Thank you, Minister Aljadaan, for your leadership during the Saudi G20 presidency, and for your partnership to create this timely high-level event.
COVID makes increasing access to opportunity more urgent
Minister, governors, distinguished colleagues, it is a privilege to join you today.
I would first like to extend my heartfelt condolences to the people of Kuwait. It was with great sadness that I learned of the death of His Highness Amir Sheikh Sabah Al-Sabah. He was a great statesman and will be sadly missed.
Access to opportunity is an issue of deep importance, including for the Fund. It is an issue that Sheikh Sabah cared about deeply. And it is even more important during the COVID-19 crisis, which is hitting those who already lacked opportunity the hardest.
How do we fight the pandemic and help the most vulnerable when budgets are stretched so thin?
By following the Arabic proverb, “Do not delay the work of today for tomorrow.”
Key policy action areas include social spending, youth and women’s employment, and closing digital divides
We must act today because the region and the world are at a transformative moment—while we face headwinds from the pandemic, we have at least some tailwinds from continued spending to fight the pandemic, and the accelerated digital transformation taking place worldwide.
Decisions made now will affect the lives of more than 420 million Arabs for years and decades to come. Preparing them for a rapidly changing global economy is the work of today, and it must not be delayed. Action in three areas will help increase access to opportunity.
First, improve health, education and social safety nets. This can be paid for by progressive taxation of both income, and property and goods. Better prioritization of spending and increased efficiency will also help. Fewer children will die preventable deaths. More girls will learn to read. Fewer people will live in poverty.
Despite much progress, health and education outcomes in this region are not as good as those in similar countries elsewhere. There is an “efficiency gap.” But if Arab countries get greater value for the money they are already spending, the IMF estimates the Arab world could close a third of the health and education gap without any new spending.
That said, some Arab countries are spending effectively, including in their response to the pandemic.
Take Jordan’s initial COVID response, which included a quick lockdown with widespread affordable testing, and steps to reduce economic harm. These included immediate tax relief to companies, and cash support for vulnerable daily wage workers.
And when you look at COVID testing, the UAE and Bahrain are among the very best in the world.
Second, increase employment of young people and women. Addressing skills mismatches, removing gender-based restrictions, and strengthening childcare and other supports will help.
Saudi Arabia has made notable progress in this area. In just two years, the percent of Saudi women in work or seeking work has risen substantially . The Kingdom has introduced workplace anti-discrimination legislation and banned pay discrimination based on gender, age, and other irrelevant factors. Smart enforcement of these measures will ultimately determine success. And additional measures are needed. But important progress is being made.
And the third area to act without delay: close digital divides.
More and more, access to the internet is access to health, education, to commerce, to financial and government services and benefits.
In short, access to the internet is access to opportunity.
Investment is needed in both the physical and human elements of digital infrastructure—training coders and engineers, in addition to installing fiber and towers. The benefits of digital access are clear: Morocco, for instance, is providing cash benefits to 85 percent of eligible informal workers using mobile phones.
How the IMF can help
As each Arab nation works to customize policies like these to your unique needs, the IMF is here to help.
We provide policy help—both bilaterally, and through research such as our Enhancing Access to Opportunity report from May, and a paper launched yesterday on Social Spending for Inclusive Growth in the Middle East and Central Asia.
We support capacity development, to help put the research into practice.
And where needed, we provide financing. We have extended additional credit to eight Arab countries this year with total credit of $26 billion to the region. And we are well positioned to do more.
As we prepare for Marrakesh 2021 for our Annual Meetings, we’re engaging with the Arab world on how to promote a recovery that is more inclusive, and also greener, fairer, and smarter.
This is the work of today. We cannot delay.