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Latin America should devise a "digital staples basket" to bridge social gaps

A new report made by ECLAC, a UN body, says that the pandemic highlighted the importance of connecting people. Providing a gadget and a web connection plan for households that are not connected would cost less than 1% of GDP, it estimates

What is necessary to bridge the digital gap in Latin America? This question gained tremendous relevance in the year of the COVID-19 pandemic, with social distancing measures taken to prevent the spread of the disease contributing to widen the huge social divides in the region. After all, people who do not have access to the internet simply cannot work remotely and therefore cannot earn their income to make ends meet.

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The Economic Commission for Latin America and the Caribbean (ECLAC), a United Nations body, proposed a “digital staples basket”, including a laptop, a smartphone, a tablet and a web connection plan for households that are not connected, with an annual cost of less than 1% of GDP. The organization urged for Latin America’s governments to ensure and universalize connectivity and the affordability of digital technologies to address the many impacts of the coronavirus (COVID-19) pandemic in the region. 

To this end, it proposed five lines of action that include building an inclusive digital society, driving a productive transformation, fostering digital trust and security, strengthening regional digital cooperation, and moving towards a new governance model to ensure a “digital welfare state”. Those measures would promote equality, protect the population’s economic, social and labor rights, guarantee the secure use of data, and fuel progressive structural change.

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A new report presented by ECLAC highlights the importance that digital technologies have had for the functioning of the economy and society during the crisis prompted by the coronavirus disease pandemic. Progress that was expected to take years to materialize has been made in a matter of months. However, access gaps affect the right to health, education and work, and can also widen structural gaps and increase socioeconomic inequalities.

Alicia Bárcena, executive secretary of United Nations Economic Commission for Latin America and the Caribbean (ECLAC). Photo: The Dialogue

The countries of Latin America and the Caribbean have taken measures to encourage the use of technological solutions and to ensure the continuity of telecommunications services. However, the scope of these actions is limited by gaps in access to and use of these technologies and by connection speeds.

Alicia Bárcena, ECLAC’S EXECUTIVE SECRETARY

According to the document, in 2019, 66.7% of the region’s inhabitants had an Internet connection. The remaining third had limited or no access to digital technologies due to their economic and social status.

In 12 countries of the region, the percentage of households in the highest income quintile that have an Internet connection is 81% on average, while the figures for households in the first and second quintiles are 38% and 53%, respectively.

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The differences in connectivity between urban and rural areas are significant. In the region, 67% of urban households are connected to the Internet, while in rural areas only 23% are. In terms of age groups, young people and older adults have less connectivity: 42% of those under 25 years of age and 54% of people older than 66 are not connected to the Internet.

The report adds that the low degree of affordability reinforces the exclusion of lower-income households. The cost of mobile and fixed broadband services for the population in the first income quintile accounts for 14% and 12% of their income, respectively. This is around 6 times the reference threshold of 2% of income recommended by the United Nations Broadband Commission.

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The rate of European and U.S. workers who can work remotely is double the one in Latin America

In Europe and the United States, nearly 40% of workers can work from home, whereas in the case of Latin America, ECLAC estimates that around 21.3% of employed persons could engage in teleworking.

Source: ECLAC

ECLAC highlights that the Internet is mitigating the impact of the crisis on companies, and in people’s earnings. It states that between March and April 2020, the number of business websites jumped by 800% in Colombia and Mexico and around 360% in Brazil and Chile. In June 2020, the online presence of retail companies surged by 431% compared with June 2019.

Finally, the report indicates that the post-pandemic period will be characterized by new demand patterns based on online channels that will require efforts by countries and the private sector to deliver better services. Meanwhile, new supply patterns will be based on flexibility, local proximity and response capacity.

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“Productivity and structural change will remain central to development. The region must move towards more diversified, homogeneous and integrated productive systems that incorporate technology at all stages in order to increase productivity, competitiveness and productive inclusion, which will lead to higher employment levels and wages,” Alicia Bárcena concluded.