I'm now finally in a position to introduce a Marshall Scholar, Carol Lee. She was a scholar some time after my time. In terms of living inside the bouncing ball, as general counsel of the International Finance Corporation, Carol probably has a closer engagement with the events in southeast Asia over the last six months than anybody else in this hall and knows something about creative destruction. Carol, your turn.

Carol Lee: Thank you.

Half the world's population has yet to make their first telephone call.

The cost of a personal computer is several times the average annual per-capita GDP in many developing countries.

More than 97 percent of estimated Internet users come from the relatively rich nations that account for 16 percent of the world's population.

During this symposium, we've heard quite a lot about globalization and the information revolution. I would like to turn your attention for a moment to the limits of globalization.

Large portions of the world's population are currently excluded from the benefits of the new information technology. These people live in developing countries, the parts of the world that I work with at the IFC, which is the private-sector investment affiliate of the World Bank.

Yes, the Internet and the information revolution have the potential to radically transform economic activity and to stimulate entrepreneurship. But they also have the potential to worsen the existing inequalities between the global haves and the have-nots.

Let me begin with some provocative words from the secretary general of the International Telecommunications Union: "For all the egalitarian talk," he said, "the Internet today is a grotesquely unequal place. It is almost exclusively reserved for the richest, best-educated people in the wealthiest, most developed nations."

The statistics are vivid. Some of them may be a bit dated, but the overall trend, I think, is clear. It's been said that there are more telephone lines in Manhattan than in all of sub-Saharan Africa. Iceland, with a population of 250,000 people, has almost four times as many Internet hosts as India, with a population of 930 million people. In addition, as you know, the contents of the Net are still overwhelmingly in English and focused, to a large extent, on the United States.

What accounts for these vast inequalities in access to the Internet, and is there any chance that the barriers can be overcome? First, there are serious technological and financial barriers. The essential components of Internet connectivity sound simple. A computer. A modem. A telephone line. But they're simply not available or affordable in many parts of the world.

In dozens of countries, there are fewer than five telephones per 100 people. In Africa, at least 80 percent of the population lacks access to basic telecommunications, and access to telephone lines everywhere in the world is particularly limited in rural areas.

Computers are also scarce and expensive in many developing countries. There are some "Internet connections" in virtually all countries, including in Africa, but many of these are only store-and-forward technologies. That means you can get e-mail, but you can't have full interactive connectivity, and it's hard to use the Web.

Even when Internet connectivity is physically available, it's so expensive that it's beyond the reach of most people in some developing countries. Where you don't have a host computer with direct high-speed links to the Internet, users have to pay international telephone charges to reach an access point, and that can cost, in some developing countries, as much as $3 a minute. Old and unstable phone lines transmit and receive data much more slowly, and thus make it more expensive to access Internet. This makes a big difference. A U.S. researcher, without giving it a thought, having a fixed link to a high-speed network, can download a lengthy, scholarly article with graphics and charts in a few seconds at essentially no cost. In Africa, this process could take 10 or 20 minutes at international telephone call rates.

There are, however, I'm pleased to say, some prospects for improvement. There are trends toward deregulation, liberalization and the privatization of telecom services throughout the developing world, at varying rates. It depends on the political will. But when it happens, it will expand the quality and availability of telecommunication services and bring down the cost.

Worldwide Internet connections will be facilitated by the development of satellite systems, such as Teledesic and Skybridge, which will offer broadband communications, even if there isn't access to high-speed fiber-optic lines. And the international development community has come to recognize that the fight against poverty depends on improving access to information, and that includes the latest electronic technologies. So, there is a wide range of donor-funded programs by the World Bank, the UNDP, USAID and other development agencies.

But establishing Internet connections to developing countries is only part of the challenge, perhaps the less difficult part. There are also formidable social and institutional barriers. Computer literacy, to say the least, is not widespread yet in many developing countries. And there are, as I mentioned, language barriers for non-English speakers. In addition, and this has been said by previous speakers, effective participation in the information age often requires changes in attitudes toward information and its use. It requires traditional cultures to overcome resistance to impersonal, unknown sources of information, as well as to develop habits of information sharing.

Developing-country users need to become more than just passive recipients of information from the global north. They need to organize themselves to provide their own Internet content. To overcome all of these social and institutional barriers, there is an urgent need for training in information technology, for training users in the sources and availability of information, and for creating a sense of ownership and of local participation in the Net, as well as establishing the physical linkages that are necessary for connection to the Net.

Now, let me end on a more optimistic note. If developing countries can overcome these barriers, the Internet and other new information technologies do hold out great opportunities for economic development. After all, the new information technologies have the capability of overcoming, as people have said, constraints of time and space. And they make it possible to store, replicate and transfer vast amounts of information at relatively low cost. So this creates the potential for leap-frogging, for developing countries to skip whole stages of development and to move into the present day.

Discussions on the Internet as a tool for economic development tend to be long on rhetoric and short on specifics. Here are just a few examples. Enterprises can use the Internet to gain access to key information that they need to make decisions on products, quantities and prices, and this is true and the need is there in the developing world as well as in the industrialized world. In countries ranging from Mexico to Mozambique, and Ghana to Namibia, networks are being created to, for example, provide rural producers with up-to-date information on market supplies, demand and prices. Instantaneous data transfer through electronic networks makes it possible to create jobs in developing countries. For example, a number of U.S. financial institutions and other information-intensive industries have transferred data-input functions to facilities in Caribbean countries. Bangalore, India, has developed its own version of Silicon Valley, which provides quite a lot of computer programming services for customers in North America and Europe.

I'd like to conclude with an example of how the Internet can help producers and developing countries reach out to customers worldwide. Traditionally, Moroccan rug-weavers in remote villages have depended on middlemen, a chain of middlemen, to get their rugs to market. Now, there's a non-profit organization called PEOPLink, which has opened up an electronic marketplace, an Internet Web site. A local NGO visits the villages with a digital camera and takes photos of the weavers, the village and the rugs. Also, the NGO records cultural information about the weavers and the patterns. The images and the text are then e-mailed to People Link, which puts them on the Web site and promotes them to retail and wholesale buyers around the world. Small steps? Yes. They certainly might not be enough to narrow the global information gap.

I will end with a quote from the president of Brazil, Mr. Cardoso: "Freer flows of trade and investments must be considered in conjunction with the increasingly crucial issue of unobstructed access to advanced technology. These considerations are inseparable. Otherwise, we will see two worlds develop - one wired to the new technological revolution, and the other unplugged and falling farther and farther behind."

William Janeway: Thank you Carol.