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Digital development in a remote paradise

Digital development in a remote paradise

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Full text also available in the ACM Digital Library as PDF | HTML | Digital Edition

Tags: Broadband access, Electronic commerce, Geographic characteristics

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Last December, I was caught in a warm tropical rainstorm as I made my way by a crowded bus and boat with friendly Portuguese-speaking locals to Ilhéu das Rolas in the Gulf of Guinea. Three weeks earlier in Washington D.C., I had trouble pinpointing São Tomé and Príncipe on a map—and now, I found myself in this paradisiacal "African Galapagos" on an operation's mission to help uncover the dual-island nation's digital economy, or lack thereof, to foster digital development in the African continent.

For better context, São Tomé has an exotic Jurassic Park appeal with beaches featured in Bacardi commercials and untouched biodiversity attracting adventure travelers, Portuguese beachgoers, the occasional trafficker, as well as United Nations officials. It is one of those countries coming into contemporary existence where happy locals ask, "how can you be poor here?" and yet the idyllic beauty and remoteness often means people survive from subsistence agriculture or simply picking the abundant mangos, breadfruit, and bananas as well as fishing. Those who can afford it also buy EU and Chinese food imports at the two supermarkets in the capital. The threats and benefits of technological development are challenging to assess in a remote island better known for cocoa plantations struggling with daily power outages, poor digital skills, and in desperate need to bridge the digital divide impacting development.

My first snapshot of São Tomé's digital reality became evident when my credit cards were rendered useless as Western bank cards are not accepted. This resonated with what I had already been thinking about what would happen to far away and remote places if they did not quickly become digitally enabled. How would they overcome geographic isolation and benefit from the digital revolution? Would they be able to create more and better jobs for youth? What would happen to their emerging tourism sector? And how would the government be able to deliver efficient and reliable citizen services? Alas, I had a week to engage with government officials and anyone in the tech and entrepreneurial ecosystem willing to talk as well as street vendors ready to exchange euros for the local currency of dobras at a corner gas station in the capital city.

As I rode in a Jeep driven by a Spanish colleague to the first of several meetings, rundown cobblestone streets and decaying colonial buildings with carved wooden balconies dotting the oceanfront promenade were reminiscent of a once-grand colonial downtown similar to the one from my childhood in Lima. It was hard to imagine how a country facing difficulties due to small size, geographic isolation, and limited economic diversity might be interested in discussing a digital transformation with technocrats from Washington. São Tomé's culture is a blend of African and European influences where locals approach living life with a "léve, léve" (take it easy) attitude.

Part of what makes working in international development both exciting and messy are the unexpected situations and characters one encounters, not to mention the myriad of cultural barriers that give way to plenty of misunderstandings. As a polyglot, I have to admit this mission trip to São Tomé was somewhat daunting as my Portuguese language skills did not go further than "obrigada." Embarking on these trips takes much preparation notwithstanding the bureaucracy in headquarters, there is desk research to be performed, field surveys to be designed and translated, in addition to endless WhatsApp exchanges to connect with helpful and knowledgeable stakeholders who are 5,000-plus miles away in a different time zone.

I was about to get a glimpse of this fascinating place that had weaned itself from cocoa dependence to embrace industrial oil palm plantations as a means to lift itself out of poverty and perhaps damage its unique biodiversity. Would chats about digital development be welcome in this context of high poverty? Of course, it should be noted this happened a few months prior to COVID-19, risking economic activity globally and upending the daily lives of people everywhere, in turn making digital inclusion more important for survival.

In São Tomé, there is limited access to affordable broadband internet service. Digital connectivity relies on the Africa Coast to Europe (ACE) fiber-optic submarine cable, which has no redundancy, and digital infrastructure only reaches major cities in urban areas. About 80 percent of the population has a mobile phone, but only 30 to 40 percent currently has an active mobile subscription to the internet. Even among those with internet access, usage is relatively low by those connected. There is a small amount of bandwidth consumed that does not lend itself to favorable market competition or increased spending in digital infrastructure. Under these conditions, how would São Tomé build strong digital foundations? How would usage barriers such as affordability and digital skills be tackled to increase connectivity?

Those of us working at the intersection of technology and international development realize that greater adoption of digital technologies creates new industries, spurs job creation, and provides sources of income—yet the on-the-ground realities make achieving a vibrant and inclusive digital economy a challenge. International exposure impacts your views on technology, design, consumption, and adoption. And technology sometimes is not even the direct solution. Building a digital ecosystem entails the right policy mix to support the expansion of mobile broadband coupled with complementary policies to boost affordability and digital skills, especially for underserved groups such as women and those in rural and remote areas. At present, millions of people are still disconnected from the digital world.

The rise of technology has helped countries leapfrog development stages, especially in economies of scale, driving productivity growth and raising incomes. Yet there I was in a tiny dual island country with a population of 220,000, or one-third of WashingTon, D.C., on a fact-finding mission to unearth any hints of government initiatives and incentives offered to the population to develop a digital ecosystem. For a while in years past, I had a fear that people in developing countries would not yet see the digital economy as critical to their future development trajectory. This was driven by early career experiences with development colleagues who were skeptical about deploying emerging technologies in international development projects for fear of failure—this is very much unlike Silicon Valley culture, which rewards innovation and failure.

In discussions, there was a definite excitement surrounding the digital economy and what it could mean for the future of São Tomé, but also a grim reality that digital infrastructure was suboptimal on the islands preventing a broader digital adoption. Neighboring Principe's connectivity was spotty during tropical storms due to a fully saturated domestic microwave radio link connecting the two islands. Worse still, there was a high risk that Principe's population would be digitally cut off in the not-so-distant future. Imagine living without digital access when your economy depends on luxury eco-tourism and services as its main source for jobs and economic development. Digital connectivity has societal implications that while difficult to measure, such as improving peoples' welfare or lifting millions out of poverty, do inevitably matter—and the faster we achieve it, the more we close the digital divide.

A clear pathway to sustainable development is getting the unbanked, especially women and rural residents, connected to digital financial services. This allows for access to credit and savings accounts fostering financial literacy and promoting growth for micro and small businesses. In Sub-Saharan Africa (excluding high-income countries), 57 percent of adults aged 15-plus are excluded from financial services in comparison to a global average of 31.5 percent according to The Global Findex 2017 Survey. Approximately 48 percent of men and only 37 percent of women have a bank account, further widening the gender gap. These figures are probably much lower in São Tomé and Príncipe with a large vulnerable population.

In São Tomé, the country's payments infrastructure is poorly developed making any type of interbank transaction or retail payment difficult and costly. There is also no integration with international payment networks, as became evident on my first day in the country. Cash is the mode of payment and the way most Santomeans receive their wages. While Africa boasts 100 million active mobile money accounts, or 1 in 10 African adults, as published by McKinsey in 2017, mobile money has yet to reach São Tomé and Principe. Perhaps fintech is the successful way forward as traditional banks have not reached low-income and rural residents—but this requires a sound digital infrastructure, digital skills to use the apps, and money to put into an account.

Back at the Omali Lodge, I wondered about the types of travelers drawn to São Tomé since it was an expensive destination and not exactly easy to reach. There are only a handful of weekly flights from Portugal and a few from Angola and Cape Verde. Portuguese is the official language and English is only spoken in the main hotels on the island. So, maybe well-heeled travelers came for the adventure to discover rainforest jungles and endemic species inhabiting the islands.

Imagine living without digital access when your economy depends on luxury eco-tourism and services as its main source for jobs and economic development.

One afternoon—as I worked to decipher that day's meeting notes written in Spanish and French, because the struggle of not speaking Portuguese was real and my childhood languages were understood by many in the government—I met a very engaging retired couple from Oxford staying at the lodge. At dinner, I learned he had worked as a nuclear physicist at CERN in Switzerland and she had raised three children while being a writer. They had booked a month-long luxury adventure holiday package that took them from Ghana to São Tomé to Gabon. While an exquisite trip, it made me contemplate if this type of tourism was benefiting the local communities since everything had been pre-paid through European companies. If you recall, São Tomé is a cash economy, so would the tourism industry get a boost if digital payments were available? And more so, if São Tomé turned to digital platforms and digital business to highlight local goods and services globally, money spent would go directly to entrepreneurial Santo-means and as such improve their standard of living.

The opportunity is there for São Tomé and Príncipe. Beyond the pristine beaches and wildlife, the government and private sector are aware that greater coordination is necessary to advance the digital economy and unlock new economic opportunities for everyone. What we found was a nascent digital economy with costly and limited digital connectivity that might benefit from a comprehensive government approach and less fragmentation.

As COVID-19 hit Europe and the Americas, I worried about the impact the looming pandemic may have on a country like São Tomé and Príncipe. The country was not prepared for remote work, virtual school, and any of the economic interactions that continued in advanced economies. In WhatsApp exchanges with acquaintances, I found out the country had been one of the last COVID-free places in the world. as it was also mentioned in a BBC News story about distant and remote islands. The country is now facing the adverse impact of travel restrictions and falling remittances with sheer isolation possibly threatening development.

A year later, I scroll through Instagram stories with mere nostalgia from that one day when I ventured on a rousing solo adventure to Ilhéu das Rolas on the Equator, a tiny island with approximately 200 inhabitants. I reminisce about the people and anecdotes like weathering a boat ride under a tropical storm, and better still being confused for an American spy by Interpol investigating one of Africa's juiciest scandals. On a jungle trek, I spotted a poor local community with villagers and roaming pigs, whose lives seemed far removed from any digital transformation or digital economy mentioned in our study—and yet a sight of clutched smartphones offered hope that digital development was doable in this African paradise.

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Jimena Luna is an economist by training, experienced in advising client governments and international organizations on tech policy, job creation, and economic development. Throughout her career, she has worked 10-plus years designing and implementing related projects with teams across Africa, Europe, and Latin America. At the World Bank, she performed research on labor markets and launched innovative solutions for job creation. She was a team member of the World Bank's flagship report the World Development Report 2013 on Jobs. In addition, she has worked for the U.S. CIO at the Obama White House on digital policies to improve how citizens and businesses interact with government—helping to close the gap between the public and private sector on technology and innovation. More recently, she has embarked on projects in Africa to promote the digital economy and digital development. Luna holds an M.A. in economics from the Aix-Marseille School of Economics (France) and a B.A. in international relations with concentrations in economics and business from Boston University (United States). Luna is fluent in English, French, Spanish, and learning Portuguese during the quarantine.

back to top  Figures

F1Figure 1. A village in Ilhéu das Rolas.

F2Figure 2. A view from the Pestana Equador resort.

F3Figure 3. Pico Cão Grande is a volcanic plug that rises 2,175 feet above sea level.

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