Digital Divide

The WBG has contributed to telecommunications sector reform worldwide. Of 88 countries that have undertaken reform measures, 63 have benefited from some form of WBG support. Emphasis in telecommunications projects has shifted away from provision of support for state owned enterprises and towards technical assistance lending designed to encourage private investment. This change of emphasis led to a reduction in the overall volume of new telecommunications lending to governments, as the Bank's traditional role in lending to operators has been largely replaced by the International Finance Corporation (IFC) IFC - A member of the World Bank Group, specializing in private sector development. The other members of the WBG are the International Bank for Reconstruction and Development (IBRD) and the Multilateral Investment Guarantee Agency (MIGA) whose new investments in the ICT sector have grown from US$129 million to US$311 million per year over the same time period.

Although the volume of WBG lending has decreased, the development impact per dollar spent has increased dramatically. Countries borrowing to finance telecommunications reform have attracted substantial volumes of private sector investment much larger than the original loan. On the IFC side, it is estimated that every dollar of IFC investment mobilizes US$9.30 of private financing. Private capital flows to many countries have allowed a massive increase in fixed and mobile telephone penetration, even in some of the poorest countries.

As a result of the growing interest in ICT and development, the Bank has launched several knowledge initiatives in recent years seeking to harness the power of ICT for education and knowledge-sharing. Global initiatives related to ICT include infoDev, the Development Gateway, the Development Forum, the African Virtual University, the Global Development Learning Network (see Box 2), the Global Development Network, the Global Knowledge Partnership, World Links for Development, and the World Bank's Knowledge Sharing Network.

These initiatives cover education, research, best practice dissemination, and have, in many cases already brought measurable development impact. At the same time, the World Bank hosts the G-8 DotForce initiative, announced at the Okinawa Summit.

Finally, while the ICT projects mentioned above are of growing importance, by far the largest ICT investments financed by the World Bank are information technology (IT) components of projects in other sectors, whose estimated annual value stands at around US$1.5 billion. As ICT becomes more pervasive in the developing world, this element is likely to become even more significant.