses the danger of creating a serious ‘digital divide’ between those who have access to ICT technologies and those that do not. Any serious attempt to develop a HRD programme in the IT domain must take account of these realities. 6.1.1

National ICT policy

The formulation of a national ICT policy should receive first priority before embarking on any major programmes in ICT. The information and communication technology policy should be implemented with appropriate plans of action that take into account short-term, mid-term, and long-term visions. 96


6.1.2

Quality control in IT training and education

The education and training in ICT imparted so far have not taken into account the sector’s unexpected growth. The curricula do not adequately respond to international market needs, though a few good quality training outfits have emerged in recent years. Most training and education programmes are run by private sector institutions and are usually skill oriented. Although these institutions of the non-formal education sector are involved in human resource development, the quality, curricula, and effectiveness of most of their programmes are questionable. Given that Nepalese schools and universities only recently introduced IT education, and the critical importance of HRD initiatives in the ICT domain, there is an urgent need for quality control mechanisms to be placed on the education and training these private institutions provide. One serious impediment is the dearth of qualified, skilled, and motivated computer teachers and instructors. It is in the country’s interest to ensure that quality is maintained in the activities for both formal and non-formal human resource development. 6.1.3

Formal and non-formal IT education

The information technology educational packages offered by schools, campuses, and universities attempt to balance theoretical knowledge and practical skills, whereas the programmes of private institutions offer little theory. There are a variety of skill oriented programmes offered commercially, especially in urban areas. Streamlining such training programmes based on evolving technologies and resultant market demand is the need of the day. This can be accomplished by designing curricula that answer the industry’s needs. In spite of the growing interest of students in computer studies, many schools still encounter difficulties in conducting these courses. This may be due mostly to a lack of resources and lack of experienced and adequately qualified instructors. 6.1.4

Development of the IT industry

Whatever its potential, Nepal’s infant IT industry needs a concerted and coordinated effort to achieve an acceptable growth rate and play an important role in the national economy. The country may be landlocked, but it has a satisfactory communication infrastructure in place, albeit with considerable room for improvement in scope and outreach. There is improvement in human resources as each year produces a fresh crop of graduates and professionals with advanced training. The number of qualified and skilled professionals in the IT sector, modest at present, is increasing. The competitive labour costs and willingness shown by the private sector to invest liberally in this field are favourable for the growth of IT. The industry must aim to cater to the need of both internal and external markets. The presence of a significant number of qualified IT professionals could help to attract foreign investment, hence the need to focus on developing human resources. A realistic human resource development programme needs a time-bound plan of action for the development of an IT industry. 6.1.5

Indigenous capacity-building

Even though the younger generation has, in recent years, shown a marked interest in IT, sustained efforts must be made to continue attracting young talent to the field. A successful IT HRD initiative depends on many factors, foremost among which is a vibrant IT industry. This is because training and education must translate into jobs or entrepreneurial opportunities for them to retain their relevance. Chapter 4 — Human Resource Development

97

As knowledge and skills continue to drive the world’s economies, a concerted effort is needed to attract students to science and technology in general and to IT in particular. A conducive atmosphere and incentives for the younger generation can help build indigenous capacity in IT. 6.1.6

Information technology for distance education

Apart from undertaking initiatives that aim to foster education and training exclusively in the ICT sector, efforts should also be made to exploit the potential of ICT in the effective delivery of the general education sector. Distance education in Nepal has until now been limited to radio education. With the availability of advanced technology, education via the Intranet and Internet should be possible. Internet application, such as tele-learning, has been introduced in neighbouring countries, making it technically feasible to bring education to the doorstep of the people. Given Nepal’s mountainous terrain and its lack of qualified teachers, the country could benefit enormously from distance education reaching every nook and corner. Ideally, each district of Nepal should be linked to a central V-SAT. Using Intranet or the metropolitan area network system, computers could be used as TV for teleteaching, tele-learning, and demonstration in a variety of educational packages. 6.1.7

Computer literacy programme for all

Nepal’s literacy rate may be increasing yearly, but even most educated people are not computer literate. A majority of the graduates in social sciences and other disciplines do not possess even basic IT skills as computer literacy does not feature in the main curricula. Computer literacy must be promoted through programmes to make Nepal 100% computer literate by 2020. It should be launched as a national campaign once the infrastructure is ready. The availability of low-cost PCs and the low-cost installation of Internet connection and telephone lines are the basic requirements, along with a large number of available IT trainers and teachers. Such a programme would accelerate all-round development and generate spin-off benefits. 6.1.8

IT-based research and development

Research and development activities in IT are yet to begin as Nepal is in the initial stages of computerisation. Computer education remains an optional subject in schools. University-level computer science and computer engineering programmes were introduced only three years ago. Research and development activities may begin once the Master’s and PhD programmes are launched. The proposed ‘Centre of Excellence’ should incorporate R and D in IT. 6.1.9

Establishment of national and regional HRD centres

In order to have a balanced and equitable distribution of IT opportunities for the Nepalese, a network of human resource development centres throughout the country is needed. The establishment of such a network would give students, teachers, and government employees, as well as the private sector, access to different training packages. This would help to bring Nepal’s IT capacity up to the regional level. 6.1.10

Manpower requirements in ICT

Nepal’s manpower requirements in ICT are varied. There is a great demand for skilled system designers, software developers, system engineers, communication and network 98


engineers, data managers, data supervisors, computer teachers, and skilled computer operators. A serious shortfall is the lack of skilled teachers in computer education. Nepal’s limited forays into software development have been promising. The prospects for exporting computer software are good, but certain conditions are needed for it to materialise. If this did develop, it would create self-employment and earn foreign currency for national development. At a time when there is such a demand for various types of manpower, the state of manpower production is rather gloomy. The number of university graduates in computer-related subjects in Nepal each year is far less than required. The number of seats allocated by universities and campuses in IT-related engineering and computer science streams is also less than the number of applicants. The government should do everything in its power to encourage and facilitate private sector initiatives for human resource development. 6.1.11

Financial constraints

Presently, import tax is levied on IT educational equipment and tools such as PCs and accessories. VAT is also levied on the data communication services. Although the government raises revenue from taxes on IT, HMG’s investment in HRD initiatives on the IT front is almost insignificant. Besides, the grants provided to schools are seldom invested in computer education. Such insignificant investments have hardly helped the cause of IT education in Nepal. Also, the lack of proper mechanisms for bank loans with low interest rates for education hampers progress. Because of the lack of funds, Nepalese IT professionals and entrepreneurs are not able to respond to the need of national and international markets. Apart from hindering IT’s growth, the persistence of the situation is certain to cause a brain drain. It is accepted that investment in education will not yield immediate and observable dividends. Thus, balancing investment in IT HRD, in the wake of other pressing demands, becomes a key issue. 7

NATIONAL

VISION

A review of the nation and region’s human resource development in the ICT sector, as well as the identification of national issues, leads us to a national vision for the next 20 years. The information age began in the middle of the 20th century and has been the focus of interest for many developed and developing nations. Its importance is being all the more realised in the beginning of the new millennium. Nepal should promote the IT sector so that it does not lag too far behind. Its efforts should be directed towards capacity building in the IT domain for all-round national development. Human capital in digital age: In an otherwise resource-scarce country, Nepal’s human resources can become the means to economic prosperity. Human resources can become a tremendous asset in the digital age. Accordingly, the country should give the highest priority to investing in developing human capital. The rapidly growing ICT industry worldwide is expected to grow further in the days to come. A dearth of IT professionals, especially in the developing countries, suggests that corrective measures should be taken to remedy the situation. An ample supply of IT professionals in Nepal could encourage foreign investment in this sector. Consequently, Nepal’s ICT HRD strategy should not only respond to the country’s requirements but also try to capitalise on the requirements for ICT manpower overseas. The anticipated volume of


99

the global IT industry could be US$ 50 trillion11 by 2008. That would mean a huge demand for IT manpower in the coming years. Even now, the demand for skilled manpower in IT is very high. The development of human resources could enable Nepal to increase its annual export of IT wares substantially in 10 to 15 years. A model agency for the information age: The successful adoption of ICT as a major driving force for human resource development depends on time-bound strategic planning and the provision of various facilitative mechanisms at the national level. It is, therefore, recommended that a national-level IT apex body under the Chairmanship of the Prime Minister be constituted. The ICT strategy should be developed in accordance with changes in education, technology, and society and should promote opportunities for all Nepalese to benefit from the information and communication technology revolution. 8

PROGRAMMES

8.1

Present state of education in Nepal

TO BE OFFERED FOR HUMAN RESOURCE DEVELOPMENT IN

ICT

Before suggesting programmes for human resource development in information technology, it may be worthwhile to consider the structure of our current education system and the number of teachers and students that may be willing to acquire knowledge in IT. The education system of Nepal can be stratified into (i) pre-primary, (ii) basic and primary, (iii) lower secondary (6-7), (iv) secondary (8-10), (v) higher secondary (11-12), and the tertiary level consisting of Bachelor’s, Master’s and PhD programmes. Besides these programmes in formal education, the Ministry of Education and Culture has launched several other non-formal programmes such as girls’ education, education for the disabled, literacy programme, distance education, and so forth. The number of teaching institutions, teachers and students at the various levels are as follows* Levels of education

Tertiary education

Pre-primary Basic & primary Lower secondary Secondary Higher secondary TU Kath. Univ. Pur. Univ.

*

Pok. Univ.

No. of Schools/ No. of students No. of teachers campuses NA NA NA 23885 3587665 91878 6617 842762 22095 3624 375076 16677 504 29021 N. A. 216 122957 5913 14 2407 144 4 71 16 8

142

7

Agency involved Pvt. HMG + Pvt. HMG + Pvt. HMG + Pvt. HMG + Pvt. TU Kath. Univ. (Pvt.) Pvt. Pvt.

Sources

Ÿ School: Educational Statistics of Nepal at a Glance, 1998; HMG, MOE, Education Department, Sanothimi

Ÿ 10 plus 2: Bulletin (Sampresion) Dec 1999 results of HSEB examination 2056, Sanothimi Ÿ Tribhuvan University: TU in data 2000, Planning Division, TU Ÿ Annual Report 1998/99, University Grants’ Commission, Kathmandu 11

100

“Policy and Strategy for Telecommunication in Nepal,” World Bank/Ministry of Information and Communication/Nepal Telecommunication Authority, 1999


Looking at these numbers of teachers and students, we realise the complexity and magnitude of the task we intend to undertake in IT manpower production. At present, our limited resources can only train and educate a handful of aspirants. We should strive to balance what is available with what is required for national development. Considering the disparities between rural and urban infrastructure and the difficult accessibility of the mountain terrain, we should launch a programme of IT education and training on a phase-wise basis. The level of IT manpower available (see National Scenario) is far below the national requirement. Nepal is expected to need different levels of manpower in large numbers. According to one projection, the manpower requirement for the next 5 years is the following. 12

• • •

Lower level - ~ 3,000 per year Middle level - ~2,000 per year Higher Level - ~ 300 per year

These figures are based on the enrolment of students in computer education at different educational levels. Clearly, there is presently a dearth of skilled teachers to run the computer education programme in schools and campuses. Thus, it is essential to design the human resource development programme in ICT with clear objectives and programme packages. There should be provision for the integration of IT in both formal and non-formal streams of education. An approach integrating both the formal and non-formal sectors of IT education should be developed and adopted. The following is a set of tentative objectives and programme packages for different educational levels. The proposed programmes merely suggest a minimum programme package for different levels of education. 8.2

Proposed programmes for IT education

8.2.1

Primary schools (1-5)

Objectives

•

To provide young children with rudimentary exposure to computers by designing lessons that are enjoyable and enhance their creativity

Programmes Computer games and creativity tools only. The computer should be treated as one of the basic building blocks of education. It should be introduced as a base for learning. It should become as essential as the alphabet and the multiplication table. At this level, computers should be useful supplementary teaching/learning tools and the use of multimedia would be highly beneficial. 8.2.2

Lower secondary schools (6-7)

Objectives

•

To familiarise students with computer fundamentals and computer languages like logo programming

12

Based on discussions with experts.


101

Programmes Computer introduction and programming basics 8.2.3

Secondary schools (8-10)

Objectives

• •

To teach the basics of computer, the Internet, and computer language (for example, QBASIC) To prepare lower-level manpower in IT

Programmes Computer basics + QBASIC programming Students at lower secondary and secondary levels should be introduced to the development of computer science and its demonstrated benefits. This will help students gain confidence in the technology. ICT should be introduced as a logical discipline. Students can be introduced to the concept of programming and how computers can be used to solve problems. They must be encouraged to use computers to improve their knowledge of health science, geography, mathematics, and statistics. 8.2.4

Higher secondary schools (11-12)

Objectives

• • •

To develop the capacity for writing programmes in high-level programming languages like Visual BASIC and C, C++ To provide basic knowledge of Internet technologies To prepare middle-level manpower

Programmes Computer fundamentals, Visual BASIC programming At this level, ICT should be treated more as a problem-solving tool than as office automation equipment. Students should be encouraged to learn new trends in ICT and its use in solving problems. The communication aspects of ICT should be emphasised. Students should also become familiar with the future direction of ICT, both at national and international levels, and its influence on career development. As a diversification from the mainstream of IT education, a ‘Computer Diploma’ course may be designed for the 10+2 or intermediate levels. The package of IT education at this level is envisioned to be mostly skills-oriented. The objectives and programmes for the diploma are as follow. 8.2.5

Computer diplomas

(The minimum entry requirement is 10+2 or certificate level.)

102


Objectives

• •

To enable students coming from different disciplines to acquire advanced skills in software development, computer operations, data processing, networking, systems’ analysis, communication technology, and hardware maintenance To prepare middle-level operators

Programmes Programming language, systems’ analysis, design and development, Internet technologies, computer networking. (A variety of 6-month to 2-year programmes may be offered.) 8.2.6

Bachelor’s level (3-4 yrs)

Objectives

• • • •

To provide knowledge-based skills in the ratio of 60% knowledge and 40% skills in IT for mainstream students To provide knowledge and skills in an equal ratio to students coming from the social sciences or pure science or management as an optional course To provide skill-oriented knowledge of IT (70% skills : 30% knowledge) to students in the social sciences or pure sciences or other streams To produce higher-level manpower.

Programmes

•

Introduction to the fundamentals of computer science, including hardware concepts, hands-on exercises involving hardware assembly Systems’ Design Kits, general application software packages, statistical packages, Management Information System (MIS) concepts, information systems’ analysis and design, Internet technologies including e-commerce, computer programming, operating systems, introduction to spatial data analysis tools like GIS, data structure analysis, simulation and modelling, numerical methods, computer graphics, object-oriented programming, networking, project works in the area of MIS, systems’ design and software development, artificial intelligence, and introduction to neural networks, and so on.

8.2.7

Master’s level (2 yrs)

Objectives

• • • •

To provide advanced knowledge of ICT and skills in the ratio of 60% knowledge and 40% skills for mainstream students To provide advanced knowledge and skills in an equal ratio to students coming from the social sciences or pure science or management or other streams as an optional course To provide skill-oriented advanced knowledge of IT in the ratio of 70% skills and 30% knowledge to students of the social sciences or pure sciences or other streams To produce higher-level manpower in IT


103

Programmes

• • •

Artificial intelligence, neural networks, database systems, expert systems, software and systems’ development, Internet technologies, structured programming languages, and IT project work Operating systems and platforms, database management systems, special packages in multimedia and Internet technologies Computer fundamentals, systems’ analysis and design, database management systems, operating systems, packages, project work, Internet, multimedia, and MIS

8.2.8

PhD level (3-4 yrs)

Objectives

• • •

To carry out research and development activities in IT To pursue innovative and creative work in IT To produce the highest level of broad knowledge-based and skilled manpower in IT

Programmes Advanced research in ICT and its applications Apart from the recommendations made above, the IT skill-based training packages are envisaged for incorporation as optional courses for different educational levels. 9

I NSTITUTIONAL

SET-UP FOR COORDINATING

HRD

INITIATIVES IN THE

IT

SECTOR

To implement the plans and programmes of human resource development in the ICT sector effectively, a formal institutional arrangement is essential. It will take the coordinated efforts of several units of the organisational structure to bring about a successful programme. The ICT HRD initiatives will thus be coordinated by the proposed National Centre for Information Technology (NACIT), operating under the proposed National Information and Communication Technology Board (NICTB). Although the proposed structure is designed to implement the plans and programmes of ICT HRD, the same institutional structure may also, with minor modification, serve the needs of other aspects of development of the ICT sector. Below is the organisational structure of the proposed institution. 10

THE

10.1

National Information and Communication Technology Board (NICTB)

MODALITY AND FUNCTIONS OF DIFFERENT ORGANISATIONAL UNITS

This Board will be the apex body that provides broad guidelines and directives for human resource development in the ICT sector. It has been proposed that the Board be constituted under the Chairmanship of the Prime Minister. It is envisaged as having representatives from the NPC, various ministries of HMG, universities, professional organisations, training institutes, industrial and business sectors, experts and other relevant agencies.

104



105

106


10.2

Ministry of Science and Technology (MOST)

The Ministry of Science and Technology will act as a line ministry between NICTB and the proposed National Centre for Information Technology (NACIT). 10.3

National Centre for Information Technology (NACIT)

The Centre, according to the proposal, will be the backbone of human resource development in the ICT sector. It will function as an autonomous body and be a focal point for all sorts of macro-level activities to be pursued in the ICT sector. It will also act as a watchdog over the implementation, quality control, and marketing aspects of the ICT sector. It will coordinate, monitor, evaluate, and adopt appropriate measures for the development of human resources in addition to formulating a national policy on ICT through the large network of its departments. As a think tank in the ICT sector, it will continually provide guidelines. It is envisaged to be self-sustaining in 10 years. Some of its functions have been proposed as follow.

• • • • • • • • • • • • • • • •

Formulation and periodic review of a national policy on ICT Strategy development for the implementation of the programme on HRD in IT Curriculum development for formal as well as non-formal education Standardisation of the programme and certification Development of evaluation schemes and testing Monitoring and supervision Providing linkages, coordination, and accreditation to IT firms Promotional activities of ICT Research and development activities in ICT and quality control Popularisation of ICT through various electronic and print media Establishment and management aspects of IT Park Financial and marketing aspects of ICT Establishment of a virtual institution Proliferation of ICT for regional development Distance education and remote learning via Internet applications Providing incentives (rewards, fellowships, soft bank loans, etc).

The functions enumerated above are expected to be carried out by various units and departments of NACIT in cooperation with various implementing agencies of HMG, universities, business circles, banks, financial institutions, and other private organisations. 10.4 10.4.1

Proposed responsibilities of different units of NACIT Policy planning and support unit

This unit is expected to serve as the backbone of the entire ICT programme with an emphasis on human resource development. The function of this unit under NACIT will be to prepare a draft policy document that clearly reflects the national goals and aspirations, and it will review policy implications periodically. It will monitor the plans and programmes needed to carry out different activities in the ICT sector to ensure maximum efficiency and effectiveness. It will provide logistic support based on needs. Chapter 4 — Human Resource Development

107

10.4.2

Curricula development and recognition unit

This unit will be responsible for bringing together academicians, policy-makers, and stakeholders for the purpose of designing national curricula in ICT HRD for all levels of education. It will see that IT is integrated into the curricula of various disciplines, including a provision for specialised study in IT at the university level. The freedom that universities are exercising in framing curricula will not be curtailed, but smooth linkage and coordination will be established to maintain uniformity among universities. The unit will recommend internationally recognised standards at different levels of education. It will develop the criteria for the recognition of IT activities. 10.4.3

Training and cyber lab

This unit will be entrusted with the task of capacity development, training and research. It will work towards setting up mobile training and a laboratory in addition to in-house programmes. The unit will also organise training equipment, books, and other training materials. Special training courses will be offered to schools, business people, and others around the country. In-house programmes of training will be carried out throughout the year. Result-oriented research activity in various aspects of IT will be encouraged in the form of time-bound projects. 10.4.4

R and D units

This unit will serve as the brain of the entire ICT programme. Its main objective is to maintain quality in IT products and services. The unit will also help to promote and encourage the development of local talent, a crucial factor in building indigenous capacities in the ICT sector. 10.4.5

Distance education - virtual and open university unit

This unit will focus on the distance education programme with a view to imparting integrated IT education to different target groups. The need for continuous learning requires new strategies. The traditional means of learning and teaching cannot fulfil the needs of universal primary education. The unit will make a concerted effort to introduce IT in all spheres of education and take initiatives to develop human resources in the entire country within the next 20 years. The power of the Internet can be used effectively to achieve this objective. There is a dearth of adequate facilities for teaching and research in Nepal, particularly in the science and engineering sectors. Distance education is an effective means of imparting knowledge and skills to overcome such shortcomings. The significance of distance education or the Open University will increase as the Internet gains popularity in Nepal. Most importantly, the Internet offers an immense potential for reducing costs and increasing productivity in education and training. A national virtual university or institute should be set up to take advantage of distance education in modern times. This will provide an impetus to the higher IT education sector as well. It will help decrease university enrolment and improve the quality of education. The virtual institution is conceived as a centre for higher studies in IT in the 21st century. The central institute will be hooked up to all regional documentation centres within a realistic frame of time.

108


10.4.6

Promotion and publication unit

This unit will have the responsibility of popularising IT through the publication of books, journals, bulletins, and software. It will organise seminars, workshops, and conferences to promote awareness of the importance of IT education and related HRD initiatives. 10.4.7

Supervision, monitoring and evaluation unit

The unit will undertake the task of supervising and monitoring IT-related activities. It will act as a watchdog and suggest concrete steps for improvements. It will see that quality is not compromised in any aspects of IT. Further, the unit will carry out periodic evaluation of IT programmes of manpower development. It will recommend appropriate rewards and incentives based on subjective and objective evaluations. It will recommend accreditation after evaluating the on-going programmes. 10.4.8

Linkage and coordination unit

This unit will be entrusted with the responsibility of establishing linkages at the national, regional, and international levels. It will coordinate the activities of HMG, semi-government organisations, and autonomous bodies and private sectors. It will see that duplication of efforts is avoided. 10.4.9

Incentive and reward unit

This unit will provide incentives in the form of fellowships, scholarships, grants, and soft loans to the people engaged in IT-related activities. It will provide an opportunity for participation in national, regional, and international seminars and workshops and conferences. Rewards, prizes, and awards will be instituted to encourage creativity and innovation in the IT sector. 10.4.10 Testing certification and standardisation unit This unit will carry out nation-wide testing and certification of all non-formal education and training programmes. It will develop the criteria for testing and certification. Skill oriented programmes run by private entrepreneurs, especially, will be tested for certification. The unit will also carry out standardisation of IT activities. 10.4.11 IT park The IT Park is envisaged as a vibrant centre of the country’s IT activities. The establishment of an IT Park will make it feasible to direct resources to a cluster of IT industries, thereby ensuring optimisation of resources. The objective will be to catalyse the sustained development of the IT sector. The availability of physical amenities and infrastructure is expected to boost research and development work by IT companies. 10.4.12 Media centre This centre will provide information to all relevant organisations and institutions on a variety of issues ranging from policy to technology. It will be a focal point for developments in information and communication technology in the country. Chapter 4 — Human Resource Development

109

10.4.13 Financial unit This unit will be active in fundraising for pursuing activities in the ICT sector. It will motivate business circles, industries, banks, HMG, NRNs, multinationals, and international funding agencies to invest in ICT activities in Nepal. It will promote commercial activities through electronic media. 10.4.14 Centre of IT excellence unit It is proposed that a number of ‘Centres of IT Excellence’ be established throughout Nepal. These centres may be modelled after the Indian Institute of Technology and the Regional Engineering College of India. This unit will link all the centres in the country. 10.4.15 E-governance unit This unit will be entrusted with all the relevant activities of e-governance. 11

RECOMMENDATIONS

11.1

Organisational structure 1. 2.

3.

11.2

Policy and planning 4. 5.

11.3

National policies for the development of human resources in ICT should be formulated. Appropriate strategies and implementation plans should be developed for the realisation of policies in the ICT sector.

Financial 6. 7.

8.

110

A high-level national board, ‘National Information and Communication Technology Board (NICTB)’ should be established under the Chairmanship of the Prime Minister for overall guidance and directives in ICT HRD. An autonomous body, ‘National Centre for Information Technology (NACIT),’ should be established for all-round development of human resources in ICT. This organisation should be developed as a focal point as well as a think tank for ICT. The Ministry of Science and Technology should be designated the role of a coordinating agency between the high-level NICTB and NACIT.

Entrepreneurs, including NRNs, should be offered special privileges and incentives to set up IT educational facilities. Banks and financial Institutions should be encouraged to work out special financing schemes for investment in IT education and training. This fund should be made available to IT HRD institutions and to students opting for IT education at low interest rates. Provision for soft loans from banks and other financial institutions should be made for educational institutions or students opting for IT education. Foreign Direct Investment (FDI) brings efficient technology and management into the mainstream economy. To encourage investment in the country, ‘soft’ infrastructures like the educational system should be made attractive.


9. 10.

11. 12. 13. 14. 11.4

Promotional activities should be organised internationally by Nepalese missions overseas to draw investment by NRNs and others. Tax exemption for IT-related HRD institutions and companies for at least five years No ceiling on investment for IT-related HRD institutions and companies should be imposed. Multinational IT HRD companies should be given freedom to open similar companies in Nepal on the condition that they reinvest up to 25% of their revenue in Nepal. Provision should be made not to levy taxes on computer equipment, accessories, or software resources donated to local academic institutions by national and international bodies and individuals. Participation by the private sector in human resource development in the ICT sector should be encouraged. A large pool of human resources (about 200,000) in the ICT domain should be produced to develop and export software and services worth US$ 1 billion within the next 15 years. Provision for incentives should be made to encourage young talent to join the ICT sector and steps should be taken to stem the brain drain.

Universalisation of IT literacy 15. Steps should be taken to propagate computer literacy and a familiarisation drive targeted at students, teachers, administrators, and stakeholders under the scheme ‘Computers for All’ by the year 2020 should begin. 16. Selected schools and campuses should be developed as Centres of Excellence in the ICT domain and be given the role of model IT centres for regional development. 17. Distance education programmes in ICT should be launched through the Intranet and Internet by 2005. 18. Computer education should be made compulsory in schools and 10+2 programmes by 2020. A national educational network should be instituted based on a modern communication technology that integrates the activities of all HRD institutions. The educational institutions of the country should be integrated in a phasewise manner. A joint venture between the government and industry should be launched for this.

11.5

Curricula 19. Curricula on human resource development in IT should be designed, standardised, and implemented in schools, private training institutes, and universities. 20. Curricula for non-formal education on ICT should be provided via a virtual system of education (Open Universities and the like); it should be standardised and executed. 21. Skill oriented curricula should be introduced as a diversification from the mainstream of IT education for different levels such as SLC (10+2) and Bachelor’s degree. 22. Master’s and PhD-level computer education should be started within the next 5 years. 23. Educational packages for ICT should be tied to national development activities. Chapter 4 — Human Resource Development

111

11.6

Quality control 24. Immediate measures should be taken for maintaining uniformity in the training programmes on ICT imparted by various entrepreneurs. 25. Strict measures should be taken for quality control in training delivery and content.

11.7

Monitoring, coordination and evaluation 26. Monitoring and coordination of the formal as well as non-formal education on ICT should be undertaken along with remedial measures to maintain quality. 27. The present evaluation system should be improved.

11.8. Testing and certification 28. A system of testing and certification should be developed and enforced. 29. Programmes listed as short-term, mid-term, and long-term in the action plans should be implemented. 11.9

Linkages 30. Linkages should be established with the relevant institutions or organisations for exchange of knowledge and skills on ICT at the national, regional, and international levels.

11.10 Role of IT organisations 31. Local IT-related HRD organisations should be encouraged to start innovative work in fulfilling the national objectives of HRD initiatives in the IT domain. 32. All IT companies in the country should be encouraged to set aside 5% of their value-added revenue to support IT education in the form of scholarships and research grants. 33. Professional bodies, such as CAN, Nepal Engineers’ Asociation (NEA), Society of Electronics and Communications of Nepal (SECEN), and Nepal Internet Users’ Group (NIUG) should be invited by HMG and NICTB to play an active role in collaboration with the industry in the process of evolving professional ethics (protection of copyright laws, intellectual property rights, etc) and standards in IT HRD. 11.11 Popularisation of ICT 34. Various types of programmes such as demonstrations, seminars, and workshops should be organised periodically. Electronic as well as print media should be used for the popularisation of ICT skills and knowledge and their development potential. 11.12 Miscellaneous 35. Greater emphasis should be laid on effective and substantive delivery of science and mathematics lessons in school systems as they serve as foundations for learning information and communication technologies. 36. The latest information on ICT should be provided through information centres located on the premises of NACIT and regional model IT centres. 37. Monitoring, supervision, and evaluation of IT-related programmes should be carried out regularly. 112


38. A special programme that seeks to narrow down the digital divide should be formulated and brought to the notice of donors with a view to providing the population living in rural areas with access to ICT. 39. A special educational programme package should be introduced to increase the participation of women in the IT-related HRD sector.

BUDGET

ESTIMATE

The estimated budget for the implementation of the plans and programmes of ICT HRD will be approximately NRs 21 million (US$ 3 million). This amount includes the approximate budget required for building infrastructure, institutional development, and annual expenditure. A 10-15% increase in annual expenditure will be necessary in view of inflation.


113

12. PLANS

114

OF ACTION FOR HUMAN RESOURCE DEVELOPMENT



115

REFERENCES Bidaud, B. and Upadhyaya, R. (1999) IT Strategy for Nepal: Preliminary Assessment and Recommendations, (Draft-), Kathmandu: Asia Pacific Development Information Programme and United Nations Development Programme Government of Nepal (1999) Telecommunication Policy. Kathmandu: Nepal Telecommunications Authority, 1999. Report available at http://www.caninfo.org Government of India (1999) Information Technology Action Plan. Paper available at http:/ /nic.gov.in/it-taskforce.html Government of Bandladesh (1997) Report on export of computer software from Bangladesh, Problems and Prospect, by the committee formed by the Ministry of Commerce, Bangladesh, September 1997. Report available at http://www.bcc.bd Marshal, G. Ruohonen, M. (eds) (1997) Capacity-building for IT in education of developing countries. London/New York: Chapman and Hall Shrestha, B.K. Bora, G. (1999) IT for Nepal’s development in the 21st century. Kathmandu: S and B Tessler, S. Barr, A. (nd) Software R and D strategies of developing countries. Report available at http://www.stanford.edu/group/scip/bib.html#publications WB (1999) Knowledge for Development, World Development Report 1999. Washington DC: The World Bank WB, MoI (1999) Policy and Strategy for Telecommunication in Nepal. World Bank/Ministry of Information and Communication/Nepal Telecommunications Authority, 1999. Report available at http://www.caninfo.org

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Chapter

5

Software Production and Application

1

I NTRODUCTION

Software production and application are key areas of evolving information and communication technologies. This section looks at the whole gamut of software production and application, including issues of human resources and intellectual property rights. For purposes of clarification, definitions of certain terminology are provided. Software Software is any representation of instructions, data, sound, or image recorded in a machine readable, modifiable, and executable form, including its source and/or object codes to be used by computers for different purposes. Software production Software production, for the purpose of the discussions that follow, means the development of packaged software, tailor-made software, and embedded software for both domestic and international markets. It involves sub-processes such as requirement analysis, detailed systems' analysis, system design, coding, testing, documentation, packaging, quality control, and implementation. Both offshore and onshore development and IT consultation have been considered. Software application Software application is defined as any service accomplished by the use of software and the adding of value to the software or information technology. It includes data entry, digitisation, medical transcription, call centres, back-office data processing, and web content development.

The software production industry requires highly skilled human resources – generally IT graduates who must have skills that constantly change with technological development. The software application industry, on the other hand, employs semi-skilled human resources, thus making use of an unemployed, educated labour force that can be trained quickly in the specific application area. Nepal is a developing country with an enormous need for development efforts to meet people’s basic needs. Considerable amounts of foreign currency is needed to buy materials and services from other countries. Nepal cannot isolate itself from current trends and technologies that require even larger investments in foreign currency. Given a situation in which unemployment is increasing even among the educated class, an industry is needed that is able to meet these demands without being affected by the impediments of landlockedness and the unavailability of raw materials. The IT industry presents such a prospect. The Asia Pacific Development Information Programme (APDIP) and the United Nations Development Programme (UNDP) conducted a study and submitted a report, ‘IT Strategy for Nepal, Preliminary Assessment and Recommendations’. The study provides the following reasons why Nepal should proceed in favour of an IT industry.

• • • • • • •

It is the fastest growing segment of the industry. It provides opportunities in Nepal for educated Nepalese. IT is at the core of the industry. Opportunities are created by globalisation. The prospects for the export of carpets, garments and so on are uncertain. There is the demographic challenge of an increase in the unemployed labour force. It provides a window of opportunity.

Nepal should move aggressively to take up blue-collar jobs in this clean and environmentallyfriendly industry. Its low labour costs give Nepal advantages in the IT sector. Given a growing educated and professional class trained in IT, it is timely for Nepal to work out a comprehensive policy framework on software production and application. 2

HISTORICAL

BACKGROUND

Nepal has come a long way since an IBM 1401 was rented by the Central Bureau of Statistics for the 1971 population census. The National Computer Centre (NCC) was established in 1974 to serve the country’s data processing requirements. Although the NCC provided the initial thrust to development of the IT sector in the country, it was not able to change its own role with the changing times. The NCC influenced the inclusion of IT policies in Nepal’s Sixth Plan, but it was not entrusted with the responsibility of implementing those policies. The failure to respond to change and severe resource limitations subsequently rendered the NCC unsustainable and as such it was ultimately dissolved. Private sector companies in the field of software development and application began to emerge on the scene in the ‘80s and experienced growth and popularity in the ‘90s. An American company was established in Kathmandu in 1982 to develop and export software. The company provided about 150 IT professionals with intensive training for a period of 6 months to a year. These professionals worked on software development projects with the help of outside consultants. The software developed was mainly exported to the US for federal government projects. The company was successful until the early ‘90s, when, due 118


to a recession, it failed to secure sufficient contracts from the U.S. It could not survive on the nascent domestic market in the absence of a liberalised economy. In the ‘80s, some IT companies were established in the private sector, with Nepali investments mostly in computer hardware sales and support, training, software development, and data processing. During the ‘90s, Nepal saw the mushrooming of many IT companies whose activities centred on trading in IT products, conducting training programmes in the usage of application software, desktop publishing, web publishing, software development, and consulting. The salient features of most of these companies were their low investments, inadequately skilled human resources, and unfocussed markets. Most government spending on IT in the early days concentrated on the procurement of computer hardware equipment without proper planning and consideration of possible application areas. Most of the decision-makers and policy-makers were not aware of the role of software and application software development. The Nepalese IT industry also failed to convince the government about the potential benefits of leveraging evolving technologies for the development of the country until the mid-90s. It was the success of some regional countries in the IT domain that opened the eyes of the government. HMG took some initiatives, including one to establish an IT Park. This, however, did not fully materialise, primarily due to a lack of bureaucratic will and political stability in the country. The Computer Association of Nepal (CAN), established in early ‘90s, has been the leading institution of the IT industry and IT professionals in Nepal. CAN has lobbied the government to promote the IT sector for a role in the national economy. In 1998 the World Bank conducted a study to assist the Nepal Ministry of Information and Communications (MOIC) and the Nepal Telecommunications Authority (NTA). It set an objective of creating a prosperous and large private IT export industry, potentially the largest export industry in the country, to reach an annual export of US$ 1 billion in 15 - 20 years. In 1999, after a majority government was established, a study was conducted on the IT sector in Nepal with help from UNDP. The draft report of the IT Strategy for Nepal, Preliminary Assessment and Recommendations, is the basis for this paper. 3

CURRENT

TRENDS

The software industry in the world is growing at a rate with which no other industry is able to compete. A study carried out by Business Software Alliance (BSA) suggests that in the U.S. (during 1994 -1998) the software industry grew at a rate of 15.4% per annum, whereas the economy as a whole grew at 5.4% per year. The growth rate of employment in the software industry also nearly doubled. Average annual employment in the industry grew 7.1% between 1990 and 1994 and has been growing at 13.9% per year since 1994. In comparison, the total private industry employment has been growing at 2.5 % per year since 1994. The industry has not stabilised yet as sophisticated and easy-to-use technologies are being invented and implemented every day. The shift of hardware platforms, from proprietary main-frame systems to generic PCs and their cluster, has also led to a greater demand for software development. Change in the paradigm of software development using third generation languages and file systems to Fourth Generation Languages and Relation Database Management Systems, Client-Server Systems, Object Oriented Systems, and Distributed Systems has contributed to the software development and application domain. Many webbased systems are already in use and undergoing significant development. Apart from the Chapter 5 — Software Production and Application

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development of new technologies, the scale of computerisation of all business activities is the key to the software industry’s continuous growth all over the world. According to a study published by Nathan Associates Inc., the average annual wage of core software industry employees is continually growing at the rate of 7.6% per year, rising to US$68,900 per year, which is far higher than the average annual salary in private industry as a whole. The high pay suggests a skills’ gap in the software industry and, hence, a huge demand for software professionals in the U.S. There is a scarcity of skilled IT professionals all over the world, a trend that will continue at least for 10 more years. In the last five years (1994-1999), the Indian IT industry recorded a Compounded Annual Growth Rate (CAGR) of more than 40.5%, almost double the growth rate of the IT industry in many developed countries. The CAGR of India’s software industry revenues in the last five years has been 56.3%, while the CAGR has been 60.71 and 46.05%1 for software export and domestic industry respectively. India’s National Association of Software and Services Companies (NASSCOM) has identified software application or IT-enabled services as another major opportunity for India along with IT software for export. Commercial opportunities of the IT-enabled services are estimated at US$ 75 billion with an annual rate of growth of 20%. According to the NASSCOM projection, IT-enabled services (software application) can employ 1.1 million workers and earn as much as IRs 81,000 Crore (approx. 17.5 billion dollars [american billion]). India’s new action plan thus emphasises the promotion of IT-enabled services and is accordingly providing more incentives and facilities to the software export industry. An international data corporation (IDC) survey estimates that the market of IT-enabled services within Europe will be US$ 129 billion in 2003. 2 India has been quite successful in strengthening its economy with the export of computer software and related services in the last 10 years. Although Nepal and India began to formulate IT policies in the early ‘80s, the Indian IT sector owes most of its initial growth to initiatives taken by the private sector. Encouraged by its phenomenal success, India has set the goal of establishing itself as one of the IT super powers over the next 10 years. The Indian government’s recent actions are extremely result-oriented; they seek to ease the difficulties faced by the industry. It has emphasised the development of a world class information infrastructure, growth of the IT software and services’ industry, and ensuring that the benefits of IT go to all its citizens. India’s Target ITEX – 50 in the action plan states: “With a potential 2 trillion dollar Global IT industry by the year 2008, the policy ambience will be created for the Indian IT industry to target a $ 50 billion annual export of IT Software and IT services (including IT-enabled services) by this year, over a commensurately large domestic IT market spread all over the country.”3 Infrastructure and facilities provided through Software Technology Parks (STP) and Export Processing Zones (EPZ) have had significantly positive impacts on the IT software and services’ export from India. Many countries in the Asia and Pacific region now recognise the importance of a robust ICT sector for competition and growth. Several developing countries in the region have ICT

1 2 3

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www.nasscom.org www.idc.com http://it-taskforce.nic.in/it-taskforce/itintro.htm


plans for the next century. They expect to attract domestic and foreign investments for development, production, and the transfer and application of ICT. The examples of these are: the Three Gold Project of China; Malaysia’s ICT Plan and Vision 2020; the National Information Technology Plan 2000 (NITP 2000 of the Philippines; the Korean Information Infrastructure of the Republic of Korea; Singapore’s IT2000; and Vietnam’s national programme on IT2000. Such plans usually also include national information infrastructure initiatives aimed at sustaining and expanding the competitive advantage of the economies.4 Besides India, Bangladesh, Pakistan, and Sri Lanka also recognise the opportunities generated by a strong software development sector. They have responded accordingly by formulating suitable IT policies for the new millenium. Nepal should also make most out of the opportunities unleashed by the evolving information and communications’ technologies so that it is on a par with other South Asian nations. After initial forays into joint ventures as early as the ‘80s in the IT sector, Nepal has been attracting foreign investment in software production and application since 1997. An American company opened its subsidiary in Nepal and two Japanese Joint Venture (JV) companies are working in GIS (Geographic Information System) applications primarily involving map digitisation work. A few other 100% export-oriented software application companies have been established in IT-enabled services like data entry, medical transcription, and management of call centres. The software application sector seems promising for Nepal, with great potential for growth, given the increasing number of educated and English-speaking professionals, competitive labour costs, and a fairly developed infrastructure for Internet services, at least in Kathmandu. The growing popularity of the Internet has widened the scope of opportunities in the Internet and email connectivity sector and has encouraged a number of ISPs to enter on to the scene. There is a clear need to catalyse the process that will lead to the growth of the software production and application sector in Nepal. This requires, as a first step, appropriate policies on software production and application, with a commitment to implement policies as quickly as possible. The objective is to bring foreign investment, create an environment for domestic investment, increase professional skills and quality, set up sufficient infrastructure, and acquire greater capabilities for marketing and management. 4

AVAILABLE

SERVICES, FACILITIES, SYSTEMS AND RESOURCES IN THE COUNTRY

In the absence of any formal survey undertaken in the information technology sector, it is difficult to quantify and take full stock of the existing system and resources in the country’s IT sector. However, the following facts constitute the basis of discussion.

•

•

4

Four Nepalese universities are offering IT-related academic courses with an annual intake of about 2000 students. Students going out of the country to study IT courses are not included in the above number. The number of colleges offering IT courses is growing every year and so is the number of students taking courses within the country. A number of colleges affiliated to foreign universities are offering IT courses. Private training institutes are now offering long-term professional training courses. Several training institutes in Nepal have been franchised in top-class institutions in India, Singapore, and the UK.

DRPAD Publication – Survey ’99 http://unescap.org/drpad/pub3/box-ch8.htm

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• • • • • • • •

5

Software development and production companies in Nepal have been successful in meeting the national software development demand and do a small volume of software exports. Foreign investment in the software development industry began in 1983. A software company has been established with full U.S. investment and is in successful operation with Nepalese software developers since 1997. The trend of opening up companies offering software application services such as digitisation and medical transcription, especially for export purposes, is growing. There are 12 ISPs that have received the License and 9 ISPs are already up and running very actively. The approximate number of Internet user account-holders is 10,000. The Nepal Telecommunications Authority (NTA) has been established to facilitate privatisation of telecom and communication facilities (ISP, VSAT, Paging, Cellular, WLL and, ultimately, fixed line services). According to a press release by the NTC, all 75 districts have telecommunication infrastructure, and 1,528 VDCs out of 4,000 have PCOs. NTC aims to have at least two telephone lines in each VDC by 2004 A.D. There are 65 institutional and 589 individual members of CAN The number of companies with web designing and hosting facilities is growing and ecommerce application development is starting. KEY

ISSUES

Development of the software production and application sector in the country will depend upon the following key issues. Communication infrastructure Communication infrastructure is one of the main requirements for a robust software production and application industry. So far, the Nepal Telecommunications Corporation (NTC) is the only service provider for fixed telephone and mobile phone line services. Most exchanges operated by the NTC are digital exchanges and state-of-the-art technologies. The NTC has been providing data communication service through voice lines and is thus limited in speed and quality. Telephone lines are still hard to obtain and many IT companies have far less telephone lines than their actual requirements. The NTC has few domestic trunk lines; hence, an inter-city data communication network is very costly and difficult to obtain from the NTC. International VSAT connections are provided by the NTC in chunks of 64KB leased circuits, but this is costly in comparison to services provided by other VSAT service providers. HMG has established the NTA to formulate and implement telecom policies and to introduce private sector participation in the telecom sector. The recent growth in the number of private sector Internet Service Providers (ISPs) and VSAT service providers has become an asset for the IT industry as it will help the export of services from Nepal. The cost of Internet services and VSAT-leased lines for international connections is decreasing and the availability of alternative routes has increased the reliability of international connections. These services are concentrated in Kathmandu Valley only, however. There is an urgent requirement for a high-speed and cost- effective data communication backbone to be spread all over the country (at least to the major urban centres) with the following features.

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• • •

A data communication speed of 2 megabytes per second (Mbps) or more Good reliability (>99.9%) Competitive rates

A second telecommunication license (as proposed in the new policy framework) should improve the situation and accelerate the provision of a broader range of services. Owing to a lack of communication infrastructure outside Kathmandu Valley, the software production and application industry for export purposes will also be concentrated in the valley only. If the same communications’ infrastructure with the same performance, speed, and cost were to be made available elsewhere, the benefits of this industry would be shared by many more. The government must work to provide an affordable and reliable communications’ system, not only to the IT sector but also to organisations to boost the use of IT technology in the country. Legal infrastructure Companies from developed countries will not do business with Nepalese companies until minimum legal provisions are in place. The key components of the legal framework required for the development of the IT Industry should encompass legal and regulatory issues related to intellectual property, trademark, copyright, patent, licensing, and so forth. It is necessary to define laws that will provide legal recognition to intellectual property rights, primarily for the following purposes:

• • •

the protection of Nepalese intellectual capital, international development, and to permit external financial support of IT firms.

In the absence of cyber laws, Nepal will not be able to take advantage of e-commerce to increase its trade within the country and for export purposes. For example, given that voice over the Internet has not been allowed by the NTA, the prospect of establishing call centres with distinct export potential will be hampered. As a proper legal framework is one of the prerequisites for international business development, intellectual property right (IPR) and cyber laws must be drafted, passed in parliament, and enforced as soon as possible. Paper documents are the current basis for any legal recognition. As Nepal moves into the information era, the value of a document must be independent of its media. It is of utmost importance to take steps that create a conducive environment for the development of electronic commerce. Nepalese industries will benefit from the resourcefulness of the Internet for their business development. Educational infrastructure and HRD The number of Nepalese students pursuing university level studies in the ICT domain is on the increase annually, with computer engineering often being the first choice of many engineering students. Although four universities in the country are offering different types and levels of computer courses, the products of these universities are yet to make an impact. Chapter 5 — Software Production and Application

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A majority of students are going overseas to pursue higher studies in computer engineering. Nepal is slowly beginning to develop the critical number of professionals required for a healthy IT industry. Apart from graduate courses, there is a great need for conversion courses so that many unemployed graduates can be used in a relatively short time. The scale of production of ICT graduates from the present universities needs to be increased. Given a nearly unsatiable demand for competent ICT graduates worldwide, the often perceived fear of excessive ICT manpower is simply without basis. Nepal can take advantage of exporting fresh ICT graduates who, in the short-term, can remit foreign currencies and, in the longer term, be the technical and managerial resource for Nepal. There is a strong need for immediate action to increase the number of faculties required by computer departments in universities and colleges. Many private institutions have emerged to cater to diverse training needs in the IT sector. While most training institutions conduct users’ training courses, some companies with the objective of developing high-end skills in the IT field. A few companies have also been established as franchises of Indian or foreign institutions. These training institutes will play a positive role in the growth of the industry if certain mechanisms can be established for the standardisation of course syllabuses and regular monitoring for quality training. This could involve, for example, periodic quality testing of training institutions. There is also a need to define a standard syllabus separately, targeting both the software production and application sector. As far as export potential is concerned, Nepal should focus on software applications, mainly in the IT-enabled service industry, which does not require many highly skilled IT professionals as the software production industry does. The last 2-3 years have seen a beginning of initiatives in this direction. Two companies in the area of spatial data set preparation, mainly data digitisation, have been established under a joint venture with Japanese companies. Another two companies have recently begun to provide medical transcription services to clients overseas, mainly the United States. Other areas for software application could be data entry, web page designing and hosting, back office operation call centres, e-commerce site hosting, and so forth. Policy-making body No agency in the government is as yet solely responsible for looking at the IT sector. If the software production and application sectors are to grow and have an impact on our economy, HMG should establish an institutional body made up of professionals who appreciate the problems faced by the industry, draft suitable policies, and oversee their effective implementation. So far only the National Planning Commission has taken initiatives along these lines. Because there is no permanent, dedicated HMG outfit to look after this sector, no concrete thrust has come from the government. HMG introduced a one-window policy under the Ministry of Industry and Commerce for prospective foreign investors long ago, but the implementation of the policy has not been very effective. To increase foreign investments coming to Nepal in a specialised sector like IT, the one-window policy needs to be strengthened and effectively implemented. Institutional financing The software production and application industry is a knowledge-based industry and an industry with the highest rate of growth. Financing in such a sector needs special 124


considerations. The government must provide mechanisms to provide capital to the software production and application sectors as most companies presently are having to finance their own development. They are unable to obtain financial support as they cannot provide legally acceptable collateral. Hardware is not recognised as an acceptable collateral (probably because of the speed of depreciation). Banks are forbidden to lend to those without collateral. This can impede the growth of new start-up companies that may have the right skills and ideas but lack the access to financial institutions. Under such circumstances, even the best business plan would have no option but to resort to private financing, which is also limited and difficult to secure. Fostering The software production and application sectors have the greatest potential of being the highest foreign currency earners for Nepal. As such, it needs all the attention HMG can afford to give. So far, these sectors have received far less attention and facilities than other industries. There is fierce competition among countries of the region to energise their economies by expanding the base of the IT industry. Incentives like tax holidays, zero import customs’ duties for exporters, and access to foreign currency are some of the schemes being implemented. In Nepal, a few software production and application companies with a 100% export potential have been established. These are model industries and the country needs to ensure that these initiatives succeed in order to attract future investments. At present, these companies experience a problem in having their exports legally recognised, hence, the difficulty of securing income tax clearance. The export of software production and application industries takes place primarily in digital form through the communications’ network and does not need any physical object to be shipped. Hence, a mechanism to recognise that the export of software services through a communications’ network needs to be developed as quickly as possible. In India the concept of Software Technology Park (STP) played a very positive role in the implementation of export-oriented software production and application industries. In Nepal the concept of both a physical and virtual IT Park should be implemented. The software production and application industry situated outside the physical IT Park should also be able to obtain all other facilities provided to the companies inside the park. The establishment of IT Parks on government initiative also demonstrates a government commitment to developing the ICT sector. That would in turn help to bolster investor confidence in the sector Market development domestic/international One of the most important ways to assist the IT industry is to create a vibrant domestic market. To do that, as well as to increase the efficiency of government institutions, the government must embark upon computerisation initiatives. The computerisation of key government activities will have several positive effects on the Nepalese IT industry.

• • •

It will raise the level of experience. It will provide more references, necessary to firms willing to develop international activities. It will be necessary for the development of international services (inter-banking systems, for example). Chapter 5 — Software Production and Application

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HMG should show its commitment to the development of the IT industry in Nepal in international forums and IT exhibitions, such as Cebit and COMDEX, and support Nepalese companies to acquire access to the international software market. ISO 9000 certification ISO 9000 (or similar) certification is fast becoming a necessity to gain international acceptance. It can often be costly to secure such certification. Nepal currently has no certifying organisation that could provide assurances regarding quality to enhance the credibility of Nepalese companies and products. The possibility of obtaining certification should be explored so as to circumvent the need for substantial financial commitment to secure such internationally acceptable certification. Nepal’s strategic advantage Nepal is situated between two super powers (India and China) of the global IT industry. The substantial progress of both countries in the IT sector in the past decade has drawn considerable foreign investment. Certainly, as their neighbour, Nepal has a chance of attracting investment. The full realisation of this vision would, however, require the creation of an environment conducive to foreign investment. The time difference Nepal has with major English-speaking countries (12 hours with the US, for example) could also work in its favour, making it possible to establish a software application industry targeted for those countries that capitalise on the time differential. Nepal’s good relationship with countries in South Asia could offer prospects for establishing an IT industry targeting those markets. Attracting foreign investment As the number of educated Nepalese increases, unemployment becomes a formidable issue. The government can respond to the problem of unemployment by taking steps to capitalise on new avenues of employment generation. The IT sector could be one such avenue. Given the technology-intensive and, at times, capital-intensive nature of the industry, it is necessary to create conditions within the country to attract foreign investment in the IT sector. While Nepalese investors are generally apprehensive about the ICT industry because of its skill requirements, foreign investors will be able to bring in trainers and consultants to provide training and supervise projects. The foreign investment in this sector will not only bring in financial resources from outside but will also allow the transfer of technology necessary for Nepalese professionals to remain competitive in the global IT industry. Therefore, HMG should modify its policies to attract foreign investment, particularly in the IT sector. The policies should also be conducive for local investors. Comparative study Kenneth L. Kraemer and Jason Dedrick undertook a comparative study of the national policies of Singapore, Taiwan, Ireland, and Korea in their paper ‘National Policies for the Information Age’. The policy and strategy adopted by India was added to it and the proposals for Nepal have been presented as follow.

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6

NATIONAL

VISION

The Computer Association of Nepal (CAN) has been working with the objective of placing Nepal on the global IT map. This objective can only be fulfilled if the economic activities in this sector are increased through export activities. Nepal can neither be isolated from the information revolution that is taking place around the world nor avoid the avenues opened by new technologies with the prospect of earning foreign currencies so crucial for the country’s economic development. Vision To establish a software production and application industry as the most prosperous and largest export industry in Nepal by attaining an annual export of half a billion US dollars by the year 2010. Strategy

• • • • • • • • 7

Implementing strong IT HRD programmes with ‘IT Education’ and ‘IT in Education’ at all levels of education and sufficient production of ICT professionals from universities, training institutes, and vocational schools. Ensuring the availability of quality and high-speed communication infrastructure and services in the country at competitive costs compared to the world market. Spearheading for the opportunities of exporting software application with an aim of exporting software products as well. Developing institutions in the public sector for formulating appropriate IT policies and their implementation. Creating an investment environment and putting a sustained financing mechanism in place specifically for the IT sector in the country Developing global linkages. Strengthening local capabilities. Committing to public sector computerisation and policy to foster private sector computerisation within the country. OPPORTUNITIES

AND CONSTRAINTS

The following two tables present the Strengths, Weaknesses, Opportunities, and Threats’ (SWOT) Analysis of the two sectors under consideration in this paper. Software production SWOT analysis Strengths — competitive cost of manpower — availability of competitive Internet services in Kathmandu Opportunity — global shortage of IT talent — export potential foreign direct investments and joint ventures Weaknesses — lack of experienced professionals — managers — poor telecommunication infrastructure — regulations making international business difficult — absence of any institutional mechanism for quality control — domestic market too small to gain significant experience Threats — experience and technology gaps Chapter 5 — Software Production and Application

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Table 5.2: Software production SWOT analysis Strength Competitive cost of manpower Availability of competitive Internet services in Kathmandu Weakness Lack of experienced professionals, managers Poor telecommunication infrastructure Regulations making international business difficult Absence of any institutional mechanism for quality control Domestic market too small to gain significant experience

Opportunity Global shortage of IT talent Export potential Foreign direct investments & joint ventures Threat Experience and technology gaps

Software application SWOT analysis Strengths — competitive cost of semi-skilled labour — manpower availability (short-term growth potential) — availability of competitive Internet services in Kathmandu Opportunity — online operation feasible through Internet services — advantage of outsourcing and out locating by foreign countries — export potential foreign direct investments and joint ventures Weakness — poor telecommunication infrastructure — regulations making international business difficult Threat — competition from other developing countries.

Table 5.3: Software application SWOT analysis Strength Competitive cost of semiskilled labour Manpower availability (short-term growth potential) Availability of competitive Internet services in Kathmandu Weakness Poor telecommunication infrastructure Regulations making international business difficult

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Opportunity Online operation feasible through Internet services Advantage of outsourcing & out locating by foreign countries Export potential Foreign direct investments & joint ventures Threat Competition from other developing countries


8

ACTION

PLAN AND CONCLUSION

Institutionalisation 1.

Regarding the establishment of the Nepal IT Board (NITB) as an organisation working to foster the IT sector in Nepal, the Board will be constituted as a fully autonomous body with the Steering Council chaired by the Prime Minister, with the Minister for Science and Technology as Deputy Chairperson, and with the following members: Vice Chairman NPC, Member NPC, IT Advisor to the Prime Minister, the Minister for Information, the Minister for Finance, the Minister for Commerce and Industry, the Minister for Education, and Vice Chancellors of selected universities, President of the Computer Association of Nepal, distinguished domestic and international IT professionals, Chairman NTA, and Secretary of MOST as Member Secretary.

2.

The proposed Steering Council should have the full power of the cabinet to approve ITrelated policies forwarded by the Executive Council of the NITB. The Steering Council will meet once a year and/or as necessary. The Executive Council will consist of the Secretary of MOST as the Chairperson, representatives from industry, academics, professionals, representatives from ministries, the Executive Director of NITB as the Member Secretary and it will be fully responsible for the development and implementation of IT policies. The Executive Director of the NITB will be hired on merit and will operate under the modern, result-oriented management set-up of a private organisation. It is important that the NITB develops as an institution capable of carrying out its mandate. MOST will be responsible for the establishment of the NITB within the year (2001). The NITB will act as a ‘one-window’ for all IT-related activities, such as registration, incentive mobilisation, and other activities related to HMG. All IT companies, including those involved in software production and application, will deal with the NITB as an interface to HMG. The NITB will be responsible for all the detailed work that has to be carried out with other government departments and ministries. Other activities of the NITB include the promotion of IT use and applications in the government and the internationalisation of the IT industry in Nepal. Ideally, the NITB should ensure that all formalities are completed within the stipulated time following the submission of the required documents by the IT companies in connection with their activities. The establishment, as well as operating cost, of the NITB is estimated at Rs 5 crore (approx. US$ 679,000) per year.

3.

The IT Advisor to the Prime Minister will be responsible for putting proper emphasis and focus on this area and to provide impetus to the planning and implementation of the government’s computerisation programme. It can be implemented within 2001 and has limited cost implications.

4.

The Chief Information Officer (CIO) will be appointed at each government ministry and public organisation to plan and implement computerisation programmes and will be responsible for design, development, and implementation of information systems. CIOs will be hired under the Ministry of Science and Technology and will be responsible for the placements in government organisations. It can be implemented in 2001, and the NITB annual budget may be sufficient.

5.

Software Technology Park (STP) or Export Processing Zones (EPZ) for software production and application will be established under NITB in 2001. STP and EPZ can offer the required infrastructure for companies willing to embark on export-oriented Chapter 5 — Software Production and Application

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ventures in a short time and also demonstrate HMG’s commitment to this sector. A committee under MOST is already working on detailing the Master Plan and an estimate of the cost can be obtained for this purpose. 6.

Private initiatives, domestic or international, to start STP facilities in Nepal will obtain similar incentives as the software production and application industry. This does not have any direct cost implication and the policy can be implemented in 2001.

7.

Like other committees in the parliament, the IT committee will be formed to facilitate and encourage better understanding of IT issues and policy implications among the parliamentarians. This does not have any extra cost implication and the policy can be implemented in 2000.

Attracting investment (foreign and domestic) 8.

Given the prospect of new employment opportunities that a strong ICT sector could generate and the positive impact it could have on the national economy, no corporate income tax will be levied on companies earning from the export of software production and application. The NITB will be the export certifying agency. A scheme will be devised so that there will be an advantage for companies to register all their exports. This policy has already been implemented by HMG and is reiterated to emphasise the present difficulty of obtaining certification for software export.

9.

The domestic software development, production, and application industry will be recognised as an export industry and will receive all the incentives provided to the export industry so as to increase the experience level and competitiveness of local industry. This does not have any direct cost implication and the policy can be implemented in 2001.

10. No tax deduction at source (TDS) will be levied on fees obtained by foreign companies or individuals that provide technical and management services to Nepalese IT companies to facilitate the transfer of technology to Nepal and on communication charges to encourage the cheaper cost of communication. This does not have any direct cost implication and the policy can be implemented in 2001. 11. Visas will be provided to foreign investors and their families and the foreign management and technical experts and their families associated with any IT company upon request from the company and certification from the NITB. No restriction will be levied on the amount of foreign investment to obtain a visa. This does not have any direct cost implication and the policy can be implemented in 2001. 12. In order to build the confidence of foreign investors and to protect the interests of all investors, the Copy Right Law in Nepal will be modified to conform to international practices and will be strictly enforced in Nepal. This does not have any direct cost implication and the policy can be implemented in 2001. 13. The software production and application will be designated a priority sector of development by HMG. Nepal Rastra Bank will instruct commercial banks to ensure provision of financial resources at relatively lower interest rates. Financing will be based on the volume of business to be done and against the receivables, and not based on assets. The requirement for conventional collateral securities will be waived. This does not have any direct cost implication and the policy can be implemented in 2001.

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14. Banks will be instructed to finance the working capital for software production and application, based on the track records of the founders and promoters of the companies, the management team, professional qualifications of its core staff, work experience in the software industry, the infrastructure available and the financial performance of the company, and on detailed project proposals and business plans. This does not have any direct cost implications and the policy can be implemented in 2001. 15. The government will create an initial venture capital fund of US$ 2 million per year for a period of 5 years, starting in 2001, for the funding of start-up companies in software production and application. Developing global linkages 16. Companies operating in software production and application areas will have access to foreign exchange facilities worth up to US$ 50,000 per year to travel abroad for marketing purposes, participate in exhibitions, and develop global linkages irrespective of the income made by the company from exports. This does not have any direct cost implication and only provides foreign currency exchange facilities. The policy can be implemented in 2001. 17. Non-Resident-Nepalese (NRN) can be a major catalysts in technology transfer and in developing the market linkages necessary for the export of services. A special package of incentives will be provided to NRNs wanting to invest in Nepal. It can begin in 2001. The NITB annual budget may be sufficient for the purpose. 18. A special website will be created and regularly updated on the development of the IT sector in Nepal by the NITB. Details of companies working in this sector will be made available and success stories will be publicised. It can begin in 2001. The NITB annual budget may be sufficient for the purpose. 19. Nepalese diplomatic missions working abroad will be apprised and mobilised to bring in foreign investments and support Nepalese companies to explore business opportunities in software production and application. Embassies in USA, Europe, Japan, and Australia will organise gatherings in their respective host countries at least once a year to promote the IT industry in Nepal and will establish an information cell in their embassies for this purpose. A special fund of US$ 100,000 per year could be created for this, from 2001, to be used by Nepalese missions abroad. 20. Foreign embassies or funding agencies in Nepal will be requested to organise business tours to Nepal for foreign IT investors in collaboration with the NITB or the Computer Association of Nepal (CAN) or any other professional society. This can begin in 2001 and the NITB annual budget may be sufficient. 21. The NITB, CAN, or the Trade Promotion Centre (TPC) will organise business tours for Nepalese entrepreneurs and professionals to participate in international IT exhibitions. It can start in 2001 and a budget of US$ 100,000 per year will be allocated for this purpose. 22. The CAN INFOTECH exhibition and conferences held every year by CAN will be elevated to an international event and will invite foreign companies and professionals and Nepalese export-oriented companies to participate in the exhibition. CAN INFOTECH will also be held outside Kathmandu Valley at least once a year. This does not have any direct cost implication and the policy can be implemented in 2001. Chapter 5 — Software Production and Application

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23. The IT Year Nepal will be celebrated in 2003 to draw the world’s attention to Nepal to establish its export-oriented IT production and application industry. An estimated budget of US$ 500,000 will be allocated for this purpose. 24. The industry will be encouraged to gather market information (inland and export) on a cooperative basis through organisations such as CAN and NITB on software production and application. Each software production and application company will be encouraged to allocate resources for market research. This does not have any direct cost implication and the policy can be implemented in 2001. Strengthening local capabilities 25. Domestic companies will be provided with 15% price preference over any software product or services in any government tenders so as to provide more opportunities for domestic companies to build the experience required for exports. The domestic companies in return provide apprenticeships to ICT students and graduates to train them in the latest technologies. This does not have any direct cost implication and the policy can be implemented in 2001. 26. No government software development contracts will be awarded to foreign companies alone, without the involvement of domestic IT companies, to ensure support at a reasonable cost and to facilitate the transfer of technology to domestic companies. This does not have any direct cost implications and the policy can be implemented in 2001. 27. An IT Centre of Excellence will be established to facilitate research, development, and technology transfer. The Centre will organise suitable high-level technical, quality and management-related training as per the requirement of the industry. The cost of establishing the Centre and its operation is estimated at rupees 2 crore (approx. US$ 272,000) per year and should be implemented in 2001. 28. The best software products developed in Nepal will be selected every year and the developer and developing company will be commended and felicitated. This will have nominal cost implications and can be implemented in 2001. 29. To foster the development of IT training institutes to provide necessary skills for the software production and application industry, these institutes will get the same benefit as the software production and application industry. This does not have any direct cost implication and the policy can be implemented in 2001. 30. The NITB will set up a unit to evolve a framework of standards such as ISO 9000. It will also work out a means for the assessment and certification of compliance to standards and processes at affordable cost. It can be started in 2001 and the NITB annual budget may be sufficient for the purpose. 31. The Nepali software production and application industry will be encouraged to obtain international standards such as ISO 9000. The NITB will organise workshops and training on international standards to help the domestic industry practice and obtain the certification. It can be started in 2001 and the NITB annual budget may be sufficient for this purpose. 32. Bilateral funding agencies will be requested to provide professionals such as systems’ analysts, quality analyst, and project managers to be permanently stationed in Nepal for the purpose of the technology transfer and especially to help overcome language and cultural barriers in obtaining software development and production contracts from 134


non-English speaking countries like Japan, Germany, France, and parts of Canada, and others. This does not have any direct cost implication and the policy can be implemented in 2001. 33. Professionals or employees of the software production and application industries will be encouraged to learn foreign languages such as Japanese, French, German, Russian, and Chinese in order to become capable of bringing projects from countries where these languages are spoken. This does not have any direct cost implication and the policy can be implemented in 2001. 34. Special training programmes for software project managers or project leaders will be organised. To widen their experience and for international exposure, possibilities of engaging them in short stints overseas will be explored. The NITB and the IT Centre for Excellence can take on this task from 2001 without any extra cost for this purpose. 35. The basic infrastructure of the IT industry (electricity and telephone lines) will be provided immediately on demand for any registered software production and application industry. The software production and application industry will be treated as any other basic industry entitled to preferential treatment from HMG and the public utilities’ sector. This does not have any direct cost implication and the policy can be implemented in 2001. Promoting IT use 36. Two to three per cent of HMG’s annual development budget will be invested in ICT to computerise its procedure and to make it more efficient and transparent to the public on a priority basis. This policy can be implemented from 2001. 37. HMG will provide tax incentives for any public or private corporation investing in computerisation of its operations and delivery of services. This does not have any direct cost implication and the policy can be implemented in 2001. 38. HMG will make it compulsory for certain businesses or industries (financial sectors, star hotels, travel and trekking agencies, export industries, etc.) to use IT in its daily operation. Specific priority sectors for such initiatives will be identified. This does not have any direct cost implication and the policy can be implemented in 2001. 39. Nepal should lobby for a special international software pricing policy for developing and under-developed countries to promote IT use at reasonable costs. CAN, Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and NITB should take up the responsibility of lobbying for such a pricing scheme. This does not have any direct cost implication and the policy can be implemented in 2001. Miscellaneous 40. Statements of income and export by companies about the export of software products and application will be accepted until a concrete measure and modality are worked out by HMG or NITB for this purpose. This does not have any direct cost implication and the policy can be implemented in 2001. 41. In the absence of any formal statistics in the IT sector, a baseline survey of the IT industry in Nepal, including the demand and supply of HRD, will be undertaken before the end of 2001. A cost of NRs 25,00,000 is estimated for this purpose. An annual 10% of this sum will go toward maintaining the database. Chapter 5 — Software Production and Application

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42. Due to the fast-changing nature of the technology of computer equipment, the life of computer hardware will be considered as 2 years for the purpose of calculating depreciation. Computer software will be treated as an expenditure and not as a fixed asset. This does not have any direct cost implication and the policy can be implemented in 2001. 43. Zero customs’ duty will be levied on the import of software and hardware as these are products of the knowledge industry and are the main ‘raw material’ for further development of the software production and application industry. This policy will be in line with WTO’s requirements. This does not have any direct cost implication and the policy can be implemented in 2001. 44. The export-oriented software production and application industry will be recognised by HMG as an industry that should run without disturbance. Hence, a study of proper labour law will be made and will be modified and enforced to suit the specific needs of the industry. This does not have any direct cost implication and the policy can be implemented in 2001.

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Chapter

6

E-Commerce

Section I 1

BACKGROUND

With an annual population growth of 2.6% and with 42% of the population living below the poverty line, the development challenges of Nepal continue to be formidable. Economic concerns are assuming increasing importance as political stability and the achievement of sustainable development goals become contingent upon how we fare on the economic front. With a foreign debt of more than US$ 2,500 million and an annual merchandise trade deficit of US$ 758.3 million1 , representing 15.8% of the GDP, it is imperative for Nepal to intensify export and increase the volume of foreign trade. Only then will Nepal be able to reduce its foreign debt and its reliance on foreign aid. This should be viewed in light of the fact that trade, including both exports and imports, continues to be a significant factor for many developing economies in the Asia Pacific region. Since 1991/92, globalisation has unleashed a spate of economic opportunities and liberalised economic policies, making Nepal relatively more export oriented. In this climate of globalisation and economic liberalisation, international trade and commerce has invariably affected many aspects of economic life and favoured approaches more responsive to the global changes taking place. Technology continues to be significant in revolutionising the trade and commerce sector. One such technological advancement having profound impact on this sector worldwide is the use of IT, in particular the Internet and its offshoot, e-commerce. The dynamism that has characterised the trade sector over the past two decades, concomitant with the increasing liberalisation of tariff and non-tariff barriers, is now being revolutionised

1

Nepal’s Foreign Trade, Dr Minendra Rijal, Mirmire, a publication of NRB

and regenerated by the phenomenon of electronic commerce, facilitated most of all by the use of the Internet.2 The new trends induced by developments in information and communication technologies present prospects and challenges for Nepal. These technologies are redefining competitiveness and changing the way businesses operate, signalling a fundamental paradigm shift in international trade and commerce. While the full impact and potential of e-commerce is yet to be determined, especially for Nepal, there are clear pointers that e-commerce will increasingly dominate trade and commerce sectors in the years to come. Thus, a developing country like Nepal needs to proactively formulate policies and develop strategies conducive to the growth of e-commerce for itself. E-commerce, however, presents several challenges that policy-makers have become aware of, the most significant of them being the speed of development in electronic commerce and its attendant financial, legal, and security ramifications. This, coupled with the rapid pace of change that it engenders, puts a strain on the processes of traditional policy formulation in countries like Nepal. The need to develop coherent policies and sound strategies vis-à-vis the information economy and e-commerce is all the more relevant given Nepal’s imminent membership in World Trade Organisation (WTO) and its subsequent participation in multilateral trade negotiations, of which e-commerce will be an important component. Without a sound policy framework, in addition to experience and knowledge in the field, Nepal risks being at the losing end in international negotiations on issues relating to ecommerce, this apart from the prospect of losing out on its development potential. Our failure to address these issues within the framework of our own ground realities as well as from a global perspective is likely to have far-reaching adverse implications for our economy. With the entire world being driven by ideas and powered by technology, it is imperative that we too take steps to create an enabling environment in which we are better positioned to benefit from the competitive advantages offered by state-of-the-art information and communication technology and one of its most significant products, e-commerce. In fact, the need to adapt to the new technologies, particularly in the information and communication fields, will soon become an economic imperative rather than a question of choice. 2

THE

EMERGENCE OF INFORMATION ECONOMY

One of the significant technological advancements in recent times has been the advent of the Internet, which is an embodiment of computer, communications, and information technologies. The pace of proliferation of the Internet has outstripped that of the telephone. The Internet network has increased from 213 computers and a few thousand users in August 1981 to more than 43 million Internet-linked computers in 1999, supporting an estimated 150 million Internet users.3 Rapid advances in Internet technologies and the subsequent proliferation of economic activity on the Internet have ushered in an information age where virtually every nation is vying to position itself advantageously. The Internet and other related technologies are transforming the world into a single virtual entity, requiring at times a radical shift from traditional methods of using a geographical frame of reference in analysing global issues and problems, particularly in financial, economic, and commercial activities. 2 3

138

http//unescap.org ITU, 1999


The Internet economy seems all poised to become one of the important components of the overall international economic order. The volume of the Internet economy reached 77 billion US dollars in 1998. 4 Since then, there has been a significant rise in the overall level of electronic commerce or business transactions conducted via the Internet and private commercial networks, and it is expected to reach US$ 400 billion by 2002. 5 The pace of growth of the Internet economy makes projections for the future difficult. The latest Forrester Research (www.forrester.com) figures project that global Business to Business (B-to-B) and Business to Consumers (B-to-C) sales will reach 6.8 trillion USD by 2004. Current trends show that online trade expansion will be concentrated in the developed world, with 12 countries representing nearly 85% of the worldwide net sales. The prospects for the AsiaPacific region are also encouraging, with a total volume of online trade expected to surge to US$1.3 trillion by 2004. But, here too, regional imbalances are projected, with exponential growth in this sector for Japan, Australia, Korea, Taiwan, and Singapore. As stated earlier, one of the main components of the Internet economy is e-commerce (electronic commerce). Electronic commerce, broadly defined, is the process of using electronic methods and procedures to conduct all forms of business activities to achieve organisational goals. Electronic commerce uses different technologies and embraces a wide range of financial forms such as electronic banking, electronic trading, Electronic Data Interchange (EDI), electronic mail (E-mail), and all forms of messages between enterprises.6 Since the rapid expansion of electronic transactions constitute a major opportunity for trade and development, information and communication technologies and electronic commerce can be expected to drive the trade component of economic growth for many years to come. Trade transactions conducted through the Internet and the World Wide Web will have enormous implications over the next few years for Asia’s international competitiveness. Nepal cannot afford to be left out. The country needs to evaluate seriously its position vis-àvis the emergence of the information economy worldwide in general and e-commerce in particular. The scope of this paper will be limited to examining issues related to the development of e-commerce and its implementation in Nepal. 3

IT

AND

E-COMMERCE

IN

NEPAL

The application of information technology in Nepal was particularly slow until the late eighties. Although recent years have seen a remarkable increase in awareness and application of IT resources, there is not yet a satisfactory pace of application of IT in the education, government, and corporate sectors. More than government and small businesses, it is private businesses, banks and financial institutions, NGO, INGOs, and international agencies operating within Nepal that are at the forefront in using IT resources. Prevailing socioeconomic realities coupled with the limitations of human resources have, to a great extent, stunted the growth of this sector in Nepal. Change is occurring relatively rapidly , though. There has been a remarkable increase in the number of personal computers and related equipment sold and installed in Nepal, especially after 1992 and, of late, an emergence of ISPs (Internet Service Providers) has resulted in an increased use of the Internet and World Wide Web. There are altogether seven licensed ISPs, including two V-SAT private operators in Nepal. 7 Recently, the National 4 5 6 7

Forrester Research UNCTAD, 1998 http/unescap.org Economic Survey, FY 98-99, His Majesty’s Government of Nepal, pp 14

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139

Telecommunications Corporation also joined the ISP bandwagon and announced the introduction of Internet-related services. Internet connectivity, though increasing at a faster pace, is far from satisfactory. The number of Internet account holders in Nepal is estimated at 10,000, a majority of whom are within the Kathmandu Valley. Since the potential for electronic commerce within and outside Nepal will also depend on the number of users who have access to the Internet, one priority will obviously be to increase that number. Increasing numbers alone will not be sufficient to guarantee the development of e-commerce in the country. E-commerce development is equally dependant upon the number of Internet users internationally who could have a prima facie interest in Nepal, the quality and types of products and services offered by Nepalese companies, the skills and creativity employed in designing websites and the bandwidth available for users and service providers. One should thus be aware of potential pitfalls resulting from the lopsided view of treating e-commerce issues solely from the technological perspective. Information and communication technologies no doubt enable e-commerce, but there are a host of other factors, many of them nontechnical, that must be taken into account in trying to formulate policies conducive to the growth of e-commerce. Even though there have been some limited initiatives on the front of e-commerce in Nepal, the country has yet to see a coordinated, holistic, and organised effort in this direction. This is because e-commerce issues cut across a range of technical, legal, economic, and institutional issues for which we do not have appropriate answers yet. Apart from isolated efforts by a few pashmina traders, the Handicraft Association of Nepal has the beginnings of a vertical portal at www.nepalhandicraft.com.np that loosely qualifies as a basic e-commerce initiative. This site has links to 12 member homepages and an email ombudsman service to match suppliers to foreign distributors. The site, however, carries incomplete information and a poor user interface. Issues such as payment mechanisms and export formalities are also not addressed adequately. More recently, a number of websites have emerged seeking to use the Internet as a medium to sell goods and services both within and outside the country, though issues of security and payment mechanisms are yet to be resolved. Given that most online trade activities are taking place in the B-to-B sector, the fundamental question will be: do we have products for global supply chains? With conventional economies showing signs of age, especially in Asia, the potential development of e-commerce in the Nepalese context demands serious attention. It will be worthwhile to assess what the potential benefits of e-commerce are for Nepal and how Nepal can create an enabling and conducive environment for e-commerce. Potentially, e-commerce can provide the following benefits to Nepal. 1. 2. 3. 4.

8

140

Generation of foreign exchange, resulting in increased hard currency earnings with a favourable impact on the balance of payments Prospects for export trade diversification in both the range of commodities and country destinations8 Potential for strengthening service exports (notably travel and tourism) that contributed to 44.1% of the total foreign exchange earnings in 1998/99 Development of e-commerce expertise within the country with far-reaching future implications for economic development As per the economic survey of 1998-99, the export of carpets and readymade garments constituted 81.3% of total exports to countries besides India during the first nine months of FY 1998-99.


5. 6. 7. 8. 9.

Expansion of skills in information technology within the country Increased transparency Driving factor for infrastructural development in the IT domain Improved government and business efficiency Enhanced social development and welfare

Notwithstanding its potential, the development of e-commerce cannot be considered in isolation from the complex array of issues and requires a holistic framework for its development. The fundamental challenge becomes that of creating an enabling environment in which e-commerce can thrive. 3.1

Towards the creation of an enabling environment for e-commerce

Before considering what it takes to create an enabling environment for e-commerce development, it is important to examine the parameters that govern an Internet-based business model, notably e-commerce. Conceptually, an Internet-based business model (see Box 1 for details on e-commerce) can be divided into the following important layers.

• • • • • •

the the the the

Internet Internet Internet Internet

infrastructure layer, application layer, intermediary layer, commerce layer,

the legal and procedural infrastructure layer, and human resources. Box 1: A typology of e-commerce At its fundamental level, e-commerce is not very different from traditional commerce. The questions about quality of products and services hold true in e-commerce situations as well. As in traditional commerce, e-commerce also always involves at least two participants and these participants can be of a different nature. Some very distinct types of e-commerce will take place, depending on the pair involved (Building Confidence, Electronic Commerce for Development, United Nations Centre for Trade and Development [UNCTAD]). The main three categories of agents likely to be involved in such pairings are: enterprises, individuals, and governments. Much of the e-commerce observed during its formative years has been between enterprises and individuals (the ‘Amazon.com’, ‘eToys’ types), and is generally known as B-to-C. In Bto-C situations, e-commerce transactions takes place between enterprises and consumers, mostly at individual levels. Less noticed but equally significant is the type of e-commerce which has been taking place between enterprises (e.g., among the manufacturers and their sub-contractors or between business equipment firms and their clients) which is better known as B-to-B. Last but not least, e-commerce can be performed between governments and private sector entities or enterprises (for example, public procurement purchases). This last type can be described as ‘business-to-government’ (B-to-G). Even though B-to-C has attracted a lot of attention over the last few years owing to its rapid development in advanced countries, primarily the United States, B-to-B is clearly the area from which most of the expansion in e-commerce will come in the near future, especially as far as international trade is concerned. This is, therefore, the area developing countries should devote their primary attention to as a possible source of integration in the emerging global information economy. Chapter 6 — E-Commerce

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Layer 1: The Internet infrastructure layer This layer includes products and services that help create an IP-based network infrastructure, a prerequisite for electronic commerce. The categories in this layer include:

• • • • • • •

a communications’ network, Internet backbone providers, Internet Service Providers, networking hardware and software, PC and servers, security vendors, and line acceleration hardware manufacturers.

Layer 2: Internet application layer Products and services in this layer build upon the above IP network infrastructure and make it technologically feasible to perform business activities online. The categories in this layer include the followiong.

• • • • • •

Internet consultants Internet commerce applications Multimedia applications Web development software Online training Web-enabled databases

Layer 3: The Internet intermediary layer The Internet intermediaries (also infomediaries) increase the efficiency of electronic markets by facilitating the meeting and interaction of buyers and sellers over the Internet. They become catalysts of process through which investments in the infrastructure and applications’ layers are transformed into business transactions. The categories of this intermediaries’ layer include:

• • •

portals/ content providers, Internet ad brokers, and online advertising.

Layer 4: The Internet commerce layer Internet commerce involves the sales of products and services to consumers or businesses over the Internet. The categories in this Internet commerce layer include.

• • • • • 142

E-tailers (e.g., Amazon.com, eToys.com) Manufacturers selling online (Cisco, Dell, IBM) Fee/subscription-based companies Airlines selling online tickets Online entertainment and professional services Information and Communication Technology - Policy and Strategy for Nepal

Layer 5: The legal and procedural infrastructure level The creation and maintenance of a website is only the tip of the iceberg as far as e-commerce is concerned. There is a wide range of issues to do with legal ramifications and payment mechanisms (see Box 2 for payment mechanisms in e-commerce) in e-commerce that must be addressed properly for e-commerce to entrench itself in the mainstream economy. Nepal still lacks legal arrangements in the form of cyber laws that would provide a comprehensive legal framework to protect both vendor and consumer in e-commerce transactions. There is an urgent need to address the key issues of security and trust that underpin successful ecommerce implementation. More importantly, online trade requires public policy support low barriers to trade, stable currencies, and flexible capital markets - as well as a technology infrastructure to reach its full potential. 3.2

Strategic and policy framework for development of e-commerce in Nepal

Any strategic and policy framework designed to promote e-commerce within the country should be based on the premise of an e-commerce business model (see Box 1), its national and international dimensions, micro- and macro-economic implications, and the layers that define the parameters of Internet-based business models. Considering its ever-increasing significance, potential, and scope, e-commerce deserves special attention as a separate entity and not as a mere part of a comprehensive information and communication technology strategy and policy by the government. Given the nature, scope, and anticipated direction of e-commerce, the strategy and policy perspectives need to be addressed at three levels.

• • •

International level National level Business enterprise level

3.2.1

International level

Since most of the e-commerce activities tend to transcend local, national, and regional boundaries, certain issues crop up over commercial transactions carried out electronically. Apart from technical issues concerning network and data security, the new global electronic commerce networks raise many fundamental concerns about the regulation of international commerce, whether it involves trade in goods, services, currencies, information, or ideas, and the impact of these developments on national sovereignty, political institutions, administration, financial and trade policy, and the way of life. 9 Any initiative aimed at developing an e-commerce strategy and policy perspective in Nepal should take these factors into account. This is important from both a national perspective and the perspective of developing strategies that are to be adopted in international trade deliberations and negotiations in forums like the WTO. Nepal should seek to address two international issues at the appropriate levels to ensure that its position in relation to e-commerce is strengthened and its concerns well presented. These issues are: i) standards and technology issues and ii) trade policy issues and responses in international trade negotiations and deliberations. 9

Didar Singh, Electronic Commerce:Issues for the South p7 (South Centre 1999)


143

Given the nature of e-commerce and its global orientation, there are a number of new standardisation and legal issues that can only be resolved at the international level. Realising this, several intergovernmental organisations have or are working on establishing international instruments, standards, or benchmarks aimed at simplifying documentation and information regarding exporting, importing, and facilitating the development of electronic commerce. Apart from UNCTAD, the work of United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) has also been significant at the regional level. Given that most of the technological advancements are occurring in developed countries, and also owing to intensified e-commerce implementation in those countries, a country such as Nepal has almost no say on the setting of standards. Efforts, however, should be made to explore the prospect of forging a common stand in conjunction with other developing countries, even in this area. That is the only way to challenge the virtual monopoly of developed and industrialised economies for the benefit of countries like Nepal. To that end, Nepal could consider working together with international bodies/ associations (for example, The Internet Corporation for Assigned Names and Numbers (ICAAN) and World Intellectual Property Organization (WIPO). Other UN agencies like UNESCAP and UNCTAD can also significantly help the poorer countries to articulate issues concerning standards and to developing appropriate responses. This could be significant as issues concerning domain names, address management, and digital certification have a direct bearing on the success of e-commerce. Technology too becomes a prime issue for Nepal as new technologies are constantly evolving and keeping pace with them will require substantial resource commitments and careful planning. 3.2.2

National level

There is a range of national issues over e-commerce that must be addressed from strategy and policy perspectives. These issures are i) national e-commerce policy and strategy, ii) infrastructure and technology issues, and iii) government initiatives to promote e-commerce. i)

National e-commerce policy and strategy

Nepal must have a national e-commerce policy and strategy in place if it is to promote ecommerce and benefit from its development potential. Ideally, as in more traditional commerce, the private sector should provide the leadership for the growth and development of electronic commerce, including the establishment of reliable and trusted business practices for conducting commercial activities in the digital age. The government has a crucial role to play though. There are a number of legal, financial, and taxation issues that must be seriously dealt with in trying to promote e-commerce. There may be a need to amend existing economic and fiscal policies in order to promote e-commerce in the country. Existing foreign exchange and export regulations and formalities must be reviewed with a view to examining their worthiness in e-commerce transactions. The banking and financial sectors must also be geared towards providing requisite services to facilitate and promote e-commerce. Such services may range from instituting proper payment mechanisms to the creation of flexible capital markets. Nepal Rastra Bank should take the lead by playing a facilitative role in addressing financial issues and developing and implementing proper payment mechanisms for e-commerce transactions. 144


ii)

Infrastructure and technology issues

This is undoubtedly a critical area that could hinder our efforts to be an active player in the creation of a knowledge society, as well as in mainstreaming e-commerce into our overall trade and commerce sector. The basic and unifying infrastructure that enables Internet and e-commerce, namely, the telecommunication network, is still in short supply in Nepal. Operating through nearly 100 exchange offices, the NTC has been able to provide only 271,553 telephone connections, including mobile telephone connections. Even though there has, in recent years, been an extension of telecommunication services to 1,676 VDCs of 75 districts of Nepal,10 there is still much to be done in terms of outreach. A relatively high communication tariff and a shortage of bandwidth coupled with the difficulty of securing telephone connections present a disappointing picture – let alone issues relating to bandwidth and the quality of connections. The number of ISPs and VSAT service providers also falls short and the costs of Internet connection and usage are still beyond the reach of Small and Medium Enterprises (SMEs) and individuals, though tariffs have gone down in the past two years. This could in part be due to relatively high initial investment costs by ISPs on computer hardware, including routers, switches, and high-speed modems, as the tariff on these items is still higher than in other countries in the region. Nepal is yet to take concrete steps to lower the tariff on ICT equipment and to promote the use of technologies as a vehicle for sustainable development. iii)

Government initiatives to promote e-commerce

Given a reluctance, owing to ignorance about the potential of e-commerce, as well as the resource limitations of SMEs, it is essential that the government take a facilitative role. It could turn its attention to creating a web on some niche-product areas (VORTALS), improving trade logistics, and developing human resources, and it could introduce a system for electronic public procurement (B-to-G e-commerce). Institutions such as the Ministry of Industry and Commerce and their related outfits - the Trade Promotion Centre (TPC – www.tpcnepal.com) – in HMG should be strengthened so that they can respond to the emerging trade and commerce regimen characterised by the increasingly pervasive use of Internet and networking technologies. Along these lines, a dedicated e-commerce cell should be opened in the Ministry of Industry and Commerce to monitor and facilitate private as well as public sector initiatives. Concerted efforts aimed at introducing electronic governance will also yield dividends as far as e-commerce is concerned. It should be stressed, however, that the government role largely be facilitative and directed at addressing public policy and regulatory issues with minimal interference. 3.2.3

Business enterprises level

From the perspective of business enterprises and the business community at large, issues connected to e-commerce include matters relating to access, trust, fraud, digital contracts, and guarantees.11 Given that even developed countries find it challenging to come to grips with these issues, Nepal must be prepared for the greater challenge of addressing them. Some fundamental questions are raised as to how these issues should be tackled. To what extent can the government intervene? Given the technical feasibility of advertising and the setting-up of databases, virtual shopping malls,12 common platforms, and supply chains, what is the trade-off between individual and collective efforts in addressing these issues? 10 11 12

Figures until the first nine months of FY1998/99, Economic Survey Didar Singh, Electronic Commerce: Issues for the South, p9 Electronic equivalent of real shopping complexes


145

SMEs in Nepal will be confronting these issues as about 80% of the growth of e-commerce will come from business-to-business transactions13 in which SMEs will have a crucial role. From the point of view of a policy and strategic framework, Nepal should undertake the following to promote e-commerce in the country. 3.3

Recommendations

3.3.1

Focused government initiatives to promote e-commerce

As the issues involved clearly cut across several distinct technical, procedural, legal, and financial considerations, the government should form an Inter-Agency Task Force on electronic commerce to formulate a National Strategic Action Plan. This task force should have representatives from the Ministry of Industry and Commerce, the Ministry of Finance, and the Ministry of Science and Technology, and the business sector should be represented by FNCCI. The Ministry of Industry and Commerce will be a nodal agency for promotion, coordination, and monitoring of activities related to e-commerce. The role of the nodal agency will be facilitative and the approach minimalist. This task force will, in essence, map the immediate and strategic steps that need to be undertaken for Nepal to participate successfully in the emerging global electronic commerce. Some important issues that need to be addressed are as follow. •

Issues pertaining to customs and taxation, electronic payments, commercial code, intellectual property, privacy, security, infrastructure, contents and technical standards Fiscal, financial, and legal frameworks to facilitate e-commerce on the basis of which an E-commerce Act should be developed and implemented. This should include: working out issues relating to export regulations and taxation; working out issues concerning IP (Intellectual Property Rights); reviewing existing fiscal regulatory provisions with a view to creating a conducive environment for e-commerce; and mobilising banks to institute proper payment mechanisms for e-commerce transactions (see Section II for details on the prevailing payment mechanisms). Work out legal provisions ( in the form of IT Bill or Cyber laws) on digital signature (See annex I) and digital certificate issues. A major legal barrier to electronic commerce (EC) implementation is the question of digitally generated (EDI) contracts/documents and their acceptability in court. In order to overcome these problems as well as to recommend other facilitative legal and procedural measures, it would be appropriate to constitute an inter-departmental E-commerce Legal Committee, with participation from the trade and industry sectors, to recommend the legal requirements needed for the admissibility of EDI contracts and commercial transactions. The main objectives of this committee will be: a) to determine the legal requirements needed for the admissibility of EDI contracts and commercial transactions; b) to review the current laws in Nepal that have a bearing on evidential (admissibility and authentication), contractual, and liability issues for the implementation of Electronic Commerce in general and EDI in particular; c) to identify any legislative policies and procedures (both legislative and administrative) that may have to be amended to tackle evidential, contractual, and liability issues for EDI contracts/transactions;

•

•

13

Didar Singh, Electronic Commerce:Issues for the South, p10

146


d) to recommend legal policies, amendments, and administrative regulations that may be required to legalise transactions derived from EDI in trade; and e) to consider other related issues of EC and EDI. It is recommended that the composition of the Legal Committee be as follows. • Department Chief, E-Commerce Department (proposed), Ministry of Industry and Commerce • Nominee, Ministry of Law and Parliamentary Affairs • Nominee, Ministry of Foreign Affairs

• • • • • •

Nominee, Nominee, Nominee, Nominee, Nominee,

Nepal Bankers’ Association Customs’ Department Nepal Rastra Bank Ministry of Science and Technology Nepal Telecommunications Authority

Nominee, Federation of Nepalese Chamber of Commerce and Industries

This committee may in turn engage a group of foreign and Nepalese legal consultants to prepare and submit to the government a report on the legal and legislative aspects of EC/ EDI in the Nepalese context. It may be necessary to study similar initiatives taken by other countries and international organisations. For example, the United Nations Commission On International Trade Law (UNCITRAL) initiative to develop an international model law approach to electronic commerce could be an important reference. There have also been numerous private initiatives made to reach a consensus on the general principles that should be applied to electronic signatures in a cross-border environment.

• •

• •

•

Work out a national e-commerce perspective to articulate Nepal’s stand on multilateral negotiations especially in view of impending WTO membership and ensuing negotiations. Strengthen the communications’ infrastructure and promote the use of the Internet. Provide of infrastructure that allows high bandwidth data communication. Make telephone connections easily available. Review the current tariff structure with regard to telephone connection and usage with a view to promoting use of the Internet and thereby facilitating increased use of e-commerce throughout Nepal. Introduce and increase use of the Internet throughout the country by creating an environment for promotional pricing of Internet services. This could be done through a joint effort of ISPs and Nepal Telecommunications Authority (NTA). Establish tele-centres in rural and semi-urban areas to facilitate access to IT services as well as introduce e-commerce facilities in those areas. Create awareness on e-commerce by creating and maintaining websites on niche product areas. This can be done through the concerned government agencies in consultation with stakeholders. In doing so, identify areas where Nepal has definite comparative advantages that could be strengthened by introducing e-commerce. The entry points for government support could be the businesses that have proven export potential but lack resources and ecommerce-related expertise. A perfect example would be handicrafts. This could also help to build national experience in e-commerce and could serve as a basis for sound policy decisions on a sustained basis. Introduce electronic public procurements (B-G e-commerce). This could involve online announcement of public procurement notices involving solicitation of quotations, online Chapter 6 — E-Commerce

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•

• • •

• •

•

•

3.4

• • • • 148

publication of tender documents and specifications, and so forth. This could prove significant in promoting the use of the Internet and e-commerce. Promote e-governance. This is an important step with a direct bearing on the success of e-commerce. Despite the perceived independence of the Internet as a global medium of communication, e-commerce activities, on the practical level, will have ramifications that largely fall under the purview of certain government activities. As such, IT-led strengthening of governance will greatly help e-commerce. Specific e-governance initiatives aimed at facilitating e-commerce may include the ability to complete export formalities electronically, among other things. Take necessary steps to create a conducive environment for FDI (Foreign Direct Investment) and venture capital initiatives. Lower tariffs on computing resources — including PCs, routers, switches, and highspeed modems. Develop human resources. In making forays into areas like e-commerce, the challenges will be enormous where human resources are concerned. Being a technology intensive intervention, sustained and growing use of e-commerce needs a pool of human resources adequately qualified and experienced in the areas of Internet technologies, web designing, experts in web-enabled databases, payment gateways and mechanisms, and security systems. The roles of both government and non-government training and academic institutions become crucial in this regard. Consequently, it will be necessary to encourage training and educational institutions to introduce courses on e-commerce. Strengthen trade and commerce-related government outfits with a view to enabling them to take proactive roles in the development and promotion of e-commerce in the country Strengthen the Ministry of Industry and Commerce to take a proactive role in the development of e-commerce in a sustained manner. This could mean setting up a dedicated e-commerce cell within the Ministry of Industry and Commerce with the task of facilitating the promotion of e-commerce and ensuring inter-agency coordination. As a promotional measure, the government could look into the possibilities of allowing tax deductions on investments made by commercial entities on procuring e-commerce solutions and services. Mobilise government institutions like the Trade Promotion Centre to take appropriate steps for the promotion of e-commerce. This could entail providing support for settingup vertical portals for less organised but potential sectors such as handicrafts and agricultural products. Mobilise postal institutions, private courier services, and freight forwarders to institute proper delivery mechanisms to facilitate e-commerce. This will include strengthening and reviewing current postal delivery systems, equipping them with IT resources (both human and material), and introducing special incentive schemes for private courier services and freight forwarders, for example, by providing tax deductions on investments made toward preparing themselves for e-commerce. Business community initiatives Undertake coordinated and collective activities in conjunction with banks and other stakeholders in building trust across the whole spectrum of users and providers of goods and services. Embark on concerted efforts in promoting local content. ISPs should also consider playing the role of CSPs (Commerce Service Providers) providing e-commerce solutions. Mobilise the Federation of Nepalese Chambers of Commerce and Industries to take a facilitative role in addressing digital certification and digital signature issues, among Information and Communication Technology - Policy and Strategy for Nepal

others. For example, FNCCI can work out arrangements with international certification authorities and agencies on behalf of Nepalese e-commerce merchants. The FNCCI could also consider creating a dedicated e-commerce cell to coordinate all ecommerce-related activities. The FNCCI could take the initiative of forming an alliance with international Trusted Third Parties (TTP) and leading provider of trust services like VeriSign Inc of USA (www.verisign.com) and WiseKey. 3.5

Possible areas of e-commerce applications in Nepal

Fundamentally, the Internet is a new medium to promote sales. As such, the quality of products and services is of supreme importance in this domain as well. The principles that constitute the mainstay of commercial transactions do not change on the Internet and networkenabled businesses. Thus, there is a need for continual innovation and improvement of products and services to make most of this new opportunity. Given an inherent resource limitation and that development prospects of e-commerce are yet to be proven in Nepal, an effort should be made to identify areas that stand to benefit from e-commerce as an immediate strategy on both B-to-B and B-to-C sectors. These could refer to the areas in which Nepal has a competitive advantage or be able to cash in on the prima facie interest in Nepal worldwide. Such areas could be as follow.

• • • • •

Handicrafts, carpets and readymade garments Digital products like Nepali music Services: computer programming and other IT-related services Food products, spices, and herbal products Hotels and tourism-related services

It should be borne in mind that e-commerce is not only about creating websites. With millions of web pages vying for attention from a relatively limited customer population, the biggest challenge is to ensure a steady flow of visitors. Creating a website is only one part of the story. For people to visit these websites, the sites must show up in a key-word search of web databases maintained at sites like YAHOO and AltaVista.

Section II

4

ADDRESSING

SECURITY ISSUES

One of the most important prerequisites of e-commerce is the presence of a solid foundation of trust and security. These are crucial elements of successful e-commerce implementation. The issue of security and trust is as important as the need to transform the regulatory and legal environment. Any initiative aimed at promoting e-commerce has to address these issues adequately. It is important to understand the technological ramifications of such initiatives as these issues ultimately become manifest in the technological domain. Chapter 6 — E-Commerce

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4.1

The ramifications of security issues

The future of electronic commerce ultimately rests on the trust that transacting parties place in the security of the transmission and content of their communications.14 There should be a belief that these communications will be granted adequate recognition to assure their legality and enforceability in any domestic or foreign jurisdiction. Apart from computer hardware and actual information stored in the hardware, the security issue should, most importantly, concern the creation of electronic data messages, data protection techniques applied to the data message, and its transmission to the recipient. Security issues must be handled in ‘scalable’ fashion; that is, different levels of security have to be selected between different trading partners in accordance with the vulnerability of their business processes. Rather than the expensive and at times impractical option of securing the medium, security on the Internet is primarily concerned with content or information. As trading over the Internet proliferates, the Internet will increasingly be required to serve as a vehicle for legally binding transactions. Efforts must thus be directed at securing the message itself, as opposed to the transport mechanism. Listed below are six important potential threats to securing messages.

• • • • • •

A message may be duplicated, lost or replayed. A message may be intercepted and modified. A A A A

third party may pretend to be a valid message sender. sender may claim s/he never sent a particular message15. recipient may claim s/he never received a particular message. message may be read by a third party.

It must be remembered, however, that secure electronic communication entails a considerable commitment in terms of effort, money, and transaction time. The use of the Internet for ecommerce raises the following security concerns.

• • • • • •

No assured delivery (This is rare but nevertheless an inherent weakness of the Internet as it consists of a vast number of connected networks, and the path through the networks is not predictable.) Confidentiality (Intermediaries can listen in on private communications.) Integrity or alteration of the message. Impersonation of the sender or recipient As per prevailing legal provisions, certain signature formalities must be also satisfied. Availability (For example, a hacker taking up all resources on a server and preventing access by genuine users.)

Solutions are being developed to address security issues. Together with GTE, IBM, Microsoft, and other companies, Visa and MasterCard have developed a Secure Electronic Transaction (SET) which will serve as a standard protocol for secure credit card transactions on the Internet. It uses complex cryptography to transmit credit card information and digital signatures to ensure that both buyers and merchants are authentic.

14 15

150

www.unescap.org Referred to as non-repudiation, this requires some way to ensure that the sender cannot falsely deny sending the message, nor falsely deny the contents of the message


In a country where Internet usage is relatively recent and e-commerce is almost non-existent, neither the technical infrastructure nor the legal framework necessary to deal with these security concerns exist at present. In order to promote e-commerce in the country and to give the Internet its value as the medium for communication, business organisations, firms, and the government have to ‘opt for an individual enhanced security architecture’.16 Given the central importance of trust, it is important to address the issue in its entirety. Currently, there are a number of systems available that help in putting a ‘trust infrastructure’ in place. 4.1.1

Building a trust infrastructure

From a systems’ perspective, available security products fall into two main categories: point tools and trust management products and services. Point tools include control, confidentiality and integrity, audit and monitoring. The usefulness of these tools is limited to addressing security issues only at the enterprise level. Given the scope and reach of e-commerce, however, this is not enough. From a policy perspective, an overriding concern is the availability of products and services that will provide the crucial foundation of trust for the sustained use of the Internet for e-commerce. Of late, the international market has seen an emergence of a number of third party products and services17 delivering technical solutions in trust management. These products have three components:

• • •

cryptographic tool kits, other trust management products, and trust management services.

4.1.1.1

Cryptographic tool kits and digital signatures

Cryptography is a data encryption technique designed primarily to provide message protection. With the ever-increasing use of the Internet and electronic commerce, the use of cryptographic tool kits, based particularly on public key cryptography, is finding widespread application. Cryptographic tool kits provide the essential building blocks for trust. Cryptography is basically applied in digital signatures and encryption. There are various ways of signing a document electronically; electronic signatures based on public-key cryptography18 or dual-key cryptography are known as digital signatures. A digital signature is an actual transformation of an electronic message using public key or dual key cryptography. Through this process, the digital signature is tied to the document being signed, as well as to the signer, and therefore cannot be reproduced. Digital signatures are important as they provide a mechanism for authentication (origin of a data message) and integrity (verifying whether a data message has been altered). Digital signatures rely on an algorithm using two different but mathematically related keys: private and public keys. The ‘private key’ is used only by the person doing the signing, the signer, to create a digital signature, and the ‘public key’ can verify the digital signatures created by the private key. 16 17 18

Ibid. For example www.digsig.com Originally recognised within the context of electronic transfer of funds, digital signatures - which are based on public key cryptography - have been thrust into the legal limelight as a solution to the problem of guaranteeing secure electronic commerce.


151

Figure 119 below is a graphic representation of the digital signing process.

Figure 1: Creating a digital signature

Certification Authority

3

Responsibility

1

5 2

6 4

Subscriber

Relying Party

The public key, as its name suggests, may be freely disseminated to those who need to verify the signer’s digital signature. There is no need to keep this key confidential, whereas the private key is known only to the signer and must at all times be kept secret. These key pairs share several important characteristics. First, while they are mathematically related to each other, it is impossible to distinguish one key from the other. Therefore, the private key cannot be compromised by the knowledge of an associated public key. Second, each key in the key pair performs the inverse function of the other. What one key does can be undone only by the other. Figure 2 below is a graphic representation of the digital signature verification process. Figure 2: Verifying a digital signature Message

Message

Hash Function

Message Digest

Signature Function

Digital Signature

Signer's Private Key

4.1.1.2

Public key infrastructure and the role of certifying authorities

With advances in the technology, digital signature software is now widely available even for individual users. Individual users can either purchase it or download it for a fee. This means that anyone can generate a key pair and release his or her public key to the public domain, using any identity he or she chooses, with no guarantee that the identity is authentic. This illustrates that security measures are not adequate and calls for some type of entity to serve 19

152

www.digitrust.com


as a trusted third party (TTP) to vouch for the individual’s or firm’s identities and their relationship to their public keys. This entity is referred to as Certification Authority (CA). The Certifying Authority is a trusted third party that issues digital certificates to its subscribers, in essence binding their identities to the key pairs used to digitally sign electronic communications. The general contents of digital certificates are the name of the subscriber, the subscriber’s public key, the digital signature of the issuing CA, the issuing CA’s public key, and other pertinent information about the subscriber and his/her organisation, such as his/her authority to conduct certain transactions, and so forth. These certificates usually have an expiry date — for security reasons that can also be revoked upon a private key compromise and separation from an organisation, for example. These certificates are stored in an online publicly accessible repository. Figure 3: PKI Process Flow

Hash Function

Message Digital Signature

Signature Function

Message Digest Message Digest

If the message digests are identical, the signature will verify, if they are different in any way, the signature will not verify

Signer's Private Key

Since trust may be the most crucial element for the success of electronic commerce, Nepal should take all the necessary steps to address the issues that run the gamut from procedural and legal to those relating to digital signatures and digital certificates. Over time, we must work out security and trust-building strategies that are more suited to our requirements but which are also robust enough to facilitate e-commerce globally. In the meantime, what we may need to do is to build relationships with reputed international Certifying Authorities in the U.S. or elsewhere. The government and organisations like the Federation of Nepalese Chambers of Commerce and Industries should be mobilised to play the important roles of infomediaries in ensuring trust and legality required in international electronic commerce transactions. In the absence of a comprehensive legal framework in the form of either an Information Technology Bill or Cyber Laws, the immediate step that the government or the private sector could embark upon is to identify foreign certifying authorities and start building relationships with them. The Federation of Nepalese Chambers of Commerce and Industries can play a leading role in this respect. 5

PAYMENT

MECHANISM

It is believed that had payment systems been better streamlined and effective, electronics commerce could have made a more significant headway than it has today. Even though a number of modes of payment has been introduced (see Box 2), the e-commerce community has yet to see a solution that is fast, safe, reliable, and workable. For Nepal, the challenges are even more formidable given the rigorous foreign exchange regulations and export formalities, which are far from conducive for the development of e-commerce in the country. Chapter 6 — E-Commerce

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The use of credit cards is still one of the most popular international payment mechanisms for transactions carried out electronically. Some of the other popular payment mechanisms also centre on credit card ownership (see Box 3 for different methods of payment).

Box 2: How does a credit card transaction work? The moment a card transaction is initiated, it goes through a host of interfaces, usually in less than 15 seconds. First, the transaction details - buyer’s card number, merchant number (the one who has subscribed to a particular CSP), and the amount of the transaction - travel to the processor that holds the merchant’s bank account. That processor reads the numbers, and calls the processor that holds the buyer’s account. The second processor tells the merchant processor if the card number is valid, and if the buyer has enough credit. Then it passes an approval code to the merchant processor, which credits the seller and passes the approval code back to the merchant’s terminal. (The two processors settle up later, usually in a batch mode, usually overnight.) Traditional credit card transactions are authenticated by the signature of the buyer, which is missing from credit card transactions carried out electronically, and which bankers call ‘card not present transactions’. You need two things to enable transaction processing on a merchant’s website, • software to handle the interfaces (payment gateway) and • a banking relationship linked to a processor

This poses a major challenge for Nepal, where credit card ownership/usage is negligibly low. It is important that banks and the business community work together to introduce the most appropriate payment mechanism for e-commerce. Nepal Rastra Bank should take a leading role in coordinating the implementation of an appropriate payment mechanism for e-commerce transactions. A sustained effort Some of the companies in the US provide services to eaimed at promoting the use of merchants in the form of payment gateways and switches. One credit cards will also yield such firm is CyberCash w ( ww.cybercash.com). dividends to all the stakeholders in e-commerce. This seems to be happening slowly, largely at the initiative of private commercial banks. Apart from this, a host of other popular payment mechanisms should also be thoroughly studied and the ones best suited to the Nepalese business environment should be introduced. Given the complex fiscal regulatory provisions, the payment mechanism, especially in the context of e-commerce transactions carried out internationally, demands a thorough study and recommendations based on the current macro-economic realities. 6

CONCLUSION

It is evident that e-commerce will bring about a major paradigm shift in national and international trade and commerce. A developing country must therefore be prepared to take advantage of the potential of e-commerce if it is to improve its economic situation and energise its economy. Even though there are numerous challenges to making fully- fledged e-commerce a reality in a country like Nepal, a concerted effort is needed to facilitate its growth and development. The government, in conjunction with the private sector, can and should play a crucial role, with the private sector taking a leading role and the government that of a facilitator. E-commerce should feature prominently in our export strategies. We should evaluate our export potential seriously, the quality of goods and services that we produce and our potential to be a part of the global supply chain. This calls for a national commitment to infrastructural development and economic growth to create new opportunities. All must begin with the basics: extending scope, outreach, and quality of telecommunications’ infrastructure and making it more affordable and promoting Internet connectivity and usage. 154


Box 3: Commonly used payment mechanisms Credit cards are still the most popular way to pay for goods and services on the Net. The more card types you can accept, the better your sales will be. Credit cards are not that popular in Nepal and Nepalese nationals cannot normally own international credit cards. Most international credit cards are accepted by the commercial banks but small and medium-sized businesses do not accept them. There is a long way to go before the usage of credit cards becomes the primary means of collecting payments for products/service offered through the web. These cards are used widely in Europe and are increasing in importance in the U.S, with ATM/Debit Cards CardData reporting a 42% growth rate last year as opposed to 15% for credit cards. The major advantage for the merchant is that they significantly lower transaction costs over cheques . To use digital cash, both the customer and the merchant need to have an account with Digital Cash the bank that issues it. The bank provides the customer with ‘purse’ software for managing and transferring their digital cash. Customers convert funds from their regular accounts into digital cash and then transfer it to purse software which stores it to their hard drives in encoded form until it is spent. MicroThe major advantage of digital cash is the relatively low transaction costs and the fact payments that it can be divided into smaller denominations than are used in the real world. This makes it suitable for use in low-value transactions such as paying for stock quotes or news’ articles. The small denomination tokens are known as microcash and transactions with them are called micro-transactions or micropayments. Electronic In virtually all aspects, an electronic cheque has the same feature as a paper cheque. In its simplest form, some systems merely require the customer to fill out a form in the web Cheques store. Data are then transferred to the merchant, who converts them into a paper cheque form using a blank cheque form on an office printer. A further level of security can be obtained by utilising third part inputs for additional services such as verification. For consumers who are not keen to transmit their credit card numbers across the net, Virtual PIN first VirtualPIN (www.fv.com) service provides an additional level of security. First Virtual issues a VirtualPIN to the customer after they have provided their card number over a voice telephone. Customers can then use their VirtualPIN in lieu of a credit card number. For each purpose, First Virtual sends the user an e-mail message asking them to confirm the transaction. Once Virtual receives the confirmation, the credit card transaction is processed off the Internet and an e-mail is sent to the merchant authorising him to ship the goods. Digital Wallets Other ways of increasing credit card safety have come from CyberCash and Verifone, both of which provide consumers with a helper application called Wallet. In the process of setting up the Wallet, the consumer provides his/her credit card information and receives an encrypted code that refers to the credit card in return. When making a purchase at a participating web-store, the Wallet passes the code to the merchant. The merchant then hands over that code, along with the purchase price, to the Wallet issuer who verifies the transaction with the credit card company and transfers the funds to the merchant along with an authorisation to ship the product. The eCharge system allows customers to charge web purchases to their normal Echarge telephone bills. It is currently only available to merchants in the U.S. and Canada and in some countries in Europe. Traditional Electronic payment via the web is still in its infancy and as such many customers would payment still prefer to pay by cheque, demand draft or cash on delivery Methods Credit Cards


155

The prevailing legal system, and regulatory measures, have to be adjusted and reformed to accommodate electronic commerce. Existing financial and export regulations must be revised and improved upon to facilitate e-commerce on a sustained basis. The crucial element of trust must be addressed adequately by all actors. Efforts should be undertaken to build a sustainable rural and remote network that can carry information, services, and programmes to the rural and remote people of Nepal so as to minimise the digital divide and expand the scope of opportunities. As such, the establishment of tele-centres could play an extremely important role. Nepal Rastra Bank should take a leading role in implementing proper payment mechanisms for purchases made electronically, especially by international buyers. Concerted efforts are needed to develop another key element, that of human resources.

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Chapter

7

E-Governance and Computerisation

1

I NTRODUCTION

1.1

National vision : Good governance

E-governance comprises development of a national IT network, computerisation of government functions, development of information systems and implementation of programmes relating to them from central to local government levels. Objectives of e-governance

• • •

To ensure transparency, efficiency, effectiveness, and accountability in government operations To improve most of the efficiency of administration and build an interface between the government and private sector To share and disseminate information between government agencies, institutions, social organisations and the private sector

Desired goals of e-governance initiatives

• • • •

To provide government services in an effective, timely, and transparent manner To enable better communication and sharing of information and resources within and between government departments, allowing people to work together more effectively To enable the government to provide the public with better services that are more easily accessible and readily available To promote information (data, text, video), interchange in real time via computer networks among government ministries, departments, directorates and offices

• • •

To develop human resources to cope with the technological and social changes and maximise the use of computer systems and applications in the administration to achieve paperless governance To computerise government institutions and build access mechanisms for the public to access data freely To ensure transparency and accountability in government operations

It is being increasingly realised that for Nepal to meet its broad development challenges, the issue of delivering good governance should be given due importance. Efforts undertaken so far, aimed at making government more accountable, transparent, and productive, have met with little success. Complexities in governance have grown with time, and the current government machinery has simply failed to face challenges because of an increasing population and a changing economic order. All this has fuelled the debate on ways and means of delivering good governance as it has a direct bearing on overall development objectives. The productivity advantage offered by pervasive use of information and communication technologies in various areas are all there to see. Some countries have been able to lever benefits offered by these technologies to ensure an effective delivery of government goods and services. In a country like Nepal, characterised by a difficult terrain and a lack of access to government services for people, especially in the rural and remote areas, e-governance offers the distinct possibility of effectively streamlining the delivery of government services. This is, however, challenging and requires some resolute responses and a major paradigm shift in the way the government functions - not to mention the significant resource commitments needed to establish an infrastructure and develop human resources to implement and sustain the efforts. In its bid to position itself on the global IT map and to streamline its governance functions, it is important first of all to identify the key issues and work out a policy and strategic framework regarding electronic governance (e-governance), keeping in mind the broader objective of national development targets. As such, the underlying concept of e-governance is built on the general principles of good governance characterised by its attributes of transparency, accountability, efficiency, and effectiveness in the delivery of government goods and services. Good governance can be seen as an exercise of economic, political, and administrative authority to better manage the nation’s affairs at all levels. Any initiative aimed at introducing e-governance presents a number of distinctive challenges. The speed of development in the ICT sector and its subsequent application in the public sector represent a major challenge, given the acute resource limitations in the country. Second, a broad range of technical, legal, economic, and institutional questions must be dealt with for e-governance to take hold. Third, a change in mind-set would be required, and it should be accompanied by a nurturing of bureaucratic and administrative value systems and norms that regard transparency and accountability as necessary. The gradual adoption and application of e-governance in the country entail certain prerequisites, which are as follow. Government to become an active player The government should take a proactive role in the use and application of state-of-the-art information and communication technology tools and resources to promote efficiency in its administration and governance.

158


Attitudinal change The use of information technology for administrative purposes and governance must be encouraged and, if necessary, enforced. In order to facilitate this, attitudinal changes are imperative, especially among decision-makers and staff in the lower echelons of the government’s administrative set-up. This is important as e-governance initiatives, in many ways, represent a major paradigm shift vis-à-vis the approach of traditional governance. Institutional framework A high-level Information Technology Development Council (ITDC) be constituted for policymaking, chaired by the Prime Minister, and with representatives from various ministries and the National Planning Commission will provide guidelines and directives. A National Information Technology Centre (NITC) (proposed in the IT policy) under the ITDC secretariat will execute and implement the HMG IT Plan and Policy. The Ministry of Science and Technology, IT Ministry should be given a special mandate to liase with the ministries, line agencies, ITDC, and NITC to oversee and coordinate the computerisation activities of the government. Each ministry and department should have an IT cell within its planning division. They should prepare annual IT plans for their respective line agencies, including their resource requirements, and submit them for approval to the ITDC secretariat. Exchange of information within government bodies The collection, preparation, and updating of data require substantial financial resources and effort. Thus, the sharing of information already computerised through statistical activities and substantive applications among government agencies should be encouraged and accorded high priority. This would entail the creation of meta data in a coordinated manner. Maintaining quality and standards Clear policies and objectives for standardisation of data and applications should be set. This could be achieved through precise definitions of their field of application, data collection procedure, updating, and process of application development. From the perspective of delivering good governance, IT is a highly potential tool. State-ofthe-art information and communications’ technologies offer immense benefits in terms of productivity and fast-paced delivery advantages and transparency in government service delivery. In order to realise the objectives of good governance through the use of IT, the aim should be to influence the way the government system functions. E-governance initiatives help to expedite the functioning of the system, ensure better services for the people, and allow greater transparency. It is important to realise that the basic tenets of good governance remain the same for e-governance. All these call for fundamental changes within the organisational environment of government offices, including attitudinal changes regarding application and integration of IT in government functions, delegation of power down the line, accountability issues, and the removal of legal and regulatory obstacles that impede egovernance initiatives.

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Given the growing complexity of governance issues and the challenges that the government is called on to meet, it can be said that the application of information technology in governance is no longer a luxury, which was a belief firmly held until recently. It is now considered a necessity. Therefore, it should be given a high priority and launched with adequate planning and policies backed by proper institutional arrangements and funding. In the discussion the terms IT and ICT have been used interchangeably. 2

GLOBAL IT

SCENARIO

Before we examine issues of e-governance, it would be worthwhile to discuss the global IT scenario and assess Nepal’s preparedness in terms of the technology involved. Information technology (IT) represents the fastest growing segment of the global economy. The present US trillion-dollar industry has been growing at more than 20% per annum for several years. Even tapping a very small portion of the global IT market would open up a new vista for Nepal’s development efforts towards poverty alleviation. Recent developments in the IT sector, resulting from the advent of the Internet and advanced networking technologies, have opened up possibilities hitherto unimagined and spawned the development of applications in a wide range of areas. Some of these IT applications have had a more significant impact than others. For businesses, the attraction of ecommerce as an important offshoot of the convergence of information and communications technologies is loud and clear: no warehouses, no waiting, no guesswork. Rather than stockpile what is believed will sell, businesses can simply respond to orders placed on the web. Instead of setting a price based on sales’ history, a seller can respond to what buyers are willing to pay. Instead of hoping that advertising reaches the right buyers, a company can use the information provided by web browsers to target the relevant people. It is an increasingly compelling vision, and one that few companies can ignore or do so at their own peril. It must be asked, however, if the benefits of e-governance are as apparent and realistic? Also, in what ways is it relevant for a country like Nepal? 2.1

Why do we need e-governance?

Nepal continues to face one of the most difficult of development challenges. Several years of concerted efforts aimed at alleviating poverty have yet to show results. As the government continues to be a key actor in the development scene whose actions have ramifications for the private sector’s initiatives, the issue of governance has acquired much greater significance in recent years. Policy-makers have responded through initiatives that seek to strengthen governance at all levels. Given the growing importance of the ICT sector and its widening application, brought on by recent technological developments, it has become increasingly compelling to see if these technological advancements can be levered to provide public goods and services in an efficient, cost-effective, and transparent manner. The dissemination of information on a wide range of issues seems to be a major activity that defines governance. E-governance initiatives taken elsewhere have proved very effective in widening the scope and ensuring access for a larger number of people to government services. In a country like Nepal, with such a poor transportation network, the ICT sector seems to have immense promise, even if it will be enormously challenging. The role of government in collecting, processing, and disseminating information is significant. This is true of national, local, or municipal governments. The planning and management of vast amounts of information in a developing country like ours is either in its infancy 160


or in a state of disarray. Given that information is considered a resource, the utilisation of IT to achieve more effective and productive delivery of government services through better management and dissemination of information is the need of the day. This is perhaps so for Nepal, where poverty remains the challenge and efforts aimed at reducing poverty and energising the economic sector have distinct information ramifications. Information is increasingly a resource that forms the basis for planning and supports monitoring and feedback mechanisms. As such, information becomes central to governance initiatives. Information gathered from various units of the government, such as ministries, departments, directorates, and offices, is a waste of effort and money and has little value if it is not processed, analysed, and used properly. Therefore, the computerisation of government today and in the foreseeable future is a prerequisite for effective national development. E-governance initiatives, however, go beyond the simple management of information – they are aimed at facilitating government functions and the effective delivery of services. Specifically, we need to encourage E-governance to do the following. Bring transparency to government operations and the government-public interface. Computerisation and networking of local-level outfits, departments, and ministries of the government will bring transparency to the activities of different operations by enabling everyone to access the network and gauge what is happening in other agencies. It will also create a bridge between the government and the public for basic information access and interchange. Improve the efficiency and effectiveness of government’s service delivery systems. Once the basic computerisation infrastructure with appropriate applications and processes are in place, the government could embark upon disseminating information to the public by setting up information kiosks in public places. This will facilitate the government-citizen, government-industry, and government-government interface, and result in effective service delivery systems. The Ministry of Science and Technology should, in the capacity of a coordinating body, make government information available to the public with the following objectives:

• • •

improve financial management, improve the efficiency of administration, and disseminate information to the private sector.

Despite the potential benefits, embarking on a fully-fledged e-governance initiative would be challenging for Nepal as it would entail substantial resource commitments – human, material, and financial. Moreover, e-governance and computerisation cannot be achieved merely by installing computer hardware, software, and establishing networks. There may be a need for organisational, structural, attitudinal, and operational changes in the government departments and their respective line agencies to ensure the smooth implementation and functioning of e-governance.


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3

HISTORICAL

BACKGROUND

The information and communication revolution has opened up powerful new business and social development opportunities throughout the world. A core requirement to realising these opportunities is an environment that allows free access to information. Moreover, success in the information age requires more than simply the development of IT. It requires the parallel development of supporting infrastructure in financial, legal, and human resource areas, in coordination with an agreed-upon national information technology strategy. His Majesty’s Government undertook its first sizeable initiative in 1971 in the domain of IT application when it commissioned the electronic processing of the National Population Census data. The establishment of the National Computer Centre (NCC) followed in 1974 with the primary objective of computerising government and public sector entities. During its existence, the NCC developed software for various government agencies, processed examination results for the SLC Board and Tribhuvan University. It also conducted regular courses in computer literacy and software applications. Before the dissolution of the NCC in October 1998, there was a plan to establish a National Information Technology Centre (NITC) by restructuring the NCC, updating its technology, and giving it a new mandate. Unfortunately, it was not realised. The private sector began its activity in the early eighties after the introduction of personal computers. To date, there are about 40 software development companies, more than 200 companies involved in IT trading, and more than 500 training institutes for IT at different levels. Where human resource development is concerned, educational institutions in the government and public sector recently started academic IT courses in their respective institutions. 3.1

Where are we?

Before addressing e-governance issues, it is important first to take stock of where we are in the computerisation of the government or public service entities. Although there may be some dichotomy between traditional computerisation issues and the issue of e-governance, a closer examination reveals a substantive interrelationship between the two. It is difficult to perceive e-governance in the absence of a certain level of computerisation and automation of government functions. Lately, the government has become aware of the growing importance of IT and the role it could play in the socioeconomic development of the country. It was along these lines that the National Planning Commission constituted a high-level committee to formulate IT policy and strategy for His Majesty’s Government of Nepal (HMG/N), supported by six subcommittees structured along the following thematic areas.

• • • • • •

Human resource development Information and communication infrastructure E-governance and computerisation Software production and application E-commerce Universal access to information

The state of development and pace of computerisation and automation in the public sector domain in Nepal remain dismal. There are a few computers in different government institu162


tions and most of them are used for word-processing purposes only. Thus, computerisation efforts in their entirety have not been undertaken except by a few banks and government institutions. Any initiative aimed at tackling the computerisation issue from a systems’ perspective is still unsatisfactory, primarily due to resource limitations and, occasionally, misplaced priorities. The situation in the district and local government outfits beyond Kathmandu is worse as most of them do not even have a PC. There are various obstacles in the promotion and implementation of IT in the government and the public sector. Some of the major problems are as follow. IT literacy There is a low level of IT literacy in society at large and specifically in the government. There is an urgent need for widespread and continued IT training for employees together with the induction of fresh IT graduates into the government. Training The curriculum of the various training institutes should be designed to meet human resource requirements in the market and in the government. Otherwise, the government should have its own training institution to cater to its own IT training needs. Infrastructure Although infrastructure, such as telecommunications, power, road access, and sanitation, have been improving lately, it is not yet adequate in most parts of the country. As far as the development of communications’ infrastructure is concerned, the primary focus has been voice communication infrastructure. If we are to embark effectively on e-governance and Internet-enabled applications, we should put an equal emphasis on developing infrastructure that facilitates data communication. The creation and sustenance of an infrastructure for IT education, training, and research should also be facilitated by the government. IT policy The government is currently in the process of adopting a comprehensive IT policy. That policy should be appropriate and facilitate conditions that remove impediments to promoting the IT sector in the country. Lack of coordination A lack of coordination and integration among IT professionals from the government, industry, and the private sector is also one of the obstacles to the development of the IT sector within the country. Coordination is essential because IT use and acquisition, particularly in a developing country like ours, needs interplay among all stakeholders. Service delivery IT vendors provide poor service delivery as they do not offer total solutions but sell their hardware/ software, with very limited after-sales’ support. This has a direct bearing on the sustainability of any IT system developed. Chapter 7 — E-Governance and Computerisation

163

IT resources This is an information age and a dynamic one. The ever-evolving nature of technology and application areas underscores our need to know what is going on in the world so as to better our performance, our effectiveness, and our efficiency in service delivery. The lack of resources to meet relatively higher connectivity costs and costs involved in the computerisation of government outfits is an obstacle to establishing IT. 4

CURRENT

4.1

Global

TRENDS

The trend towards globalisation deserves special attention as the ICT sector has become a potent actor in this process. Globalisation is manifested in the development of regional trade blocks, trans-governmental organisations like the World Trade Organisation (WTO), and in the spread of multinational corporations all over the world. The presence of such transnational bodies mediating for national concerns and universal laws weakens a state’s absolute sovereignty. Globalisation is also forcing governments to be more accountable, transparent, effective, and efficient. In such times, it is imperative for the government to find a balance between taking advantage of this globalisation and providing a secure, stable socioeconomic environment for the country’s development. Developments in the ICT sector can be used to achieve this objective. 4.2

Regional initiatives in IT and e-governance

4.2.1

India

The Prime Minister of India has called for measures to make India an information technology superpower by 2008. As a major step toward this, the government has announced the formation of a Ministry of Information Technology (MIT). This initiative stems from the realisation that IT is the key to vigorous economic activity, improving governance, and improving the overall quality of life in the new millennium. Functions of the MIT As a ‘key sector’ the MIT will review the measures by which Indian companies and products can ride the Internet boom, with an emphasis on greater Indian content on the net. It will also suggest measures to spur the growth of exports with extensive use of e-commerce and electronic data interchange. The ministry will outline the extensive use of information technology in all sectors of the economy. Important functions under the purview of MIT are: 1. 2. 3. 4. 5. 6. 7. 164

policy matters relating to information technology, promotion of knowledge-based enterprises, development of electronics and coordination amongst its various users, all matters relating to personnel under the control of the ministry, coordination of requirements relating to electronic processing equipment (computers), all matters pertaining to a Silicon facility, all matters concerning computer-based information technology and processing, such as hardware and software, standardisation of procedures, and matters relevant to interInformation and Communication Technology - Policy and Strategy for Nepal

national bodies such as IFP, IBI, and ICC, promotion of the Internet, promotion of information technology education and information technology-based education, 10. national Informatics Centre, and 11. an export promotion council for electronics and computer software. 8. 9.

In its recommendations, the Prime Minister’s IT task force called for some vital steps to be taken to legalise e-commerce and to ensure a regular flow of funds to the IT sector. Immediately following its formation, the Ministry of IT followed up to make sure these recommendations were carried out. A committee of ministers, under the Chairmanship of the Minister of IT, has been constituted by the government to coordinate issues related to the convergence of IT technologies and services. The ministers of communication, commerce, and I and B are members of this committee. Other steps in this direction include the setting up of venture capital funds and the introduction of the IT Bill ’99. Venture capital funds The software industry is one of the fastest growing industries in India with more than 50% annual growth. Its sustained and continued growth raises the issue of the availability of finance in the industry. The IT task force set up by the Prime Minister in its first report recommended that banks and financial institutions establish joint ventures with Indian or foreign companies to set up funds dedicated to venture capital to cater to the credit needs of the industry and to encourage small-scale entrepreneurs. As an initiating step, Prime Minister, Atal Behari Vajpayee, launched the IRs 100 crore (approx. US$ 22 million) National Venture Fund for the software and IT industry. IT bill 1999 E-commerce and the Internet are two of the most important developments, not only in IT but also in the world of business. As increasing numbers of activities are carried out electronically, it becomes important that evidence of these activities be available to demonstrate legal rights. The Bill facilitates electronic transactions in trade and commerce and eliminates barriers to E-commerce resulting from uncertainties. (source : National Informatics Centre (NIC) website) 4.2.3

Singapore

Government computerisation The Public Service for the twenty-first century’s (PS21) vision of ‘one-stop, non-stop’ electronic government services to all Singaporeans rests primarily on computerising the civil service. With easy online access to the government, these benefits extend beyond Singapore to bring the ‘Connected Government’ to Singaporeans around the world. Singapore is one of the few countries in the world with an integrated and coherent approach to computerisation in the public sector. Its all-encompassing civil service computerisation programme (CSCP) aims to turn the entire civil service into a world-class exploiter of information technology.


165

Since its launch in 1981, CSCP has brought about many exciting changes to how the Singapore government works, interacts, and serves the public. As the technology continues to evolve, the CSCP continues to keep up and take advantage of opportunities for innovation. IDA Singapore has put in place a strong government information infrastructure and deployed various Internet technologies and applications (such as a government Internet website and eCitizen Centre) to make communications and transactions between the government and the public more accessible and convenient. IDA Singapore also articulates the ICT policies and standards for the civil service. It identifies appropriate technologies for experimentation and exploitation in government and spearheads and manages government-wide ICT initiatives. At the core of the government IT infrastructure is the GovII, a multi-layered IT infrastructure that links public sector agencies to facilitate communication between the civil service, external bodies, and the public. It enables a ‘Connected Government’ through which people communicate and work together more effectively and services are delivered to users in an accessible and timely manner. Among the infrastructure and suite of applications delivered over the GovII are the Public Sector (PS) Smart Card, Government Electronic Mail System (GEMS), and the Government Intranet. Enhancing internal efficiency The government Intranet and messaging infrastructure enables better communication and sharing of information within and between government departments, allowing people to work together more effectively. Serving the public Through delivery mechanisms, such as public kiosks, the Internet, and Singapore ONE, the government is able to serve the public better with more easily accessible and readily available services. Working with partners Improving internal efficiency is just the first step. With increasing collaboration between the government and the private sector, it is important for us to share information with partners as easily and efficiently as we do internally. Extranets allow just that by extending our Intranet to our partners so that information can be shared easily and securely. (source: National Computer Board (NCB) Singapore website) 4.3

National scenario

Telecommunications The Ministry of Information and Communication’s liberalisation of the Internet sector has made the Internet, within a few years, one of the cheapest and most widespread means of access to information and electronic mail (e-mail). Since deregulation, nine Internet Service Providers (ISP’s) have started operating in Nepal, all within Kathmandu Valley. 166


Nepal Telecommunications Corporation has the basic monopoly of telephone services , with systems that are digital and modern, though mainly concentrated in Kathmandu and other urban areas. Rural access is severely restricted with low tele-density in those areas. Since all the communication-related initiatives so far are predominantly intended for facilitating voice communications, development of infrastructure for suitable high-speed data communication is needed. IT applications in government Some ministries and departments of the government are using IT applications and resources and there is a great deal of enthusiasm for its widespread application. But the pace and quality of implementation can still be improved considerably. Government departments developing and implementing IT applications lack the ability to address problems from a systems’ perspective. Things are changing gradually, however, and, of late, there have been some encouraging developments. The Ministry of Science and Technology (MOST) has recently installed a VSAT to provide Internet connections and develop a government network between the ministries and departments. With minor upgrading it will be technically feasible to provide access to rural areas even up to the Village Development Committee level, provided other enabling infrastructures are in place. So far there have been no concerted efforts to create VAN (Value Added Networks) to facilitate communication and exchange of information among government agencies on a larger scale for e-governance. Success stories Some of the areas in which IT has been successfully employed in Nepal, with considerable impact, are as follow.

• •

IT application in banking has been successful in offering 24-hour banking and countrywide branch office networking. Some areas of successful application of IT in government institutions include the national pension and provident fund, telephone and electricity billing systems, VAT department, and customs’ department (partially).

The success rate is higher for smaller-scale IT applications at the firm/institutional level than at the corporate and national levels. 5

AVAILABLE

FACILITIES, SYSTEMS, AND RESOURCES IN THE COUNTRY

5.1

Available resources and IT applications in government

Computerisation is growing steadily in some sectors of the government but a majority of these computer systems, communication equipment, and other resources are procured for projects run by foreign donors. As a result, the problem of ownership among government departments surfaces time and again. IT-trained personnel exist in these projects but once the project is handed over to the respective agencies the management and sustainability of the systems become major issues.


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5.2

Infrastructure

The creation of infrastructure involves a lot of investment, either directly or indirectly. Direct investments relate generally to capital expenditure for physical entities such as highways, telecommunication networks, public utilities, industrial parks, to name a few. Indirect investments include education and training, government administration, and everything else needed to manage and ensure the sustainable development of a country. An appropriate infrastructure assumes great significance when it comes to adopting an integrated approach in developing the ICT sector for national development. This will be especially so since ICT’s role in national development has never been considered pivotal and, consequently, the specific needs of the ICT infrastructure have been given less attention than they deserve. E-governance relies heavily on communications’ infrastructure as it draws its strength from a government-citizen, government-industry, and government-government interface. The provision of a dedicated networking infrastructure, including VANs (Value Added Networks), as well as the provision of Internet booths throughout the country, should be important considerations. Telecom regulating authority The Nepal Telecommunications Authority is the main regulator in the provision of communications’ infrastructure. After a landmark decision to provide licenses to ISPs to install their own VSAT, Internet connectivity charges went down 40%. In this situation of rising demands for telecom infrastructure and a concomitant rising demand for data-grade communications’ infrastructure with increasing bandwidth requirements, there is a need to streamline the telecom sector to meet the challenges of changing times. This means deregulating the telecom sector as quickly as possible. Some activities along these lines are either complete or in the pipeline. They include:

• • • •

licensing open for wireless local loop and GSM by March 2000 AD, licensing to be extended to international services and long distance telecommunications by the end of 2001 AD, the telecommunications’ environment to be open to all by the end of 2004 AD, and licensing available for the digital data network.

Telecommunications/networking Telecommunications and networking facilities face the following constraints.

• •

The main thrust area is the basic telephone service, which is far behind in the implementation of data communications. Customers have limited choices for access to Internet: - Dial-up lines

- Leased lines • •

168

Since leased lines are given through the telephone lines, bandwidth bottlenecks are encountered. Telephone lines are not reliable for data communication needs. Technically, the NTC is digital and therefore minor investments could achieve major breakthroughs in terms of gearing it up for more ‘data intensive’ demands. It should go for ADSL / ISDN or other Information and Communication Technology - Policy and Strategy for Nepal

advanced package switching systems to eliminate unexpected bottlenecks. Fibre optic lines should be explored as an alternative. 5.3


Government organisation There is as yet no institution with a specific mandate to formulate an IT policy or act as an executing agency to implement a policy for e-governance and computerisation in the government. Given the complexities involved, it would be very desirable to have such a body as e-governance initiatives demand a coordinated and focused approach. The initiatives undertaken so far lack coordination, with different government agencies developing individual sectoral computer applications that could later create data integration and authentication problems. A centralised approach might be desirable to avoid duplication of systems’ development work and the sharing of limited resources. 6

KEY

ISSUES

Some of the issues to be addressed for IT application so that the government can achieve good governance are given in this section. 6.1 6.1.1

E-Governance Technical (hardware/software)

The government’s primary objective of computerisation should be to automate the current manual processing of a vast amount of data in order to enhance productivity and efficiency for the effective delivery of government services. Experience cautions us against the danger of finding investments made in hardware, application software, and even in training without a proper and holistic resolution of issues such as those of sustainability, a management setup to ensure prompt and regular delivery of services, and the regular updating of data. Any e-governance initiative has to address the technological problems objectively by identifying functional areas in every government organisation to initiate the process of computerisation and choose a hardware platform and software applications tailored to the specific requirements of the institution concerned. We should create different levels and models of computer applications for the ministry, department, directorate, and for government and public offices in urban and rural areas which could be suitably customised in accordance with the specific location and work requirements. Without linking separate government entities, it will not be feasible to achieve e-governance. As such, it is important to develop networks based on appropriate backbone and topology. This could include the development of VANs and Intranet. 6.1.2

Management of changes

The management of change is a major challenge in implementing IT for good governance. Changes in the decision-making procedures, processes, and delegation of power would lead to mandatory organisational and institutional changes affecting both people and methods in all links of the delivery chain. Chapter 7 — E-Governance and Computerisation

169

This means that changed processes will have to be properly understood, accepted, adopted, and improved to enable the adoption of a form of e-governance that takes full advantage of information technology. 6.2

Human resources

Human resources present another important aspect of any e-governance initiative. Given that e-governance is at times technology-intensive involving management of networks, optimal use of Internet technologies, and the development of a service delivery system, the availability of human resources becomes a key issue and has a direct bearing on the sustainability of the undertaking. A shortage of manpower trained in niche areas to enable e-governance is a major impediment to implementing e-governance solutions. See the chapter on human resources. 7

RECOMMENDATIONS

7.1

Strengthen HRD activities

Human resources are at the centre of the global IT industry and applications that add value to it. Training needs must be identified and appropriate measures taken to ensure a regular flow of manpower trained in the technologies and systems that enable e-governance. In order to strengthen the computerisation of the government and promote e-governance, the Public Service Commission should make it mandatory to have a certain degree of IT knowledge to qualify for all government posts at entry level. A holistic approach to the development of human resources must be adopted that should aim at strengthening both public and private institutions engaged in human resource development in the IT sector. 7.2 7.2.1

Tele centres Promote computerisation initiatives in government

As stated earlier, e-governance initiatives should not be seen in isolation. In order for egovernance to become a reality, it will be important to embark on the computerisation of government offices and to link them through a specialised or Internet-based network. The computerisation drive could be launched in phases by identifying and prioritising areas that could benefit most from the computerisation initiatives. MOST should be equipped and strengthened to provide necessary oversights on the computerisation initiatives of the government. Along these lines, each ministry should have at least one IT expert to advise the ministry on technical issues and work with computerisation efforts to be coordinated by MOST. The expert should be assigned to the planning cell of the ministry. The planning cell of the ministry should prepare a five-year perspective IT plan for the respective ministry. Resources for the computerisation of government have to be allocated in phases, in accordance with an agreed-upon priority to cover various areas of government operations. In order to have an immediate impact, the public service delivery systems should be identified and taken up for computerisation on a priority basis.

170


NITC/MOST has to create a government Intranet incorporating security features to ensure the smooth flow of data and access to information between different ministries, departments and offices. It should be made mandatory for the planning cell (IT expert) to revise the data of the ministry and its respective line agencies on the government Intranet regularly. Information kiosks should be set up for the public to access data at points such as post offices and departmental stores. Key areas of public interest should be identified and the contents developed to be initiated accordingly by the Ministry of Science and Technology. Many organisations have been known to independently adopt and develop applications in operating systems and languages that duplicate those of other organisations, thereby wasting resources and effort. This has not only increased costs but also minimised the chances of sharing information between different line agencies. By standardising data, application logic, user interfaces, and a development platform across platforms, operating systems and languages, a great deal of repetition in work and resources can be saved. While identifying and developing new application areas, it is necessary to connect to older systems and databases. These databases should be integrated into a data warehouse to support government decision-making. Given that different applications may work with different languages, a coherent data integration policy needs to be developed. A draft cyber bill should be passed and made available to the public as soon as possible so that the documents stored in the systems will have the same legal validity as those on paper. 7.3

Provision of communications’ infrastructure

Providing an infrastructure is another issue that lies at the heart of e-governance initiatives. Since e-governance solutions are primarily intended to facilitate government-citizen, government-industry, and government-government interface, the presence of a communications’ infrastructure becomes critical. As mentioned, much remains to be done on the communications’ infrastructure front for it to respond fully to the needs of e-governance and ecommerce applications. As computers and Internet connectivity are still commodities beyond the reach and imagination of most Nepalese, it would be appropriate to embark on initiatives aimed at establishing tele-centres and Internet kiosks in rural areas with telecommunications’ infrastructure. This will ensure greater access to information and services. 7.4

Timeline : activities to be undertaken

By the end of 2001

• • • • •

Set up a high-level ITDC and executing agency. Publication of a national IT policy and strategy on paper and on the web. Start the process of computerisation of three ministries, systems’ study, and application development to support government budgeting, local development and planning, as well as the automation resource allocation process. Develop an Internet website for the Ministry of Science and Technology with information on the organisational structure of the ministry, services provided, and procedures, and so on. Develop websites for other ministries with appropriate contents and built-in modules for interactive interface.


171

• •

Initiate steps to expose IT to students in public and private schools. This could include an introduction to a scheme to provide computer equipment to schools. Identify areas in which government services could be delivered effectively using e-governance. Forms for applying for a driver’s licence and filing tax returns, for example, could be made available on the Internet.

By 2003

• • • • •

The IT park should be operational with all the physical facilities and facilitate software and e-services’ exports worth at least US$ one million. Accelerate government computerisation in at least 10 ministries. Launch a long-term programme to introduce IT in secondary schools and universities. Establishment of tele-centres in at least five development regions Availability of government forms on the Internet convenient for local submission.

By 2005

• •

Government computerisation of all ministries Ministries administering and executing work electronically

By 2010

• • 7.5

Accelerate development of government computer applications to include all government departments Ministries and departments administering and executing work electronically Infrastructure

In order to intensify e-governance initiatives, it is important to liberalise the telecommunications’ sector. It is vital to bring in at least another telecommunications’ service provider to compete with the present one. The aim should be universal access to information, good value for money, and lower costs for customers. 7.6


The proposal to create a high-level Information Technology Development Council (ITDC) for policy-making under the chairmanship of the Prime Minister, with representatives from the NPC and various ministries of HMG is a positive step. The proposed National Information Technology Centre (NITC) will enhance for the execution and implementation of HMG’s IT Plan and Policy. Each ministry and department should have an IT cell within its planning division. It should prepare annual IT plans for respective agencies along with funding requirements for approval and implementation to the NITC Secretariat. 7.7

Policy guidelines

The government through its agencies should enforce effective policies concerning the following.

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• • • • • • • • • 7.8

Define IT as a priority sector and set a sound system of labour rules, safeguarding entrepreneurs from the influence of unscrupulous trading practices. Recognise digital documents and digital signatures in the government administration. Accept electronic payment systems between banks, customers, and enterprises. Create a Venture Capital Fund to finance start-up companies that can bring in joint venture companies. Reform the telecommunications acts to make them more relevant to modern technology and global business environments. Simplify export procedures by changing NRB rules to facilitate software and services’ exports or treat software and services’ exports as a special case and make rules accordingly. Reduce customs’ tariffs on hardware/software/multimedia imports and software and services’ export industries. Give incentives (exemption from income tax for exports of software and services for 10 years) to local companies and Nepalese working abroad to establish IT firms in Nepal for the export of products and services. Build adequate roadways, feeder roads, power, communications’ networks, education, regional development control measures, and planned development of infrastructure. Create stringent regulations and make their enforcement mandatory. Resource allocation

The achievements of expected output depend, among other things, on the adequacy of resource input. Resources should be allocated nationally and also by ministry and department, according to priorities and requirements of different agencies.


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Annex 1 Bibliography www.nasscom.org www.nic.org www.infonepal.com www.caninfo.org/general.htm www.bsa.org IT strategy for Nepal: Preliminary Assessment and Recommendations-APDIP/UNDP,’99 www.oedc.org Http://egov.doe.gov.in/bground1.htm

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Annex 2 Details of key institutions implementing IT applications in government S N Institution 1.

2.

MOLRM

MOF

Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ

Hardware/ Software Fifty+PC /compatible computers, printers, digitisers, plotters, UPS Windows 95/98, Windows NT Novell NetWare, GIS, Arcview Oracle Sixty-five PC /compatible computers, printers, UPS, etc. Windows 95/98, Sco UNIX Novell NetWare, MS Access Oracle VSAT/ Hub, etc. 200 PC/compatible Oracle RDBMS Windows 95/98 Novell NetWare Sco UNIX.

3.

NEA

4.

NRB

Ÿ 300 PC’s, 150, printers, UPS etc. Ÿ Windows 95/98 Ÿ Novell NetWare

5.

NPHQ

160 PC/printers/UPS - UNIX/Windows NT - Windows95/98 - Oracle RDBMS

Applications (projects) Land information system

Manpower Three skilled and 35 semi-skilled

1. Financial Management 2. Privatisation 3. VAT Department Debt Servicing ASICUDA

One project manager, rest of the skilled technical staff from outside. Handful of semiskilled personnel

Elec. Billing System Load Dispatch System

IT department consists of 5 skilled and 9 semiskilled personnel

1. Banking application Five skilled and 10 developed such as semi-skilled personnel, accounts, insurance, pro vident fund, government account, central government account etc. 2. Banking Intranet using dial-up modems between Nepal Rastra Bank and commercial banks to send and receive data on Letters of Credit. 1. Criminal records’ system 2. Criminal Information system 3. Driving license information 4. 4. Personnel management


175

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P

ART

THREE

STAKEHOLDERS WORKSHOP

178


Chapter

8

Proceedings of a National Stakeholders Workshop

1

BACKGROUND

The National Planning Commission (NPC) organised a day’s interaction programme to deliberate on the formulation of a national policy and strategy for information and communication technologies in Nepal. The deliberations centred on the position papers on six thematic areas of ICT prepared by a number of national consultants, which NPC had commissioned last year. The main objective of the interaction programme was to initiate a public debate on the issues and to examine the findings and recommendations of the position papers. The six subjects included human resource development, information and communication infrastructure, e-commerce, e-governance, universal access to information, and software development and production. Participants in the interaction programme included representation from public sector agencies, private enterprises, and civil society organisations (Annex 1). 2

I NAUGURAL SESSION

In his inaugural speech, the Hon’ble Minister for Science and Technology, Surendra Prasad Chaudhari, underscored the importance of IT in national development, citing examples from countries that have had remarkable success in the IT sector. He observed that in the ‘wired society’, people of all walks of life could use and benefit from IT. Vice-Chairman of NPC and special guest of the programme, the Hon’ble Prithvi Raj Ligal, said that NPC and the Ministry of Science and Technology (MOST) were cooperating on working out a comprehensive IT policy. He expressed his appreciation for the support extended by International Development Research Centre (IDRC) and International Centre for Integrated Mountain Development (ICIMOD) in this regard. Mr Ligal spoke of a government plan to introduce cyber law in the near future.

The Hon’ble Rameshananda Vaidya, member of NPC and convenor of the programme, drew attention to the main points of the ICT draft policy. The policy focuses on promoting access to ICT services, human resource development, and services and applications. He summarised the main findings of the six reports and outlined their policy implications. 3

GROUP

WORK

To ensure that discussions attained greater focus, participants were divided into six groups to deliberate on the six reports. An intensive discussion of the main features of the reports led the participants to make a number of suggestions and recommendation to include in the proposed ICT policy and strategy document. They are presented below. 3.1

Group one - universal access to information

The proceedings began with Dr Mohan Man Sainju asking the group to focus their discussion on the specific goals and objectives on the subject as well as on the government’s role. He recommended a plan of action for the next few years be drawn. The second part of the proceedings followed by a brief presentation of the paper entitled ‘Universal Access to Information’ by the principal author of the team that prepared it - Mr Aditya Man Shrestha. The paper recommended that Nepal’s information technology planning focus on people, their needs, and development aspirations and not on the technology itself. Mr Shrestha cautioned that there was a danger of undermining Nepalese traditional means of accessing information and the idea of ‘Alternative Media’ was strongly recommended in the paper. Mr Shrestha asked participants to focus on information technology or media that worked in Nepal rather than on chasing the latest information technology, saying one did not have to come at the expense of the other. Rather, both were needed to ensure universal access to information in Nepal. 3.1.1

Key issues

The Chairman of the session, Dr Mohan Man Sainju, opened the floor for group discussion. The discussions focused on the following key issues.

• • •

Why do we need to promote the concept of alternative media? What are some of the forms of alternative media that can help us attain universal access to information? What are the characteristics of alternative media that ensure universal access?

Some points that emerged as a result of the group discussions were: the group felt the necessity of promoting the concept of alternative media because of the unusual circumstances for Nepal and the existing state of access to infrastructure. The group held that the government and influential people forgot or undermined their international and constitutional obligations to provide the Nepalese with access to information. Further, current efforts to draft policies and legislation were driven by a need to acquire the latest technology rather than to ensure universal access. The Access to Information Act seemed to be dictated by the needs of journalists and not by the public at large. In the group’s view, information should be guided by development needs; it should be a means to a greater end such as the alleviation of poverty or of empowerment. 180


More important, policy and strategy design should consider how the Nepalese acquire information and what works in Nepal and not be based on what is available in the market. The emphasis on alternative media should in no way compromise or exclude the current advances in electronic media. They should be complementary. The strategy building process should clearly concentrate on providing access to all, it should be locally affordable, available, and sustainable. It should provide information that matters locally, i.e., it should meet local needs. Further, it should be sensitive to gender and local culture. In other words, it should be demand driven and by the local community. The proposed ‘alternative media’ should be locally owned, designed, and paid for, in the group’s view. It should use local language as far as possible. Electronic media should focus on audio in order to extend its reach. It was emphasised that ‘alternative media’ is not and should not be compromised in favour of the latest technologies and should be complementary to each other. Examples of the alternative media include locally-owned and operated FM stations, brochures, wall-newspapers, street theatre, local libraries and reading rooms, VDC telecom centres, local intranet that allow local access, community viewing centres, and so forth. The group strongly recommended that any national strategy consider the masses on the other side of the digital divide. 3.1.2

Recommendation

From the group discussion emerged the following recommendations regarding plans of action and the role of government.

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• • • • •

The government should de-regulate the alternative media and allow its expansion as quickly as possible. It should facilitate the process of expansion. It should try to create an environment of trust and responsibility. There is a need to standardise the various outputs so that people do not have to waste resources in upgrading costly equipment all the time. For example, of the Nepalese font needs to be standardised as soon as possible. The government should make information-related utilities such as telephone and electricity affordable to the average Nepalese. Telephones are not easily available and even local calls are expensive. Despite the decreasing cost of Internet usage and free Internet access in schools, the cost of telephone connection and usage continues to be a deterrent. The government needs to encourage the establishment of local ISP all over Nepal as sub-contractors and branch offices tend to push prices up. The government needs to improve the overall access to infrastructure and purchasing power of the average Nepalese to ensure universal access to information. All else will follow from that. Universal literacy, for example, is essential. The government needs to research and develop what works in Nepal and make available technologies compatible with Nepalese conditions. Training for new and skilled persons to manage FM stations, for example, has to be a top priority for Nepal. There is a need for greater investment in training. The government needs to close the discrepancy between planning strategies and their implementation. Chapter 8 — Proceedings of a National Stakeholders Workshop

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• • • • •

The government needs to invest more and upgrade the government-owned media because this is the only available source of information for the majority of Nepalese currently. Government-hosted websites need to be updated regularly to become more popular for public information. An information officer needs to be assigned to all government institutions, programmes and projects to facilitate the flow of information to all. The government must keep equity and gender in mind while designing any strategy. The government must support those who are working on innovations in providing alternative media to the Nepalese people.

3.2

Group two - human resource development

Dr Chabi Lal Gajurel underlined the importance of HRD in information technology and its vital role in ensuring sustained development of the IT sector in the country. He also apprised the group of the objectives and major concerns of the paper. Mr Rajib Subba described the major issues raised in the paper, such as the importance of IT for Nepal and Nepal’s endeavour in developing human resources crucial to sustained development of IT in the country. The paper by Dr Gajurel and Mr Subba discusses the current HR situation in the country and volume of IT manpower produced so far at different levels. The paper describes the national education scenario. It provides statistics on the number of teachers and students from primary level to higher studies, along with segregated data on the HR scenario in the information technology domain. The paper also analyses Nepal’s strengths and weaknesses in the information technology sector. 3.2.1

National vision

The paper envisages a national vision of Computer education for all by 2020. Among other things, it incorporates the role of human capital in the information age as well as visions of a model agency for the digital age as follow. Following the authors’ presentation, the floor was opened for discussion. The suggestions that emerge fall into three major areas, which are as follow. 3.2.2

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Key issues

Government initiatives should be integrated with private sector-led HRD programmes. The new distance education programme should be re-modelled to reflect current needs and be integrated to older and existing forms of similar programme initiatives of the government. There is a need for a special institutional set-up that could plan, implement, and influence IT-related HRD in the country in both the private and government sectors. The proposed institution (National Centre for Information Technology, NACIT) should focus more on facilitating the promotion of HRD initiatives than on regulating them. In addition to assisting in devising various curricula, NACIT should collaborate with private and government sector institutions to introduce IT- related courses. Information and Communication Technology - Policy and Strategy for Nepal

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The role of the private sector in HRD development should be clearly defined. With a view to narrowing the potential digital divide, the government should support rural sector IT education in collaboration with the local private sector under special arrangements. The HRD vision should be clear about the direction of such initiatives and the ways of absorbing and using the manpower created with such efforts. HRD policy should be consistent, transparent, and well defined.

3.2.3

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• • • • • • • • • •

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Recommendations

NACIT (National Centre for Information Technology) should be headed by a Chief Executive Officer (CEO) who embarks on continual assessment of the country’s IT manpower requirements and takes decisions accordingly. The government should help to create a conducive environment for the development of the IT sector. The partnership of the human resource development programme, as proposed by the paper, with the teachers’ training programme of the Ministry of Education would strengthen both the government’s programme and the private sector. The computer-based distance education programme could be incorporated into the Radio Education Teacher Training Centre, established in 1978, and the Ministry of Education’s Distance Education Centre, established in 1994. Training and orientation programmes through TV, radio and print media, with a distinct IT dimension could be provided, under the distance education programme envisaged in the paper. NACIT (National Centre for Information Technology) could play a pivotal role with MoE in curriculum development and other aspects related to the development of ITrelated human resources. While developing the curriculum, efforts are needed to ensure a proper measure of coordination with CTEVT (Centre for Technical Education and Vocational Training). Any initiatives towards attracting FDI (Foreign Direct Investment) should be encouraged by attractive tax incentives. Nepal should aim at producing 200,000 people trained in IT within the next five years. The brain drain could be reversed by creating appropriate opportunities and inviting FDI. Prompt and effective implementation of IT policy is vital. The development of HRD curricula should engage school and campus levels. IT manpower should be given proper certification through an effective testing and certification procedure. IT-related HRD initiatives should consider the gender dimension to ensure a more balanced approach to IT education and other programmes. The role of a proposed national board — the National Information and Communications Technology Board (NICTB) under the Chairmanship of the Prime Minister, as envisaged in the paper, should be more clearly specified for the whole IT sector and not HRD alone. NACIT can be established under NICTB as a coordinating agency for IT education and HRD. Computer education should be made compulsory for all beginning at the school level. A centre of excellence, distance education facility, and establishment of educational network are important for developing skills in IT. Chapter 8 — Proceedings of a National Stakeholders Workshop

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IT human resource development and training outfits should be declared a services’ sector and be accorded the facilities of service sector companies.

3.3

Group three - information and communication infrastructure

Mr Bhup Raj Pandey, Chairperson of the group, opened the session by addressing development of communications’ infrastructure for information technology. Mr Bhesh Raj Kanel gave a summary of his paper entitled, ‘Information and Communication Infrastructure’, in which the ICT development trends in the context of the world and the region were presented. The existing infrastructure, key indicators, key questions, and the national vision by the year 2017 were also discussed in detail. The 14 participants commented on the paper contributed jointly by Mr Bhesh Raj Kanel and Mr Subhas Bajracharya. The National Vision and the key discussions and recommendations made by the group are as follow. 3.3.1

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A target is set of reaching a telephone density of 15 per 100 population by the year 2017: presently, it is only 1 per 100. All VDCs and secondary schools and health services should have phone/internet access. By 2017, the infrastructure will allow all the 3,913 VDCs to have access to the Internet and phone. Presently, 1,528 VDCs have access to phones. The present Internet account of 10,000 will increase to 400,000. All the government agencies and secondary schools will have their operations computerised by 2017. There will be adequate infrastructure for the country’s health-care centres to access tele-medicine facilities. Schools should have access to educational materials through the Internet irrespective of their distance and location. Software exports should set a target of earning half a billion dollars per year for the national economy.

3.3.2

•

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National vision

Key issues

The common topics raised by participants included a policy review featuring regulatory practices in licensing, returns on investment, and telecom access for the rural community, among others. The participants suggested revenue sharing for charging a five-year upfront license fee since the purpose of a license fee is to induce the growth of the private sector and not to generate revenue. Revenue would grow with consumption. Participants expressed reservation on spending extra money for too sophisticated, highend computers and related equipment as these could actually be underused. Most participants were unequivocal about the impracticalities of having the Prime Minister (PM) serve as Chairman of the National IT Board. They said the NTB (National Tourism Board) is functioning well without any ministers. It was suggested that one ministry be the central authority, taking full responsibility, and could be called the IT Ministry. Information and Communication Technology - Policy and Strategy for Nepal

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• • • • • • • • •

•

• •

A point was raised that Internet connectivity to the ministries and other government departments is essential. The necessity of an IT park was discussed, in particular the possibility of the private sector establishing such a park with the government providing land or such infrastructure. The centralisation of spectrum management to NTA, instead of to the Ministry of Information and Communications, was considered crucial, but it was suggested the scope be limited to include telecom frequencies only. The prospect of taking advantage of Nepal’s status in the category of least developed countries for foreign funds was discussed. Encouraging banks to provide loans to private investors to build IT infrastructure was also considered vital. It was unanimously agreed that those without access to IT and the Internet are virtually outside the economy. Unless each person has access, it will not be well used. There is a fundamental difference between thinking about IT services as a commodity, affordable to only those who can pay and in thinking of IT as a basic infrastructure that is accessible to all. Government offices lack the culture of making information available. Thus, development needs must be changed or else IT and development cannot be used in the best way. The information needs of people depend on whether they are researchers or industrialists. Information should be generated and disseminated to meet the varied needs of the nation. Supporting infrastructure, such as electricity, is essential. The leadership of organisations should be aware of IT potential. NITB should have representatives from users’ groups. As with sectors of telecommunications, the National Terrestrial Infrastructure should be liberalised to allow private sector participation. A permanent regulatory board should be constituted with competent members whose salaries and remunerations are not restricted to the levels of corporation offices, as is the case presently. The high tariffs for international telephone calls prevent younger people from exploring professional and educational opportunities abroad. Thus, the tariff for international calls must be brought down to a reasonable level. There is no need to reduce the tariff for international calls in Nepal as it is low in comparison to that of other countries. Following the private sector’s involvement, or the ‘smuggling’ of international traffic (NTC’s reference to the use of the Internet phone), the NTC is losing a great deal of revenue. Thus, NTC has to either stop Internet telephony altogether or legally sanction it. The reduction of international telephone costs is only possible by re-balancing the tariff; presently, the tariff for local calls is heavily subsidised by that of international calls. As Internet usage does not make up even 1% of total telephones, NTC cannot justifiably keep the tariff low for local calls. However, if there is a proposal to purchase calls in bulk, NTC is open to negotiation. The main access for Internet in Nepal is the PSTN line; however, local telephone charges far exceed Internet charges. Thus, the high cost of local access has a negative impact on the development of Internet use in Nepal. The contention that NTC telephone tariffs are higher than those for Internet usage is false. The Internet wee hour charge for 20 hours is $14, whereas the wee hour charge for local calls is only Rs 200. Local access, which has 60% of the total investment, has Chapter 8 — Proceedings of a National Stakeholders Workshop

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a return of only 18%. The tariff needs to be raised and the cross subsidy stopped. The scenario for future telecommunications in a competitive environment is to go into the cost-based tariff, which will not be subsidised in the liberalised competitive situation.

3.3.3

Recommendations

Chairman Bhup Raj Pandey summed up the following recommendations.

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The government should be more of a facilitator than a restrictive regulator. The Telecom Act has to be revised to levy charges on operators based on revenue and not royalty. Following the principle of convergence of the whole spectrum of IT, broadcasting and communications should be under only one ministry and one regulator. A permanent regulatory board should be formed consisting of competent members whose salary and remuneration are not restricted to the level of corporation officers. Review of the telecom policy may be required as early as 2002 because a duopoly in mobile communications might be restrictive to the development process. The government must decide and declare IT to be one of the 10 priority areas and clearly indicate the level to which it belongs.

3.4

Group four - E-governance

Mr Rajesh Upadhyaya presented a position paper on E-Governance and Computer Applications, with Mr Achyut Bahadur Rajbhandari as coordinator and Dr Hiramani Ghimire as rapporteur. The paper outlines recent trends in the global IT market and cites examples from India, Thailand, and Singapore and describes the situation in Nepal. It also identifies the key issues of E-Governance in Nepal, including technical infrastructure, human resources, and institutional framework. The national vision of E-Governance in Nepal encompasses national IT network development, computerisation of government operations, development of information systems, and the implementation of the same at the district level in order to achieve good governance. In doing so, one needs to be aware of the strengths and weaknesses of the country. Toward this, the paper presents a SWOT analysis. Finally, recommendations are made regarding various areas of IT application, among them a proposal to form an apex body called the National Information Technology Board under the chairmanship of the Prime Minister. Following Mr Upadhyaya’s presentation, the discussion was opened to the floor. Some of the issues raised are included in the paper. A summary of these is presented below. 3.4.1

National vision

For the creation of a national ‘information highway’, IT networks must be set up so that they connect all the administrative districts with each other and with other regional and central government organisations. Government offices must be computerised. IT systems and appropriate rules and regulations must be set up, backed by a staff qualified in IT so as to achieve the prime objective of good governance.

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IT systems provide an interface between government agencies and citizens. The empowerment of IT users through training/education and orientation of service delivery agencies to give good service to people can provide a firm basis for participatory governance. 3.4.2

Key issues

The theme of e-governance encompasses the notion of improving the performance of government through appropriate use of IT in its operations. IT can play a catalytic role in boosting public sector performance and can become a vehicle for good governance. IT cannot improve government performance on its own; good organisational skills are needed to harness its potential. In fact, organisation should precede ‘informatisation’, as put by a phrase in Zuboff. Experience shows that there is a tendency to emphasise IT use without taking adequate measures for institutional changes, thus diminishing the effectiveness of IT application. Therefore, there is a need to be realistic and not over-ambitious about IT potential in government. The use of IT in poorly managed organisations could even be counter-productive. In our own organisations, it is difficult to foresee the changes that IT is expected to bring about. Government agencies are not using IT adequately. Employees are not trained for extensive use of IT, especially in the higher echelons of administration. An IT facility (a PC, for example) in an office is still a mark of status. IT professionals in government service are not adequately paid. In addition, their career development opportunities are limited. The experience of the National Computer Centre shows that, without an appropriately designed compensation package, professionals tend to leave the government for better opportunities. The desire to use an IT facility can be capitalised for training and educating prospective users. A computer is not a glorified typewriter but a means for achieving far more. Recognising the potential of a computer, many government departments are beginning to use the available IT facilities. Some of these are the Election Commission, Controller of Examinations, Income Tax Department, Department of Land Revenue, and the Nepal Police. Even in these agencies, however, there is room for improvement. There are three areas for IT intervention: intra-governmental operations, interface between government and citizens, and networking with partners. Measures that could be taken in the three areas include a number of policy and programme initiatives, such as those enumerated below. 3.4.3 3.4.3.1

Recommendations Intra-governmental operations

The government could create an Intranet for inter-organisational communications, which would require networking between government offices. Given the scarcity of the country’s IT infrastructure, especially the absence of data transmission lines, a gradual approach is appropriate. Chapter 8 — Proceedings of a National Stakeholders Workshop

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Changes/adjustments in existing rules and regulations should be initiated in order to encourage IT-based communications within government agencies. Of particular importance is the review of the evidence law. Human resources should be developed, especially to reorient higher-level civil servants to the use of IT. Effort should be made to work out flexible time tables for civil servants willing to undergo IT training. Additionally, on-the-job training programmes should be implemented. Adequate budgetary provisions for the use of IT should be made for all tiers within the government. Hardware and software services should be available for each department. IT has the potential to change the way the government functions. An emphasis on process innovation should be made to duly take advantage of IT application. IT provides support to teamwork in a distinct manner, two examples of which are the Computer Supported Group Work (CSCW) and workflow management. These are possible when business transaction rules are defined anew. As human resources are a key component, an appropriate compensation scheme should be put in place for IT experts in government with a view to offering them competitive salaries. Such an approach should be guided by the ‘fair comparison’ principle, which would offer incentives for them to remain in government service. It is essential that organisational structure and decision-making processes change, in recognition of the importance of ‘flat organisations’ in an IT-supported environment. It is accepted that IT makes information ubiquitous, enabling us, among other things, to cut short a tedious channel of communication. Even the much-cited chain of command could be made shorter. The computerisation of government operations should be financially viable and address felt needs so that it becomes sustainable. A phase-wise approach should be adopted in this context. Important: in no case should computerisation be undertaken according to a donordriven agenda IT application should be based on the use of appropriate technology defined by management experts. Overemphasis on the technology aspect of information may only create a burden for users. “What can be administered best is best” is recommended as the guiding principle for IT use. 3.4.3.2

Interface between government agencies and citizens

IT applications can be expected to immediately improve the quality of service delivery of government organisations. Examples are revenue office, police, passport applications, and tax returns. A large part of the document-intensive work can be replaced by using electronic means in these services. In addition, it is possible to acquire these services ‘anywhere, anytime’. IT applications promote public relations’ functions of the government. Government agencies should improve both quality and quantity of the information they give to the public. IT should, however, also facilitate feedback systems for government operations. In designing new schemes for IT applications (‘backward mapping’), the emphasis should be on what benefits clients, and not only on those of the service agency. The main objective of IT application should be in creating an ‘interactive’ administration. Automated offices should not mean isolation for service recipients. 188


IT in itself cannot benefit service users; rather, users should be empowered to use it. A programme to improve the capacity of users should be launched to enable ‘netizens’ to interact with the government through IT equipment. On the other hand, government agencies should be required to provide better ‘customer’ care in an IT-enabled environment. Citizens should be enabled not only to receive what the government delivers but also should engage themselves in the different stages of service delivery. Adequate room for such participation should be created within the IT application framework. IT should be used to educate citizens to participate in ‘E-Democracy’. Some initiatives have already been undertaken by the mass media on this front. Government agencies should complement such efforts in their own way. While IT can support the transparency initiatives of government, it does not guarantee transparency in government operations. Norms should therefore be developed to ensure transparency, for example, by setting minimum disclosure standards for information. The IT system should be maintained well in order to promote confidence in the technology. This is very important in our context. The IT system must remain updated. In addition, regular maintenance of the system (both hardware and software) should be a built-in feature. Experience tells us that there is a marked difference between people who have access to IT facilities and those who do not. IT is often associated with creating a divide between social groups. To avoid a ‘digital divide’, the government should ensure that people from all sections of society have equal access to IT-related services. 3.4.3.3

Networking with other partners

Networking with donors, civil society organisations, and citizen’s groups should be set up with a view to creating a more meaningful partnership with them. Such a network serves the purpose of exchanging information between the government and these organisations. In addition, this mechanism allows resources to be shared. The government should be aware that the IT sector is, in general, led by the private sector and should thus work in close cooperation with the private sector. Doing so encompasses the vision of learning from the private sector. Efforts should keep this in mind while networking with private sector organisations. Working relationships should be established with industry associations and user groups (e.g., Computer Association of Nepal, Nepal Internet Users’ Group). These groups work closely with their members. Thus, they provide an opportunity for the government to reach a large number of service users in a cost-effective manner. 3.5

Group Five - Software production and application

Mr Suresh Regmi presented a paper on software production and application in Nepal, while Mr Sanjib Rajbhandary served as group coordinator and Mr Jyoti Tandukar as rapporteur. While expressing approval of the paper, the group noted that some of the issues addressed in relation to software production and application needed further attention. A summary of the discussion is presented below.

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3.5.1

National vision

The ‘national vision’ entails establishing software production and an IT-enabled services’ industry as the most prosperous and the largest export industry in Nepal by attaining annual exports totalling half a billion US dollars by the year 2010. Exports totalling half billion US dollars will need 4,300 skilled professionals in the software production industry producing an average of US $ 2000.00 a month, and 30,000 semiskilled professionals in at IT enabled services’ industry producing on average US$ 1200.00 a month of exportable work. (The paper is lucidly written and addresses almost all the possible issues and offers solutions for attaining the vision of an IT industry with exports totalling half a billion dollars in 10 years. In spite of that, year-wise projected growth from Year 2001 to Year 2010 would be desirable here. Such a projection can later be set against actual growth per year to determine whether the target will be met and could suggest measures that might be required. Also, the contents under ‘Action Plan’ and ‘Conclusion’ are recommendations. An action plan should consist of phase-wise or step-wise tasks, with time frames, expected results, and fallback plans if required.) 3.5.2

• • • •

Major factors for the growth of the IT industry

Skilled manpower Telecom infrastructure Right and timely policies Foreign and domestic investments

3.5.3

Key issues

Make IT a national priority. It may be late, but not too late. It is possible to witness the miraculous growth of our IT industry, as many Asian countries did, with definite plans and policies. 3.5.3.1

Liberalise communication services

The already liberal communication policy and services could benefit from further liberalisation. It would include, for example, competing telecom and electricity operators to optimise the cost of IT usage, legalisation of Voice over IP service, and so forth. 3.5.3.2

Resolve hindrances to export

It has been a nightmare for the software and services’ export industry to win recognition for their exports. The customs should accept digital products (software, services) as an exportable commodity according to certain criteria. 3.5.3.3

Implement policies to encourage an environment for investment

A favourable and stable policy is the key to attracting domestic as well as foreign investment in this sector. Ease of establishment, tax incentives, an efficient system, and so forth would be of immense help in encouraging investment. Considering the size and economy of the 190


country, the entry of even a single multinational company, such as Microsoft, Intel, HP, Sony, or Adobe, could bring profound economic gain. 3.5.3.4

An independent body of the government to oversee IT-related issues

In the absence of an established body to oversee IT development, the industry will remain a neglected orphan. A government institution that is focused on developing the IT industry and resolving all IT-related issues would greatly help the growth of this industry. 3.5.4 3.5.4.1

• • • • •

• • •

Strengthening local capabilities

Priority given to local companies over foreign competitors Formation of an IT resource centre Standardisation of Nepalese companies and products Technology transfer incentives

3.5.4.5

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Developing global linkages

Easing of foreign exchange regulations Mobilisation of NRN and diplomatic channels to market Nepalese IT capacities and products Designating 2003 as the IT Year in Nepal International IT market Information system

3.5.4.4

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Attracting investment

Tax incentives (deemed an export industry) IPR regulations Easy finance for software industry Export-oriented labour law

3.5.4.3

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Institutionalisation

Formation of NITB IT Advisor to the Prime Minister CIO to all government and public institutions An IT committee in parliament Software Technology Park

3.5.4.2

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Recommendations

Promoting IT use

Government investment in IT implementation and awareness Up-to-date IT statistics Incentives for computerisation

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3.6

Group six - E-commerce

Mr Manohar Bhattarai presented a position paper on E-commerce in Nepal. The paper describes the emergence of an information economy worldwide and relates it to the situation in Nepal. It foresees policy intervention on three levels: international, national, and enterprise levels. It also identifies possible areas for e-commerce applications in Nepal. While underlining the importance of e-commerce, the paper rightly addresses security issues, including cryptographic tools and digital signatures. The group discussion was coordinated by Mr Bijaya K. Shrestha, with Mr Chandi Prasad Shrestha as rapporteur. The group pointed out that further attention was needed on some of the issues related to e-commerce. Basically, the need to adopt an approach specific to Nepal was stressed. A summary of the discussion is presented below. 3.6.1

National vision

E-commerce is to be seen as a means to bringing about economic prosperity to the people through the use of IT in trade and commerce. An efficient and effective telecom infrastructure needs to be in place to ensure sustained growth of e-commerce in the country. Efficient and well-functioning banking systems, along with the introduction of a modicum of reliable payment mechanisms, are prerequisites for the development of e-commerce. 3.6.2

Key issues

Raising awareness about the benefits of IT and popularising the application of computers in government and in the private sector organisations are some of the main challenges. Even where IT tools and systems have been introduced, users are still not aware of their full potential. Educating the public about the potential of e-commerce is another major challenge. An enabling environment for telecommunications infrastructure is crucial for e-commerce development, as are regulatory and institutional support systems regarding payment mechanisms. The Nepalese customs continue to levy relatively high rates of duty on the import of hardware. As such, Small and Medium Enterprises (SMEs ) cannot afford to procure computer equipment and Internet connectivity remains costly. This is a single major impediment to e-commerce. The dearth of qualified human resources is another major issue as the development of ecommerce solutions demand domain-knowledge in diverse fields. Further, the development of e-commerce requires certification schemes for security of operations, including legal sanction of digital signatures. This is especially important in relation to payment and authentication. It is vital that plastic money (credit card, smart card, and debit card) gain currency. In this regard, payment by credit cards in large business establishments (such as NEA, NTC, and schools) is an immediate possibility. The problem is that business transactions based on e-commerce are not recognised for tax/ customs’ purposes. This is discouraging for potential users of e-commerce services. The establishment of a monitoring/regulatory system for Internet-based business transactions, therefore, becomes an important policy issue. E-commerce cannot be promoted in the absence of IT infrastructure. Efforts are needed to establish Internet nodes in all 75 districts of Nepal. E-commerce creates a positive business environment, even if it cannot be applied everywhere. There is a need to identify e-commerce activities with competitive advantages in the national 192


context. The operation of call centres, data entry services, medical transcription facilities (which would need to allow voice telephone over the Internet) are areas worthy of consideration first by Nepalese business houses. 3.6.3

Recommendations

Nepal is in the initial stages of e-commerce. Policies should therefore encourage B2B transactions, which can be promoted gradually with an emphasis on raising awareness. E-commerce is not an end in itself. Rather, it is a marketing tool. It should be promoted accordingly. Provision for information on products and services must be in place. Of special importance is the maintenance of transparency with regard to the production process and other features of a product. In a developing country like Nepal, e-commerce should come as a benefit to small and medium enterprises (SMEs). This may be achieved by dispensing with the intermediation so critically important for bringing the SMEs into the international market. Support of business enterprises, particularly SMEs, should therefore be a priority for the government. Quality control mechanisms with regard to e-commerce products and their production process, as well as their delivery systems, should be set up with a view to generating confidence in Nepalese service providers. The starting point could be building the capacity for undertaking outsourced activities. Establishment of business information centres should be another priority. E-commerce is a new area for many entrepreneurs. They need to be aware of the technical and the financial feasibility of the system. In addition, the proposed business information centres will keep them abreast of the developments in the international market for e-commerce services. The creation of nodal points for e-commerce at the Ministry of Industry, Commerce and Supplies and also at the Export Promotion Board could be the basis for an integrated information system on e-commerce. Such nodal points may also be mobilised for other services that need to be provided to e-commerce business houses. These administrative services should be coupled with infrastructural services. The establishment of software technology parks should be accomplished as soon as possible. The implementation of trade facilitation measures, such as ASYCUDA, EDI, and ACIS could also encourage e-commerce. These services are themselves based on IT and, therefore, their provision fits the e-commerce model well. Nepal’s small economy and limited experience in providing IT-enabled services limit the prospects of market development in foreign countries. Collaboration with bigger partners thus becomes a business imperative for the Nepalese e-commerce establishments. In this respect, ‘strategic alliances’ with intergovernmental organisations, regional organisations, and multilateral agencies should be pursued. The government and the private sector should work together towards this end. 4

PLENARY

SESSION

All six groups presented their findings at the plenary session after the individual group discussions. An intensive discussion followed on the various aspects of the proposed policy and strategy framework. A summary of the issues raised follows. Chapter 8 — Proceedings of a National Stakeholders Workshop

193

While it is good that the VSAT market is liberalised, such an approach should also include the liberalisation of the terrestrial networks. In fact, the biggest barrier to effective use of IT is our ‘mindset’. It is therefore necessary to build up the capacity of the regulator. It is essential that civil servants become sensitised and respond to the information needs of the public. Typically, spokespersons at HMG ministries do not cooperate with informationseekers. To promote the use of IT, telephone rates must be lowered and software piracy should be checked. The public is not getting the benefits of IT equitably. For example, the people from the remote districts do not have any access to IT facilities. Appropriate use of the available broadband should be addressed. There is already a lot of public awareness that cables can be used to access the Internet. That is technically feasible. It is more important, however, that Nepal Telecom Authority (NTA) reaches out beyond Kathmandu. Liberalisation of the infrastructural sector is necessary. One benefit of this is that it could promote competition, as it did with electricity. The high cost of telephone usage poses obstacles to talented professionals entering the international employment market. The ‘body shopping’ business in India teaches us that. As for transparency, it is not only the government but also the industry that tends to conceal information. Telephone tariffs in Nepal are not unjustified. International tariffs are in keeping with SAARC levels. Local tariffs are among the lowest in the world. Regrettably, ‘smuggling’ (overseas calls using Dialpad) is affecting the NTC. There is a marked tendency to designate the Prime Minister head of every institution, which is neither justifiable nor healthy. The telephone charges should be seen against the per capita income of the country. The fact that a monopoly agency (such as NTC) is profitable does not mean that it is efficient. What is essential is efficiency, which only competition can foster. One only needs to look at the healthy state of airlines in Nepal for corroboration. As far as readiness to cooperate with information-seekers goes, spokespersons at HMG ministries are not so hesitant (reluctant) in the opinion of one speaker. On the other hand, they themselves do not use what can be downloaded from our websites. In the meantime, Internet charges are lower than telephone charges, which is unfair. It is better that NTC adapt to technological developments. The term ‘smuggling’ used for Internet telephoning is not appropriate. It is obvious that telephone charges have to be lowered in order to promote e-commerce. The charge for 20 wee hours of Internet use amount to Rs 1,000, whereas telephone charges for the same amount of time is Rs 200. It is thus false to claim that the Internet is cheaper than the telephone in Nepal. Investment in local telephony is 65% of the total investment; however, it brings in only 18 % of the total revenue. How can a business be sustained by further lowering charges for local calls? In fact, IT products do not suffer from telecom charges. It is the quality of the IT products and services rather than the communication costs that determine their commercial viability. On the other hand, telecom charges are also associated with power costs, which also have gone up in recent years. It is important, thus, to note that every service should be costbased. 194


Let us first define our goal. Where do we go from here? It is no use blaming each other. Once we agree on a vision, we can cooperate with each other. 5

CLOSING SESSION

In his closing statement, the Hon’ble Rameshananda Vaidya, referring to an earlier discussion, observed that telephone tariffs should not be an obstacle to wider use of IT in the country. He noted that Nepal has a creditable performance at the South Asian level. He spoke of the government policy to cooperate with the private sector in this field and cited the example of the liberalisation of VSAT with a view to enabling the private sector. Mr Vaidya said the current year’s budget has been regarded as IT-friendly. He believes that private industry associations, such as CAN, should have a broader mandate (such as NASSCOM has in India). An IT bill is expected to be presented to Parliament soon. Mr Baida Nath Mallick, Joint Secretary of the National Planning Commission, gave the vote of thanks. Feedback and comments received through Internet on the ICT Policy and Strategy The presentation of all six thematic subjects, under the comprehensive ICT Policy and Strategy development exercise, provoked intense discussion. The responses ranged from the generic to the specific. A synopsis of these follows. General comments

• •

• 1.

It would have been good if the position papers had been properly edited before posting them in the public domain. A regulatory mechanism is needed to make Internet and IT service providers more accountable to customers. All forms of monopolistic business practices in the IT domain, including the provision of telecommunications’ services, must be done away with. The ISPs should be encouraged to introduce state-of-the-art technologies. Communication infrastructure within the country must be strengthened. Human Resource Development (HRD) •

•

The recommendations made by the paper on HRD are unrealistic. Resources are too limited to allow for the introduction of computer education in primary and high schools in Nepal; the financial commitments to sustain such an initiative would be substantial. The paucity of human resources within the country is another obstacle to realising an initiative of this magnitude. Instead, it might be more realistic and sustainable to initiate small, manageable IT awareness programmes for students. The government should play a facilitative role and even keep its distance from developing a curriculum. The business community and educational and academic institutions should get together to develop a curriculum tailored to the actual needs. Adequate resources should be provided to engineering institutions and universities to introduce courses in computer sciences. Special scholarship schemes should be introduced to students pursuing higher education in computer sciences and IT. Chapter 8 — Proceedings of a National Stakeholders Workshop

195

•

• •

2.

Universal access to information •

3.

According to a participant from RONAST, the institution plans to establish EDIC (Electronic Database and Information Centre) to serve as an information resource centre for the science and technology community of Nepal. One prominent feature of the proposed EDIC will be the provision of Internet connectivity and a requisite facility for handling multi-media information resources.

E-Commerce •

•

196

The entire education system should be made non-partisan by avoiding political appointments at all levels. Executive positions of all institutions should be filled by qualified professionals and not by political nominees. All nominations for higher studies, seminars, and workshops abroad must be made transparent. There are inconsistencies in the statistics cited by the HRD paper. According to a participant from CORExpress, some reliable statistics can be found in CORExpress (June/July 2000). In view of the increasing number of IT-related educational and training institutions, a shortage of faculty is imminent. The HRD paper does not foresee this lacuna, and the role of professional fora has also been left out.

The government should play a proactive role in creating the right environment for the promotion and development of e-commerce. Due to the nature of the issues involved, market forces alone will not be able to overcome all barriers. A host of issues, such as the legal framework, access to capital, and protection of intellectual property, necessitates an active role of the government in promoting e-commerce. E-commerce ventures, like any business venture, involve considerable risks. Entrepreneurs, the cornerstones of e-commerce activities, should understand this well. In the prevailing economic conditions, venture capital would be hard to find in Nepal. Alternative ways of mitigating risks can be considered, however, such as the provision of low-rent/ rent-free high tech hubs. E-businesses could be given tax holidays, as in Malaysia.


P

ART

FOUR

THE NATIONAL POLICY

198


Chapter

9

Information Technology Policy 2057 (2000/2001)

1.

V ISION :

“To place Nepal on the global map of information technology within the next five years.” 2.

BACKGROUND :

The world’s least developed countries including Nepal have availed themselves of the opportunity to rapidly develop education, health, agriculture, tourism, trade and various other sectors using information technology (IT). The extensive application of this technology will engender economic consolidation, development of democratic norms and values, proportional distribution of economic resources and enhancement of public awareness, thereby raising living standards and eventually contribute significantly to poverty alleviation. It is the information technology which will turn out to be a strong infrastructure for mitigating Nepal’s geographical adversities. In the coming years, globally, there will be a significant difference in the economic conditions of the countries developed in the field of information technology and of the countries lagging behind in this field. The persistence of such disparities may not be congenial even for the developed countries. In this context, there is a greater possibility that the international community will extend its support to developing countries in the promotion of information technology. Such assistance will certainly play a vital role in the national development of a least developed country like Nepal. Hence, it has become essential to formulate a policy at the earliest for developing information technology with a view to boosting up national economy. 3.

OBJECTIVES :

The information technology policy shall be formulated to achieve the following objectives :

3.1 3.2 3.3 4.

To make information technology accessible to the general public and increase employment through this means, To build a knowledge–based society, and To establish knowledge–based industries. STRATEGIES :

The following information technology strategies shall be adopted to accomplish the abovementioned objectives through rapid development and extension of information technology in a fair and competitive manner. 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 5.

The government shall act as a promoter, facilitator and regulator. High priority shall be accorded to research, development and extension of information technology with participation of private sectors. Competent manpower shall be developed with the participation of both the public and the private sectors for the sustainable development and extension of information technology. Domestic and foreign investment shall be encouraged for the development of information technology and the related infrastructures. Nepal shall be placed on the global map of information technology. E-commerce shall be promoted with legal provisions. Information technology shall be used to assist e-governance. Information technology shall be applied for rural development. Information technology industry shall be promoted. Speedy and qualitative service shall be made available at a reasonable cost by creating a healthy and competitive atmosphere among information technology service providers. Computer education shall be incorporated in academic curriculum starting from the school level. Professional efficiency shall be enhanced through the use of information technology. Information technology network shall be extended to rural areas. Nepal shall be placed on the international market through information technology. Export of services related to information technology (software and hardware) shall be increased to 10 billion rupees within the next five years. I NFORMATION TECHNOLOGY POLICY :

The following policies shall be followed up for the implementation of the aforesaid strategies : 5.1 5.2 5.3 5.4 5.5 5.6 5.7 200

To declare information technology sector a priority sector, To adopt one window system for the development of information technology, To prioritise research and development in the field of information technology, To create an atmosphere conducive to attracting investment in the private sector, keeping in view the private sector’s role in the development of information technology, To provide Internet facilities gradually to all Village Development Committees of the country, To assist educational institutions and encourage domestic and foreign training to fulfil the requirement of appropriate manpower at various levels pertaining to information technology, To computerise the system in all government offices and build their websites for the flow of information, Information and Communication Tecnology - Policy and Strategy for Nepal

5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 6.

To encourage the use of computers in private sectors, To develop physical and virtual information technology parks at various places with private sector’s participation in the development of information technology, To use information technology to promote e-commerce, e-education, e-health, among others, and to transfer technology in rural areas, To establish a National Information Technology Centre, To establish a fund at the national level by mobilising resources from His Majesty’s Government, donor agencies and private sectors so as to promote research and development of information technology and other related activities, To establish a venture capital fund with joint participation of public and private sectors, To include computer education in the curriculum starting from the school level and broaden its scope, To establish Nepal in the global market through the use of information technology, To enact necessary laws for providing legal sanctions to the use of information technology, To use information technology gradually in all government activities and provide legal sanctions to them. ACTION PLAN :

The following action plan shall be adopted to implement the national information technology policy and fulfill its objectives : 6.1

6.2

Participation of private sectors in infrastructure development : There may be up to cent percent foreign investment in areas such as information technology park, research and development, technology transfer and human resource development. Infrastructure development : The following arrangements shall be made for development of infrastructure related to information technology : 6.2.1 An info-super highway and north-south info-highway shall be built taking into account the rapidity of information flow, changes introduced through information flow and the gradual development of multimedia service. Nepal shall be linked with other parts of the world through a broadband information network. 6.2.2 An IT park shall be established at Banepa in Kabhrepalanchok District. Such IT Parks shall be established also elsewhere as required with private sector’s participation. 6.2.3 Any company interested in establishing an industry within the park shall be levied only 1% customs duty in importing IT related equipments for the next five years. 6.2.4 Internet nodes shall be established in all development regions by fiscal year 2058/059 (2001/2002) and in district headquarters by fiscal year 2060/61 (2003/2004) with participation of the private sector in order to make Internet facility available throughout the Kingdom. In making telephone contact with such nodes, the telephone charge shall be levied on par with local calls; and telephone contact with a nearby node within the development region shall be deemed to be a local call, so long as the node in that district is not established. The use of the Internet shall be gradually extended to rural areas as well. The charge for telephone calls to be used for the Internet shall be gradually reduced. Chapter 9 — Information and Technology Policy 2057 (2000/2001)

201

6.2.5 Telecommunications and electricity services shall be provided to the entrepreneurs involved in information technology sector as per their need. 6.3

Human Resource Development : The following measures shall be adopted to develop skilled manpower : 6.3.1 Necessary facilities shall be provided to the universities in the country and graduate and postgraduate-level classes of international standard shall be offered in computer science and computer engineering subjects. 6.3.2 A long-term programme with a slogan “Computer education to all by 2010 A.D.” shall be formulated and computer education shall be offered as an optional subject in some public secondary schools from the coming academic year and shall be made a compulsory subject in phases. 6.3.3 IT shall be used to improve the quality of education. 6.3.4 Private sector shall be encouraged to prepare middle-level manpower required for the information technology sector. Assistance shall be provided to the private sector to set up institutions for education, research and development in the field of information technology in each development region. 6.3.5 Computer knowledge shall gradually be made compulsory to all newly-recruited teachers so as to introduce computer education in schools; and computer education shall also be provided to all in-service teachers in phases using various means including distant education. 6.3.6 Emphasis shall be given to provide computer education from the school level. Internet facility shall be made available free of cost to universities and public schools for four hours a day within the next five years to provide computer education in a systematic way. 6.3.7 His Majesty’s Government shall provide scholarships to public and private sector technologists for higher study in information technology. 6.3.8 Necessary scholarships shall be provided to poor and meritorious students from remote areas to pursue higher studies in information technology.

6.4

Dissemination of Information Technology : The following measures shall be followed up for the extensive dissemination of information technology : 6.4.1 Educational institutions and hospitals in the areas where telecommunication and electricity services are already available shall be encouraged to use IT enabled services. Even in places where electricity service is not available, the development of information technology through solar power system shall be encouraged. 6.4.2 Distant learning system shall be introduced through the Internet and Intranet apart from radio and television. Networking systems like school-net, researchnet, commerce-net and multilingual computing shall be developed. 6.4.3 A three-year programme shall be formulated and launched to extend the use of computer in government offices. All ministries, departments and offices shall be linked to the Internet; and other agencies shall also be encouraged to be linked through the Internet. 6.4.4 Websites for all ministries, departments and district offices shall be created within one year. Necessary legal provisions shall be made to reduce the use of

202

Information and Communication Tecnology - Policy and Strategy for Nepal

6.4.5

6.4.6 6.4.7 6.4.8 6.4.9

6.5

papers by using information technology in all kinds of government activities in a phased manner. An action plan shall be devised and introduced to include computer education as a subject for the examination of a specified rank and make it obligatory for the applicants taking a written examination during recruitment. Provisions shall also be made for prescribing basic computer training as a requirement for the promotion of employees. Content shall be prepared to enhance Nepali materials on the Internet to preserve Nepali arts and culture as well as to develop rural areas. A public awareness-enhancing campaign on the utility of information technology shall be launched extensively through the electronic media. Provision shall be made for an information officer in each ministry in a phased manner. In view of the present development of information technology, provisions shall be made to open voice-mail to talk point-to-point for one’s own business without a link to the public switched telephone network.

Promotion of E-commerce, etc. : E-business, tele-medicine, tele-processing, distant learning, and the like shall be promoted as follows : 6.5.1 Necessary arrangements shall be made to encourage e-commerce. 6.5.2 Necessary legal infrastructure shall be created for the promotion of tele-medicine, distant learning, tele-processing and e-commerce. 6.5.3 Intellectual property right shall be protected through the formulation of necessary laws in relation to the development of information technology. 6.5.4 Provisions shall be made for the export of software and IT–enabled services through IT in the following ways: a) The person or organisation concerned shall submit certified copies of the documents on agreements relating to export to the Nepal Rastra Bank. b) Invoice or bill of exportation made under the agreements referred to in clause (a) shall be submitted to the Nepal Rastra Bank. c) The Bank shall validate foreign currency earned on the basis of such documents.

6.6

Facilities : The following facilities shall be provided for the development of information technology sector : 6.6.1 One percent (1%) customs duty shall be levied on hardware, software and all kinds of computer spare parts imported by training institutions related to information technology, albeit on the recommendation of the National Information Technology Centre on the basis of services rendered and the achievements of such institutions. 6.6.2 As software development and services based on software are operated twentyfour hours, such services shall be declared essential services to guarantee regular production by employees working in the companies related to such services, and arrangements shall be made accordingly. Chapter 9 — Information and Technology Policy 2057 (2000/2001)

203

6.6.3 A venture capital fund shall be established by utilising capital market with the joint investment of His Majesty’s Government and private sector. His Majesty’s Government shall make an investment of 100 million rupees initially for such a fund. 6.6.4 Domestic preference shall be given in accordance with the prevailing law on computers, spare-parts and software produced within the country. 6.6.5 Software may be directly depreciated for the purposes of income tax, whereas equipment relating to information technology may be allowed an accelerated depreciation in two years. 6.6.6 In case an investment has been made in foreign currency either as a loan or share capital required to build and operate infrastructure, the investor shall be allowed to repatriate the principal amount and interest of the loan and dividends in accordance with the prevailing laws. 6.6.7 The foreign currency earned from exporting information technology software and services shall be granted facilities on par with facilities provided to other export-oriented industries earning foreign currency. 6.6.8 An information technology development fund shall be established to create public awareness about information technology, assist rural networking, develop information technology with market management, generate required manpower for this sector and make social services easily accessible where such technology is used. Arrangements shall be made for financial contributions towards this fund from His Majesty’s Government, private sector, donor agencies and others. The National Information Technology Centre (NITC) shall operate this fund. A feasibility study shall be carried out to mobilise additional financial resources by establishing information technology bond. 6.6.9 Export of software shall be subjected to an additional service charge of 0.5 % for the information technology fund, in addition to customs duties. The amount obtained from that charge shall be deposited in the fund referred to in clause 6.6.8. 6.6.10 As Nepali nationals working abroad can play an important role in the technology transfer and market promotion in this sector, they shall be encouraged to invest their foreign currency earnings in this sector. 7. 7.1

204

I NSTITUTIONAL PROVISIONS : The National Information Technology Development Council, consisting of the following members, shall be constituted under the chairmanship of the Rt. Honourable Prime Minister. a. Rt. Honourable Prime Minister Chairman b.

Honourable Minister, Ministry of Science

and Technology Vice-chairman

c.

Honourable Minister, Ministry of Information and Communications Member

d.

Honourable Vice-chairman, National

e.

Honourable Member, National Planning Commission (Information Technology Sector) Member

f.

Secretary, Ministry of Finance Member

g.

Secretary, Ministry of Law, Justice and

h.

Secretary, Ministry of Water Resources Member

Planning Commission Member

Parliamentary Affairs Member

Information and Communication Tecnology - Policy and Strategy for Nepal

7.2

7.3

i.

Secretary, Ministry of Science and Technology Member

j.

Secretary, Ministry of Education and Sports Member

k.

Secretary, Ministry of Information and Communications Member

l.

Computer specialist representatives, University/ RONAST (three persons) Members

m.

Chairman, Computer Association of Nepal Member

n.

President, Federation of Nepalese Chamber of Member

o.

Persons involved in Information Technology in Private Sector (three persons) Member

p.

Chairman, Telecommunications Authority Member

q.

Executive Director, NITC Member-Secretary

Commerce and Industries

The National Information Technology Council shall review and revise information technology policy, appraise annual progress and solve problems that may arise and carry out such other activities as it may deem necessary for the development and extension of the information technology sector. To carry out research on and develop information technology, develop manpower required for this sector and a curriculum for information technology, improve the quality of computer training operated by the private sector, ascertain the norms and monitor these and co-ordinate such activities of establishing relations with foreign educational institutions, a National Information Technology Co-ordination Committee, shall be constituted as follows: a. Honourable Minister, Ministry of Science and Technology Chairman b.

Honourable Member, National Planning Vice-Chairman

Commission (concerned sector)

c.

Vice-chancellors of any two universities Members

d.

Secretary, Ministry of Finance Member

e.

Secretary, Ministry of Industry,

f.

Secretary, Ministry of Science and Technology Member

g.

Secretary, Ministry of Education and Sports Member

h.

Secretary, Ministry of Information

i.

Two information technologists Members

j.

Representative, Computer Association of Nepal Member

k.

Representative, Federation of Nepalese Chamber of Commerce and Industries Member

l.

Executive Director, NITC Member-Secretary

Commerce and Supplies Member

and Communications Member

Chapter 9 — Information and Technology Policy 2057 (2000/2001)

205

7.4

National Information Technology Centre : This Centre shall be set up under the Ministry of Science and Technology. As per requirements, its regional and districtlevel offices shall be established. It shall carry out the following functions : a) Act as a data bank of information and assist in computerisation of records in government offices and in developing and expanding contents, b) Act as the Secretariat of the National Information Technology Development Council and the National Information Technology Co-ordination Committee, implement or get implemented the policy and plan on information science and information technology, monitor and supervise the same and regulate the activities carried out by the private sector and submit reports on these activities to the council, c) Render assistance in all kinds of computer-related services of His Majesty’s Government. Also, render assistance in designing, updating and operating websites of all the agencies of His Majesty’s Government and serve as a data depository by collecting all types of data at the national level, d) Act as a regulator for the healthy development of information technology, e) Arrange for coding and standardisation required to bring about uniformity with respect to information technology and implement and monitor it.

7.5

8.

Information Technology Park Development Committee : This committee shall function as a separate body under the Ministry of Science and Technology. It shall manage and co-ordinate parks to be built in various places in the country and coordinate the construction and implementation of info-cities and info-villages. LEGAL PROVISIONS :

Necessary laws shall be enacted to regulate transactions to be carried out through information technology as well as other necessary arrangements pertaining to this technology and to protect intellectual property right. 9.

AMENDMENT

TO THE

POLICY :

This policy may be reviewed and amended every two years in view of technological development and expansion of services resulting from rapid developments in the information technology sector. Nonetheless, at the suggestion of various sectors, it may be reviewed and amended if necessary even prior to this period.

206


A

NNEXES

208


Annex

1

Project Implementation Process

1

I NTRODUCTION

A well-structured project implementation process was adopted in formulating the Information and Communication Policy and Strategy. The methodologies adopted were premised around the concept of ensuring thorough background research on various areas in evolving Information and Communication technologies and stakeholders’ participation in the process. The following is a brief description of the project implementation strategy. 1.1

Formation of a project steering committee

The Vice-Chairman of the National Planning Commission established a Project Steering Committee (PSC) comprising of representatives from the government, academia, and the private sector to oversee the ICT Policy formulation process and provide necessary guidance and inputs. National Planning Commission Member, Hon. Dr. Ramesh Ananda Vaidya, chaired the Steering Committee. 1.2

Project framework

PSC developed a framework for the formulation of a comprehensive ICT policy and strategy. This framework emphasised development, of IT infrastructure focusing on telecom infrastructure and development of human resources, among other things. Based upon the framework worked out by PSC, it was decided to engage national consultants to write six background position papers in various thematic areas of the ICT sector. 1.3 Position papers The position papers were to be based upon extensive background research on specific areas, including the study of the current status of the ICT sector in Nepal. The proposed

strategic framework as well as policy recommendations were to be crucial components of the position papers. Papers were commissioned on the following areas. i) ii) iii) iv) v) vi) 1.4

Universal Access to Information Human Resource Development (HRD) Information and Communication Infrastructure Software Production and Application E-Governance, and Computerisation E-Commerce. Advisory group

Each of the six position paper writers was assigned a small (4-6 persons) Advisory Group made up of specialists from academia, the research community, government, and the private and NGO sectors. The chairperson in each group was drawn from the Project Steering Committee. 1.5

International consultant

An international consultant (Dr. T.H. Chowdhary, Advisor to the Chief Minister of Andhra Pradesh) was hired to review and provide expert opinion and advice on all aspects of the six position papers, keeping in mind development trends in ICT and telecommunications’ sectors internationally. His services were also sought in consolidating the findings and recommendations of all six position papers, thereby laying the necessary groundwork for formulation of a comprehensive ICT policy and strategy for Nepal. 1.6

National stakeholders workshop

A one-day National Stakeholders Workshop (NSW) was held with a view to initiating a public debate on the issues pertaining to a National ICT Policy and Strategy and to examining the findings and recommendations reflected in the six position papers as well as the draft ICT policy. The Honourable Minister of Science & Technology, Mr. Surendra P. Chaudhary, inaugurated the Workshop on 24th August 2000 while the Honourable Vice-Chairman of the National Planning Commission, Mr. Prithivi Raj Ligal, presided as a special guest and speaker. The Honourable Ramesh Ananda Vaidya, Member, NPC, and convenor of the programme, drew attention to the main points of the draft ICT policy and strategy. He summarised the main findings of the six position papers and outlined their policy implications. After the inaugural session, 135 participants from various institutions in the public and private sectors, civil society organisations, and the universities were divided into six different working groups to hold discussions on the issues covered and report back to the workshop plenary on each of the six position papers with their findings, conclusions, and recommendations. 1.7

Consultation with the public-at-large

The full texts of all six position papers were posted on the Internet site www.nepalnews.com for feedback from the public, both nationally and internationally. 210


1.8

Interaction with the IT task force established by the Ministry of Science & Technology (MOST)

MOST also established a special IT Task Force to look into many of the questions and issues being addressed by the National Planning Commission’s ICT policy and strategy formulation project. To avoid any overlap and duplication of efforts, the two groups shared information openly. Along these lines, the Secretary of MOST was invited to sit as a member of PSC, and the Chairman of PSC was invited to be a member of MOST’s IT Task Force 1.9

IT policy and final publication

The Cabinet approved the national ‘Information Policy 2000’ on 23rd October 2000. In light of the wider public interest in the national IT policy and strategy and the studies leading up to it, it was decided that NPC would publish a more detailed monograph that included not only the policy itself, but also the six position papers, the proceedings of the National Stakeholders Workshop, and an introductory chapter synthesising the entire exercise from beginning to end. A brief Nepalese language version of this publication will also be brought out. ICIMOD will assist with the publication of both these items, which are expected to be available by the end of January 2001. 1.10

Peer reviews

Each of the six position papers was peer reviewed by local independent reviewers prior to publication.

Annex 1 — Project Implementation Process

211

212


Annex

2

List of Participants

Hon. Dr Jagdish C. Pokahrel Member National Planning Commission Singha Durbar, Kathmandu Phone: 977-1-228287 [email protected]

Hon. Dr. Ramesh Ananda Vaidya Member National Planning Commission Singha Durbar, Kathmandu Phone: 977-1-224251 [email protected]

Hon. Mr. Hari Shankar Tripathi Member National Planning Commission Singha Durbar, Kathmandu Phone: 977-1-228394 [email protected]

Mr. Shahid Akhtar Head ICOD ICIMOD Jawalakhel, Lalitpur Phone: 977-1-525313 [email protected]

Hon. Dr. Nirmal Pandey Member National Planning Commission Singha Durbar, Kathmandu Phone: 977-1-228846 [email protected]

Mr. Shreeman Shrestha Member Secretary National Planning Commission Singha Durbar, Kathmandu Phone: 977-1-228934 [email protected]

Hon. Dr. Shankar Sharma Member National Planning Commission Singha Durbar, Kathmandu Phone: 977-1-228197 [email protected]

Mr. Sanjib Rajbhandari Chief Executive Officer Mercantile Communication Pvt. Ltd. Durbar Marg, Kathmandu Phone: 977-1-220773 [email protected]

Mr. Joyti Tandukar Chief Executive Officer CORExpress Pulchowk, Lalitpur Phone: 977-1-545015 [email protected] Mr. Mohan B. Karki Joint Secretary Ministry of Science Technology Singha Durbar, Kathmandu Phone: 977-1-228906 [email protected] Mr. Suraj Vaidya IT Coordinator Federation of Nepal Chamber Commerce & Industry Teku, Kathmandu Phone: 977-1-248307 [email protected]

Mr. Basanta Shrestha MENRIS, ICIMOD Jawalakhel, Lalitpur Phone: 977-1-525313 [email protected] Mr. Dinesh Chapagain Former President Association for Overseas Technical Scholarship Koteswor, Kathmandu Phone: 977-1-478467 [email protected] Mr. Pramod Pradhan Head of MENRIS ICIMOD Jawalakhel, Lalitpur Phone: 977-1-525313 [email protected]

Mr. Sushil Pradhan Director Professional Computer Systems Anam Nagar, Kathmandu Phone: 977-1-244626 [email protected]

Dr. Binod Hari Joshi General Secretary Federation of Nepal Chamber of Commerce & Industry Teku, Kathmandu Phone: 977-1-262061 [email protected]

Mr. Bimal Tamrakar Director World Distribution Nepal Kanti Path, Kathmandu Phone: 977-1-246234 [email protected]

Mr. Lochan Amatya President Computer Association of Nepal Putali Sadak, Kathmandu Phone: 977-1-432700 [email protected]

Mr. Binod Pal Chief Executive Officer GEO Spatial Jawlakhel, Lalitpur Phone: 977-1-531131 [email protected]

Ms. Timila Yami Thapa Managing Director Design Co. Putali Sadak, Kathmandu [email protected]

Mr. Juddha B. Gurung Chairman Himalayan Infotech Services (P) Ltd. Kumari Pati, Lalitpur Phone: 977-1-526346 [email protected]

214

Mr. Rishi B. Shah Chairman Everest Net Jawalakhel, Lalitpur Phone: 977-1-521506 [email protected]


Mr. Kushboo Sarkar Shrestha Chief Executive Officer Japan-Nepal Collaboration Phone: 977-1-524525 [email protected] Mr. Bipin N. Suwal Director Professional computer Systems Anam Nagar, Kathmandu Phone: 977-1-244626 [email protected] Mr. Biplav Man Singh Managing Director Computer Advance System Putali Sadak, Kathmandu Phone: 977-1-240881 [email protected] Mr. Rajesh Sakya Chief Executive Officer College of Software Engeering Hattisar, Kathmandu Phone No: 97-1-483729 [email protected] Mr. Rajesh Shrestha Chief Executive Officer Meiken Digital Technology Putalu Sadak, Kathmandu Phone: 977-1-431525 [email protected] Mr. Naveen P.J. Shah Vice Chancellor Tribhuvan University Kirtipur Phone: 977-1-330433 [email protected] Dr. Suresh Raj Sharma Vice Chancellor Kathmandu University Banepa Phone: 977-11-61511 & 61399 [email protected] Mr. Prateek Pradhan Journalist Kathmandu Post

Tinkune, Kathmandu Phone: 977-1-480100 [email protected] Dr. Kedar L. Shrestha, Advisor Ministry of Science Technology Singha Durba, Kathmandu Phone: 977-1-244698 [email protected] Mr. Yalam Vaidya Chief Executive Officer NIIT/CIS Kanti Path, Kathmandu Phone: 977-1-245499 [email protected] Mr. Shree Ram Regmi Assist Dean Institute of Engineering Pulchowk, Laltipur Phone: 977-1-521531 [email protected] Mr. Ramesh Nepal President Association for oversea technical scholarship Koteswor, Kathmandu Phone: 977-1-478467 [email protected] Dr. Jib Raj Pokharel Dean Institute of Engineering Pulchowk, Kathmandu Phone: 977-1-543080 [email protected] Dr. Krishna Manadhar Dean Institute of Science & Technology Kirtipur Phone: 977-1-330844 Mr. Hari Gopal Shrestha President Computer Education Society of Nepal Kathmandu [email protected] Annex 2 — List of Participants

215

Dr. Devendra R. Mishra President University Grants’ Commission Baneswor, Kathmandu Phone: 977-1-480422 Mr. Harihar N. Regmi Computer Section Tribhuvan Univeristy Balkhu, Kathmandu Phone: 977-1-330677 [email protected] Mr. Yogesh Mishra Managing Director College of Software Engineering Putalisadak, Kathmandu Phone: 977-1-483832 [email protected] Representative 10 plus 2 board Sanothimi, Bhaktapur Phone: 977-1-630819 Mr. Chun Man Singh Basnet Joint Secretary Ministry of Education & Sport Keshar Mahal, Kathmandu Phone: 977-1-418780 Mrs. Sulochana Shah Everest Net Jawalakhel, Lalitpur Phone: 977-1-521506 [email protected] Mr. Umesh Shrestha Principal Little Angel School Hatiban, Laltipur Phone: 977-1-541222 Mr. Madan K. Shrestha Principal Campion Academy Kumari Pati, Lalitpur Phone: 977-1-537959 Mr. Buddha Saran Manandhar Former Principal 216

Shanti Nikunja School Maru, Kathmandu Mr. Kiran Sharma Board Member Nepal Internet Users’ Group Ekanta Kuna, Lalitpur Phone: 977-1-538549 [email protected] Mr. Bhoop R. Pandey Chairman Nepal Telecommunication Authority Singha Durbar, Kathmandu Phone: 977-1-221944 [email protected] Ms. Ela Sharma Editor, The Rising Nepal New Road, Kathmandu Phone: 977-1-523860 Mr. Chet Prasad Bhattaria Former General Manager NTC Ministry of Information & Communication Phone: 977-1-227525 [email protected] Mr. Gajendra Singh Boharra Ex-Special Officer MOIC Man Bhawan, Lalitpur Phone: 977-1-525454 [email protected] Mr. Nirmal Pradhananaga Managing Director Easy page Pako, Kathmandu Phone: 977-1-246293 [email protected] Mr. Sri Ram Poudel Secretary Ministry of Information & Communication Singha Durbar Phone: 977-1-227525 [email protected] Mr Rupak Haldar Deputy General Manager Nepal Telecommunication Corportion


Singha Durbar, Kathmandu Phone: 977-1-210205 [email protected] Mr. Sugat Kansakar Regional Manager Nepal Telecommunication Corporation Sundhara, Kathmandu Phone: 977-1-229114 [email protected] Mr. Ratna K. Tuladhar Deputy General Manager Nepal Telecommunication Authority Singha Durbar, Kathmandu Phone: 977-1-221944 [email protected] Mr. Pawan Tuladhar Manager Mercantile Communication Pvt. Ltd. Durbar Marg, Kathmandu Phone: 977-1-220773 [email protected] Mr. V. N. Goyal Manager New Service Nepal Telecommunication Corporation Pulchowk, Lalitpur Phone: 977-1-522096 [email protected] Mr. Madan K. Sakya Manager Nepal Telecommunication Corporation Jawalakhel, Kathmandu Phone: 977-1-533811 [email protected]

Mr. Raghubar L. Shrestha General Manager Nepal Telecommunication Corporation Singha Durbar, Kathmandu Phone: 977-1-413741 [email protected] Mr. Jamil Sah Chairman Space Time Cable TV Network Pvt. Ltd. Kamaldi, Kathmandu Phone:538790 Mr. Tul Hari Ghimire Managing Director Nepal Radio Paging Durbar Marg Kathmandu Phone: 977-1-231420 Mr. Raju Sakya Managing Director OTARD Tangal, Kathmandu Phone: 977-1-413933 [email protected] Mr. Rajesh Shrestha Managing Director Infocom Pvt. Ltd. Hattisar, Kathmandu [email protected] Mr. Ravi Tandukar IT Manager Save the Children Norway Jawalakhel, Lalitpur Phone: 977-1-538204

Mr. Lok R. Sharma Manager Nepal Telecommunication Corporation Tripureswor, Kathmandu Phone: 977-1-226849

Mr. Girish Kharel Board Member Nepal Internet User Group Ekantakuna, Lalitpur Phone: 977-1-538549 [email protected]

Mr. Hem Raj Poudel Joint Secretary Ministry of Information & Communication Singha Durbar, Kathmandu Phone: 977-1-227303 [email protected]

Mr. Sushil Pandey System Manager ICIMOD Jawalakhel, Lalitpur Phone: 977-1-525313 [email protected] Annex 2 — List of Participants

217

Mr. Bijay K. Shrestha Former President Computer Association of Nepal Putali Sadak, Kathmandu Phone: 977-1-253311 [email protected] Mr. Chandi P. Shrestha Joint Secretary Ministry of Industry Commerce & Supply Singha Durbar, Kathmandu Phone: 977-1-224631 Mr. Padma Joyti Tuladhar Former President Federation of Nepal Chamber Commerce & Industry Teku, Kathmandu Phone: 977-1-262061 [email protected] Mr. Allen Tuladhar Chief Executive Officer Unlimited Software Pvt. Ltd. Khichapokhari, Kathmandu [email protected] Chairman Nepal Bankers’ Asscociation Heritage Plaza Kamaladi, Kathmandu Phone: 977-1-230868 President Hotel Association of Nepal C/o Russian Culture Centre Building Kamal Pokhari, Kathmandu Phone: 977-1-424914 Mr. Raghu Shah Chief Executive Officer Sigma Research Samakhusi, Kathmandu Phone: 977-1-350660 [email protected] Mt. Laxman Agrawal Coordinator IT Summit Khichapokhari, Kathmandu [email protected] 218

Mr. Muni Sakya Managing Director Hi-Tech Pioneers Ghate Kulo, Kathmandu [email protected] Mr. Indra B. Sakya President Handicrafts’ Association of Nepal Thapathali, Kathmandu Phone: 977-1-244231 [email protected] Mr. Rajib Pradhan Managing Director Everest Net Jawalakhel, Lalitpur Phone: 977-1-521506 [email protected] Dr. Y. R. Khatiwada Chief Economist Advisor Nepal Rastra Bank Baluwatar, Kathmandu Phone: 977-1-419804 Mr. Hareram Bhattaria Freelancer IT Consultant Mr. Ashok Rana Deputy General Manager Himalayan Bank Pvt. Ltd. Tridev Marg, Thamel Phone: 977-1-227749 [email protected] Mr. Rajendra B. Shrestha Director Everest Call Centre Jawalakhel, Kathmandu Phone: 977-1-521506 [email protected] Mr. Ananda R. Mulmi Advisor Ministry of Industry Commerce & Supply Singha Durbar, Kathmand Phone: 977-1-224805


Mrs. Ambica Shrestha Managing Director Dwarika’s Hotel Battisputali, Kathmandu Phone: 977-1-470770 [email protected] Mr. Prachanda Man Shrestha Under Secretary Ministry of Tourism Singha Durbar, Kathmandu Phone: 977-1-246024 Mr. Pradeep K. Shrestha President Federation of Nepal Chamber Commerce & Industry Teku, Kathmandu Phone: 977-1-260261 [email protected] Mr. Shyam L. Agrawal Chief Executive Officer World Link Jawalakhel, Lalitpur Phone: 977-1-523050 [email protected] Mr. Shashank Kansal Chief Executive Officer Information Technology & Telcom International Kathmandu Phone: 977-1-529403 [email protected] Mr. Navin Joshi Chairman Communication & Communicate Kanti Path, Kathmandu Phone: 977-1-243706 [email protected] Mrs. Shanti Chada Managing Director Woman Entrepreneurs of Nepal Putali Sadak, Kathmandu Mr. P. L. Shrestha Managing Director Team Nepal

Kathmandu [email protected] Mr. Poshan N. Nepal Secretary Ministry of Science Technology Singha Durbar, Kathmandu Phone: 977-1-225660 [email protected] Dr. Hiramani Ghimire Under Secretary Ministry of Industry Commerce & Supply Singha Durbar, Kathmandu Phone: 977-1-432018 [email protected] Mr. Punnya P. Neupane Joint Secretary Ministry of Science & Technology Singha Durbar, Kathmandu Phone: 977-1-244609 [email protected] Mr. Om Rajbhandary Information Manager United Nations Development Programme Pulchowk, Lalitpur Phone: 977-1-523200 [email protected] Mr. Suresh Pudasani Chairman Nepal Television Singha Durbar, Kathmandu Phone: 977-1-226255 [email protected] Mr. Shambu S. Kayastha Executive Director Nepal Administrative Staff College Jawalakhel, Lalitpur [email protected] Mr. Surya P. Shrestha Nepal Administrative Staff College Jawalakhel, Lalitpur [email protected] Mr. Ram Binod Bhattarai Secretary Annex 2 — List of Participants

219

Ministry of Finance Bag Durbar, Kathmandu Phone: 977-1-259809

Nepal Police Naxal, Kathmandu [email protected]

Mr. Ramanada Sharma Secretary Ministry of General Administration Harihar Bhawan Pulchowk Phone: 977-1-521578

Mr. Vivek Rana President Nepal Internet Users’ Group Ekanta Kuna, Lalitpur Phone: 977-1-538549 [email protected]

Mr. Arun D. Adhikary Assist Representative United Nations Development Programme Pulchowk, Lalitpur Phone: 977-1-523200 [email protected] Mr. Manoj Karki Information Manager Department for International Development Ekanta Kuna, Lalitpur Phone: 977-1-542980 [email protected] Mr. Achut Rajbhandari Managing Director CSDG Pulchowk, Lalitpur Phone: 977-1-542823 [email protected] Mr. Neel Kantha Upreti Chief Computer Department Election Commission Secretariat Kanti Path, Kathmandu Phone: 977-1-226093 Mr. Atma Ram Ghimire Year 2000 (Y2K) Consultant Freelancer Ghattekulo, Kathmandu Phone: 977-1-436370 [email protected] Mr. Gaurav Upadhaya IT Consultant Freelancer [email protected] Mr. Mahesh Singh Kattyat Chief, Computer Section 220

Dr. Mohan Man Sainju Executive Director Institute of Integrated Development Studies Baneswor, Kathmandu Phone: 977-1-478930 [email protected] Mr. Anil Chitrakar Nepal Federation of Environmental Journalists Anamnagar, Kathmandu Phone: 977-1-261991 [email protected] Mr. Hem B. Bista Media Service International Tripureswor, Kathmandu Phone: 977-1-260989 [email protected] Mr. Bharat Dutta Koirala Media Service International Tripureswor, Kathmandu Phone: 977-1-260989 [email protected] Mr. Binaya Kasajoo Media Service International Tripureswor, Kathmandu Phone: 977-1-260989 [email protected] Mr. Gokul Pokharel Nepal Press Institute [email protected] Mr. Binod Bhattarai Editor Nepali Times


Patan Dhoka, Lalitpur Phone: 977-1-523845 [email protected] Mr. Kanak Dixit Editor, Himal Magazine Patan Dhoka, Lalitpur Phone: 977-1-523845 [email protected] Mr. Kunda Dixit Chief Editor Nepali Times Patan Dhoka, Lalitpur Phone: 977-1-523845 [email protected] Mr. Shankar Aryal Research Associate Institute of Integrated Development Studies Baneswor, Kathmandu Phone: 977-1-478930 [email protected] Mr. Heet Singh Shrestha Research Fellow Institute of Integrated Development Studies Baneswor, Kathmandu Phone: 977-1-478930 [email protected] Mr. Bhairav Risal Nepal Federation of Environmental Journalists Anamannagar, Kathmandu Phone: 977-1-261991 [email protected] Dr. Bhesh R. Dhamala Assist. Representative United Nations Development Programme Pulchowk, Lalitpur Phone: 977-1- 523200 [email protected] Mr. Tapa Nath Shukla Former General Manager, NTV Ministry of Informatin & Communication Singha Durbar, Kathmandu Phone: 977-1-224348 [email protected]

Mr. Durga N. Sharma General Manager Nepal Television Singha Durbar, Kathmandu Phone: 977-1-226255 [email protected] Ms. Saloni Singh Managing Director Didi Bahini Anamnagar, Kathmandu Phone: 977-1-226753 [email protected] Ms. Sumeena Vaidya Program Coordinator Didi Bahini Anamnagar, Kathmandu Phone: 977-1-226753 [email protected] Ms. Bandhana Rana Managing Director Sancharika Ekantakuna, Lalitipur Phone: 977-1-538549 [email protected] Dr. Chandra Bhadra Gender Specialist Dr. Ava Darshan Shrestha Gender Specialist Samanta Ekanta Kuna, Lalitpur [email protected] Ms. Manisha Basnet Chief Executive Officer Nepal Internet Users’ Group Ekantakuna, Lalitpur Phone: 977-1-538549 [email protected] Ms. Sangeeta Pandey Documentation Officer ICIMOD Jawalakhel, Lalitpur Phone: 977-1-525313 [email protected] Annex 2 — List of Participants

221

Mr. Bhesk R Kanel Deputy General Manager Nepal Telecommunications Corporation Singha Durbar, Kathmandu Phone: 977-1-422799 [email protected] Mr. Subash Bajracharya Sr. Executive Engineer Nepal Telecommunications Corporation Jawalakhel, Lalitpur Phone: 977-1-536883 [email protected] Mr. Suresh Regmi Chairman IT Professional Forum Anamnagar, Kathmandu Phone: 977-1-244626 [email protected] Professor Chabi L. Gajurel Central Dept. of Chemistry Tribbuvan University Kirtipur Phone: 977-1-471683 Mr. Rajib Subba General Secretary Computer Association of Nepal Putali Sadak, Kathmandu Phone: 977-1-432700 [email protected] Mr Rajesh Upadhaya IT Consultant Ministry of Science and Technology

222

Singha Durbar, Kathmandu Phone: 977-1-244609 [email protected] Mr. Manohar Bhattarai Information Manager Rural Urban Programme Project Sanepa, Lalitpur Phone: 977-1-536156 [email protected] Mr. Aditya Man Shrestha Director Media Service International Kathmandu Phone: 977-1-260989 [email protected] Mr. B. N. Mallik Joint Secretary National Planning Commission Secretariat Singha Durbar, Kathmandu Phone: 977-1-229059 [email protected] Mr. Kudan D. Shrestha Section Officer National Planning Commission Singha Durbar, Kathmandu Phone: 977-1-224251 Mr. Mahesh Bdr. Malla Project Coordinator, NPC ICIMOD Jawalakhel, Lalitpur Phone: 977-1-525313 [email protected]


Annex

3

Workshop Programme I NAUGURAL SESSION 09:00–9:30 Registration of Participants 09:30–10:30 Ÿ Welcome address – Secretary, National Planning Commission Ÿ Inaugural Speech by – Honorable Minister Mr. Surendra P. Chowdary, Ministry of Science & Technology Ÿ Chief Guests’ Remarks – Dr. Prithivi R. Legal, Vice Chairman, National Planning Commission Ÿ Remarks on the Subject Matter – Dr. Ramesh Ananda Vaidya, Honorable Member, National Planning Commission & Chairperson Steering Committee 10:00–10:30

Refreshment - Tea/Coffee

P LENARY S ESSION ONE 11:00–13:00 Working Group Discussion

Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ

Universal Access to Information Information and Communication Infrastructure Human Resource Development E-Commerce/E-Services Software Production E-Governance

13:00–14:30

Lunch Break

14:30–15:30

Group report from the Rapporteurs

Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ

Human Resource Development E-Commerce E-Governance & Computerization Software Production & Application Universal Access to Information Information Human Resource Development

Open Floor Discussion P LENARY S ESSION TWO 16:30–17:00 Closing

Ÿ Closing Remarks – Dr. Ramesh Ananda Vaidya, Honorable Members, NPC

Ÿ Vote of Thanks – Mr. V. N. Mallik, Joint Secretary NPC 17:00

Ÿ Reception Annex 3 — Workshop Programme

223

List of Abbreviations ACAP ADSL APDIP ASYCUDA ATM

Annapurna Conservation Area Project Assymetric Digital Subscriber Line Asia Pacific Development Information Programme Automated Systems of Custom Data and Administration Asynchronous Transfer Mode

BBC BSA BTMC B-to-B B-to-C B-to-G

British Broadcasting Corporation Business Software Alliance Bell Telephone Manufacturing Company Business to Business Business to Consumers Business to Government

CA CAGR CAN CB CDMA CDO C-DoT CEO CESON CIO CNN CTEVT

Certification Authority Compounded Annual Growth Rate Computer Association of Nepal Crossbar exchange Carrier Detect Multiple Access Chief District Officer Centre for Department of Telecommunications Chief Executive Officer Computer Education Society of Nepal Chief Information Officer Cable News Network Centre for Technical Education and Vocational Training

DAMA DECT DEL DoT

Demand Assigned Multiple Access Digital Enhanced Cordless Telecommunication Direct exchange line Department of Telecommunications (in India)

E&E EC EDI Email EPZ

Electronics and Electrical (2 different subjects) Electronic Commerce Electronic Data Interchange Electronic mail Export Processing Zone

FDI FM FNCCI

Foreign Direct Investment Frequency Modulation Federation of Nepalese Chambers of Commerce and Industry

GBH GNP GoI GPRS GSM

Global Mobile System Gross National Product Government of India General packet radio service Global System for Mobile Communication

HAN HDR HMG/N HRD

Hotel Association of Nepal Human Development Report His Majesty’s Government of Nepal Human Resources Development

ICAAN ICC

ICT IDC IDRC IEDC INGO IOE IP IPR ISD ISDN ISP ISTD IT ITC ITU

Internet Corporation for Assigned Numbers and Names International Computing Centre (based in Geneva, part of the United Nations) International Centre for Integrated Mountain Development an IT company that designs, builds and operates solutions earlier concentrated on mainframe computers. The first computer that came to Nepal to National Computer Centre was a mainframe from ICL. Information and Communication Technology International Data Corporation International Development Research Center Industrial Enterprise Development Centre International Non-governmental Organisation Institute of Engineering Internet Protocol Intellectual Property Rights international subscriber dialling Integrated Services Digital Network Internet Service Provider International Subscriber Trunk Dialling Information Technology International Trade Centre International Telecommunication Union

JICA JV

Japanese International Cooperation Agency Joint Venture

KU

Kathmandu University

LB LDO

Lumbini Exchange System Local Development Officer

MAC MARTS MD MIS MIT MMDS MNC MoE MoF MoI MoIC MoLRM

Macintosh Computer Multiple Access Radio Telephone System Managing Director Management Information System Ministry of Information Technology (India) Multi-channel Multi-point Distribution Service Multi National Companies Ministry of Education Ministry of Finance Ministry of Industry Ministry of Information and Communication Ministry of Land Reform and Management

ICIMOD ICL

MoST MPEG

Ministry of Science and Technology Moving Picture Experts Group

NACIT NASSCOM NATA NCB NCC NEA NEA NEC NEFEJ NGO NIC NICTB NITB NITC NIUG NPC NPQ NRN NTA NTC NTV

National Centre for Communication and Information Technology National Association of Software Service Companies Nepalese Association of Travel Agents National Computer Board, Singapore National Computer Centre Nepal Electricity Authority Nepal Engineers’ Association Nepal Engineering College Nepal Forum of Environmental Journalists Non Governmental Organisation National Informatics Centre, India National Information and Communication Technology Board Nepal Information Technology Board National Information Technology Centre Nepal Internet Users’ Group National Planning Commission Nepal Police Headquarters Non Resident Nepalese Nepal Telecommunications Authority Nepal Telecommunications Corporation Nepal Television

OEDC

Organization for Economic Co-operation and Development

PC PCM PCO PHQ PHS PM PMP PON POP PP PS21 PSTN

personal computer pulse code modulation public call offices Police Headquarters personal handphone system Prime Minister Point to Multi-point Passive optical network points of presence point to point Public Service for the Twenty-first Century Public Switched Telephone Network

R&D RDBMS RLU SDH SECEN SET SITF SLC SME SOHO SRTP

Research and Development Relational Data Base Management System Remote Line Unit sychronous digital hierarchy Society of Electronics and Communications of Nepal Secure Electronic Transaction Singapore Information Technology Federation School Leaving Certificate Small and Medium Enterprises Small Office Home Office Special rural communications Development Programme

SRTS STD STP SWOT

Single Channell Radio Telephone System subscriber trunk dialling Software Technology Park Strengths, Weaknesses, Opportunities & Threats

TAAN TCP/IP TTP TV

Trekking Agents’ Association of Nepal Transmission Control Protocol/Internet Protocol Trusted Third Party Television

UHF UNCITRAL UNCTAD UNDP UNESCAP

ultra high frequency United Nations Commission on International Trade Law United Nations Centre for Trade and Development United Nations Development Programme United Nations Economic and Social Commission for Asia and Pacific

VAT VDC VHF VoA VoIP VORTAL VSAT

Value Added Tax Village Development Committee very high frequency Voice of America Voice Over Internet Protocol Vertical Portal Very Small Aperture Terminal

WAP WDR WIPO WLink WLL WTO WWW

Wireless Access Protocol World Development Report World International Property Organization World Link Wireless Local Loop World Trade Organization World Wide Web

XDSL

Refers to all types of digital subscriber lines

Y2K

Year 2000

Preface

Acknowledgements

Table of Contents Preface List of Abbreviations Acknowledgements

PART ONE: INTRODUCTION

Chapter 1 - Information and Communication Technology for National Development

PART TWO: BACKGROUND PAPERS

3

Chapter 2 - Universal Access to Information

13

Chapter 3 - Information and Communication Infrastructure

55

Chapter 4 - Human Resource Development

87

Chapter 5 - Software Production and Application

117

Chapter 6 - E-Commerce

137

Chapter 7 - E-Governance and Computerisation

157

PART THREE: STAKEHOLDERS WORKSHOP

Chapter 8 - Proceedings of a National Stakeholders Workshop

PART FOUR: THE NATIONAL POLICY

Chapter 9 - Information Technology Policy 2057 (2000/2001)

179

199

ANNEXES Annex 1 -

Project Implementation Process

209

Annex 2 -

List of Participants

213

Annex 3 -

Workshop Programme

223