DHAKA, May 6, 2025 (BSS) - Digitalization can be a powerful tool to help reduce persistent economic inequality in Asia and the Pacific.

But, to harness its potential, governments need to narrow "digital gaps," including gaps in infrastructure, access, and skills, according to a new report by the Asian Development Bank (ADB).

Although developing Asia and the Pacific has outpaced other regions in digital development in recent decades, the benefits haven't been shared equally.

For instance, the report said across the region the percentage of residents using the internet is 13 percentage points higher in urban areas than in rural areas, according to Asian Development Policy Report 2025: Harnessing Digital Transformation for Good, released today.
 
Mobile internet download speeds are also 38% faster in urban areas than in rural areas. Previous studies have also found that many of Asia and the Pacific's developing economies lag in terms of digital inclusion and have generally low digital skill levels, said an ADB press release.

At the same time, despite rapid development and growth, economic inequality persists in the region.
 
Developing Asia's population-weighted average Gini coefficient-a measure of domestic inequality-was 6% higher in 2022 than in 1990. As of last year, 18.9% of the region's population was classified as poor, defined as living on less than $3.65 a day.

"Developing Asia and the Pacific's rapid digital transformation puts the region in a position to reap significant benefits," said ADB Chief Economist Albert Park.

"Governments that promote inclusive, sustainable digitalization have an opportunity to not only boost overall productivity and innovation but also reduce economic inequality at the same time," added Park.

Digitalization can alleviate inequality by widening access to basic services such as personal finance and education, or by helping small business owners overcome barriers such as lack of access to financing or business networks.

Digital transformation can also help accelerate the shift to low-carbon development and make communities in the region more resilient to extreme weather and disasters, for example by supporting modeling and analytics to improve disaster risk management and forecast climate patterns to identify solutions such as climate-resistant crops.

The report recommends that governments in developing Asia and the Pacific adopt national digital strategies that integrate inclusion and sustainability objectives, and enact locally tailored policies that promote these objectives.
 
Governments should also engage with the private sector, civil society organizations, and local and international communities.

ADB is a leading multilateral development bank supporting inclusive, resilient, and sustainable growth across Asia and the Pacific.

Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members-50 from the region.