World Bank: Central Asia Could Become the Entire Continent’s Hub for Online Traffic

The World Bank is to launch a major infrastructural project Digital CASA in Central Asia. The project aims to diversify the channels of transborder Internet traffic and create a communication hub in the region. Afghanistan, Kyrgyzstan, Pakistan, and Tajikistan are among the participating countries. Central Asia could greatly benefit from the transit of Internet traffic, but this will require commitment to the principles of open access on their part, believe Rajendra Singh and Juan Navas-Sabater, who are at the helm of Digital CASA. Digital.Report sat down with them to learn more about the project and the region’s digital potential.

Digital.Report: It is clear that the project is aiming at improvement of external (trans border) traffic bandwidth. It also emphasizes the need to connect South Asia and Central Asian countries. Why is that important — is it a political context of taking the region out of Russia’s orbit and/or involving Central Asia in efforts to stabilize Afghanistan, or just a developmental context of diversifying the routes of backbone infrastructure for the Central Asian countries, which are currently connecting, for the most part, through Russia?

The Digital CASA program is in line with the World Bank’s mission of ending extreme poverty and fostering shared prosperity. The recently launched World Development Report 2016 “Digital Dividends” suggests strong linkages between broadband access, growth and jobs. For instance, access to high speed broadband promotes inclusion of firms in the world economy by expanding trade, raising the productivity of capital, and intensifying competition in the marketplace. It also brings opportunities to individual households by creating Internet-enabled jobs, and transforming public service delivery.

Many of the countries in Central Asia and South Asia (CASA), especially those that are landlocked, have had high reliance on individual neighbors for accessing international connectivity, which has led to higher prices at both the wholesale and consumer level, delayed adoption and use of broadband technologies, and restraint of overall social and economic growth.

The primary objective of the Digital CASA program will be to bring reliable and affordable Internet services to the CASA countries, by improving international connectivity, as well as by increasing domestic fiber connectivity in rural and remote areas. The combined interventions will enhance the development of regional public goods through the development of a highly interconnected regional broadband infrastructure; the joint deployment and transfer of experience in electronic services and content; and institution building to ensure sustainability and further regional integration.

If we are talking about alternative international cables: Central Asia is closer to the model you have had in Africa. What kind of activities do you expect to happen within CASA? New underwater cables to serve Central Asian markets or connecting Central Asian infrastructures to India’s digital highways, or something else?

A technical pre-feasibility study to identify the supply side interventions is currently being carried out in collaboration with the IFC, and no specific activities have been determined to date. Digital CASA is expected to support the deployment of multiple terrestrial international fiber optic links and integrated networks that would bring economies of scale, seamless regional connectivity and would have a competitive advantage over submarine cable infrastructure when targeting Europe-to-Asia intercontinental traffic. Digital CASA will also be seeking to capture cost and time saving synergies through cross-sector infrastructure sharing, e.g. leveraging existing or future fiber optic networks on power transmission lines, pipelines, roads and railways, among others.

If I understand correctly, you expect that countries would have more traffic between each other, not just going through the neighbors on the way to international internet? Why do you think it is going to happen, given the fact that many attempts of regional integration failed, because countries have much less in common than it may seem from the outside.

Digital CASA aims to complement existing efforts that are being implemented to foster regional integration, such as those by the Central Asia Regional Economic Cooperation (CAREC) program, the Economic and Social Commission for Asia and the Pacific Efficient (UNESCAP), and regional integration initiatives led by the World Bank. The combined activities of Digital CASA will help by creating a digital foundation for enabling trans-border flow of information, goods and services.

Speed and price of internet connection are issues standing high on the agenda in Tajikistan and Kyrgyzstan, but also in Uzbekistan – why is it not participating in CASA? Are there plans to involve it, too, especially in view of its strong commitment to development of e-government, expected investments into infrastructure and partial privatization of the national telecom operator?

Digital CASA will be designed as an umbrella “series of projects” program which would allow for flexibility on timing of entry of various participating countries into the program. Other countries in the region, including Uzbekistan, would be eligible to join the program at any time based on the country’s readiness and interest.

Both Tajikistan and Kyrgyzstan have been working towards development of e-government for the last decade or so, unfortunately, with little result due to financial restrictions they experience. I did not quite understand what place do you give to e-government initiatives within CASA – would it be a project’s dedicated component to support local e-government solutions in each country to boost internet usage by communities, or do you envisage some kind of regional e-government initiative?

Country specific projects under the Digital CASA program will have different components including e-government depending on the priority areas and availability of funds for each of the participating countries. Note that the use of regional IDA funds will be restricted to interventions that will have spillover benefits beyond each country’s boundaries and aimed toward creating regional public goods. This is the same for both supply side infrastructure investments and demand side interventions, including e-Government. Specifically for e-government, while most interventions under Digital CASA are likely to be focused on national initiatives aimed at increasing the impact of national e-government programs, it is hoped that a number of shared regional e-government initiatives will also be implemented.

It is said that the project might help the region grow into a transit hub for transcontinental connectivity between Europe and Asia by getting connected to infrastructure from both sides. Could you comment on the current situation from the European or East Asian perspective – are there any estimates how they are disadvantaged now by Central Asia’s exclusion from the global digital highways, and how they would benefit from its inclusion? And also here: what do you mean by “a hub” — what does it imply here in addition to the connection point between East Asia and Europe? Any examples how such hubs emerged in Africa or in the Caribbean, where similar projects took place?

Operators around the globe have continuously sought means to mitigate the risks presented by the current concentration of Europe-to-Asia transit submarine cables passing through several choke points along the route, including the Strait of Malacca, the Red Sea and the Strait of Sicily, among others, and are likely to place large volumes of transit traffic on the trans-Asian terrestrial fiber path that can prove itself to be cost-effective, low-latency, and reliable. Further, larger markets in the region would also gain by supplementing their intercontinental connectivity with greater, multi-directional network diversity, and by increasing their linkages to the growing markets that have been stimulated by Digital CASA.

Capitalizing on its strategic geographical location, Digital CASA will also provide an opportunity for creating a regional Europe-to-Asia hub for routing Internet traffic, which will create revenue earning potential (from taxes, transit fees) for the participating countries that will accrue in much larger measures than if done individually. Similar regional connectivity programs in West and East Africa as well as the Caribbean and the Pacific Islands, have improved global and domestic internet connectivity through the deployment of submarine cables and terrestrial backbone infrastructure. However, Digital CASA would be the first regional connectivity program to translate the successes of these previous regional programs to creating transit hubs in landlocked countries for facilitating reliable and affordable intra-regional Internet traffic. The concept of a regional hub goes beyond connectivity, as it will also enable the creation of new businesses in the region that did not exist before, such as green data centers, IT-enabled services outsourcing, etc.

The current trends in Central Asia are that governments tend to centralize and control backbone infrastructure – particularly, in Tajikistan they are now enforcing the new law on Joint Commutation Center that would be a sole gateway for international traffic of all ISPs. You want to build a regional network of backbone lines, a regional solution for governments torn apart from each other by many internal and external challenges. Why do you think your project would cope this tendency for more centralized government control of infrastructure? Do you think there is enough political will in the governments to harmonize and liberalize their national regulations of telecoms?

Participating in Digital CASA will require adherence to ‘open Access’ principles to ensure robust sector competition. As part of the program, Digital CASA will provide technical assistance to governments and regulators to establish an appropriate enabling environment by implementing policy and regulatory frameworks that are conducive to private sector investments and cross-sector infrastructure sharing including open access policy and full liberalization of domestic and international optical fiber connectivity.