Digitalization has been a transformative mechanism in every aspect of society. It has been particularly relevant during the pandemic, through its roles in international aid and broader development cooperation, including labor. Biometric systems, registration processes, data storage, and digital platforms have enabled financial institutions to transfer funds to beneficiaries through government-to-person (G2P) channels, providing efficiency, speed, and innovation within government systems. For instance, the World Bank (2022) has recorded that digital G2P systems enabled over 1.1 billion people in 186 countries to receive social protection measures, including emergency cash transfers during COVID-19. The rise of digital work has also increased the availability of jobs that support transnational workflows and the global spread of digital connectivity.
Nonetheless, behind this development of services lies a complex reality at the grassroots level, where power asymmetries between the Global North and the Global South are being reinforced. Profit maximization is a basic fiduciary duty that corporations have to their shareholders. This does not imply that they do not engage in charitable endeavors; rather, it simply means that their business interests naturally coincide with their philanthropic initiatives. A report found that only a minimal amount of global development funding flows directly to local CSOs, reflecting the limited inclusion of grassroots actors in digital aid design and implementation (Civicus, 2023). As a result, marginalized communities and civil society organizations often find themselves excluded from the very systems that are intended to help them.
To understand how digitalization has shaped and continues to shape development and modernity, we must look deeper beyond the tools themselves to how they are used, by whom, for whom, and with what consequences.
Digital systems such as online banking platforms or e-wallets, biometric databases, and online data storage have simplified how aid and information are delivered. These systems enable organizations and governments to track funds, monitor beneficiaries, and reduce leakage. India’s Aadhaar-linked Direct Benefit Transfer (DBT) system saved the government a cumulative savings of USD 40 billion through leakage reduction, a halving of subsidy allocations (16% to 9% of total expenditure), and a 16-fold expansion in beneficiary coverage (World Bank, 2019). Governments have used this technology to expand access to services like cash support and identification during calamities or crises. However, in many cases, digital systems are introduced without sufficient consultation with the public. As data, including biometrics and personal information, is collected, it is often managed by external firms or stored in foreign systems. According to UN Trade and Development (UNCTAD), 22 countries in the Asia-Pacific region still have no legislation on privacy and data protection, and even more lack comprehensive data protection frameworks despite having some form of legislation. This poses serious risks related to surveillance, sovereignty, and accountability.
We must recognize that reliance on foreign systems and mechanisms can lead to bias in technological advancements as it exemplifies prioritizing profit over rights-based and people-centric development. Governments and concerned institutions must establish common standards that apply people-centered principles. The absence of such protocols endangers the genuine meaning of development, as well as the dignity and security of the people it aims to serve.
Likewise, digitalization is transforming labor markets and employment. The rise of global labor platforms, such as online agencies and Business Process Outsourcing (BPO) companies, has created job opportunities for workers in the Global South. IT and Business Process Association of the Philippines (IBPAP) reported that the industry employed approximately 1.7 million individuals in 2023, reflecting an 8% increase from 1.57 million in 2022. They also noted the growing global competition in the IT-BPM sector, with countries such as South Africa, Colombia, Vietnam, Poland, and Egypt emerging as notable destinations. These increasing numbers of Filipino virtual assistants, Indian freelance programmers, transcriptionists, and others have found livelihoods through remote work. Yet this employment is shaped by a deeply Westernized system. In many cases, workers in the Global South are working for clients or companies in the Global North — underpaid, with no labor protections, algorithmically managed, and lacking formal arrangements. A 2021 ILO study on platform work found that workers in developing countries generally earn 60% less than those in developed countries on freelance platforms. More than this, many platform workers remain excluded from key labor protections, including health insurance, injury compensation, unemployment benefits, disability coverage, and retirement security. What is more alarming is that a substantial number report experiencing or witnessing discrimination and harassment in digital labor environments. These workers often have no contracts, benefits, or avenues for grievances. The digitalization of labor is thus undermined by the precarity and invisibility it entails. While it expands labor markets globally, it also imposes a new form of digital colonialism, where control and profits remain concentrated in the Global North while labor is outsourced to the Global South at minimal cost.
Furthermore, digital tools have created new opportunities for micro, small, and medium enterprises (MSMEs). Online marketplaces and digital banking have helped many entrepreneurs scale their operations, reach global customers, and access credit. According to the International Trade Centre (2023), MSMEs in the Philippines, Myanmar, Jordan, Tunisia, Kyrgyzstan and several Latin American countries built or increased their capacity for using digital trade channels. For instance, women in Southeast Asia use platforms like TikTok and Facebook to sell their products, Indonesian Grab drivers use mobile apps for ride bookings, and small logistics firms rely on digital platforms to coordinate deliveries. However, it is important to note that many of these applications and software are developed in countries from the Global North.
While these tools bring benefits, significant barriers remain. Unequal access to the internet and digital devices, limited digital literacy, and dependence on foreign platforms or multinational corporations restrict MSMEs’ ability to thrive. The UNCTAD (2021) noted that half the world’s population still lacks access to reliable broadband, with the majority of the unconnected living in the Global South. Hindrances such as premium app features and irrelevant taxation also pose negative impacts. These factors risk reinforcing existing inequalities rather than eliminating them, especially in the absence of inclusive digital infrastructure, policies, and protections from exploitative systems.
The GPEDC’s 2022 Annual Report emphasized that inclusive partnerships with CSOs are essential for effective development, but also noted that this engagement remains weak in many digital initiatives. We advocate for systems that are inclusive, accountable, and transparent, not just efficient. Our call is for digital development to prioritize people over platforms, rights over profits, and local communities over multinational corporations. This means urging governments and institutions to rethink how aid and labor are delivered, and how development cooperation can be more genuinely effective.
We must invest in co-creating digital strategies with the communities themselves, rather than adopting ready-made solutions from other countries. This includes prioritizing data privacy, labor rights, and community-based digital literacy programs. More importantly, we must ask critical questions: Who decides which digital tools are used? Who profits from them? Is digitalization people-centric? What does meaningful inclusion look like — not just for middle-class merchants, but also for informal workers, digitally excluded individuals, and grassroots organizations?
The growth of digitalization across society will undoubtedly shape the future of aid, labor, business, and communication. But for development cooperation to be truly inclusive and accountable, it must avoid unintentionally deepening inequalities.
Institutions and governments must recognize that utilizing digital tools for efficiency cannot be their only consideration. They must critically examine how these tools affect people, both consciously and unconsciously, by analyzing the socio-political landscape: who builds the tools, who funds them, who uses them, and who is left behind. Only by centering the lived experiences of local communities, workers, and enterprises can we ensure that digital development truly benefits the people it claims to serve, not just bureaucracies, donor countries, international financial institutions (IFIs), or Big Tech entities.
This piece is contributed by Jann Trixy Velasco, an intern of Reality of Aid – Asia Pacific from the Philippines.