Mobile phones

In Africa, Banking Goes Mobile

Mobile phones have made the headlines this year due their role in political organizing the world over, from the aftermath earthquake and environmental protests in China to political campaigns here in the United States. Now, what many have recognized as the true power of mobile technology is being realized in Africa. In Tuesday's Guardian, Richard Wray writes that "the dramatic spread of the handset is revolutionising the way money circulates."

For consumers in developed markets, using a mobile phone for banking services is a smart add-on to a bank's branch network. But to people in the developing world, the arrival of mobile banking - or m-banking - is potentially revolutionary.

If money is an economy's lifeblood, improving its circulation plays a critical role. Many Africans living in rural areas, for instance, rely on money sent home by members of their family who work in towns and cities. But getting that cash to a village that could be hundreds of miles away is a tricky business. In Kenya, for example, workers in urban areas hand wages over to bus drivers, who promise to stop off at the worker's home village en route to their destination.

Even those who do have a bank account - and they make up only a few per cent of Africa's 950 million population - are restricted in what they can do with their money because of the dearth of branches in rural areas.

But the dramatic growth in mobile phone use in Africa - phones now outnumber cash machines by several thousand to one - is paving the way for a new set of services that turn the humble handset into a banking tool with the potential to transform Africa's economy.

Services have sprung up that let people transfer cash by text message to other mobile phone users and give Africa's vast number of "unbanked" their first access to financial products. Instead of using a bank branch, these services rely on local retailers who already sell mobile top-up cards.

"We wanted to offer something that would work," explained Mung Ki Woo, who heads Orange's m-payments division. "Instead of giving people a plastic card, why not use something many people already have: a mobile phone? And instead of doing transactions at a bank branch, why not let people go to their local retailer to deposit and withdraw cash?"

The article goes on to discuss the proposed creation of m-banking systems that allow access by all users, regardless of cell phone carrier. It also discusses the expansion of this technology to microfinance, which would potentially allow these small loans that have changed the lives of millions for the better to be expanded to many times more people.

M-banking is truly revolutionary, and a broad-based implementation that allows mobile technology to substitute for visits to banks will have dramatic economic development impacts. The emergence of technology that enables bottom-up politics and banking may yet be the beginning of a new era of prosperity and engagement that will be felt globally.

New Politics in China: Prime Minister Wen Jiabao on Facebook

Following the massive earthquake in China, there was much discussion of the new media and communications technology that Chinese were using to spread news and opinions about the earthquake and the response to it. It seems that this earthquake and the use of this new media and new political tools has lead to the emergence of a new politics in China. From Nicholas Kristof’s op-ed in the New York Times last week:

In the aftermath of the great Sichuan earthquake, we've seen a hopeful glimpse of China’s future: a more open and self-confident nation, and maybe — just maybe — the birth of grass-roots politics here.

In traveling around China in the days after the quake, I was struck by how the public and the news media initially seized the initiative from the government. Ordinary Chinese are traveling to the quake zone to help move rubble, and tycoons, peasants and even children are reaching into their pockets to donate to the victims.

"I gave 500 yuan," or about $72, a man told me in the western city of Urumqi. "Eighty percent of the people in my work unit made donations. Everybody wants to help."

Private Chinese donations have already raised more than $500 million. That kind of bottom-up public spirit is a mark of citizens, not subjects.

This political cycle in America, the Obama campaign has revolutionized fundraising through the internet by enlisting supporters as partners in the campaign, not just voters. Just as American politics has changed, so too are Chinese taking politics into their own hands through individual giving. As Kristof argues, China is going through a fundamental change, as its people think of themselves as "citizens, not subjects." Kristof continues:

China may claim to be Marxist-Leninist, but it’s really market-Leninist. The rise of wealth, a middle class, education and international contacts are slowly undermining one-party rule and nurturing a new kind of politics.

Prime Minister Wen Jiabao is hard-working and blessed with nearly a photographic memory, but he also may be the second-most boring person alive (after his boss, President Hu Jintao). Both Mr. Hu and Mr. Wen rose through the system as classic Communist apparatchiks — Brezhnevs with Chinese faces. Yet Mr. Wen has seen the political landscape changing and has struggled recently to reinvent himself. When the earthquake hit, Mr. Wen flew immediately to the disaster area and appeared constantly on television, overseeing rescue operations.

Heroic tidbits seeped out. Mr. Wen fell and cut himself but refused medical attention. He bellowed directions to generals over the telephone and then slammed the handset down. He shouted to children buried in a pile of rubble: "This is Grandpa Wen Jiabao. Children, you’ve got to hold on!"

Mr. Wen’s conduct is striking because it’s what we expect of politicians, not dictators. His aim was to come across as a "good emperor," not to win an election. But presumably he behaved in this way partly because he felt the hot breath of public opinion on his neck.

Yesterday, the world (and Mike, who tipped me off to this) was shocked to find Prime Minister Wen on Facebook. That’s right,, the social networking site started by Harvard students and spread through America’s universities, is now impacting Chinese politics. As of this posting, Wen had just surpassed 16,000 supporters.

China's transition from a compltely closed society in the three decades ago to one in which individuals are coming together to develop civil society - in large part with the help of these new tools - is indicative of broader change happening in that country. Kristof predicts that within two decades, the Chinese Communist party will transition to a "a Social Democratic Party that dominates the country but that grudgingly allows opposition victories and a free press." Indeed, there is already evidence of this in the aftermath of the earthquake, as the Chinese government realizes a free but professional press is of great use to them in that it provides important services that free-wheeling and unaccountable media cannot.

In this short period of time since the US chose to normalize trade relations with China, there has been much improvement in economic freedom. China's economy is moving toward a free market model and many sectors are extremely entrepreneurial and open. There can be no doubt that the liberalization of relations with the west and the opening of China and its markets to American goods, services, and ideas has worked. Time will tell if a market of ideas, that ultimately leads to a more democratic and liberal China, takes hold, even if that process does begin on Facebook.

Bush: Americans can send cell phones to Cuba

Following up on recent work on the power of mobile communications in the developing world, the Bush Administration has provided an important step on this issue in its Cuba policy. Americans will be allowed to purchase and pay bills for cell phones that they can ship to Cuba.

From yesterday’s New York Times article by Sheryl Gay Stolberg:

President Bush announced Wednesday that Americans would soon be allowed to give their relatives in Cuba cell phones to use. The move is intended to challenge Cuba’s new leader, Raul Castro, to make good on his promises of reform, by giving ordinary Cubans more freedom to communicate with one another and the outside world.

"If the Cuban people can be trusted with mobile phones, they should be trusted to speak freely in public," Mr. Bush said, during a White House ceremony attended by dozens of Cuban-Americans, including the families of imprisoned dissidents. He added, "The world is watching the Cuban regime."Since Mr. Castro succeeded his ailing 81-year-old brother, Fidel, in February, he has initiated a series of changes in the country, including opening up access to cell phones, computers and DVD players.

But most Cubans cannot afford to buy such luxuries, Mr. Bush said, so the policy changes have amounted so far to "nothing more than a cruel joke perpetuated on a long-suffering people." He added, "If the Cuban regime is serious about improving life for the Cuban people, it will take steps necessary to make these changes meaningful."

We at NDN applaud this move by the Bush administration, but the fact is that this move is far too little in terms of broader Cuba policy. It is a positive development that the administration is on board with mobile communications as a tool to advance human rights. The lessons from China and Egypt, among others, are too significant to ignore.

New Media informs Chinese quake response

In the wake of the catastrophic earthquake in central China last week, the western media has reported on the role that new media – blogs, mobile phones, and instant messages – have played in communicating news of the earthquake around China. These communications mark a vast change in the flow of information surrounding a disaster from previous disasters in China.

From Cara Anna of the Associated Press:

Almost nonstop, the uncensored opinions of Chinese citizens are popping up online, sent by text and instant message across a country shaken by its worst earthquake in three decades.

"Why were most of those killed in the earthquake children?" one post asked Thursday on FanFou, a microblogging site.

"How many donations will really reach the disaster area? This is doubtful," read another.

China is now home to the world's largest number of Internet and mobile phone users, and their hunger for quake news is forcing the government to let information flow in ways it hasn't before.

A fast-moving network of text messages, instant messages and blogs has been a powerful source of firsthand accounts of the disaster, as well as pleas for help and even passionate criticism of rescue efforts.

"I don't want to use the word transparent, but it's less censored, an almost free flow of discussion," said Xiao Qiang, a journalism professor at the University of California, Berkeley, and director of the China Internet Project, which monitors and translates Chinese Web sites.

China is well known for controlling the flow of information.

"We didn't know that hundreds of thousands of lives passed away during the Tangshan earthquake in 1976 until many years after the disaster took place," sociologist Zheng Yefu said in a commentary last week in the Southern Metropolis News.

But word about Monday's magnitude 7.9 quake spread quickly on Web sites and microblogging services, in which users share short bursts of information through text and instant messages. The services also publish the messages online.

"It all depends on the users; we don't edit it," FanFou founder Wang Xin said. "We just gather their words together."

A string of crises over the last few months — including crippling snowstorms and Tibetan protests — has taught the government a few lessons, Berkeley's Xiao said.

Government officials held a rare, real-time online exchange with ordinary Chinese on Friday to answer angry questions about why so many schools collapsed in the quake.

"They understand better now that to react slowly or to cover up in the Internet age is a bad idea," Xiao said in a telephone interview.

But the government is still monitoring the online conversation. Seventeen people have been detained since the earthquake, warned or forced to write apologies for online messages that "spread false information, made sensational statements and sapped public confidence," the state-run news agency, Xinhua, reported Thursday.

Even as recently as the SARS crisis, the Chinese government did not seem to understand the beneficial role of an uncensored press. Instead of allowing the media to report on the public health crisis, Chinese officials censored reports of the disease. This new media, particularly text messages via mobile communications devices, exist in great degree outside of the government’s ability to censor. NDN has written about the impact these devices are having on Chinese political movements and the power of mobile bring about major societal changes – from governance to public health.

The impact that these mobile phones has on communications in China will be far reaching. The Chinese government has been realizing that a free(er) press and communications flow serves an important role in distributing reliable information in the wake of disasters. While the blogging and texting has been valuable, rumors circulated wildly in these unrestricted media. The introduction of these technologies to the information market in China will have a profound effect on its openness going forward, as new media will doubtless improve both government responsiveness and the ability of, and necessity for, traditional media to function.

Mobile Phones fuel protests on the environment in China

China’s poor stewardship of the environment in pursuit of economic gain has gotten to the point that the World Bank estimates that damage to the environment costs China 5.8% of its GDP annually. However, the costs of poor environmental stewardship are also political. China's leaders are starting to feel the wrath of NIMBY (Not In My Back Yard) syndrome, as Chinese people rise up to protest polluted water and dangerous factories. Recent noted protests have been covered closely by the western media, the first in a New York Times article by Edward Wong over a multibillion dollar PetroChina plant in Chengdu and the second in the Economist over heavily polluted Tai Lake, the third largest lake in China.

These protests are significant, not only because the Chinese people are rejecting their government’s poor environmental record, but because of how they are organizing protests. These, like other political protests in Egypt and Tibet, are being put together by blogs and mobile phones. Mobile phones, especially, allow organizers to put together spur of the moment action in political issues in a way that the Chinese government cannot monitor in the same way it monitors the internet.

From the New York Times:

The recent protest, which was peaceful, was organized through Web sites, blogs and cellphone text messages, illustrating how some Chinese are using digital technology to start civic movements, which are usually banned by the police. Organizers also used text messages to publicize their cause nationally.

From the Economist:

The same internet and mobile-telephone technology that is helping China's angry young nationalists organise protests and boycotts is also helping other aggrieved citizens to unite. The past year has seen the first large-scale, middle-class protests in China over environmental issues: in the southern coastal city of Xiamen in June over the construction of a chemical factory, and in January this year in Shanghai over plans to extend a magnetic levitation train line.

These Chinese political organizers are developing a movement of their own, one that will ultimately make their government answer hard questions about democracy, human rights, and the environment. In large part, new technology, especially mobile, will be responsible. Simon Rosenberg recently wrote about the power of mobile to reduce global poverty, one of the many exciting broader applications for mobile technology that will be able to bring an improved standard of living to people in developing nations in every corner of the globe.

The power of mobile

Coming on the heels of a slew of stories about how people have been using mobile phones to organize against the government in places like Tibet and Egypt, the NY Times magazine published a truly great article yesterday by Sara Corbett on the growing global power of mobile phones, Can the Cellphone Help Global Poverty? An excerpt:

To get a sense of how rapidly cellphones are penetrating the global marketplace, you need only to look at the sales figures. According to statistics from the market database Wireless Intelligence, it took about 20 years for the first billion mobile phones to sell worldwide. The second billion sold in four years, and the third billion sold in two. Eighty percent of the world's population now lives within range of a cellular network, which is double the level in 2000. And figures from the International Telecommunications Union show that by the end of 2006, 68 percent of the world's mobile subscriptions were in developing countries. As more and more countries abandon government-run telecom systems, offering cellular network licenses to the highest-bidding private investors and without the burden of navigating pre-established bureaucratic chains, new towers are going up at a furious pace. Unlike fixed-line phone networks, which are expensive to build and maintain and require customers to have both a permanent address and the ability to pay a monthly bill, or personal computers, which are not just costly but demand literacy as well, the cellphone is more egalitarian, at least to a point. 

"You don't even need to own a cellphone to benefit from one," says Paul Polak, author of "Out of Poverty: What Works When Traditional Approaches Fail" and former president of International Development Enterprises, a nonprofit company specializing in training and technology for small-plot farmers in developing countries. Part of I.D.E.'s work included setting up farm cooperatives in Nepal, where farmers would bring their vegetables to a local person with a mobile phone, who then acted as a commissioned sales agent, using the phone to check market prices and arranging for the most profitable sale. "People making a dollar a day can't afford a cellphone, but if they start making more profit in their farming, you can bet they'll buy a phone as a next step," Polak says.

Last year, the World Resources Institute, a Washington-based environmental research group, published a report with the International Finance Corporation entitled "The Next Four Billion," an economic study that looked at, among other things, how poor people living in developing countries spent their money. One of the most remarkable findings was that even very poor families invested a significant amount of money in the I.C.T. category - information-communication technology, which, according to Al Hammond, the study's principal author, can include money spent on computers or land-line phones, but in this segment of the population that's almost never the case. What they're buying, he says, are cellphones and airtime, usually in the form of prepaid cards. Even more telling is the finding that as a family's income grows - from $1 per day to $4, for example - their spending on I.C.T. increases faster than spending in any other category, including health, education and housing. "It's really quite striking," Hammond says. "What people are voting for with their pocketbooks, as soon as they have more money and even before their basic needs are met, is telecommunications."

There are clear reasons for this, but understanding them requires forgetting for a moment about your own love-hate relationship with your cellphone, or iPhone, or BlackBerry. Something that's mostly a convenience booster for those of us with a full complement of technology at our disposal - land-lines, Internet connections, TVs, cars - can be a life-saver to someone with fewer ways to access information. A "just in time" moment afforded by a cellphone looks a lot different to a mother in Uganda who needs to carry a child with malaria three hours to visit the nearest doctor but who would like to know first whether that doctor is even in town. It looks different, too, to the rural Ugandan doctor who, faced with an emergency, is able to request information via text message from a hospital in Kampala.

Jan Chipchase and his user-research colleagues at Nokia can rattle off example upon example of the cellphone's ability to increase people's productivity and well-being, mostly because of the simple fact that they can be reached. There's the live-in housekeeper in China who was more or less an indentured servant until she got a cellphone so that new customers could call and book her services. Or the porter who spent his days hanging around outside of department stores and construction sites hoping to be hired to carry other people's loads but now, with a cellphone, can go only where the jobs are. Having a call-back number, Chipchase likes to say, is having a fixed identity point, which, inside of populations that are constantly on the move - displaced by war, floods, drought or faltering economies - can be immensely valuable both as a means of keeping in touch with home communities and as a business tool. Over several years, his research team has spoken to rickshaw drivers, prostitutes, shopkeepers, day laborers and farmers, and all of them say more or less the same thing: their income gets a big boost when they have access to a cellphone.

This understanding of how being connected to this immensely powerful emerging global communications network was behind the two papers NDN released last year, A Laptop in Every Backpack and Tapping the Resources of America's Community Colleges. In these papers NDN argues for a new national committment to give all our workers and kids access to the global communications network and training on how to best use it for their own life sucess. As Alec Ross and I wrote in our Laptop paper:

It is the core premise of this paper that the emergence of a single global communications network, composed of Internet, mobile, SMS, cable and satellite technology, is rapidly tying the world's people together, is one of the seminal events of the early 21st century. Increasingly, the world's commerce, finance, communications, media and information are flowing through this network. Half of the world's 6 billion people are now connected to this network, many through powerful and inexpensive mobile phones. 

Each year more of the world's people become connected to the network, its bandwidth increases, and its use becomes more integrated into all that we do. Connectivity to this network, and the ability to master it once on, has become an essential part of life in the 21st century, and a key to opportunity, success and fulfillment for the people of the world.

We believe it should be a core priority of the United States to ensure that all the world's people have access to this global network and have the tools to use it for their own life success. There is no way any longer to imagine free societies without the freedom of commerce, expression, and community, which this global network can bring. Bringing this network to all, keeping it free and open and helping people master its use must be one of the highest priorities of those in power in the coming years.

This paper offers thoughts on one piece of this commitment - how we best bring the power of this network to America's schoolchildren. Achieving the American Dream in this century increasingly requires fluency in the ways of this network and its tools - how to acquire information and do research, how to construct reports and present ideas using these new tools, how to type and even edit video. We believe we need a profound and urgent national commitment to give this powerful new 21st knowledge, essential for success in this century, to all American school children.

The implications of the spread of this mobile, global communications network are huge and only just beginning to be understood. It is a subject we've spent a lot of time thinking about, and plan to spend much more time in the coming years. We've looked hard at the coming power of mobile for advocacy at our affiliate, the New Politics Institute, and also recommend a compelling new series in the current issue of the Economist. And we are proud that Senator Obama has choosen to adopt our Community College plan outlined in our paper in his campaign for the Presidency. But there is much more to understand about how all this is changing the world, and how we can best harness it for the common good.

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