Digital Economies in Developing Nations Under Discussion in New York

As we wrote in this newsletter on August 4, Digital Economies are not reserved just for wealthy, developed countries. In fact, developing nations can benefit more quickly and more dramatically than developed nations from injections of money and technology into their economies, providing better (and faster) access to the Internet, creating communications webs and mobile services in nations that still have majority-rural populations, and bringing hope for the future.

One of the Links of the Week below mentions one such effort, from Mastercard and the African Development Bank, in East Africa. Other efforts were recently discussed at a series of financial forums in New York recently, embracing several sub-Saharan Africa nations, including the DRC, Liberia, Malawi, Nigeria, and Sierra Leone.

IDCA Research finds there are around 60 countries in the world with average per-person annual income of less than $2,500 – compare this to the world average of about $14,000 (comparable to Turkey or Mexico), and the US average of about $80,000.

These are technically known as the world's Least-Developed Countries, or LDCs. None of them can sit around and wait for their incomes to increase to where it seems like a good time to digitize their economies. The time is now.

All nations can convert endless mountains of paper forms to online formats, develop mobile government eservices, create centralized online markets for agricultural and manufactured goods, participate in ongoing global logistics streamlining, and improve their transportation grids and traffic flows.

As hard experience dictates to anyone who has undergone such efforts, the big impediments are always institutional sclerosis and bureaucratic obstruction, often accompanies by corruption-driven inefficiency, and steadily increasing population pressure.

LDCs uniformly have underdeveloped electricity grids, too, their populations having to get by on constant blackouts and service that delivers 3% to 5% of the per-person power. One piece of good news is that there are more than 40 LDCs with sustainable power grids that produce at least 40% of their electricity. There is little legacy fossil-fuel energy to deal with, as is the case in the developed world.

In these times, where people are throwing around multi-trillion-dollar visions and plans, it should be refreshing to know that about $400 billion would deliver electricity grids reaching 25% of the developed-world standard to the entire world of LDCs. This jump from the 3% to 5% cited above would go a very long way in enabling LDCs to develop their Digital Economies to a point that brings enormous improvements in the lives of the 1.5 billion people who are destined to live in these places.

Digital Economies are essential to lift LDCs into more highly developed states. The challenges are profound, but possible if all of the great discussions like those held last week in New York result in investments, development, and sincere commitments to progress.