eCenters Pilot Project One Year Anniversary - Innovations for Sustainability and Impact

In 2005, the eCenters project began with a simple premise - to empower rural residents in Kyrgyzstan by connecting them to high-speed Internet and knowledge skills training. A year after the launch of the project, the eCenters are showing great promise.

Phase 1 Sites are located in Nookat, Kara-Suu, Karakol, Bosteri, & Naryn The eCenters project began with a request from USAID’s Last Mile Initiative (LMI) in 2005 for dot- ORG to assess the potential for a highly innovative technology project in Central Asia. The assessment concentrated on the potential for a rural technology initiative in Kazakhstan or the Kyrgyz Republic. The assessment found that the Kyrgyz Republic, with its rural poverty and recent revolution, would make an excellent candidate. The USAID Mission in Almaty supported the concept for four eCenters in rural Kyrgyz communities.

In June 2005, a national competitive tender was issued to rural communities throughout the country. Over fifty rural towns responded to the tender and four finalists were selected. USAID’s Central Asia mission contributed additional resources for a fifth location in Naryn, one of the country’s most economically depressed areas. Every eCenter is co-located with a successful local Internet cafe. Each eCenter operator is an experienced local entrepreneur with a track record of business success (at least two years of profitability).

eCenters are very different from many donor-subsidized rural ICT access projects. The eCenter pilot planning process calls for eCenters to have a sustainability model in place prior to project implementation. The process also calls for each eCenter to co-locate with a committed partner who offers high levels of customer service and a commitment to continuous quality.

The flexibility and private sector orientation of the eCenters model allows for organic development and accelerates the rate of technology saturation in rural communities. eCenters use available technologies, like Skype, to improve communication and offer distance education. eCenter operators now hold weekly video conferences with the project coordinator in Bishkek and between individual centers using Skype. This ‘free’ technology also allows eCenter students and customers to communicate with relatives in Bishkek or anywhere in the world where there is internet access.

A major buzzword in the development world is sustainability. Similar to private sector counterparts, donors seek a return on public sector investments and eCenters are uniquely positioned to capitalize on this trend. Each eCenter leverages its demand for ‘infotainment’ services. Infotainment services are generally computer games and other forms of online entertainment. These services are highly profitable and allow the operator to pay staff and overhead costs. eCenter services are offered separately and are funded, in this case, by USAID. The eCenters pilot project defines sustainability as monthly revenue exceeding monthly costs to run the eCenter, pay trainers and overhead.

All five eCenters currently meet this criterion. Two additional strategies contribute to enhanced sustainability: 1) the use of microstipends to stimulate demand; 2) an innovative land grants approach.

One of the most successful pilot initiatives is in the use of pre-paid voucher cards – or ‘microstipends.’ Offered through eCenters and licensed agents in the community, microstipends offer a set number of minutes/hours for Internet access and specific access to computer and ESL training.

Microstipends are offered for the duration of project. Stipends are collected by the eCenter operators. eCenter management verifies that the microstipend was used for educational purposes by accessing a web-log feature built into the eCenters backend office suite. If the recipient successfully completed training or used the stipend for educational purposes the project reimburses the eCenter operator. This model has proven very successful in stimulating local demand for eCenter services.

Since the project began in July 2005, 3,372 microstipends were distributed and 762 rural citizens were trained and certificates of attendance were issued by eCenters. Microstipend values are based on fair market average costs for training and Internet access. It is up to eCenter management to determine whether or not a microstipend is issued to the same user more than one time. The project encourages repeat customers to pay market rates for eCenter services. The project is currently adjusting pricing as the project comes nearer to completion in December 2006.

Land Grants
Another aspect of ongoing training, improvement and sustainability for eCenters is the linkage of each eCenter to a plot of land. This concept is developed by project partners at Openworld. The land grant of at least 10 hectares of prime undeveloped real estate is envisioned to receive investor interest once the eCenter builds a reputation for local 21st century job skills talent. The idea is to attract investment in office space or a software farm, etc to the donated land. Once the land is developed and generates cashflow, a portion of the proceeds is ploughed back into the microstipend fund to provide access and training to citizens – thus fueling the local labor market. The project has yet to reach this.

Who Benefits from the eCenter?
Rural areas of the republic suffer from post Soviet economic divestment. Thousands of able bodied and otherwise employable people struggle with ongoing economic uncertainty and the maladies associated with economic depression (e.g. alcoholism, hopelessness, suicide, etc). The alternative to a hard life in rural areas is migration to larger cities and abroad, thus making life in rural areas even worse for those who remain. Very few international investors look at the Kyrgyz Republic as a viable business location mostly because very few investors know much if anything about the country. eCenters are helping to change this situation. Since the majority of the country’s five million residents still live in rural areas, eCenters are the lifeline that brings the Internet revolution to their villages and connects people and creates positive change in their lives.

Several eCenters are located in college and university towns. High school and college students tend to use the eCenters the most although a growing number of customers are government employees and small business owners. These groups generally study basic accounting courses and tutorials on developing and managing a business. AED is currently building a web-based eLearning modules for local economic development courses.

Future full of possibilities
Early in 2006, a review of budgeted costs vs. actual spending for the initial five eCenters revealed unforeseen project savings in terms of project management and costs associated with microstipend grants to eCenter operators. The budget windfall was discussed with USAID’s Kyrgyz office and USAID agreed to the re-allocation of available funding to open three additional eCenters. The first of three was opened in Talas oblast in May 2006.

The remaining two eCenters will be opened in Jalalabad and Chui oblasts in June and July 2006. The initial success of the project has attracted additional support from the International Telecommunications Union (ITU). The ITU is allocating resources to open 16 additional eCenters later in 2006. The ITU funded eCenters follows the USAID funded pilot structure with the addition of an e-government pilot component. The e-government component will attempt to increase government transparency in rural areas and will establish online resources and applications to better deliver government services to rural areas including: permits, tax filings, government information and distribution of social benefits.

dot-ORG is also currently developing an eLearning resource for Local Economic Development (LED) to be offered by eCenters. The eLearning modules will educate local government and business leaders on best practices in improving the conditions for economic growth in rural communities. Participants will use eCenter facilities and equipment for web-based LED training. The program is co-developed with AED’s Center for International Training.

dot-ORG/AED and its GreenCom project are exploring additional ways eCenters can contribute to Kyrgyzstan’s rural economy through the development of tourism resources. Adventure tourism is a fast developing segment in the overall tourism industry. Kyrgyzstan is an emerging destination for adventure travelers interested in being “first to market” in exploring relatively unknown areas of the world. AED is in discussions with Solimar International, an experienced eTourism provider in marketing the country’s rural assets in partnership with eCenters in offering training and contributions to an eventual tourism portal for adventure travel in Kyrgyzstan.

Perhaps the single most important development in the overall project is the ongoing collaboration and working relationship with Kyrgyz Telecom (KT), the country’s monopoly telecommunications provider. Once the target of international investors, the KT was the victim of the sudden instability following the revolution and lost a bid to privatize from a major German telecom investor. AED’s local counterparts at the Civil Initiative on Internet Policy (CIIP) worked with KT management in offering affordable high-speed Internet access to all eCenters (ADSL). KT was so impressed with the eCenters model that they have set aside funding to launch over 100 new eCenters in 2007 as a means of transforming KT’s rural services and in the grassroots privatization of KT’s analogue phone shops using the eCenter model.

The future of eCenters is still being written, the success has been largely credited to a solid project plan, commitment from USAID, strong project management and the willingness of Kyrgyz entrepreneurs to try this radical model in connecting rural citizens to the Internet and creating extraordinary changes in the lives of ordinary people.

For More Information, Contact:
Steven Rynecki
Senior Program Officer, Academy for Educational Development
Tel: 202-884-8948

Related DOT-COM Activity
Kyrgyzstan eCenter Project
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