The Arab Spring Can Bring a Demographic Dividend: That is Good for Business and Investors

For decades the Arab Middle East was seen as resisting economic liberalization. Once it opened its doors to economic liberalization and foreign investments, the region failed to achieve inclusive economic growth. The Arab Spring, in part, was borne out of people’s frustrations with non-inclusive economic growth. It is argued that the ‘relative deprivation’ felt by many of the Arab masses was a contributing factor to why the Arab people chose to rise against their governments. While the region is in a period of difficult transition, there is reason to be hopeful and optimistic that the Arab Spring will lead to progress. The Arab Middle East is going to experience a demographic dividend: economic growth due to its educated, youthful population. The challenge for policymakers will be to ensure that this is productive economic growth and to not repeat the errs of past mal-investments into non-productive sectors.

Policy Implications

• Policymakers in the Middle East and North Africa need to recognize the importance of creating policies that unlock the potential of the burgeoning youth population of the Arab World. Doing so would increase economic growth and help to create happier, more stable, and inclusive societies. Failing to do so will lead to high unemployment and unrest.
   
• In order to enhance economic opportunities for youth, it is critical that states in the Arab World work to further integrate their economies into the broader global economy so as to increase inflows of foreign direct investment. This would help to increase the productive capacity of youth there, while also imparting knowledge and technical know-how into the population.
   
• Governments should identify opportunities to work with the private sector so as to maximize investment in physical infrastructure and tailor education efforts geared toward benefiting from the interconnectedness of country economies. Improving infrastructure and knowledge within economies will promote movement and innovation, allowing for increased productivity and helping to alleviate unemployment, particularly among Arab youth.
   
• Governments need to ensure that the jobs they pursue run in line with the cultural and educational expectations of their youth. Undesired jobs will not help to alleviate unemployment and will create friction between nationals and foreign workers.