It is not a surprise that, since some years, the 4IR – Fourth Industrial Revolution – has been changing the production systems and, de facto, global economies. The most impressive and disruptive component of the 4IR lies in Artificial Intelligence (AI). This technology is destined to play a crucial role and to be a game-changer worldwide, with an estimated contribution to the global economic output of $15.7 trillion in 2030. To be clear, it is almost the sum of the current GDP of China and India.
The immense opportunities that AI can bring about have not been missed by Middle Eastern policymakers and businessmen, aware of the necessity to give a fresh restart to their stagnant economies. Indeed, the Middle East is experiencing several hitches, such as weak education systems, bureaucratic hurdles, high youth unemployment, and the lack of funding for new start-ups. These issues are seriously undermining the economic development of the region.
It is worth noticing that, according to the World Bank, the growth rate of the MENA region grew very slightly in 2019 and even less in 2020. In addition to the urgent necessity to diversify the economy, still excessively dependent on the hydrocarbons sector, Arab leaders also have to find a solution to the dramatic unemployment, particularly severe among the youth, that hits the region. Let’s consider that, in the Middle East, the category ‘under-24’ amounts to 300 million, two out of three people. According to the World Bank and to the ILO (International Labour Organisation), the unemployment among 15/24-year-old people was 26.2% in 2019.
Finally, the long-protracted attitude to view the public sector as the main source of investment and employment to stimulate the economy has severely damaged the private sector and constrained private investment. If the Arabic leadership desires to maintain sustainable development in the future, it shall create at least 300 million jobs by 2050. Only in this way, it can address the pressing occupational need.
All these troubles can however find a solution in the development of AI, whose tremendous potential can overcome the destiny of the region. It implies a digital transformation likely to translate into job opportunities and civic participation. According to a recent study, the Middle East can potentially grasp 2% of the total economic impact that AI will produce by 2030: it means $320 billion. In particular, in 2030 AI is likely to generate $135.2 billion for Saudi Arabia (12.4% of GDP), although the greatest recipient in relative terms is the UAE (United Arab Emirates), with $96 billion (13.6% of GDP).
Despite some appreciable developments in this field, such as the investment recently performed by Uber and Amazon, and the introduction of the 5G have opened the door to the emergent Arab technology market to greater foreign investments, digitalization – intended as the use of technology to develop business activities – has been advancing with fatigue in the region.
Indeed, although Statista estimated that in 2019 the internet penetration rate in the Middle East is 67.2% – considerably higher compared to the global average (56.5%) – this potential record has not yet transformed into job opportunities. According to a study of the World Bank, Arab young people suffer from stringent State control and over-regulation that prevent them from keeping pace with the West. Accordingly, the MENA region is experiencing a paradox: millions of skilled and active youth, with more technological devices than everyone else, spend their time on social media rather than using the internet to create and develop businesses.
To address this ‘market failure’, Arab leaders should take immediate and urgent measures to turn this potential into job opportunities and economic growth. Firstly, they should modernize the internet infrastructure and improve the bandwidth to provide an up-to-date and fast internet connection, especially in depressed areas. Then, they should reformulate the old and ineffective regulatory body and allow for digital money transfer, creation of online start-ups, smart online bureaucracy, etc.
Besides, there are other aspects to be considered. For instance, it is widely assumed that large access to the internet provides people with more civic opportunities and helps to push governments to become more transparent and accountable. However, this belief does not always match reality. Indeed, the internet is an excellent tool at the disposal of regimes to increase their authoritarian rule, to better monitor citizens, and tackle dissent.
Arab monarchies often see the internet as a gate to move to the next stage: digital authoritarianism. Digital rights expert Hanane Boujemi posits that MENA leaders are increasingly taking advantage of the internet to illegally control people, using spyware as well as automated surveillance software, and strictly monitor domestic data flows, not to talk about disinformation and propaganda. For instance, in 2018 Egypt introduced a scandalous cyber-security law to black out hundreds of websites, a huge part of them consisting of news websites.
However, if the internet quality will improve, people will likely have new tools to fight against oppressive regimes: for instance, profiting from a greater information flow and secure communication channels to organize civic mobilization provides safe meeting points for persecuted minorities. Furthermore, young people could progressively use virtual ‘squares’ to hold public forums of discussion and increase the likelihood of political participation. Last but not least, the internet has been proving crucial to communicate abroad and denounce the abuses and actions of their governments.
Will the Middle Eastern future be a brighter one? Let’s see what’s coming.
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