WSIS PrepCom2 will be "stormy"
  Dispute over financing was stepped up at UN ICT Task Force meeting
  23 November 2004. The UN Information and Communication Technology Task Force (UN ICT TF) met in Berlin last week, and civil society groups had a number of meetings around this event. The conflicts and coalitions in the second phase of the WSIS are becoming clearer now. One major dispute is to be expected over financing.

Debate on digital divide and financing shows major conflict potential

UN Under Secretary-General José Antonio Ocampo in his opening speech to the Task Force Global Forum set the tone for the week. This second phase of the WSIS has to meet two challenges to overcome the digital divide, according to Ocampo. New and innovative financing mechanisms have to be developed, and cooperation between the different stakeholders has to be improved. Not only need the NGOs more support, there is also a need to improve "the institutional capacity of developing countries to participate in international policy processes more effectively". WSIS 2005 also has to lay out the tracks for follow-up and implementation, which will be "more needed than ever then." Task Force chair José María Figueres Olsen added that this can only be done with a strong link between ICT policy and the Millennium Development Goals (MDGs). A lot of discussion is already going on in UN circles on how to link the big MDG+5 conference in New York City in the summer and the WSIS summit in the fall of next year.

Though the Task Force meeting and the attached Global Forum officially were about "Promoting Enabling Environment for Digital Development", the discussion always came back to the money question. This issue had been left open at the WSIS summit 2003 after fierce fights between the developing countries, especially from Africa, and the Western countries, led by the US and Germany. The group set up by UNDP last month following a summit decision to study existing and think about new financing mechanisms has to deliver its report by the end of the year.

Though this Task Force on Financing Mechanisms (TFFM) has only met once, UNDP staff has already drafted a first version of the report. From what we could hear from TFFM members about the first TFFM meeting, they were mostly shot at with PowerPoint presentations produced by consultants for UNDP, OECD or the World Bank, without a real chance to discuss. This discussion is urgently needed, though, and therefore a big chunk of the Berlin meeting was devoted to it.

The private sector representatives (most from global corporations or the International Chamber of Commerce) again asked for a better environment for investments, including the possibility to let the money made in the South flow back to the North. The Northern delegates noted the shift in official development assistance (ODA) from telecommunications to water and energy supply - an outcome of another UN event, the Habitat summit. We then could hear suggestions to invest a small percentage of the money spent on other development projects for ICTs. In this way, the use of ICTs could be improved, and the productivity increase would be much bigger than the few percent lost on the original project job, e.g. a water pipeline system.

The underlying current was a clear message to the developing world: Play nice with the North, especially with the private sector, and be happy about every dollar of development aid you get. Then play smart with the money and use it to improve overall infrastructure and education goals while at the same time investing into ICTs.

Global Taxes for Global Goods

It was an NGO representative again who had to kick off a more lively debate. Roberto Bissio, Director of the Third World Institute in Uruguay and speaking on behalf of the Association for Progressive Communications (APC), made clear that it should be totally okay to subsidize connectivity in developing countries. The US government had subsidized the Internet for 20 years and made millions of money and exports out of it afterwards. Even today, US e-business is heavily subsidized, as it is still exempt from value-added taxes. Not subsidizing developing countries therefore is a very unfair strategy, Bissio said.

The second part of Bissio's presentation was even more interesting. He described the Internet as a global public good with specific properties. Based on the theory of network externalities, he said, if more connections are developed, the whole network gains from them: "If you connect a country, it's not only the country that benefits, but also the rest of the world gets connected to the country" and can then sell e-services and goods there, hire cheap programmers, or do whatever is possible on the growing network of networks.

The question then boils down to "how do we finance global public goods?" ODA is intended to support local development, not global public goods. Therefore, we have to think about global taxes. These have been suggested elsewhere to decrease global public "bads" like carbon dioxide emissions. A tax on email would slow down spam - one of the worst global public bads on the Internet, as it eats up bandwidth for all net users. But an email tax could not really be wanted, as it would decrease the chances for the poorest to use the net for communication. Bissio suggested to instead tax the producers of integrated circuits, as they all earn from the enlargement of the network. His presentation ended stating there would even be support for this. When the presidents of France and Brazil, Chirac and Lula, suggested a global tax as an innovative development funding mechanism last year, they got support from 110 countries within 24 hours.

The following presentation by G.-O. Segond, Mayor of Geneva and President of the recently founded Digital Solidarity Fund (DSF), took up on this. In the hallways, there was already significant confusion among governments about the DSF. Some call it "the DSF", others say "a DSF", and its link to the official WSIS process is very unclear. According to Segmond, the idea of the DSF is a global tax of 1 per cent on all ICT-related public tenders, to be paid by the contractor. The managers of the fund should be cities and local governments, as they are closer to the needs of the people. The private DSF, set up on an initiative by Senegal and the Summit of Cities and Local Authorities, will try to broaden political support next year, and is aiming in 2006 to transform into an international treaty.

Both presentations hit right in the mark of the WSIS struggles a year ago. But the sophistication of the discussion has increased clearly, and is moving away from the former position of mostly the African governments asking for more development money from the North. Globalization is also taking over this discourse, as could be seen in the following interventions. Luke Williams, COO of the private firm ENABLIS, agreed with Bissio in saying that "taxes are the only known way to transfer money from people having it to people needing it", and he got strong applause. The problem is now less framed as just between the countries of the North and the South, but as a truly global challenge.

Then, one more speaker took the floor: US-Ambassador David Gross. After initially mentioning all the money his government spends on ODA and other development aid, he made clear there is no way that the US will ever accept or apply any kind of international taxation. The following seconds were chilling and telling at the same time. Vittorio Berttola from the Internet Governance Caucus has described them very accurately in his blog:

"When he finished, for a long, infinite moment that stood for ten or twenty seconds, there was just silence. No trace of the ordinary applause, no noise, no comment whatsoever. Just silence. Emptiness. Still air, but with such an absolute and perceivable load of hostility that I found the moment terrifying; just as if someone had suddenly torn the veil of words and smiles, and shown reality in all its ugly appearance."

The finance battle for PrepCom 2 in February has just started, it seems. PrepCom chair Janis Karklins, who briefed the NGO delegates in Berlin on the current state of official WSIS preparations, predicted that PrepCom 2 will be "really stormy". He encouraged the activist to stay involved and raise their voice: "Keep up the spirit of NGOs!"

Civil Society working on financing, better coordination needed

Civil Society's finance discussions around the WSIS at the moment take place in different venues. The finance caucus, which mostly works in French, is discussing a position paper, but has difficulties to meet the short timelines for input into the TFFM. Other discussions are going on in the Swiss WSIS coalition, in Germany, and in the APC. The latter had commissioned the paper on which Roberto Bissio's "global taxes for global goods" presentation was based on, and the APC is the only NGO that is represented in the TFFM.

There is clearly a need for better coordination, and the Berlin discussions hopefully helped in this regard. A big chance to develop common positions will be the African WSIS regional meeting in Accra (Ghana) in February. As this is right before the PrepCom, we can hope for a strong position from the African NGO representatives that come to Geneva afterwards. Civil Society from Africa should also be included in the DSF. At the moment, the 8 Civil Society representatives on the DSF's board are unknown, as are the criteria for their selection.

One of the larger strategic challenges for civil society is to create linkages between WSIS and other processes. WSIS NGOs are largely de-linked from the networks mobilising around WIPO, WTO, UNESCO, etc. They are similarly de-linked from the social movements around the social forum processes. The recent European social forum, according to participant Karen Banks from APC, "demonstrated the benefit of maintaining strong relationships between the activists and the more traditional NGOs".


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