To accelerate growth and create jobs for millions of unemployed youth, MENA countries will have to develop a digital economy that takes advantage of its young and educated workforces. This will require the adoption of new technologies and even the provision of ¡°digital public goods¡± like fast and reliable broadband internet and digital payment solutions.
Countries in MENA possess all the ingredients they need to leapfrog into the digital future. Their well-educated youth have already adopted new digital and mobile technologies, but, this is still in its infancy, and young people in MENA face obstacles in putting technology to productive use.
Seizing the opportunities that the digital economy offers the MENA region will require a big push. Policymakers will need to work on multiple fronts, while making the best use of all available tools. The sooner they start, the greater the chance that today¡¯s young people can overcome economic exclusion and gain more opportunities to realize their¡ªand their region¡¯s¡ªfull potential. This report lays out the principles for a new digital economy for MENA that embraces innovation and entrepreneurship.
Chapter 1. The ¡°New Economy¡±: An Agenda for Youth and Women Economic Empowerment
Countries in the Middle East and North Africa have large, well-educated youth populations that have already adopted new digital and mobile technologies on a wide scale. They have a highly educated female population. That combination has immense potential to drive future growth and job creation. The question is whether the region can adapt to a new economic reality.
Chapter 2. The Middle East ¡°Middle Income Trap¡±
For developing countries, achieving middle-income status is both a blessing and a curse. While extreme poverty and deprivation have been overcome, what typically follows is a growth slowdown that, historically, has made further progress toward high-income levels exceedingly rare. That has certainly been the case for the largely middle-income countries of the Middle East and North Africa (MENA). The pervasiveness of the middle-income trap among MENA countries points to common structural impediments to growth. In particular, all suffer from a lack of private-sector dynamism, owing to their lack of will or ability to adopt the latest technologies. This has precluded sustained productivity growth, without which it is impossible to sustain an increase in overall living standards.
Chapter 3. Laying the Foundations for the New Economy: A Moonshot Approach
A new economic reality is needed in the Middle East and North Africa (MENA). And that new reality must emerge soon. In a region where the old social contracts are breaking down and hidebound economies fail to employ their most educated and potentially highly productive workers, a gradualist approach to change is not viable. Instead the region requires an all-in effort, akin to the one the United States undertook after it decided in the early 1960s that it wanted to land a man on the moon. Such a MENA ¡°moonshot¡± can unite people behind a common goal and transform the ways in which governments, companies, international financial institutions and civil societies conduct business. It would transform MENA economies and help to ensure that millions of the region¡¯s young people can find the good jobs they deserve.
Chapter 4. Internet in the Middle East and North Africa
Digital infrastructure in MENA lags that of other emerging regions. Internet speed is slow. Prices, while lower, remain high. Too few users have high-speed internet. Many internet markets in MENA countries have monopolies or entry barriers. Severe barriers exist in the markets that provide internet infrastructure, which limit innovation across the whole internet value chain. They limit data centers, constrain data intensive businesses, and hurt the overall environment for a data-driven economy.
Chapter 5. Rekindling the Role of State in the Middle East and North Africa
Arab countries should try to inculcate a culture of ¡°value for money¡± and promote the emergence of independent, yet accountable, regulators and rely less on the state to rejuvenate their economies and ease inequality.
Regional Economic Outlook:
Economic growth in the Middle East and North Africa (MENA) region is expected to rebound to an average 2.0 percent in 2018 from an average 1.4 percent in 2017. The mild rebound in regional growth reflects the positive impact of reforms and stabilization policies undertaken in many countries in tandem with the recent pick up in oil prices and external oil demand. Economic growth in the MENA region is forecast to improve modestly, reaching an average of 2.6 percent in 2019-2020. Oil exporters will significantly benefit from higher oil prices and external oil demand that will likely remain high, as well as domestic reforms. Oil importers are expected to benefit from reforms, rising trade with the Europe and China, and financial inflows from MENA oil exporters.
While overall growth appears robust, the pace of the economic recovery in the region is still sluggish. Challenges¡ªincluding the slow pace of reforms, a temptation to return to pro-cyclical fiscal policies in the wake of higher oil prices, rising debt levels, and high unemployment rates among youth and women¡ªstill exist and, if not addressed, could deter economic recovery and hamper long-term growth prospects in the region.
Economic prospects for:
Algeria | Bahrain | Djibouti | Egypt | | Iraq | Iran | Jordan | Kuwait | Lebanon | Libya | Morocco | Oman | Palestine | Qatar | Saudi Arabia | Tunisia | United Arab Emirates | Yemen |