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Vol 3, No 23
25 June 2001
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Sam Vaknin Disconnected
The Internert in
countries in transition

Sam Vaknin

Though the countries in transition are far from being an homogeneous lot, there are a few denominators common to their Internet experience hitherto:

Internet invasion

The penetration of the Internet in the countries in transition varies from country to country, but is still very low even by European standards, not to mention by American ones. This had to do with the lack of infrastructure, the prohibitive cost of services, an extortionist pricing structure, computer illiteracy and Luddism (computer phobia). Societies in the countries in transition are inert (and most of them, conservative or traditionalist)—following years of central mis-planning. The Internet (and computers in general) is perceived by many as threatening—mainly because it is part of a technological upheaval that makes people redundant.

The rumor mill

All manner of instant messaging—mainly the earlier versions of IRC—played an important role in enhancing social cohesion and exchanging uncensored information. As in other parts of the world, the Internet was first used to communicate: IRC [1], MIRC [2], e-mail and e-mail fora were—and to a large extent still are—all the rage.

IRC was and is used mainly to exchange political views and news and to engage in inter-personal interactions. The media in countries in transition is notoriously unreliable. Decades of official indoctrination and propaganda left people reading between the (real or imaginary) lines. Rumors and gossip always substituted for news, and the Internet was well suited to become a prime channel of dissemination of conspiracy theories, malicious libel, hearsay and eyewitness accounts.

Instant messaging services also led to an increase in the number (though not necessarily in the quality) of interactions between the users. From dating to the provision of services, the Internet was enthusiastically adopted by a generation of alienated youth, isolated from the world by official doctrine and from each other by paranoia fostered by the political regime. The Internet exposed its users to the West, to other models of existence where trust and collaboration play a major role. It increased the quantity of interaction between them. It fostered a sense of identity and community.

The Internet is not ubiquitous in the countries in transition and, therefore, its impact is very limited. It had no discernible effect on how governments work in this region. Even in the USA, it is just starting to affect political processes and be integrated in them.

The Internet encouraged entrepreneurship and aspirations of social mobility. Very much like mobile telephony—which allowed the countries in transition to skip massive investments in outdated technologies—the Internet was perceived to be a shortcut to prosperity. Its decentralized channels of distribution, global penetration, "rags to riches" ethos and dizzying rate of innovation attracted the young and creative.

Many decided to become software developers and establish local versions of "Silicon Valley" or the flourishing software industry in India. Anti-virus software was developed in Russia, web design services in former Yugoslavia, e-media in the Czech Republic and so on. But this is the reserve of a minuscule part of society. E-commerce [3], for instance, is a long way off (though m-commerce [4] might be sooner in countries like the Czech Republic or the Baltic).

E-commerce is the natural culmination of a process. You need to have a rich computer infrastructure, a functioning telecommunications network, cheap access to the Internet, computer literacy, inability to postpone gratification, a philosophy of consumerism and, finally, a modicum of trust between the players in the economy.

The countries in transition lack all of the above. Most of them are not even aware that the Internet exists and what it can do for them. Penetration rates, the number of computers per household, the number of phone lines per household, the reliability of the telecommunications infrastructure and the number of Internet users at home (and at work) are all dismally low.

On the other hand, the cost of accessing the net is still prohibitively high. It would be a wild exaggeration to call the budding Internet enterprises in the countries in transition "industries." There are isolated cases of success, that's all. They sprang up in response to local demand, expanded internationally on rare occasions and, on the whole, remained pretty confined to their locale. There was no agreement between countries and entrepreneurs who will develop what. It was purely haphazard.

The great equalizer

Very early on, the denizens of the countries in transition have caught on to the "great equalizer" effects of the Net. They used it to vent their frustrations and aggression, to conduct cyber-warfare, to unleash an explosion of visual creativity and to engage in deconstructive discourse.

By "great equalizer," I mean equalizer with the rich, developed countries. See the article I quoted above. The citizens of the countries in transition are frustrated by their inability to catch up with the affluence and prosperity of the West. They feel inferior, neglected, looked down upon, dictated to and, in general, put down. The Internet is perceived as something that can restore the balance. Only, of course, it cannot. It is still a rich people's medium.

President Clinton points out the Digital Divide within America—such a divide exists to a much larger extent and with more venomous effects between the developed and developing world. The Internet has done nothing to bridge this gap. On the contrary: it enhanced the productivity and economic growth (this is known as "The New Economy") of rich countries (mainly the United States) and left the have-nots in the dust.

Intellectual property

The concept of intellectual property—foreign to the global Internet culture
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to start with—became an emblem of Western hegemony and monopolistic practices. Violating copyright, software piracy and hacking became both status symbols and a political declaration of sorts. But the rapid dissemination of programs and information (for instance, illicit copies of reference works) served to level the playing field.

Piracy of material is quite prevalent in the countries in transition. The countries in transition are the second capital of piracy (after Asia). Software, films, even books are copied and distributed quite freely and openly. There are street vendors who deal in the counterfeit products, but most of it is sold through stores and OEMs [5].

I think that intellectual property will go the way the pharmaceutical industry did: instead of fighting windmills, owners and distributors of intellectual property will join the trend. They are likely to team up with sponsors who will subsidize the price of intellectual property in order to make it affordable to the denizens of poor countries. Such sponsors could be either multilateral institutions (such as the World Bank), or charities and donors.

Sam Vaknin, 25 June 2001

The author:

The author is General Manager of Capital Markets Institute Ltd, a consultancy firm with operations in Macedonia and Russia. He is an Economic Advisor to the Government of Macedonia.

DISCLAIMER: The views presented by the author in this article represent only the personal opinions and judgments of the author.

Moving on:

After the Rain cover

After the Rain:
How the West Lost the East

Sam Vaknin's book on sale from CER as a print book and as an ebook

Moving on:


1. Internet Relay Chat (IRC) is a system for chatting on the Web, a more powerful precursor to Instant Messaging, and involves a set of rules and conventions and client/server software.

2. mIRC is a specific program for using IRC (MS WORD is a word processor, mIRC is an IRC program).

3. Electronic commerce or EC is the buying and selling of goods and services on the Internet, especially the World Wide Web. In practice, this term and a newer term, e-business, are often used interchangeably.

4. Mobile commerce is the buying and selling of goods and services through wireless hand-held devices, such as cellular telephone and personal digital assistants. Known as next-generation e-commerce, m-commerce enables users to access the Internet without needing to find a place to plug in.

5. An Original Equipment Manufacturer is a company that uses product components from one or more other companies to build a product that it sells under its own company name and brand. (The term is sometimes mistakenly used to refer to the company that supplies the components.)



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