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Low internet access is driving inequality

Covid-19 and the great lockdown triggered a mass migration from analog to digital and highlighted that access to the Internet is crucial for socio-economic inclusion.

High-speed Internet is key for working from home, for children’s education when they can’t attend school in person, for telemedicine, for benefiting from social support programs and for enabling access to financial services for everyone, especially for those living in remote areas.

As this map shows the digital divide — the gap between those who have Internet access and those who don’t — is more like a chasm, both within and between countries.

Still, Internet usage remains a luxury: Half of the world’s population does not have access to the Internet, either through a mobile device or through fixed-line broadband.

Advanced economies like the United States, France, Germany, the United Kingdom, and Canada have the highest access rates. Big emerging economies show large disparities in the proportion of Internet users in their populations, which range from about two-thirds in Brazil and Mexico to about one-third in India.

Countries in sub-Saharan Africa, followed by many in emerging and developing economies in Asia, are among those with the lowest access to the Internet despite being world leaders in mobile money transactions There is also a large variation in Internet connectivity by firms in sub-Saharan African— only about 60% of businesses use email for business compared to about 85% in Europe and Central Asia.

  • Within countries. Income inequality and inequality of opportunity may worsen — even in advanced economies — because disadvantaged groups and people who live in rural areas have more limited Internet access. The disparity between men and women in their labor force participation, wages and access to financial services may increase where there is a gender gap in access to the Internet. This could be the case in many emerging and developing countries where fewer women than men own a mobile phone.
  • Between countries. The relatively low Internet access might depress productivity in emerging and developing countries. IMF staffs research finds that a one percentage point increase in the share of Internet users in the population raises per capita growth by 0.1-0.4 percentage points in sub-Saharan Africa. The Covid-19 pandemic demonstrates that having reliable Internet allows some businesses to continue operations amidst lockdowns, which keeps economies running.

So, how can policymakers support affordable and universal access to the Internet?

Governments can foster a digital-friendly business and regulatory environment for the private sector. This can be instrumental to accelerate and finance investments in infrastructure.

Government support, for instance by ensuring the Internet investment is complemented with universal electricity access, is essential. In addition, subsidies may be needed so that all households — including disadvantaged groups and those in rural and remote areas — have access to quality Internet, and to ensure there is no digital gender gap. For example, in response to the Covid-19 crisis, the governments of El Salvador, Malaysia, and Nepal have introduced free internet discounts.

Policies should also be geared toward closing the Internet gap for firms. Broadening small businesses’ access to financial products, such as loans, will allow these firms to undertake productive investments in information and communications technology. Governments could also see fiscal savings from digitalization. They can lower the public cost of tax compliance through greater access to taxpayer data and improved spending efficiency, which in turn, may help to finance these policies

Given the increasing role of the Internet for the economy and for accessing public services, policies to foster an inclusive recovery must aim to tackle the digital divide within and between countries.

 

vtuking

22 Comments

  1. Reply

    Tnks for this

  2. Reply

    Driving inequality indeed

  3. Reply

    100% true

  4. Profile photo ofItz Kvng Twitch

    Reply

    Very interesting

  5. Reply

    Technology has helped a lot

  6. Reply

    Thanks for sharing this update

  7. Reply

    This is quite insightful

  8. Reply

    It sure is

  9. Reply

    I tell you the mass has really migrated from analog to digital

  10. Reply

    good

  11. Reply

    nice

  12. Reply

    great

  13. Reply

    Hmm

  14. Reply

    I don’t get

  15. Reply

    Nice Post

  16. Reply

    It sure is

  17. Reply

    well done

  18. Reply

    Dats so poor
    Need 2 improve

  19. Reply

    Good

  20. Profile photo ofExcel01

    Reply

    Data is bae

  21. Reply

    Wonderful

  22. Profile photo ofYusuf

    Reply

    Good info

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