Summary and Conclusions
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he report begins in chapter 1 by documenting a digital paradox in the Middle East and North Africa: the region has an excess of social media accounts for its level of development but exhibits glaring gaps in use of the internet to make payments. The evidence presented cannot fully account for this paradox, but it does yield several observations. The coverage of digital infrastructure services, particularly mobile broadband, is roughly on par with what is predicted by the region’s level of gross domestic product (GDP) per capita, but the population’s adoption of digital payments is low relative to its level of development. The reason for this glaring gap is subject to speculation, although circumstantial evidence suggests that lack of societal trust in government and the financial system are part of the explanation. Following the presentation of data on the region’s digital paradox, chapter 2 discusses the correlations between indicators of trust, use of digital payments, and transparency. Chapter 3 proposes a logical framework in which trust not only is affected by regulatory policies such as laws that protect c onsumers and personal data privacy, but also helps to determine the population’s level of adoption of digital tools, such as using the internet to pay bills. The region’s digital paradox notwithstanding, chapter 4 describes the key channel
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through which digital technologies can help to raise economic growth and create jobs— overcoming market barriers. It presents evidence of how transactions in digital platforms can provide information that helps to improve the quality of ride-hailing services. Recent research commissioned for this report indicates that the information technology sector in West Bank has helped to cushion the economic blow of mobility barriers. The chapter presents estimates, also commissioned for this report, about how the adoption of digital technology can help to reduce the economic costs of geographic distance and language barriers in the tourism industry. A f ter establishing the mechanisms through which digital technologies support economic activity, chapter 5 provides lowerbound estimates of the economic upside of a digital economy for the Middle East and North Africa compared to Sub-Saharan Africa. The evidence is nuanced, but overall approaching the aspirational goal of achieving universal coverage of digital infrastructure and universal adoption of digital tools by individuals and enterprises is likely to bring substantial gains in growth and jobs. The evidence here is nuanced as well. For example, universal digitalization of formal manufacturing enterprises in the Middle East
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