Courtenay Rattray

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Doreen Bogdan-Martin: Is this thing on? Can you hear me?

Technician:

Yes, we can loud and clear. Thank you. Welcome to the latest episode of the UNconnected, a podcast series about information and communication technologies and development with Doreen Bogdan-Martin, Director of the ITU Telecommunication Development Bureau.

Doreen Bogdan-Martin:

I'm happy to have with me today, Under Secretary-General Courtenay Rattray of the United Nations Office of the High Representative for the Least Developed Countries, the Landlocked Developing Countries and Small Island Developing States known as UN-OHRLLS. His key role is to mobilize international support in favor of the 91 most vulnerable member states of the United Nations. It is his mandate to advocate on their behalf, to raise awareness of their economic, social and environmental potential, and to ensure that the pressing needs of the 1.1 billion people who live there, remain high on the international agenda.

Today, we will be having a conversation on connecting 91 vulnerable member states of the United Nations, what I would call the hardest-to-connect communities. They include Least Developed countries, LDCs, that suffer from very low levels of socio-economic development, Landlocked Developing Countries, which are heavily constrained by lack of territorial access to the sea, and Small Island Developing states, which face both environmental and developmental challenges that impact their progress. The predisposition of these countries is exacerbated by connectivity barriers and there is a clear case to step up efforts to bridge the connectivity gap between the developing and the developed countries. The challenge is enormous and there is no doubt that an ambitious plan is required for these very vulnerable countries.

You took up this role recently. Tell us what your vision is to advance socio- economic development of these countries. What role do you think connectivity plays in addressing their developmental challenges? Courtenay, so happy to have you. Over to you.

Courtenay Rattray:

Thank you, Doreen. I hope I'm coming through loud and fair. Thank you so much for featuring me on your podcast, Doreen. It is a real pleasure to be with you again.

You are quite right, I've been in this role for just over two months now, which has been a heady experience for me, so far. It has been intense, but it's supremely interesting and important work, certainly a privilege to be able to share and lend my own levels of expertise to some of the very stubborn challenges that beset the vulnerable 91 countries that you refer to.

From my vantage point, I think this topic that you have selected for our conversation, the area of digitalization and internet connectivity has become an integral part of the development discourse in a way that it just wasn't just a few years ago.

Regarding your more pointed question with respect to my own vision of advancing the socio-economic development of the LDCs, LLDCs and Small Island Developing states. Since there is already a rich body of knowledge and evidence on the variety and the multiplicity of challenges that beset these most vulnerable countries, one can become a bit overawed by the variety and just sheer breadth and scope of the development challenges that these countries are grappling with, and from the vantage point of where I sit, where we are trying to remediate some of those challenges, to address them in a sustainable way. I don't think the right approach is to just either be overawed by it, or to look at all of them as equal in terms of the magnitude of their challenges. There are some challenges that are the real ones that you need to focus on.

The economist, Danny Roderick had written a paper some years ago, where he was talking about the most binding constraints on socioeconomic development, and that you really had to focus on what are the most binding constraints. I think that's a better way to look at it because if you look at all of these challenges, and accord them the same amount of importance and urgency, then you're going to become a bit overwhelmed by the task at hand.  The strategy, is to focus on finding practical solutions to the critical inhibitors of development.  When you do that, when you attack or address the real core challenges, many of which are structural challenges, then you will see that there are multiplier effects where solutions can be found in other associated second tier challenges. I don't want to be too esoteric, I'll just give you an example. It's often noted that LDCs are missing out on opportunities associated with the digital economy, for example, because of limited access and limited use of broadband internet.  Addressing the challenge of ‘access and use’, will help deliver important benefits or payoffs to many different areas of our socio-economy beyond e-commerce, but also in education in health, in governance, making open government work more efficiently and in a more concerted all of government way, and many other applications. So, our challenge now is how to do that, how do we advise these countries on the best way of improving access and the use of   broadband technology. 

The other thing I wanted to talk about as another binding constraint, which is almost like a structural impediment is the ‘lack of human capacity’.  The development of human capacity is something that I'm very interested in. When you talk about digitalization and internet connectivity, you can't do that without talking about the gaps that exist in some countries with respect to education and skills development, which for me, are hugely important. I do think that people need to attain at least a quality level of secondary school education. In fact, when I say people need to attain it, I'm not putting all the burden on the governments need to ensure this— the international community has to support governments in ensuring that their populations and the people in which they are in service of, attain at least minimum quality level of education at the secondary level, in order to effectively use the internet and use it in a meaningful way. Every time you say something like that, you're probably saying, ‘’that sounds nice, but how do we get this done?”

This is one of the major challenges that is hindering the attainment of our sustainable development. The way I think about it, is that there's one or two or three ways they can look at it, or maybe a couple of ways that you can look at. There's a lot that is going on outside there, in different countries that I don't have a handle of, and I'm not sure anybody within the UN system has a full handle of, there's a lot that is going on in countries on the ground by the UN system. UNDP is doing a lot and their footprint is large; I think they have about 170 programme countries and they are finding solutions to these sorts of stubborn problems that yield real results. What I wanted to highlight, one approach could be to sort of adapt models that are proven to work in other countries in other settings by localizing and scaling them to fit different environments. This is not a ‘one size fits all approach’, it is actually saying listen, why am I going to reinvent the wheel? This is working in that country. I'm not saying it's going to work the same way in another country, but we can scale it and localize it to fit the conditions in another country, because this has already been proven to work. So that's one way that you can do that. The other way that you can tackle some of these stubborn challenges is actually to completely think outside of the box and to invite some of the eminent thought leaders and academicians that exist around the world, and give some concentrated time to see how we can address these problems in a novel and in an innovative way, something that hasn't been thought about before. The trick with that is, that you don't want to just rely on high level scholarship, that is, looking at it from a more research point of view, we want to be able to have what they have, to be translated into a practical solution that can help people on the ground where they live. So yes, stimulate innovative thinking about how to surmount stubborn challenges, many of them, are structural. This sort of research academic based approach must be able to be translated to ‘Practical Action on the ground. This is what we're trying to do with the lead up to the LDC-5 conference that will be next January in Doha, Qatar. We are having a forum, it's been dubbed as a future forum, we're partnering with the government of Finland. This will take place in Helsinki and it will be from the fifth to the seventh of October,

Doreen Bogdan-Martin:

We will be there!

Courtenay Rattray:

We have invited thought leaders and people from the academic community to submit research papers on how to approach some of these issues. The other thing that I think would be brought to bear in terms of trying to solve some of these issues is that whole issue of finance and whether or not we can mobilize financing, the amounts that are required to really bend the curve or move the needle on some of those issues. It is a challenge to do that, because the majority of these countries, have very limited room to maneuver in terms of their fiscal space, their national budgets. Their social and developmental needs far outweigh their ability to mobilize finance to really make an impact on it. One really can't get away from the finance piece. We're talking about building infrastructure, that is hard infrastructure or soft infrastructure, providing social safety nets, ensuring that your citizens have a basic level of quality public health care and quality education. When I think infrastructure, I'm not just thinking about the physical infrastructure, I'm thinking about all the sub things that need to be done as well. They are just not in a position to do that. So, a lot of you know that a lot of them have guided versions. There are countries where almost 50% of all government revenue that they earn goes towards servicing debt.  If you're seeing that, the residual 49% of your government proceeds is what you have to run the country on. Well, then, we have a problem.

Doreen Bogdan-Martin:

Yeah, if I can just jump in on that point.  We did this ‘Connecting Humanity Report’’, and we estimated something around 428 billion would be needed to connect the unconnected by 2030. That's just the infrastructure piece, on top of it, it's everything else from the capacity development, the skills, the applications, the content in local languages. How do you think we can find those vital investment dollars?

I'll come back to the point you mentioned previously, which is a plus, and that is that ‘connectivity has finally become part of the development discourse.’ So, how do you think we can translate that into those vital investment dollars?

Courtenay Rattray:

Well, first of all, we need to recognize that there's some amount of a market failure there. There's a large pool of capital numbering in the trillions of dollars, over $100 trillion. There is a huge lack of supply here that is supply of capital, investment capital, and opposite that, there is a huge demand.  When there is a large supply and equally large demand, and supply isn't meeting demand, there is something that is breaking down in the middle.  I think we realized just picking up on my last point that there is limited amount of capital that can be obtained through domestic resource mobilization, because there just isn't the fiscal space in countries to do that through their own budgets. So, you look at these countries and you say, ‘Well, some of them or most of them qualify for official development assistance’. Maybe ODA can fill  the financing gap.  When I talk about the financing gap just for the SDGs implementation alone, the figures, a lot of estimates, but I've seen estimates from two and a half trillion dollars a year to as high as $7 trillion a year that we need to implement the SDGs, by all countries by 2030. So, the ODA is not going to be sufficient to close that financing gap. So, there is no other way than saying you have to go and look at the private sector, and meet with the stewards of the global savings pool, which is the ones that control the portfolio flows, control it, meaning own it, and manage it.

I'm talking about pension funds, insurance companies, sovereign wealth funds, for example, private equity firms, endowments, there's a lot of money that is being deployed through the capital markets.  We haven't been able to add accurate, adequately structured investment proposals that we can put to these fund managers, for example, and say, we want to tap into this flow of funds, through the capital markets.  We need to be able to design these projects in such a way that a potential investor can actually look at it.  Firstly, you know, they want to preserve the capital. So, it obviously has to be secure in terms of, they want to see something, if you're looking at infrastructure, they don't want to get into a project at the early stages, they want to get into an infrastructure project, for example, when it is in the operating phase, because they want to identify a secure revenue stream. So don't go to these people and say, ‘Well, listen, we are in the early stages.’ They don't want to have anything to do with designing a project, developing a project, construction of a project, building the project, because at those early stages, no money is coming through the door, when the project is operational, say a renewable energy plan, for example, that is selling to a reliable [inaudible] like a national grid, then you have to structure it and say, ‘Listen, this project is operational’, they have a loud source of revenue. And if we can issue a bond, get an investment grade credit rating on it, backed up by the project proceeds, then maybe you probably have to go to the OECD or the multilateral development banks, or even local commercial banks to do the construction and all the other things that you need to do at the early stages.

But at some stage, when the project is operational, there is an opportunity to go to the market and say to these investors ‘we want to float a bond and the proceeds from that bond and the issue can be used as takeout capital to repay all the early investors  who provided the seed capital to do the initial, project design and construction and then get the long term finance that we need from the capital markets through a bond issuance. These are the sort of ideas that are percolating in my mind, but it needs to be properly structured, we need to have a lot of things that are going on in the developing countries themselves, because they need to do a lot of restructuring in order to make their enabling environments more hospitable to that investment capital. So, this is not just putting the onus on the people in the capital markets. This is also saying to LDCs, LLDCs and SIDs, that “you have a job of work to do as well.” Then I  think that the MDBs and the DFIs, the multilateral development banks and the development finance institutions can play a role, catalytic role, by deploying their own finance as a de-risking instrument through guarantees and credit enhancement and instruments and first class facilities actually sweeten the pot, so that when a potential investor looks at the risk return, looks at the projected cash flows on the project, that they're with the World Bank, for example, to the IFC, or Beagle, that is taking some of the risk of when they look at their risk return proposition.

Doreen Bogdan-Martin:

Yeah, I mean, absolutely, it's not going to be one entity, one organization, one government, one company, this is a big investment gap. The magnitude that we're looking at when it comes to your group, your 91 countries and I just wanted to lay out these figures. We have 49% of the world that's not connected. You have 19% in LDCs  but some LDCs,  it's in single digit numbers. It's seven or 8%. Then when we look at the Landlocked Developing Countries, we're about 27% of the population using the internet. So, it's big, right? The task is big.  I think the urgency as well is there, it's very pressing largely, thanks to COVID. The importance of the developing countries being committed themselves, I wanted to just stress that piece that you mentioned, about the commitment of countries, we need to have the political will, and the role of the MDBs and the IFIs and others.  We're quite excited and you'll be joining us for the Partner2Connect Digital Coalition that we're putting together to really bring all stakeholders together to foster meaningful connectivity and digital transformation in those hardest-to-connect communities. I completely agree with you it's all about practical solutions, and we have many of them, we just need to be able to adapt them to local context.

If I can, Courtenay, can we switch to the LDC-5 conference, because I'd like to hear a little bit more from you, you can count on us to be there, we're excited to support you. If you can share how you see digital connectivity being featured in the conference agenda, and how you think countries should be aiming to achieve their objectives when it comes to digital development?

Courtenay Rattray: Well, there is a conference itself but, it's integrated into the conference and it's integrated in a way that they are having satellite events, connected to the main sort of plenary if you will.

So, the heads of state and government, from the LDC countries are our main participants and, at ‘the big show’, the conference itself, there will be a number of satellite events that are going to be staged by critical stakeholders of LDCs. We're having the private sector through the leadership of Microsoft, to put on a private sector forum. I've been speaking a lot about the importance of the private sector. That is an opportunity for them to address the issue of digital connectivity, and just the advantages to countries in the LDCs of becoming digitalized in terms of their economies, and the benefits that it would bring not just for businesses and for commerce, but also for everyday people as they go about their business. I think that is a huge platform, to amplify the message to read that book, which I want to see gotten across to these countries, and also the policymakers and the development partners that will be there, the friends of the LDCs there are about 20 of them, these are developed countries who have traditionally supported development in these countries.

There's a private sector forum, there's also going to be a youth engagement forum, there's going to be a forum put on by civil society, there's going to be one staged by South-South partners, talking about the benefits of South-South cooperation. There's going to be one put on by the IPU, the International Parliamentary Union, which is a forum of parliamentarians. These are all structured around the conference itself, it is an integral component piece of what we have designed. I would imagine that this issue that we're discussing today, will be high on the agenda.

Now, if you were to ask I am actually stimulated by thinking about that, because in a lot of these things, what you want to do is actually sort of bake the cake, so that you know exactly what is going to come out rather than just leaving it to the ones who are spearheading it and you're stimulating by thinking, what I should be doing is actually to be feeding into those organizers.

I'm having a meeting with Microsoft in a couple of days, and what I should do is to ensure that digital connectivity is going to be on the agenda, and to satisfy myself with the way in which it will be treated. Rather than saying, I'm sure they will address this as a critical theory. Let’s not put it to chance – I will make sure that is a key feature of those forums that will be taking place.

Doreen Bogdan-Martin:

Great! I'm preaching to the choir here but for us, digital and connectivity, it's going to be the critical accelerant if we have any hopes of getting the SDGs back on track.  As the UN SG said when he launched his common agenda, it's the moment of a global breakdown or breakthrough. I think that digital can be that breakthrough.

Looking forward to working with you and your team as you advance to LDC-5 and helping to ensure that digital has its place on the agenda and the side events, hoping that LDC-5 is a natural seg way to our World Telecommunication Development Conference that will take place and looking forward to your participation there in Addis Ababa in June 2022.

So, Courtenay, I'm putting the same question to all of my interviewees. Can you tell us what was your first mobile device? And how did it change your life?

Courtenay Rattray: It was, I don't if you're familiar with this expressions, but in, colloquial speak, it was like one of those burner phones. I don't know if you know what I mean. It was like a Nokia device that could fit into the palm of your hand. And it did voice and text, basically.

Doreen Bogdan-Martin: And how did it change your life?

Courtenay Rattray: I think it was empowering for me. It gave me a huge level of security. If I was a woman, it would even be more. But even as a man, going out, for example, on the town, with friends, coming home late at night, using public transportation, it's a huge security blanket and know that if anything were to happen to me out on the streets,  I'm connected, I don't have to search around for a payphone in a dark corner somewhere, I have the means to get in contact with anybody if there is an emergency, whether it's my family, or the fire department, or the police or my friends, who can come to get me if there is a situation here. So, it was a bit of a security blanket for me, which in my mind, liberated me. It liberated me to feel that I could actually be confident to, venture forth in the knowledge that I, some insurance in my pocket, which was my ability to connect in case there was a problem.

Doreen Bogdan-Martin:

So well said! Empowering, liberating, security.  Whether it's a burner phone, or a smartphone. It's incredible, the way connectivity has really transformed our lives.  We're the lucky ones and we still have to connect that other half of the world and looking forward to achieving that through LDC-5 and my development conference next year, and many other great programmes that we will team up to do together.

Courtenay, thank you so much for spending time with us and for sharing these fascinating, inspirational stories, insights and your vision as the new Under-Secretary-General. Ladies and gentlemen, this concludes this episode of the UNconnected podcast. Until next time, let's all stay connected. Thank you and goodbye.

Technician:

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