Promoting a New Economy for the Middle East and North Africa
Countries in the Middle East and North Africa (MENA) possess all the ingredients they need to leapfrog into the digital future. They have large, well-educated youth populations that have already adopted new digital and mobile technologies on a wide...
| Main Authors: | , , |
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| Format: | Essays |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/781781561575850158/Promoting-a-New-Economy-for-the-Middle-East-and-North-Africa http://hdl.handle.net/10986/31984 |
| Summary: | Countries in the Middle East and North
Africa (MENA) possess all the ingredients they need to
leapfrog into the digital future. They 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. Public spending, the region's
historical engine of development, has reached its limit.
Because the public sector can no longer absorb the swelling
ranks of university graduates, the MENA region has one of
the world's highest rates of youth unemployment. For a
variety of reasons, many of them cultural, highly educated
women stay home. The female labor participation rate is
among the lowest in the world. The digital economy holds the
promise of a new way forward, but it is still in its
infancy, and young people face obstacles in putting
technology to productive use. Although the internet and
hand-held devices are ubiquitous throughout the region, they
are currently used for accessing social media, rather than
for launching new enterprises. But there are green shoots
emerging. For example, the ride-hailing app Careem has grown
from a start-up to a billion-dollar company, creating
thousands of jobs in 80 cities in the MENA region and in
Pakistan and Turkey. And new digital platforms are already
connecting job seekers and employers, providing vocational
training, and hosting start-up incubators. The challenge now
is to create the conditions for these green shoots to grow
and multiply. The first, essential step is for MENA
countries to become "learning societies," a phrase
coined by the Nobel laureate economist Joseph E. Stiglitz to
describe countries in which shared knowledge leads to
increased innovation. This, in turn, fosters development;
and in the case of MENA, it could lead to the creation of a
vibrant digital service economy. To get there, education
systems must change. For the region's young people, the
curriculum is more often a source of frustration than
advancement. The concept of a "skills premium" —
the difference in wages between skilled and unskilled
workers—dictates that higher educational attainment should
lead to higher compensation and more secure employment. Yet
in the MENA region, the opposite has happened: university
graduates are far more likely to be unemployed than are
workers with only a basic education. Two factors work
against the region's young people. First, schools are
still geared toward channeling graduates into large public
sectors, which means they place less emphasis on fields such
as mathematics and science. Second, bloated public sectors
are crowding out the private sector, which would otherwise
be a larger provider of high-skill, high-wage jobs. |
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