Economy changing ICT focus among CEE governments

The Economist Intelligence Unit (EIU) said that "the financial crisis has forced governments in Central and Eastern Europe to make tough decisions about their information and communications technology spending priorities", causing concern over whether the region can maintain its lead over other emerging markets in the "international e-readiness rankings".

The study said that the economy in the region is expected to contract by 5.7% in 2009, being affected more than the 4.1% decline anticipated in the Euro region, and the 2.5% contraction expected worldwide. Most CEE countries have also been cautious when it comes to the initiation of stimulus spending packages, and where they do exist, these are unlikely to include significant ICT elements.

With this in mind, few CEE governments can now afford to fund large ICT development projects, and are instead turning their attention to programmes with lower up-front costs and shorter payback terms, for example seeking improvements in the way government agencies manage information flows. This includes governments looking to the issuing of electronic ID cards to enable online access to government services, which can cut paperwork and other administrative costs.

The EIU said that although budget funds are scarce, governments are not losing sight of the long-term goal of making digital access availability universally, including to citizens in remote areas. However, the funding for these projects often comes from the European Union's regional development funds, rather than from national budgets.

According to the study, the approach of CEE governments fall in to three categories:

  • Go full steam ahead: Bulgaria, Croatia, Estonia, Poland, Romania, Russia, Slovakia, Slovenia and Turkey.
  • Change tack, to focus on projects with shorter payback times: Czech Republic, Greece, Hungary, Latvia, Lithuania.
  • Throw out the anchor, and wait for better times to return: Albania, Bosnia and Herzegovina, Ukraine.

The Economist Intelligence Unit's whitepaper can be found here.

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