The Arab world region is changing, what has led to this change?

Several factors have contributed to this. Some of them are related to political reforms. For decades we did not witness the right political changes and there have been a number of socio-
economic problems that were not addressed properly. These issues today are pressing problems for the countries that have gone through political transformation. The nations that did not witness a major political transformation are also facing the same issues, and it is a combination of the bulge in youth population, unemployment and a mismatch between the skills of the workforce and markets’ demands and needs. We all know that the youth in the Middle East and North Africa region represent some 30 percent of the total population. There will be more young people who will be entering the labor market in the near future. There is an immense wealth of talented Arab youth, but the countries have failed to create meaningful jobs for a large number of young people. Most of jobs came from the public sector and that gave rise to the unemployment rate in the region because the number of jobs created was less, and that includes oil-exporting countries in the region where the percentage of jobless is quite high.

When the young population enrolled in the mostly non-productive public sector, a big mismatch between skills and market demand was created and due to this we have a seen a large influx of foreign labor which contributed to the rise in the unemployment rate. Although the region saw some reforms and growth in the past decade, that did not translate in raising living conditions of local people.

Economic disparities have been wide in this region. The subsidies are basically product-based and universal, so the rich and poor get the same discount. This disparity has not been corrected, and we also don’t have the right kind of tax system. Public money has not been utilized in a proper manner and all of these factors were at the root of the Arab Spring.

What role has technology played in demonstrations in this region?

Well, definitely technology and social media have played a significant role in this movement for change. The regimes were controlling the traditional way of communication – TV and print media – in a very tight manner. Social networking played a big part in mobilizing people and we saw this in Egypt. Even the new government used social media to communicate with public more than traditional methods. The change in the government, for instance, was first announced on Facebook. I think the expansion of social media and development of technology means that it is now available to all. However, this has not been the cause of transformation, but it definitely accelerated this transformation and transition.

Do you think new governments would help change the critical view of global bodies such as UNDP, IMF and WEF about some Arab economies?

First of all, if we look back at the past decade, we saw few reforms and growth, unfortunately those reforms were too little too late, we had some liberalization but it benefited only a few companies. What we need is a two-track reform, one would be for short-term, where government’s work toward achieving stability, brings in a policy of good governance to restore public trust and refocus on their social programs. More importantly, for the long-term, there is a great need to come up with the new economic agenda and this will focus on key pillars. First is rejuvenating growth through supporting small- and medium-sized enterprises. The government should also facilitate in making a room for local entrepreneurs to prosper. The second pillar would be to accelerate the structural reforms such as the changes in the labor market so that the workforce’s output would meet the market demand. It will also include reforming the education system, bringing in the social security measures for citizens. The social protection mechanism would definitely act as a social stabilizer.

Do you see a rebirth of the Arab world?

This transformation is providing a lot of hope to so many people, but this transition carries a lot of risk and it all depends on the approach used to devise a new framework that is more democratic in decision making, keeping the economy modern and not going back to the old recipes in terms of the role of state and in terms of weakening the role of the private sector. It is very critical how reforms are conducted and how the inclusive transformation is implemented. The local companies that are operating at regional or international level should be supported by the state machinery.

How is the Arab society likely to change with this revolution in the region?

First of all we expect the level of information available to the general public to improve. Transparency and access to information is very important for people to be able to play an active role in policymaking.

What kind of risks are involved as the regimes change in the region?

There are several risks. Transition to democracy will take time and in some countries macroeconomic situation and public finances are not strong enough to accommodate the expansion of government or to implement new policies. We have noticed during the course of these recent events that the financial condition of some countries has deteriorated. In the short term we might see a higher level of state involvement in economic and financial affairs. Besides this, there would always be a risk of second uprising, if the root cause of transformation is not addressed. Millions of jobs should be created and social welfare programs should be implemented.

Do you see the effects of the Arab Spring trickling to other states in
the region?

I think we are going through a major transformation and each country is likely to take a different approach. We are seeing the emergence of a new Arab world, where certain values would become standard, but as each country has its own social fabric and political dynamics the process would be gradual.

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