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Arab News
23-02-2025
- Business
- Arab News
Pursuit of economic security is a double-edged sword
Like all social media storms, the one over whether couples are wise to delay having children for financial reasons is unlikely to throw up any practical solution soon. But there are enough pros and cons in this debate to keep it simmering for as long as platforms like X allow people across the world to express their opinions freely. This discussion overlaps with a much bigger question that confronts perhaps every generation: Should achieving economic security take precedence over all pursuits and activities that involve a degree of risk? As is almost always the case, there are no easy answers. What can be said with some confidence, though, is that achieving economic security is a goal that is gaining in importance with every passing generation, especially in countries that don't have reliable social safety nets. This will most likely result in young people in such countries becoming less enterprising and more risk averse, both in personal and professional choices. Yet elaborate welfare services or social security benefits do not guarantee the opposite. Editions of the Arab Youth Survey since 2021 reveal a striking paradox: 71 percent of millennials admire entrepreneurs, yet 63 percent fear failure. This tension between aspiration and anxiety highlights the Middle East and North Africa region's struggle to balance economic security with the risks necessary for societal progress. Across the Middle East, young men and women face multiple existential dilemmas — whether to chase stable salaries or launch business ventures; delay marriage for financial readiness or build families early; prioritize career continuity or reinvent themselves. These choices are not merely personal; they shape the economic and social fabrics of nations. While caution is understandable in uncertain or turbulent times, excessive risk aversion is inimical to innovation, demographic vitality, and long-term societal resilience. Fortunately, the Gulf Cooperation Council bloc's free-market economies, particularly Saudi Arabia's Vision 2030, demonstrate that calculated risk-taking — supported by policy infrastructure and mindset shifts — can transform the quest for economic security from a negative influence into a catalyst for growth. While caution is understandable in uncertain or turbulent times, excessive risk aversion is inimical to MENA innovation, demographic vitality, and long-term societal resilience. Arnab Neil Sengupta The Arab world grapples with a 30 percent youth unemployment rate, yet 78 percent of young Arabs prioritize stable salaries over entrepreneurial ventures. This contradiction is nothing but a reflection of systemic barriers: Studies show that entrepreneurs in Egypt and Tunisia are typically older, less educated and male, contrasting sharply with the unemployed youth demographic. However, exceptions in the form of successful startups in Jordan show education and mentorship can bridge this gap. The UAE's entrepreneurship ecosystem further proves that calculated risks yield dividends when supported by streamlined regulations and funding access. Recent surveys suggest more than 58 percent of Gulf youth now find entrepreneurship 'easy,' compared with 73 percent in North Africa who describe it as arduous. The lesson is clear — economic security and ambition are not mutually exclusive but interdependent variables of modern life. Rising living costs concern 56 percent of young Arabs, delaying marital plans. In the Gulf, 43 percent of couples are believed to postpone marriage for financial stability, wary of inheritance complexities and childcare expenses. However, family networks remain a cultural safety net; 68 percent of youth still value traditional family structures, even as they marry four years later than their parents' generation. Childcare subsidies that reduce daycare costs in some Gulf states demonstrate how policy can alter risk perceptions, enabling people to marry young without sacrificing quality of life. To be sure, the financial challenge of parenthood worldwide is daunting, with first-year childcare costs exceeding $12,500 in advanced economies. In the Arab world, 61 percent of mothers return to work within six months postpartum, often due to economic necessity. At the same time, sharp declines in fertility rates in Gulf countries since 1980 have stoked fears of a demographic timebomb. With a median age of 22 — eight years below the global average — delayed family formation regionwide adds to strain on societies and labor markets. Egypt alone needs 700,000 new jobs annually to absorb youth entrants, a demand that calls for greater self-reliance and creativity. To compound the problem, 52 percent of Arabs believe their economies are headed in the wrong direction, with 40 percent blaming mismanagement. Lebanon's currency collapse, which wiped out middle-class savings, has forced people to protect what little they have as institutions grow weaker. Sixty-one percent of Arabs say they do not worry about personal safety, yet economic anxiety dampens propensity for risk-taking. Guaranteed public sector jobs provide stability to households but reduce incentives for private enterprise and innovation. Physical security enables entrepreneurial experimentation, but it must be supplemented with financial safeguards like bankruptcy reforms and venture capital access. The truth is, risk-taking in any form is not necessarily followed by rewards. Up to 90 percent of startups can fail within five years even in Gulf states, and MENA entrepreneurs often earn less than wage workers. Cultural stigma around failure is all too real: Surveys show that 63 percent of Arab millennials fear entrepreneurial missteps. In Egypt, youth view entrepreneurship as a late-career pursuit best explored after accumulating capital and experience. There are possible solutions, though. Integrating entrepreneurship education into MENA curricula can make the nature of risk easier to understand. Saudi Arabia's Misk Foundation workshops and the UAE's Hub71 incubators are models of this approach, combining technical training with mentorship. Likewise, childcare subsidies and funding for small and medium-scale enterprises have demonstrated the benefits of targeted state interventions. Expanding bankruptcy protections and reducing startup fees would make entrepreneurship less risky in the Arab region. Thanks to such steps and a generational shift, 53 percent of Gulf youth now pursue entrepreneurship. As things stand, micro-entrepreneurship via social media may be the best way to overcome traditional barriers. Indeed, 15 percent of Arab startups now focus on e-commerce, leveraging the popularity and reach of platforms like Instagram, Facebook, YouTube, and TikTok. Encouragement of bold career switches and late-stage entrepreneurship can contribute to economic vibrancy without hurting innovation. Some experts believe the path forward lies in redefining economic security not as an absence of ambition but as the capacity to withstand risk. Whatever the correct course, for MENA countries to thrive and compete on the global stage, the goal of government policies should be to empower — not stifle — the ventures, families and individuals, and innovations that drive lasting progress and ensure demographic robustness. • Arnab Neil Sengupta is a senior editor at Arab News. X: @arnabnsg
The National
11-02-2025
- Politics
- The National
The World Governments Summit has begun at just the right time
As the World Governments Summit begins today, it is worth reflecting on how often the UAE-hosted event has tackled challenges and assessed opportunities, producing thinking that is ahead of its time. From topics as diverse as artificial intelligence and mental health, as well as food security, climate change and citizens' happiness, for more than 10 years the Dubai forum has proved itself to be a valuable international meeting point, aimed at improved governance. What makes this annual summit a consistent fixture of the international calendar is how expansive its exchange of ideas is; few other forums can command a list of participants with such breadth of experience. More than 30 heads of state and government will attend, including the Presidents of Indonesia, Sri Lanka and Poland. They will be joined by more than 80 international organisations and about 6,000 individual experts. Any summit that can bring tech figures such as Google chief executive Sundar Pichai and Elon Musk together with important individuals like Kristalina Georgieva, managing director of the International Monetary Fund, Rafael Grossi, head of the International Atomic Energy Agency, and UN High Commissioner for Refugees Filippo Grandi has more than proved its relevance. Those attending this week's summit are meeting at a critical time. The speed and profundity of recent developments – global and regional – require strong leadership, collaboration and innovative thinking. In the Middle East, new governments in Syria and Lebanon are taking shape as a tentative ceasefire holds in Gaza. In Washington, a new and very different America is being created; this promises to have far-reaching political, economic and security implications for the rest of the world. Indeed, many of the world's current talking points – global trade, government efficiency, the future of health care and international security – will be scrutinised and debated over the next three days in Dubai. Consensus is never guaranteed but bringing together people with different competencies and perspectives contributes to better understanding – and in today's fragmented world, this is a commodity that is often in short supply. This storm of change that is taking place makes it more important than ever to prepare the next generation of policymakers. Complementing the work of the WGS this week has been the first meeting of the Young Arab Leaders Forum that took place in Dubai on Monday. More than 200 emerging leaders took part, and there are plans to grow the event; Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, Deputy Prime Minister and Minister of Defence, has said the initiative aims to attract 50,000 participants in the coming years. The UAE is an apt place for an ambitious project to develop leadership among the next generation. Consistent Arab Youth Survey results have revealed how many young people across the region see the Emirates' model as one that they aspire to. A forward-looking approach to policy and problem solving will be indispensable in the years to come, owing to the sheer number and scale of the challenges facing 21st-century humanity. This week's World Governments Summit is undoubtedly important for the present but also because it will set the tone for future convenings, with the summits of 2030 or 2035 also being ones to watch.
