An unseen barrier to Arab prosperity

Hafed Al-Ghwell

Parts of the Arab world have — for a long time — grappled with myriad recurring challenges arising from protracted low economic growth and the intensifying social unrest that typically follows. A number of these issues were already well-known prior to the global pandemic that has since amplified these woes and made the prospect of sustained, long-term recovery extremely complicated. Each new challenge has only shrunk the political, fiscal, and governance capacities required to solve them, increasing the likelihood of runaway convergent crises that today’s Arab societies are frankly ill-equipped to handle.
In a bid to chart a path forward, more priority is given to addressing the most destructive threats, but this comes at the expense of ignoring their amplifiers, such as unfettered access to reliable data. Transparent data aids not only in fashioning effective policies but also in nurturing trust between governments and their citizenry. In essence, closing data gaps and countries improving their statistical capacities are serious non-negotiables in the pursuit of economic expansion, sustainable development, and societal resilience throughout the Arab world.
However, the current state of data transparency in the Arab world leaves much to be desired. Statistical capacities in several countries have significantly declined over the past few decades, impeding growth, undermining development, and threatening social stability. According to the World Bank’s Statistical Capacity Indicator, for instance, many countries in the Middle East and North Africa region showed a downward trend in their statistical capacity, particularly between 2005 and 2018. And, according to the Open Data Inventory, which measures the coverage and openness of official statistics, Arab countries rank lower than their counterparts around the world.
This decline is largely attributable to underinvestment in statistical systems, political instability, and a lack of rigorous data-sharing protocols. It precipitated an estimated 7-14 percent loss in GDP per capita for the region over a 13-year period, which is roughly equivalent to a $165 billion loss at minimum. While some countries have witnessed improvements to date, those marred by conflict or wrestling significant economic headwinds have not been as lucky.
If these disparities linger, they will continue to obstruct Arab governments from making informed decisions, thereby stunting economic growth and societal resilience.
The implications of this decline are far-reaching, impacting everything from GDP growth to fostering resilience to the complex threats inherent in an increasingly interconnected global economy. Statistical gaps hamper the ability to accurately measure and analyze economic performance, as well as to gain crucial feedback from top-down interventions. The end result is misguided policies running rampant at the risk of stagnation and, in the worst case, an implosion, at a time when informed decision-making is absolutely critical. For instance, Egypt’s GDP growth rate had to be significantly revised downward in 2014 due to statistical discrepancies, which raised concerns about the reliability of its economic data.
Similarly, the decline in statistical capacity undermines societal resilience. Without timely and accurate data, it compounds the challenges of pinpointing social vulnerabilities and designing effective interventions to address them. For instance, without accurate data on unemployment rates, policymakers may underestimate or overlook the severity of joblessness, leading to inadequate job creation strategies. Similarly, without transparent data on poverty rates, efforts to alleviate poverty may be misguided or insufficient.
It also makes monitoring progress and holding governments accountable more difficult, which can fuel an undercurrent of public angst, and lead to social unrest. The upheavals in 2011 and the chaotic decade that followed after, remain a case in point. In the absence of reliable socioeconomic data, grievances about inequality and corruption did not just escalate into widespread protests. They also destabilized several countries in the region and introduced new maladies that require even more quality data and greater access to it.
So, how does a region beset by numerous challenges address this costly invisible barrier?
Addressing the data transparency crisis in the Middle East and North Africa requires a nuanced yet multipronged approach that focuses on capacity-building and robust data-sharing agreements. Of course, such approaches are a significant departure from standard practice, but given the current climate it is now crucial for the region to bridge existing gaps, improve statistical capacities, and develop more accurate modeling. It is also important to note that the effectiveness of policies and the progress of economies are intrinsically tied to the quality and reliability of the data that is available. A region’s ability to generate quality data can enable policymakers to make informed decisions, thereby fostering social and economic growth.
Furthermore, the region’s youth bulge, the explosion of digital skills, and the promotion of entrepreneurship present ripe opportunities for data-driven innovation. By enhancing the digital skills of the population, the innovative capacity of technology can be maximized, leading to more effective use of data for, and in, sustainable development, which is critical for resilience-building in a fast-changing world. In addition, data-sharing agreements are pivotal in promoting transparency as well as attitudes around it across the region beyond just data. These agreements can establish a culture of openness and collaboration, allowing for cross-validation, which can further enhance the reliability and credibility of information.
They will also facilitate better policy-making by ensuring that decisions are based on data that is accurate, comprehensive, and timely. Comparing performance with historical data and data from peer economies, for instance, enables producers to better assess risks, allocate resources optimally, and secure investments. Accessible data for civil society, moreover, paves the way for a more open and informed policy debate, ensuring only the most well-grounded ideas prevail, facilitating superior policy development and implementation in increasingly sophisticated economies.
Conversely, the absence of transparent data can broaden the perceived chasm between the public and the government. It breeds mistrust and skepticism when new reforms are announced, leading to societies resisting much-needed transformations, making them more susceptible to shocks both at home or abroad. By providing a clear and honest view of the situation at hand, accessibility to data not only allows policymakers to understand the nuances of the issues they are addressing. It also helps to create policies that are more responsive to the actual needs and conditions of the society, enhancing citizen participation and societal harmony.
When citizens have access to transparent data, they are better equipped to engage in meaningful discussions about policies and issues that directly affect them. Engaging in more open dialogue between the government and its citizens fosters a sense of trust and mutual understanding. It also helps to create a more informed citizenry, which is essential for society to function, even when faced with unforeseen shocks. While the road to achieving full data transparency and accessibility might be challenging, the rewards it can bring in terms of effective policy-making and social cohesion are indeed promising. With concerted efforts, the vision of a transparent and inclusive society can surely be realized.