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Rethinking Telecenters: Knowledge Demands, Marginal Markets, Microbanks, and Remittance Flows
By Scott S. Robinson
ssr@laneta.apc.org

The international telecenter movement is barely under way in Latin America (see www.tele-centros.org). Public schools languish without connectivity, and social services have been curtailed across the board. At the same time, the let's-get-everybody-connected slogans, such as those that appeared in last April's Time Latin American edition-confuse public opinion, and costly, high-profile, difficult-to-replicate pilot programs may be polarizing the development business. The World Bank is galvanizing a Global Development Portal (see www.worldbank.org/gateway), which is encountering significant opposition among nongovernmental organizations (see www.bellanet.org/gdgprinciples) whose funding sources and Web sites may be displaced by the institutional mega-inertia of one of the world's foremost development agencies.

Few are lobbying for public policies that employ the public sphere to catalyze social development with Internet-based micro-banks. And it may turn out that fewer than expected can play, because the entrance fee is exorbitant for the majority who have no telephone, no personal computer at home, and no credit to acquire those basic components of the knowledge society.

The Second World may mean nowadays those beyond connectivity or who are on the other side of the digital divide. It is growing in proportion to the connectivity rate within the First World and their cousins throughout the class-and-ethnically-polarized Second World. In Latin America, mediocre public school systems and their dropouts are not being equipped--nor are their teachers and students being trained--to use today's digital tools. Similarly, public libraries either are nonexistent or subsist with few resources and services. Nurses, always on the underequipped and gender-sensitive front line of public health services, staff rustic clinics in which medicines are scarce, demands are overwhelming, and continuing education courses are often unknown. A few privileged public universities offer online extension courses, but duplication of expensive efforts is rampant and planning for economies of scale often nonexistent (even among UN agencies that should know better). Providing public domain information and training in its usage do not appear to be priorities for public policy makers in Latin America today, with the exception of the unique INFOCENTROS project in El Salvador at www.infocentros.org. sv and perhaps www.telecentro.cl in Chile. Argentina is currently defining the destiny of an incipient national network of community technology centers (see www.ctc.net.ar).

Thus, it should come as no surprise that universal access, microbanking and telecenter services, and content creation attuned to public needs are absent from telecommunications priority agendas throughout the region. Commercial television generates demands for the delivery of knowledge and skills that few states in the South are committed to providing, much less equipped to supply in the short term. This frustrated, pent-up demand for access to the jobs, resources, infotainment, and opportunities implicit in the new economy may be one of the elements fueling widespread student discontent. Those who inhabit the Second World are poor and increasingly urban, and they subsist on overpopulated and marginal lands with few services. They are without credit, and, if fortunate, they are dependent on unstable wage labor.

Increasing globalization appears to translate into more food insecurity and environmental degradation, as traditional farmers get forced off the best lands so that lands can be used for export crops. Demand for firewood often devastates nearby forests. In Mexico half of the population lives from and in the informal economy. In vast regions and in many countries, remittances from migrant family members obliged by conditions at home to move abroad now account for the majority of aggregate incomes in small towns and villages (www.worldbank.org/wdr/2000).

There is a well-researched pattern of migration to the United States and Canada from Mexico, Belize, Guatemala, El Salvador, Honduras, Nicaragua, Cuba, the Dominican Republic, Haiti, and parts of Colombia, Ecuador, and Peru. Similarly, in the southern cone (Mercosur) another regional pattern exists whereby the industrial centers of Sao Paulo, Rio de Janeiro, Buenos Aires, and Cordoba attract migrants from Bolivia, Paraguay, and Uruguay, as well as Brazilians and Argentines from the so-called interior. The argument can be made that the First World's prosperity is to a major extent a function of the presence of a stable flow of cheap labor provided by migrants from the Second World. Remittance economies now drive families' subsistence strategies at home in the South while fueling labor-intensive industries in the North, which exploit the migrants' illegal status and cultural networking. In fact, the migrant networks are a de facto employment agency subsidizing many companies.

This article proposes a novel use of information and communication technology (ICT) to link the First and Second worlds--that is, the creation of telecenters using satellite or local Internet service provider (ISP) Internet connections linked with microbanks providing digital remittance services while offering a set of generic financial, communication, education, informational, and even e-commerce resources (www.idrc.ca/pan/telecentres.html).

To begin, we need to ask, Who would use a rural or community telecenter, especially if the best and the brightest have already left? Observing the pattern of telephone usage in rural, migrant-exporting regions, we can see that significant resources have been invested in communicating with kin abroad, many of which, we assume, fall into the category of when-are-you-sending-money-home? conversations. In Mexico reliable estimates peg the total transfer costs of remittances at an average of 20 percent of the more than 8 billion U.S. dollars sent home every year by the more than 18 million Mexicanos who are living north of the border.

In addition to a poor exchange rate --one usually below the going market of currency conversion--migrants pay a service charge on both ends of the transaction. Together the transfer and communication costs represent a significant chunk of capital (on average 20 percent of each remittance transfer) that could be redirected to create a rural microfinance system currently absent in most regions of the Second World. The operational premise here is that practical people will use the system if it represents a significant savings over current practices and if it is secure and available close to home on both ends (see www.cap.org on microfinance institutions).

The microbanks required to handle digital remittance transfers can assist their clientele in exploiting certain benefits of electronic commerce and can operate back to back with telecenters offering ICT training and skills, which are useful in the migrant job markets. In addition, local people may be trained to create and maintain a public domain of local information, which is yet unavailable in Mexico, for example. The telecenter on the back side of the microbank may also offer voice Internet protocol and distance education services (see www.icde.org). This could represent a win-win scenario for migrant communities North and South.

What is required to jump-start this telecenters-cum-microbanks proposal? Because migration networks are community based, each microregion is the hub for its respective network of citizens who have left to work elsewhere. Therefore, research needs to detail each migrant-exporting hub (regions tend to share an overlap in destinations and patterns), the location of migrant clusters, the existence and location of credible institutions via which money can be sent home, and the community's commitment to collaborating with the proposal. The goal is to develop a managed and secure system that drops the transfer cost to a minimum, estimated to be circa 5 percent, while providing a series of Internet technology-based benefits and services. In effect, the marginal condition of domestic and international migrant communities, still a liability, can be transformed into the motor for local and regional development by a judicious application of ICT in conjunction with community will and local organization (see www.virtualia.com.mx/990119/articulos/telecen.html).

The issue of connectivity is being resolved by what promises to be a competitive market in Internet by satellite services recently announced for Latin America (see www.tachyon.net and www.gilat.com, to name two). Whether connectivity is achieved by satellite or by dedicated lines (which the Red Cientifica Peruana is rolling out in Peru and with joint ventures elsewhere, see www.rcp.net.pe), it is a function of local infrastructure, the portal players and their carriers, and, oftentimes, regulatory caprice.

A complicating issue is the lack of a clear and public commitment on the part of Latin American national telecommunications regulatory bodies, whereby universal access and competitive markets and pricing may be induced by the rules of engagement in each domestic market. It is almost redundant to remind ourselves that the public sphere requires such commitment from the appropriate agency of the state charged with advancing and protecting the universal-access policy goal. And the historical impotency of civil society and/or nongovernmental-organization (NGO) policy proposals in the increasingly lucrative Latin American telecommunication scenarios is a matter of major concern. Without accountability and citizen input, national regulatory commissions are be-holden to their clients: the carriers and their associated portal players. This does not bode well for the future public sphere and innovative proposals therein. One option to counteract the closed-shop script now in effect involves using existing international organizations, such as the Internet Society, to create countervailing pressures and credible policy proposals difficult to ignore by all of the institutional and corporate actors involved.

The issue of the appropriate software for secure remittance transfers and other banking and commercial functions is central to a project of this nature. It requires an effective public key infrastructure--PKI (www.pkiforum.org)--which consists of three components: a certificate authority (CA), preferably to be installed in each country where operative; a registry authority (RA) for each institutional and individual actor in the network; and a repository of all certificates. Such a system also implies using a personal digital ID card (readable with a biometric device, for example) to be installed at both ends of the system. This is no small challenge, and there are currently efforts to resolve the formidable cross-certification issues (CA-to-CA operations, issues also linked to permissible encryption software exports). For secure remittance transfers to scale requires resolution of the problems inherent in designing a PKI with CA cross-certification (for an overview see www.networkcomputing.com/1108/1108colmoskowitz.html).

Low-cost digital remittance transfers permit the creation of microbanks on a broad scale. In effect, each migrant could administer a personal account at a terminal with an IP connection, from anywhere. Of course, this possibility is not embraced enthusiastically by the established banking community in migrant-exporting countries such as Mexico. It is a situation analogous to the plain-old-telephone-service (POTS) companies, pressing regulators to outlaw Voice over IP, Internet telephony. There may not yet be a generic microbanking model with the requisite off-the-shelf accounting and operational software, but the present convergence of interests and proposals is today historically unique (see www.soc.titech.ac.jp/icm/icm.html).

International NGOs and some of the major foundations assume microcredit and banking to be a central issue on today's agenda (see http://gsips.miis.edu/ips1/ips1d7_IS581.html). Digital remittance transfers can capitalize local and regional microbanks in migrant-exporting communities. These microbanks, once approved by national regulatory agencies, may be an appendix to established credit unions or local savings and loan institutions. Each branch requires the requisite PC with a reliable connection to the Internet and the PKI, CA, and RA software, as well as the means for dispensing cash to clients. This latter function can be problematic because the cost of secure armored car service to remote regions is almost prohibitive and logistically complex. Until key local merchants are willing to accept debit cards issued by microbanks, for example, the cash-dispensing function will remain an obstacle for bank clients in the villages and small towns without regular bank branches and orthodox automated teller machines (in Mexico two-thirds of the nation's 2,427 municipalities do not have a branch bank). The development of a low-cost, third-generation ATM for microbanks is waiting to happen.

On the back side of each village microbank is a telecenter--a public, low-cost access point for Internet and IP services, including telephony. The voice over the Internet protocol service alone will pay for the operation of the complete telecenter. Each telecenter may have five or six PCs in a LAN connected to the Net--some by satellite and dedicated lines where available--and others may be obliged to use dial-up services to regional ISPs in the meantime. Telecenter users may not only communicate with their relatives for less cost than long-distance POTS calls but also may have the wealth of Internet-supplied information at their disposal.

It is important to distinguish a telecenter from a cybercafé. A telecenter generates reliable local and regional information, placing it on a Web site for public consumption. Cybercafes offer Net access, but they have no role in local institutions and training programs. A telecenter may well become a key auxiliary to schools and clinics, offering continuing education for local teachers and nurses--and doctors, if any.

The issue of who will create and maintain the continuing education courses as well as lobby for their certification on the part of national education and health authorities is central to the microbank-cum-telecenter strategy. Basic and intermediate Internet technology (IT) training packages--in addition to elementary PC software usage plus Internet browsing--can be another component of each telecenter's menu of content services. Given the current rates of outmigration, and the improbability of major changes in the current development model, and the impossibility of attenuating the observable and widespread ecological impoverishment in the diverse regions, it makes sense to offer job skills that will be useful in the future workplaces in the North (yes, training for migration!). This is a need that younger returned migrants have expressed to me in different locations within Mexico. Viewed in this fashion, local telecenters complement microbanks by offering communication services, IT and other skills training and continuing education for local professionals who staff local institutions (see www.tele-centros. org for information regarding recent Latin America-wide efforts to create telecenters).

Microbanks capitalized by digital transfers from migrants in the North sharing Internet connectivity with telecenters in small towns and villages in the South translates into institutionalization of today's parallel migration-fed remittance economies. This regional dual economy wherein migrants are feeding their extended families at home and subsidizing small and medium-size manufacturers with their cheap labor in the North is now a vast, regional phenomenon. It extends from the U.S.-Mexico border, around the Caribbean, and down the Central America isthmus, in pockets throughout Colombia and Ecuador, and as far south as Peru. And the Africa- and South Asia-based networks are analogous. For this novel public-sphere initiative to move forward, considerable research is necessary to create reliable databases for each community-based overlapping social network in each national migrant stream.

Today that research is neither uniform nor available for many countries' migrants. Research in Mexico has produced an enormous body of materials (see www.embassyofmexico.org/english/4/3/migration3.htm and www.thedialogue.org/publications/lowell.pdf) often up-dated as the government has finally publicly recognized the importance in the national income accounts of the $8 billion Mexican migrants send home every year ($6 billion via commercial courier services and an estimated $2 billion by personal messengers). However, the data is uneven and there are few overview reports in the public domain offering current data and profiles of migrant networks, remittance-sending patterns, and resource usage in home villages (see www.globalexchange.org/economy/alternatives/americas/Immigration.html and www.thedialogue.org/publications). For ex-ample, El Salvador is considered a full-blown remittance economy (receiving approximately $1.5 billion a year from its transnational community abroad, see www.jhu.edu/~soc/pcid/papers/18.htm).

Available El Salvadoran online data and analysis contrast dramatically with those of its neighbor, Guatemala, where few relevant contemporary studies of the pattern of native Mayan outmigration and remittance transfers appear (www.gtz.de/orboden/thiesenh/thi4_b.htm and di.uca.edu.sv/publica/proceso/proc755.html). The same statement applies to the rest of the Central American countries, with the exception of Costa Rica, which receives many migrants (rough estimates peg it at 800,000 people) from neighboring Nicaragua.

In sum, a substantive and useful public sphere has yet to appear in most of the nations with remittance-driven economies.

It may well be that the extensive migrant communities will create and pay for a network of microbanks and telecenters to serve their own needs while simultaneously crafting a new digital public sphere. Each telecenter would generate a menu of local and regional information that municipal and provincial governments do not offer in the public domain at this time; in effect, the telecenters would substitute for certain functions of local government as well as educational and health institutions (see http://som.csudh.edu/fac/lpress/articles/villages.htm). Again, it is the paradox of those with the least who may creatively gain the most while generating a public sphere of information and accessible online opportunities-a true multiplier effect for the balance of their respective national populations.

The migrant organizations may well catalyze the telecenter rollout in their countries, a development irony bar none. Given the convergence of IT-sensitive transnational migrant organizations, the growing rural microcredit movement, a few pilot telecenter projects, some enlightened regulatory agencies, available connectivity, and increased innovation by IT-savvy entrepreneurs, this scenario may soon turn into a reality in a few Latin American regions.