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.