Bridging Gaps and Sustaining Development with Digital Technologies

Dear Rector,

Ministers,

Colleagues,

Distinguished Guests,

I would like to start by thanking Mr. Remus Pricopie and the National School of Political and Administrative Studies (SNSPA) for partnering with the World Bank in launching the World Development Report 2016 – Digital Dividends. A special thanks also goes to Ioana Petrescu, former Governor of the World Bank who made sure that Romania would be among the first EU countries to host the launch of the report.

The World Development Report (WDR) is the World Bank’s most important analytical publication, prepared since 1979. Each year it focuses on a topic of interest to the broader development community. This year’s Report aims to expand our understanding of the impact of digital technologies on the lives of poor people around the globe.

For many of us interaction with digital technology is a big part of our daily life. From checking-in online for an airline flight, paying for goods, chatting with friends on a bus ride to work, the impact of technology in today’s world is truly unprecedented. Technology - and especially the use of internet – opens new avenues for connectivity, and changes our social and political landscape in a way that creates new catalyzers of cooperation. There are 4.2 billion Google searches every day and 6.000 tweets go out every second. Digital technologies are important because they promote inclusion, efficiency, and innovation.

But just as the reality of digital technology touches so many of us, there are far too many people who are left outside of it. The WDR tells us that over 60 percent of the world’s population is still offline and not fully participating in the digital economy. The rest of the world enjoys a very different experience in their interaction with the digital world based on their level of digital literacy, location, age, income and degree of physical access to digital infrastructure.

Fully reaping the benefits of digital technology must therefore be a clear public policy priority that integrates development of adequate infrastructure, an enabling business environment, predictable and good regulations, and a constant focus on the skills agenda. 

My colleagues will focus on the main findings of the report and the range of solutions that exist to capitalize on digital dividends globally, but I would like to spend some time to discuss the significance of the report for Romania.

The Digital agenda is an important area of the World Bank’s engagement in Romania. One of our key findings, confirmed by this year’s report, is that geographical and poverty disparities are strongly connected to the way technology is used in the country.

Let me highlight some of the challenges that Romania needs to address on the digital agenda?

First, Romania should close the broadband gap and reduce urban-rural disparities.

Romania ranks among the top countries in the world in high-speed Internet access, better than the EU overall. Nine out of the world’s top fifteen cities with fastest broadband internet are in Romania. The ICT sector could become one of the key growth drivers of the Romanian economy if the opportunities of high-speed Internet are fully utilized.

However, the gap between the number of internet access connections in rural areas compared to urban areas remains wide. The country ranks 23^rd among EU member states on connectivity. 11 percent of Romanian households are still not covered by fixed broadband, and close to half of households do not subscribe to fixed broadband. The strategy of the Government are that broadband coverage should increase from 90 to 97 percent (EU28 value), and household penetration in rural areas should increase from 55 percent to 70 percent (EU28 value).

Romania needs to close the broadband gap to fully reap all digital and economic benefits. In the next five years more than 3.4 million households need to be connected to broadband to achieve universal coverage. Internet usage and content should be promoted hand in hand with these infrastructure advancements. I suggest that priority for broadband connection should be given to school, library and public access places.

Second, Romania must focus on digital skills and narrow the digital gap.

Romanian is the second most spoken language in Microsoft offices around the world and Romanian IT specialists are among the best in all major global IT companies. Some of the most popular Apps on our cell phones are developed by Romanian engineers. The human capital potential in this country is extremely rich.

The paradox, however, is that Romania has the lowest percentage of regular Internet users in the EU (48 percent), and 39 percent of the Romanian population has never used the Internet (EU average is 18 percent). This means that more than one-third of the population cannot take advantage of the possibilities offered by the Internet and only 20 percent of Romanians possess basic levels of digital skills.

Digital skills are needed for every type of workforce in Romania and their absence is an important barrier to economic development. Sustained efforts have to address the reform of the education system to develop the digital skills of citizens and maximize the potential of available human talent. This is highly significant considering Romania’s shrinking labor force and aging population.

Third, Romania must boost efforts to expand its eGovernment services for citizens and businesses. 

Romania has registered progress in some areas of eGovernment services for businesses. The National Agency for Fiscal Administration (ANAF), for example, is seeking to simplify the payment of taxes and support a modern revenue management system. Another example is the recent performance in ePrescription, whereby 60 percent of general practitioners transfer prescriptions to pharmacists electronically, ranking Romania 7^th among EU countries for this type of service.

Overall, however, the availability of eGovernment services is the lowest in the EU. Online public services – such as the online civil status registry and citizens’ ID database - would be an efficient tool to reduce public administration expenditures and achieve efficiency gains for both enterprises and citizens.

To make this happen, the National Strategy for the Digital Agenda in Romania (NSDAR) has several objectives related to such life events. The Ministry of Communications and Informational Society aims to develop a range of e-services for citizens and businesses. I believe a key area to be addressed is the interoperability of IT systems across the Government to achieve an efficient IT architecture.

This World Development Report celebrates the digital developments but reminds us that a whole host of auxiliary services, policies and regulations are needed to reach those least able to help themselves - the poor and marginalized.

Thank you for attending today’s WDR launch. I wish us all a successful conference and I look forward to a lively debate and exchange of ideas.