Entrepreneurship space in the Arab  world

Entrepreneurship space in the Arab world

Zawya #sme posted this article dated 13 December 2018 after conducting a series of interviews with many stakeholders in the Arab entrepreneurship space to gauge their views on the opportunities and the challenges that they face.

The image above is of a technology start-up firm used for illustrative purpose. Getty Images/Caiaimage/Agnieszka Olek

Special Report: Entrepreneurship in the Arab world: the opportunities, challenges, the stakeholders and the funding environment

By Yasmine Saleh, ZAWYA

Governments across the Arab world have been spending money on consultants to set up incubators and other tools to help those with business ideas create new firms and scale them, as more private sector jobs will be needed to provide employment for a young and fast-growing population.

But how successful are these, and what are conditions like for those brave souls who take a plunge and quit their jobs to start their own businesses? Are there enough opportunities, how hard is the journey and which track should the Arab entrepreneurs take to achieve their goals? And what happens if they fail?

Over the past three months, Zawya has conducted a series of interviews with many stakeholders in the Arab entrepreneurship space to gauge their views on the opportunities and the challenges that they face.

The Data

There are two major annual reports into the funding for start-ups in the Arab region carried out by Dubai-based research and funding platforms. One, carried out by Arabnet in collaboration with Dubai’s Mohammed Bin  Rashid Establishment for SME Development (Dubai SME), looks at the investments in the digital space across 11 countries in the Arab world.

The second, by Magnitt, a Dubai-based start-up platform that provides entrepreneurship research and data, looks at funding from angel to growth capital stages in 16 Arab countries.

  • According to the Arabnet/Dubai SME report, the number of active investors in the market increased by a compound annual rate of 31 percent between 2012 and 2017, from 51 in 2012 to 195 last year. It said around 40 new funds were created between 2015 and 2016 and around 30 new funds between last year and May 2018. Of these 30 new funding institutions, around one third are based in the UAE, while one quarter are based in Lebanon.
  • A majority of the investors are based in four Arab countries: The UAE hosts 32 percent, Saudi Arabia 17 percent, Lebanon 13 percent and Egypt 10 percent.
  • The investor community is almost equally spread between early stage funders such as angel investors, seed funders and incubator programmes, and later-stage venture capital, growth capital and corporate investors.
  • According to Magnitt’s report, 318 start-up funding deals were made in 2017, up from 199 in 2016. However, deal volumes for the first nine months of this year declined 38 percent to $238 million, from $383 million achieved in the same period last year.

The Opportunity

The start-up success stories in the region are growing, with the best-known so far being Dubai-based Careem and Souq.com.

Careem, which started in 2012, is a local ride-hailing app which has been through many rounds of venture funding, with the most recent $200 million fundraising completed in October bringing its valuation to over $2 billion, according to a Reuters story, citing an unnamed source.

Souq.com was founded in 2005 by Syrian entrepreneur Ronaldo Mouchawar and was sold to online retailer giant Amazon for $580million, according to documents filed by Amazon in April 2017.

Egypt was home to one of the region’s first incubators, Flat6Labs. It was founded in Cairo in 2011. It was deemed a success and later opened branches in Tunisia, Bahrain, Saudi Arabia, the UAE and Lebanon.

Mirek Dusek, the World Economic Forum’s deputy head for geopolitical and regional agendas, told Zawya in a telephone interview in September that the increasing interest by investors in the start-up scene is driven partly by governments, but also by local, private sector interests.

“We have a different picture than from five to ten years ago and that picture has changed dramatically because of the involvement of the family businesses, the traditional long-standing family firms that we have seen in the Arab world are now setting up venture capital arms and also sovereign entities, PIF (the Pubic Investment Fund) in Saudi Arabia or elsewhere are increasingly active in this space.”

 “Sovereign entities, particularly through sovereign wealth funds are setting up arms that are specifically targeting SMEs or start-ups in their home economy… This is quite healthy as long as it does not crowd out other competitors,” he added.

 The Pubic Investment Fund (Saudi Arabia’s sovereign wealth fund) is an investor-partner in ecommerce platform Noon, which was founded by UAE-based businessman Mohamed Alabbar.  The portal was launched late last year with an initial investment of $1 billion.  

Abu Dhabi’s Mubadala, a state-owned investment company, has pledged $15 billion to the $100 billion Softbank Vision Fund, a tech fund run by Japanese technology company Softbank in May last year, while Saudi Arabia’s PIF was the fund’s biggest investor, with a $45 billion commitment.

According to the Arab Competitiveness Report 2018 released in August, “research has shown that countries and regions characterized by higher entrepreneurial activity tend to have higher growth rates and greater job creation, the main pathways through which to grow the global middle class”.

The report, which was compiled by the International Finance Corporation (IFC), the World Economic Forum and the World Bank, added: “Global experience shows that entrepreneurship stimulates job creation in the economy, as most new jobs are created by young firms, typically those three to five years old.”

Saudi Arabia, the Arab region’s biggest economy, needs to create 1.2 million jobs by 2020 to reach its unemployment targets, Reuters reported in April, quoting an official in the Ministry of Labor.

The unemployment rate for Saudi nationals stood at 12.9 percent of the population in the second quarter of 2018 – the latest for which figures are available.

Anass Boumediene, one of the founders of Dubai-based eyewa.com, an online portal that sells spectacles and contact lenses that expanded to Saudi Arabia last year, said the region still lags behind others with regards to the size and type of support provided by governments to start-ups.

“What needs to be improved in the region is governments’ involvement in fostering entrepreneurship. In Europe, Asia, or the U.S., governments are a lot more active in supporting entrepreneurs, providing access to simple and cheap legal frameworks for startups and VCs (and) government funding in the form of grants, loans or equity to both startups and VCs, and other ecosystem-building infrastructure facilitating access to talent and technologies,” he told Zawya in an interview in September.

Aysha Al-Mudahka, the CEO of Qatar Business Incubation Center (QBIC), told Zawya in a phone interview in September that it is important both for start-ups and investors to feel they have “the consent of the government”. This will make “the private sector feel comfortable to invest in start-ups, especially in the Arab world, as that will lead to better regulations and support for start-ups.” 

QBIC is a government-backed incubator, co-founded and solely owned by Qatar Development Bank.

Read more on the original Zawya publication

UAE tops MENA for wage equality, but . . .

UAE tops MENA for wage equality, but . . .

GULF BUSINESS Economy posted this enlightening article by Aarti Nagraj on how It will take the MENA economies “153 years to close the gender gap at the current rate of change”

UAE tops MENA for wage equality, Arab region remains world’s least gender-equal

The UAE has been ranked as the top country in the Middle East and North Africa for wage equality, according to a new report released by the World Economic Forum (WEF).

However, the UAE’s performance on the WEF’s Global Gender Gap Report 2018’s wage equality indicator saw a slight decrease compared to last year, a statement said.

The Emirates also topped the region in terms of the number of women in ministerial positions, with improvements recorded in gender parity in the legislators, senior officials and managers and healthy life expectancy indicators.

Overall, the report found that despite the gender gap across the MENA region closing narrowly in 2018, it remains the world’s least gender-equal region.

It will take the Middle East and North Africa economies “153 years to close the gender gap at the current rate of change”, the report stated.

While Tunisia topped the region for gender equality – ranking 119 globally, the UAE ranked 121 with the gender gap closed at 64.2 per cent. Saudi Arabia, ranked 141 with a 59 per cent gender gap rate, showed “modest progress”, with improvement in wage equality and women’s labour force participation, the report stated.

Globally, the report found that the global gender gap only slightly reduced in 2018, as stagnation in the proportion of women in the workplace and women’s declining representation in politics, along with greater inequality in access to health and education, offset improvements in wage equality and the number of women in professional positions.

According to the report, the world has closed 68 per cent of its gender gap, as measured across four key pillars: economic opportunity; political empowerment; educational attainment; and health and survival.

Last year was the first since the report began publishing in 2006 that the gap between men and women widened.

At the current rate of change, the report indicated that it will take 108 years to close the overall gender gap and 202 years to bring about parity in the workplace.

Globally, having closed more than 85.8 per cent of its overall gender gap, Iceland topped the list for the 10th consecutive year. It was followed by Norway, Sweden, Finland and Nicaragua.

“The economies that will succeed in the Fourth Industrial Revolution will be those that are best able to harness all their available talent,” said Klaus Schwab, founder and executive chairman of the WEF.

“Proactive measures that support gender parity and social inclusion and address historical imbalances are therefore essential for the health of the global economy as well as for the good of society as a whole.”

The report also found that while the income gap between men and women has become narrower, fewer women are participating in the workforce.

“This a worrisome development for which there are a number of potential reasons,” the report said.

“One is that automation is having a disproportionate impact on roles traditionally performed by women. At the same time, women are under-represented in growing areas of employment that require STEM (science, technology, engineering and mathematics) skills and knowledge. Another potential reason is that the infrastructure needed to help women enter or re-enter the workforce – such as childcare and eldercare – is under-developed and unpaid work remains primarily the responsibility of women,” the report explained.

“The corollary is that the substantial investments made by many economies to close the education gap are failing to generate optimal returns in the form of growth.”

According to Saadia Zahidi, head of the Centre for the New Economy and Society and member of the WEF managing board, industries must “proactively hardwire gender parity in the future of work through effective training, reskilling and upskilling interventions and tangible job transition pathways”.

“It’s in their long-term interest because diverse businesses perform better,” she added. e-height:norm

Arab women outnumber men in pursuing university degrees, but . . .

Arab women outnumber men in pursuing university degrees, but . . .

This article was written by Kelly Ommundsen, Community Lead, Digital Economy and Society System Initiative, World Economic Forum and Khaled Kteily, Founder and CEO, Legacy posted on the World Economic Forum of July 21, 2018, does bring to the fore only what has been happening throughout the MENA region’s diverse youth. Urbanised as never before, these are in increasing numbers educated and open onto the world. And a fact that is more and more obvious on the ground is that Arab women outnumber men in pursuing university degrees, but . . . . how is this fact affecting the rest of the region’s populations?
The Brookings back in 2015 noted in its website that “Echoing the trend observed globally, women in the Arab world outnumber men in pursuing university degrees.” However, it added that “For Arab women, hard-won progress in education has not earned them the economic progress they deserve. Although young women seek and succeed in tertiary education at higher rates than young men, they are far less likely to enter and remain in the job market. Understanding and tackling the barriers that hinder women from working would unlock Arab women’s potential and yield significant social and economic benefits to every Arab State.”
It remains however that according to the World Bank, “Thirteen of the 15 countries with the lowest rates of women participating in their labour force are in the Middle East and North Africa (MENA), according to the 2015 Global Gender Gap Report (2015). Yemen has the lowest rate of working women of all, followed by Syria, Jordan, Iran, Morocco, Saudi Arabia, Algeria, Lebanon, Egypt, Oman, Tunisia, Mauritania, and Turkey.”
“So, why is women’s participation in the workforce so low in MENA, especially when the education rate is at parity for girls and boys, and especially when, often, the girls outperform the boys?”
Here is the WEF’s article that covers that segment of activities as helped today by all the ‘smart’ technological advances of recent years.

The picture above is of The Arab Weekly’s Greater opportunities but entrenched stereotypes for Arab women in data science captioned as Sunshine sector. Lina Daouk-Oyry, assistant professor of organisational behaviour at the American University of Beirut, moderates a panel. (The American University of Beirut Conference)


How women are transforming the Arab world’s start-up scene

Palestinian entrepreneur Samar Hijjo developed an app for women during pregnancy.
Image: REUTERS/Ibraheem Abu Mustafa

It may surprise some to learn that one in three start-ups in the Arab World is founded or led by women. That’s a higher percentage than in Silicon Valley. Women are becoming a force to be reckoned with on the start-up scene across the Middle East. Because the tech industry is still relatively new in the Arab world, there is no legacy of it being a male-dominated field. Many entrepreneurs from the region believe that technology is one of the few spaces where everything is viewed as possible, including breaking gender norms, making it a very attractive industry for women.
Despite many challenges, including societal pressure on women to stay at home, a digital gender gap, and structural disadvantages in fund-raising and investments, female entrepreneurs are finding new and creative ways to overcome barriers to entering the workforce and starting their own business.
Key to these efforts has been their ability to leverage the internet and engage through online platforms to reach new markets. They are able to work from home if they wish. As Saadia Zahidi argues in her book Fifty Million Rising, these digital platforms allow women to be unimpeded by cultural constraints or safety issues, and they lower the implicit and explicit transaction costs of transport, childcare, discrimination and social censure.
Finding how to tap into this valuable resource of highly educated women could be a game changer for the region. Given the market power of women’s increasing participation in the workforce, which by 2025 could add an estimated $2.7 trillion to the region’s economy, the growing trend of women in start-ups could be transformative for the Middle East.
Unlocking the potential of female start-ups
The rise of women in the Arab world starts early, with girls outperforming their male peers in school. In Jordan, girls do better than boys in school in nearly all subjects and at every age level, from grade school to university. When it comes to STEM subjects (which include skills critical to launching and running a start-up in the Fourth Industrial Revolution) several Arab countries are among the global leaders in terms of the proportion of female STEM graduates. According to UNESCO, 34-57% of STEM grads in Arab countries are women, which is much higher than in universities in the US or Europe.
Despite the fact that many Arab women are thriving in school and graduating with advanced degrees, this success has not necessarily translated to the job market or the start-up world. Many women are instead staying at home, whether from choice or because of cultural, social or familial pressures. In fact, 13 of the 15 countries with the lowest rate of female participation in the workforce are in the Arab world, according to the World Bank.
Restrictive laws in many countries across the region put women who wish to join or start their own businesses at a disadvantage. These include prohibitions against women opening up a bank account or owning property, limited freedom of movement without a male guardian and constraints on interactions with men who are not in their family, as well as further cultural and attitudinal stigmas.
In fact, even women who do start a company face structural disadvantages. On average, female-led start-ups receive 23% less money than male-run firms, and are 30% less likely to have a positive exit, according to the OECD.

Changing the ecosystem, one woman at a time

To close this gap, the entrepreneurship ecosystem needs more women. One data point makes this clear: venture firms with one or more female partners are twice as likely to invest in a start-up which has women in the management team, and three times more likely to invest in a company with a female CEO.
This is also true for female founders. Female-owned businesses hire more women (25%) than their male counterparts do (22%), according to the World Bank. Female-owned firms also employ a higher percentage of women in managerial roles, helping women to climb up the ladder, compared to those who are only hired for lower, unskilled positions. And women-led businesses are hiring more workers in general. In Jordan, Palestine, Saudi Arabia and Egypt, firms run by women are growing their workforces at higher rates than those run by men.
Womena is an investing platform based in Dubai, dedicated to encouraging gender diversity and inclusion in tech. It believes that in order to increase the number of female tech entrepreneurs, you need to build networks of women that can help support one another to grow and thrive. Role models are also important, such as HE Sheikha Lubna Al Qasimi, who studied computer science before opening one of the region’s first B2B marketplaces. She is best known for being the first woman to hold ministerial posts in the UAE, as Minister of Economy and Planning, Minister of State for International Cooperation, and then Minister of State for Tolerance.
Womena co-founder Elissa Freiha also believes that investing time, energy and money into female entrepreneurs will pay huge dividends.
“Women from the Arab World need to fight. The struggles they face in society, in their communities and sometimes even in their families create an amazing resilience that makes these women incredible entrepreneurs. If given the right platform, these women can become the business owners and leaders for the future of the region.”

Go digital, young woman

Digital represents a key opportunity for women in the region to solve technical and societal challenges. For example, Egypt-born Rana El Kaliouby is the co-founder of Affectiva, which has developed cutting-edge AI technology to help computers recognize human emotions based on physiological responses and facial cues. Meanwhile, Loulou Khazen Baz founded the Middle East’s first freelance marketplace, Nabbesh, as a way to help tackle the region’s youth unemployment. She has been recognized as one of the World Economic Forum’s 100 Arab Start-Ups Shaping the Fourth Industrial Revolution.
As Zahidi writes in Fifty Million Rising “If the narrative of American expansion was ‘Go West, young man’, the new narrative for up-and-coming women in the Arab World may well be ‘Go digital, young woman’.”
Evidence points to this being the case. Nearly 60% of women who are not currently employed believe that flexible hours and working from home, full- or part-time – which going digital can enable – would help them find work, showed a study by Accenture. The digital economy is also opening up opportunities for women looking to get back into the job market. The same study points out that more than 60% of women who have left and want to rejoin the workforce have entrepreneurial aspirations to start their own business.
Crucially, studies from the US demonstrate that gender pay gaps are lower in industries where there are more flexible work arrangements. Moreover, women who gain ICT skills increase their wages by 12%, which is higher than equivalent gains in men’s salaries. With a large market potential, a low amount of resources needed to get started, and productivity efficiencies enabled by technology, digital opens up a whole new world of opportunities and possibilities.

Paving the way forward

Many incredible women across the region are paving the way forward, such as Joy Ajlouny, who recently helped close a $41 million Series B funding round for UAE-based Fetchr, or Gaza Sky Geeks, the first tech hub in Gaza providing mentorship to start-ups with a focus on women. But there is still a long way to go. The digital gender gap in Arab states remains at 17.3%, down from 19.2% in the last four years, according to the ITU. Women are still a minority across the entire start-up ecosystem.
But as more women throughout the Arab World start their own businesses, break down gender barriers and push through the glass ceiling, these pioneers become an example for other women. They inspire them to imagine what’s possible for an Arab woman in the Fourth Industrial Revolution.

Read more on 3 striking trends shaping start-ups in the Middle East

 

The views expressed in this article are those of the author alone and not the World Economic Forum.

Limited Women’s Rights in Saudi Arabia

Limited Women’s Rights in Saudi Arabia

Limited Women’s Rights in Saudi Arabia is a fact that is acknowledged throughout the world, but it is also well known that the situation of women in their everyday life generally as well as in their representation in all socio-political and economic institutions in that country would perhaps be understood relatively differently.  For that, we published on March 19, 2016 an article ironically titled Women Pilots Driving Saudi Men Crazy and written by our own .
It remains that women in business or in any other professional commitments whether in education, healthcare, sports if compared to many of the country’s neighbours, Saudi Arabia does not seem to be too much left behind; we would recommend reading this article of National Geographic The Changing Face of Saudi Women published in February 2016 on the subject that is quite of an eye opener in this respect.
Per local media reports, the Saudi King issued recently an order that allows women to benefit from certain government services without the consent of a male guardian. This looks to many observers like a move by Saudi Arabia to give women more control over their life choices by relaxing the prevailing system of male domination that could hopefully to a little more gender equality.
Meanwhile another but recent article of Al Bab written by Brian Whitaker on May 2, 2017 is republished here as another way of looking at the same topic of women’s status in Saudi Arabia.  Apart from the first thing that comes to mind which is who to believe, the issue here seem to be far more concerned about how a country could vote for therefore endorse a country usually depicted as to put it mildly overbearing towards women.  Or is it a matter of how to vote in a country into this or that international institution on the basis of its performance on this or that domain?

Belgium admits backing Saudi Arabia on women’s rights

The Belgian government has admitted supporting Saudi Arabia’s election to a UN body which champions women’s rights – and now says it regrets doing so. Meanwhile, numerous other countries supposedly committed to gender equality are refusing to say how they voted.

Saudi Arabia has a long history of institutionalised discrimination against women and is one of the world’s worst offenders in that respect, but last month it was elected to the UN’s Commission on the Status of Women. The commission is described on its website as “the principal global intergovernmental body exclusively dedicated to the promotion of gender equality and the empowerment of women”.

Commission members are chosen by ECOSOC, the UN’s Economic and Social Council. In a secret ballot, Saudi Arabia won a place on the commission with 47 out of 54 countries voting in its favour and only seven against. The electoral arithmetic means that at least three EU countries (and possibly more) voted in favour.

In the Belgian parliament on Saturday, prime minister Charles Michel said his government had been informed of the ballot “only a few hours” before it took place. He continued:

“Thus, a vote was expressed by our diplomats on behalf of Belgium. I regret this vote. [Applause]. If it could be done again and if it was possible to proceed with a political assessment at the government level, I of course would have pleaded against a favourable vote. There is no ambiguity in this matter …

“I regret this vote. We will draw the consequences of this in the future and I have given instructions for a political assessment to be made at the highest level in order for this not to occur again. In short, we are fully determined to promoting the universal values of human rights.”

A translation of the full statement is here.

The other EU countries casting votes in the election were Britain, the Czech Republic, Estonia, France, Germany, Ireland, Italy, Spain and Sweden. It is still unclear how any of them voted.

In a comment posted on Facebook (translated by UN Watch), Swedish foreign minister Margot Wallström wrote said: “The decision on how Sweden would act in the vote for the Women’s Commission … was not something that was decided at the political level.” She added that the government would reveal how it voted to parliament’s Foreign Policy Committee – but the committee’s meetings are confidential.

A spokesman for Ireland’s mission at the UN mission said “it is not our usual practice to disclose publicly how we vote in such ballots”, claiming that ballot secrecy “facilitates the conduct and management of sensitive international relationships”.

Norway, a non-EU member which boasts of being “one of the foremost advocates for women’s rights in the UN and in the Commission on the Status of Women” is refusing to disclose how it voted – again citing ballot secrecy.

Britain is also refusing to say how it voted.

Last week a freedom of information request was submitted to the British Foreign Office by John Roberts. It said:

“Under the terms of the Freedom of Information Act, I would like to ask for access to the decision on the vote cast by the United Kingdom in ECOSOC regarding the candidature of the Kingdom of Saudi Arabia to CSW.

“Given the salience of the candidature, I assume a decision was taken either at ministerial or at senior official level and instructions were then communicated to the UK Mission in New York. If the decision itself is not recorded in written form (e.g. by endorsement of a submission), I would instead ask for a copy of the instructions sent to the UK Mission.”

This brought a Kafkaesque brush-off from the Foreign Office. It said the request should be redirected to the Government Equalities Office in Manchester – a body which appears to have nothing to do with foreign policy.

Although the UN ballot was secret, there appears to be no rule preventing any country from disclosing how it voted. Vote-trading between countries is a common practice at the UN and would probably embarrass a lot of governments if details became public – hence the desire for secrecy. Britain has previously been suspected of trading votes with Saudi Arabia in connection with membership of the UN Human Rights Council.

 

Women at the rescue of the MENA Economies

Women at the rescue of the MENA Economies

Markaz of Brookings Doha Center published this article written by Firas Masri, Research Assistant at the Doha Center, on February 6th, 2017, so as to make a clear point with regards to women generally not only of the GCC countries but possibly of the wider region of the MENA countries.  These do indeed share the cultual, cultural and historical background that for centuries bore on all beings, particularly women of all ages and social backgrounds.  According to FS_Masri, employment of women would not impinge on that of the men but could also help the economies of those countries; she does make a point that preoccupied many and notably the European Union.  It said in its study that examined the economic, political and socio-cultural changes which have affected the situation of women in the Gulf region over the last decades by focusing on women’s rights and gender equality in Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates and provided a socio-cultural, political and economic analysis of women’s situation in the Gulf region.  Firas Masri in her essay looks at more recent trends and gives us an outlook that is not different from that of the EU’s.  So, is it Women at the rescue of the MENA Economies ?

 

Why the Arab world should employ more women

Governments in the Middle East and North Africa (MENA) continue to search for ways to repair their fragile economies. For some countries in the region, experts wonder whether high unemployment and poor economic growth could precipitate another round of political upheaval, similar to the uprisings in early 2011.

Despite this ominous scenario, there is one strategy that MENA governments persistently overlook to ease economic pressures: increasing female employment, a topic that Bessma Momani explores in a recent Brookings policy brief. Momani explains that the lack of female representation in MENA workforces limits economic growth in the region. She also argues that government policies encouraging greater female participation in the workforce will have a host of other economic and social benefits, in addition to boosting GDP. Furthermore, Momani contends: “introducing diversity through gender parity will benefit economic growth and can help Arab countries generate prosperity—as well as the normative and social imperative of change.”

Unfortunately, as Momani outlines, several barriers impede women in MENA from joining the labor force. In order to counter this, in her view, MENA governments should conduct gender impact studies for regional policymakers to understand how policies shape cultural attitudes toward gender. MENA governments manage primary and secondary school curricula, which studies have shown contain direct and indirect gender biases in the national education curriculum. Momani’s research shows that such gender impact studies could expose the types of gendered language used in textbooks that help reinforce male-dominated workforces in the region. Government-sponsored internships allocated for women could overcome stereotypes in industries previously gendered as masculine, she adds.

Other factors that prevent women from entering the workforce in MENA countries include the following: low salaries, early retirement, underwhelming job benefits, difficulty securing capital for entrepreneurial ventures, and harassment in public spaces. By addressing these concerns in the short-term, Momani argues that regional governments will lay the foundation for economic prosperity in the long-term.  Regional policymakers face an enormous challenge if they address these issues simultaneously. Nevertheless, with many economies in the region facing a grim outlook for 2017, she contends that it would behoove them to seriously consider policies that encourage more women to join the workforce.

Women’s full employment in MENA could increase household incomes by as much as 25 percent:

According to a World Bank report, “women’s employment can significantly improve household income—by as much as 25 percent—and lead many families out of poverty.” It continues that increased household income will not only positively impact MENA economies on the micro level, but it will bolster economies on the macro level as well. The IMF supports this claim by noting that from 2000 to 2011, the region

“could have gained $1 trillion in cumulative output (equivalent to doubling average real GDP growth during the past decade) if female labor force participation had been raised enough to narrow the gender gap from triple to double the average for other emerging market and developing countries.”

Momani’s new research indicates that such predictions remain relevant today.

Higher female employment rates could reduce poverty due to lower birth rates and improvements in child welfare:

As Momani further discusses, echoing other researchers, greater economic opportunity for women could contribute to reducing poverty. Research by the National Institutes of Health, for one, has shown that financially independent women demonstrate a greater ability to support their children, which greatly improves child welfare. Momani points to studies showing that women in the beginning stages of their careers—especially younger women, who make family planning decisions later in life—tend to have fewer and healthier children, as well as higher earnings, which can reduce poverty rates among  youth.

 

Women-led households save more money:

Momani’s brief illuminates that as working women gain financial independence—and in some cases become the breadwinner of the family—they can gain more decisionmaking power in the family. As one gender equality study she cites argues: “Women’s propensity to save is greater than men’s, and women’s consumption focuses to a greater extent on the children and on household necessities.” As another report shows, this change in the household dynamic will also boost regional economic growth in the short-term, which will lead to sustainable economic development in the long term.

Even in households where financial responsibilities are shared equally among men and women, a cross-country panel study of semi-industrialized nations found “that an increase in women’s wage share relative to men is associated with increase in the domestic savings rate.” Whether women take sole responsibility of household financial matters or share this responsibility with their spouse, the benefits of this development will make families in MENA more fiscally secure, Momani shows.

If women were employed at the same rate as men, they would contribute $2.7 trillion to regional GDP by 2025, a 47 percent increase:

According to a McKinsey report, if MENA countries close the gender gap in the labor force, the region could see an additional $2.7 trillion added to MENA countries’ GDP by 2025. Momani concludes that Arab countries must overcome numerous cultural and societal challenges to stimulate increased female participation in the labor force, but by initiating policy changes that encourage a shift in this dynamic, MENA countries will find themselves more financially secure in the future.

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