EY research says the largest event to be held in the Arab World is predicted to add the equivalent of 1.5% to UAE GDP
Expo 2020 Dubai will boost the UAE economy by AED122.6 billion ($33.4 billion) and support 905,200 job-years between 2013 and 2031, according to an independent report published by global consultancy EY.
During the peak six-month period of the World Expo, the largest event to be held in the Arab World is predicted to add the equivalent of 1.5 percent to UAE gross domestic product.
The scale of investment pouring in to construct and host an event of this ambition, as well as goods and services consumed by the millions expected to visit and the businesses that will occupy the Expo site in the legacy phase, will result in an economic dividend that will benefit businesses large and small across a range of sectors for years to come, according to the report.
From November 2013 – when Dubai won the bid to host the Expo – until its opening in October 2020, the economic impetus will be driven by the construction sector as work continues on building the site and supporting infrastructure such as roads, bridges and the Dubai Metro Route 2020 line, EY noted.
Najeeb Mohammed Al-Ali, executive director of the Dubai Expo 2020 Bureau, said: “This independent report demonstrates that Expo 2020 Dubai is a critical long-term investment in the future of the UAE, which will contribute more than 120 billion dirhams to the economy between 2013 and 2031.
“Not only will the event encourage millions around the world to visit the UAE in 2020, it will also stimulate travel and tourism and support economic diversification for years after the Expo, leaving a sustainable economic legacy that will help to ensure the UAE remains a leading destination for business, leisure and investment.”
The report added that small and medium enterprises, a core component of the UAE economy, will receive AED4.7 billion in investment during the pre-Expo phase, supporting 12,600 job-years.
Job-years is defined as full-time employment for one person for one year and describes the employment impact over the life or phase of a project.
During the peak six months of Expo 2020, visitor spending on tickets, merchandise, food and beverage, hotels, flights and local transport will propel economic activity.
Expo 2020 expects 25 million visits, with 70 per cent of visitors coming from outside the UAE, providing the hospitality industry with an unmissable opportunity to show the world what the UAE has to offer.
The EY report added that the positive thrust will continue in the decade after Expo closes its doors in April 2021, thanks largely to the transformation of the site into District 2020, an integrated urban development that will house the Dubai Exhibition Centre.
Matthew Benson, partner, Transaction Advisory Services, MENA, EY, said: “Expo 2020 is an exciting long-term investment for the UAE, and is expected to have a significant impact on the economy and how jobs are created directly and indirectly.
“As the host, Dubai aims to use the event to further enhance its international profile and reputation. The event will celebrate innovation, promote progress and foster cooperation, and entertain and educate global audiences.
Egypt is working on formulating a strategy for artificial intelligence (AI) which will include the establishment of the country’s first faculty of artificial intelligence and artificial intelligence academy in the coming academic year, in a bid to produce the scientific workforces needed to develop a sustainable knowledge-based economy.
The FAI will start student enrolment in the next academic year, 2019-20, as a centre of excellence for artificial intelligence research, education, teaching and training.
Besides establishing an artificial intelligence academy specialising in innovation and new thinking in artificial intelligence, several AI departments will also be set up at higher education institutions to develop capacity and boost innovations.
AI is the science of developing computer systems capable of carrying out human tasks.
According to a 2017 PricewaterhouseCoopers (PwC) report entitled The Potential Impact of AI in the Middle East, it is estimated that 7.7% of Egypt’s gross domestic product could come from the AI sector by 2030.
“We estimate that the Middle East is expected to accrue 2% of the total global benefits of AI in 2030. This is equivalent to US$320 billion,” the report stated.
“In the wake of the fourth industrial revolution, governments and businesses across the Middle East are beginning to realise the shift globally towards AI and advanced technologies.
“They are faced with a choice between being a part of the technological disruption, or being left behind. When we look at the economic impact for the region, being left behind is not an option.”
The biggest opportunity for AI in the Middle East and Africa region is in the financial sector where it is estimated that 25% of all AI investment in the region predicted for 2021, or US$28.3 million, will be spent on developing AI solutions. This is followed by the public services, including education among other sectors, according to the PwC report.
Samir Khalaf Abd-El-Aal, a science expert at the National Research Centre in Cairo, welcomed news of the FAI as a “pioneering initiative” that will have an impact on Egypt as well as North Africa.
“It is a good step forward for raising awareness of the potential of AI for sustainable development as well as contributing in facing regional challenges to fully harness the deployment of AI, including infrastructure, skills, knowledge gaps, research capacities and availability of local data,” Abd-El-Aal told University World News.
“The FAI is an important initiative in training students in AI, which will become one of the tools of future jobs, as well as building AI applications in Arabic, which can easily go to all Arabic-speaking countries including North African states.”
“The FAI could also act as a regional focal point for carrying out mapping for local artificial intelligence start-ups, research centres and civil society organisations as well as serving as an incubator for skills development and promoting AI entrepreneurship oriented towards solving North African problems,” Abd-El-Aal said.
Virtual science hub
The Egypt government also announced the launch of a virtual science hub at the Forum. The hub, affiliated to the Academy of Scientific Research and Technology at the Ministry of Higher Education and Scientific Research, aims to enable integration, management and planning of Egyptian technological resources, work on the international information network, and includes an integrated database for all Egyptian technological resources.
It also includes all scientific and technical resources as well as material assets and academic research contributions, which will make it possible to measure the degree of technological readiness of all Egyptian academic and research institutions. The general objective of the system is to provide the necessary information to support decision-makers in research projects and to facilitate the follow-up of research activities.
As per the World Bank in its latest announcement, “Growth has picked up across the region and is projected to strengthen over the next few years. And almost all MENA countries have moved to reduce or eliminate energy subsidies, identify new sources of non-oil revenues, and expand social safety nets to shield the poor from adverse effects of change.”
Meanwhile the World Economic Forum informs that the MENA region hosts the world’s elite today and tomorrow by the Dead Sea shore, to try and debate some of the region’s current issues. Jordan has already held the WEF’S gathering in the recent past; refer to MENA-Forum.
ByMirek Dusek, Deputy Head of the Centre for Geopolitical and Regional Affairs, Member of the Executive Committee, World Economic Forum
For thousands of years, the Dead Sea has attracted visitors from far and wide, drawn by legends of its power to heal and rejuvenate. On 6-7 April, 1,000 key leaders from government, business and civil society will gather on its shores for the World Economic Forum on the Middle East and North Africa (MENA). Over two days they will confront the issues facing more than 400 million people.
A region of two opposing systems
The Arab world is a region of two contrasting systems. One system features a dynamic private sector, digitally native youth and open economies. The other has a bloated public sector and closed, controlled economies.
Most people in the Middle East and North Africa (MENA) interact with both systems, facing a mixed reality. Wealth sits side-by-side with poverty; an exciting entrepreneurial culture struggles with leaden bureaucracy; and an insatiable appetite for the new is balanced with a reverence for tradition.
How these two systems interact – and whether the dynamic, forward-looking system can thrive while respecting the traditions of the Arab world – is among the most important issues the region is facing today.
Five key questions
The following five areas will determine whether the Arab world can successfully move towards the system of innovation and competitiveness.
1. Can the Arab world develop a new, sustainable economic and social framework?
The social contract in much of the Arab world has relied on state-provided employment. This is unsustainable. Nearly half the population is under 25, and a quarter of those are unemployed. Add the biggest gender gap in the world, and it’s clear a new framework is needed.
2. Can a mechanism for conflict resolution be developed?
Ongoing humanitarian disasters in Syria, Yemen and Iraq require immediate attention, as do the longer-term projects of rebuilding fully functioning states. The region has been home to long-standing tensions, and unless these are mitigated, a thriving, competitive region will be hard to realise.
3. Can an ecosystem of entrepreneurship and innovation be developed?
The stories of individual success in the region are too often ones of thriving despite the economic framework. An ecosystem that nurtures innovation and encourages firms to flourish and grow is needed.
4. Are countries prepared for the Fourth Industrial Revolution?
Changes in the way we work are happening more quickly than most societies are prepared for. There is a short window for establishing the right regulatory environment, and reskilling people to make sure they – and the larger economies – can capture the opportunities of technology.
5. Will addressing corruption and transparency be a priority?
Governance reform is a “must do” issue in the region and disillusionment caused by perceptions of corruption is particularly strong among young Arabs.
Global questions, Arab answers
While other regions have grappled with similar questions, the Arab world needs Arab solutions, that capitalize on the unique strengths of the area while accounting for its important sensibilities. There are good examples of this starting to happen.
The UAE is playing a leading role in integrating the region into the global economy. The new Emirates Centre for the Fourth Industrial Revolution, run by the Dubai Future Foundation in partnership with the World Economic Forum, is working to shape governance and capacity issues in the MENA, and it could shape data protocols across the world as a whole. Europe is enforcing strict data protections and regulations, while the United States is taking a more liberal approach. The Arab solution being developed may not just be a better fit for the region, but for elsewhere as well.
Saudi Arabia already has an influential voice as part of the G20, and it’s a voice that can grow. In 2020, it will host the Riyadh Summit, presenting an opportunity for greater impact on the regional and global agenda. A forward-looking programme that strengthens the MENA economies and the global economy as a whole will be an important step toward long-term success for the area.
Actions not words
There is a dire need for a new collaborative platform that brings governments together with businesses and other stakeholders in private-public cooperation. This is the aim of the World Economic Forum’s summit in Jordan. By convening members of the public and private sectors, and bringing new voices into the arena, such as the 100 Arab Start-ups, we hope to facilitate forward-leaning dialogue that understands and respects the values and culture of the region.
The International Monetary Fund (IMF), keeps on pressing on all economic and policy issues of the day in every country. Doing so for all these years, it has, in the end, amassed such knowledge and experience that enabled it to have a worldwide view of the latest trends. Tackling corruption in government could save $1 trillion in taxes, but not only that as we were recently told, it could also resolve many of the plethora of all related issues throughout all regions in the developing and developed world alike. A point in case is elaborated on this particular article that is republished here for its obvious importance, especially for those developing countries of the MENA region.
No country is immune to corruption. The abuse of public office for private gain erodes people’s trust in government and institutions, makes public policies less effective and fair, and siphons taxpayers’ money away from schools, roads, and hospitals.
While the wasted money is important, the cost is about much more. Corruption corrodes the government’s ability to help grow the economy in a way that benefits all citizens.
But the political will to build strong and transparent institutions can turn the tide against corruption. In our new Fiscal Monitor, we shine a light on fiscal institutions and policies, like tax administration or procurement practices, and show how they can fight corruption.
Political will can turn the tide against corruption.
Corruption helps evade taxes
We analyze more than 180 countries and find that more corrupt countries collect fewer taxes, as people pay bribes to avoid them, including through tax loopholes designed in exchange for kickbacks. Also, when taxpayers believe their governments are corrupt, they are more likely to evade paying taxes.
We show that overall, the least corrupt governments collect 4 percent of GDP more in tax revenues than countries at the same level of economic development with the highest levels of corruption.
A few countries’ reforms generated even higher revenues. Georgia, for example, reduced corruption significantly and tax revenues more than doubled, rising by 13 percentage points of GDP between 2003 and 2008. Rwanda’s reforms to fight corruption since the mid-1990s bore fruit, and tax revenues increased by 6 percentage points of GDP.
Corruption also prevents people from benefiting fully from the wealth created by their country’s natural resources. Because the exploration of oil or mining generates huge profits, it creates strong incentives for corruption. Our research shows that resource-rich countries, on average, have weaker institutions and higher corruption.
Corruption wastes taxpayers’ money
The Fiscal Monitor shows that countries with lower levels of perceived corruption have significantly less waste in public investment projects. We estimate that the most corrupt emerging market economies waste twice as much money as the least corrupt ones.
Governments waste taxpayers’ money when they spend it on cost overruns due to kickbacks or bid rigging in public procurement. So, when a country is less corrupt, it invests money more efficiently and fairly.
Corruption also distorts government priorities. For example, among low-income countries, the share of the budget dedicated to education and health is one-third lower in more corrupt countries. It also impacts the effectiveness of social spending. In more corrupt countries school-age students have lower test scores.
Corruption is also a problem in state-owned enterprises, such as some countries’ oil companies, and public utilities like electric and water companies. Our analysis suggests that these enterprises are less efficient in countries with high levels of corruption.
Where there is political will, there is a way
Fighting corruption requires political will to create strong fiscal institutions that promote integrity and accountability throughout the public sector.
Based on the research, here are some lessons for countries to help them build effective institutions that curb vulnerabilities to corruption:
Invest in high levels of transparency and independent external scrutiny. This allows audit agencies and the public at large to provide effective oversight. For example, Colombia, Costa Rica, and Paraguay are using an online platform that allows citizens to monitor the physical and financial progress of investment projects. Norway has developed a high standard of transparency to manage its natural resources. Our analysis also shows that a free press enhances the benefits of fiscal transparency. In Brazil, the results of audits impacted the reelection prospects of officials suspected of misuse of public money, but the impact was greater in areas with local radio stations.
Reform institutions. The chances for success are greater when countries design reforms to tackle corruption from all angles. For example, reforms to tax administration will have a greater payoff if tax laws are simpler and they reduce officials’ scope for discretion. To help countries, the IMF has built comprehensive diagnostics on the quality of fiscal institutions, including public investment management, revenue administration, and fiscal transparency.
Build a professional civil service. Transparent, merit-based hiring and pay reduce the opportunities for corruption. The heads of agencies, ministries, and public enterprises must promote ethical behavior by setting a clear tone at the top.
Keep pace with new challenges as technology and opportunities for wrongdoing evolve. Focus on areas of higher risk—such as procurement, revenue administration, and management of natural resources—as well as effective internal controls. In Chile and Korea, for example, electronic procurement systems have been powerful tools to curtail corruption by promoting transparency and improving competition.
More cooperation to fight corruption. Countries can also join efforts to make it harder for corruption to cross borders. For example, more than 40 countries have already made it a crime for their companies to pay bribes to gain business abroad under the OECD anti-corruption convention. Countries can also aggressively pursue anti–money laundering activities and reduce transnational opportunities to hide corrupt money in opaque financial centers.
Curbing corruption is a challenge that requires persevering on many fronts, but one that pays huge dividends. It starts with political will, continuously strengthening institutions to promote integrity and accountability, and global cooperation.
In effect, three ways cities can help feed the world . . . without costing the Earth, per Silvio Caputo, University of Kent seem to be one of the few options remaining for life on earth to carry on.
Climate change is underway, and human activities such as urbanisation, industrialisation and food production are key contributors. Food production alone accounts for around 25% of global carbon emissions. Ironically, the changing weather patterns and more frequent extreme weather events resulting from climate change also put the world’s food supplies at risk.
Food production drives deforestation, meaning there are fewer trees to absorb carbon dioxide, which contributes to the greenhouse effect. What’s more, the fertilisers and pesticides used to protect crops have caused a dramatic decline in insect populations, and in soil fertility, by affecting the microbial organisms that enrich the soil and enable plants to gain nutrients.
At the same time, the world population is rising and there are expected to be more than 9.5 billion people on Earth by 2050. In response to these projections, the UN’s Food and Agriculture Organisation (FAO) is campaigning for a 60% increase in food production by 2050, by intensifying agriculture to be more productive and use fewer resources, all without increasing the amount of farm land.
It’s not yet clear exactly how this “intensification” should happen. Alternative methods, such as organic farming, are respectful of soil ecology and insect life and can restore soil fertility. But they cannot, at present, produce as much food as industrial agriculture.
Yet the idea that we need more food is debatable. Although, according to the FAO, there are 821m people globally suffering from hunger, the world produces 50% more food than is needed to feed the global population. Another estimate from biologist and author Colin Tudge suggests that the current food production can feed as many as 14 billion people. But one third of this food is wasted because of distorted supply systems, unjust food distribution and unhealthy and unsustainable diets.
So, the efforts of experts in the food sector should not concentrate on agriculture intensification, but rather on strategies to change patterns of consumption and waste at a local and global level. My own research on urban agriculture and sustainable cities suggests there are three main areas where effective changes can be made.
1. Recycling food waste
Food consumption needs to become “circular”. This means that organic waste such as food scraps does not go to landfill, but is instead transformed into compost (which will be needed in a transition to organic agriculture) and biogas.
At present, organic waste is only recycled to a small extent, with some countries such as Germany and the Netherlands leading, while others including Italy and Belgium lag behind. But there are new technologies emerging to make this process easier.
For example, the Local Energy Adventure Partnership (LEAP) has created an anaerobic digester designed for an urban context: this machine can transform organic waste from residential or commercial buildings into compost and biogas that can fuel urban food growing.
Some experts also suggest that some food waste – if treated properly – could be used as animal fodder: a practice currently forbidden on hygiene grounds. If reinstated, this measure could reduce the environmental impact of grain cultivation, as less is grown to feed livestock.
2. Urban farming
Another option is to decrease demand for agricultural land by growing food in cities, where more people need it, thereby reducing the distances food has to travel. This would also allow producers to map and match consumers’ demand more effectively, by producing close to the places where food is consumed.
There is a lot of research on urban agriculture and how cities can support it, spanning from vertical farms – hydroponic systems enabling cultivation on vertical surfaces – to principles for planning cities that facilitate the use of land, rooftops and other spaces to grow food into a continuous green infrastructure.
In this area, too, it’s possible to find innovations designed to make urban farming easier and more sustainable. For example, The Farmhouse is a modular housing system suitable for vertical stacking that enables all residents to grow food. And Blockchain Domes is a patented system that uses excess heat from computer servers to provide optimal thermal conditions for greenhouses in colder climates.
3. Changing diets
The third option is to encourage people to change their diets. Growing middle-income groups in developing countries are consuming ever higher quantities of meat, cheese and eggs. In China, since 1990, consumption of beef and poultry has quadrupled. But the diet of farmed animals is heavy in grains, which instead could be used to feed people more efficiently. Also, cattle farming requires vast quantities of water and grassland, sometimes obtained through deforestation.
Getting people to eat less meat will help to ease the pressure on the world’s food system. In cities, governments, research institutions, communities and businesses can collaborate on food initiatives to give people healthier, cheaper and more sustainable choices – but this requires political will and organisation between different levels of government.
Clearly, each of these approaches has a limited scope of action, compared to agricultural techniques or strategies which can be deployed at an industrial level. But with so many promising proposals, there can be a many-pronged approach that that makes efficient use of the existing resources in cities, while also changing consumers’ habits. Together with these three changes, more effective policies for food justice and sovereignty can establish fairer food supply chains and more just distribution of food around the world.
World trade will continue to face strong headwinds in 2019 and 2020 after growing more slowly than expected in 2018 due to rising trade tensions and increased economic uncertainty, said the World Trade Organisation (WTO).
WTO economists expect merchandise trade volume growth to fall to 2.6 per cent in 2019 — down from 3.0 per cent in 2018. Trade growth could then rebound to 3.0 per cent in 2020; however, this is dependent on an easing of trade tensions.
WTO director-general Roberto Azevêdo said: “With trade tensions running high, no one should be surprised by this outlook. Trade cannot play its full role in driving growth when we see such high levels of uncertainty.”
“It is increasingly urgent that we resolve tensions and focus on charting a positive path forward for global trade which responds to the real challenges in today’s economy – such as the technological revolution and the imperative of creating jobs and boosting development.
“WTO members are working to do this and are discussing ways to strengthen and safeguard the trading system. This is vital. If we forget the fundamental importance of the rules-based trading system we would risk weakening it, which would be an historic mistake with repercussions for jobs, growth and stability around the world,” he added.
Trade growth in 2018 was weighed down by several factors, including new tariffs and retaliatory measures affecting widely-traded goods, weaker global economic growth, volatility in financial markets and tighter monetary conditions in developed countries, among others. Consensus estimates have world GDP growth slowing from 2.9 per cent in 2018 to 2.6 per cent in both 2019 and 2020.
The preliminary estimate of 3.0 per cent for world trade growth in 2018 is below the WTO’s most recent forecast of 3.9 per cent issued last September. The shortfall is mostly explained by a worse-than-expected result in the fourth quarter, when world trade as measured by the average of exports and imports declined by 0.3 per cent. Until then, third quarter trade had been up 3.8 per cent, in line with WTO projections.
Trade expansion in the current year is most likely to fall within a range from 1.3 per cent to 4.0 per cent. It should be noted that trade growth could be below this range if trade tensions continue to build, or above it if they start to ease.
Nominal trade values also rose in 2018 due to a combination of volume and price changes. World merchandise exports totalled $19.48 trillion, up 10 per cent from the previous year. The rise was driven partly by higher oil prices, which increased by roughly 20 per cent between 2017 and 2018. – TradeArabia News Service