The “Future of Fintech” conference “Advancing economies in the post-Covid 19 world”

Date: 19 - 10 - 2020

During the “Futures of Financial Technology” conference

Dr. Ali Al-Khouri: The digital economy would contribute $3 trillion to Arab GDP if governments adopt accurate and comprehensive strategies

The contribution of the global digital economy is currently $12 trillion.. It is expected to rise to more than half of the GDP in 2023

Advisor to the Economic Unity Council presents 5 recommendations for policy-makers to take into account in short and medium-term plans

Dr. Ali Muhammad Al-Khouri, Advisor to the Council of Arab Economic Unity of the League of Arab States, and President of the Arab Federation for Digital Economy, delivered a speech during the activities of the “Future of Financial Services Technologies” conference, which was held under the title: “Advancing economies in a post-Covid 19 world” during my two days. October 19 and 20 sponsored by the Saudi Arabian Monetary Agency and the Group of Twenty within the program of international conferences held as events accompanying the year of the Saudi presidency of the Group of Twenty, with the participation of elite local and international speakers in the financial sector, and more than 4,000 participants.

Al-Khoury started a talk highlighting the increasingly important digital economy and ways to employ it to overcome the Covid-19 crisis, noting that the contribution of the digital economy constitutes about $12 trillion, representing 15.5% of the global GDP, and its contribution is expected to rise to more than half through 2023, driven by digital transformations in organizations, products, and services.

Then, Al-Khouri reviewed the indicators of the digital economy in a number of major economies of the world, saying: “The digital economy constitutes about 22% of the GDP in the United States of America and about 30% in China, and the percentage increases or decreases somewhat in the European Union countries, Therefore, we meet today with the global view of the digital economy as one of the most effective drivers of innovation and growth, as well as generating a multiplier effect in value chains in various sectors, as for example, the digital economy in China succeeded in providing about 200 million jobs in 2018, according to official data.”

He added: “As the conversation goes to our Arab region, we find that our study indicates that the size of the contribution of the digital economy in the region is an average of 12%, compared to a global average of 16%, which means that there are great opportunities to increase this percentage, and to improve the current deteriorating economic conditions in the region. Arab countries, where our studies also indicated that in the case of accurate and comprehensive strategies, the volume of potential opportunities could reach 3 trillion dollars that can be achieved in a short time that does not exceed 10 years.”

And he continued his speech, saying: “As you know, the Corona pandemic came by surprise and turned plans upside down. trillion dollars, which represents 12% of global GDP.”

The adviser to the Council of Arab Economic Unity explained that although the global economy has somewhat begun to emerge from the epidemiological trench, the continued spread of Covid 19 is forcing countries to take a more slow approach, with some returning to partial closure measures, which means that The global economy is still subject to more obstacles.

He went on to say: “With unemployment rates rising dramatically, and in light of the crises created by the Covid-19 crisis, there is no clear and direct solution to get out of these mysterious times, however, based on studies, research and international practices, there are strategic directions that can contribute to achieving the goals of Economic recovery and growth, as we see that countries that invest heavily in technology and digitization have been able to maintain better productivity levels, and we all agree that digital services have played a pivotal role during the pandemic that contributed greatly to ensuring the continuity of some sectors, including education and e-commerce and other service sectors.

He pointed out that the impact of digital technology lies in its ability to produce three times the investment value in the information and communication technology services sector, noting the announcement of a strategic initiative in 2018, adopted by the Council of Economic Unity and launched by the “UAE” entitled “The Arab Vision for the Digital Economy.” Which aims to support social and economic growth in the countries of the region through digital transformation, in line with the requirements of vital sectors such as digitization needs in governments, businesses, infrastructure and the integration of citizens into the work environment, in parallel with a focus on innovation and creativity in designing solutions for business models.

Al-Khouri presented 5 main recommendations for policy makers as axes that can be implemented in the short term to get out of the current crisis related to the Corona virus; Which:

First, the need to focus more on technological investments aimed at accelerating digital transformation and developing innovative social and economic solutions within a comprehensive framework to build the components of society and the digital economy.

Second.. Governments should pay special attention to demographics and marginalized sectors by adopting more inclusive and sustainable social and economic development models. These models must be designed with an inspiring vision to achieve goals and take responsibility at the level of individuals and institutions.

Third, the need for policies, strategies and action plans to have an impact on the ground and capabilities with which pivotal strategic shifts can be implemented, as well as various means to address and recover from the repercussions resulting from the Corona pandemic.

Fourth.. Governments need to take into account two important factors in their initiatives. The first is to focus on achieving the highest rate of productivity gains and investment returns, in addition to the second factor, which is the importance of absorbing the unemployed by creating more job opportunities.

Al-Khouri touched on the fifth and final point, which is related to investing in individuals; He explained that this term is well known as an administrative and organizational topic, but it is necessary to address it at the governmental level, as this is achieved by securing basic necessities such as education, health care, housing, cultural enrichment and spreading positive energy in the social system, especially that the Covid-19 pandemic has caused a situation It also led to negative attitudes and behaviors among large segments of the population towards health precautions and procedures.

He referred to the experience of the United Arab Emirates, which it launched in 2019, through the “Behavioral Rewards Program”, which aims to encourage the local community to adopt positive behaviors, as dozens of targeted behaviors that have been identified and shared with public and private sector institutions have been adopted. To monitor and motivate the positive behavior of individuals and institutions and reward those committed to it.

In the conclusion of his speech, Al-Khouri affirmed that there is no doubt; Success in such delicate and turbulent times requires the skill of thinking outside the box, a skill that countries need to build a flexible and responsive system to changes.