World Bank: Developing countries yet to benefit from digital growth

World Bank has challenged developing nations to improve their business environment increase access to Internet and promote good governance to reap benefits of Information and Communication Technologies.

In a report dubbed ‘World Development Report 2016: Digital Dividends’, the bank notes the potential of modern technologies in delivering jobs, crucial services such as identification, and money transfer in areas previously unimagined.

It for instance cites Kenya as a nation where modern technologies has assisted her citizen to cut cost in money remittances through the Mpesa technology. Other developing countries mentioned in the report such as India have also harnessed technologies in job creation through business and outsourcing processes.

“In Kenya, for example, the cost of sending remittances dropped by up to 90 percent after the introduction of M-Pesa, a digital payment system,” says Jim Yong Kim President The World Bank Group

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“New technologies also have helped women to participate more easily in the labor market as ecommerce entrepreneurs, in online work, or in business-process outsourcing. The world’s 1 billion persons with disabilities 80 percent of whom live in developing countries can lead more productive lives with the help of text, voice, and video communication,” he says.

The World Bank President notes that those in extreme poverty have the most to gain from better communication and access to information which requires input from the authorities in charge.

He calls on governments within developing countries to improve their business climate, invest in people’s education and health, and promote good governance.

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He says in countries where these fundamentals are weak, digital technologies have not boosted productivity or reduced inequality. “Countries that complement technology investments with broader economic reforms reap digital dividends in the form of faster growth, more jobs, and better services,” the President says.

According to the ‘World Development Report 2016: Digital Dividends’ report a total of four billion people, representing 60 per cent of the world's population remains excluded from the ever-expanding digital economy.

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The report conducted by co-directors, Deepak Mishra and Uwe Deichmann and team says the benefits of rapid digital expansion have been skewed towards the wealthy, skilled, and influential around the world, which are better positioned to take advantage of the new technologies. 
In addition, though the number of internet users worldwide has more than tripled since 2005, four billion people still lack access to the internet.

"Digital technologies are transforming the worlds of business, work, and government," said Deepak Mishra.  
He added, "We must continue to connect everyone and leave no one behind because the cost of lost opportunities is enormous. But for digital dividends to be widely shared among all parts of society, countries also need to improve their business climate, invest in people's education and health, and promote good governance."

Although there are many individual success stories, the effect of technology on global productivity, expansion of opportunity for the poor and middle class, and the spread of accountable governance has so far been less than expected. 
Digital technologies are spreading rapidly, but digital dividends - growth, jobs and services - have lagged behind.

"The digital revolution is transforming the world, aiding information flows, and facilitating the rise of developing nations that are able to take advantage of these new opportunities," said Kaushik Basu, World Bank Chief Economist. 
He added, "It is an amazing transformation that today 40 percent of the world's population is connected by the internet. While these achievements are to be celebrated, this is also occasion to be mindful that we do not create a new underclass. With nearly 20 per cent of the world's population unable to read and write, the spread of digital technologies alone is unlikely to spell the end of the global knowledge divide."

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