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WEF: Youth Unemployment, Inequality and Climate Change Top Challenges Facing MENA

WEF: Youth Unemployment, Inequality and Climate Change Top Challenges Facing MENA

Maroun Kairouz unveiled plans to open 2 new 4th industrial revolution centers in the region
Monday, 23 May, 2022 - 05:15
Participants gather at the 51st annual meeting of the World Economic Forum (WEF) in Davos, Switzerland, 22 May 2022. EPA/GIAN EHRENZELLER

Running the team that manages the WEF’s relations and initiatives with the Middle East and North Africa, Maroun Kairouz has a busy portfolio on his hands.

After a two year hiatus, the WEF is holding its first in-person meeting in Davos since the start of the pandemic. “The meeting couldn't be more timely”, Kairouz says in an exclusive interview with Asharq Al-Awsat.

The theme the WEF has chosen for this year's meeting is “History at a turning Point”. “The world is facing a confluence of multiple crises that all require different remedies”, Kairouz explains, before he goes on identifying three overarching challenges the world is collectively facing today.

The war on Ukraine, being the first challenge, is a “one-off shock” to the global economy and to the international system. The second challenge according to kairouz, is the Covid-19 pandemic “which is still ongoing as recent events in China have shown, and which requires a different approach”. The third and more “slow-burning challenge, but not less pressing”, is the climate change agenda. “Various expert reports have warned that the window for action is narrowing, and highlighted the need to accelerate progress, if we were to limit warming to 1.5 degrees Celsius”.

Goals of the May meeting

The WEF praises itself on fostering dialogue by bringing together leaders “from different backgrounds, sectors and industries”, and helping make progress on some of the world’s most pressing issues through the sense of community.

In order to illustrate how the WEF brings together public and private sectors to come up with innovative solutions to global problems, Kairouz cites an initiative the Forum undertook alongside US Special Envoy for Climate John Kerry. “Working with Special Envoy Kerry during the COP meeting (in November), we brought together a coalition of 30 companies from “hard to abate industries”, such as aviation and shipping, that committed to store a certain percentage of their purchasing from sustainable sources. That creates a demand signal to innovators indicating that demand is going to be there in the short and medium terms”. He continues: “This way, if you are a nascent company or an innovator working for on sustainable fuels for airplanes, for instance, then it gives you the confidence that some of these big companies are going to want to work with you in the future”.

“We are looking to expand that coalition to more regions and more sectors, including the launch of a community of leaders for sustainability in the Middle East. That is just one example of how we bring the private and public sector together, and help them advance impact on some of those issues”, Kairouz adds.

Deep-rooted ties

Like every year, the 2022 annual meeting will host dozens of leading business and political leaders from the Middle East and North Africa. These will include the Emir of Qatar Sheikh Tamim bin Hamad Al-Thani, the President of Israel Isaac Herzog, the Tunisian Prime Minister Najla Bouden, the Palestinian Prime Minister Mohammad Shtayyeh, as well as big delegations from Saudi Arabia led by Minister of State and Member of the Cabinet of Ministers Ibrahim Al Assaf, the UAE led by Minister of Cabinet Affairs Mohammad Al Gergawi, Kuwait led by the Minister of Foreign Affairs Ahmed Nasser Al-Sabah, Egypt led by Minister of Foreign Affairs Sameh Shoukry, and Morocco led by Minister delegate in charge of investment Mohcine Jazouli.

There will also be a sizeable representation from the business world, including around 60 CEOs from some of the biggest companies based in the region, like Saudi aramco, Mubadala, Agility, DP World, Majid Al Futaim and others.

The WEF has traditionally enjoyed deep-rooted relations with the MENA region, which have resulted in a number of initiatives and collaborative efforts over the past few years.

Central to these initiatives are the Centers for the Fourth Industrial Revolution in the region, "which help governments and the private sector govern and regulate new technology", says Kairouz. He adds: “We have three centers open. One in Riyadh, the other in Dubai and the third in Tel Aviv. And we're hoping to expand to more centers”, unveiling that “in the course of the annual meeting, the WEF is hoping to announce additional centers in the region, potentially in Manama and in Doha”.

Another effort Kairouz chose to emphasize is the “regional action group” which was formed in April 2020 at the outset of the Covid-19 pandemic. “This group includes ministers, CEOs and academics from across the region. Its purpose was to create a space for peer exchange and debate, as well as peer learning and updating in the wake of the Covid-19 crisis”.

“Our first meeting was chaired by Mohamed Al-Jadaan, Minister of Finance in Saudi Arabia, who had the opportunity to share the plans and measures Saudi was planning to take before (the spread of) Covid with the business community. That allowed business leaders in Saudi Arabia to prepare themselves accordingly”.

The action group used to meet once every four to six weeks, throughout the pandemic, to make sure these information channels are open, according to the WEF official.

Challenges and opportunities

When asked about the collective challenges facing the Middle East and North Africa, Kairouz chose to identify four different issues he believes are crucial to the growth and stability of the region.

“On the long term, I think the key challenge the region will face is climate change. It's not immediate, but if we look at the numbers, experts predict the Middle East will warm at twice the rate of the rest of the world”.

“In Kuwait for example, temperatures are expected to grow by 4 to 4.5 degrees Celsius, by 2050. That means parts of the Gulf will become practically unlivable”.

Despite this rather bleak outlook, the WEF official sees reasons for hope. “I think that having the next two COP summits hosted by Arab countries, Egypt and the UAE, as well as the Green Initiative that Saudi Arabia is leading, are strong signals that the region is now taking this issue seriously”.

Another challenge that is more short-term, is youth unemployment, which Kairouz connects to skills, education systems, and the digital divide.

“There is the potential, according to some studies at least, that accelerating the digital transition could boost GDP per capita by 46% by 2030”. That said, there are variations within the region. “For instance, there are countries who are 5g Pioneers, others who are not as advanced”.

But Kairouz sees real potential for the region, “if its turns its young people into an opportunity, and gives them the tools that they need to succeed in the digital economy”.

Connected to that is the role of women. Last year, the WEF published its gender gap report, which found that on current trends, it will take 142 years for the region to fully close the gender gap.

“Efforts are of course being made”, says Kairouz. “Look at Saudi Arabia, the UAE, Jordan, Tunisia, and Morocco. Progress is being made, but it needs to be accelerated and synergized much faster”. He adds: “We can't catch up if half of our population is excluded from economic activity”.

One other challenge is inequality. Some studies show that 10% of the region's richest people have 56% of its income, according to Kairouz. “If you combine that with the food crisis, you start to understand some of the roots of unrest in many of the countries in the region”.

“We are starting to see action on this side, where countries are starting to replace subsidies with direct transfers. The citizens’ account in Saudi Arabia overseen by the Ministry of Finance is an example of a step in the right direction to address this aspect”.

Kairouz believes that the reform momentum today “is mostly concentrated in the GCC. Whereas you see in some other parts of the region, particularly in the Levant, there are still insecurities, conflict, direct impact of climate dynamics, and food insecurity. Reforms need to be accelerated”.

Economic diversification

In regards to the reform agenda that many countries are undertaking in the region, Kairouz says that “in oil-producing or hydrocarbon-exporting economies, especially in the Gulf, I see commitment to reforms. The privatization schedules are going according to plan in most countries. You see initiatives in manufacturing, technology, 5g rollout”.

He notes that despite the temporary measures that had to be taken during Covid and the increase in oil prices, countries like Saudi, the UAE, and Qatar are sticking to their economic diversification policies.

On the other hand, he expressed deep concern about other countries in the region, “which are also in a way oil-addicted, even if they don't produce it, because they depend heavily on remittances. And there has been a remittance shock caused by Covid as well”. He continues: “There, we need to see a quicker transformation of the economic models, if they want to succeed”.

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