Harbour, not Hideout

11 April 2009 Dan McGarry

The rationale for Vanuatu acting as a tax-free jurisdiction is simple: Given a lack of sustainable industry, a small economic base and few prospects for international trade, tax haven status is one of the few avenues available to countries like Vanuatu to attract foreign currency. By enticing money and people into the country, the government is able to derive income from import tariffs, license fees and other activities that don’t unduly burden either investors or ni-Vanuatu.

Some degree of visible, verifiable probity is required for such a role, and cooperation will no doubt be expected from neighbouring nations as they pursue individuals playing fast and loose with the rules. But this should not be cause for alarm. We don’t want people investing here who only see the rule of law as an encumbrance.

Nonetheless, we’re facing a strong, even unreasonable backlash, which is directing itself in part at some of the punier members of the international community.

[Originally published in the Vanuatu Daily Post’s Weekender Edition.]

A prominent US liberal blog recently ran a story, titled “So Go Already” that captured in a nutshell the deep resentment that many, Americans especially, are feeling toward those captains of enterprise who continued to receive massive payouts even as the financial service companies they guided were foundering in bankruptcy.

Reacting to a rather blithe and blinkered editorial on tax havens published by the right wing Washington Times, the article ranted, “If you don’t like paying taxes here on the millions you’ve made or that someone made for you, you’re free to take your shekels and move.”

Both Right and Left utterly miss the point.

What's in a Name?

9 April 2009 Dan McGarry

Throughout the country, we find that the depiction of the human body, the discussion of certain topics, to be perfectly appropriate in one community, but tabu in the next.

At the core of the problem, therefore, is the question: How can we usefully engage on a discussion of controversial topics – not just pornography, but politics, society, kastom, religion… you name it – if we don’t allow certain words and terms to be used?

[This week’s Communications column for the Vanuatu Independent.]

A colleague recently sent me a link to a story originating from Ireland, in which the national domain administrator refused to allow the registration of certain terms. I’ll let the author of the original article explain:

‘I’ve been trying to register the domains porn.ie and pornography.ie for about four years. Every time I try to register either domain, the Irish Domain Registry (IEDR) refuse my application because “the proposed domain name must not be offensive or contrary to public policy or generally accepted principles of morality.”’

(For reference, ‘.ie’ is the two letter domain name (properly called a country code Top Level Domain, or ccTLD) that that signifies Ireland. Vanuatu’s ccTLD is ‘.vu’.)

The writer continues: “I found myself a solicitor who specialises in digital law (e.g. cases involving the Internet) and arranged an appeal against the refusal of registration.”

Eventually, a court found that there was nothing inherently offensive about the domain names, but to the author’s astonishment, it still found against him. The rationale? The court had no mandate to intervene with the actions of the domain administrator. The body managing Ireland’s ccTLD is a purpose-built non-profit organisation, and though the Irish government has reserved the right to take control of the ccTLD, they haven’t exercised it. In all likelihood, they wouldn’t, except in an emergency.

Vanuatu is currently taking a look at how its ccTLD will be managed in the future, so it’s worth taking a few moments to consider what we would do in the same situation.

Elephants

28 March 2009 Dan McGarry

In recent years, Vanuatu has been learning to manoeuvre in this demanding and rather tricky role. To further complicate things, there is more than one elephant in this particular bed. Between the EU, the WTO, China and our other regional neighbours, trade and aid negotiators in Vanuatu have had their hands full.

Happily, 3000 years of practice in patient negotiation and peace-making have so far paid off. To mix metaphors, Vanuatu has of late consistently punched well above its weight when it comes to negotiating this sometimes parlous state of affairs.

But our work isn’t finished yet, and if anything, the stakes are higher now than they’ve been in years. Time is not on our side and the elephants are encroaching once again.

[Originally published in the Vanuatu Daily Post’s Weekender Edition.]

“Living next to you is in some ways like sleeping with an elephant. No matter how friendly and even-tempered is the beast, if I can call it that, one is affected by every twitch and grunt.”

Canadian Prime Minister Pierre Trudeau offered this wry description of relations between Canada and the US at the Washington Press Club back in 1969. Had he been a ni-Vanuatu politician addressing the press in Canberra, he might have used an aquatic simile, but the message would have been the same.

But our work isn’t finished yet, and if anything, the stakes are higher now than they’ve been in years. Time is not on our side and the elephants are encroaching once again.

Appropriate Technology – Take Two

27 March 2009 Dan McGarry

We need to take steps to improve access to information, learning and communications for all ni-Vanuatu. The steps we’ve taken so far are necessary, but not sufficient. We need to do more. And in the absence of a coordinated national strategy, we should take small steps like this simply because we can.

The cost of failure is measurable, and probably low. Maybe there won’t be a huge surge of new employment; maybe it won’t help local small business people as much as we like. If it doesn’t work, though, at least they won’t suffer for the mistake.

Though we can’t really know exactly what the value is on the upside, we can all agree that if it does work, it will benefit people in countless small ways: expediting business, enabling both formal and informal political, social, religious and community networks, encouraging learning and exposing people to a world that many have never encountered before.

[This week’s Communications column for the Vanuatu Independent.]

I got some really good feedback from last week’s proposal to create incentives for those kinds of computer equipment that are most suited to creating opportunity and improving access to information for ni-Vanuatu.

Not all of the news was necessarily good, but all of it was useful. Daryl Moon, who runs the local Datec store, responded that he’d done a little math on the issue, and he found that computer vendors would certainly be able to sell computers for less if they were constructed locally from tariff-exempt components.

But he went on to explain that in order to justify hiring extra staff for that purpose, he would have to sell 20 computers per week – a number which, he suspected, exceeds the weekly sales of all local computer retailers combined.

I also had discussion with a few local economists and trade experts. One of the issues raised was the difficulty of actually measuring the outcome of such tariff exemptions. Generally speaking, government is willing to accept a drop in revenues in one area provided that it sees an increase elsewhere (VAT income from increased sales, for example) or that the social benefit is sufficient to merit the cost.

As I reflect on these conversations, I’m beginning to realise that, ultimately, the most compelling argument for Appropriate Technology incentives is not economic in nature. The capstone on this discussion is a moral one.

The Price of Democracy

23 March 2009 Dan McGarry

As I write this, Vanuatu’s members of Parliament are plodding through the Government’s budget bill. It’s an unusual second consecutive week of work for our MPs, and though everyone is intent on seeing the job completed, they’re giving the work the attention it deserves.

Opposition members have kept cabinet ministers on their collective toes. Following a salvo of incisive questions from across the floor, Finance Minister Molisa sent his staff back to the Ministry with instructions for more detailed briefing materials. The lights were burning into the small hours at Finance.

Measured in strictly procedural terms, progress may be slower than Speaker George Wells might want, but the Opposition, looking revitalised and with a newfound sense of purpose, has been… well, doing its job, to be frank. That’s a refreshing – and timely – first.

[Originally published in the Vanuatu Daily Post’s Weekender Edition.]

It may seem silly to outsiders, but I’m not the only one here who’s taken some encouragement from these few weeks of Parliamentary process. After years of listening to the same tiresome tirades against do-nothing politicians, we are at last seeing something genuinely newsworthy in Vanuatu politics: A thorough and detailed investigation of how the nation spends its money.

Appropriate Technology

23 March 2009 Dan McGarry

Technology is complicated, and in relation to other aspects of daily life in Vanuatu, it’s expensive. But its value to society is indisputable.

Without a doubt, the Government needs to develop a clear, comprehensive policy concerning use of technology within its own sphere of operation, and on the national level as well. But that will take time, and there’s much that can be done in the mean time.

The benefits of telecoms market liberalisation are undeniable, but as the Pacific Institute of Public Policy rightly pointed out in its baseline study of social effects of the opening of the mobile market, more needs to be done. Uptake for business purposes is still low. Secondary infrastructure needs work as well, and if we want to see the same growth in Internet as we’ve seen in mobile use, we’re going to have to take steps to make it possible.

[This week’s Communications column for the Vanuatu Independent.]

One of the joys of working in IT is the endless tide of change that seems to run through it. The stereotypical geek – and I confess I bear a strong resemblance to him – is constantly, almost pathologically curious. Like mynah birds we flit from one shiny piece of technology to the next, changing our song moment by moment.

Some may find it dizzying. Just as they get used to one set of jargon terms, the lexicon changes and their stuttering education in techno-Babel starts anew.

IT professionals typically work with about a six month window before the bleeding-edge products they’re using slip down the next rung of the ladder of obsolescence. After about two years, they’ve dropped away completely.

Governments and other institutions often find this a constant source of aggravation. It takes so long to develop standards that they’re often outdated even before the testing, analysis and verification is complete.

But their mistake is one of emphasis….

Two If By Sea…

20 February 2009 Dan McGarry

Vanuatu has done well by satellite in the past, and the new VSAT technologies available today are great, but we should not limit our options. Direct investment in a fibre-optic link may not be an option for the government, but it’s reached the point where private sector and institutional funding can take up the slack. Costs will be lower, megabit for megabit, than any other alternative.

[This week’s Communications column for the Vanuatu Independent.]

This week, I’m going to channel the spirit Paul Revere and try to determine where the next invasion is coming from.

The invasion, of course, is the Internet, and the question is: Will we use satellite-based services to meet our needs, or an international fibre-optic cable link, or both?

First, I need to make something clear. Last week’s column looked at the fundamental issues behind financing a fibre-optic cable link to the outside world. It appears to have come across as pessimistic to some because it laid out some considerable challenges and risks.

My contention was never that fibre is a bad option. On the contrary. There are risks inherent to all projects on such a scale and I wanted to make them clear. But my point was only that the traditional role of government as underwriter or guarantor of major infrastructure projects is beyond Vanuatu’s capabilities. There’s nothing stopping us from finding other backers, though.

Last week at an ITU-sponsored conference for Pacific ministers, the World Bank presented a report on the feasibility of fibre-optic cable links throughout the region. The picture it paints is of a timely and fundamentally important opportunity for island nations, and for Vanuatu in particular.

Again With the Micro-Payments

16 February 2009 Dan McGarry

Rex Sorgatz posted a quick and dirty re-think of how micro-payments could be made to work in a present-day web-browsing scenario. Again, I question the premise of the problem micro-payment purports to solve.

My fundamental objection to online payment is that most people won’t pay for something of unknown value. Speaking for myself (and a few others I know), the moment a website starts putting obstacles between me and the content I want to access, it’s easier for me to move on than it is to leap whatever interface hurdles are barring my path.

That’s because:

I refuse to buy something sight unseen. In the material world, I can at least take a look at the package and compare with a few competing products before I pull out my wallet. On the Web, I can’t really know whether something is worthwhile until I’ve had a look. For a bit of writing of less than 5000 words, that means I need to see most – if not all – of it before I decide what it’s worth to me. For a short video, that means all of it. (The mere idea of a trailer for a 15 minute video makes me shudder.)
The whole point of micro-payment is that the amount is ‘throw-away’ money. Increments so small that we don’t even have to think about it. Forcing someone through the UI equivalent of a toll booth creates an impediment that’s out of scale with the benefit.
As I mentioned before: Online payment is not really payment, it’s reward. So much comes free with the price of admission (i.e. an Internet connection) that the only way we can assess the value of content is in the context of a gift economy. Think of it as a pay-as-you-exit performance, or busking, if you like. Modulo a few stingy, poorly socialised freeloaders, anyone who really enjoyed the show will happily toss a few coins into the hat. But not before they’ve seen the show.

To sum up: It’s best to leave interface and program flow issues alone until we’ve established the proper intellectual framework. Conceptualising a rewards system generates very diffierent results than a payment system. Given that reward and payment systems are both easily circumvented, the only thing we can rely on is the visitor’s goodwill. Place a little box at the exit, allow people to click right past it if they want, and you’ll never have any complaints about access to data.

More to the point, everyone who gives, gives gladly. This is more than just a moral point. The importance of goodwill from one’s website visitors cannot be understated. Remember: karma comes first, reward later, when it comes to online success. In fact, karma is the primary reward. Cash is just a symbolic representation of the goodwill people feel toward you.

P.S. If we’re honest with ourselves, we can accept that others’ failure to give us money is not an interface failure, nor is it a failure in their judgement. For better or for worse, if people aren’t willing to give money of their free will, then the failing is ours, not theirs.

I suspect that some manifestation of the Endowment Effect underlies most efforts to control access to online content. It’s irrational in the online context, but it’s human nonetheless to say, “I worked hard to produce this. I have a right to be paid for it.”

Those of us who have more or less grown up online have fewer reservations about the benefits of sharing content without precondition, and I suspect such expectations will become the norm for at least a significant subset of society before too very long.

Boom or Bust?

13 February 2009 Dan McGarry

The economic benefits of a fiber-optic connection to the outside world cannot be overstated. But it’s got to be seen as a labour of love. The benefits to be derived from the operation of the cable itself might never be great. If it’s not managed properly, the cost of failure could be high indeed. That said, the knock-on benefits to the community are numerous.

Call center services for European customers, online education, interactive tourism resources (video feed from the Nangol, anyone?), live video lectures from universities overseas, online consultations by medical specialists, offshore financial transaction processing… the list goes on and on. All of this becomes possible if we improve our basic infrastructure.

[This week’s Communications column for the Vanuatu Independent.]

We need fiber, and we need it soon.

No, I’m not talking about changing the nation’s diet. I’m talking about fiber-optic cable. Made of very long strands of glass fiber, this kind of cable has the unique ability to allow light to turn corners. This means that we can shoot tiny laser pulses into one end of it and have them emerge intact from the other end, even if it’s thousands of kilometers away.

The result? Fast, very high-capacity communications become possible. In laboratory experiments, researchers have achieved rates of up to 14 trillion bits of data per second. Current commercial implementations don’t go nearly that fast, but even a single thread of fiber a few millimeters wide can carry billions of bits every second. Just a few strands would be enough to increase Vanuatu’s total available bandwidth to a large multiple of its current capacity.

So what’s the catch? Why haven’t we invested in a fiber connection yet? Fiji has it, and so does New Caledonia. Why not Vanuatu?