The next frontier in development

When the Ukrainian refugees’ exodus began in late February, they were welcomed with open arms in neighboring countries, especially Poland where more than 1 million refugees had arrived by mid-March 2022. Volunteers took care of their basic needs: food, shelter, clothing and other basic necessities. Often the most direct support service was: a SIM card, a phone charger and internet access to stay connected

Today, internet access is a basic need. The Covid-19 pandemic exacerbated this need and made the requirement for online access all too clear. Everyone needs a minimal internet package to connect with their loved ones, check and write emails (eg to apply for a job), read the news or fill out forms necessary for standard administrative procedures.

Expanding the definition of extreme poverty

The concept of “minimum internet needs” builds on the global definition of poverty and links to the World Bank’s World Development Report of 1990, when it created the $1 per day per person definition of extreme poverty as a minimum level of spending necessary to meet basic human needs. Since then, the global community has measured extreme poverty in all its forms, leading to increasingly sophisticated research into the causes and consequences of poverty, as well as ways to end it. A recent highlight of this new poverty survey was the award of the 2019 Nobel Prize in Economics to: Esther DufloAbhijit Banerjee and Michael Kremer for their experimental approach to analyzing poverty. This approach has led to significant improvements in the design of efficient policies to combat economic deprivation.

A new Internet Poverty Index can now adjust the true costs of Internet services in each country to provide standardized estimates of people living in Internet poverty worldwide.

This definition of extreme poverty – initially set at $1/day and since 2011 at $1.90/dayincludes two basic elements. First, it quantifies the minimum needs for survival (especially food, shelter, and clothing). Second, it is based on the concept of purchasing power parities (PPS) so that the costs of these basic needs can be compared across time and space. The current definition is in 2011 PPPs; in the current US dollar it is about $2.20 (or about 2 euros).

However, people today also need access to a minimum set of internet services as part of basic human needs. To extend the traditional method of poverty measurement, researchers from World Data Lab have identified and calculated a “minimum internet basket” that combines quantity, quality and affordability based on consultation with the Affordable Internet AllianceOokla and GSMA

According to this extended definition (see image below), a person is considered to be Internet poor if he/she does not commit to a minimum quantity (1 GB) and quality (10 Mbps download speed) of Internet services without spending more than 10 percent of his or her disposable income on those services. This minimum set of internet services would enable a person to meet basic needs such as accessing email, reading the news or using government email services. The core methodology of internet poverty was: initially presented mid 2021 and has undergone additional improvements to identify the number of Internet poor in almost all countries.

This is the definition of internet poverty.World Data Lab just launched Internet Poverty Index can now adjust the actual cost of internet services in each country to estimate what a standard mobile internet package from 1 GB to 10 MB/second would cost in that country. It then calculates how many people in the country could afford such a package. If the cost of the standardized package exceeds 10 percent of a person’s total expenses, the person is taken into account internet bad† This allows us to make global estimates and divide the number of people living in internet poverty worldwide, with breakdowns by gender.

As with the $1.90 threshold for extreme poverty, the main added value of the approach is not the threshold itself, but its consistent measurement across countries and over time. There may be a legitimate discussion about the minimum package, just as there are now suggestions for higher poverty levels in low-middle-income and upper-middle-income countries. For now, though, we’re using the same package in all countries, which is roughly $6 per month ($0.19/day; PPP 2011).

1.4 billion people live in internet poverty

There are two main findings when we put all the data together. First, there are about twice as many people living in internet poverty as compared to extreme poverty – highlighting all the work that remains to be done to close the gap and reduce poverty in general. There are nearly 1.4 billion people (18 percent of the world’s population) living in internet poverty, compared to 675 million living in extreme povertyAfrica is home to 709 million (50 percent) people in internet poverty and Asia of another 457 million (nearly 33 percent). Many Asian countries that have succeeded in reducing extreme poverty, such as China, India, Indonesia and Pakistan, still have a large number of internet poor.

Figure 1. Brazil, Nigeria, DRC, India and China are responsible for a third of global internet poverty

Number of people in internet poverty in 2022 map.

Source: World Data Lab projections

Second, while the countries with the highest poverty levels are also typically the places with the highest levels of internet poverty, there are significant differences between countries with similar income levels. For example, among the rich countries, the US has about 85 percent higher costs for the same Internet package compared to Germany. However, there is hardly any internet poverty in Organization for Economic Cooperation and Developing Economiessince almost everyone can afford a basic internet package, even if it is expensive. In less prosperous countries, on the other hand, prices are fuel internet poverty. In South Africa, a basic internet package costs more than twice as much as in Kenya and more than four times as much as in India. If South Africa India’s internet prices would reduce internet poverty by more than 21 million people. If you compare it to Kenyan prices, the drop would still be 17 million.

Figure 2 Ccountries in sub-Saharan Africa have the highest shares of internet poverty

How strongly are countries affected by internet poverty?  Map

Source: World Data Lab

While internet poverty remains high at 1.4 billion people it can be tackled more easily than extreme income poverty. extreme poverty can to be diminished when people get higher incomes, What’s? a gradual and lengthy process. internet poverty, unlike, eradicated much faster if internet prices continue to fall† ssome emerging economies including India, Kenya and Colombia, have shown that this is possible.

Remark: For the full ranking and additional information on the Internet Poverty Index, see: https://internetpoverty.io

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