Managing digital technologies has been possible by Asia’s highly adaptable digital consumers but there is a digital divide within Asia and more particularly South Asia, which we need to take into consideration for a better understanding of the impact of COVID-19. But looking at the positive side, the number of internet users in Asia has grown more than the number in other regions, and account for half the global total.

Asia’s e-commerce market revenue is projected to reach $1.4 trillion in 2020, nearly three times the market revenue in the United States. It is estimated that mobile e-commerce spending accounts for 74 percent of total spending on e-commerce in Asia, compared with 37 percent in Europe and 31 percent in North America. App downloads have grown more in the region than in the rest of the world, reflecting Asia’s obsession with the  mobile-first approach to the internet and consumers are more likely to spend more time on those devices.

The region accounted for 41 percent of all mobile app downloads in 2019, which should enable it to tap the growing demand for business technology services. For example, India has considerably more software developers and architects than the United States. Asian countries produced 76 percent of the world’s STEM (Science, Technology, Engineering, and Mathematics) graduates in 2016–18. India produces the most computer science graduates in the world- about 215,000 each year. However, the region will have to constantly improve the quality of talent and enhance organizational capabilities to capture the growing global demand.

Digital divide within Asia

A deeper look inside Asia shows that there are regional disparities. One part of Asia which is advanced Asia (Australia, New Zealand, Japan, Singapore, and South Korea). South Asia falls into one of the poorest regions within Asia. The COVID-19 pandemic has brought in additional challenges to tackle amidst the technological disparities within Asia. There is a digital divide witnessed in the economies of South Asia. 

The digital divide and the need to expand existing investments in digital infrastructure by building more and higher quality mobile broadband infrastructure and ensuring affordable internet access and coverage have been recognised by international financial institutions. They recognise that the impact of such a divide on human health and wellbeing including child education, livelihoods, and economic activity has been severe with lockdown, social distancing, and lack of physical interface. At the same time, the pandemic has accelerated digitization - which is transforming the way to communicate, work, learn, and live.

Here lies the development dilemma. While digitisation becomes imperative, it also brings in challenges of equitable access within countries of South Asia as the poor in these countries are very often not able to get access to digital services.

The pandemic has exposed the divide between those who have access to the benefits of welfare measures and those who do not due to the inequitable digital access that exists among citizens. More than two billion people in Asia still are not online and the mobile operator association GSMA, which represents the worldwide mobile communications industry, estimates 207 million women in South Asia alone do not own mobiles. The impact of the pandemic has got aggravated through the digital divide as access to welfare measures in the areas of health, education and livelihoods are often more accessible to only those with access to digital modes of connectivity.  

The Asia-Pacific region has been an important driver of the digital technological revolution. Yet, it is also one of the most digitally divided regions, with less than 14 percent of the population connected to affordable and reliable high-speed Internet. During the COVID-19 pandemic, the digital divide has become the new face of inequality - creating not only income inequality but also inequality of opportunity.

The digital economy globally is estimated to be around USD11.5 trillion in 2016, equivalent to 15.5 percent of global gross domestic product (GDP), and grew at a pace two and a half times faster than global GDP during the past 15 years. It is expected to rise to 25 percent of global GDP by 2025 and create new economic opportunities. However, only half of the global population has access to the internet with access dropping to less than 30 percent in parts of South Asia and Sub-Saharan Africa.

Access to the Internet

Among the regional members of the Asian Infrastructure Investment Bank (AIIB) consisting of 45 countries, including India and other South Asian countries except for Bhutan, nearly 2.4 billion people do not have access to the internet, with the majority of them residing in India, China, Indonesia, Pakistan, Bangladesh within South Asia and the Philippines, outside South Asia. Consequently, many of these countries would find it difficult to leverage digital technology to overcome the economic hardships caused by lockdowns and social distancing, and access to basic necessities and services would be difficult.

Across countries in Asia, the majority of the employed population are working in sectors that require face-to-face interactions. But richer countries tend to have more workers in sectors that are amenable to work-from-home (WFH), such as education and financial services. Countries in Central and West Asia seem to have the highest share of workers in these WFH-amendable industries, whereas, in South Asia, this share seems to be the lowest.

About 88 percent of South Asia’s school-age children do not have internet connection in their homes, according to a new joint report from UNICEF and the International Telecommunication Union (ITU).

The report, How Many Children and Youth Have Internet Access at Home? has come out with the disturbing finding that globally two-thirds of school-age children have no internet access at home. The situation is similar among young people aged 15-24 years old, with 759 million or 63 percent of them unconnected at home.

The digital divide is perpetuating social inequalities that already divide countries and communities, the report notes. Children and young people from the poorest households, rural and lower-income states are falling even further behind their peers and are left with very little opportunity to ever catch up. There are also geographic disparities within countries and across regions. Globally, around 60 percent of school-age children in urban areas do not have internet access at home, compared with around three-quarters of school-age children in rural households. School-age children in sub-Saharan Africa and South Asia are the most affected, with around 9 in 10 children unconnected at home with the rest of the world through the internet.

Region 

School- children( 3-17 years)  unconnected

West and Central Africa 

95% - 194 million 

East and Southern Africa 

88%    - 191 million

South Asia 

88% - 449 million

Middle East and North Africa 

75% - 89 million

Latin America and the Caribbean 

49% - 74 million

Eastern Europe and Central Asia 

42% - 36 million

East Asia and the Pacific 

32% - 183 million

Global 

67% - 1.3 billion

Source: How Many Children and Youth Have Internet Access at Home?

The analysis presented in the report finds those 2.2 billion children and young people aged 25 years or less - more than 65 percent of the total young people globally - lack internet access at home. This critical situation undermines the potential for children and young people to succeed in school, work, and life in an increasingly digital world. With education systems investing in hybrid (consisting of a mix of digital and normative physical proximity) and remote learning due to the COVID-19 pandemic, it is becoming increasingly clear that lack of digital connectivity is a barrier that will prevent children and young people from accessing effective and interactive forms of learning.

Bridge the digital divide in Asia

Significantly expanding internet access in homes, communities, and schools are vital to ensure that this and subsequent generations of children and young people acquire the knowledge and skills they need to support a sustainable future.

How do countries in South Asia invest more to bridge the digital divide of its citizens? Countries in the region have the world’s poor more than any other part of the globe and most countries are classified as low or lower-middle-income. Six of the eight countries in the region, Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, and Pakistan are IDA (international development association) borrowers and, therefore, eligible for the Debt Service Suspension Initiative (DSSI) and concessional loans and grants. India, the world’s third-largest economy, is also a lower-middle-income country but, over the past decade, has become an important source of intra- regional financing between low- and middle-income countries. As a member country of the G20, India is committed to participation in the DSSI and extend the agreed debt service moratorium to borrowers.

The six South Asian DSSI-eligible countries had a total external public debt of US$ 135 billion at end-2019, equivalent to over 25 percent of the external public debt of all DSSI-eligible countries combined. The two largest DSSI-eligible borrowers are in South Asia, Pakistan, and Bangladesh. South Asian countries have borrowed primarily from official creditors and on average owed only seven percent of external public debt stock to private creditors at the end of 2019. This is in marked contrast to other DSSI-eligible countries, where the comparable share owed to private creditors was 25 percent at the end of 2019. 

More concessional public debt needs to come into the region to not only enable the countries to come out of the pandemic but also build a better future for its citizens by bridging the digital divide that keeps a large part of their population outside the core ambit of economic development.

(The writer is a retired Indian Economic Service officer who worked in the labour ministry. The views expressed are personal. He can be contacted at ppmitra56@gmail.com)  

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