WEF 2009 global problems, local solutions: more than 1,000 participants from around the globe will gather together at the Dead Sea in Jordan this month for the World Economic Forum (WEF) Middle East, which this year takes as its core theme the global economic crisis and its implications for the region.[ILLUSTRATION OMITTED]
Long considered the stellar engine of the world economy, financial markets have set in motion the biggest global crisis since World War II. Caused by inherent weaknesses in risk management practices, the current downturn has been exacerbated not only by lack of transparency and poor corporate governance but also by stakeholder complacency. Like every other region on the planet, the Middle East faces a host of challenges requiring bold leadership and firm commitment from all interested parties, if it is to successfully weather the storm.
Recognising the complexity of global challenges and the need for collaborative, innovative and integrated approaches, in 2008, the Network of Global Agenda Councils was formed. Professor Klaus Schwab, founder and executive chairman of the WEF, had the vision of bringing together the very best minds from a variety of diverse sources and geographic perspectives to engage in dialogue and debate that would encourage the sharing of specialised knowledge and the exploration of problem solving across myriad global issues.
In a global environment often marked by short-term orientation and narrow thinking, the Network of Global Agenda Councils will help foster interdisciplinary and long-range planning in the face of prevailing global challenges. As Marwan Muasher, senior vice-president of the external affairs department at the World Bank and the chairman of the Global Agenda Council on the Future of the Middle East, noted: "As a region that faces huge political, security and economic challenges, the Middle East needs to adopt policies that would better integrate it with the global world in a sustainable manner. Such policies should emphasise values of tolerance, inclusivity and good governance."
As envisioned, the Network of Global Agenda Councils is already proving to be an integral part of the Forum's commitment to delivering value to its partners, members and other communities. Council members and experts are currently in the process of assessing whether an early warning system based on macro-prudential surveillance could help anticipate future financial market exuberance.
In a region with a strong tradition of contributing to society, the Arab Business Council (ABC)--composed of leading representatives of the private sector committed to enhancing economic competitiveness in the Arab world--is debating to what extent corporate engagement in society can have a tangible impact on economic progress and the environment.
The world is undergoing a profound transformation in global governance driven by the financial situation that is unfolding. In finding solutions, a key and long term resource will be education, explained Patrick Aebischer, president of the Swiss Federal Institute of Technology: "The solutions to regional problems in the Middle East require home-grown strategies focused on building institutions of educational, academic and research excellence. Partnerships with international institutions are crucial, but cannot succeed without effective integration and the commitment of academics, scientists and business leaders from the region," he observed.
Over the past decade, the Middle East has witnessed the rise of a generation of young entrepreneurs who have introduced new business models and built companies with a global presence. There is consensus that diverse groups reach better decisions than homogeneous ones and that closing the gender gap will result in increased levels of competitiveness and success. On this front, the WEF Gender Equality Report 2008 gives restricted cause for celebration. The report highlights the fact that while most Middle East and North Africa (MENA) region countries continue to perform far below the global average, countries such as Tunisia, Jordan, the UAE, Algeria, Oman, Egypt, Morocco and Yemen have shown a marked improvement. Unfortunately Syria, Qatar, Bahrain and Saudi Arabia have moved down the poll, overtaken by states that are recording improved gender equality at a more rapid rate.
Israel (at position 56) continues to hold the highest position among countries in the MENA region, while for the third consecutive year, Kuwait (at 101) holds the second MENA spot, favoured in particular by higher-than-average female performances in areas of economic participation and educational attainment. Admittedly, there is still much progress to be made with only 1.5% of boardroom seats in the region occupied by women, but the long march has unquestionably begun.
Another catalyst for growth is in the information and communications technology sector. WEF's Global Information Technology Report 2008-2009 underlines the point that good education fundamentals and high levels of technological readiness and innovation are, in the 21st century global community, essential engines of growth; imperative if the region is to overcome the current economic predicament. Under the theme 'Mobility in a Networked World', the latest report places a particular focus on relationships--and interrelations--between mobility and ICT. In Northern Africa, Tunisia (at 38th position) leads the way with Egypt, Morocco, and Algeria trailing at 76th, 86th, and 109th, respectively.
By contrast, the Middle East further improved its networked readiness, with all countries but one appearing in the top half of the rankings, namely Israel (25th), the UAE (27th), Qatar (29th), Bahrain (37th), Saudi Arabia (40th), Jordan (44th), Oman (50th), and Kuwait (57th). In the same report, Ms Nagwa El Shenawy, head of information at the Ministry of Communications and Information Technology in Cairo, and Bruno Lanvin of the Paris-based graduate business school and research institution INSEAD, (Institut Europeen d'Administration des Affaires), focused on Egypt's successful experience as an emerging outsourcing gateway in the Middle East. The report relates the carefully built business environment strategy and the sustainable and ongoing technological development and skills upgrading programmes that have enabled Egypt's transformation in this area. A dynamic national plan was set out, including specialised ICT-training programmes and the creation of business hubs such as the Smart Village and Maadi Investment Park, alongside investor incentive packages.
Thanks to competitive advantages such as low costs, a competitive labour pool, stable macroeconomic environment, strategic geographical location, strong government focus, good telecommunications infrastructure, and an improving business environment, Egypt has the potential to be one of the top five business process outsourcing destinations within the next 10 years.
A major lesson to be learned from Egypt's experience is the importance of investing in relevant human resources, ensuring an overall infrastructure with world-class connectivity levels.
As governments of the world's major economies agreed at the G20 summit in London in March--along with their decision to spend a combined amount of around $3 trillion to help stimulate economic growth--in the drive to ensure future prosperity, there is a pressing need to prioritise the development of a high-growth/low-carbon economy. President Hosni Mubarak of Egypt pointed out at the last WEF Middle Eastern Forum that "the current economic crisis introduces many problems where social and economic dimensions are intertwined, including other issues such as climate change and water, food and energy supplies".
On the issue of tackling the region's never-ending concerns over water, the WEF's Thirsty Energy--Water and Energy in the 21st Century report explores the risks and opportunities inherent in the ancient relationship between energy and water that has taken on a new urgency as competition for finite freshwater resources rises.
Produced in partnership with Cambridge Energy Research Associates (CERA), the study includes perspectives from prominent experts and decision makers. "The importance of bringing water into the energy equation now cannot be underestimated as we are heading for a more water-scarce future," said Christoph Frei, Senior Director and Head of Energy Industry at the WEF.
Although water worries are global--especially with climate change--water solutions are local, since transporting water over long distances is not economically feasible. Translating global water worries into local solutions requires a better understanding of the complex relationship between water and energy.
Daniel Yergin, the chairman of CERA, explained: "Understanding how to optimise the use of water and energy in a carbon-constrained environment is becoming critical for both business leaders and policy makers. The industry's goal must be to use water resources wisely while taking into account climate change and energy security concerns. Finding solutions will be a challenge for energy companies for decades to come."
To address some other pressing environmental issues, the WEF launched The Task Force on Low-Carbon Economic Prosperity at the end of March. Introducing a set of practical policies and incentives should enable green recovery packages to have maximum impact both in the short-term and into the future. But this is not a task for governments alone.
As the business sector is key to low-carbon investment, innovation, products and services, it needs to have a voice at the table.
While the Middle East faces many challenges, the reassuring message of successive forums is that none is insurmountable. The region's aspirations for prosperity will be challenged as it attempts to restore its own growth while navigating a complex geopolitical landscape. But approaching global problems with a global approach will lead the way to long-term sustainable results.
SHERIF EL DIWANY
HEAD OF MIDDLE EAST AND OF THE ARAB BUSINESS COUNCIL, WORLD ECONOMIC FORUM, TALKS TO THE MIDDLE EAST
What can participants at the World Economic Forum on the Middle East expect to see this year? Under the patronage of King Abdullah of Jordan, the World Economic Forum is convening its seventh consecutive annual meeting on the Middle East, entitled "Implications of the Global Economic Crisis for the Middle East: Home-grown Strategies for Success".
The objective of the meeting is to align perspectives and action plans regionally and globally to ensure that the government and business responses to the crisis are realistic, timely and pave the way for future sustainable growth.
The World Economic Forum is working in conjunction with the Ecole Polytechnique Federale de Lausanne, Switzerland. For the first time, the Forum will bring together leading scientists from the region and the diaspora to engage top executives, science and technology ministers and leading decision makers in a dialogue on a long-term strategy for higher education, science and research in the Middle East. They will also look into ways to develop successful business models for scientific infrastructure in the region, such as the King Abdullah University of Science and Technology in Saudi Arabia.
Will the current financial crisis dominate the upcoming forum on the Middle East at the Dead Sea? What other key issues will be discussed?
Until a year ago, the most pressing issue in the Middle East was the peace process, which affected growth prospects for its largely entrepreneurial population. As the region attempts to play an active role in the world economy, it is now facing--perhaps to a lesser degree than other parts of the world--the economic consequences of the global crisis. Nevertheless, regional leaders in both politics and business have conceded that, while the peace process needs renewed attention and commitment, the economic architecture also needs a renewed, timely and coordinated response and recovery measures that amplify its competitive advantage.
This timely gathering will allow regional and global leaders to articulate the Middle East's response six weeks after the G20 summit in London and one quarter of the way into implementing the 2009 rescue packages of the United States, Europe, India and China.
The programme highlights include:
Overcoming the Crisis and Restoring Growth
With results for the fiscal year 2008 and the first quarter of 2009 just published, premier entrepreneurs and public officials will have a unique opportunity to take stock of the global economic downturn. They will be able to evaluate policies, assess the adequacy of business plans and formulate strategies for reinvigorating growth in the region and globally.
Shifting Geopolitical Landscape
Prospects for progress along the region's major fault lines will be examined in view of the global economic crisis and with respect to the foreign policy implications of several elections around the world.
Towards New Partnerships in Science and Research
For the first time, the meeting will bring together leading scientists from the region and the diaspora to engage decision makers in a dialogue on a forward-looking agenda for science and research in the Middle East.
Soft Touch of the Middle East
Reflecting the growing prominence of soft power in international affairs, the meeting will examine the concept's significance for the Middle East's internal dynamics and position in the world arena. Participants will be encouraged to articulate "soft" approaches to regional and global challenges, and recommend measures for their integration into established practices.
New session designs, including Arenas, Jury Sessions and Systems Mapping will be introduced with the goal of accentuating the participatory nature of the meeting.
WEF and Water Initiatives
Our wealthier, more populous, more climate-variable world is fast becoming a more water-insecure world
The World Economic Forum is undertaking a major initiative on water from 2008 to 2010. The project is structured to complement and build upon the Global Compact CEO Water Mandate and will bring multistakeholders together to address three areas of activity.
(1.) Raise awareness about the structural water challenges that the world will soon face, especially among leading political, macroeconomic and corporate decisionmakers; increase understanding about the policy and technical options available to address the challenge.
(2.) Find ways to leverage the competencies of international business to help political and civil society leaders address the water challenge.
(3.) Catalyse new interested parties to convene discussions about water challenges at the global and regional level and stimulate at the highest level a scale-up of public-private/ civil society activities.
Barcelona begins to import drinking water; Istanbul and Atlanta came close to a dryout. Are these patterns the future of water security for richer cities?
According to UN Secretary-General Ban Ki-moon, the fighting in Darfur resulted from water shortage: "Fighting broke out between farmers and herders after the rains failed and water became scarce." Will water become a consistent flash point for conflict?
Due to domestic water constraints, Saudi Arabia makes a policy decision to stop being food self-sufficient. It becomes a cash-rich, water-poor state, searching for water and food outside its borders. Is this the future of water geopolitics?
The rising costs of oil-based and foodstuff commodities start to threaten social stability around the world. Does access to water lie at the centre of the food-energy trade nexus?
As predicted by the IPCC in 2007, there are now up to 25 million climate-change refugees in Africa, as water insecurity causes a 5o% drop in yields from rain-fed agriculture in less than a generation. Will cash-poor, water-poor states simply start failing?
The target year for achieving the Millennium Development Goals, but over 40% of the planet's population still does not have adequate access to sanitation facilities. Is a world system that fails to deliver on this most basic water service to upwards of two billion people living on borrowed time with regards to political stability?