Digital Economy and Policy Needs for Digital Transformation: An Overview of Arab Digital Economy Strategy Blueprint, published in Dubai Policy Review

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110 AI NATION.. HOW TO BUILD IT
66 CAN AGILE GOVERNMENT
IN THE DIGITAL AGE RESTORE
PUBLIC TRUST?
74 POLICY WITH IMPACT: A
POLICYMAKER’S TOOLKIT
Why Smart Cities
Fail 10
Measuring the
Future of Cities 20
When Smart Cities
Leave You Behind 32
Advancing the Arab
Digital Agenda 90
Governing Sustainable
Development 52
After Oil.. A Digital
Economy Blueprint 60
Our SDGs Scores,
and How to
Improve them 38
Smart Cities
The Catalyst for
Sustainable
Development?
February 2020

2. DUBAI POLICY REVIEW
FADI SALEM
Editor in Chief
policymakers and government practitioners
across the government ecosystem. This
edition of the DPR extends the theme of
“public policy for a digital future” present-
ed in the inaugural edition. It goes in-depth
to analyze the link between smart cities
and digital development as catalysts for a
sustainable future.
As you read through the thought-pro-
voking contributions in this edition, the
link between sustainable development on
the one hand, and smart cities and digital
development on the other, becomes clear.
When smart cities fail, they create expen-
sive lost opportunities for development,
and may lead to urban and social decay
(Pardo). However, assessing if they are suc-
ceeding and measuring their performance
towards the future is highly complex and
can lead to different pathways (Lanvin).
Moreover, cities will soon host the majority
of the world’s population. If we are to really
“leave no one behind”, then having cities
that grow ‘smart’, but become less acces-
sible, will be a step backwards for many of
the sustainable development goals (Pineda
and Poitier). Meanwhile, in the Arab region,
we now know which of the SDGs we are
lagging behind on, what local data to
gather, how to prioritize and the urgency
of regional coordination (Luomi). We have
global lessons on the novel governance
structures and innovative policy approach-
es we can establish (Fyson, Lindberg and
Morales, OECD). Moving ahead towards a
sustainable future will also require painful
economic transformations and tradeoffs
(Arezki, World Bank). These command
adopting agile governance approaches
and taking painful steps to respond to the
pressing social changes of the digital age
(Santiso, CAF Development Bank). They
require comprehensive policy instruments
that inform, measure and drive impact and
value in complex policymaking ecosystems
(Andrews and Samji). However, given the
monumental challenges the region faces,
governments cannot lead this transforma-
tion alone. They need to empower societal
leaders and collaborate with change-mak-
ers willing to drive large-scale developmen-
tal interventions (Jalbout). At a strategic
level, governments in the region need to
apply a holistic agenda for development
that embraces digital transformation at the
core (El-Sherbiny, UN ESCWA). A key part of
which will rely on building a future-facing
digital economy that adapts to the knowl-
edge economy era (Al-Khouri). However,
to achieve these ambitious developmental
goals, nations have to find their own for-
mulas for adopting novel transformations,
such as data-driven and AI-enabled digital
government (AlDhaheri).
The path leading the region to success-
fully achieving the SDGs is not straight-
forward. It is filled with major obstacles
and the roadmap that can guide leaders
through it is not yet clear. To help policy-
makers through this journey, the carefully
curated set of articles in this edition of the
DPR provides rich datasets, policy recom-
mendations, tools, action plans, advice
and warnings. These are presented in each
of the insightful contributions, providing
a wealth of policy options for government
leaders in the region.
The philosophy of the Dubai Policy
Review is to generate value and advance
progress towards better governance,
higher quality of public administration, and
policies that drive real impact. Ultimately,
we hope that the thought-leading contri-
butions presented here, will inform and
support leaders in governing development
responsively, responsibly and sustainably
towards a better future in the region.
Can smart cities help us achieve true
sustainable development? With merely a
decade to go to deliver on the 2030 agenda
and the universal Sustainable Development
Goals (SDGs), digital development is seen
as a forceful catalyst that can help gov-
ernments close developmental gaps and
accelerate progress. In particular, smart and
sustainable cities are becoming microcosms
of policy and governance transformation
challenges we face in our drive towards
achieving the SDGs. They are the juncture
where the governance issues we face in ad-
dressing developmental goals intersect with
the promises—and challenges—of the digital
future. Additionally, they are also the arena
where policy innovations and governance
dilemmas emerge and interact.
How can Arab governments navigate
these major double-edged transformations?
More importantly, how can they do so rap-
idly, but safely; with agility, but also with
inclusiveness that leaves no one behind?
In other words, how can we deliver on the
promises of smart cities, ‘digital by default’
governance, data-driven public policy,
knowledge-based digital economies and
artificial intelligence adoption across the
governance apparatus? How can we succeed
in reaching these grand goals sustainably,
without causing harm to society, damaging
decades-old economic models, destroying
established safety nets, infringing on per-
sonal rights or causing social unrest? What
types of policy instruments do we need?
Which public administration tools would
suit the region’s context? What governance
structures would help achieve local, as
well as global, objectives? Finally, what
combination of skillsets and capabilities do
governments need to respond to challenges
faced by their populations and not others?
A year ago, the Dubai Policy Review was
launched as a world-leading thought-lead-
ership journal with the mandate to deliver
evidence-backed policy recommendations
and practical actionable advice to senior
From the Editor
Smart Cities.. The Policy Catalyst for Sustainable Development
5

3. EIC Word 05
Editorial Team 07
DPR Contributers 08
Why Smart
Cities Fail? How
Understanding
Context Can Save
your City’s Future
Can Agile
Governance
Restore Trust in
Government?
Lessons from
Latin America
I Love Smart
Cities, But They
Don’t Love Me
Back (yet)!
Towards a More
Inclusive Urban
Future
Building the
Arab Digital
Economy: A
Strategy Blueprint
How to
Implement
Policies with
Impact? A
Policymakers’
Toolkit
Measurements?
Turning the
Tide in the Arab
Region: How
Data-drivenPolicy
Can Accelerate
Achieving the
SDGs
Developing the
Digital Future of
the Arab World:
A Policy Roadmap
towards National
Agendas
After Oil: From
Diversification to
Transformation
10
66
32
9974
38
90
60
ARTICLES
Contents
Theresa Pardo
CAF Bank
Victor Pineda and
Federico Poitier
Governments
Simply Cannot Do
It Alone: How
Philanthropy Can
Drive
Development in
the Arab World
Maysa Jalbout
83
Governance for
the SDGs: How
Can We Accelerate
Achieving the
Sustainable
Development
Goals?
OECD
52
Ali Al-Khouri
The Future of
Cities: What Can
Policymakers
Learn From
Smart Cities
Measurements?
Bruno Lanvin
20
Matt Andrews and
Salimah Samji
Mari Luomi
UNESCWA
World Bank
Building an AI
Nation:Accelerating
Artificial Intelligence
Adoption through
Agile Policymaking -
The Case of the UAE
Saeed AlDhaheri
110

4. DPR Contributors
Theresa Pardo is the
Director of the Center
for Technology in
Government and a Full
Research Professor of
Public Administration,
University at Albany, SUNY.
Dr. Pardo is a Fellow of the
National Academy of Public
Administration and in 2018
and 2019 was named a Top
100 Influencer in Digital
Government globally.
Bruno Lanvin the President
of the Smart City Observatory,
the Executive Director of
INSEAD’s Global Indices,
and founder and CEO of
D&L Partners. Since 2002
he has been co authoring
the Global Information
Technology Report (INSEAD
World Economic Forum); he
is currently the co-editor of
the Global Innovation Index
Report (INSEAD-WIPO-
Cornell University).
Matt Andrews is the
Edward Mason Senior
Lecturer of Economic
Development at Harvard
Kennedy School, working
on questions of government
effectiveness in the
development process. He is
also the Faculty Director of
the Building State Capability
program at Harvard
University’s Center for
International Development.
Victor Pineda is the
President of World Enabled and
President of the Global Alliance
on Accessible Technologies
and Environments (GAATES).
He is a recognized leader
in international disability
rights and was appointed
by US President Barack
Obama to the Architectural
and Transportation Barriers
Compliance Board. He is
currently a non-resident Fellow
with the Mohammed Bin
Rashid School of Government.
Salimah Samji is the
Director of Building State
Capability at Harvard
University’s Center for
International Development.
She has more than 15 years
of experience working in
international development
on issues related to public
service delivery, transparency
and accountability,
monitoring, evaluation and
learning.
Carlos Santiso heads the Government Digital
Innovation Directorate at the Development
Bank of Latin America (CAF). He is a member
of the World Economic Forum’s Global Future
Council on Anti-corruption and was named one
of the World’s 100 Most Influential People in
Digital Government in 2019 by Apolitical.
Ayman El-Sherbiny is the Chief of
Information and Communication Technology
Policies at the United Nations – ESCWA. He
was also the co-founder of the Arab Internet
Governance Forum (AIGF) and the Arab High-
Level Forum on WSIS and 2030 Agenda. As a
senior United Nations Official since late 2002,
his work currently focuses on developing an
Arab Digital Agenda.
Rabah Arezki is the Chief Economist for
Middle East and North Africa Region (MNA) at
the World Bank and a senior fellow at Harvard
Kennedy School. Previously, he was the Chief
of the Commodities Unit in the Research
Department at the IMF and a non-resident
fellow at the Brookings Institution. He is also
an external research associate at the University
of Oxford.
dubaipolicyreview.ae | 8

5. Ali Al-Khouri is the
Advisor to the Arab Economic
Unity council, and Chairman
of the Arab Federation for
Digital Economy in the Arab
League. He has more than
100 books and scientific
researches in the field of
digital government and
public sector development
and has recently appeared
among the world’s 100 most
influential people in digital
government.
Maysa Jalbout is a leader
in international development
and philanthropy. She is
currently a Visiting Scholar
and Special Advisor on the
SDGs at MIT and ASU and
a Non-resident Fellow at
the Brookings Institution.
She was the founding CEO
at the Abdulla AlGhurair
Foundation for Education,
the founding CEO of the
Queen Rania Foundation and
the Head of Education Policy
at Global Affairs Canada.
Mari Luomi is a Senior
Research Fellow at the
Emirates Diplomatic Academy
and the lead co-author of
the 2019 Arab Region SDG
Index and Dashboards
Report. Having worked in
research and advisory roles
worldwide, her extensive
publication record covers
the global governance of
sustainable development and
climate change, and climate
and energy policy in the Arab
region.
Federico Poitier
is the Director for
Partnerships at World
Enabled. His background
is in international
development with a focus on
international, regional and
national disability policy,
international human rights
law, education, disability
inclusive development,
grassroots and community
development, gender
equality and human rights
advocacy.
Saeed AlDhaheri is the
Chairman of Smartworld, and
board member of the Emirates
Safer Internet Society.
Formerly, he was the Director
General of the Emirates ID
Authority, a member of the
scientific advisory committee
of the UAE Space Agency, an
Advisor to the Minister of
Foreign Affairs, a Professor at
the UAE University and the
Vice President of the Emirates
Information Technology
Society.
Sara Fyson is Head of the Sustainable
Development Unit in the Public Governance
Directorate of the OECD. She was previously
lead governance advisor in the Development
Cooperation Directorate managing work on
donor-supported governance programmes,
citizen-centred governance, peer-to-peer
learning methodologies. She previously led the
policy work on public procurement and public
financial management.
Carina Lindberg is Policy Analyst in
the Unit for Policy Coherence at the OECD,
where she supports the work on institutional
and governance mechanisms for policy
coherence and integrated approaches to
SDG implementation. She is the co-author
and coordinator of the annual report Policy
Coherence for Sustainable Development and
the recent publication Governance as an SDG
Accelerator.
Ernesto Soria Morales Senior Policy
Analyst in the OECD’s Policy Coherence Unit
since 2010, where he has helped shape and
take forward the OECD Recommendation on
Policy Coherence for Sustainable Development.
His recent work has focused on developing
tools to support governments in enhancing
policy coherence for the implementation of the
SDGs. He is co-author of several OECD reports
on policy coherence.
9

6. BUILDING THE
ARAB DIGITAL
ECONOMY
A Strategy Blueprint
Ali M. Al-Khouri
Over the past decade, global economic growth rates have continuously
declined. The extent of this trend, influenced by developments in digital
technologies, are yet to be fully captured. Today, numerous national
efforts are deemed to be largely ineffective in terms of their responsiveness
to new and emerging social, economic and political landscapes. What are
the strategic directions and policy roadmaps for a thriving digital economy
that spans the Arab World? This is what the Arab Digital Economy Strategy
aims to achieve. Here’s how we can make it a reality.
DIGITAL
FUTURES
Policy in Practice
99

7. TECHNOLOGICAL
DEVELOPMENTS
AS DRIVERS OF
ECONOMIC
GROWTH
On a global scale, digital transfor-
mation is seen to have a positive impact
on GDP, including GDP per capita. In fact,
the literature suggests that countries that
succeed at digital transformation become
more prosperous than their counterparts
who fail to do so.
Within the context of global digital
transformation, Arab countries are large-
ly lagging behind. This is substantiated
by a host of economic indicators demon-
strating weak levels of competitiveness
and continuously increasing unemploy-
ment rates, pointing to considerable
vulnerabilities in their economies.
It is therefore fundamental for pol-
icy makers to understand the complexity
of digital transformation and the ways in
which technology is changing the rules
of the game, in order to cope with the
paradigm shift brought about by digitali-
zation. It is also imperative to understand
the role of technological evolutions in
building resilient economies and inclu-
sive social systems.
ARAB DIGITAL
TRANSFORMATION AND
COMPETITIVENESS
Many nations are making rapid strides in
their digital transformation efforts believing
that it is a precondition to compete on the
global stage. According to the IMD World
Digital Competitiveness Index,1
governments
around the world are investing heavily in digital
economy initiatives with the goal of enhancing
value creation and national prosperity.
The report suggests a correlation between
a country’s GDP per capita and the state of
advancement of its digital ecosystem, whereby
an increase in the use of digital technologies
triggers countries to become more competitive
overall thus achieving further growth in GDP per
capita. In fact, countries ranking in the Top 20 in
terms of digital competitiveness also rank in the
Top 20 in respect to their GDP per capita, which
exceeds US$ 20,000 in every Top 20 nation.
Only three Arab countries appeared in the
2019 Index: UAE, Qatar and Saudi Arabia. The
main reasons for the exclusion of most Arab
countries, as explained in the report, are existing
regulatory frameworks, legislations and access
to capital.
Passive and
reactive
national
policies, or
reliance on
individual
action plans,
will not only
be unfeasible,
but impossible
Figure 1: Global Wealth Redistribution due to Digitalization
dubaipolicyreview.ae | 100
Source: (Petersen, 2019)
BUILDING THE ARAB DIGITAL ECONOMY

8. The stark
contrast in terms
of performance
between Arab
and European
Union countries
demonstrates
the impact that
cooperation and
joint planning, or
lack thereof, can
have on a country’s
knowledge,
economic
capabilities, and
competitiveness
More troubling is the low appetite to
cooperate and benefit from shared
experiences and resources in the region.
How can we develop a more
coordinated strategy to address these
common barriers and drive economic
developmental in the digital age across
the region?
THE ARAB DIGITAL
ECONOMY
STRATEGY
As a blueprint for strategic action
towards building a sustainable digital
economy in the region, in 2018 the
League of Arab States, through the
Arab Economic Unity Council,
developed the “Arab Strategic Vision
for Digital Economy” as a guiding
tool for economic development in
the digital age.3
The vision views
the development of a thriving digital
economy as a catalyst for a sustainable,
inclusive and secure future for the
Arab world.
The Arab Strategic Vision for
Digital Economy is based on a five-
dimensional framework of digital
transformation. The plan includes 50
initiatives and projects, and takes into
account the current maturity levels
and competitiveness of each Arab
country.
Similarly, the 2019 Global
Competitiveness Report by the World
Economic Forum2
confirms IMD’s findings.
The UAE ranks as the most competitive
country in the Arab region, ranking 25th
overall, and Yemen as the least competitive
as 140th out of 141 countries. Meanwhile,
at the top of this ranking are countries of
the European Union with the Netherlands
ranking number 4 overall, the highest for EU
member countries, and Greece the lowest at
number 59.
The stark contrast in terms of
performance between Arab and European
Union countries demonstrates the impact
that cooperation and joint planning, or lack
thereof, can have on a country’s knowledge,
economic capabilities, and competitiveness.
This also highlights the lack of clear and
unified focus across the Arab economies.
Figure 2: Digital Competitiveness Ranking
Source: IMD World Digital Competitiveness Index 2019
DIGITAL
FUTURES
Policy in Practice
101

9. contribute to fostering a digital
economy.
This shapes the direction
of digital government agendas
towards being more innovative,
accessible and inclusive. Digital
governments need to accelerate
the implementation of a range of
reforms as a means to encourage
the creation of more dynamic
and sophisticated digital business
environments, modernize
education systems, improve the
standards of healthcare, achieve
food security targets, build
industry-driven economies and
enable e-commerce platforms.
- Source: World Economic Forum (2019)
Figure 3: 2019 Global Competitiveness of 141 Countries
Figure 4: The Five dimensions of the Arab Digital
Transformation Framework
The first foundational dimension
seeks the build-up of the necessary
digital infrastructure meant to
accelerate digital transformation.
This dimension is largely based
on techno-legal foundations and
requires the existing legal systems
in the region to take account of the
blurring boundaries of jurisdictions
and update outdated laws in order
to make them relevant for the digital
space.
Once that barrier is removed, this
can then be a foundational building
block for developing an innovation
ecosystem that fosters creativity and
accelerates digital transformation and
BUILDING THE ARAB DIGITAL ECONOMY
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10. Operating Model and Implementation Stakeholders
For the purposes of the strategic vision, 22 Arab countries were divided into three clusters based on their current competitiveness
and digital readiness levels.4
To implement the strategy, an action plan with a wide spectrum of stakeholders is required.
Figure 5: Proposed Framework of the Arab Digital Economy Strategy
Overall, digital technology is assumed to contribute significantly to the foundations of economic and social development objectives
in the Arab Digital Economy Strategy as visualized in Figure 5.
DIGITAL
FUTURES
Policy in Practice
THE INSIGHT
The blueprint of a regional digital economy (as
identified in the Arab Digital Economy Strategy)
demands reforms to (1) digital infrastructure,
(2) policy and regulation reform, (3) digital skills
development, (4) access to capital, and (5) digital
governance.
There is no regional digital economy, anywhere,
without strong cooperation.
THE POLICY DIRECTION
Policies for building a digital economy, need to focus
on (1) developing clear strategic objectives, (2)
building human capital, (3) collecting and utilizing
data across sectors, (4) driving R&D, (5) creating
conducive digital ecosystems, (6) supporting SMEs
and (7) ensuring regional cooperation.
Sustaining a regional digital economy requires (1)
strong ICT infrastructures (2) secure digital identity
systems, (3) secure financial services, (4) data sharing
and management policies.
THE POLICY BRIEF
THE CHALLENGE
Arab countries lag behind in digital
transformation, leading to lost economic
opportunities and reduced competitiveness.
Building an Arab digital economy faces
numerous barriers, including cumbersome
regulations, lack of regional cooperation
and joint planning, and lack of focus among
national economies.
103

11. POLICY GUIDING
PRINCIPLES
TOWARDS AN ARAB
DIGITAL ECONOMY
Implementing an ambitious and
forward-looking strategy such as
the Arab Digital Economy Vision is
certainly not an easy task. Its scope
includes 22 Arab countries and
affects nearly half a billion people. In
addition to this, the broad spectrum
of economic and social structures of
Arab countries poses a major challenge
to successful implementation. What
policy instruments can enable this
transformation?
Policymakers at the helm of driving
Arab economies towards the digital age
would benefit from applying the following
guiding principles when drafting regional
and local policies. This will ensure that
such policies will serve to create an
enabling environment for the execution of
the strategic vision.
Policy Framework
It is vital that the strategic vision and
its initiatives are supported by a strong
policy framework and a set of laws and
regulations that can contribute to the
adoption of digital transformation across
all Arab nations. The framework must be
designed to clearly depict both the mission
and the high-level strategic directives
which should, in turn, guide decisions,
detailed policies, implementations and
measurement of outcomes.
Human Capital
Building a digital infrastructure
necessarily entails building competencies.
This requires a strong education and
training ecosystem to be put in place. The
current model of education systems that
are heavily reliant on rote learning need to
be reformed in order to include cognitive
learning processes. Investing in building
human capital is as important as building
for economic growth. In fact, human
capital and economic growth are closely
linked, as the former plays a key role in a
nation's production capacities, in creating
Figure 6: The Stakeholders of the Arab Digital Economy Strategy Implementation
BUILDING THE ARAB DIGITAL ECONOMY
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12. Private Sector
Government support for the private
sector should particularly be geared
towards supporting micro businesses
and small and medium-sized enterprises
(SMEs). Digital transformation leaders
have made this area a focal point of their
activities across the globe. According
to the European Commission, micro
businesses and SMEs are considered
the backbone of Europe's economy,
providing two-thirds of the total private
sector employment in the EU. Despite
the importance of SMES to employment
and economic growth, especially in
the digital age, they have garnered
little attention and support from
governments in Arab countries.
Arab countries need to address this
issue of unemployment strategically by
ensuring that the micro and SME sector,
including start-ups, are promoted,
supported and their outputs monitored
in order to draw a clear picture of their
impact on the economy. A new approach
to SMEs is needed to ensure that they
contribute actively to economic growth
targets, innovation, and unemployment
reduction.
employment opportunities and increasing
both income levels and living standards.
More targeted investments are needed for
planning and supporting current education
programmes and strategies to ensure
building knowledge and skill-sets that can
keep pace with changing market needs.
Knowledge Society
Knowledge in today’s digital world is
considered a commodity to be traded for
economic prosperity. Data, information and
knowledge are replacing capital and energy
as primary wealth-creating assets. As such,
building a knowledge society is seen as
paramount for national progress and global
development, hence the central place it has
occupied over the last two decades in global
and regional agendas.
However, plans to build a knowledge
society in most Arab countries appear to
have remained in the theoretical realm.
These countries have yet to truly transform
into knowledge societies, where they need
to not only leverage technology, but to
increase capacity and develop conducive
policy environments. This in turn, will
empower these newly-formed knowledge-
driven societies to develop into production
societies, with robust export capabilities and
capacities.5
A systemic, policy-driven
transformation is required to strengthen the
national knowledge ecosystems of the Arab
countries, through focusing on innovation
and entrepreneurship. Significant
developments are also required to develop
innovation and knowledge infrastructures
such as national standards organizations and
other systems that could be implemented as
joint ventures of several countries. In fact,
leveraging the strengths and infrastructures
of neighbouring countries and working
towards the same objectives, may prove to
be cost-effective.
Sector Enterprises % Employed Workforce % Value Add %
Micro 93.1% 29.4% 20.7%
Small 5.8% 20.0% 17.8%
Medium-sized 0.9% 17.0% 18.3%
SMEs 99.8% 66.4% 58.8%
Large 0.2% 33.6% 43.2%
Total 100.0% 100.0% 100.0%
Table 1: Employed Workforce by MSMEs’ in EU
Source: European Commission (2019)
Research and
Innovation
A renewed focus on innovation
and investments in research can
enable the growth and development of
sustainable economies. Yet, fostering
and encouraging a research environment
needs a conducive platform to attract
talent that enables building a knowledge
society, and contributing towards
sustainable growth and economic
development. Leaders of digital
transformations view research and
innovation as indispensable instruments
for value creation and new employment
opportunities. In fact, developed nations
have attributed their sustained growth to
their intensive research and investments
in development.
While global spending on research
and development has reached a record
high of almost US$ 1.7 trillion (UNESCO,
2019), statistics show that ten countries
account for approximately 80% of total
spending.6
Research and development in
Arab countries are not prioritized nor
officially supported in regulatory texts
with dedicated recurrent budgets. Arab
DIGITAL
FUTURES
Policy in Practice

13. spending on research and development
is less than 0.5% of GDP. Furthermore,
there is no clear link between policy-
making and research institutions in the
region. Arab countries need to allocate
greater investments into research and
development activities in both private
and public sectors. Furthermore, these
should be linked to national targets
and recognized as an indispensable
foundation for economic growth.
Regional Economic
Coordination
Unquestionably, pan-regional joint
action needs to be mobilized to build a
collaborative Arab economy. Capacities
can be built in some countries by catering
to the needs of others. A classic example
is the China and India success story,
whereby China built manufacturing
capacities while India built service
capacities for the world. The result is that
both of these economies - metaphorically
described as a dragon and an elephant
– continue to be some of the fastest
growing economies in the world in the
digital age.
A collaborative framework would
prepare a combined workforce to cater
for the current and future needs of the
Arab world. Furthermore, the nearly half
a billion Arabs constitute a huge captive
consumer base. There are massive
opportunities that can be achieved in the
Arab world through closer cooperation on
political, economic, cultural and social
reforms.
COUNTRY-
LEVEL POLICY
IMPLICATIONS
A vision is just a starting point.
Building a strong digital economy
requires a number of enabling factors in
addition to developing and implementing
a strong strategic vision. Other policy
implications to be addressed at a country-
level include the following:
DIGITAL IDENTITY:
The overall policy objectives
highlighted in the strategy need to be
focused on the promotion of digital
transformation, supported by the
development of ICT infrastructure
and broadband capacities to create
an inclusive digital society. As
transformation implies more reliance
on digital connectivity and the
prevalence of data in cyberspace,
governments also need to focus on
cybersecurity challenges and threats
to ensure the security of their citizens.
Addressing security and trust in digital
environments is necessary for an
efficient and effective digital identity
management system that would enable
innovative models of public service
delivery, planning and informed
decision-making.7
Absence of such
platforms increases administrative
burdens for businesses and individuals
to authenticate identities in the virtual
space. Related policies therefore need
to mandate the provision of verified
digital identity platforms that balance
privacy and security requisites. The
economic potential of digital identity
in the digital ecosystem should not be
underestimated.8
FINANCIAL INCLUSION:
In addition to this, in light of the
growing global interest in financial
inclusion as a driving force towards
economic growth, related policies
need not only to be designed to
facilitate constituent access to secure
financial services and products, but
to target apt financial institutions to
cater to the various needs of societal
development and sustainable growth
goals. Policies must ensure that high-
level stated digital economy objectives
accelerate the growth of a strong and
well-organized structure of financial
systems. Directives should include
updating and creating new policy
frameworks to promote investment,
competition and innovation in this fast
evolving sector.
Research and
development
in Arab
countries
are not
prioritized
nor officially
supported in
regulatory
texts with
dedicated
recurrent
budgets.
Arab
spending on
research and
development
is less than
0.5% of GDP
BUILDING THE ARAB DIGITAL ECONOMY
dubaipolicyreview.ae | 106

14. with short-term outlooks. This is quite
evident from current indicators of
competitiveness.
The Arab Digital Economy
Strategic Vision presents a real
opportunity to develop an integrated
regional vision, and achieve
sustainable transformations. The
holistic approach utilized by the
strategy has the potential to enhance
social, economic and sustainable
development in the region.
The strategic initiatives aim
to develop critical sectors such as
government service, education and
digital capacity building and SMEs,
and promote job creation, innovation,
competition, and social welfare. The
vision calls for Arab governments to
collaborate and invest in building the
future of their nations.
The policy framework
requirements postulated here seek to
set the agenda for much-needed digital
transformation in the Arab World and
can be used as a guide for accelerated
growth in the region.
Technological developments
can be described metaphorically as
hurricanes that will upheave existing
social and economic structures and
develop new conceptual and practical
maps, which societies will have to
accept and adapt to. Passive and
reactive national policies, or reliance
on individual action plans, will not
only be unfeasible, but impossible.
Countries in the region need to take
a strategic coordinated approach
towards economic transformation
if they are to take advantage of the
economic growth potential in the
digital age.
DPR-EN-023
Ali M. Al-Khouri is the Advisor to the
Arab Economic Unity council, and
Chairman of the Arab Federation for
Digital Economy in the Arab League.
DATA FOR ECONOMIC
GROWTH:
The digital industrial revolution
is a function of data management and
data sharing. Policies thus need to be
developed with an eye toward enabling a
data-sharing ecosystem. Such ecosystems
need to be planned at national and
regional levels to succeed with digital
transformation targets. Regulators and
concerned departments in Arab countries
must agree on the guiding principles for
the development of digital cloud-based
data-lakes, consisting of public data-set
development and resource-based services,
as a foundation to promote digitization in
select business sectors. Relevant policies
also need to address the application of
open data, big data analytics and Artificial
Intelligence as a backbone for decision
making and innovation.
Finally, in light of the growing
importance of the rapidly evolving
roles of citizens and social sentiment,
policies need to encourage active citizen
engagement and citizen-driven planning
in laying down the roadmaps of the digital
economy.
A COMMON
REGIONAL STRATEGY-
THE KEY FOR A
THRIVING DIGITAL
ECONOMY
Global economic trends indicate that
traditional economic growth rates are
stagnant or falling while digital economy
growth rates are increasing at double
the speed. Governments are pressured
to transition away from the status quo
and adopt more creative and innovative
economic models and structures. In order
to achieve this, they must build complex
and large-scale capacities to address global
challenges and uncertainties.
In the Arab region, the general
approach to these issues has so far been
reactionary offering temporary solutions
1. The IMD World Digital Competitiveness Rank-
ing measures the capacity and readiness of 63
economies to adopt and explore digital technolo-
gies as a key driver for economic transformation
in business, government and wider society. The
2019 report is available here: https://www.imd.
org/wcc/world-competitiveness-center-rank-
ings/world-digital-competitiveness-rank-
ings-2019/
2. 2019 Global Competitiveness Report: http://
www3.weforum.org/docs/WEF_TheGlobalCom-
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3. This strategic vision was launched in the
United Arab Emirates at the end of 2018 in
the presence of representatives from all Arab
countries
4. Cluster 1: Iraq, Libya, Syria and Yemen, as
well as Algeria, Comoros, Djibouti, Mauritania,
Palestine, Somalia and Sudan. Cluster 2: Egypt,
Jordan, Lebanon, Morocco and Tunisia. Cluster
3: Saudi Arabia, UAE, Bahrain, Kuwait, Oman
and Qatar.
5. Al-Khouri, A.M. (2017) Electronic Commerce
and its Role in Advancing Arab Interregional
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Arab League.
6. These countries are: United States, China,
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16(2): 3594-3617.
8. McKinsey estimates that digital identity
systems can help achieve 3% of economic value
equivalent of GDP in developed economies and
up to 6% in developing economies (McKinsey,
2019). For instance, in Germany, with a current
GDP of approximately $3.6 trillion this would be
an equivalent of more than $108 billion per year.
The Digital ID and Authentication Council of
Canada (DIACC) estimates the potential value of
trusted digital identity to the Canadian economy
being at least 1% of GDP, and $4.5 billion of
annual added value to small and medium-sized
enterprises. In India, 309 million new bank
accounts were opened owing to the reduced KYC
costs made possible through digital identities
(Kumar 2018).
END NOTES:
DIGITAL
FUTURES
Policy in Practice
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