Countries in the Arab world have long failed to create enough jobs for their growing working-age populations. Accordingly, with roughly 300 million people under the age of 24, the Middle East and North Africa (MENA) continue to suffer from a youth unemployment crisis. The socio-economic problems resulting from this have contributed to the violent conflicts and civil strife that continue to shake the region.Many Arab countries have long depended on hydrocarbons, but increasing access to the internet could provide the foundation of a new economic future. As governments across the region roll out economic diversification strategies, its technology sector – and its tech-savvy, often unemployed young people – has the potential to transform the economy.
A digital transformation of this kind could empower current and future generations, providing them with much-needed job opportunities and new forms of civic participation. Indeed, the World Bank has called on governments in the MENA region to launch a “moonshot” – a reference to the United States’ space-flight programme in the 1960s and 1970s – that will “liberate the digital futures of their millions of tech-savvy youth”.And there have already been successes in the Arab world’s technology sector, albeit on a relatively small scale. Ride-hailing app Careem and online marketplace Souq – which Uber and Amazon recently bought for $3.1bn and $580m respectively – have put the Middle Eastern technology industry on the map for global investors. The introduction of 5G across the region promises to open a new digital frontier.
Nevertheless, digitisation – the use of digital technologies to transform business practices and everyday activities – faces numerous challenges. Although both the use of smartphones and internet penetration rates have increased drastically in the past decade – reaching more than 65% of the region’s population, according to some estimates – this has not yet translated into digital jobs. And, despite all the hype, 5G may not turn out to be the positive game-changer many observers hope.Digitisation is a double-edged sword. While they can improve transparency and accountability, new technologies can also provide authoritarian regimes with new means to monitor citizens and crack down on dissent. Moreover, digitisation is entangled with geopolitics. As the US-China trade war and Russian interference in the 2016 US election illustrate, the battle for technological supremacy is a deeply political affair, particularly in relation to 5G. The Arab world is emerging as a key battleground in both respects.
Different countries, notably the United Arab Emirates and Jordan, in the region have stepped up their digitisation efforts in recent years. The UAE, the main hub of the digital economy in the Arab world, aims to become a global centre of technological innovation. Jordan, one of the region’s early movers in technology startups, has also allocated significant resources to boosting economic growth through digitisation and created the Arab world’s first digital economy ministry. Both countries are strategic allies of Europe and the US, with Jordan forming an important part of the European Union’s Neighbourhood Policy. The EU has a strong interest in stabilising the MENA, particularly in preventing the emergence of terrorist groups and conflicts close to their borders. Contributing to the region’s economic success – through measures such as stabilisation funding, aid, and youth employment initiatives – is a key component of this effort.
Given that supporting the Arab world’s digital economy is an important and under-explored element of the process, the EU should give greater thought to how it can support digitisation in the MENA, as well as further integrate this into its development policies. The EU should use its position as a global leader in regulation to help countries in the Arab world build policy frameworks that will strengthen the digital economy. The bloc should also increase its funding for capacity-building programmes in the region, aiming to provide young people with the latest digital skills. And the EU should also reassess the role of European tech companies that have supplied cyber-surveillance tools to Arab governments.
The EU’s support for digital transformation in the Arab world goes hand in hand with the new agenda of the European Commission. It also complements various strands of the foreign policy of the bloc and its member states, including those focused on stabilisation and conflict prevention in the MENA.European countries that have long supported economic development in the Arab world, such as Germany and France, should expand their existing work on digitisation. They could do so by, for example, funding training centres that provide digital skills to citizens in the region or set up a fund for digital innovation projects. The German Society for International Cooperation should adapt its support for the dual study programme in Jerusalem to other parts of the region, including by providing courses specifically designed for refugees and internally displaced persons.
It is in the EU’s interest to develop the digital economies of Arab countries, especially given their potential to boost regional employment rates, improve socio-economic stability, and reduce the incentives for people to migrate to Europe. A more productive digital ecosystem could encourage circular migration to the Middle East and North Africa by young, tech-savvy Arabs who currently work in Europe, enabling them to contribute to the Arab world’s digital transformation. Europe’s support for digitisation also aligns with that for democratisation and political empowerment in the Arab world. In many ways, the EU and its member states can play a crucial role in digital transformation in the region, building on their existing initiatives to support economic development and empower young people.
‚Digital Stability: How Technology Can Empower Future Generations in the Middle East‘ – Policy Brief by Manuel Langendorf – European Council on Foreign Relations / ECFR.
The Policy Brief can be downloaded here