Is the Web Widening the Poverty Gap?


By Claire Doole

BBC News Online
January 29, 2000

The BBC's Geneva correspondent, Claire Doole, reports from the World Economic Forum in Davos on the impact of the internet on the gap between industrialised and developing nations. Two billion people on the planet have never made a phone call, let alone dialled up America Online. Even if they did manage to get to a phone line, it costs five times as much to log on in developing countries as in North America or Europe.

It's not surprising then that predictions that the internet would be the great equalizer, helping the developing world leapfrog into the First World are beginning to look over optimistic. A survey, just out at the World Economic forum in Davos, shows that business leaders fear that - far from bridging the gap between industrialised and developing nations - the internet will only widen it. About half the one-thousand chief executives surveyed said the internet would create a new world of haves and have-nots. The chief executive of financial services firm PricewaterhouseCoopers, James Schiro, said he was surprised by the result because in the past new technology had meant a narrowing of the gap between the haves and the have-nots.

Access problems
But analysts say it is not quite as simple as that. Firstly, there is the problem of Third World access. Peter Armstrong of, a consortium of some 700 online non-governmental organisations, says there are as many phones on the island of Manhattan as in all of sub-Saharan Africa, excluding South Africa. Secondly, he points out the internet can create a knowledge gap between those with the skills and access to the technology needed to make use of the web.

India's internet boom has been held up as the great example of how a Third World country can benefit. Successful Indian technology entrepreneurs are returning from Silicon valley to raise venture capital for Indian net companies. But the downside is this only helps a fraction of the population.

Log on and learn
Organisations like the World Bank and the United Nations are scrambling to wire the developing world. The UN development programme, for example, has set up centres in Mongolia's Gobi desert where locals log on and learn about computing. It is also pouring money into net access for Third World students. The idea is that students should be able to train online and catch up with their peers in the West. The website African Virtual University offers lectures, interactive tutorials and even sets exams.

Here in Davos, the UN organisations have been heavily promoting their websites as tools to fight global poverty. David Morrison of said his service was all about building connections between people. After its high-profile start with pop concerts in New York, London and Geneva, which raised $12m for development projects worldwide, it is starting a new service next month. Morrison says people in the north will be able to offer their expertise to people in the south, becoming virtual volunteers. This, he says, is a concrete example of good corporate citizenship... another buzzword that Davos man loves to use.

In fact, the World Economic Forum prides itself on expanding the Oxford English dictionary. The phrase "global compact" may not mean anything to non-Davos man, but it is seen as a way of ensuring multinational companies follow the labour, human-rights and environmental standards set by the UN. On Friday, the UN launched its website. The aim of this is for non-governmental organisations - NGOs, or let us say 'pressure groups' - to be able to keep tabs on whether the big companies are keeping to their word, as well as communicating with each other.

It was, after all, via the web that the Seattle protesters organised the demonstrations which gave the international community a most unwelcome wake-up call. But although the UN and NGOs have been quick to spot the potential of the internet, without the infrastructure for those in the developing world to log on easily and cheaply, it could cause great frustration. PwC's James Schiro says it could create new tensions between rich and poor. It should not be a tool, he told businessmen here in Davos, to cause division but to educate people.

By all accounts, the internet is still in its infancy. The chairman of Novell, Eric Schmidt, estimates it has only reached 5% of its potential. The question will be whether in future it can live up to its promise of creating a world which really does bridge the information divide.

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