Seven themes of change for MENA beyond the COVID-19 pandemic

To build a better working world and economy beyond the COVID-19 pandemic, we must rethink and explore the possibilities of change. 

It’s not yet the end of the COVID-19 pandemic, but we are thinking ahead to the lasting economic implications of coexisting with it. Governments across the globe are faced with the hard choices of how best to continuously address and contain the virus, citizens’ welfare, economics and diplomacy.

No doubt we are on the brink of a new economic paradigm. In addition to the clash between the digital and physical environments, we now have the confluence of changing social behaviors which together will reset many industries. The precise shape is not yet defined, but these themes may indicate the direction.

1. A new era of patriotism

It’s already clear that projected global economic growth will turn negative in 2020. In fact, governments around the world are bracing for significant economic fallout. Although this global pandemic has redefined global solidarity, courage and creativity, its magnitude has called for unprecedented policy innovation and thinking at a nation-state level. Confronting this crisis has meant that nation states alone will need to define the actions needed to determine the strength and speed of recovery. Most MENA countries have now opened their economic war chests and are implementing some forms of stimulus packages. What is now bound to follow is a wave of austerity measures, bailouts and nationalization actions.

As oil price volatility dominates headlines, the GCC’s extraordinary reliance on oil has affected national credit ratings and is set to impact their currency peg. Ultimately, this means that traditional macroeconomic measures through defined fiscal or monetary packages for responding to economic shocks will most likely have a limited and suboptimal impact.

2. The increasing role of government

The pandemic battle has galvanized and strengthened the value of government globally. We now look to government not only to protect our lives but also livelihoods. Governments around the globe have taken decisive, swift steps to limit and address the human and economic impact of the COVID-19 pandemic. Most have responded by launching extraordinary economic packages and stimuli measures.

As governments navigate us through an extraordinary time in history to plan for recovery and reforms, citizens are demanding greater interventions and protection. The success of the pace of the recovery will depend crucially on the policies being undertaken during the pandemic. Most of us will now accept the mantra that a strong functioning government is crucial for a healthy society and, in turn, a healthy economy.

We are now on the brink of witnessing the rebirth of strong ever-present governments, further extending their reach to protect us. Looking ahead, citizens will demand their government and its institutions to be further entrusted with protecting health, preserving civil liberties, and overseeing national security.

Governments’ ongoing quest to protect citizens and reform will be grounded on the compulsion to rely on a host of technologies that, for the most part, we’ve resisted until now. Just as surveillance and security stepped up after the 11 September 2001 terrorist attacks, the COVID-19 pandemic will force us to trade off some privacy in exchange for safety, security and economic well-being. Leaders understand that the COVID-19 pandemic will be fought not just by epidemiologists, but by Internet of Things (IoT) specialists, computer scientists, and big data analysts. Examples of actions that some organizations will deploy (and are already deploying) include biometric hardware, artificial intelligence (AI), and analytics and smart security tools.

The virus didn’t just attack the immune system of citizens but has potentially infected the foundations of society as we know it. Safety and security will now take center stage of our regional governments’ strategies. 

3. Reform is the new medicine

The past tells us that at critical junctures in global history, nation-building events can quickly manifest themselves to produce political and economic institutions. These institutions have the potent power to redefine how nations can thrive into inclusive, productive, and highly educated advanced states.

Sector by sector, the pandemic has unintentionally sparked changes that were being pushed by reformers for decades – what could have taken years is now happening in a matter of weeks. Robust institutions which underpin governments now have the proclivity to introduce policy changes dismissed as unworkable in the past but absolutely imperative for tomorrow.

Policymakers are providing unprecedented support to help manage and plan for the recovery from the pandemic. Critical sectors which have been most impacted as susceptible to the pandemic include health care and education. The pandemic revealed deadly flaws in health care and awoke a pent-up societal need for policymakers to do more to educate future generations.

The current crisis may well change our perspectives, but it will forever teach us how education needs to change in order to better prepare our young learners for what the future might hold.

For some time now, global educators have been grappling with the challenge of educating future generations. For decades, education has been distracted from its core functions by regulatory frameworks and management cultures that demand endless commercial income, greater competitiveness between one another with less focus on how best to pivot the art of teaching. The pandemic aggravated the imaginative dismantlement of the classroom; technology immediately stepped into the breach to continue playing a more pivotal role in education. Technology has already become an extension of young learners’ consciousness and identity — a way of life, which needs to be instilled in the way we reconstruct education systems.

Much of the current attention in health care has been focused on the near-term challenges. Health care technology is undergoing a major revival, which promises to become a permanent reality moving forward. The sudden boom in telemedicine, regulatory and policy shifts, location data tracking, preemptive care through genomic sensors, AI digital therapies, are accelerating the sector’s long-established conservative grip on the past, ushering in a new era of global health care.

This broadscale global pivot could help solve many challenges confronting MENA health care systems and lead to unprecedented health care reforms. Regional governments and policymakers will need to purge the paper from health care and build flexible, modern systems capable of handling complex surges.

MENA governments are faced with a once in a lifetime opportunity to lift their nations from a legislative and regulatory lethargy and clear the way to further unite, bind, and advance their countries.

4. Digital for good

The pandemic has swept away many artificial barriers to moving our lives online. For far too long, vested self-serving parties maintained a slow burn of collaborating with governments. Regulatory barriers are now set to fall, allowing for an unimpeded movement of all things digital.

Through creative destruction, this pandemic will abolish established enterprises and yield new ones, and in the process, redistribute resources and displace sectors and talent. The democratization of disruptive knowledge through technology will further galvanize the empowerment of people through ideas and not through goods or traditional services.

We will soon witness innovation on steroids. MENA governments will need to quickly recalibrate and embrace the power of entrepreneurialism to foster this unstoppable tide of change.

5. Supplies unchained

While there is no evidence that the pandemic can be transmitted through commerce, it is clear that an inevitable global economic contraction combined with a strong willingness to protect national interests will invariably limit countries’ access to normal global supply chains. The pandemic has now placed substantial pressure on governments and the private sector to weigh the efficiency and cost or benefit of globalized supply chains.

In an instant, the pandemic has unwound years of multilateral trading relationships across the world, unhinging global networks and unleashing a force which has the power to deglobalize and divide. Many nations and organizations are now considering recalibrating their dependency on fractured supply chains to stronger and more robust domestic alternatives.

Moving forward, open international coordination will be essential to MENA in order to restore market confidence and contain fiscal stability. The GCC nations are no exception. They will need to assert the full weight of their resources to protect and galvanize their existing bilateral and multilateral global trading partners, but will also need to reach out to possibly new trading partners as the post-COVID-19 world order emerges.

Regional governments will need to reimagine a diversified economic paradigm in the GCC. Economic attractiveness of their respective markets to facilitate greater multilateral ties will include an improvement in market-related data, to be timelier and more transparent, relaxed FDI rules and a more inclusive and liberalized labor market. Open and multilateral-based GCC economies will be vital to support economic recovery and long-term prosperity.

6. Rebirth of a new labor force

The current pandemic has placed extraordinary demands on government and business leaders around the world. Fear and unpredictability have exposed the capabilities of many leaders resulting in a high degree of disorientation, stress and loss of control, and leading to possible tectonic labor market shifts. The consequential mettle testing in leaders will inevitability result in significant executive management churn across the region in all sectors of the market.

The current mix of work from home and at-work social distancing, combined with economic anxiety, is driving an unequal opportunity dynamic in the regional labor market. More highly skilled individuals are easily adapting to working from home. This unconventional dynamic is negatively impacting economic productivity, but is also manifesting itself into a more positive, agile shift in workplace behaviors such as team structures, applications of technologies and routines. We are now set to see a workplace reimagined by flexibility.

Across the world, we are witnessing an immense number of measures by governments to protect and bolster the employment opportunities of citizens. Unfortunately, it appears that the brunt of the bleak economic outlook will be felt more by younger people. Our regional governments in MENA, particularly in the GCC, will choose to tailor their employment measures and policies in favor of its national citizens as a key priority for the recovery.

Additionally, governments throughout the region have been trying to push workers off public payrolls into the private sector, but the economic shocks of the COVID-19 pandemic, and the presumption that government employees will be among the few enjoying regular paychecks, will make that change even harder.

7. The values of society

As countries in MENA implement necessary quarantines and social distancing practices to contain the pandemic, the speed and magnitude of change on our lives is unlike anything we have ever experienced before. This will no doubt be imbibed into our societal consciousness forever.

This pandemic flies in the face of our natural cognitive state, biases and behaviors, annihilating what we came to refer to as “social norms”. In the absence of an effective treatment or vaccine, social distancing has redefined our routines and habits. Ultimately, our communities are now set to be recalibrated by new norms that are yet to be defined.

Reduced close physical contact, enhanced standards of hygiene and restricted travel are all set to fuel a renewed bedrock of alternate ideas and innovations which will redefine our live-work-play paradigm forever.

In the aftermath, society will hunger for a diversion. History suggests, as with most globally defining events, people will seek ways to alleviate their stresses and mental fatigue by focusing on leisure and wellness. Our regional communities in MENA had already begun the arduous journey of challenging their social norm compatibilities in ways which would not compromise regional values but would facilitate further economic diversification and ultimately the long-term quality and standard of living for their citizens.

When this pandemic is over, will this spell the beginning of a new social era for the region, where people share the same values and search for a more liberal society?