Stability through sustainability

The Middle East must take a more strategic view of its investment strategies and focus specifically on the urgent creation of new job opportunities for its people. This is key to our survival into the future.

To address the challenges we face across the Middle East and North Africa region, particularly post the so-called Arab Spring, we must recognise that job creation is perhaps the only path to meaningful, long-term sustainability which, in turn, allows room for the stability we so desperately seek. All other approaches take a dangerous, short-term view and, by failing to address the underlying issues, contribute to the problem, not the solution.

The International Labor Organisation’s 2014 report puts unemployment across the Middle East at 11.5 percent, the second highest in the world. That fact alone should get our collective alarm bells ringing and, when we factor in population growth rates, the need for urgency becomes painfully obvious.

Infrastructure development, including building roads, ports, railways and other transportation networks, is a quick, easy way to create large numbers of new jobs. A well-developed infrastructure that will allow, even facilitate, economic activity and subsequent growth is an added bonus and a welcome by-product of such development. Jobs right now, and potential for accelerated growth in the near future. It sounds ideal.

Such infrastructure development, however, requires very significant investments – by some accounts, more than US$1 trillion across the MENA region over the next few years alone.

If we don’t, we will be looking at a prolonged state of chaos across the region as we struggle to come to terms with the new realities of a post Arab Spring Middle East.

Khalid Abdulla-Janahi

Ironically, Arab nations have more than twice that invested abroad. Even more ironically, these investments bring almost negligible financial returns and even less socio-economic benefits. Instead of competing with one another on who owns more hotels abroad, perhaps we should consider using at least some of that wealth to help develop our own region and create sustainable growth and, by extension, social and political stability.

MENA nations with surplus cash should reconsider their investment strategies and seriously consider infrastructure development in countries like Egypt, Syria and other so-called Arab Spring countries. This will go a lot further to contributing to long-term sustainability and, subsequently, stability, than propping new government systems by pumping cash and other financial aid.

One possible approach is to establish a MENA equivalent of the European Bank for Reconstruction and Development (EBRD), a multilateral development bank that uses investment as a tool to help build market economies. Like in the EBRD example, the United States could be the largest shareholder and use some of the excess Arab cash currently invested in the US, be it $20 billion a year or $50 billion a year, to invest in sustainable development across the MENA region.

If we don’t, we will be looking at a prolonged state of chaos across the region as we struggle to come to terms with the new realities of a post Arab Spring Middle East.

Khalid Abdulla-Janahi was elected Vice Chairman of WEF's Arab Business Council (2003 to 2007). He was also the Co-Chair of WEF's Global Agenda Council on the Middle East up to 2011. He is the Group Chief Executive of Dar Al Maal Al Islami, a Chairman of Solidarity Group Holding and the Chairman of Naseej. Khalid is based in Geneva.

Last Update: Wednesday, 20 May 2020 KSA 09:48 - GMT 06:48
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