UNION INTERNATIONALE DES TELECOMMUNICATIONS INTERNATIONAL TELECOMMUNICATION UNION UNIÓN INTERNACIONAL DE TELECOMUNICACIONES St. Petersburg, 22 April 1993 ITU's new strategies to promote telecommunications development and its activities in Central and Eastern Europe and the CIS Address by the Secretary-General Dr. Pekka Tarjanne Today, information technology and telecommunications are among the major driving forces for socio-economic and cultural development. The vital need for an adequate telecommunication infra-structure for industry, trade and services in the increasingly global market place is widely recognized. New applications and technologies are continuously being developed and the telecommunication sector is being restructured in many countries. For its part, the ITU is facing a set of new challenges, as a result of the changing telecommunications environment. We have just restructured the organization, to position ourselves to respond more effectively to the needs of our clients. We have recently elected the first Director of the BDT and we are in the process of reviewing our development strategies, to bring them into line with new needs and new realities. What are the main lines of our new strategic approach? * Playing a catalytic role with other international agencies, particularly funding agencies, in the mobilization of resources for investment in telecommunications development; * Providing advice on policy and regulatory matters, including such questions as liberalization, privatization, regulatory processes and tariff questions; * Coordinating the three pillars of the new ITU - development, standardization and radiocommunications - to promote the development of telecommunications, e.g. through BDT-sponsored seminars on spectrum management and standards issues; * Continuing to support the development of human resources and management capabilities: * Act as a "clearing house" for information on telecommunication development, including standards,regulations, etc. The emergence of strong regional organizations is one of the dominant features of the changing telecommunications environment. In recognition of this fact, the ITU's overall strategy is to work cooperatively with regional organizations. The High Level Committee emphasized ITU's catalytic and coordinating role and recommended that it strengthen its cooperation with other International and regional organizations. This is also reflected in the formulation of the purpose of the Union (Article 1 of the ITU Constitution, Geneva, 1992). Consequently the standardization and radiocommunication sectors of the ITU have established closer contacts with regional organizations, such as CEPT and ETSI, ERO and ETNO in Europe, APT in Asia and CITEL in the Americas region and many others. As regards the "development function" of the ITU, the organization of regional telecommunication development conferences also provide fora for coordination with regional organizations in this sector of international cooperation. However, these conferences are only held every four years, or so, in each region, so something more permanent is needed to ensure continuity of cooperation and coordination with the ITU and other development partners. Recognizing this need, the Regional Telecommunication Development Conferences organized by the ITU for Africa (Harare, 1990), Europe (Prague, 1991), Americas (Acapulco, 1992) and the Arab States (Cairo, 1992) have called for the creation of mechanisms to enhance cooperation and coordination between the ITU and the concerned regional organizations. Regional organizations, or less formal mechanisms for regional and sub- regional cooperation, are established in all major regions of the world. These organizations can certainly contribute to promoting and harmonizing telecommunications development, at the regional level. However, there is of course still a need for inter-regional harmonization of telecommunication standards and over-all development, which can best be handled by an organization with global membership, such as the ITU. There are several examples of sub-regional mechanisms for cooperation in other parts of the world where telecommunications organizations have been created for groups of countries with similar situations and priorities. One example is the Caribbean Telecommunication Union (CTU), where the communality is rather of linguistic and geographical nature. The Caribbean sub-region consists mainly of small island nations, most of which are English speaking. The so-called "Nordic Cooperation" is another example somewhat closer to you. It should be noted that membership in a sub-regional telecommunication organization does not exclude membership in larger regional and international telecommunication organizations. CTU members are also members of CITEL in which all the countries in the Americas region participate and the Nordic countries are full members of, and certainly participate very actively in pan-European fora. All of them are of course also members of the ITU. By contrast, regional co-operation in Central and Eastern Europe has become significantly weaker since the political changes of the last five years. The changing map of Europe has created a special situation. ETSI for example provides a forum for standardization of telecommunications development but, until recently, only for Western Europe. The old organizations for regional cooperation within the former USSR and between other socialist countries in Central and Eastern Europe in the field of telecommunications have virtually disappeared, as have most other mechanisms for cooperation between these countries. Some of the countries in Central and Eastern Europe are now participating in European organizations and others are knocking at the door. However, some others are not yet in a position to participate. Furthermore, most of them recognize the need for an organization which takes care of the special interests of the countries in the former Eastern bloc, at least until they have reached a level of development that enables them to participate fully in existing European regional organizations. The countries in Central and Eastern Europe and the new nations of the CIS at present have many common problems and priorities, which, for historical reasons, differ significantly from those of the countries in Western Europe. The European Development Conference in Prague (EU-RDC/91), which is of particular interest to participants in this meeting, resolved to ask the ITU to assist in creating a "Central and Eastern Europe Telecommunication Cooperative Mechanism" (called CEETEC) with the overall objective to ensure a coordinated and harmonious development of telecommunications in the region and to optimize the use of resources. The CEETEC, I understand, is intended to be an informal forum for regional cooperation, similar to the Nordic cooperation, with rotating Chairmanship and secretariat and few, if any, permanent staff. Unfortunately, at the time of the conference (November 1991), most of the countries of the former USSR were too busy with their own internal problems to attend. This is perhaps why these countries recently created their own mechanism for coordination, the so-called "Regional Commonwealth in the field of Communication" (RCC) rather than to wait for the CEETEC to become operational. This could be also extended to include other countries in the region or to join the CEETEC, if and when it is established. However, the fact is that in spite of the ITU's effort to assist the countries in implementing the EU-RDC Resolution calling for the creation of the CEETEC, such a mechanism for all the countries in the former Eastern bloc is still not in place. Regional organizations can facilitate ITU decision-making processes in a number of ways: * by "pre-processing" material and by reducing the number of inputs that have to be considered at ITU conferences and meetings; * by assisting the implementation of decisions and projects by pushing responsibility closer to end-users (the principle of "subsidiarity"); * by acting as a central point for information exchange, particularly for telecommunication development indicators, tariff data and regulatory information. For individual members, regional co-operation can provide benefits in terms of increased political clout in ITU fora as well as the benefits of larger markets for goods and services, and economies of scale more generally (e.g. in training, information sharing etc.). However, the ITU's aim is not to encourage the division of its membership into five or more closed blocs that are impenetrable to people from outside the region in question. Our objectives are global and we seek to promote regional cooperation as a means towards global integration and not as an end in itself. The sharing of power and responsibilities along these lines depends on the existence of an effective ITU and effective regional organizations. Developing an effective regional organization is a challenge for the countries of the former USSR and other countries in the region which are not presently participating fully in existing regional organizations; a challenge with which the ITU will be pleased to assist. Obviously, the ITU is also prepared to assist the three former Soviet republics; Kyrgyzstan, Tadjikistan and Turkmenistan, which are not yet Members of the Union. The Resolutions of the earlier mentioned Telecommunication Development Conferences, which reflect current priorities and needs, serve as guidelines for the BDT in the development of its strategies. Some of the activities carried out in response to these Resolutions may serve as examples of how our strategy could be translated into concrete actions in this region. As regards ITU's catalytic role, it is important to note that the European Conference (like the development conferences in other regions) generated a number of actions by other regional and national cooperation agencies. Thus the Commission of the European Communities has allocated some 7 million ECU to assist some of the countries in the region in the implementation of the EU-RDC Resolutions within their PHARE programme. Government agencies and private sector representatives in some Western European countries as well as Canada and the USA, with or without the cooperation of the ITU, have organized training courses and seminars for policy makers and managers from this region. The principal objective of these courses and seminars is to transfer skills and knowledge required for the transition into market economies, particularly skills in financial management, telecommunication business administration, marketing of telecommunication services and other skills required by managers of telecommunication operating entities in the new environment. In response to EU-RDC Resolutions, ITU has also undertaken some activities which may be considered as resource mobilization. Thus, the Union has organized two meetings of a working group on investment considerations and financial strategies. These round table meetings, with participation of representatives of the countries in the region, the major development banks and the OECD, examined issues such as telecommunication markets and sources of investment. Two other meetings were organized to design a project for development of business-oriented new telecommunications services in some of the countries in Central and Eastern Europe which the ITU has submitted to financing institutions. Through its Voluntary Programme the ITU has also been able to provide some of the countries in the region with re-cycled computers offered by Western European countries. Similar offers of re-cycled transmission and switching equipment have been made but these transactions are not yet finalized. However, not all of the countries benefit from the quite substantial assistance offered by regional organizations, bilateral cooperation agencies and the private sector. Often the poorest and least developed nations are left out, sometimes due to national priorities of the donor countries or special interests of the private sector organizations involved, sometimes due to political instability in some of these countries. Furthermore, donors tend to duplicate efforts in the limited number of countries that benefit from assistance in the field of telecommunications. A more active role of the ITU in the coordination of international cooperation could reduce duplication of effort. This means more value for money spent on assistance which should be in the interest of both recipients and donors. The ITU itself has very limited resources. However, by acting as a "resource-linker" and promoting a more equitable and widespread sharing of resources developed in the more favoured countries, it could ensure that also the poorer countries in the region benefit more from the assistance provided to any country in the region. The additional cost of, for example, delivering training or sharing management tools, which has been provided as assistance to one country or a limited group of countries, also to other countries in the region, is very marginal indeed in relation to the potential benefits. This coordinating role is clearly within the mandate of the ITU but donors and recipient countries are not always aware of it or don't see the "added value" of ITU's involvement. Furthermore, there are probably a host of on-going cooperation activities which are known to few others besides the partners directly involved. Access to information about all on-going activities is another prerequisite for the ITU to fulfill effectively its coordinating role. The EU-RDC, as all other development conferences, stressed ITU's role as a clearing-house for information and asked the ITU to assist in the development of a system for telecommunication information exchange. A Working Group meeting on this subject was organized by the ITU in Prague in April 1992. On the basis of suggestions made in this meeting, and bearing in mind the need for international standards in this field, the ITU has prepared a proposal for information to be included in the database. This proposal has been submitted to the countries concerned as well as to regional organizations, such as CEPT, EEC, EFTA and OECD, with an interest in telecommunication development indicators. In the meantime, ITU and OECD have jointly produced a publication including such indicators for the former USSR countries. Such information is vital to prospective investors as well as for providing a benchmark for subsequent studies. Similar activities are going on also in other regions The new nations of the former USSR, while similar in many aspects, have many factors that distinguish them from other developing regions in the world. The level of telephone penetration is around 14 mainlines per 100 population, or one for every seven persons. This is much lower than the average of the OECD nations (around 44 per 100) but much higher than Africa, most of Asia and Latin America. Equally, in terms of indicators of development such as digitisation, productivity, and waiting lists the former USSR fits ahead of most developing regions but behind the OECD. However, in three key areas the former Soviet Union is lagging behind: * Telecommunications revenue as a percentage of GDP is among the lowest in the world at just under three-quarters of one percent. By comparison in most other developing regions it is between 1 and 2 per cent and in the US close to 3.5 per cent. This is because tariffs in the USSR were kept artificially low for social reasons and because of technical deficiencies in billing at the local exchange; * The volume of international traffic is much lower than would be expected for a region of the economic importance of the former USSR and this lack of communication is severely constraining the development of international trade. * The development of new services, notably mobile communications and data communications has been severely retarded compared with other developing regions. Development strategies used in other regions are therefore not necessarily applicable to these countries and there is a need for new innovative development models. Thus, EU-RDC resolved to ask the ITU to assist in the development of models for telecommunications development in this region. A consultant has been recruited to analyze the situation and propose options for such models. His report will soon be available. Other consultancy missions organized by the ITU in the former USSR which give you an idea of the areas where the ITU can assist, include: * a follow-up mission to Lithuania, Poland, Russia and the Ukraine to assess what actions are taken following the conference and the needs for assistance; * three missions to Albania, one to provide advice on restructuring and management issues, another to advise on monitoring, frequency management and maritime communications and one to conduct a seminar on ISDN; * two missions to Bulgaria, one to assist in the field in tariffs and accounting and another to help in the preparation of specifications for a TV production centre; * three consultants were sent to Georgia following the earthquake to examine the needs for rehabilitating the network, including replacing old rural transmission systems with radiocommunication systems and set up an urgency relief network; * a mission to Uzbekistan to prepare a proposal for optimizing the use of satellite communication systems for international communications; * a mission to Ukraine to assist in a study of the traffic and tariff situation. In addition, network planning courses, using the ITU software PLANITU have been conducted in the former Czech and Slovak Republic, in Hungary and in Romania. Development of human resources has always been a priority task for the ITU and in recent years we have executed projects in this field in Hungary and the former Czech and Slovak Republic aiming at development of human resources strategies master plans for human resources and specification and construction of modern training facilities. The ITU also participates in a similar project executed in Poland and financed by Sweden. We have also conducted training management courses and instructor courses for telecom staff in Hungary, the former Czech and Slovak Republic, Lithuania and Poland. The need for assistance in this field has been conveyed orally to most of the consultants who have been on ITU missions to the new republics of the CIS but for some reason there are very few official requests for assistance from these countries. Perhaps we have not provided enough information on what assistance the ITU can offer and how to go about getting it. Some information about the ITU and its services has now been translated to Russian which hopefully will improve this situation. These documents are available and will give you more information on the assistance you can get from the ITU for the development of your telecommunications. We look forward to working with you, the newest "region" to emerge in our rapidly changing world, in response to the challenges facing us. ***