Mobile phones are helping the third world to develop

In developing nations, mobile phones can serve many purposes especially if infrastructure is underdeveloped. They can reduce transaction costs, broaden trade networks, and substitute for costly physical transport, says the Economist.

For example:

In Zambia, Coca Cola distributors, dry cleaning firms, gas stations and dozens of other shops use mobile phones for financial transactions.

Fishermen and farmers can check prices at different markets without travelling preventing wasted journeys.

Consequently, mobile phones can boost growth considerably. Researchers analysed telephony and economic growth in 92 countries, both rich and poor, between 1980 and 2003. They found:

An increase of ten mobile phones per 100 people boost gross domestic product (GDP) growth 0.6 percentage points.

Long-run growth in the Philippines is a percentage point higher than in Indonesia because there are 27 mobile phones per 100 people in the Philippines, while there are only 9 mobile phones per 100 people in Indonesia.

Because of these clear economic benefits, there is booming subscriber growth. In several sub-Saharan countries, subscriber growth exceeded 150 per cent last year. There are now eight mobile phones for every 100 people in Africa, up from three in 2001.

Source: Calling across the divide, Economist, March 12, 2005.

For text: http://www.cass.cn/webnew/yanjiusuo/cms/show_News_e.asp?id=6094

For more on International: Growth and Technology: http://www.ncpa.org/iss/int/

FMF Policy Bulletin/ 12 April 2005

Publish date: 19 April 2005
Views: 475

Technology, News

The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation. This article may be republished without prior consent but with acknowledgement to the author.

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