While digital exclusion affects communities around the world, this issue has unique implications in each region. Although all communities stand to benefit from improved access to affordable, secure Internet service, the barriers they face and the potential benefits depend on a number of intertwined factors like geography, political atmosphere, and educational infrastructure.

To understand the current state of connectivity in the Middle East and North Africa, we interviewed Baher Esmat, a leading voice on Internet policy and governance issues in the Middle East. His experience at the Internet Corporation for Assigned Names and Numbers (ICANN) and participation in a variety of United Nations (UN) committees gives him unique insight into how this complicated problem impacts the region and its residents.

Before addressing the questions, it’s important to underline that countries in the Middle East and North Africa (MENA) are economically, socially, ethnically and digitally diverse.

Economically: The oil-rich gulf cooperation countries (GCC) enjoy a very high per capita GDP compared to other countries in Levant and North Africa. According to the World Bank data, Qatar is one of the wealthiest countries in the world, with a per capita GDP of almost $96,000 (on a purchasing power parity basis), almost 30 times that of Yemen.

Socially: Almost half the population is under the age of 25, and while levels of school enrollment and literacy are generally good, the urban-rural gap is quite significant. Unemployment rates vary with North African countries generally score higher rates than those in GCC; 50.9% in Libya as opposed to 0.3% in Qatar. Most GCC countries, on the other hand, suffer from lack of local human capital that could cater to the increased demand in the job market, whereas most of the jobs in North Africa and Levant are fulfilled with local expertise.

Ethnically: Economic migrants from South and Southeast Asia make up the majority of the population in half of the GCC countries—comprising 88% of the population in UAE, 79% in Qatar, and 72% in Kuwait. More than 10 million people in MENA have been forcibly displaced with refugees accounting for more than one third of the population in Lebanon, Palestine, and Jordan.  

Digitally: Almost 55% of the population in the region use the Internet, with wide variations between the different countries. GCC countries have the highest penetration rates reaching around 99% in Kuwait and Qatar, as opposed to 48% penetration rate in Egypt, and around 30% in Sudan. The gender gap is also closing in the GCC countries compared to other countries in the region. For instance, Bahrain has more female Internet users (99%) than male Internet users (97.5%). In Saudi Arabia, the rate of female Internet users is 93% compared to a rate of 93.7% for male. In Qatar, the rate of female Internet users is 91.7%  compared to 94.1% for male. The gender gap is higher in other countries like Morocco, which has a rate of 53.5% for female Internet users compared to 63.1% for male, and Egypt where the percentage of female Internet users is 38.2% compared to 44.2% for male (data from 2015–2016).

The MENA region can generally be segmented into four country groups:

1. Oil-rich, high-income countries of the GCC: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and UAE
2. Large area and population middle-income countries: Algeria, Egypt, Iraq, and Morocco
3. Small area and population middle-income countries: Jordan, Lebanon, and Tunisia
4. Lower income or poor and/or violent countries: Libya, Mauritania, Palestine, Sudan, Syria, and Yemen

Lastly, as a general note, I’d like to underline the importance of all efforts aiming at narrowing the digital gap, however, I don’t want to lose sight of the fact that bridging the digital divide is, in itself, not the goal. The ultimate goal that many countries and societies have been and should continue to be pursuing is digital transformation and digital inclusion.

How does connectivity impact economic development in the region? In communities? For individuals? 

Digital infrastructures enable economic growth by making services available at everyone’s fingertips, by increasing the efficiency and productivity of all sectors of the economy, and by creating new direct and indirect jobs.

A report by Business Consulting Group (BCG) in 2014 introduced the concept of e-friction and showed that countries would be able to boost their GDP by 2–3% by reducing barriers to Internet access, affordability, and usage. Countries in MENA covered in this report are: UAE, Bahrain, Qatar, Kuwait, Saudi Arabia, Jordan, Egypt, and Morocco. Qatar and the UAE score best on BCG’s e-friction index, followed by Bahrain and Kuwait (all oil-rich and relatively small countries), then Jordan, Saudi Arabia, Morocco, and Egypt. This report provides two important guidelines for how MENA countries could work towards reducing e-friction and reaching digital transformation:

1. Providing affordable Internet access, particularly in rural areas is key (one reason why Saudi Arabia, Morocco, and Egypt score less than other countries in “infrastructure” is due to the vast rural areas that are generally far less developed compared to urban areas).
2. Creating a local digital industry of services, applications, content, etc., by taking access to and usage of technology to the next level of nurturing a local digital ecosystem.

Note: Although the BCG report was published more than six years ago, it remains an invaluable resource to better understand the digital gaps and challenges in different countries. Of course, more progress has been made on many fronts since then, particularly with regard to access and infrastructure, yet the core value of the report in examining a wide range of elements that affect digital transformation, including connectivity, is still relevant.

According to ITU data, mobile penetration rates have reached 103.1% across the MENA region, mobile broadband subscriptions reached 62.7%, and more than 50% of individuals and households are connected to the Internet. More stats on mobile Internet access can be found in this GSMA report. 

It’s worth noting that the rising trend in Internet penetration across the region is mainly driven by the decline in cost of smartphones and mobile Internet access. However, people in the MENA region who have access to smartphones mostly use the Internet to access social media. And although social media may bring benefits to individuals, communities and businesses, its ultimate effect in building digital societies or economies is very limited.

Research was conducted in 2017 studying Uber as an example of the sharing economy in Egypt. While the study focused primarily on the economic aspects, it provided an interesting example of the economic impact of connectivity on individuals. At the time of the research, Uber had 40,000 drivers in Egypt, a majority of which were youth, and they were able through a mobile app and some basic skills to earn higher or additional income. The study can be downloaded here.

How do you build skills, foster innovation and entrepreneurship and put the right policies and regulations in place to create opportunities?

Building skills, fostering innovation, and encouraging entrepreneurship should begin at schools and universities, and it should not end there.

Generally speaking, education systems in most countries in the region need to be revamped. Although school enrollment indicators in most countries in the region are close to universal standards, it is the quality that needs to be improved. Other than government efforts in this regard, many EdTech platforms have been created across the region to help reduce the strain on the formal education system. The impact of such platforms on the wider community of students in the region is yet insignificant.

There have been many national initiatives aiming at bridging the gap between academic education and employment. Most of those initiatives have been shepherded by governments and implemented in partnership with the private sector, and while they have had a positive effect on advancing the skills of university graduates in areas pertaining to computer engineering and software development, most countries in the region are still suffering from this gap between education and market requirements. The rapid and amazing development in technology makes it more challenging not only for the education system to catch up but also for professional learning programs to close the gap.

Governments should act as enablers, facilitating collaboration amongst stakeholders and creating an environment that promotes and fosters innovation and entrepreneurship. Policies and regulations do matter as they can make or break the business environment. 

What are some of the key strategies that work? Can you share success stories?

I don’t think I can point to specific strategies or success stories per se. However, in working towards digital transformation and digital inclusion, experiences in various parts of the world have shown that efforts should be made in the following areas:

1. Get the basics right: ensuring affordable and meaningful access, developing content in local languages, building Internet Exchange Points (IXPs) to keep local traffic local, etc.
2. Leverage technology: the trend of consuming technology has been in the rise in the MENA region, but that alone won’t help in realizing the ultimate goals of digital transformation and inclusion. The region should invest more in developing technologies, tools, applications, etc. The IT industry in the region is still very small compared to other verticals and its contribution to the GDP is far less than in the developed world. Much more needs to be done there, however, one must also not forget that local tech startups are a bright spot as they play a key role in developing the digital ecosystem across the region, and they deserve every support that can be offered to them.
3. Shake the system: In the MENA region, there is a plethora of bureaucratic processes and legal frameworks from the previous century; there is also little transparency with regard to public policy processes with minimal participation, if any, from business and civil society stakeholders. Multi-stakeholder participation in Internet public policy development has been followed in parts of the developed world and has proven to be effective, but it doesn’t seem to be a preferred model in this region.
4. Skills, skills, skills: I can’t emphasize more the importance of skill building and skill lifting. It’s a tireless process that cuts across many different areas and involves various stakeholders. It also goes beyond what we know today about the technology and its impact on societies, economies, etc. to what we don’t know about new technologies or about the impact of technologies we kind of know today (e.g. AI, IoT, Blockchain, etc.) but it’s not exactly clear what effect they will have in the future.

How would you characterize the relationship between broadband development and economic growth?

According to a World Bank study, the MENA region needs to create 300 million new jobs by 2050. This cannot be achieved without creating more and more “digital” jobs. Various reports have shown correlation between broadband access and GDP growth, and in a recent study, the World Bank argues that the development of broadband access can stimulate job opportunities in rural areas. However, there is little research done in the Middle East and North Africa with respect to the impact of broadband access on the job market. Perhaps, the only study I’ve come across in this regard is the Uber case study in Egypt.

What are you most excited about for the future of a digital economy in the region? 

The short answer is entrepreneurship.

The tech startup sector in the region is emerging, with some very good success stories over the past decade, perhaps the best known so far being Careem and Souq.com. 

Last year saw a record number of 564 startup investment deals, amounting to $704m in funding, in the MENA region. This equated to a 12% increase in funding in just one year, excluding the acquisitions of Careem and Souq.com.

What are the greatest challenges to creating digital inclusion?

The lack of:

1. Digital infrastructure
2. 21^st century legal and regulatory frameworks
3. Skilled human capital