Photographer: Dhiraj Singh/Bloomberg

The Poor Need Toilets, Not Just Mobile Phones, World Bank Says

  • Digital technology `far from sufficient' to lift poorest
  • Productivity gains from Internet expansion have fallen short

The world’s poorest families are more likely to have mobile phones than toilets or clean water. It hasn’t necessarily made them better off, according to a new report by the World Bank.

The number of Internet users more than tripled in a decade to 3.2 billion at the end of last year, representing more than 40 percent of the world’s population, the Washington-based development bank said in a report released Wednesday titled “Digital Dividends.”

While the expansion of the Internet and other digital technologies has made communicating easier and fostered a sense of global community, it hasn’t delivered the widespread gains to productivity that many expected, the lender said. It has also fallen short in improving opportunities for the world’s poorest, and helping spread “accountable governance.”

“The full benefits of the information and communications transformation will not be realized unless countries continue to improve their business climate, invest in people’s education and health, and promote good governance,” the report said. “In countries where these fundamentals are weak, digital technologies have not boosted productivity or reduced inequality.”

The World Bank’s view compares with the optimism of technology entrepreneurs such as Mark Zuckerberg and Bill Gates, who have argued that universal Internet access is essential to eliminating extreme poverty. “When people have access to the tools and knowledge of the Internet, they have access to opportunities that make life better for all of us,” said a declaration last year signed by Zuckerberg, Gates and others including Richard Branson and Bono.

Not Sufficient

According to the World Bank, connecting the world should be seen as “essential but far from sufficient” to lifting the poor. The development lender aims to reduce extreme poverty -- defined as living on an income of less than $1.90 per day -- to 3 percent globally by 2030.

In markets without enough competition, digital technologies can give rise to monopolies, curbing innovation, the lender said. While the Internet allows many tasks to be automated, it can create greater inequality if workers don’t have the skills to take advantage of technological advances. And when governments aren’t accountable, the spread of the Internet can allow them to exercise greater control.

In many developing countries, Internet and mobile-phone access eats up a big portion of incomes. Moreover, some countries don’t have the education systems to enable people to use the Internet. In Mali and Uganda, about three-quarters of third-grade children can’t read, the World Bank said.

“Not surprisingly, the better educated, well connected, and more capable have received most of the benefits” of the digital expansion, the report said.