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How Communications Are Vital For Economic Growth

There are a variety of conditions that need to exist in a country before economic growth becomes a realistic prospect. While it is possible to grow incrementally through increasing the amount of land used for farming, or through improving the efficiency of agricultural technologies, those economies that still depend heavily on agricultural output can achieve more substantial results by focusing on more economically productive sectors. However, there are a few basic requirements that will prove essential for any economy hoping to show serious development and growth.

A workable legal system is perhaps a good starting point. Laws must be in place to facilitate and encourage business, including laws around liability, company formation and contracts. Employees need a base level of education or training, and to a certain extent the quality of a national education system will determine its future ability to compete in global markets. But perhaps more fundamental of all is communications infrastructure, and the ability to reach out to both suppliers and customers across the country and the wider world. The Afghan example is particularly pertinent here.

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In late 2001, the Taliban regime in Afghanistan fell, and a country was liberated into democracy and a free market for the first time. By 2004, the Afghan economy was growing at a rate of 20%, having shed the shackles of planned economic policy in favor of a freer approach. When Afghan Wireless Communications was founded, it helped drive investment in a mobile and telecoms infrastructure that would help the country find its feet economically. But how is it possible that communications can introduce such firepower to an economy that is still trying to rebuild?

Communications plays a vital role in any modern economy. For an economy to function in a healthy, growth-ready way, there needs to be a combination of employment and productivity. This requires a private sector, growing and ready to provide jobs to help kickstart tax revenues. When businesses grow and make money, they take on new employees to meet rising demand. But this demand can only exist in the first place where there are sufficient people with the economic means to buy. As the economy develops, this relationship between supply (i.e. business and state provision of goods and services) and demand (i.e. the willingness and capacity of consumers and businesses to buy) is necessary in order to build a functioning, healthy economic balance.

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The Afghan story highlights perfectly the need for investment in basic infrastructure, and the ways in which this can support economic growth. Communications lie at the heart of this process of economic development. Whether it is for making contact with suppliers across the country, or in marketing goods and services directly to consumers, there is a need for this basic level of infrastructure in order to provide the basic framework against which growth can take place. Without the ability to communicate in a more cost-effective, time-effective way, it can be difficult for any country to achieve this level of results.


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