Ghana's Digital Dilemma

Some random reader writes: "Here is a fascinating Technology Review article about information technology in the West African nation of Ghana. It's an illustration of how new technology relies on, and can be hampered by, old technology. It's also a testament to the ingenuity of the people there who are working to maintain and update the country's IT infrastructure. These folks are working with a terrible phone system and frequent power outages, but they still manage to succeed."

Comments

World aid and putting the cart before the horse

[ObviousGuy]

The article talked about a Ghanaian man who was interested in IT and who was biding his time in a data entry position, gleaning as much technical knowledge as he could absorb. Along comes some bureaucrat from some NGO saying that data entry is a dead end position and wasting the many talents of the workers.

I see this as completely backwards. Obviously they don't have either the infrastructure or the technical resources to be a computerized society, but they do have some investment in the form of Aetna putting in a somewhat technically advanced data center where locals can get a job entering data. They aren't going to be able to step up to bat at the IT table until they get the necessary infrastructure and educational systems in place.

When these NGOs look at a country like Ghana and proclaim that investment isn't enough because more people aren't living at the same level as their Western counterparts, they are looking through their own paternal prizm which is in itself racist.

Re:World aid and putting the cart before the horse

[Jason Earl]

In the end it always boils down to simple economics. The reason that Ghana can't compete with the West is that they don't have the infrastructure necessary to tie their economy to the rest of the world. Labor is ridiculously inexpensive, but without the roads, plumbing, phone systems, etc. it is hard to utilize that labor in anything but the pitiful local economy.

Geeks typically assume that this lack of infrastructure is the root cause, but this is not generally the case. Ghana could almost certainly attract capital. In fact, the article shows several examples of foreign individuals and companies that were willing to invest in Ghana. The problem is that the current political system is too corrupt to make large scale investments practical. As long as Ghana remains corrupt investing in the country is like pouring water into a sieve. The rich and privileged that control the system will derive all of the benefits, and the poor will stay in the same position that they currently are in. Even now the political leaders that are hoping for technology to enrich their nation are almost certainly looking at it with an eye towards controlling the bulk of those riches themselves. It's no wonder that entrepreneurs flee countries like Ghana. They know that if they do manage to make money the politicos will simply extort it from them.

The investments featured in the story required very little capital. Aetna's little form industry is a prime example of this. With the relatively small expense of a satellite link and a couple hundred used PCs, they are able to save a substantial amount of money getting their forms filled out. If the government decides to expropriate the business then very little is lost.

However, this type of business is not something you can build your economy on. For one thing, it is very easy to move this type of business. If problems do arise in Ghana the owners of the business can simply pack up and leave. Also the type of work offered is usually the easiest type of work to automate. As U.S. firms move more and more towards electronic forms obtaining electronic information from paper forms is going to become less important.

In the end, long-term growth is only possible through reforming corrupt political systems and inviting the type of investment that builds the economy. Until the people running Ghana figure this out, they will continue in the same rut as they are now.

The Digital Dilemma -- Our Exploitation

[Vengie]

I think the most important point that /.'ers should take from this article is in the second page. "Local Ghanaian supervisors do much the same. Thomas Fabyan, smartly dressed in black suede shoes, khaki pants and a pressed white shirt buttoned to the neck, prods and cajoles his typists to push their limits. Fabyan sits in the corner of a large open room, with tall windows that overlook the city and give glimpses of the Atlantic Ocean. Along with a colleague, Fabyan is responsible for 275 employees who work over three shifts, round the clock. These typists are paid piece rate: the more records they complete, the greater their pay. The fastest workers can earn nearly three dollars a day, while the slowest take home little more than a dollar, still slightly higher than the pay of a local policeman." Essentially, we are giving Ghana better technology so we can find yet another way to leverage minimum wage differentials across the globe to increase the profits of an American Company. (Aetna) What are these "high tech" workers using their technology for? They are processing scanned documents into a database; They are doing outsourced data entry work! What normally would go for (at least) 6.00 an hour (more in most places) in the states is happening at _dollars per day_. This has nothing to do with "giving technology to the masses" -- it is a corporate strategy to get more "bang for their buck" -my US $0.02 (In Ghana thats $0.000000002)

Re:The Digital Dilemma -- Our Exploitation

[sql*kitten]

What normally would go for (at least) 6.00 an hour (more in most places) in the states is happening at _dollars per day_. This has nothing to do with "giving technology to the masses" -- it is a corporate strategy to get more "bang for their buck" -my US $0.02 (In Ghana thats $0.000000002)

You have completely misunderstood the difference in currencies. In the US, you pay $4 for a cup of coffee at Starbucks. A cup of coffee in a third world nation costs a fraction of a cent. People aren't working 8 hrs a day to afford a single Big Mac, in their local currency, they are well off! The reason for this is that their currencies aren't "hard", they are volatile, and hence FX market participants who hold hard currencies (USD, GBP, CHF, EUR and JPY) are relucant to exchange them for the local currency. The law of supply and demand means that you can buy a lot of local currency for a small amount of hard currency. Why would you want to? Either you want to spend some money in that country, or you are in that country and want to buy something outside of it. Since that doesn't happen much, relative to the rest of the global economy, hard currencies command a premium.

You are also forgetting that these workers would otherwise be unemployed, and that they are happy to have the work. They have changed the weakness of their currency from a burden to an advantage by exploiting the comparative purchasing power of their economy. This scenario is win-win: the locals are employed and have revenue coming in, the multinationals get their work done for a lower cost, and can therefore provide consumers in the West with cheaper products.

Eventually, as has happened in India, local tech skills will develop, and they will move up the value chain from data entry, to technical support, to programming, to complete systems development. Then you will find that these "poor, exploited" people are competing on a level playing field with Americans, and if they manage their economy skillfully, they will be able to do it while still remaining cheaper.

Found the problem...

[MarvinMouse]

convinced Ghana's government that the satellite would not steal business from the country's national phone company

Obviously the government is more concerned about holding the monopoly on the telecom then providing quality service to its citizens. I hate to admit it, but when a government get involved with an economy, it always seems to go this way. There is really no easy way to control an economy and still have quality service. (This happens in a laissez-faire economy as well, when rock-solid monopolies form.)

Basically, if they want better service, they are going to have to deregulate and let in other telecoms, or really get in gear and start developing better business plans. Otherwise they will continue to have this level of quality in Ghana.

Just my opinion of course. :-)