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Good morning to everybody.
I was quite instrumental working with the team from the World Economic Forum
to put this issue on the agenda.
And in fact, it's arguably the most important issue for the next 10 to 20
years, one would say, for the Middle East and North Africa, and that
is building the future middle class.
The best form of security, if you think about it, is economic prosperity
not for a chosen few or an elite in the
society but inclusive growth that is viable on its own merits despite the
revenues that come in from, for example, hydrocarbons and that
over-dependence that we often hear about, particularly within the Gulf
Cooperation Council states. Now, a common and accepted yardstick
is the pressure to create a certain level of jobs between now and 2020.
I've covered this issue going back to 2003, when the Arab Business Council,
the World Economic Forum got very involved with the issue of job creation.
For the purposes of this debate, I'd like to include Turkey in our
measurement as well for the broader Middle East and North Africa and bring
it all the way here to the host country of Morocco.
So I'm going to use a benchmark, it's
a high benchmark but the need to create 100 million jobs by the year 2020 to
tread water, to not add to the unemployment rate.
Also, to use the benchmark for
purposes of our discussion, the latest
numbers from the Middle East North Africa economic snapshot from
International Monetary Fund which puts
the unemployment rate in the Middle East and North Africa at 11% and again,
another common benchmark that we use in this region when covering it is that
the youth unemployment level is at least double that.
It's actually much higher in some
countries, well into the 40 to 50% range, depending on what you're looking
at. It's not surprising to find youth
unemployment at 20 to 25%.
Just to lay the groundwork for the discussion here, we're going to have
a roundtable discussion for about 35 to 40 minutes, and I want to open the
floor to questions. When we do get to the questions, I ask
you, because we're taping this for our CNN program Marketplace Middle East,
that you keep your questions very
direct, identify who you are,
and allocate that question to one person on
the panel. Welcome to everybody on the panel.
I appreciate you joining us. We intentionally brought two people
from the Gulf States, one minister from our host country Morocco and a business
leader looking at the pan-regional
basis and it's a real pleasure to have Lubna Olayan, who is a highly respected
business leader from Saudi Arabia.
What I'd like to do to start in terms of the panel, let's spend, if we can,
a minute or two on how you see the
intensity, the pressure, the building
of the future middle class.
Let's frame the debate first that way. Joe, do you want to start us that way?
Sure, yes.
Thank you, John. I would start by saying that the
emergence of a strong and vibrant
middle class in the MENA region is in
the national interest of most governments in the region.
And starting from that point, when you think about it, there are 100 million
people today roughly between ages 15 and 29 in our region, again, in the
MENA definition, many of whom will come to the workforce in the coming years,
and this is often seen as a -- it can
be seen as a liability in the short term, but in fact, it holds great
potential for all these countries in
the long term. If you remember yesterday, one of the
panelists was commenting on the negative implication of an aging
population in Japan.
And so my belief is that again,
this youth bulge, if you want, of 100 million people within this age
structure holds great potential for the
region.
Now, having said that, if you couple
this observation with the unemployment observation that you've made that youth
unemployment stands at twice the
national average in most of these countries, you couple this with still
strong population growth in our part of the world compared, for instance,
to OECD countries, if left unaddressed,
this potential will go to waste and I
would call it almost like a ticking
time bomb, economic time bomb. So this is something that we've got to
get right and it's the national self interest of everyone in the region.
So in the big picture, if you're
defining this region and you're trying to attract foreign direct investment,
we have to move the conversation from this fast-growth population from
a liability to an asset and that's not happening today, in your view,
Joe? No, it is starting to happen.
The problem is this is an awfully complex issue.
There is no magic stick to just decrease the emergence or the rise of
middle income tier or middle income
class. And so it's really about lots of
things, lots of policies coming together at the same time.
That's where the complexity frankly lies.
There is no silver bullet.
Thank you. Sheikh Ahmed, there is a number of
different measurements and that's part
of the challenge when framing the debate here.
But if I look at purchasing power parity, Bahrain ranks 32, according to
the IMF 2009 survey, with the per capita income around $27,000,
again, depending on how you measure that. What's the progress made?
What's been the concrete progress for
Bahrain in this effort of
a redistribution of wealth in the island
state? Well, I'll pick up from a point that
Joe just mentioned, and it is looking
at no on solution works for all countries.
There are many different tools in our
toolkit to tackle the problem of building the middle income or maybe
even middle income and higher.
The challenge for us has always been what is needed for each country?
For us, it was creating a vision.
Our Vision 2030 document is a vision
that took time and consultation with
many different bodies around Bahrain to understand what the country wants,
what can we do, and what we want to do as a nation.
And I think that's the important challenge.
Once we built that vision document,
we were able to develop six-year plans for
different ministries that then were
incorporated in our budget cycles.
It's a consultation process with many
different bodies. It's understanding what we want to do
and then to take us forward.
But what we felt was important was
providing access to capital,
investing even further in education, and making
sure we have the infrastructure to
support business at the lower end.
Small enterprises, small businesses,
development bank, even smaller banks to get micro loans and creating the chain
that will help an individual from micro business all the way to small business
until they are ready to be taken over by commercial banking.
That was an important thing. And creating the training facilities
through some of the programs we introduced that allowed money for
investment and trading to make sure
that our people are ready for the jobs
that are actually out there.
The challenge now is no longer thinking within a country.
It is the ability to think how can we compete as a nation regionally
and globally? And that's how we see the world
evolving. How you benchmark in Bahrain, and Mr.
Baraka, I'd like to post that question
from Morocco, but internally, how you benchmark in your countries to say we
are making progress on the development of a middle class?
First, Bahrain. We look, first of all,
at benchmarking to the region and to the
world in terms of what is best practice out there.
We have no room for local laws or local regulations.
We've got to see what is out there in terms of benchmarking.
We follow what the World Economic
Forum does in terms of research.
We look at the World Bank-IMF work.
We definitely follow what the G20 does in terms of how the new structures in
finance and other bodies are actually evolving.
I think that's very important in how the world will look in the next 10
years.
And we need to understand how the world
is changing and what our role needs to change to so that we are ready for the
challenge. Education definitely is key.
Access to finance, training are two other important things.
I'm not saying these are the only
ones.
For us in Bahrain, we saw this as very
important. But as I said, for every country,
there is a different set of policy elements that are needed to be implemented to
make sure that that country can keep the challenge.
You brought up a number of things I
want to come back to after our opening comments with regards to education as
well and the broader influence of the G20 on the Middle East and North
Africa. Mr. Baraka, how are you benchmarking in
Morocco? I know the efforts that's been underway
by King Mohammed VI to broaden out the economy, to attract foreign direct
investment, and to build a tourism
sector. There's been an effort over the last 10
years to broaden the base of foreign direct investment and broaden the
sectors that can create wealth. How are you benchmarking yourselves in
Morocco? I think that for our country, the most
important is to maintain very higher
rate of growth. And as you know, we had average rate
of growth is about 5% a year.
And how to have better wealth for our population is, first of all, to know
that this growth, the beneficiaries of growth are the poor.
Then we reduce poverty and we reduce
the poverty from 2004 until 2008 from 14% to 9%.
Second thing is to have a better middle
class. And now, I would like to explain that
middle class is not only problem of
revenue. As you know, Morocco had revenue per
capita increase 12% a year. But we think that the most important
is to have this feeling of to be into
this middle class because that means
that we have hope to have a better life and to have a better future for our
people.
And the statistics say that the middle
class in Morocco have been enlarged to about 50% of our population.
Fifty percent working from a baseline of what before 10 years ago?
They said it was about 40%.
That means there is an increase,
a very important increase, thanks to, first of all, to creating jobs because
in the '90s, the rate of unemployment, it was about 14%.
Now, the rate of unemployment in July 2010 is about 8%.
Second thing is to have better skills. And as you know, Morocco have been
diversified his economy with new
sectors like electronics, like aeronautics, like nanotechnology now,
and of course, automotive with investments of Renault, who will
produce about 400,000 vehicles, cars a year in 2012.
All that give us the opportunity to
have better productivity and of course, a better growth.
Good. Lubna Olayan, what do you think is at
the onset here of this debate, what is the most important thing today?
Is it defining what we want to see
within a middle class, whether it's Saudi Arabia or a country like Morocco
or Egypt? Well, I think it will be good to define
the middle class, and some people don't
like middle class. They like middle income rather than
middle class. But if we -- and I think we've all
looked into the definition of the middle class and it's numerous ones we
have seen. But one of for us to say is I think
for a society is the middle class is the one nowadays with at least
university education.
This is what I would -- and this takes
us to the value of education
and training and the quality of education. The ability to access funds, having
a good job and an opportunity to contribute to the sector.
Access to health care, I think, is very important.
So whether through insurance and in
particular, this is important so in case of a serious illness, they don't
fall back to poverty. So there are many definitions of what
constitute a middle person in the
middle class.
And to be able -- also home ownership
is an important category of middle class.
Good.
So let's drill into various subjects that have been brought in this first
round of opening comments. One of those things that stands out in
the broader Middle East and North Africa is that the poverty rate
is still extraordinarily high at nearly 40%.
That's not acceptable in 2010 with the
sort of wealth that we have throughout the region.
And again, depending on the measurement, that's a very high poverty
rate that is not in each one of the
different countries. But if you look at the totality of the
Middle East and North Africa, a poverty rate of up to 40% in some markets
is very high.
Joe, do you want to jump in on why that still is so persistent today?
Well, if you think about it, take the example of China recently, in recent
years, it does take several years in a row of sustained economic growth at
levels of 8, 10, and 12% year in,
year out to have a chance to lift people out of poverty.
And if you think about the traits of
our economies, of regional economies,
for a long time, for instance, if you take some of the GCC countries,
the state of the economy was very much
linked to oil prices in the '80s and '90s and the economies went up and down
together with oil prices.
So economic diversification was one reason why, for instance, over the
decades, if you want, this has not happened or this emergence of the
middle class has not happened. But that's not the only reason.
Another reason has been historically, in many of these countries, the lack of
private sector participation or strong participation in the local economies,
the fact that entrepreneurship was not only frowned upon but entrepreneurs do
not have access to financing, for instance, which is the point that you
made, Sheikh Ahmed. There are other reasons as well that I
think if you can drill into education, education is probably the major, in my
eyes, the most important factor in turning this situation around and we
could probably go down there. Well, let's interject here.
There is not a lack of will on
education.
If you look at the amount of money being spent in some markets, it's as
high as 30% of GDP in education, but
is it the right education?
Lubna, do you want to start? Yes.
I think with our youth and the huge youth and the population growth,
governments are focusing on education. Private sector is focusing on
education. But what I would like to focus on is I
think we all recognize that we should
focus on the quality of education,
on teachers' training, on getting the
right teachers, concentrate more on the
curriculum and the teacher rather than the infrastructure surrounding the
education. And we've seen recently focus on
centers of excellence, and universities
in the Arab world do not rank among the
top 400 universities in the world. And Saudi Arabia have done one attempt
in KAUST University, which is
a research institute. We need a lot more centers of
excellence. Would we say we're starting at the top
in the Middle East and North Africa
and worrying about higher education where
that actually has to get to the
grassroots? You have to start somewhere and maybe
it's easier to start at the top in some countries.
Easier but is it more effective is the
question. But it is effective if, for you to get
into a very good university, you would have to have a good standing from
school so you slowly will force the -- you will naturally force the schools,
the high schools, to try to meet more
entrance into university.
So it's a natural way of forcing the change.
What's the approach in Morocco,
Minister? I would like, first of all, to say that
I agree with Mrs. Olayan that it's very important to invest in software and of
course, in human capital and in training.
But I think that we have, at the same time, to link the education and the
program, the higher education and the sectoral strategies because we all know
that for example, in Morocco, we know
exactly what kind of sectors we would
like to promote and to invest into and what kind of training we need to have
the skills, to have a better
productivity, and to bring into our
labor markets.
Then with the strategies we put,
we have strategy industry, in services,
in agriculture, in fishery, and all these
strategies, we know exactly what kind
of people can work in 2020, 2015,
and we are preparing people for that.
Second thing we did I think is very
important.
It's about when we have a big foreign
investment in Morocco, like Renault, we decided to invest with Renault in
training.
We will have Renault Academy to train people for automotive construction.
And I think it's this kind of work we can do for the future.
Good. Joe, before I go to you, I wanted to
bring in Sheikh Ahmed here.
I know there has been a great effort within Bahrain to match the skill set
at the high end of the market to the demand of those investors who have
chosen Bahrain to use as their base for the Gulf and the broader Middle East.
Are you matching correctly at this stage to create the middle class?
When we started the process,
our unemployment rate was very high.
It was double digit.
Today, it's 3.6%, even though we have gone through the worst economic crisis
that the world has seen.
The challenge was very simple, how to
match the skills and how to improve
education.
The mandate was taken over by our
Economic Development Board and the process was very straightforward.
Again, consulting with the people on
the ground and looking at best practice
around the world. And building a process where we can
encourage people to learn and give them
the skills on how to further learn on two tracks.
One is academic learning, which is very important, for people who are
still in schools, and the second is to make sure that we are building the
capacity for people to learn on the job
to improve themselves and to be able to match those training programs
and skills with the jobs on the ground, whether present jobs or future-created
jobs, because of the capacity that's on
the ground. And I think we have seen the change in
unemployment rate. Of course, that and economic growth
that we've had because of the oil
crisis have helped reduced our unemployment rate.
Joe, you wanted to make a point on
education.
Where did you want to point to?
I just wanted to add that while it was
the right thing to do start with
modernizing the education system at the
higher educational level for the
reasons that were cited, I think now we are the stage, John, where we need to
work on both ends of the spectrum. Turning around an entire education
system is a matter of a generation or
two at least. It doesn't get done in two or three
years.
And so things like computer literacy,
English fluency,
mathematics, encouraging a mind to be inquisitive,
so the method of teaching are best ingrained in the early stages of
schooling. And so now, I don't think we have the
luxury to just focus on higher education.
We really got to work at both ends.
Good.
I want to bring in the political
element because we can't ignore it. We have elections coming up in Egypt.
We have elections in Jordan.
We had parliamentary elections in
Bahrain. What are those elections pointing to
and which role does job creation and the creation of the middle class play
into the election cycle now and the
results that we saw in Bahrain, for example, Sheikh Ahmed?
Well, the elections is a process of democracy where we have a legislative
body that we work with as an executive
branch in government on getting the
budget discussed and passed and the
process of creating laws. But my question is a little bit
different, if I can pinpoint because this is important.
The development of a middle class,
is it played out in the election result, for example, in Bahrain?
That sort of pressure that's leading to
the results that we're seeing within the legislative body.
I think it is our government's
interest and any government's interest to make sure that the economic
prosperity actually reaches every citizen in the country.
We see this today in Western countries where the challenge of creating
economic growth is there, creating jobs
are there. We've been tackling this for many
years.
When I mentioned earlier that we've
dealt with the unemployment, we maintained trend and growth at about
6.5%.
Through the crisis, we went down last year to 3.1%.
We're back to about 4 as our
expectation for 2010. We believe that it is our mandate as
a government to make sure that we continue the process, the process of
growth. The people on the ground definitely are
looking to improve themselves.
It is our job with them to consult them how.
And I remember my opening remarks, I mentioned in developing economic
theory, one has got to consult on what is capable and what is needed by
a country to grow.
There might be some social, some other restrictions within a country of what
they want to do as a people. Consultation has become a very
important part of what we do.
We need to make sure that the people
are on board in the new ideas. Yes, there are ideas that are tough
sell. But it is important that we create this
forum for debate and discussion between
government and the people through our legislative body, which is the
parliament, to make sure that we come
with the right laws, the right tools, and the right set of ideas to continue
economic growth.
And our goal is to reach that economic
growth rate, which is our trend.
Good. In fact, the IMF was suggesting,
and Minister, I'll come back to you,
the IMF was suggesting that you need at
least 6.5% growth regionwide to make
a serious dent in the creation of the middle class and a serious dent on the
unemployment rate.
That's a very tough benchmark to hit. Yes.
About this point, I would like to say
that with the crisis, as we know,
our partners, like Europe, for example,
for Morocco, had the reduction of their potential of growth to about 4.5% of
all the countries of the OECD. That means that of course, there is an
impact in our potential of growth.
But I think, and to have and to have
the possibility to maintain and to have the rate of growth about 6% or 7%,
integration of our countries, of the MENA region is very important.
I will give you one point. First of all, the non-Maghreb,
the non-construction of the Maghreb costs two points of GDP a year for our
countries.
That means that if we [audio glitch] to open the border with Algeria and to
have this Maghreb created, we can
double the income per capita for our
people in seven years.
That's why I think that integration, economic integration for our countries
are very important and can give us the opportunity to have a better internal
demand, domestic demand, and thanks to that, to have a better rate of growth
because we all know that, for example, for Europe, we can't have a rate of
growth more than 2% in two, three, in a few years after.
So this is one thing I do want to pick
up on, the ability to have inter-Arab trade both within the GCC and the
broader Middle East and North Africa. Can we move beyond the rhetoric, as the
building blocks are there, Lubna,
to action to remove non-tariff barriers to
trade? Yes, I think there is a lot of interest
in moving into regional trade. I don't get the sense of urgency.
Let me ask you a little bit
differently.
2005, the creation of the Greater Free
-- I'm sorry.
In 2005, you saw the creation of the
Greater Arab Free Trade Association and this market potential that was there.
If we're going to measure that in
2010, one would say we haven't seen a lot of progress.
No, you're right, we haven't seen too
much progress and there is a lot of obstacles we have to remove, a lot of
bureaucracy that stays in the way. And these are things we do have to
handle. And trade, as we all know, does create
jobs and does improve the -- I mean
we'll bring more people to the middle class.
But what we really hear and what I would like to say here, if I may,
is entrepreneurship really can add also to
the middle class. If we look and we learn from other
countries, if we learn from Brazil, what Brazil has done, they have added
30 million people to the middle class and reduced the poverty level quite
a bit, and that's due to
entrepreneurship.
If we try to learn from other countries
how they have tackled their middle
class, if we try to learn from Korea,
for example, Korea increased
and bolstered its middle class by education.
So we have spoken quite extensively
about education, about training, and we do -- I mean Singapore has one of the,
some of the best training schools,
non-government, and the time spend
and the money spent into these training
schools and the quality of the training
is phenomenal, and this is what we
need, is to bring that type of a job. And of course, foreign direct
investments coming in, encouraging high
level foreign direct investment to the countries can have --
Saudi Arabia has climbed the ranks in
terms of attracting foreign direct
investment. Is it making a difference in the
creation of the middle class in the country?
It is making a difference in job
creation. To measure whether it's making
a difference in the middle class and the actual measurements would be for us to
see. But definitely, we see, I mean we see
some of the joint ventures of SABIC coming in.
Exxon and Shell are one of the largest investors in the country and I guess
the technical knowledge and the
improvements and the requirements of
job training has improved quite a bit in there.
I want to go to this point of the
building blocks that we have available
to enhance the middle class. And one would argue, at least within
the Gulf States, having a single currency would lower some of the
non-tariff barriers to trade.
Sheikh Ahmed, we've been talking about a single currency.
The UAE is not part of that process. Can we get past those barriers between
the countries to get something done at
the core of the Gulf that could perhaps
be spread throughout the Middle East as single currency?
We are committed to the single currency and working towards it as four
states that are committed to the single currency.
Not very encouraging, four out of six, which doesn't lead us to believe it's
going to be a broader initiative over
the next 10 to 20 years. Well, I think the door is always open
for the other two. What is important to note is to see
that today, we understand the challenges that countries are dealing
with and monetary and fiscal policies. One angle maybe we should tackle upon
and maybe it's my chance to plug my
field is when even looking at building
middle income or middle class,
we should look at monetary policy. We should look at fiscal policy.
Single currency is part of that process.
But what is important is there is an
increased need and an effort to understand better how to position our
monetary policy and fiscal policy to
help economic growth. We understood that in our budget cycle
of '09-'10 by going counter-cyclical and spending like some other countries
to make sure that we maintain growth, and that's why we kept positive growth
in our economy in the last year and this year.
And we are looking to fix that over the next -- I'm having to deal with
a fly here but the challenge of that.
I thought you pulled out a magic wand
there. But basically, the challenge for
every country now is how to develop monetary policy tools and fiscal policy
tools to make sure that we understand
how to deal with the challenges
and also help create the middle income class, if we like, because that
is certainly a part of the process. Joe, to create the opportunity for
foreign direct investors, one would
like to look at this market, say,
250 to 300 million people in the broader Middle East and North Africa.
We're well off that concept of looking at this region as a single market.
What needs to happen to do so? I think moving beyond the rhetoric,
everyone has been talking about integration.
I remember, for instance, and if you remember, Sheikh, about the discussion
on electricity interconnection within
the GCC that was first talked about in
the '70s.
So there are lots of the ideas.
It's the political will that frankly
needs to translate those ideas into actions and initiatives.
I don't think this needs to be studied
a lot or overanalyzed. I think everyone knows what needs to
be done.
It's just a matter of picking up a few
things and running with them.
Good. So let's go around the table on this
one because I think this is an essential question.
Are we tackling this creating of the middle class with a sense of urgency
that is needed, knowing the competitive landscape within the G20 structure,
for example? Should we be doing more?
Yes. But are we tackling it?
Yes.
I think I mean both the private sector and the government sector have realized
the urgency of tackling this problem, tackling the youth bulge employment,
education.
If I may sidetrack here, I think when
we talk about unemployment, we talk about the overall average.
But women unemployment throughout the
whole Arab world is much larger and that is something recent statistics
have had throughout the MENA region,
not only in the Gulf, is I mean the average is around 40, and maybe here,
Joe, you can help out. That is a large number of the sector
that we .
And there is attention being put on
job creations or maybe should be there, some -- I'm not too much of a quota
person but should be there incentives for companies to hire more women.
Yes. I'd like to come back to that as
a separate subject because it's a very
important one, is the role of women in the workforce, particularly in the Gulf
States. But let's go to the issue of the
urgency. You addressed it briefly here, but are
we taking that sense of the
unemployment rate in the region and applying all the policy tools that are
necessary, knowing how competitive the landscape is outside the Middle East as
well?
Let's start with you and I'd like to go
right across the table on that particular topic.
But the unemployment of women is very important for this.
We shouldn't put it aside. No, but I want to come back to it.
Okay. Yes, I think we are all aware of the
necessity of creating jobs, and all efforts are being done to do.
Should we be doing more? Most definitely.
And job creation is what is important
to keep us prosperous in the long term. We also have to make sure we don't
fall back from where we are because we can see how middle income can be really
decimated due to political -- for
example, Lebanon, the war in Lebanon has really hit terribly the middle
class. And we also can see if there is
a recession or that -- so we have also to guard against factors that can take us
back.
So there is concern in your part that
we're backsliding with that lack of
a sense of urgency in some markets?
Backsliding, I am not sure we are backsliding.
I think we should do more than that, yes, I would agree with that.
Good. Minister Baraka? I think that, first of all, we all know
and we think that the middle class
is very important for us. First of all, middle class represents
social stability. It represents economic efficiency.
It represents hope for the future, and more than that, that means that if we
have good middle class, that means that
for the young people, they can and the social lift works that they can have
a better life, a better level of life.
That's why the King gave us to work in the government to enlarge the middle
class.
And we put a strategy with two big measures.
The first is to enhance middle class
and to maintain the purchase of the middle class and to have better revenue
thanks to reduction of the income tax, thanks to having more social guarantees
and protection. And the third thing is to have,
of course, to create more jobs. And the second point of this strategy
is to fight poverty. And thanks to the initiative National
Initiative of Human Development leaders led by the king, we could and all the
public policies are, have the same goals, is to work to have better human
development in our country and of course, to fight poverty.
Good.
How do you define the safety net? And I'd like to ask Sheikh Ahmed the
same because this is the important in
the protection of the middle class. What would you say are the two to
three key essential tools within the safety net of Morocco today to develop
that middle class? Yes.
About the safety, what we have now in
Morocco, we have now -- what is it's
name -- it's instruments,
medical instruments for the people.
We have it. We just began this year for poor
people, give them the opportunity to
have social protection,.
And we are working for people who lose her work, her job, their job.
We can give them the opportunity to
maintain their revenue during six
months. Then we re working on enhancing this
social protection for our people and to
maintain the level of the middle class
in our country. Good.
Sheikh Ahmed, has it been necessary to put the tools or ingredients in place
for a safety net within Bahrain as well?
I think that's critically important, but for me, I'd take just a minute to
talk about the G20.
The G20 represents countries with a GDP
of 85% of the GDP of the world. But today, we have 187 countries as
members of the World Bank. So if we take out 20 countries,
we're left with 167 countries with about 15% of the GDP of the world.
But 15% of GDP of the world, 167 countries, they need to be more
included in the process.
I think that's a very important
message and the point. So what sort of pressures are applying
to those that don't represent 85% of
the economy?
What are you looking at to say within Bahrain, "To develop the middle class,
I see what the G20 is doing.
This is what I'd like to do within our country?"
The challenge that I am trying to explain is as the G20 is introducing
changes in how things are done,
whether fiscal, monetary, looking at fuel
subsidy or other programs that they are trying to tackle, it's important also
to understand how the other smaller
countries will be affected by any
changes in regulations or any changes at the institutions the other
institutions are looking at.
I think that's critically important. Looking at the safety net in Bahrain,
we've created unemployment benefits,
which we felt is important.
That was the first element in actually tackling unemployment, is getting the
right numbers.
To make sure we get the right numbers, we started paying people who are
unemployed and offering them job
opportunities.
This way, we can actually state that we
know the true unemployed because we
paid them money if they are unemployed
and we give them job opportunities and we offer them training.
So making sure you have unemployment
benefits, making sure that you can actually train the people and offer
them jobs to make sure that you create a safety net.
For people who are unable to work,
there is, of course, social services
and programs related to that to make sure that maybe within the family,
they could help them come up with better
means to improve their capacity.
Most important program I think that
would help people who are earning less money, low income, is a program we call
temping , which is actually a program
that was introduced by His Royal
Highness, the Crown Prince, through
a law, of course, that went through our
judicial system and legislative body.
The law is very straightforward.
Basically, there is a fee for every
foreign worker that goes into our fund.
That fund is actually spent on
training and enabling people, local people to be able to get better skill
sets to earn more through better jobs. And I think that's a very important
program in enabling the middle class. We saw the process in Singapore.
It was implemented in Bahrain a few
years ago and the process is working
very well with companies and with individuals to increase the skills that
the currently have today to get better jobs.
Good. Joe, if I can have you bring your mic
a little bit closer.
I wanted to pick up here, and Sheikh
Ahmed makes a very interesting point. What are the best examples,
a Singapore, a South Korea, a U.S. or European model that would apply to the
Middle East on accelerating the
creation of the middle class? I don't think, as usual, the easy
answer is there is no single model that
the Middle Eastern countries can learn
from, but it's rather looking at various models and picking up what's
best. And it is a combination of all the
elements that we've talked about.
There is the social safety net aspect that some countries have built,
and Sheikh Ahmed I think listed most of those.
There is the aspect of letting the
private capital or private sector loose and creating jobs, SME creation,
SME, small and medium enterprises support. Access to financing for entrepreneurs
is absolutely key. And so you see different countries
experimenting with different pieces of that puzzle.
The trick, John, is to stay the course
on those. It is easy to not backslide but not
press on when the economies are in trouble or growing less or less of
a fiscal surplus. The real key is to stay the course for
a sustained period of time under this
really, and again, China brings a great example of lifting, I've read
somewhere, between 40 and 50 million people out of poverty every single
year. And the reason they're able to do that
is sustained strong growth of 9 to 10%
10 years in a row.
I totally agree with everything Joe said, but just to add one more point,
is retraining.
We have a lot of jobs, sometimes too many jobs, whether teachers or
administrative workers, that we would really have to take them and retrain
them so they can contribute more to the
sector. And I think other than training
is maybe we should look at retraining to
have them more fit into what
is required into the economy.
So you are suggesting that modernizing
the current workforce by retraining those who are in specific areas of the
economy? Yes.
I mean we have a lot, abundance of school teachers and a lot of school
teachers are not finding jobs.
Should we try to retrain them to see
-- I mean there are more need maybe for financial analysts to try to see what
the society needs and retrain
and that's an opportunity that also should be looked at.
Good.
I promised you I'd come back to this role of the female in the workforce,
and this is a huge issue within the
Gulf States in particular. You are removing at least half of your
economic development or potential economic development by not having
women in some markets work. Let's tackle it head on.
What's being done to readdress this
cultural barrier to females in the workforce?
And I'll approach Sheikh Ahmed afterwards.
Please. Well, I mean it is very obvious that if
50% of the population are not allowed to contribute, you're already at
a disadvantage and you can't get to where you want to go.
So there is a role for the females and opportunities to work.
Historically in my country, in Saudi
Arabia, the old job opportunities have been in education and the health care.
And so now, we are expanding to open more the job opportunity outside these
areas. And we are seeing tremendous change in
the last, I would say, five, six years
of women participation. We are seeing the private sector are
hiring women in Saudi Arabia. Of course, we have to abide by certain
restrictions. But overall, I see -- I think one of
the challenges also we see is that women are, in Saudi Arabia and other
countries I think in the Arab world,
more into university degrees than men,
so that also, you have a higher education for women and that we would
have to create more jobs for. And there was one study I was reading
that some of the unemployment maybe
is for a higher -- because of a higher education.
The higher school, the more
unemployment.
So we're educating the women in our
work -- to be prepared for the work but
we're just not using it. So they're getting the high education.
They're going abroad in many instances
but we're just not tapping into that
resource. Yes.
But I mean steps are being taken. And if we look throughout the GCC
countries, the percentage of
non-nationals working there vis-à-vis
the women available, I think we can look at it and see there is a natural
fit here. Good.
Sheikh Ahmed, you had your hand up.
Do you want to address it?
And I'll come back to Minister Baraka.
I don't think a nation can succeed
with 50% of its capacity underutilized. There are two elements to this.
In Bahrain, we have 37% of the
workforce in the financial services as women, 25% of the total workforce.
I still think we can do more.
We are examining and looking very closely at gender-based budgeting,
and that's a politically correct term,
I guess, that we can use that says the
budget will look at issues related to women and men to specifically target
programs that will serve both women and men within the government budget.
It's an important element to enable the economy to even produce more
through utilizing women more in the
workforce.
But I just wanted to echo the message
that we need to empower women and make sure that they are actually out there
working.
The grades we see in schools now, in universities, women are much higher
than men. And I remember when I was governor of
the central bank, we sent a delegation for a training course of nine women,
and the person on the other side called
me and said, "I thought you were
joking, but when I saw them participate, they're all very capable."
And I see no reason to distinguish
based on gender in jobs and in promotion.
I think that actually makes the society
stronger, much stronger.
How does that play out in Morocco, Minister?
I think that the most important thing is to rehabilitate women in society.
And I think in Morocco, we began with
Moudawana, the change of, the law of -- the Moudawana, and we give women more
rights and we have now women in politics, in economics,
in entrepreneurship. We have women studying and of course,
we promote women thanks to the education.
Like they said, it's very important I
think and if we -- in Morocco, what we are trying to do is to have women in
all the aspects of the life. And we can talk about, for example,
in the local elections, in 2009, we had 12%, 45% who are women.
In 2003, there was only 0.5%.
That means that women are more present
in society, in politics, and of course, in other areas.
Good.
There is a couple of things I wanted to
touch upon and then I'd like to go to
the audience for some questions.
I'll ask the lights to go up when we do so.
But the role of Big Brother, there is a tendency, particularly in the Gulf
States where the energy wealth is, to look over the shoulder and say,
"Well, Big Brother will provide the job for me in government and not the private
sector." And this has always been
a tap since the 1970's.
Are we getting past this trap that the government or Big Brother will look
after us and provide a government job just to make sure the employment
numbers look better?
Well, I think yes, in Saudi Arabia, job creation has been more in the private
sector in the last 10 years than in the
government sector. But the mentality is there that the
government will look for us in terms maybe of health care, but not in terms
of job creation, in terms of housing
and helping in house loans and all
this. But job creation, I would say,
mostly is coming from the private sector.
And this change in mentality that it's
not going to be the government providing the job not just in Saudi
Arabia, and I'm thinking in the broader region as well?
Yes, I think that is the fact that really it is entrepreneurship.
It's new companies coming up
and creation and it's mostly private
sector. But I don't think it is mostly relying
on the government in job creation. Good.
Minister? And Sheikh Ahmed after.
Of course, that is the problem. We know that people and young people
want to work in administration. And that's why it's very important for
us, as you know, that job creation is more in the private sector than in
public sector. The administration represents only
about 10% of the job creation in all
the country.
That means that of course, we can't provide all the people who want to work
in administration, and that's why we are trying, first of all, to change
mentality, to change the program of
education in universities to prepare people to work in private sector
and not to work in administration. That's I think the big change.
And of course, we are working with -- we have some experiences to promote
entrepreneurship and entrepreneurship in our country.
And we begin in primary education
because we think it's at school what we
have to change the mind of our people. So the seeds have changed or planted at
the primary school level now?
Exactly. Within Morocco to change that mentality?
Yes.
We try to explain that it's very
important to be responsible and to have their job, their creating of their
enterprise. Good.
Sheikh Ahmed, you wanted to address
this issue yourself.
Thank you.
Yes.
Just very briefly, at the lower end
jobs, I think the challenge is still that the government jobs are more
appealing. We are seeing a trend beginning of
change but we are definitely not there yet.
I think what is important is focusing
on productivity, and I think that's what His Excellency, the Minister was
referring to.
As we focus more and more on productivity within government
and private sector, as an economy starts looking at how can we be more
productive, I think jobs, whether in
government or private sector,
will start looking more and more similar.
Good.
I'd like to touch upon this issue which
I think is a very important one, and that is the role of the sovereign
wealth funds between the Gulf States
because of the blessing of, in the last
18 months, $70 to $80 oil.
But there's been a tendency to take the oil wealth and splash it out on
trophy properties and not focus on
regional or even domestic development
of the middle class.
Is that starting to change, the strategies, the sovereign wealth funds
starting to change with the money
staying closer to home but targeted at
development? Joe?
Again, countries are acting quite
differently. I mean in Abu Dhabi, for instance,
you are seeing some of those foreign investments really aimed at
transferring back some key technologies
that can benefit the economic development of the country of origin.
In other cases, it is really -- you
can look at it from a financial
investment perspective and maybe acquiring some trophy properties but
with the goal of generating financial
returns that can be used as a buffer or a fund for future generations.
So I think the situation is quite, the starting point is quite different.
From what we see now, the trend is evolving more towards the domestic
and not economic development.
There are more investments being made
with the aim of generating wealth
and job creation, technology transfers within.
So that will be, I think, increasing with the trend.
Good. It's through the downturn Saudi Arabia
was quite proud of the way it handled its investments in terms of the
international portfolio and the lack of losses within this portfolio.
What's been the strategy not just for Saudi Arabia but your views, Lubna,
on this issue of the sovereign wealth funds and how we see the change of
strategy over the last four to five
years?
Well, Saudi Arabia is, I guess, one of
a few countries that really didn't have
a sovereign wealth fund to invest outside.
Most of the funds are invested under
SAMA and .
But I mean we have a couple of funds,
PIF and other funds, which their investments have been mostly locally
and supporting local industry, and I think more and more activities are
happening.
Recently, we've seen PIF investing in,
and it was all announced, with Aramco
project. It's a huge investment.
And the focus has been and continues
to be to create jobs.
The difference is dynamics, is because among the GCC countries, Saudi Arabia
is the most populous of all the GCC countries and we have, and it's one of
the highest population growths.
So there has to be focus on job
creation and investments from the
government and it's truly
a government/private sector partnership
in trying to see and invest in jobs
that do create.
And I think the government is very
sensitive about that issue in
particular.
Good.
So what's the most effective way,
and we target to this to the Gulf, what's the most effective way to take the
blessing of the natural resources
and that revenue and apply it to developing
the middle class at a faster pace? Sheikh Ahmed?
I go back to my vision comment.
We've got to know where we are,
where we want to go, and how do we want to get there.
And there are different policy levers and policy tools that could be used.
We just talked about sovereign wealth
funds. Fiscal policy is very important.
Private sector enablement is very important.
How do we manage all those different policies together to make sure that we
are targeting a growth rate that is in
line with what is needed to create full
employment or near full employment, making sure also that we are not
overdoing it and getting inflation in
the way and creating a lot of
challenges in that area.
And I think one area we haven't maybe
tackled enough, again, I go back to
monetary and fiscal, and I think that's
what is critically important to make sure that there is stability medium
and long term in any economy.
It's to make sure that the policy
levers are managed well.
There is more coordination within the different bodies within a country.
And no longer you could set a budget without understanding what your
monetary levers are, what your -- the
banking systems, the quality of assets, and how they are managing their
business.
Are they keeping up with the best
practice and potential regulation and so on and so on.
So making sure that you've got that coordinating body or communications
strategy within a country to control
all these different policy levers
is critically important.
Okay.
I want to follow up, and this is a very important issue and let's see if I can
get very candid answers as a result of
this.
When does the slower creation of a middle class and a very high
unemployment rate amongst the youth
become a security issue? Minister?
Or is it already a security issue?
I mean if you don't have an active youth population that's going to be the
next generation of your middle class,
if you don't deal with it with a sense
of urgency, does it become a problem in the next five to 10 years?
Of course, I think it's, as you know,
it's very important for us, for our countries to have better middle class,
to enlarge the middle class, and to
give our young people hope to have
a better life and a better level of life.
I think about these points that middle class is very important, like I said,
for our social stability.
But more than that, we have to have
this middle class to be involved in democracy because middle class is very
important to modernize the society
and to have democracy in our country and to
have more democracy in our countries. And the third thing is, as you know,
we have -- there are a lot of problems
in our region.
Then we think then, because the middle class is, first of all, to be involved
in some and to creating some values, values of stability, values of
tolerance, values of opening,
and values of productivity and efficiency.
And we think that we have to invest
more in human capital and to do our best to have better and to enlarge
middle class to give stability to our countries but to modernize and to have
better rates of growth for our
countries. Good.
Lubna, do you want to jump on this?
Yes, I think --
You need to have that mic a little bit closer.
Thanks.
Yes, I think the concern whether unemployment for the youth is there
and will it lead to social instability, of course, it will.
And if the question is are the governments aware and focusing on this,
most definitely because it's a very sensitive area.
So definitely, this is an area of
concern for all. One point we did not touch on
is creating middle class across the Arab
world.
For example, I mean it just dawned on me, a lot of jobs have been created,
middle class jobs in Dubai for other
Arab nationals. So we are seeing job inter-regional
middle class job creations taking place
and that is something that is really
helping the Arab world overall.
But that's changed a lot in the last
four to five years specifically.
Sheikh Ahmed, back to my original point about security, obviously,
you're a member of the cabinet.
You see this as a real issue in which to maintain that sort of vision you
have in Bahrain to create the middle
class wealth as a security issue.
And it is as political need to give every citizen the chance for employment
to improve themselves or to create a family and to see economic growth
trickle down to that individual. Economic growth that doesn't trickle
down to every individual does not mean anything to the people that don't get
any benefits from that wealth. It is an important challenge for us to
make sure that whatever we do actually
trickles down to the average individual on the street.
To us, dealing with parliament
and dealing with the public in a democracy means that understanding what society
wants and how to put it in a policy tool that achieves that.
There are challenges from time to time
where long-term discipline, fiscal discipline, and making sure that we are
thinking medium and long term versus very short term policies, that's where
the debate is. It's usually a very lively debate.
But usually, we tend to reach an
agreement to what is good for the long
term of the country. But definitely, all we have to do has
to trickle down to every citizen.
They've got to see what it means to
them and their own family.
Good.
Let's turn the lights on, if we can, because it's hard to see and we've got
a lot of hands that are going up. If we can get the microphones.
I do need to see people.
I ask you, because we have about 15
minutes for this area of discussion,
identify yourself and then direct it to one of the panel members, if I may.
Who has a microphone there?
Okay, please. You can stand up so the camera can
capture you as well.
My name is Mohammed Buchdir Sorry, Mohammed,
. If we can get more lights on the front
if it's possible, that would be great. If not, we'll live with it.
Thanks. Please.
My name is Mohammed Buchdir. I'm a Moroccan from New York City,
U.S.A. My question is for all the panel.
Everybody in the panel seems to agree
that education is a key component in the economical growth, enhancing the
narrowing of the gap between the
classes. My question is in the MENA region
and in Morocco in particular, the education is provided by two different systems,
the for-profit private sector and the public sector.
The challenge here is that we created a system with two speeds and two skills
outcomes. I'd like to know what are the
governments doing to provide the opportunity for the and the privileged
population to have access to the
private sector, assuming that the private sector provides additional
skills, such as soft skills that they
can't provide in the public.
Thank you very much.
Joe, can I have you tackle it and then maybe Sheikh Ahmed.
But is there a danger of a two-speed education system within the Middle
East, the private sector souped up
and ready to go and the state Lubna talked
about getting retrained in time to serve the greater population?
I think first of all, this situation of having two tracks for education exist
in many, many countries in the region
is not only specific to Morocco.
If you look at it from a spending
perspective, the spending on physical
infrastructure when it comes to
schools, universities, it is there in most places.
The key change that needs to happen
is, and I think it's been commented on
by the panelists, is the focus now on
the qualitative side of the education
system, better spending on teachers, retraining, performance evaluations.
I mean we are seeing some very
interesting experiments in Qatar and in Abu Dhabi and Dubai for instance of
evaluating the performance of teachers, something totally unheard of in our
part of the world.
So now, most of the attention needs to
be really spent on the quality side of education, not just on buildings
and infrastructure.
Good. We have some hands up.
If I can get a microphone to this
gentleman and then the person back there afterwards.
Yes?
My name is Fernando Reimers.
I'm a Professor of Education at Harvard University.
My question is for Minister Khalifa
and for Mrs. Olayan.
All of the panelists have talked about the importance of substantial education
reform to create this middle class.
And the ambitions for education reform are of a very different order than the
targets of the past. We are talking about serious
improvements of quality, serious enhancement of the relevance of
education, training a very different kind of teacher.
It seems to me that it's not likely that those challenges will be met by
the current institutions of education. For example, to produce a very
different kind of teacher, it would seem to me that this is not a task that
the existing schools of education are up to, that we would need to create new
collaboratives, maybe collaborative efforts between schools of education,
business, engineering,
combining universities and the private sector back to the leveraging effect of
universities, which can be terrific in terms of improving K-12.
That is going to require a different
kind of leadership on the part of
university leaders to get the
universities seriously to engage in developing curriculum and teacher
training. Is there the right kind of leadership
in this sector, both public
and private, to bring about these kinds of
very transformative changes?
Brazil, which was mentioned, for example, mobilized a coalition of
business leaders who decided to achieve synergies by leaving aside a small
and an integrated project and really come nationally into coalition of business
leaders working with government to
produce those changes. Is there that leadership available in
this sector in the region?
And if not, what would it take to
produce it?
Well, I think there is a commitment
from the private sector to tackle this problem and it is essential for the
survival of the private sector and for
the thriving of the private sector. And by doing so, we are tackling the
thriving of the middle class and the middle income, so that definitely there
is. So this pressure now from business
leaders, such as yourself, within the country to say, "This is not meeting
our requirements or skill sets needed?" I think this is an area where
definitely, it's a public/private section collaboration, as you have
said. And the private sector is recognizing
that there is tremendous need for this to happen.
Now, the question is the government
and the role of the government in this? I have to say there has been
tremendous change in the government view and mentality of tackling this
problem. Are we most doing what we should be
doing to perfection? Definitely not.
We are improving. We are learning and we are trying to
learn from what other countries are trying to do.
Good. Sheikh Ahmed? I think the most important thing
is not just the industry getting committed.
I think politically, we got to be committed.
So in Bahrain, His Royal Highness,
the Crown Prince has personally committed
on education. We have our most senior deputy prime
minister chairing a committee that looks at education.
So whether it's teacher pay, training, setting up the standards body,
making sure that we build quality and what we teach the students, it's all being
done. Can we have harmonization in all the
schools and make them all set a standard?
I think that's very difficult.
What we can do is make sure that they reach certain minimums and then leave
room for individual schools because I've seen reports on government
schools, I think even within government schools, there are differences in the
quality of education because it's how
the school is actually managing its own
affairs. So can you standardize?
It's very difficult. But can you maintain certain minimums?
I think that's very important.
Even in the United States, not all universities are alike.
There is a huge, huge difference between different universities.
But is there political will,
commitment? Yes.
Is the money being put forward? Yes.
Are the standards and education bodies and teachers being looked at very
closely and being helped to achieve the
targets?
Yes.
I am being very brief because of time.
No, it's okay.
We do have a question there.
Please.
My name is Jamal Binta . I'm from Newspaper.
My question is to you, Mr. Defterios
and to the panel.
Don't you think it is ironic where we are discussing the prospect of the
middle class in the MENA region that we are actually witnessing the slow death,
if I may say so, the slow death of the
middle class in the advanced countries? U.S.A., for example, the income of the
middle class has almost stagnated since
1980.
U.K. is almost the same.
Sure. What is your take?
Well, I can provide my sense of
analysis, and I'm sure Joe would agree
with me on this because I'm sure he has his head in this sort of space.
Sheikh Ahmed talked about the shift from the G7 in a very rapid time frame
in the last two to three years to quickly to the G20.
And I don't think it was insignificant
at the last IMF board meeting that the
shareholder rights have been divided to
represent the growth that we've been
talking about and the tilt to the East
to include China, India,
Southeast Asia, and I may add the Middle East
and North Africa, with Saudi Arabia
and Turkey at the table. I personally think, and I'm an
American speaking, that the next 25 years are going to belong to the East.
And that's why it is extremely
important for the Middle East and North Africa to address this issue of
development of the middle class so it
can harness that growth not so much coming from Europe or the United States
anymore but the growth that's going to be coming from this triangle of growth,
if I can put it that way, China, India, Southeast Asia, as a huge opportunity
for the Middle East going forward. Joe, I think you would agree with that
because the opportunity for the Middle East now is not necessarily to look at
its traditional trade partners, which have been in the West, but to look at
new trade partners which would be in
that triangle of growth for the future.
We had a question in the back corner,
if I may.
FeWe have already the mics. Let's get to you right after.
I didn't see you. But I'll make sure I get you.
Terry Tamminen: Terry Tamminen from
Pegasus Capital Advisors.
I wanted to ask the panel what their
thoughts were about sustainability, the topic of our opening plenary yesterday.
The region has been known here for
some time for resource extraction. And as one thinks about developing
industries and the middle class,
there would certainly be a temptation to just
provide more jobs for the service
industry and the various industries that are serving more resource
extraction in this region. But at some point, the music stops
and that's not sustainable.
Sheikh Khalifa mentioned
a sustainability vision for Bahrain,
but I wondered what some of the other
panelists feel about this notion of the
possible tension between taking sort of
short-term growth opportunities around resource extraction versus long-term
economic development of industries that are likely to be here for the next 50
to 100 years.
Okay. That's a phenomenal question on the
diversification.
Minister Baraka? Yes.
About diversification, I would like to say, and about sustainable development,
that Morocco decides to invest in
renewable energy.
As you know, in 2020, we will have
2,000 Megawatts of solar energy and 2,000 Megawatts of wind energy.
That means that in 2020, we will have 42% of our needs will be product
renewable energy.
Second thing, we invest in alimentary security because it's very important
for our region, and we have a plan of
what we -- its name is Morocco, Green Morocco, and to have a better
rentability in foods, food security.
And the third thing is we are working
about, of course, environment and water, preserving water, because it's
one of big problems we have to face in the future, in the future years in the
region. That's why we are trying, first of all,
to have modern, modernizing, using water in Morocco, saving water, and to
have better productivity of our water. And at the end, about our
diversification, we are investing in add value sectors, higher add value
sectors like electronics, like automotive but like nanotechnology.
We just begin here in Morocco and that gave us with and other areas more
possibility to have better competitivity and to be more involved
into a dual economy. Lubna, do you want to add?
I've seen the diversification in Saudi Arabia linked very much so to natural
resources and into petrochemicals and down the food chain.
But is this the right strategy, do you feel, for diversification?
Yes. I mean it is a strategy the government
has been taking. There also has been recent discussion
into solar energy, into other forms of energy.
One of our biggest challenge is also our dependence on water, which
is another, other than the energy, is one of our challenges looking forward.
But there has been a focus by the government to diversify and look into
sustaining the economy other than purely oil.
Sure. We launched our show three years ago
and I would say I know that the creation of the middle class is a huge
issue and the youth unemployment, but nobody can really argue with the
efforts that are underway to diversify at a pretty rapid pace.
I mean Abu Dhabi took an investment in a very large chip operation and they
benchmarked to have their own plant on the ground in Abu Dhabi by 2014 or
2015, only 12 months after the initial investment, so it is a sign.
You had the microphone here. Thanks.
We'll take two more questions. We had one on the center.
Perfect. Please.
FeMy name is Yasmin. I'm from Egypt and I'm here with the
Global Changemakers Network from the British Council.
I have two things to say. The first thing is to answer your
question about the security. As a young person, not having access
to funds and not having access to proper education creates frustration
and creates a lot of time that I don't know what to do with.
So what do you turn for is whether drugs or extremism, which then affects
your point, Minister, about stability. So it is a very pressing security
issue, I agree with that. The second thing I wanted to say about
gender equality, because I work at the Women Rights Organization, numbers of
improvement can be misleading so let's not fall into this trap.
Because things -- it's always easy to say things are improving but they're
not reaching equality yet. And I think as an indicator in the
business sector, we can see the WEF panels here.
How many women and how many men are talking on the panels?
The ratio of men and women is not equal.
It's not even close to equal. And it's always like the same women
talking in the same panels. So let's really -- don't you think
it's an issue? How many men in the hall and how many
women is important, and this is the World Economic Forum.
So I think it's a great indicator and representative of how the business
world is. It's not about that women have entered
the field. It's about how many women and what are
they doing. What are the obstacles they are facing
compared to men I think is an important thing to look at.
Thank you. Great.
Thanks for the input. We had a microphone here.
Thanks. Thank you very much.
private equity in Dubai. I didn't hear anything about the scale
or the size of the talent pool in the GCC states in particular.
And the question is to Sheikh Ahmed. Given the size of the populations in
the Gulf and the reliance on foreign talent, despite the small,
despite youth unemployment, isn't there a need to change laws to attract and retain
foreign talent in the Gulf states and is there any -- are there any plans to
do so in Bahrain? Interesting.
You have Bahrainization, which has been an effort to increase the employment at
the high end of the market in Bahrain recently.
Do you think you need to retain foreign talent and at the same time train your
workforce, your domestic workforce? Can you get the balance?
We believe, and I'll speak specifically first about financial
services, that foreign talent is an important ingredient in the success of
financial services because it helps you understand the world, what are the
challenges, what's going on. In every new sector, you would
definitely see at the beginning a huge number of foreign workers at every
level, from CEO all the way down to technical expert staff.
As time goes on, we train more and more Bahrainis and that's ultimately
the goal. Do we believe that a healthy
percentage of foreign expertise in every sector is important?
Yes, because it increases the challenge within that sector and it
increases the capacity within each sector to understand what the needs are
for Bahrain and what the needs are to export our products, whether they're
financial services or others to other regions of the world.
But retaining foreign workforce is actually done by what jobs you offer
them, and what jobs you offer them is what the industry needs to attract them
at a certain point in time because of what the economic competition or what
is available to them as opportunities in other parts of the world.
Will we have a government policy to attract foreign workers?
I don't see that as something necessary.
But within every industry or sector, they will do what is necessary to
create that mix of competitiveness in the workforce that they see fit.
Okay. Can I follow up quickly?
This effort for Bahrainization, is it a clear effort to nudge out the foreign
worker in time? This question has been brought up time
and time again. It is a clear effort to make sure
that Bahrainis' capacities and capabilities are enhanced and actually
developed and that they can get better and better opportunities as time goes
on. If the economy is continuing to grow,
then the need for foreign workforce will always be there.
Are we looking at specific jobs and saying, "This job, we need to have
Bahrainis instead of foreigners?" That's not ultimately the goal.
The goal is what is the maximum potential that I can take an individual
man and woman in Bahrain? How can I help them reach that
potential? That's the challenge that I see for
Bahrainization. Perfect.
The gentleman in the back had his -- we'll take that as the last question.
Sorry. Thanks for your patience back there.
I did see you. Thanks.
Thanks, John, for giving me the chance. My name is Elliott Tamimi .
I work for Hewlett-Packard in Saudi Arabia.
My question is about IT and information technology.
I didn't hear any of the panelists discussing how can information
technology help the cause of middle class grow and nurture it?
So I would like to hear from the panelists .
Thank you. It's been a huge job creator in
Silicon Valley and it's spread into different clusters around the world.
Is it being maximized in the kingdom? I think it has been and we see women's
involvement in the workforce in information technology and the access
of technology because a lot of women can work from the home, given the
cultural differences. You can have them being involved in
that so yes, technology has been working.
Also, it's an enhancement to the improvement of efficiency, and what you
need to a thriving middle class is to have more efficient resources
available. So yes, technology, and you're right,
we did not cover it here. Minister?
Yes, of course -- The big issue here, I know you're
trying to create the sort of clusters in Morocco.
Yes. We have a plan for clusters here in
Morocco, and at the same time, we have a plan whose name is Numeric 2013 to
have, to be more involved into technology and new technology.
And I would like to say that when we talk about productivity, when we talk
about efficiency, of course, we talk about information technologies and we
think that it's the future. We are investing a lot into these
kinds of technologies because we think that thanks to that, we give the
opportunity first to be more competitive and to give the opportunity
to our people to have better life. Good.
Thanks. On that note, I want to give a nice
round of applause to the panel for taking on everything we threw at them.
And many thanks for the cooperation and participation from the floor.
We apologize for the late start. There was just a technical issue.
But I appreciate your patience. Thank you.