Abu Dhabi

Source: mufakiru Alemarat

Dr.. Ali Mohamed Al Khouri

The field of the global digital economy has witnessed great development, especially after the “Covid-19” pandemic, and it has been able, with its contemporary mechanisms, to achieve qualitative leaps, compared to the traditional economy that relies on classical models and activities. Today, digital markets have become more attractive to millions of users around the world, especially in light of the outbreak of conflicts, international disputes, and global crises that have made traditional trade through the usual channels very difficult and restrictive, and unable to compete with the presence of shipping, transportation and production obstacles, and the low level and fluctuation of demand in global markets.

International reports confirm the significant growth of the digital economy in the past decade, and its numbers have multiplied remarkably. While the World Bank report (2022), on technology and the digital economy, indicates that national “digitization” projects in the countries of the Middle East and North Africa region will contribute to an increase in per capita GDP by no less than 46 percent over a period of 30 years, or what equivalent to 1.6 trillion dollars, which are direct economic effects; As for the indirect effects of digital development, they can be estimated at five times the direct effects.

This expected increase will be driven by digital transformation projects and the capabilities of available digital technologies, which will expand access to markets, provide new economic opportunities, as well as enhance production capacity and raise its efficiency. In our view, this could lead to the creation of more than 50 to 100 million jobs for young people at a critical time in the region, when the youth unemployment rate is twice the global average.

The World Bank report indicates a digital paradox in the countries of the region that should be noted. Despite the wide spread of the Internet among its population – which amounts to 66 percent – digital financial transactions are still very low at the level of 32 percent, with this percentage varying in the countries of the Cooperation Council for the Arab States of the Gulf.

The report highlights the importance of enhancing societal trust in government institutions and companies, in addition to redesigning regulatory regulations and policies that may prevent digital transformation projects from achieving their goals. This is one of the general and possible reasons that may motivate the rise in the low rates of use of digital technology in financial transactions.

What government policy makers in the Arab region should pay attention to is drawing up large-scale development plans to attract more investments in the digital economy and digital transformation. With the aim of “mechanizing” the main and subsidiary joints of the economy, and taking reform measures to enhance economic resilience; By developing legislations and laws that are able to enhance the incubating environment that is commensurate with the requirements of developing the digital economy and sustainable digital development, and that can compete in the global market that has no mercy on those who are left behind or slow in progress.