Cooperation, Technology and Digital Transformation: The Case of Arab countries
Samia Satti Osman Mohamed Nour, Economic Research Forum (ERF)
This global South case study discusses the use of information and communication technologies (ICT) and digital transformation in the Arab region2. In particular, the paper explains potential opportunities and challenges and the positive and negative impacts of ICT and digital transformation in Arab countries and offers recommendations for South-South cooperation.
The paper uses descriptive and comparative approaches and employs the most recent secondary data obtained from the International Telecommunication Union (ITU) ICT Indicators database and other relevant sources. Trends in global ICT use and digital divides among world regions and the Arab region during the period 2005-2021 are shown. Specifically, the paper’s results are drawn from information based on five observations: 1) increasing trends and the rapid diffusion of ICT indicators in the Arab region and world regions during the period 2015-2021; 2) the incidence of the global digital divide in ICT indicators between the Arab region and other world regions during the period 2005-2019; 3) increasing trends and widening digital divides in ICT indicators between the Arab region and other world regions during the period 2015-2021; 4) differences in the growth rate and diffusion of different modes of ICT indicators in the Arab region during the period 2005-2021; 5) incidence and trend of digital divides within the Arab region (defined by urban/ rural area 2015-2019.
ICT provides several opportunities for supporting economic development and sustainable development. In particular, ICT has the potential to support digitalization, digital transformation and digital economies in Arab countries, for instance, by supporting government and social services. This is demonstrated by several indices, including the Digital Index (DiGiX), the Digital Adoption Index (DAI) and the Euler Hermes Enabling Digitalization Index (EDI). On the other hand, ICT creates challenges for economic development and sustainable development when there is a digital divide. Substantial discrepancies were observed in digital indices, digitalization and digital transformation within the Arab region, with high performance reported in Arab Gulf high-income countries compared to Arab middle-income and low-income countries. This discrepancy is not surprising and can be explained in relation to corresponding substantial discrepancies in economic development, income levels and human development among Arab countries. The concentration of ICT diffusion is found in the Arab Gulf countries and there are wide disparities between these and other Arab countries with regard to the use of ICT (percentage of population accessing the internet, internet subscribers and users). The richest Arab Gulf countries, with the highest gross domestic product (GDP) per capita and better average years of schooling, have higher percentages of people accessing the internet and better opportunities for digitalization and digital transformation, while poorer Arab countries with a lower GDP per capita and less schooling have a correspondingly smaller percentage of inhabitants accessing the internet and poor opportunities for digitalization and digital transformation.
South-South cooperation in the use of ICTs has the potential to accelerate sustainable economic development. Examples already exist of Arab-Arab, China-Arab and Indian-Arab South-South cooperation in ICT. Existing regional initiatives in ICT and digitalization are contributing towards closing gaps in digital divides. Recommendations are provided at the end of the paper to further strengthen Arab- Arab and other South-South cooperation in ICT to address digital divides within and among Arab countries.