People keep talking about "the future of capitalism" after the subprime debacle; it is as if private enterprise had lost its muse. The Financial Times even has an entire section devoted to it. While that debacle is surely regrettable, remember that there are numerous counterexamples of channeling capitalism for better ends. (Being of Asian descent, you surely can't accuse me of following Anglo-Saxon orthodoxy ;-) There is a dynamism to it that allows renewal time and again--something Marx would actually agree with. Today, I bring you an example of how this future could be like in a country that certainly could use one.Given the daily bad news spilling out of Afghanistan, I figured we could all use some good news. Like in Iraq, there are people of good will trying to lay the groundwork for Afghanistan's (hopefully heroin-free) future. There is an innovative firm telecoms firm called Roshan receiving funding from the Asian Development Bank (ADB) spearheading an effort to surmount a number of difficulties. There is no fixed-line network in the country; whatever little existed has been idled in the war-torn nation. Yet, the advantages of cellular telephony are clear in alleviating social challenges such as encouraging women to communicate more openly. Also, speech is more important than writing in a country whose illiteracy rate is unfortunately high. From the ADB's program write-up:
Decades of conflict devastated Afghanistan's already challenged communications systems. Fixed telephone lines are virtually absent in a country with rugged terrain—soaring mountains and wide deserts—as well as limited electricity and poor roads. Postal services don't work well, either, especially with weak demand—the illiteracy rate is roughly 70%. An unstable security situation further contributes to a difficult environment.The firm is even beginning to offer financial services via cell phone, following the example of the Philippines:
Thus, the arrival of mobile phones in Afghanistan represented a telecoms revolution, enabling the country to leapfrog conventional fixed line systems straight to 21st century satellite technology.
As a result, families that have been displaced by the conflict can remain connected. Commerce and industry can grow as business owners are better able to search for the best prices and are better informed as to when goods are arriving. Isolated communities can be more integrated into the economy. In a country where remittances play a vital role in the economy, cellular technology enables people to carry out basic banking functions.
Demand for mobile phones was strong from the outset, but service rollout was constrained by limited financing options in Afghanistan's challenging political and security environment.
Telecom Development Company Afghanistan—operating under the name Roshan, which means "light" and "hope" in the two national languages—is the country's largest operator with over 2.6 million subscribers. Roshan has been able to expand its mobile network infrastructure nationwide as well as improve its range of services with an assistance package from ADB's private sector operations. An initial loan of $35 million in late 2004 was followed by a $40 million loan in mid-2006. The second loan was accompanied by a complementary financing scheme of up to $30 million and a political risk guarantee of up to $15 million. In July 2008, ADB provided a third loan of $60 million and a $10 million political risk guarantee.
"The development impact of mobile phones has spread across the country and through all levels of society," says Craig Steffensen, ADB's Country Director for Afghanistan. " Having access to information and knowledge is as critical for the education of the young—almost half the population is under 15—as it is for the social development of women." He notes that such communications promote better understanding—and reduce misunderstandings—in a society that is ethnically and linguistically diverse.
With expansion, Roshan has been able to lower the cost of its mobile phone services, increasing their accessibility to the poor. As an example of innovative services, Roshan introduced M-Paisa, designed as a mobile wallet. M-Paisa enables the transfer of funds by mobile phone in a quick, easy, safe, and cost-effective way for peer-to-peer transfer, repayment of microfinance loans, purchase of airtime, and salary disbursement. This has brought financial transaction services to a country where only 3% of the population has a bank account. Users can access the service at the push of a button and face less of the risk involved with physical money transfers.One of the most war-torn nations on Earth now has cell phones being used for financial transactions--something that isn't even being done in most of the land of subprime. The ADB article goes on to discuss how this system is being used for telemedicine given a highly fragmented health care system. Add in renewable energy for powering the network and you have a compelling project all around. How about this for the innovative power of capitalism? There are efforts we can all get behind like this wherein the power of capitalism is working for the common good. My friends, it is in these cases where I see "the future of capitalism" unfold--something anti-globalization neo-primitivists would never really understand.
Countrywide, Roshan has set up public call offices—places to call for those who do not have their own mobile phone. Apart from offering a service to the poor, this scheme offers an opportunity for Afghans to learn how to run their own business. Roshan has partnered with First Microfinance Bank in a scheme under which aspiring entrepreneurs can borrow capital to set up a public call office. Roshan also supports women-only public call offices. This is important in a culture in which the sexes are often segregated.
In another example of using innovative technology, Roshan is installing solar photovoltaic panels to power telecom towers, thus reducing diesel fuel consumption and greenhouse gas emissions. In 2009, Roshan plans to launch Trade Net, which will provide farmers with market prices through text messaging. This will allow farmers and traders to secure the best prices possible for their crops, enabling them to increase their incomes.
