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Self-sustainable e-Gov key to ME growth

Dubai, June 30, 2013

In the past decade, some Mena governments have developed pioneering e-government programs driven by ambitious national economic agendas of modernization and diversification, and to serve the ever-growing number of digitally savvy young people, commonly known as the Arab Digital Generation.

In effect, the e-government assets have clear potential to create both economic and social value for all demographic segments.

Today, however, the region’s leading e-government programs face growing social and financial challenges, forcing them to find new funding mechanisms.

Amidst recent economic and social uncertainties, governments have shifted their spending priorities to other areas such as housing, social welfare, and employment.

In this new environment, e-government initiatives can no longer solely rely on central government budgets. Hence they must learn to become self-sufficient and self-sustainaable, according to management consulting firm Booz & Company.

In recent years, the governments in the Mena region have developed e-government programs aimed at streamlining the delivery of public services and helping leaders better engage with their constituents – businesses, citizens, or visitors.

In effect, Bahrain, Saudi Arabia, and the UAE have all launched noteworthy e-government programs and continuously implement strategic updates to take into consideration emerging constituents’ needs.

Now, however, a number of governments in the Mena region are allocating resources away from these programs due to budget constraints. And, the truth is, even though the resources required to maintain e-government programs have, in many cases, diminished, public expectations for these programs remain high, said the study.

Governments must therefore find ways to sustain, or regain, their momentum toward e-government realization. “This can only be achieved if these schemes become self-sufficient,” remarked Dr Raymond Khoury, a partner with Booz & Company.

“This requires evolving beyond the traditional model – in which governments pay all costs – to one in which governments share the benefits of such programs with strategic partners, generating revenue, and delivering better services to constituents,” he stated.

“Although fiscal self-sufficiency may initially seem like an undue burden, the right approach–implemented in conjunction with the private sector– can actually help governments achieve some of their core goals, which include sustainable growth, development, and enhanced efficiency,” said Fady Kassatly, a principal with Booz & Company.

“If structured correctly, self-funding schemes can create actual economic and social value, improving the delivery of government services, increasing digital literacy, and fostering greater job creation in the public and private sectors,” explained Ramez T. Shehadi, a partner with Booz & Company.

“The result is an improved business climate and an enhanced quality of life for constituents,” he added.

According to Booz & Company, there are four possible ways to make e-government programs financially self-sustaining: Public-Private Partnerships (PPPs), open-data platforms, advertising on e-government channels, and leveraging government platforms for commercial purposes.

“The four ways to make e-government initiatives fiscally self-supporting are not mutually exclusive,” observed Dr Khoury.

“Some are already operating successfully. Such initiatives generate revenue for governments, improve operating efficiency, create jobs, foster new businesses, and encourage digitization – the mass adoption of connected digital technologies,” he added.

These four means are:

*PPPs for Service Delivery

In a PPP model, the government agency develops a strategic arrangement with a private vendor that deploys its capabilities and funds to design, build, maintain, enhance, and market e-government services.

PPPs are a very promising option for designing and implementing innovative e-government services at minimal cost to the government.

Moreover, well-designed PPPs benefit both parties. The private-sector partner generates profits by charging fees for the services provided. The government entity obtains high-quality services that meet its constituents’ needs at significant cost savings and without incurring major up-front investments.

The PPPs for service delivery scheme has been successfully deployed in the US, where state and federal governments have partnered with NIC, a private company that specializes in providing governments with online solutions, and have decreased costs, simplified processes, and now provide better service to constituents.

In the Mena region, Bahrain government has initiated work on such a scheme.

*Open Data Platforms for Service Delivery

Open data platforms make rich sets of government data available so that businesses can use them to create groundbreaking new services and applications. They host a wide array of content – transactional government information, geospatial data, maps, and statistics – with strict mechanisms in place to protect the privacy of citizens and companies.

Regionally, Saudi Arabia and Bahrain as well as the UAE federal governments have launched open data platforms for service delivery schemes. A number data sets have been already put online for businesses and/or entrepreneurs to use in creating new services and apps.

*Advertising on E-government Channels

Commercial advertising has yet to emerge on a widespread scale on government websites and portals, in part due to a fear that such displays would carry an implicit state endorsement of the products and services being advertised.

This argument is pervasive yet inconsistent with government practice. Around the world, governments have long generated revenue from many public-sector physical assets, said Booz & company in the study.

*Leveraging govt platforms for commercial purpose

Governments should allow the private sector to use public-sector platforms to offer commercial services. “Governments that provide a large number of e-services tend to receive considerable user traffic through their platforms. As in the case of online advertising, they should capitalize on this traffic by offering value-added services to commercial providers” stated Kassatly.

Governments can also generate value by charging private companies to use official systems. In reality, the advantage of these programs is that they use preexisting infrastructure, which means that the associated capital costs are relatively low.

Regionally, Bahrain’s e-government portal serves as a platform for national mobile operators Zain and Viva to provide payment and credit recharge services to their customers.

Given the substantial volume of usage traffic through the portal, the government has negotiated with these telecom operators for a percentage of the payment and recharge services transaction fees, the study added.

According to the study, the regional governments have an opportunity to use these four self-sustainable schemes to not only create substantial economic and social value, but to boost digitization efforts and create much needed knowledge and technology-based jobs.

By following a self-sustainable scheme to e-government, Mena authorities can foster a friendlier business climate, an enhanced quality of life for constituents, and advance different approaches to value creation and partnership that open new opportunities in the digital arena, it added.-TradeArabia News Service




Tags: Middle East | e-Government |

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