July 2000

Mediterranean Area Synthesis of Update Memos

I. INTRODUCTION

Developing the " Information Society " is becoming a major challenge for the economic and social development of Mediterranean countries. For several years, public and private players have become increasing interested in enabling the development of infrastructures networks, technologies and information society applications. New information and communication technologies are seen as key components of growth.

Most of the Mediterranean countries have launched Internet and telecoms infrastructures development programmes, as well as sector-specific projects (such as computerising government departments, introducing IT into schools and universities and setting up e-commerce pilot projects). Certain countries are also putting major legislative reforms into place (to privatise key sectors of the economy or attract foreign investments).

However, the level of development of the information society (measured by the amount of computer equipment in the country or even the rate of penetration of telephony services) remains low across the region.

The purpose of this document is to summarise regulatory developments related to the information society which have taken place between April and July 2000.

The first section of this document restates the information society policies which have been put into place in the Mediterranean countries – reiterating the influence of the European Community – and the main characteristics of national policies. The second section outlines the main developments which have taken place in the course of the past three months.

This document is based on the contributions of the national contractors to the ESIS II project. For more information, please see national reports or the master summary (April 2000).

1. Information society policies

1.1 The influence of European Community politics

Since its foundation the EU has developed a wide-ranging regulatory framework – aimed at enabling the introduction of competition and development of the telecoms sector, and today the "information society" sector – through the adoption of a series of directives.

The influence of the European Community manifests itself in many different ways in the Mediterranean countries:

• Cyprus, Malta and Turkey are official candidates to join the European Union. With this in mind, these three countries are in the process of changing their national legislative frameworks to bring them in line with European directives. An integral part of this process is the incorporation of the principle of ‘Acquis communautaire’ (adherence to the body of EU law) in information society-related developments. In this context, significant advances in Malta over the last three months are outlined below (publication of draft legislation covering telecoms and e-commerce, taking into account the principle of ‘Acquis communautaire’).
• Influence can be felt in other Mediterranean countries notably in terms of the many inter-regional co-operative initiatives with the EU and its member states (in research programmes and so on) or through the example of the regulatory frameworks established by European countries and the strategies followed by the member countries.

Key EU developments related to IS include:

• Establishment of a legal framework to open up the telecoms market. It is important to note that in July 2000 the Commission adopted a range of new legislative arrangements to enable better account to be taken of convergence between the telecommunications, multimedia and information technology sectors. These arrangements focus particularly on the promotion of high-bandwidth Internet access. This approach is aimed particularly at enabling the development of an all-inclusive information society, accessible to everyone.
• The implementation of a legal framework which helps to promote the rise of e-commerce (focusing particularly on respecting people’s privacy, authentication and security).
• Supporting content-providers and those involved in R&D in the industry.
• And finally, the eEurope initiative launched by the Commission should also have a major influence. The EU’s ambitious goal is to give everyone in all its member states – every citizen, every school, every company… – access to the Internet as quickly as possible. In particular, eEurope includes the following objectives: cheaper access to the Internet, promotion of e-commerce, high-speed Internet access for researchers and students, on-line government, and so on.

1.2 National policies

1.2.1 The low level of penetration of information technology makes it difficult even to conceptualise the information society at the highest level in many Mediterranean countries

At the end of 1999, with an average penetration of 21% for basic telephone services and just 5% for mobile, the Mediterranean countries are way behind the EU countries, who enjoy comparative penetration rates of 46% and 40% respectively (source: ESIS - ISPO).

Note (for all graphs): Figures for Jordan, Palestine and Syria are not available. The tables do not include these countries. Data taken from end 1999.

The rate of penetration of PCs is also extremely low, averaging three PCs per 100 head of population across the region at the end of 1999 (compared with 12 in Central and Eastern European countries), although rates vary markedly between different countries.

Note : Figures for Jordan and Palestine are not available. The table does not include these countries. Data taken from end 1999.
Sources : ESIS II

It is clear that the very notion of the information society is extremely difficult to comprehend for the majority of the Mediterranean countries, with the exception of Israel, Cyprus and Malta which enjoy similar penetration rates for IT equipment as EU countries.

1.2.2 Major themes of national policies

National reports indicate that there are several key themes in the national policies developed for the information society:

• Investment programmes for modernising Internet and telecommunications infrastructures
• major privatisation programmes (in Turkey, Morocco, Jordan, etc.) and programmes for encouraging foreign investment
• in virtually all the Mediterranean countries, programmes dedicated to the computerisation of the public sector
• programmes aimed at the education and research sectors
• note: only a very few countries have developed an all-encompassing policy for the information society. Projects and action plans tend to be developed and implemented in an ad hoc way by the bodies (often government ministries) involved.

2. New developments between April and July 2000

In terms of the implementation of new national policies relating to the information society, important developments have taken place notably in Malta, Jordan and Syria.

• In Malta, the government has published a new IS policy. This enshrines the principle of conformity with European Union directives into the Maltese legislative framework.
• In Jordan and Syria, the government authorities have underlined the necessity of encouraging development of the information society. Significant developments have taken place in terms of foreign investment (amendment of a Syrian law covering foreign investment and other specific developments in Jordan).

In terms of application areas covered by the information society, a greater number of developments have happened:

• In government, large-scale projects in Cyprus are reaching their final stages (for example, the ‘Government Data Network’ project). In Turkey, the government has also launched a vast project encompassing all information systems in government organisations.
• In the telecoms and Internet sector, the Maltese government has adopted a policy of liberalisation for the telecoms sector, an Internet and telecoms infrastructure modernisation programme has been launched in Jordan and Syria is planning the implementation of a national Internet backbone
• In the area of e-commerce, a new draft law bringing the country in line with European directives is being examined in Malta. Initiatives in other countries including Morocco and Tunisia are also under way, including the setting up of pilot projects and the development of action plans.

When it comes to vertical market sectors, the education and research sector is the focus for many initiatives, notably in Cyprus, Jordan, Tunisia and Syria. Policies followed in different countries share a common objective to make training courses available so that as many people as possible can learn to use the information technology environment more effectively.

Legislation on foreign investment is one area where there have also been many developments, particularly in terms of a much greater openness to foreign organisations taking equity stakes in local bodies, as has happened in Jordan and Syria.

Below, we summarise the new developments which have taken place during the past three months in each country:

Further details and analysis can be found on the national reports, the ESIS II database and on the master synthesis (dated April 2000).

2.1 Umbrella policies and national IS strategies

In Jordan, in a recent speech King Abdallah stressed the need to promote information technology. In this context, a particular effort must be made to rapidly modernise existing telecommunications infrastructures. Elsewhere, although there is already an active policy of privatisation covering several key sectors of the economy, the king restated the important role which the private sector can play in development policies.

In Malta, in April and May the government published two major documents defining the current direction of the information society. These two documents have been developed within the framework of ensuring conformity between Maltese legislation and European Union directives. The documents are:

• the Policy for the Liberalisation of the Telecommunications sector
• the Information Practices Legislative Framework, this document was created by a dedicated working group and has now been turned into a White Paper for an Electronic Commerce Bill, a Data Protection Bill and a Computer Misuse Bill

In Syria, the new government formed over the past few months has underlined the country’s guiding principles in terms of the information society:

• Computerisation of all government bodies
• Ensuring that the Internet is accessible to government departments and companies, followed by the general public

2.2 IS application areas

2.2.1 Government and the public sector

In Cyprus, key public sector projects include the ‘Government Data Network’ (the implementation of a single network linking all government departments) and the ‘Office Automation Pilot’. These two projects are entering their final stages. Elsewhere, the minister of the interior has announced his willingness to develop a smart identity card. This project is still at the planning phase.

The Turkish government recently launched a huge project with the aim of harmonising all projects related to networks and information systems across central and local government and public bodies.

2.2.2 Telecommunications and Internet

The telecoms sector remains very closed off in Algeria. However, the principle of opening up the Internet access market has been accepted since 1998. The development of competition in this market should be followed by a more rapid penetration of the Internet. In the past three months, it is notable that the Algerian president has indicated that urgent reforms are needed in the telecommunications and Internet sectors.

In Cyprus, the telecoms sector has not seen any new regulatory developments. However, a new Internet access supplier, Avacomnet, has entered the market.

In Jordan, the national operator, Jordan Telecom, has announced a massive programme of modernisation and diversification of its services. Most notably, the programme includes the construction of a national data network, and the extension of the national GSM mobile network operated by the historic operator’s subsidiary MobileCom. Elsewhere, the Jordanian government has awarded new licences for operators to run data networks.

The Maltese government has published its policy for deregulating the telecommunications industry. As expected, the data services market was opened up to competition in June 2000. In addition, a second GSM operator licence is due to be awarded during the course of 2000, and a third in 2003. The total liberalisation of the market is due to take place on 1 January 2003.

The Internet access sector is attracting a large number of players in Turkey, including companies originally from outside the telecoms sector who are now pursuing active diversification strategies by creating Internet subsidiaries or buying ISPs. These new players include banks such as Garanti Bankasi and Is Bankasi, major industrial groups such as the Koc Group and the Dogus group, or big media players such as the Star group.

In Syria, the government is due to sign contracts with their chosen suppliers for a national Internet backbone very shortly. The implementation of the network is due to be completed at the beginning of 2001. This is the first stage in a policy aimed at developing the Internet in Syria and opening it up to competition. The government has effectively announced its intention to offer licences to privately-owned ISPs in the future.

2.2.3 E-commerce

In Cyprus, the minister of finance has appointed a special committee on electronic commerce. The aim of the committee is to create a national strategy for developing e-commerce.

In Malta, the recently-created draft Electronic Commerce Bill (cf above) proposes a sound legal basis for the development of electronic commerce. The Bill is in line with European directives on electronic signatures and e-commerce

In Morocco, the minister of general affairs has put out an invitation to tender for the implementation of e-commerce sites in certain sectors of the economy including agriculture and commerce.

In Tunisia, a national action plan for the development of e-commerce has recently been produced. This plan is aimed particularly at establishing training courses for children in secondary schools on using information and communications technologies, and on promoting e-commerce projects.

2.2.4 Education and research

In Cyprus, in May 2000, the Minister for education and culture announced a special emphasis on IT teaching in technical secondary schools. All secondary school students will have IT courses from September 2000. The Minister also announced a programme of IT education activities covering several key areas such as:

• IT teaching in academic institutions
• seminars on IT
• a special programme for IT teachers

In Jordan, the Ministry of Education will allocate JD 22 million to put in place a data network which will connect together all the country’s educational establishments.

In Tunisia, a pilot tele-education project is due to be launched very soon.

In Syria, the Higher Institute of Applied Science and Technologies (HIAST) is carrying out a project for the national Syrian Seismology Centre known as ‘the Seismic Monitoring System’. The project will allow on-line access to seismic data and new advanced remote monitoring functions.

2.2.5 Transport

The Turkish highways have several IS projects under way, including a highway information network and automatic toll payment.

2.2.6 Healthcare

In Cyprus, the health minister has launched a project aimed at developing experience in remote healthcare. The project brings together a number of partners including the health ministry, the Royal Brompton Hospital in London, the Cyprus telecommunications authority and the Greek insurance company Aspis Pronoia.

In Morocco, the new ‘Medinweb’ portal – dedicated to the healthcare world – has been set up with the aim of distributing medical information.

2.2.7 Privacy, data protection, consumer protection

In Malta, a draft data protection bill, conforming to EU directives, is currently being read.

2.2.8 Others

In Algeria, in August 1998 an agreement was signed between the finance ministry and the ministry of post and telecommunications dealing with the creation of an inter-banking network, enabling rapid and secure transactions. The post and telecommunications administration will be providing the network infrastructure.

2.3 International relationships and agreements

In April, Jordan joined the World Trade Organisation: a move which should speed up the liberalisation of the country’s telecoms sector.

Malta has completed negotiations on eight chapters of the ‘Acquis communautaire’. When it comes to the chapter on telecommunications, the Maltese government has indicated that the national legislation will be in line with the ‘Acquis communautaire’ by I January 2003.

2.4 Market: privatisation, foreign investment, mergers, acquisitions, invitations to tender, etc.

Jordan is following an active policy to attract foreign investment. It is interesting to note that the Jordan Investment Board (JIB) has launched a Web site giving a great deal of information about investment opportunities in the country. The site is aimed at both national and foreign investors and includes a wide range of financial, legal and other information.

The historic operator in Tunisia, Tunisia Telecom, has been awarded a licence to run the first GSM mobile network in Mauritania.

In Syria, a major recent development in May 2000 involves the amendment of the law on investment, to encourage foreign investment. The amendment includes a number of measures, for instance to enable non-Syrian investors to own property in Syria, additional tax exemptions for projects in rural areas, and so on.

In Algeria, a privatisation programme was launched two years ago, and several sectors should soon be open to foreign investment. The national report shows that major changes are also due to take place in the telecommunications sector (see national report for more details).