Magazine article UN Chronicle

The ICT/poverty Nexus

Magazine article UN Chronicle

The ICT/poverty Nexus

Article excerpt

Over the past decade, there has been a remarkable growth in the use of information and communication technology across the world. Writing in 1999, Geoffrey Kirkman (1) commented that half of the world's population had never made a telephone call. By 2011 this has changed dramatically, with mobile cellular networks covering over 90 per cent of the world's population, and there is the expectation that more than half of the world's population will be using mobile phones by 2015. Despite the persistence of widespread poverty, the use of mobile telephony in African countries in the last few years has grown more rapidly than in any other region in the world. There are now an estimated 500 million mobile phone subscribers across the continent compared to 246 million in 2008. By late 2010, Africa exceeded Western Europe in terms of the number of mobile connections. Further, although Africa lags in terms of other forms of ICT usage with an estimated 100 million Internet users, between 2000 and 2011 the growth of Internet usage exceeded 2,000 per cent, which is more than five times that for the rest of the world.

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The phenomenal increase in ICT access has been accompanied by a burgeoning literature on the contribution of ICT to economic growth, development, and poverty reduction. At the most optimistic, ICT has been described as the means whereby developing countries can leapfrog over development Stages and technology barriers to achieve both economic growth and broad-based development. Other views are less sanguine about attributing direct benefits to ICT and raise concerns that a one-dimensional push for their greater use may increase the dependency of poorer countries, as well as the divide between urban and rural areas, the rich and the poor, and between generations. Thus, while there may well be a link between ICT and poverty reduction, the mechanisms through which the connection takes place are not fully understood. In fact, whatever dimension of welfare change is being considered, the direction of its causal link to ICT is contentious. Problems of reverse causality and spurious correlation that apply to the relationship between any investment in infrastructure and increasing output are of equal relevance to the analysis of the ICT/poverty nexus.

Even prior to the current era of widespread mobile telephony and Internet usage, a causal relationship between telecommunications infrastructure and economic output was identified using data from the 21 Organization for Economic Co-operation and Development (OECD) countries. This relationship has also been found for mobile telephony and data from 113 countries over a 20 year period, which showed that a 1 per cent increase in the telecommunications penetration rate leads to a 0.03 per cent increase in gross domestic product (GDP) (Torero and von Braun, 2006)(2). This positive correlation between ICT and economic growth extends to the developing world through direct expenditure on ICT infrastructure and services, as well as through its economic multipliers. Mobile network suppliers are estimated to have invested more than 90 billion dollars in Africa, and in some countries they are now the most profitable enterprises as well as significant generators of employment. Telecommunication revenue and expenditures presently contribute an average of 7 per cent of the GDP in many African economies, while investment in communications has reached about 5 per cent of the total investment spending on the continent. The expansion of ICT globally has also had upstream impacts through components and manufacture. Gold, tantalum, tin, and tungsten are used in the manufacture of mobile phones and other ICI' devices, while cobalt is an important component used in the batteries to power them. Zambia and the Democratic Republic of Congo supply the raw material used for more than half of the world's lithium-ion rechargeable batteries. …

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