Growth, Employment, Poverty, Inequality, and Digital Transformation in the Arab Region

For the Arab region, the potential for digitalization to produce economic gains appears large, particularly over the longer term. However, digital transformation could have significant and unpredictable impacts on income and wealth inequality, employment, trade and investment, supply chains, migration, service delivery, and environmental and climate-related challenges.

This policy-focused research project is a collaboration between The Arab Development Portal and ERF. Led by Mustapha Nabli, the project examines how digital transformation is affecting economic growth and structural transformation through its impact on key sectors of the economy, and what are the opportunities that digital transformation can provide in supporting inclusive and sustainable growth, employment generation and poverty reduction? It examines also how is digital transformation affecting human development and human capital accumulation, and what is its potential impact on inequality and poverty? Potential risks, especially for vulnerable populations (through widening inequality, job loses, and so forth) will be assessed to the extent feasible, based on availability of data. Where data and other information are available, papers will assess the potential effects of the COVID-19 pandemic on existing vulnerabilities (including vulnerabilities in the gig economy) that can exacerbate inequalities, and discuss policy options for addressing the potential challenges.

The research program will produce 5 thematic papers and 8 country-level policy briefs on the subject: Egypt, Jordan, Lebanon, Tunisia, Algeria, Morocco, Saudi Arabia and Oman. The project commissioned internationally known experts to write five thematic papers on global and region-wide issues related to the digital transformation. Meetings were set up to provide a platform for expert peer review and an opportunity to discuss and debate initial policy recommendations and input to country studies. First meeting on Inequality and digitalization in the 21st century, including within country and across countries economic forces that affect inequality in opportunities and in outcomes, and their impacts and policy implications for the Arab countries/MENA region was held on December 22, 2020. Paper authorship: Shahid Yusuf. Special review by Francois Bourguignon.

ERF acknowledges the generous financial contribution of the UNDP.