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OPINION October 3, 2018

A Moonshot for the Middle East and North Africa

In the Middle East and North Africa (MENA) region two out of every three people are under 24, which amounts to around 300 million young people.   This large youth population could be a source of innovation and economic transformation, but a bold and ambitious effort is needed to remove the accumulated obstacles.   In most regions, education offers a way up the social and economic ladder.  But in the Arab World, university graduates are frustrated to find that they are even more likely to be jobless than those with less education.  In Egypt about 30% of youth with a university degree are unemployed, and the figure for Tunisia is closer to 40%.

The answer to harnessing the potential of the 300 million youth in the Arab World lies just at their fingertips – in their smartphones.  While youth in the OECD enjoy access to services and goods online and can easily transfer money virtually, most Arab youth are left out in the cold by over-regulated telecommunications systems that have not kept pace with rapid change sweeping the globe.  Arab youth today contend with the world’s smallest amount of bandwidth per subscriber, and countries in East Africa outperform the MENA region in the usage of mobile money.  Arab youth are intimately familiar with Facebook and Instagram but distant strangers to PayPal.

Youth in the Middle East and North Africa are digitally savvy, hyperactive on social media, and have more mobile phones than youth elsewhere. This gaping mismatch between a vast reservoir of digital potential and lack of access to quality internet and digital money is robbing the Arab World and its youth of huge opportunities to boost economic growth, open new businesses, and create jobs.  

So what can be done?  We would like to challenge the countries of Middle East and North Africa to dedicate themselves to their own “moonshot” to liberate the digital futures of their millions of tech-savvy youth.  Just as US President John F. Kennedy set a goal in 1961 to put a man on the moon by the decade’s end, the governments of the Arab World should commit themselves to their own moonshot.  

A MENA moonshot would focus on two concrete and achievable goals by 2020.  First, MNA countries must create a modern broadband internet that covers all regions, including those that are lagging economically. In those lagging areas, the India model could be followed where internet access is offered free for a while to enhance its beneficial economic and job-creating effects.  Second, countries must develop an infrastructure and regulatory apparatus that supports money transfer digitally through mobile devices and the internet. The money transfer infrastructure could be provided by telecom companies, banks, and other operators.

It is time for MENA countries to catch up to the digital age and allow their youth to take advantage of the opportunities in the New Economy.  Unlike countries in Latin America or East Asia, which aggressively pushed telecom competition and liberalization, MENA countries have pursued a very gradual and ineffective approach to change.  Instead, policymakers should look to countries like Kenya whose model of light but effective regulation has fostered the rapid growth of the peer-to-peer system M-Pesa that requires no financial intermediary like a Bank.

Of course, boosting online access and enabling mobile payments system will not solve all of the Arab World’s problems or completely satisfy the aspirations of its youth.  But a MENA moonshot could unite the authorities with young people behind a common goal, and transform the way that governments, companies, civil society, and young entrepreneurs conduct business and collaborate online.  One big answer to boosting jobs and growth in the Middle East and North Africa lies just within the grasp of the millions of youth who text, Whatsapp, Instagram, Facebook and tweet every day.  It is time for Arab youth to have an equal chance for online success and for MENA governments to pursue their own moonshot.

Ferid Belhaj is the World Bank Vice President for the Middle East and North Africa Region

Rabah Arezki is the World Bank Chief Economist for the Middle East and North Africa Region