The digital war on poverty is not won. A comment to Jeffrey Sachs

Economist Jeffrey Sachs signed on August 21 2008 an article at The digital war on poverty — in which, summing up, he explains that [t]Thanks to market forces, even the world’s poorest people are beginning to benefit from the flow of digital information. Not that I do not agree, in general, with what is explained in his article, but there are some clarifications I’d like to make.

Over all, the tone of the article is optimistic. I am also optimistic about the ends, but not on the actual estate of the situation nowadays. Besides, I’m becoming more sceptic about leapfrogging, which is one of the strong points made by Sachs. Don’t get me wrong: I do believe ICTs are a revolution and will provide renewed energies for those who will be capable of benefiting from them, but I think that ICTs will be catalysts and multipliers (perhaps in several orders of magnitude), but not substitutes.

I’ll try and comment some original statements made in the article one by one, and then gather up some conclusions.

The digital divide is beginning to close

Were this a question, the answer would simply be no. Put short, the inequality in the quantity of existing infrastructures is certainly narrowing. But when we look about quality, the digital divide is actually widening. I’ll be discussing this later, but here come some other articles of mine where I already debated about this issue (in chronological order):

Extreme poverty is almost synonymous with extreme isolation […] [b]ut mobile phones […] will therefore prove to be the most transformative technology

I agree. Mobile technologies (cellphones, wireless, etc.) have a strong power and I also think that they will (they actually are) transforming the society at several levels. But from this sentence we understand — I’m sorry if it is me that got the author wrong — that poverty comes from isolation and, hence, as mobile devices will make isolation disappear, so will poverty.

I agree with Sachs that poverty usually means isolation — I’d say “exclusion” — but this is a consequence of other factors, a symptom, but not (or not always) a cause. So:

  • Communication fosters development, but isolation not necessarily leads to (dire) poverty.
  • Poverty has many factors, and many of them come from unequal distribution of wealth, unbalanced trade relationships, personal exploitation, etc. And they do happen in spheres of actual communication and not isolation (especially exploitation, by construction).

Mobile phone technology […] costs so little per unit of data transmission

Underdeveloped countries quite often are accompanied by lack of civil rights and concentration of power, which includes, usually, lack of competition in the telecommunications market. This means that prices are not that cheap. In absolute terms. In relative terms, with huge amounts of people living under the threshold of poverty, the prices are anything but cheap (a direct consequence of monopolistic regimes). Of course I agree that they provide cheaper means to exchange knowledge than other technologies, but I’m afraid that, even so, costs are not “so little”.

On the other hand, not only communication services have to be cheap, but also devices. Data transmission requires some devices (e.g. 3G cellphones) that are simply out of reach to 99% of the world population. Of course, I’m talking about rich data, and not SMSs or (in some cases) WAP — remember what we said about quality.

Despite this criticism, there are excellent experiences like Brosdi, Tradenet or (also mentioned by Sachs), M-Pesa, that picture an optimistic future. The final results will depend on how these experiences impact on developing countries and, more important, how fast developed countries are in running their own path… with better technology.

In the following paragraphs, Sachs explains some good examples on how ICTs have changed jobs and employment, business and commercial relationships, Education or the Health system. I agree these are good examples. I agree, too, that convergence is a very good thing, so that same content and services are made available regardless of the place or tool you’re using to access them. In general, I somewhat share his ideal that the end of poverty could be reached would we put all the potential we already have by pointing to that goal.

But the devil is in the details.

In a research I’m just carrying on, I’m finding that (almost) all good performance in indicators from the Digital Economy depends on exogenous factors, on analogue or “real economy” ones: the gross domestic product, education, inequality, freedom, etc. This puts at stake some optimisms about leapfrogging. The idea that the Information Society, Knowledge Based Societies or the Digital Economy can run in parallel from the Industrial Society does not seem backed up by evidence. So, not two parallel lines of development, but a circle is the figure that fits best. A virtuous circle or a vicious one, depending on what sense are you making it spin.

For all the benefits that Sachs speaks of to come, other (deeper) changes must take place too. And it is true, we can provoke and speed up some of these changes by means of ICTs. But to have a rabbit coming out of the hat, someone had to feed it first.

If you need to cite this article in a formal way (i.e. for bibliographical purposes) I dare suggest:

Peña-López, I. (2008) “The digital war on poverty is not won. A comment to Jeffrey Sachs” In ICTlogy, #59, August 2008. Barcelona: ICTlogy.
Retrieved month dd, yyyy from http://ictlogy.net/review/?p=935

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6 Comments to “The digital war on poverty is not won. A comment to Jeffrey Sachs” »

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  2. Great point Ismael. I also agree with you that we have not yet overcome the digital divide. I am also optimistic and must say I’ve seen that in many third world countries ITC mean a new opportunity to foster development and increase communication. Though there’s still much to do regarding human rights, accesibility, infrastructures etc. Recently a frien of mine in Latin America wanted to get Ubuntu and he preferred to order the CD rather to download ot, because the speed of his Internet connection is to slow.
    ITC are very important as a tool to support creativity and entrepreneurial initiatives, and these habilities can be found everywhere, but if there’s a lack of resources, there still will be a divide.
    Finally, regarding exclusion or isolation, ITc have been probably the most effective way to fight them. When thinking in Social Capital, structural holes are fundamental to increase knowledge inside networks. To make a society more prone to innovation it needs links and connections with external networks and sociaties. ITC play a key role in this regard and that’s a big change.
    So I’d say. digital divide still exists, though the expansion of ITC should be seen as an opportunity to fight against.

  3. The digital divide is getting wider. The gap in per capita GDP between rich and poor countries is getting wider, and rich countries spend more of GDP on ICT. That gap is not in radios (which were an earlier transformative technology) or cell phones so much as in high end computing and embedded ICT.

    On the other hand, as everyone knows, the diffusion of more affordable technologies has been wonderful, and those powerful technologies can help the very poor escape from the poverty trap. To move someone for one dollar a day to two dollars a day, only requires that their income be increased by one dollar a day! That is a very difficult gap to bridge, but one that yields huge benefits in quality of life. Cell phones in the hands of the poor themselves, and a wide variety of ICTs in the hands of people working to help the poor are making a difference.

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