*Follow-up to WSIS-Geneva*

Task Force on Financial Mechanisms

Brainstorming Meeting

June 11^th^ 2004

UNDP New York

*Draft Report (June 23, 2004)*

Background & Overview

On June 11^th^ 2004, UNDP organized a brainstorming session with experts
from key institutions, stakeholder organizations and partners to consult
and secure inputs on the following:

(i) Critical issues to be addressed by the report of the Task Force on
    Financial Mechanisms

(ii) Structure and composition of the Task Force on Financial Mechanisms
     and a roadmap for its work (see attached agenda).

The WSIS context for the work of the Task Force on Financial Mechanisms
was provided by Astrid Dufborg (who had been involved in facilitating
the negotiations on the text on financing at WSIS-Geneva) as well as by
others. Mr. Mamadou Diop Decroix, the minister of culture and
communication of Senegal as well as Mr. Amadou Top provided participants
with a background and updates on the voluntary Digital Solidarity Fund
launched at Geneva by President Wade of Senegal with initial
contributions from the cities of Geneva and Lyon and the Government of
Senegal. The ITU, which was in the process of holding its council
meetings, was represented on videoconference by Mr. Pape-Gorgui Toure.
See Annex I for a full list of participants.

The discussions were productive and resulted in a series of
recommendations that would be used to guide the work of the Task Force
on Financial Mechanisms. These are indicated in the sections below.

Given that the report of the Task Force on Financial Mechanisms is due
in a very short timeframe (End December 2004), the chair of the meeting
-- Mr. Shoji Nishimoto of UNDP -- proposed that its work be divided into
two phases, with the first phase devoted to information gathering,
research and the development of background materials even prior to the
formal launch of the Task Force on Financial Mechanisms.

The chair also requested the experts to continue their involvement as a
"resource group" to support the activities of phase one of the Task
Force on Financial Mechanisms, at least until such time as the formal
task force was convened.

# Role & Scope of the Task Force on Financial Mechanisms

Over the course of reviewing the background discussions and framework of
deliberations leading up to WSIS-Geneva, it became clear that while
there had been recognition of the various dimensions of the financing
issue, the discussions had become deadlocked on the issue of the Digital
Solidarity Fund. Many delegations felt that this had been an unfortunate
outcome and should be avoided in this taskforce.

It was pointed out that at WSIS-Geneva, the negotiations on financing
were perceived to have been disadvantaged by the lack of comprehensive
data and information that could have been used to facilitate a
*diagnostic* of the situation.

The expectations of the task force were seen to be quite high and it
needed to be acknowledged that while financing had its expert, technical
and policy dimensions , the work of the task force needed to be situated
within the WSIS context and to facilitate movement on the discussions
taking place therein. It also needed to demonstrate that it was
cognizant of the concerns of developing countries and on the side of
action by way of strengthening financing in ICT for development as part
of broader development agenda of achieving the MDGs.

In light of the above considerations, the experts agreed that:

1.  Its role should be to contribute to the negotiations at
    inter-government level leading up to and during Tunisia by providing
    inputs for an evidence-based dialogue and by highlighting of key
    issues with regard to financing challenges and opportunities.

2.  It should follow the remit and look into the *range of*
    *complementary financing modalities* and avoid becoming locked into
    discussions about the Digital Solidarity Fund. Further, since the
    Fund has already been created the task force should consider it
    within the context of public-private and innovative financing
    mechanisms.

3.  At a *minimum*, it was proposed that the task force should focus on
    producing a detailed report on how much financing is available to
    different kinds of ICT (as infrastructure and as a tool through
    private investment, and domestic as well as international funding).
    This was seen as important from the point of view of presenting a
    solid defensible picture of reality as well as for providing a
    *diagnostic* for identifying gaps and areas of concern with respect
    to funding.

4.  Going in the direction of a more *maximalist* interpretation, it was
    proposed that the Task Force on Financial Mechanisms should do more
    than simply report on what exists and that it should in fact try to
    *push the envelope* and also identify innovative financing
    mechanisms*.*

5.  There was also general agreement that the task force was expected to
    make recommendations that could be usefully considered by
    decision-makers (within and outside the WSIS process).

6.  With regard to the issue of assessing "adequacy"[^1] of current
    financing it was pointed out that in general whether financing was
    seen as being adequate or not was a matter of judgment since the
    reality is that there will never be "adequate" funding for all
    development goals. Some participants also pointed out that the
    question of adequacy needed to be placed in the context of financing
    for development objectives more broadly. Through an assessment of
    how ICT is faring in relation to these other development priorities
    -- to which it also has the potential to contribute -- the Task
    Force on Financial Mechanisms could explore the issue of whether a
    case should be made to adjust priorities for development financing.
    There were differences as regards how far the Task Force on
    Financial Mechanisms needed to go in making the case for ICT for
    Development.

# Focus of the Report

7.  It was proposed that the deployment of ICT within the context of the
    MDGS would provide a good conceptual umbrella framework for the
    report. This would be useful both from the point of view of securing
    greater commitment as well as in identifying development and
    financing priorities.

8.  In this context, the financing needs corresponding to the two
    different roles of ICT - as a development tool and ICT as
    infrastructure- would need to be looked at. This was also because,
    in part, the "i" could be seen as coming before the "e" and because
    investment in infrastructure in was viewed as constituting the
    *bulk* of ICTD financing needs.

9.  It was agreed that the financing picture would be addressed through
    a presentation of trends and quantitative data as well as through
    the use of case studies and lessons learned from sectoral studies.

> [ICT Infrastructure]{.underline}
>
> Of the two, it was agreed that the mapping financing of
> *infrastructure* development would be a relatively easier task.

10. It was agreed that the role of the private sector was critical for
    infrastructure development and that a strong rationale would need to
    be provided for public sector involvement. In the cases where there
    was insufficient investment by the private sector, it was pointed
    out that a distinction needed to be made, in effect, between
    *regulatory /policy* issues and genuine *market* failures (when the
    market left to itself does not allocate resources or provide
    services efficiently).

11. If a case was to be made for public financing, this should be done
    on a sound basis, including (i) to facilitate the involvement/role
    of the private sector through the use, for e.g., of smart subsidies,
    risk mitigation and guarantee schemes; (ii) mechanisms to service
    under-served areas/address issues that the private sector was either
    unable or unlikely to address or were better achieved through
    coordinated public activity. The areas that needed to be explored
    further in this regard included rural and other under-served areas,
    conflict regions, cross-border connectivity and government networks.

12. Based on a snapshot of the broad trends over the last decade in
    infrastructure financing and investment that was provided by one of
    the experts, there were suggestions of themes that might be explored
    further, which included the following: (i) examination of whether
    there were complementarities between public and private sector
    investment in infrastructure rather than "crowding out"
    effects; (ii) assessment of whether there was a case to be made to
    revisit some of the policy decisions taken during the 1990s to
    [not]{.underline} actively support ICT infrastructure through ODA
    and/or assistance provided by the development banks.

> [ICTD Activities]{.underline}
>
> With regard to ICTD activities, it was pointed out that there were a
> number of conceptual and data difficulties that needed to be untangled
> and addressed. First, it needed to be recognized that most
> institutions (including the World Bank) did not track assistance for
> ICT as a tool but only assistance to it as a sector. Support for ICT
> in the context of education, health or government was more likely to
> be incorporated into assistance provided to those sectors. Thus it was
> difficult, off hand, to assess whether there was, for example, a
> problem at the level of financing of education priorities per se or
> whether the problem lay in securing resources for ICT in education.

13. It was proposed that the Task Force on Financial Mechanisms should
    attempt to explore these issues through case-studies/analysis of a
    few development sector/s and by drawing on lessons learned from
    major initiatives in these areas.

> [Other Considerations]{.underline}

14. While the focus of the report is on financing, it was suggested that
    to be effective and credible, the report would need to be situated
    within the context of other development financing needs. A variety
    of participants stressed the need to highlight complementary and key
    issues such as capacity development and supportive policy frameworks
    without which existing and/or additional financing would not have
    the desired development impact or be sustainable.

15. It was also argued that current limitations in capacities should not
    be used as a reason to reduce funding. This was because of
    importance of ICT for development. Instead, it was proposed that
    support for capacity development should be a key component of
    assistance provided.

16. It was proposed that the discussion of financing should also
    consider how *costs could be reduced* -- both through policy
    mechanisms as well as through support for use of cost effective
    technologies.

17. It was pointed out that since ICTD was an emerging area for some
    development partners, a number of other types of capacities could be
    usefully strengthened through this report and its related processes.
    Building a shared understanding of the issues and of the role that
    ICT can play in development could help to facilitate the development
    of programme and funding priorities that were more in tune with
    developments and innovation at the country level. An example of the
    type of chicken and egg type problem that this situation could
    create was provided by the example of a country which sought funding
    for ICT but could not put it in its PRSP -- which was the key
    strategic instrument for determining funding priorities -- because
    some donors did not see ICT for development as important for poverty
    reduction.

# Roadmap for the Task Force on Financial Mechanisms

18. It was agreed that, given the very short time frame, the work of the
    task force should be carried out in two phases, with the first phase
    focused on information gathering and research prior to the formal
    launch of the Task Force on Financial Mechanisms.

19. Its work would be achieved through collaboration with the key
    players and institutions and the contributions of a *resource* group
    and *consultative mechanisms* involving stakeholders, regional
    entities etc. At least until the formal launch of the Task Force on
    Financial Mechanisms, the brainstorming group with high level of
    expertise and commitment was requested to serve as a *resource*
    group.

20. Consultations and information-sharing with stakeholders should be
    organized through virtual means (e.g. WSIS-online and other fora) as
    well as through dedicated outreach at key global and regional
    meetings, etc.

21. A small *expert group* (e.g consisting of 5-6 people) with expertise
    in financing, ICTD and IT/telecom infrastructure should be
    constituted to "draft" background materials and inputs for the
    report based on contributions, information gathering and research
    undertaken.

22. A proposal for the composition and criteria for membership of the
    Task Force on Financial Mechanisms should be ready by mid-July and
    the task force itself should be expected to formally meet in End
    September/Early October to review initial findings and background
    papers and provide guidance for further work.

23. It was agreed that the Task Force on Financial Mechanisms itself
    should be fairly small and that it should consist of participants
    from developing as well as developed countries, not be too
    \"high-level\", but rather be oriented to \"experts/individuals\"
    persons who between them would have an understanding of ICT for
    development, finance, policy issues and be cognizant of the WSIS
    inter-governmental issues and processes so as to provide guidance
    and finalize a report that is perceived to be credible for the WSIS
    process, decision-makers in ICTD and stakeholders.

24. The draft report is expected to be circulated in November and
    finalized by end-December.

25. The WSIS prepcom process is expected to focus on the financing issue
    and the report at the up-coming February 2005 prepcom.

#  Timeline for Activities

+-----------------+----------------------------------------------------+
| #               | Secretariat constituted with outreach to experts,  |
| ## **April -**  | partners at stakeholders at regional/global fora   |
|                 | as feasible;                                       |
+-----------------+----------------------------------------------------+
| ###             | Brainstorming meeting with experts and partners to |
| **11^th^ June** | discuss scope and composition of the task force    |
|                 | and content of report.                             |
+-----------------+----------------------------------------------------+
| ###             | Experts recruited to provide background papers and |
|  **June- July** | undertake research.                                |
|                 |                                                    |
|                 | Reporting on progress at WSIS- PrepCom 1 (24-26    |
|                 | June), information sharing with stakeholders and   |
|                 | informal consultations at Hammamet, Tunisia.       |
|                 |                                                    |
|                 | Launch of virtual consultation process on          |
|                 | WSIS-online and outreach to stakeholders to secure |
|                 | inputs.                                            |
|                 |                                                    |
|                 | Finalization of the scope and composition of the   |
|                 | Task Force on Financial Mechanisms                 |
+-----------------+----------------------------------------------------+
| ### **Mid-L     | First meeting of the Task Force on Financial       |
| ate September** | Mechanisms to review initial findings/reports      |
+-----------------+----------------------------------------------------+
| ### **          | First drafts of report chapters with case studies, |
| End - October** | etc., following consultations as needed            |
+-----------------+----------------------------------------------------+
| ### **E         | Circulation of draft report of the Task Force on   |
| arly-November** | Financial Mechanisms for comments and virtual      |
|                 | consultations                                      |
+-----------------+----------------------------------------------------+
| ### *           | Compilation and incorporation of comments received |
| *Mid-November** | into the report                                    |
+-----------------+----------------------------------------------------+
| ### **End-      | Final in-person Task Force on Financial Mechanisms |
| November/Early- | meeting, key working group members and secretariat |
| December 2004** | to finalize and launch report, chaired by UNDP     |
|                 | Administrator                                      |
+-----------------+----------------------------------------------------+
| **End December  | Submit Report to the SG                            |
| 2004**          |                                                    |
+-----------------+----------------------------------------------------+

#  Annex I 

# [Agenda]{.underline}

9:00 -- 9:30 Breakfast and initial networking

9:30 - 9:45 Introduction & Discussion of the Agenda

Mr. Shoji Nishimoto (UNDP)

9:45 -- 10:00 WSIS Context for the Task Force on Financial Mechanisms

*Presenter*: Ms. Astrid Dufborg, Sweden

10:00- 11:15 Brainstorming: Identifying critical issues on ICTD
Financing

*Moderator:* Shoji Nishimoto, UNDP

-   What are the issues at stake?

-   How can they be addressed?

-   Thinking out of the box & looking for a "creative middle" between
    public and private

-   Issues to be included in the final report

11:15 -11:30 Coffee Break

11:30 -- 12:30 Brainstorming: Identifying critical issues on ICTD
Financing (continued)

*Moderator:* Pierre Guislain, World Bank

-   Thinking out of the box & looking for a "creative middle" between
    public and private

-   Issues to be included in the final report

12:30 -- 1:30 Lunch

1:30 -- 3:00 Towards a Roadmap for the Task Force on Financial
Mechanisms

*Moderator*: Sarbuland Khan, UNDESA

-   Role and TORs for the Task Force on Financial Mechanisms

-   Membership and representation

-   Role of the brainstorming group

-   Expected outputs

3:00 -- 3:30 Consultations and WSIS process

*Moderator*: Daniel Stauffacher, Switzerland

3:30 -- 4:00 Summary and Conclusions

*Moderator*: Shoji Nishimoto, UNDP

+--------+-------------+------------------------------+---------------+
| *      |             |                              |               |
| *Annex |             |                              |               |
| II -   |             |                              |               |
| Pa     |             |                              |               |
| rticip |             |                              |               |
| ants** |             |                              |               |
+--------+-------------+------------------------------+---------------+
| **Or   | **Name**    | **Title**                    | **E-mail**    |
| ganiza |             |                              |               |
| tion** |             |                              |               |
+--------+-------------+------------------------------+---------------+
| A      | > Daniel    | Ambassador, Switzerland,     | <daniel.      |
| dvisor | >           |                              | stauffacher@s |
| to     | Stauffacher | > Office of the Swiss        | eco.admin.ch> |
| Secre  | > (Mr.)     | > Federal Council for WSIS   |               |
| tariat |             |                              |               |
+--------+-------------+------------------------------+---------------+
| A      | > Astrid    | Ambassador, Special ICT      | [*a           |
| dvisor | > Dufborg   | Adviser                      | strid.dufborg |
| to     | > (Ms.)     |                              | @foreign.mini |
| Secre  |             | > Permanent Mission of       | stry.se*](mai |
| tariat |             | > Sweden, Geneva             | lto:astrid.du |
|        |             |                              | fborg@foreign |
|        |             |                              | .ministry.se) |
|        |             |                              | or            |
|        |             |                              | [*ast         |
|        |             |                              | rid.dufborg@s |
|        |             |                              | ida.se*](mail |
|        |             |                              | to:astrid.duf |
|        |             |                              | borg@sida.se) |
+--------+-------------+------------------------------+---------------+
| Assoc  | > Sonia     | > Deputy Executive           | <s            |
| iation | > Jorge     | > Director/Programmes and    | onia@apc.org> |
| for    | > (Ms.)     | > Projects Manager           |               |
| Progr  |             | > Association for            |               |
| essive |             | > Progressive Communications |               |
| C      |             |                              |               |
| ommuni |             |                              |               |
| cation |             |                              |               |
| (APC)  |             |                              |               |
+--------+-------------+------------------------------+---------------+
| Canada | Jim Crowe   | Deputy Director, OECD, UN    | <ji           |
|        | (Mr.)       | and G-8 Section              | m.crowe@dfait |
|        |             |                              | -maeci.gc.ca> |
+--------+-------------+------------------------------+---------------+
| DESA   | > Sarbuland | > Director for the Division  | <             |
|        | > Khan      | > for ECOSOC Support and     | khan2@un.org> |
|        | > (Mr.)     | > Coordination, DESA         |               |
+--------+-------------+------------------------------+---------------+
| Eu     | Harry De    | ICT Adviser, DG Development  | <h            |
| ropean | Backer      |                              | arry.de-backe |
| Comm   | (Mr.)       |                              | r@cec.eu.int> |
| ission |             |                              |               |
+--------+-------------+------------------------------+---------------+
| Nether | Peggy       | Policy Advisor United        | <peggy.visser |
| lands\ | Vissers     | Nations & IFIs Dept.,        | s@minbuza.nl> |
| (*on   | (Ms.)       | Ministry of Foreign Affairs  |               |
| behalf |             | of the Netherlands           |               |
| of the |             |                              |               |
| EU     |             |                              |               |
| Presid |             |                              |               |
| ency*) |             |                              |               |
+--------+-------------+------------------------------+---------------+
| Fr     | > (Mr.) Mr  | > Conseiller du Directeur    | <             |
| ance/T | > Jérome    | > General                    | adamj@afd.fr> |
| unisia | > Adam      | >                            |               |
|        |             | > Groupe Agence Francaise De | <jean-marc.   |
|        |             | > Développement              | bellot@diplom |
|        |             |                              | atie.gouv.fr> |
+--------+-------------+------------------------------+---------------+
| ICC    | > Ayesha    | > Senior Policy Manager,     | <ayesha.hassa |
|        | > Hassan    | > E-Business, IT & Telecoms  | n@iccwbo.org> |
| USCIB  | > (Ms.)\    | > ICC International          |               |
| on     | > (Unable   | > Secretariat                | <dfar         |
| behalf | > to        | >                            | es@uscib.org> |
| of ICC | > Attend)   | > Vice President, Electronic |               |
|        | >           | > Commerce and               |               |
|        | > David     | > Telecommunications, United |               |
|        | > Fares     | > States Council for         |               |
|        | > (Mr.)     | > International Business     |               |
|        |             | > (USCIB)                    |               |
+--------+-------------+------------------------------+---------------+
| ITU    | > Pape      | > Chief, Policies,           | <             |
|        | > Gorgui    | > Strategies, and Financing  | pape-gorgui.t |
| (*via  | > Touré     | > Department                 | oure@itu.int> |
| video  | > (Mr.)     | >                            |               |
| confer | >           | > Chief, Coordination,       | <arthur.l     |
| ence)* | > Arthur    | > External Relations and     | evin@itu.int> |
|        | > Levin     | > Communications             |               |
|        | > (Mr.)     |                              |               |
+--------+-------------+------------------------------+---------------+
| Japan  | Yoshiaki    | Councelor                    | <             |
|        | Ito (Mr.)   |                              | yoshiaki-ito@ |
|        |             | Permanent Mission of Japan   | un-japan.org> |
|        |             | to the United Nations        |               |
+--------+-------------+------------------------------+---------------+
| OE     | > Ichiro    | > Advisor on Science &       | <ichiro.ta    |
| CD/DAC | > Tambo     | > Technology Development     | mbo@oecd.org> |
|        | > (Mr.)     | > Co-operation Directorate   |               |
+--------+-------------+------------------------------+---------------+
| S      | Mamadou     | > Minister of Culture and    | Fax           |
| enegal | Diop        | > Communication, Senegal     | 212-517-9030  |
|        | Decroix     | >                            |               |
|        | (Mr.)       | > Second Counselor, Mission  |               |
|        |             | > of the Republic of Senegal |               |
|        | Malick      |                              |               |
|        | Thierno Sow |                              |               |
|        | (Mr.)       |                              |               |
+--------+-------------+------------------------------+---------------+
| S      | > Amadou    | > Advisor to the President   | <amadou.t     |
| enegal | > Top (Mr.) | > on the Digital Solidarity  | op@osiris.sn> |
|        |             | > Fund                       |               |
+--------+-------------+------------------------------+---------------+
| T      | > Ali       | Ambassador Extraordinary &   | Fax:          |
| unisia | > Hachani\  | Plenipotentiary              | 212-759-9538  |
|        | > (H.E.     |                              |               |
|        | Ambassador) | > Permanent Mission of       |               |
|        |             | > Tunisia to the United      |               |
|        |             | > Nations                    |               |
+--------+-------------+------------------------------+---------------+
| World  | > Pierre    | > Manager, Policy Division   | <pguislain@w  |
| Bank   | > Guislain  | > (CITPO) Global Information | orldbank.org> |
|        | > (Mr.)     | > & Communication            |               |
|        |             | > Technologies               |               |
+--------+-------------+------------------------------+---------------+

[^1]: For context, see WSIS plan of Action -
    <http://www.itu.int/dms_pub/itu-s/md/03/wsis/doc/S03-WSIS-DOC-0005!!PDF-E.pdf>,
    p12

    "While all existing financial mechanisms should be fully exploited,
    a thorough review of their adequacy in meeting the challenges of ICT
    for development should be completed by the end of December 2004.
    This review shall be conducted by a Task Force under the auspices of
    the Secretary-General of the United Nations and submitted for
    consideration to the second phase of this summit. Based on the
    conclusion of the review, improvements and innovations of financing
    mechanisms will be considered including the effectiveness, the
    feasibility and the creation of a voluntary Digital Solidarity Fund,
    as mentioned in the Declaration of Principles." It should be noted
    that a voluntary digital solidarity fund has already been setup.