President, World Economic Forum
PHILIPPE LE HOUÉROU
Chief Executive Officer, International Finance Corporation
The Arab world is at a critical juncture. Ambitious economic and social reforms bring great economic promise to the region and at the same time we continue to see fragility and persisting inequalities that can potentially erode social cohesion. Within a rapidly changing geopolitical landscape, the world is moving from a unipolar system of governance toward a multipolar and multi-conceptual order grounded in competing sets of values and precarious friction points. In this context, much of the hope in the region rests on the imperative of constructing a social contract between the population and the state that is based on a more competitive and open economy, with a dynamic and entrepreneurial private sector offering employment prospects for the region’s youth.
The swiftly spreading Fourth Industrial Revolution—a dramatic change that involves a range of new technologies that are fusing the physical, digital, and biological worlds, impacting all disciplines, economies, and industries—provides new opportunities that can support growth. In this context, entrepreneurship and diversification will be key to enabling Arab societies to thrive and prosper in the coming decades. The Arab World Competitiveness Report 2018 presents a timely diagnostic of the competitiveness landscape in the Arab world and provides guidance about what can be done to boost competitiveness and economic and social progress in the region.
The report, which is the result of a long-standing collaboration between the International Finance Corporation (IFC), the World Bank, and the World Economic Forum, leverages the joint knowledge and expertise of each organization to present a shared policy vision to transform the region’s economies. It delivers detailed competitiveness profiles for 12 economies of the region, providing a comprehensive summary of the drivers of productivity and competitiveness in the Arab world. It also identifies strengths of the region’s economies country by country. Some improvements have been seen in investments in infrastructure and connectivity; the business environment and institutional quality that enables more private- sector investment; the relatively high levels of manufacturing and service exports in some of the region’s resource-poor economies; and the achievements of its leading entrepreneurs. Finally, the report highlights areas requiring immediate action to ensure that the societies and the private sector can thrive in a 21st century economy.
The previous Arab World Competitiveness Report, published in 2013, just two years after the Arab Spring, identified youth unemployment as a clear challenge that requires a range of efforts. To address those challenges, the World Bank Group has been focusing its work on areas that have the potential to accelerate job creation and economic growth. The World Economic Forum paid special attention to preparing the Arab youth for a changing work landscape through the New Vision for Arab Employment initiative. One manifestation of collaborative efforts for youth empowerment is the partnership between the World Economic Forum and the IFC to identify, support, and enable innovative entrepreneurs of the Arab world through the 100 Arab Start-Ups Shaping the Fourth Industrial Revolution initiative. We are also devoting a special chapter on entrepreneurship in this report to take stock of where we are today since the 2013 edition of the Arab World Competitiveness Report.
We hope that the 2018 Arab World Competitiveness Report will stimulate discussions resulting in government reforms that could unlock the entrepreneurial potential of the region and its youth and accelerate progress toward an innovation-driven economic model that creates productive jobs and widespread opportunities. This should be the basis of a new social contract that can support inclusive growth and shared prosperity in the region.