ALKHOBAR, 16 March 2004 — Recently we’ve had several conferences in the Kingdom focusing on information and communications technology (ICT). In fact, this week COMDEX is ongoing in Jeddah. I haven’t attended any of these events. They seem so useless. Do you remember the old tale of the Emperor Nero fiddling while Rome burned? Well I can sense that it’s getting hotter and hotter in Saudi Arabia and that burning feeling is in no way associated with the weather.

For months IT professionals and officials have stood in front of microphones and extolled the wonders of ICT in Saudi Arabia. Awards have been distributed for best performance or latest, greatest technology. Conference halls full of people have nodded their heads sagely, concurring with the drivel dribbling down from the podium. The whole situation reminds me of another tale involving an emperor — the one who wore imaginary clothes.

Over the last year, I have received many requests for facts and figures relating to ICT in Saudi Arabia. Vendors and investors from abroad are struggling to understand the true nature of the Saudi market. Local companies are trying to get a grip on the reality of ICT in the Kingdom. The bottom line is that with all the hype coming from parties with a vested interest in controlling public perceptions about ICT in Saudi Arabia it is difficult to find the truth. The truth is out there though, and I’d like to tell you about a few places where it’s currently languishing.

Few people have heard of it but there is a very informative title, “The Arab World Competitiveness Report 2002-2003,” edited by Peter K. Cornelius. This report has been published by the World Economic Forum where it was a special project within the framework of the Global Competitiveness Program. Obtain your copy through the Oxford University Press. Three Saudi companies, SABIC, Saudi Aramco and Xenel Group, should be congratulated for having the courage to be sponsors of the report.

The Arab World Competitiveness Report 2002-2003 (AWCR) represents the first systematic benchmarking exercise for the region, combining broad macroeconomic and political analyses with analyses of country competitiveness. The report attempts to distinguish between necessary conditions for growth and development and true engines for growth and development.

The report has a strong focus on ICT. Two chapters, “Challenges for ICT Development in the Arab World,” and “A Review of Telecommunications and Networked Readiness in the Arab World,” are essential reading. AWCR also includes the results of an Executive Opinion Survey. The survey results are not definitive as the responses received were insufficient to allow for rigorous statistical analysis. However the point is made that this survey data provides information on an economy’s competitiveness for which no hard data sources exist.

How did the Kingdom fare in the report? In most instances — poorly. Of the 10 nations included in the executive survey — Bahrain, Egypt, Jordan, Kuwait, Lebanon, Oman, Qatar, Tunisia, Saudi Arabia and UAE — the Kingdom generally ranked in the bottom half of all responses and almost always ranked lower than the other GCC states. To typical questions covering areas such as: International Investment in Local e-Commerce Ventures, Administrative Burden for Startups, Technological Sophistication, Firm-level Innovation, Quality of Math and Science Education, Women in the Economy, Government Restrictions on Internet Content, Public Access to Internet, Telephone/Fax Infrastructure Quality, Availability of Legal Framework for Business — the Kingdom ranked last.

In a comment on bandwidth utilization the report is scathing: “Bandwidth utilization tracking, as published by King Abdul Aziz City for Science and Technology (KACST), suggests that some ISPs are underbuying bandwidth capacity and underallocating it. The result is that end users experience slow transmission rates.”

The Kingdom is designated as “emerging” in ICT maturity while the UAE and Kuwait are both “fast-track.” The report notes that PC penetration in the Kingdom is low compared to other GCC countries and Internet penetration remains low compared to regional levels. The only really bright spot in ICT that the report could point to was the Kingdom’s telecommunications regulatory environment. AWCR is profoundly depressing reading.

Perhaps even more humiliating is the International Telecommunication Union’s Global Digital Access Index. Released at the end of 2003, the index and its explanation are online at http://www.itu.int/ITU-D/ict/dai/index.html. Read it with a box of tissues at hand. The figures it gives for Saudi Arabia will make you weep.

The Global Digital Access Index (DAI) distinguishes itself from other indices by including a number of new variables — including education and affordability. The eight variables cover five areas, to provide an overall country score. The five areas are: Availability of infrastructure, affordability of access, educational level, quality of ICT services and Internet usage. The results of the index point to potential hurdles in ICT adoption and can help countries identify their strengths and weaknesses.

The inclusion of the education and affordability factors are enlightening. It’s one thing to provide a nation’s people with “access” to technology and infrastructure, but if the vast majority can neither afford it nor have the required education level to be able to use it, is that progress? As the report states:

“Until now, limited infrastructure has often been regarded as the main barrier to bridging the Digital Divide,” said Michael Minges, Market, Economics and Finance Unit, ITU. “Our research, however, suggests that affordability and education are equally important factors.”

Exactly how did the Kingdom rate on the index? Saudi Arabia was ranked 82nd, behind the UAE (34), Bahrain (37), Qatar (48) and Kuwait (60). Of the GCC nations only Oman fared worse at 91st. Some of the relevant statistics used in the ranking were:

• Internet tariff as a percentage of Gross National Income — 4.9 (UAE 0.8)

• Broadband subscribers per 100 inhabitants — 0.0 (UAE 0.5)

• Subscriber lines (fixed) per 100 inhabitants — 14.4 (UAE 34.2)

• Mobile subscribers per 100 inhabitants — 21.7 (UAE 75.9)

• Internet users per 100 inhabitants — 6.2 (UAE 36.7)

• International Internet bandwidth per capita — 12.9 (UAE 339.1)

Which Middle East nation scored highest on the Global Digital Access Index? Israel ranked 25th.

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