This policy brief examines the implications of digitalization in Fragile and Conflict-Affected Situations (FCS). Digitalization has a transformative potential but simultaneously presents distinctive challenges, particularly in FCS characterized by infrastructural limitations, weak governance, and socio-economic disparities. The OECD identifies digitalisation as one of the intensifying factors for the growing inequality between FCS and the rest of the world. However, in FCS the story extends beyond inequalities between countries to inequalities within countries which are more critical for the FCS context as inequalities exacerbate fragility and conflict. This brief highlights three points. The first point explores the dual impact of digitalization on FCS business environments. Digital tools can overcome infrastructure barriers, thereby fostering economic growth and enhancing market dynamics through increased transparency. However, digital technologies create information asymmetry, resulting in widening the gap between those who can participate in the digital economy and those who are left behind, subsequently exacerbating socio-economic inequalities, fostering exploitative working conditions, and potentially escalating instability in fragile and conflict-affected regions.The second point focuses on the labour markets, where digitalization through the online gig economy can create job opportunities and improve labour mobility. However, it can also undermine labour protection and contribute to wage disparity and issues relating to workers’ rights, accentuating inequality and exclusion, particularly in FCS. The third part investigates the role of digitalization in Communications and Information Security. Digital tools can empower communities to resist oppressive regimes but can also be exploited for surveillance and censorship, fuelling conflict and exacerbating social tensions. The brief concludes with policy recommendations aimed at integrating digital inclusion principles in FCS strategies, emphasizing equitable digital initiatives, and adopting conflict-sensitive and equitable digital policies. The recommendations underscore the need for a balanced approach to digitalization, fostering innovation while providing protection from contributing to fragility and conflict.
Opportunities and Challenges of Digitalization in Fragile Settings