Internet ‘fuels frustration of world’s poor’

The internet threatens to cause a new wave of migration and conflict across the world by fuelling aspirations in developing countries that cannot be matched by opportunity, the president of the World Bank has warned.

Jim Yong Kim said that such frustration “may very well lead to fragility, conflict, violence, extremism and eventually migration”.

His warning flies in the face of utopian claims by internet companies such as Facebook and Google that the web will transform poor countries. Both are running projects to bring the internet to the world’s most remote regions and Mark Zuckerberg, the Facebook founder, has described web access as “a basic human right”.

Mr Kim, 57, acknowledged that the internet has improved living standards but claimed that it had also sparked a “convergence of aspirations” as people from poor regions can “become immersed in the detail about life” far away.

Technology also threatened to wipe out low-skilled jobs, making it more difficult for people in poor nations to fulfil their goals, he added.

Work by the World Bank shows that an individual’s happiness depends on how their earnings compare with a reference income, like the familiar tale of “Keeping up with the Joneses”.

If the reference income rose by 10 per cent, the individual’s income would need to rise by at least 5 per cent to maintain the same level of satisfaction.

“As internet access becomes more widespread, people are increasingly looking outwards for their reference income,” Mr Kim said in a speech at the London School of Economics. “Keeping up with the Joneses used to be about keeping up with your neighbours. But it’s no longer only about the Joneses living around you — because of connectivity, the Joneses could be anywhere in the world.”

The demand for opportunity caused by the rapid spread of aspiration through the web had made development aid “much more urgent than we ever thought”, Mr Kim added. In Africa, for example, 226 million smartphones were connected to the internet at the end of 2015, a number that is expected to triple by 2020. Yet across Africa, GDP growth is not keeping pace with the population, which means individual living standards are falling.

To speed up the pace of development, institutions such as the World Bank need to attract private finance into emerging markets.

“We have to think of ourselves as strategic advisers and honest brokers who link capital looking for greater returns to countries looking to achieve their highest aspirations,” Mr Kim said.