Information Infrastructure and Technology Status in

West Bank and Gaza

 

 

 

 

 

 

 

 

Hanan Askalan

September 10, 1996

 

 

 

 

 

 

 

 

 

This is a preliminary draft based on mission discussions from August 18th to August 27th with Palestinians from the PNA, academia, NGOs, international agencies and private sector. It is also based on reviewing several documents and published papers.

 

 

 

Executive Summary: Table of Contents

 

  1. Introduction
  2. Status Today
  1. Existing Communication Facilities
  2. Overall use of IT
  3. IT Private Sector
  4. Institutional Support
  5. Regulatory Framework and Policy Formulation
  6. Human Resource Development and Training
  1. Potential opportunities for the use of IT and Telecommunications to provide the environment and the means for economic growth and development
  1. Telecommunications
  2. Government
  3. Private Sector
  4. Education
  5. Human Resource

 

Executive Summary

Introduction

The economical and social development of the West Bank and Gaza (WBG) is taking place during a time when a new medium of human communications is emerging and surpassing all previous revolutions in its impact on economic and social life. Interactive multimedia and the so called information highway, and its exemplar the Internet, are enabling a new economy based on the networking of human intelligence.

 

The availability of infrastructures for electronically transferring and accessing information is perceived as critical for hastening the realization of economic, social and cultural benefits as well as for conferring competitive advantage. Building high capacity communications facilities - information infrastructure - is mandatory for countries to drive robust and sustainable economic progress, better solutions to environmental challenges, improved public services, and competitive participation in the fast growing global market.

 

A New model for growth should be developed to enable Palestine to overcome constraints and achieve economic gains in local, regional and global markets. Palestine’s economy will increasingly be shaped by its ability to facilitate foreign trade and investment, flow of information, timely delivery, development of appropriate and competitive production technologies, rapid adaptation to changes in demand and consumer preferences, product and niche markets development and aggressive markets strategies.

 

Revolutionary advancement in technology and telecommunications and the impact it is already having on business conduct, economy and culture can become a very valuable tool in the hands of Palestinian leaders, planners and the private sector in their economical and social development efforts. Building an information-based economy will enable them to overcome limitations that includes:

 

Furthermore, an appropriate information infrastructure and advanced communication facility will help:

 

Status today

Communication facility

  1. The infrastructure that was handed over to the Palestinian Authority after the Oslo peace accord is in a poor state. The Israeli occupation has done very little in the development of telecommunications infrastructure in WBG.
  2. Israel has built the telephone networks and infrastructure outside the West Bank and Gaza. All major trunks and international exchanges are connected in areas outside WBG and controlled by Israel. Any type of high bandwidth transmission depends on Israel’s provision of the frequencies and permissions.
  3. Building a common voice and data communication infrastructure needs a fiber optic backbone that crosses West Bank and Gaza cities. Since areas within the West Bank and Gaza that are under the Palestinian Authority rule are not contiguous, connecting cities together into a common backbone will require permission and negotiations with Israel to cross zone B and C.

 

Overall use of IT

  1. Personal computers are in general widely spread across public and private establishments and they are mainly used for office applications such as word processing and spreadsheet.
  2. Local area networks for file and printer sharing and database access are widely utilized.
  3. Demand for Internet service is very high and is often driven by expatriates and international organizations. However, there is a clear mounting demand for World Wide Web (referenced to as “web”) and its use in information publishing and marketing. Unfortunately, a web site needs a leased line (a connection Israel is not willing to provide) to the Internet service provider in order to be on-line on the Internet. Currently there are few web sites developed and published through Palestinian Internet Providers facility.
  4. There is good talent in the area of information systems analysis and development. But there is deficiency in the communication and network engineers and experience due to the limited use of these technologies in WBG.
  5. Information in general does not travel across the society through active transmission medium. It is often confined to the walls of the establishments or houses. When it travels, it goes back to its old form of ink on papers or static electronic format stored on magnetic diskettes.

 

Private Sector

There are several factors that works against healthy development, competitiveness and efficient operation of the private sector in relation to IT:

  1. Forced to operate in a very inefficient manner by having to incur the cost of operating at least two offices in the West Bank and Gaza due to the border closure problems.
  2. Inability of the Service/Support based businesses to have an efficient way of communicating with their customers due to the lack of adequate telecommunication facilities from basic telephones to direct access to customers’ facilities.
  3. Isolation from the increasingly information driven world. Their competitiveness will depend on their ability to electronically access and exchange information (in its various forms) globally. Internet shopping revenues are expected to skyrocket, from $518 million in 1996 to $6.6 billion in 2000. Three-quarters of Fortune 1000 companies plan to process on-line transactions by 1997. And at least 20 percent of all household expenditures will funnel through the Net within the decade (World Telecommunication Development Report 1995, ITU publication). Without high capacity and multimedia based information infrastructure that will enable businesses to digitize their product marketing and service delivery, WBG private sector will significantly lag behind and will be confined to its very limited local market.
  4. Delayed shipment clearance from ports, and high VAT charges. This process leads to sometimes significant delays, confiscation of goods by the Israelis and heavy lose to the company especially when the agent premium is higher than the cost of the product itself. These are measures that comparable Israeli companies do not have to deal with.
  5. Absence of a fair anregulatebidding and procurement process, causing major discouragement and lose of business for existing companies and potentially interested investors.
  6. Lack of clear government policy regarding IT sector and incentives to strengthen the capacity of WBG companies in order to be able to provide value added service at competitive prices to compete with the long established Jordanian and Israeli companies which have already established their presence in WBG.
  7. Lack of needed local training facilities to train their employees without incurring major costs by sending them abroad. Especially the turn around is very high among IT professionals due to the high demand. Also lack of training centers is contributing to the scarcity of IT professionals in the local market making salaries and low return from investment in on-job training major problems.

 

Institutional Support

Absence of technology council to assist in developing technology standards, competitive procurement and bidding process, provide hand holding service through project partnership, provide the know how and guidance to business and government, and propose to government technology policies and regulations.

 

Regulatory Framework and Policy Formulation

Absence of government role in tackling political related issues and inhibitions, and formulate regulations and policies to address issues such as universal access, price and import tariffs, fair and open competition, privacy, security, training and R&D incentives, and investment incentives. The government has to act as a catalyst for new kinds of partnerships that would encourage demands, growth and the use of new technologies.

 

 

Potential opportunities for the use of IT and Telecommunications

Telecommunications

Advancement in communication technologies and its rapidly dropping costs will allow WBG to build its information infrastructure based on state of the art technologies, costing no more than traditional telephone infrastructure, thereby leap-frogging most developed countries. Because WBG has no existing infrastructure it can use the same amount of investments to build a multimedia digital based infrastructure with immense capability for future growth and expansion. This is a very important advantage since timely availability of an advanced communication facilities constitute the bases for building an information based economy.

 

To satisfy the immediate need and high demand, provided political obstacles are resolved, WBG can obtain communication services such as additional telephone lines, and leased lines and microwave frequencies for data communication. These temporarily constructed facilities can become a backup as WBG permanent information infrastructure is gradually built.

 

Government

  1. Border closure and physical distance between West Bank and Gaza is leading to the creation of two parallel entities for each government institution. Each parallel entity is building its own autonomy and setting up its own policies and procedures, adding to the political complexity and operational inefficiency. It is an opportunity to use the power of information technology to fight this alarming situation through the use of integrated information systems that will streamline and automate each government institution processes and transactions and integrate its operation in WB and Gaza and with other government institutions.
  2. Currently the PA civil servants lack the skills and understanding of how to function within the new environment that is based on institutional structure and processes that are setup to serve the public. Today, management is facing difficulties in translating and delegating implementation responsibilities. Proper information systems based on developed institutional structure and processes will provide government employees with the tools they need to dramatically enhance task and learning efficiency. Further more information systems will become a tool in the hands of management to monitor performance and to enforce rules and procedures through the system. More importantly automating public services will make it available to the public without the need for favoritism and individual contact.
  3. The PA is building a whole new government from ground zero. It has the opportunity to use the new technologies to reinvent itself, to cut cost and improve the delivery of government services and programs. In doing so PA would not only deliver better and cheaper services, but as a significant purchaser (provided fair bidding) will place a significant demand on the market.
  4. Planning and gradual building of integrated, standard based information systems will eventually provide timely, reliable and secured statistical and analytical to feed into a national decision support system accessible to the country planners and decision makers. It will also facilitate performance monitoring at the organizational level as well as the national level. The key here is that this type of planning has to take place at this early stage of development to gain these desired results.

 

Private Sector

The provision of telephone and leased lines services in the immediate short term, and advanced telecommunication facilities and services based on international standards and capable of supporting integrated information systems in the long term will enable the private sector to:

 

  1. Develop sector based networks to facilitate information exchange and dissemination within the sector and across sectors. Integration of these sector based networks will allow for cross sectors based services and unified view of the economy and its activities.
  2. Develop a healthy service industries which is a major consumer and producer of information. Service-based firms do not produce goods directly; their activities involves marketing of service/products, design of goods, exchange of information, and analysis of market trends and demands.
  3. Develop information based industries. Manufactured goods have growing information component - computer chips (processing), extensive research and development - and a decreasing wage component. Countries from Barbados to India are exploiting decreasing long-distance telecommunication costs to enter new markets in off-shore information processing and software engineering. Actually Palestinians do not have to go further than Israel to provide such services to it. Israel using new technologies and advanced communications facilities developed a very advanced information based industries making it one of the leading silicon valleys of the World.

Education and Training

Due to occupation and frequent area closures the Palestinian labor force has suffered from high rates of unemployment, massive displacement and high level of unskilled labor from deteriorating and exploited economic conditions. Overall it is estimated that 76.4% of labor force that constitute the Palestinian labor market do not have the required educational and training skills (Palestinian Human Resource: future prospects by Dr. Abdelfattah Abu-shokor). The Palestinian labor force is characterized by the majority being male, very young (50% of the population under the age of 15), and poorly utilized labor force with skills tailored to the needs of the Israeli economy (manual construction labor).

 

This situation and its drastic effects on economic development can be reduced through: 1) immediate establishment of high tech vocational centers; 2) development of programs that utilize advanced technology and multimedia based tools to attract drop out youth and provide them with the learning environment to develop the needed knowledge and skills to go back to school or get better jobs; 3) development and funding of continuing educational programs in universities and community colleges that aims at upgrading skill set of existing labor force and train new ones with up to date high tech skills that are needed in today’s labor market and; 4) development of special programs designed to attract female participation and encourage their re-absorption into the labor force by training them with IT related skills and services that they can utilize from their homes as well as incrtheir opportto find jobs.

 

Scarcity of IT professionals with up to date skills and international experience is hindering the ability of institutions to develop their IT plans and strategies based on today’s standards and best practices in IT in various fields such as health, trade, education and many others. In some cases IT solutions that are being implemented are based on the 70s model and understandings. Investments are made into solutions that are poorly designed with very short term vision. Lack of the know how and the high cost associated with hiring expatriates is not enabling these institutions to formulate the proper strategies and requirements to obtain the needed funds or if funds are available to be invested in technological advanced and standard based solutions. The availability of an information infrastructure and an technology advisory council will allow these institutions at affordable costs and time frame to tap on expatriate expert advice, initiate dialogue with local expertise, electronically access widely available information on best practices in every field, and establish contacts with key players in the field.