Dubai: Middle East and North Africa (MENA) wide economic integration, which includes addressing regulatory framework and collaboration opportunities, could unlock nearly $1 trillion in additional GDP growth, UAE retail giant Majid Al Futtaim has said in a report released during the World Economic Forum (WEF) in Davos.
The report, Picking up the Pace of Change: Opportunities to Accelerate Economic Integration across MENA, identifies key factors influencing integration, such as the flow of goods, capital, people, and data.
The report also highlights the initiatives designed to stimulate investments and trade against other regional blocs, highlighting collaboration opportunities for private and public sectors to drive greater economic growth.
Ahmed Galal Ismail, Chief Executive Officer at Majid Al Futtaim, said at the WEF, said, “Despite facing global and regional challenges, the MENA region is seeing rapid growth and economic improvement. Yet, with its share of world GDP at 3.3 per cent falling short of its 4.2 per cent global population share, bridging this gap could unlock nearly $1 trillion in additional GDP, fuelling the region’s aspirations.”
‘Golden age for the region’
Ismail said, “250 years since the first industrial revolution, the region has been trying to play catch-up with the rest of the world. The economic transformation Saudi Arabia, Egypt, and the UAE is undergoing puts us at a unique point in history. The next quarter century is more consequential than the last quarter millennia.” The MAF CEO said the UAE, Saudi Arabia and Egypt are at the cusp of a new golden age for the Arab world.
“Scale, momentum, and the ease of doing business means that we could be looking at a golden economic age for the region,” he said.
He also said that the role of the private sector in driving regional growth is critical to the collective success of all who inhabit the MENA region.
Data from the report shows that while intra-regional trade in MENA has grown significantly since 2016, it accounts for just 14 per cent of total global trade and 16 per cent of Foreign Direct Investment. Approaching ASEAN’s benchmarks of 19 per cent and 18 per cent in these areas could potentially unlock an additional $9 billion in FDI for MENA.
Reduce brain drain
“Additionally, the region must concentrate on developing regional talent and job creation, crucial for reducing the ‘brain drain’ to Europe and North America,” said Ismail.
However, Dr Rania Al Mashat Egypt’s Minister of International Cooperation, who was also at the session, said governments are investing heavily in youth upskilling and reskilling to achieve economic integrity,
“There is so much we are doing with multilateral development banks (MDSs) and bilateral agencies to skill, reskill and provide financing at a concessional rate to the private sector. There are so many programmes which have been tailored to create skilled youth. In the case of the start-up ecosystem, our region exports a lot of talent to the UAE and Saudi Arabia,” said Dr Rania. She added, “Of course, reform is an ongoing process. It has no finish line.” She said public-private sector integration is critical to the collective success of all who inhabit the MENA region.
That said, Hatem Dowidar, CEO of e&, said the MENA region has the advantage of a very young population. “The endorsement of new technology within that region has been high. We see that in UAE, Saudi Arabia, Egypt, Morocco and elsewhere, graduates who are technically sound wish to join the new frontier – like AI.”
He said e& has been hiring 100 new graduates working on AI in the UAE every year. “But there is huge competition to get to that 100, showing an abundance of talent,” said Dowidar. He explained that economic integration will drive the need for scale and provide more opportunities for job seekers across various frontiers.