Let's learn from India's wealth of rural expertise

Onlookers line the streets as India’s President Pratibha Patil visits the Independence Monument in Phnom Penh. Photo by: Heng Chivoan

via CAAI

Friday, 17 September 2010 15:01 Steve Finch

WHAT a difference a regional superpower makes. When Chinese Vice President Xi Jinping visited Phnom Penh in December, Beijing pledged some US$1.2 billion in soft loans and grants to the Kingdom.

And although the visit of Indian President Pratibha Devisingh Patil to Cambodia this week has resulted in far less direct financial aid – the EXIM Bank of India confirmed just US$15 million for the Stung Tasal water project, according to an Indian Embassy spokesman – in many ways Cambodia can glean more from India’s economic model than that of China.

In terms of telecommunications, China’s answer to Cambodia’s problem of extending rural infrastructure was a $200 million soft loan to market leader Mobitel, a company that will surely use the capital to further its competitive advantage. CEO David Spriggs said last month that Mobitel had “no plans” to share towers in a market that has struggled to invest in infrastructure in the past six to nine months.

Rural infrastructure development is a significant challenge in a country where tower overlap has reached absurd levels in places like Phnom Penh. It is thought that there are enough towers to cover the country twice over, yet some areas remain without a signal. India by contrast has perfected a system in which mobile-service providers share infrastructure so that there is increased motivation to access even the most remote rural areas of the country – given that costs are split and infrastructure and services separated within the sector. It’s called the “Indian model” in the industry.

It is in the area of rural economic development that Cambodia could perhaps learn the most from India. Though China has perfected the art of bringing the rural masses to cities to manufacture wealth and development, India’s specialty – services outsourcing – has largely moved the other way in recent years as businesses have increasingly targeted the countryside.

Known as Business Process Outsourcing, or BPOs, companies have sought to save money on wages by targeting rural communities despite problems of a low skills base, a lack of elec-tricity and sometimes-patchy telecommunications. In other words, the exact same challenges faced by Cambodia’s rural poor.

India addressed these problems by installing generators in key areas, using its dynamic mobile-phone infrastructure model to target unconnected towns and villages planned for outsourcing work.

Of course, India already had an urban-based outsourcing industry, so the leap to the countryside was not such a large chasm to overcome.

Cambodia could still transfer a great deal of this Indian experience to its own countryside. In fact, promising examples already exist: The Battambang office of Digital Divide Data, an IT outsourcing NGO founded in 2001, was its first branch to reach profitability.

For an economy that has seen its tourism sector thrive in recent years, why is there practically no effort towards community-based tourism in rural areas? Chi Pat, in Koh Kong province, remains one of the few examples.

The Kingdom also suffers from a lack of rural economic statistics. Were companies or government departments to train rural populations to input or even collect data we would suddenly see huge knock-on benefits, in terms of investment information. This would be especially true in terms of market data, where companies such as Indochina Research remain largely confined to major urban areas.

Cambodia should not over-emphasise investment figures, especially when many turn out to be overblown, anyway.

A key factor in economic growth remains taking on the best expertise gained from more developed economies, particularly in a bid to tackle low levels of rural economic development. In this respect, India is surely something of an expert.