Telecommunications Regulation in the Eastern Carib- Bean 129 Edgardo Favaro and Brian Winter
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43961 Public Disclosure Authorized DIRECTIONS IN DEVELOPMENT Public Disclosure Authorized Public Sector Governance Small States, Smart Solutions Improving Connectivity and Increasing the Effectiveness of Public Services Edgardo M. Favaro, Editor Public Disclosure Authorized Public Disclosure Authorized Small States, Smart Solutions Small States, Smart Solutions Improving Connectivity and Increasing the Effectiveness of Public Services Edgardo M. Favaro, Editor © 2008 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org E-mail [email protected] All rights reserved. 1 2 3 4 :: 11 10 09 08 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. 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Contents Foreword ix Preface xi Acknowledgments xv Chapter 1 Introduction 1 PART 1 Case Studies on Regional Solutions 25 Chapter 2 Banking Supervision in OECS Member Countries 27 Edgardo Favaro and Frits van Beek Chapter 3 Banking Supervision in the CFA Franc Countries 51 Christian Brachet Chapter 4 The Regional Court Systems in the Organization of Eastern Caribbean States and the Caribbean 91 Sir Dennis Byron and Maria Dakolias PART 2 Cases Studies on ICT Regulation and Outsourcing 127 v vi Contents Chapter 5 Telecommunications Regulation in the Eastern Carib- bean 129 Edgardo Favaro and Brian Winter Chapter 6 E-Government in Cape Verde 155 Edgardo Favaro, Samia Melhem, and Brian Winter Chapter 7 Impact of ICT on University Education in Small Island States: The Case of the University of the South Pacifi c 193 Ron Duncan and James McMaster Chapter 8 From Monopoly to Competition: Reform of Samoa’s Telecommunications Sector 215 Edgardo Favaro, Naomi Halewood, and Carlo Maria Rossotto Chapter 9 Exploiting Tender Processes for Budget Reform in Small Countries: The Case of Samoa 243 Geoff Dixon Appendix A Overview of the Studies of Economic Growth 265 Edgardo Favaro and David Peretz Index 281 Figures 4.1 Rule of Law: World Bank Governance Indicators, 2005 93 4.2 Number of Judges per 100,000 Inhabitants, 2000 96 4.3 Clearance Rate for ECSC Court of Appeal: Civil and Criminal Cases 100 4.4 Clearance Rate for Civil Cases, 2002 101 4.5 Percentage Increase in the Number of Civil Cases Filed in ECSC High Court, 1967–2005 102 4.6 Salaries of Judges 105 4.7 Percentage Increase in the Number of Cases Filed: ECSC High Court and Court of Appeal Caseloads Compared with Those of the European Court of First Instance and European Court of Justice 117 Contents vii 5A.1 Telecommunications Share in GDP 151 6.1 Histogram: Cost in US$ of a Three-Minute Phone Call to the United States 165 Tables 1.1 Ratio of Government Consumption and of Telecommunications to GDP in Small States and in Larger States 2 1.2 Selected Indicators: Small States and Large States, 1986–2005 4 3.1 CFA Franc Zones: Basic Data, 2005 52 3.2 CFA Franc Zones: Net Foreign Position of Monetary Authorities 64 3.3 CFA Franc Zone Banking Commissions: Regulatory Apparatus, Modus Operandi, and Powers 66 3.4 CFA Franc Zones Regional Banking Commissions—Governance Structures 71 3.5 UMOA and UMAC: Operational Norms and Prudential Framework 73 3.6A Number of Banks in Compliance with Prudential Norms and Solvency Ratios (2004) 76 3.6B Number of Banks in Compliance with Prudential Norms and Solvency Ratios (2004) 77 4.1 Contributions to ECSC from OECS Member Countries 97 4.2 Legislative Process for Changing the Constitution 104 4.3 Trust Fund Contributions for CCJ 107 4.4 Number of Cases Appealed to the Privy Council 110 5.1 International Rates from OECS Countries 133 5.2 Number of Telephone Subscribers and Internet Users in 2000 134 5.3 Percentage Increase in Number of Phone Subscribers, 2000–04 142 5A.1 Number of Phone Subscribers, 2004 and 2000 150 6.1 Telecommunications Indicators 182 8.1 Telecommunications Indicators for South Pacifi c Ocean Countries 219 8.2 Chronology of Events, 1996–2006 220 8.3 Number of Mobile-Phone Subscribers per 1,000 People in Samoa 226 viii Contents 8.4 Telecommunications Indicators Pre- and Postreform 233 8.5 Value of the Reform 236 8A.1 The Demand for Telecom Services 238 9.1 Current State versus Future State 250 9.2 Analysis of Options 251 A.1 Telecommunications Regulation 270 A.1 Growth and Volatility 276 A.2 Growth and Volatility 277 Boxes 1.1 A Roster of Small States 3 2.1 Banking Supervision in Central and West Africa and in the EMU 32 2.2 Governance of the ECCB 40 3.1 Legal Frameworks 56 3.2 UMOA/BCEAO: Institutional Arrangements and Governance Structures 57 3.3 UMAC/BEAC—Institutional Arrangements and Governance Structures 59 3.4 The Mechanisms of Coordination with France 60 5.1 Governance Structure of ECTEL 140 5.2 Comparison of Responsibilities of ECTEL and the NTRCs 141 6.1 Cape Verde’s Economy 158 6.2 Who are NOSI’s Managers? 169 8.1 The Country and Its Economy 217 8.2 Objectives of the Telecommunications Act of 2005 228 8.3 Responsibilities, Functions, and Powers of the OR 230 9.1 What Is Financial Control? 245 9.2 How Financial Packages Achieve Devolved Financial Control 258 Foreword Small states face special hurdles in achieving development gains. These geographic disadvantages are well recognized. What is new and dif- ferent is that there are valuable experiences concerning the ways and means of overcoming these impediments in certain areas. That is the focus of this volume. This book is the result of a partnership between the World Bank and the Australian Agency for International Development (AusAID). It fol- lows the path initiated by the Commonwealth Secretariat—World Bank Task Force on Small States a decade ago, which advocated the study of the distinctive development problems of small states. The book examines how some small states use international trade and telecommunications technology to source services such as justice, banking supervision, public utilities regulation, high quality medicine, and educa- tion. Sourcing these services internationally is in sharp contrast with the reality of other countries where most of these services are nontradeable. Studying this is of critical importance to small states. Forty-eight out of 185 members of the World Bank are small states, defi ned as countries with population below 2 million. High quality public services are an important aspect of development, but high-quality services are expensive to produce, especially when there are indivisibilities in production and capacity limitations. ix x Foreword Sourcing some public goods internationally fosters the bridging of domestic capacity limitations and accessing high quality services. But how do small states outsource the provision of these services? The case studies illustrate the historical context in which the outsourcing of public services has developed, the type of services that are more likely to be outsourced, and the complexity of the contractual structure required to govern the relationship between the service provider and the country client. The most common model of outsourcing found is to a regional organi- zation. The creation and operation of a regional body is facilitated when countries share a common culture, history, and language. Success is more diffi cult to achieve when a common historical background does not exist. Other forms of outsourcing—for instance to other countries, when there are special historical ties, or to international organizations—may also be viable. The outsourcing of some public service provision is an attractive pro- position for larger countries as well, especially for fragile states where institutions are weak. The international outsourcing of some services provision has been greatly facilitated by worldwide improvements in tele communications technology. But sharing in these improvements requires investments in infrastructure and organization to create the necessary interfaces with the rest of the world. There is some understanding of which public goods and institutions are important to development, but less understanding of how these insti- tutions are built over time and what agenda is to be followed when these institutions are fl edging or weak.