The World Economic Forum’s (WEF) Middle East head believes it is “highly likely” that another startup like the ride hailing firm Careem will emerge from the United Arab Emirates.
“You really have access to capital here if you are a good company, which is important … and there's, of course, many other opportunities in the digital economy, so I'm quite optimistic,” Mirek Dusek told Al Arabiya English in an exclusive interview.
Dusek is the regional head of affairs for the WEF, a not-for-profit organization best known for hosting the annual Davos economic summit, which brings together thousands of political leaders, business heads, and economists.
To boost entrepreneurship in the Middle East region, WEF has spearheaded a biannual event, where top 100 Arab startups are given a chance to pitch their ideas to government and business leaders.
“So, through that I can tell you that we have seen an immense growth in the ecosystem overall … what is positive is that you see local players becoming venture capitalists,” Dusek said.
He also added that more family business owners were investing in startups through different vehicles.
MAGNiTT, a firm that tracks the region’s start-up activity, had reported earlier that funding across MENA-based startups jumped 66 percent in the first half of 2019, compared to the same period last year.
This has clashed with the GCC’s emergence as a business-friendly region. In the World Bank’s latest Ease of Doing Business index, Jordan, Bahrain, and Kuwait were on the list of top ten improvers.
But Saudi Arabia was the standout performer with a 30-place jump on the index as economic and legal reforms implemented under the Vision 2030 program came into effect.
“The big story, of course, is also Saudi Arabia where there is an explosion in a positive way of funding going into startups,” Dusek said.
Economic collapse in the Levant
Elsewhere in the Middle East, the situation has become dire.
Lebanon, which is witnessing its worst protests in over three decades, is on the verge of a total economic collapse.
In Iraq, thousands are on the streets calling for political reforms and the end of Iran’s influence on their government.
Except for the GCC, “economic integration has been … very hard to accomplish in the Middle East, particularly in the Levant,” Dusek said.
Referencing the countries suffering from economic instability, the “can has been kicked down the road … and now we’re seeing the manifestation of that fact,” Dusek said.
He calls for the free movement of data between MENA countries, in order to set up the foundation of a digital economy and encourage the emergence of startups in that space.
OECD countries need to re-think the way they provide budgetary support to some of the countries in the region, Dusek added, who sees an opportunity for developed nations to work directly with regional firms and startups through VCs focused on making a social impact.
“We have … countries that are quite stable, with good numbers economically, that are thinking about the future … and there are countries that have just not been very agile and would need to really respond to some of the societal grievances that they’re facing,” he said.