Internal reforms are essential, aiming to restructure existing organizational structures to improve efficiency, accountability, and inclusiveness. In recent years, the Arab region has witnessed remarkable efforts to enhance transparency and anti-corruption standards in public and private institutions. Although reform programs have shown some progress according to Transparency International, reports indicate that countries in the region still need structural changes to achieve the desired progress.

The reforms required by these reports must address the current labor market conditions and skill requirements of the Arab world’s workforce. According to the United Nations Development Program, although 70% of the region’s population is connected to the internet as of 2022, only 1.7% possess the advanced technical skills needed to handle modern digital jobs, such as programming, data analysis, application development, and cybersecurity. It is worth noting that in 2023, the youth unemployment rate in the Arab world reached about 25%, which is one of the highest rates in the world. More than 100 million young people are expected to enter the labor market over the next decade, which in turn will put additional pressure on Arab governments to provide job opportunities and develop their economies to keep pace with growing needs.

On the other hand, modernization aims to enable Arab economies and societies to integrate into the global context through innovation and technology. Investment in renewable energy is a prominent example of modernization. In the Arab world, countries such as the United Arab Emirates, Egypt and Morocco have made remarkable progress in this field, such as the Masdar, Benban and Noor Ouarzazate projects, as prominent global projects.
Despite these efforts, the Arab region is still lagging behind in realizing its renewable energy potential. According to a report issued by the International Renewable Energy Agency (IRENA), the solar energy production capacity in the Middle East region reached about 12.9 gigawatts in 2022, a number that is almost equal to the capacity of France.

Along with renewable energy, economic diversification is a key element of modernization. Historically, many Arab countries have relied heavily on oil, making their economies vulnerable to price fluctuations and the global transition to a low-carbon economy. It has become important for Arab countries to develop their vital sectors such as technology, tourism, and agriculture as a necessary step to reduce dependence on oil revenues and build more balanced and sustainable economic models. The Suez Canal Economic Zone is a model for such projects that focus on developing infrastructure, improving logistics, attracting investments, and localizing industries.

Overall, both domestic and modern reforms require strong legislative frameworks to support innovation, achieve justice, develop transparency, and reduce corruption. Modern economies need flexible legal systems that protect intellectual property rights, ensure the highest levels of data security, and improve their attractiveness to foreign investment. The comprehensiveness of reforms is crucial to meeting the needs of marginalized groups, engaging all components of society, and ensuring equal opportunities.

Digital transformation, by its very nature, is an important axis for integrating internal reform and modernization. The rapid pace of adopting digital technology in education, health, and trade has contributed to qualitative transformations in these sectors. Initiatives such as the digital strategy in Egypt and the smart government program in the UAE have emerged as striking models that focused on building internal capabilities and enhancing global competitiveness. However, the expansion of digital transformation projects has become necessary for further internal reforms and modernization to keep pace with issues of cybersecurity, digital privacy, and raising the level of technological awareness to ensure the comprehensiveness of its benefits.

Overall, the challenges remain significant. Many Arab countries are suffering from high levels of debt, inflationary pressures, and demographic changes that are straining public services and eroding public confidence. In addition, the region is suffering from geopolitical instability and risks related to climate change, which further complicate the situation and undermine the ability of countries to achieve stability and development.

However, these challenges present great opportunities, as the Chinese philosopher Sun Tzu described in his book “The Art of War”: “Out of chaos, opportunity is born.”
The demographic shifts in the Arab world represent vast opportunities and prospects. Population growth projections indicate that the region’s population will exceed 500 million by 2050. If Arab countries can properly plan their societies and engage them in driving development, this will be a tremendous driving force. Reform and modernization programs must focus on investing in education, health care, and entrepreneurship to transform young people into drivers of innovation and development.

On the other hand, the current changes in global supply chains present an additional opportunity for the Arab world. As countries seek to diversify their trading partners and reduce reliance on traditional sources, the region could emerge as a major hub for global trade thanks to its strategic location and emerging infrastructure. Expanding intra-Arab trade could also enhance Arab and regional economic integration.

Ultimately, the success of reforms in the Arab world depends on the ability of countries to understand the importance of integrating the two basic concepts of reform: internal reforms are concerned with providing the necessary foundation for stability and inclusiveness in national institutions and structures, while modernization reforms focus on stimulating competitiveness and supporting innovation to meet the requirements of the digital age. Combining these two paths will enable Arab countries to formulate an effective roadmap for achieving sustainable development and ensuring a stable future for the region.