On the occasion of the 50th anniversary of diplomatic relations between the Swiss Confederation and the United Arab Emirates, a high-level delegation from the United Arab Emirates visited the Swiss capital, Bern, at the beginning of March last year. The delegation was led by His Excellency Dr. Thani bin Ahmed Al Zeyoudi, Minister of Foreign Trade, and included several meetings with Swiss officials, including Swiss State Secretary for Economic Affairs H.E. Helen Budliger Artieda.

In addition to government officials, the UAE delegation included top executives from companies representing high-growth industries such as banking and finance, aviation, trade, investment, healthcare, and advanced technology, including representatives from the Abu Dhabi Chamber of Commerce and Industry, Dubai Chamber, Emirates Airlines, M42, Abu Dhabi-based Global Healthcare Services, Emirates Insurance Company, Ajman Chamber of Commerce, First Abu Dhabi Bank, Hub71, and others.

The delegation also visited leading Swiss private sector companies, including the headquarters of Swiss pharmaceutical company Novartis, where they discussed partnership prospects, particularly with the newly established Emirates Pharmaceuticals Foundation in the UAE, of which Dr. Al Zeyoudi is the Chairman of the Board. The tours also included Pilatus Aircraft Ltd., a Swiss aircraft manufacturing company collaborating with the Emirati company Strata to enhance advanced manufacturing capabilities in the country and support its knowledge-based economy.

Furthermore, a celebration marking this occasion was organized under the sponsorship of the UAE Embassy in Bern, attended by the high-level Emirati delegation, Swiss officials led by the H.E. Helen Budliger Artieda, Swiss State Secretary for Economic Affairs, and representatives of leading companies and investors from both countries to explore high-potential investment and partnership opportunities.

The meeting was opened by Michel Lane, President of the Swiss Business Council. The meeting included speeches from Dr. Thani bin Ahmed Al Zeyoudi, Minister of Foreign Trade, Helen Budliger Artieda, Swiss Minister of Economy, and Dr. Hissa Abdulla Ahmed Al Otaiba, Ambassador of the United Arab Emirates to Switzerland and Liechtenstein.

During the celebration, achievements in Emirati-Swiss relations were reviewed, and the meeting served as an opportunity to showcase the advantages each country offers to investors, business owners, and projects.

In his address during the forum, Dr. Al Zeyoudi, emphasized Switzerland's role as an important trading and investment partner for the UAE. He highlighted Switzerland as the leading European destination for non-oil Emirati exports, ranking fourth globally with a value of $9.5 billion in 2023. He noted that the trade volume between the two countries exceeded $22.3 billion in 2023, representing a 41.2% increase from 2022 and confirming the synergy between their economies. He affirmed that Switzerland shares the UAE's vision for sustainable long-term economic growth built on knowledge and innovation, providing a platform for deeper cooperation. By combining the public and private sectors, he emphasized that the Emirati-Swiss Economic Forum is one of the best ways to identify and explore these opportunities, build connections, and networks that will support another 50 years of positive relations between the UAE and Switzerland.

He also pointed out areas of Emirati-Swiss cooperation in various fields such as alternative fuels, trade finance, biotechnology, and medical technology research, aiming for greater economic integration. He promoted the benefits of the dynamic business landscape in the UAE to attract Swiss companies seeking to expand into Asian and African markets, including its strategic location, world-class infrastructure, and logistical capabilities. The Swiss cybersecurity company ZENDATA is a recent addition to the NextGen program for foreign direct investment, which helps innovative companies from around the world establish or expand their operations in the UAE[1].

In his intervention, the Minister of Trade emphasized that the trade sector in the UAE has grown by 3% over the past three years, highlighting the UAE's reliance on three pillars: technology, human capital, and market access. Regarding technology, the aim is to serve human being, focusing on sectors such as healthcare, education, and aviation. Concerning human capital, the UAE works on attracting talents through its immigration system, attracting many entrepreneurs and investors. Regarding market access, the UAE strives for diversity and has signed 14 free trade agreements in the past decade. It is also part of the European Free Trade Association (EFTA), and it recognizes the importance of investing in emerging markets in Asia, Africa, and South America.

Additionally, there is a focus on the service sector as a game changer, with the UAE being a global hub for re-export, connecting with 400 cities worldwide. The UAE is also considered one of five green hubs for global trade, facilitating trade in rice and diamonds.

Rashed AlBlooshi, the undersecretary of Abu Dhabi Department of Economic Development, highlighted the advantages of investing in the UAE, where the GDP reaches around $500 billion. The UAE has a future vision for a knowledge-based economy, with flourishing sectors including industry, pharmaceuticals, and finance, along with developments in aerospace, medical technology, and the environment.

Tariq Al Hashmi, Assistant Undersecretary of Advanced Technology at the Ministry of Industry and Advanced Technology, emphasized the competitiveness of the UAE's economy, which ranks first in the region. The industrial sector has witnessed significant growth, with industrial exports reaching around $47 billion, including petroleum refining, chemicals, and steel industries. Incentives for investors include competitive energy prices, availability of clean energy, central geographic location, land availability, robust infrastructure for communications and transportation, low tax rates, human capital, financial incentives, and a stable political environment.

During her address at the forum, Swiss State Secretary for Economic Affairs, Helen Budliger Artieda, affirmed the available opportunities in Switzerland for the business community, emphasizing that Switzerland enjoys one of the most prosperous economies. Stability is one of the distinguishing factors of Switzerland, along with a good regulatory environment. She added that transparency, neutrality, and predictable environment are crucial factors that strengthen the Swiss economy. She also pointed out important economic sectors in Switzerland, such as intellectual property rights, innovation, and technology. The significance of the European Free Trade Association (EFTA) was highlighted as it provides international dimension to the Swiss economy. She highlighted that one of the main characteristics of governance in Switzerland is the partnership between the public and private sectors, with the government adopting policies that involve citizens in decision-making processes. Switzerland benefits from a multicultural and multilingual environment, with one of the strongest universities and scientific institutes. She added that the Swiss government invests in basic research and supports startups through incubators and accelerators. Switzerland also boasts one of the best dual education and training systems globally, with statistics showing that one in three students pursues higher education, with the majority opting for vocational training. Switzerland spends around 5.6% of its GDP on education.

On the other hand, the role of small and medium-sized enterprises (SMEs) was emphasized, as Swiss companies operate internationally due to the small domestic market. Major global companies have branches in Switzerland due to its competitive environment. Switzerland also assists Swiss companies in expanding into foreign markets through its institution “Switzerland Global Enterprise”. The Swiss State Secretary for Economic Affairs highlighted the strong partnership between Switzerland and the United Arab Emirates, considering the UAE as a key partner for Switzerland in the region.

At the end of the forum, a joint panel was held with experts from both sides and participation from Swiss and Emirati companies. They emphasize the need of utilizing available expertise from both sides regarding best practices to facilitate the entry of companies into new markets. The economic model of Hong Kong has been cited as one of the successful models. Future prospects for cooperation, especially in the development of artificial intelligence and research and development, were also addressed.

In conclusion, the importance of cross-border partnership was affirmed, reflected in the strong and long-standing bilateral relations between Switzerland and the United Arab Emirates, benefiting both countries.

[1] The NEXTGEN FDI program is a national initiative launched by the Ministry of Economy. The initiative aims to attract digital companies from around the world and provide them with the necessary fundamentals to enter the market and expand within the United Arab Emirates.

Once again, the funding raised by startups in the Middle East and North Africa has dropped to a meager amount. In June 2023, the total funding amounted to only $35.6 million, distributed across 45 deals, with 17 of them being grants.

Despite the significant decline in startup funding in June 2023, as well as in April 2023, startups in the region raised over $1.6 billion during the first half of the current year.

Distribution of startup funding by country

Saudi Arabian startups took the first position in terms of funding value, with a total of over $25 million raised across 12 deals. Emirati startups ranked second with a total funding of $6 million distributed across 20 deals.
Egyptian startups secured the third position with approximately $5 million raised across 5 deals, of which $3.5 million came from a funding deal for the logistics platform Trella in the Egyptian trucking market. Moroccan, Omani, and Tunisian startups followed in subsequent positions with a total funding amount of less than half a million dollars. At the same time, startups from other countries were absent from the funding list for June 2023.

Distribution of startup funding by sectors

In terms of sector-wise distribution of funding in June 2023, the food tech sector occupied the first position with around $20 million raised across 4 deals, representing 56% of the total funding. The logistics services sector followed with approximately $4 million raised across 4 deals. In the third position, we find the gaming sector with around $3.4 million raised across only 2 deals.
Regarding the sectors that received the highest number of deals, the fintech sector ranked first with 7 deals, totaling $3.3 million in funding.

In July 2021, Burj Khalifa was covered in red with the word “SVWL” in the middle, announcing that the Egyptian mass transit company Swvl had become “the first unicorn company* in the Middle East with a market value of $1.5 billion to be listed on the NASDAQ New York Stock Exchange.” This is how Dubai celebrated the city-based company in 2019.

It did not take long for the wave of celebration of the Swvl company to turn into heartbreak and regret. Less than 6 months after the start of trading its shares on the Nasdaq Stock Exchange, the Swvl share price collapsed, losing about 95% of its value in September 2022. The downward journey of its share continued, bringing the share price in 2023 to about 20 cents, compared to $10 at the start of trading in March 2022. The market value of the company decreased from more than $1.5 billion to about $9 million only, so the company lost about 99% of its value after about twenty months of its listing on Nasdaq. How did Swvl descend from the pinnacle of success to the specter of bankruptcy? And what scenarios are waiting for the company?

In less than a year, Swvl succeeded in attracting financing amounting to about $9 million, starting with financing of $500,000 from “Careem” passenger transportation company, which was later acquired by “Uber”, and in 2018 it obtained financing of $8.5 million from a Series A funding round, and in the same year it succeeded in obtaining an undisclosed Series B funding round, estimated at between $20 and $30 million at the time, making Swvl the most funded startup in the Middle East and North Africa in 2018.

Swvl Mass Transport is an example of a startup that achieves great success at the beginning of its journey. The company started its operations in Egypt in 2017 with self-financing from its founders (Mustafa Qandil, Mahmoud Noah and Ahmed Sabah) that did not exceed $30,000 at the time. The idea of ​​Swvl was based on providing a reasonable alternative that combines low cost and efficiency, so that it enables individuals who wish to move away from public transportation, at a lower cost than the costs of shared transportation companies. In practical application, Swvl started operating large and small buses on specific routes, enabling users to book their trips through an application that runs on smartphones.

Funding continued to flow to Swvl, as in 2019 it succeeded in raising about $42 million from a Series C financing round, bringing the total amount it obtained, in less than two years following its foundation, to about $80 million. In view of this success, Swvl decided to move its headquarters to Dubai, in a building that includes large companies, such as: "BMW" and "Rolls-Royce". From Dubai Swvl worked to accelerate its expansion in large and important markets in the Middle East and Africa, including the Saudi, Pakistani and Emirati markets, as well as Nigeria and Kenya.

Media aura

Propelled by the rapid success it achieved, Swvl gained a great media aura since its launch. In 2018 the founders of Swvl were chosen among the Forbes Middle East list of the most influential youth under the age of 30, and in 2020 the name of Swvl appeared in the Forbes Middle East list of the “50 most funded startups in the Middle East”, where it ranked second, while its financial director, Youssef Salem, appeared on the same list in 2021. Mr. Salem is a prominent banker who used to work in Moelis & Co, who was among a large group of employees who were attracted by Swvl through generous salaries, temptations and other incentives.

This is in addition to many TV interviews and dozens of websites that dealt with the company's success story. The media aura contributed to increasing the confidence of investors and financiers in the success of the company and in the possibility of it becoming one of the largest companies in the field of mass transportation in the world, especially with its great expansion in foreign markets.

Acquisition and listing on NASDAQ

Swvl reached the pinnacle of its success in the summer of 2021 when it was listed on the Nasdaq Stock Exchange after its merger with Queen's Gambit Growth Capital, a special-purpose acquisition company (SPAC), turning the startup that launched just 4 years ago, from a small company active in the streets of Cairo and Alexandria to a global company with a market valuation of $1.5 billion, this valuation at the time was considered exaggerated.

It is also worth noting that prior to this merger, two of the founders of Swvl had left; Mahmoud Noah, who later founded Capiter for business-to-business transactions, and Ahmed Sabah, who founded the emerging financial technology company Telda, while Mustafa Kandil continued to manage SWVL.

Less than a month after the announcement of Swvl’s listing on the Nasdaq Stock Exchange, the company began an expansion process in global markets. It began its global activities by acquiring the Spanish “Shotl” smart transportation company specialized in ordering buses in Spain and 22 cities in 10 European countries, in addition to its activity in Brazil [1]. It also announced its acquisition of the German company "Door2door" in an undisclosed deal. In November, it acquired a controlling stake in the Argentine company Viapool, which operates in both Argentina and Chile, for $10 million.

Swvl's appetite for expansion and acquisition did not stop, and in April of 2022, i.e. one month after its shares began trading on the Nasdaq Stock Exchange at a value of $10 per share, Swvl announced two acquisition deals, the first of which was the acquisition of the Turkish "Volt Line" company for participatory transportation. Its value amounted to 40 million dollars, and the second was the conclusion of an initial deal with the British company "Zello" in preparation for its acquisition in a deal whose estimated value was about 100 million dollars [2]. This is in addition to pumping 25 million dollars allocated to increase expansion in the Turkish market through "Vault Line"[3].

Falling from the top

Less than two months after Swvl's shares began trading on the Nasdaq Stock Exchange, the company's share price fell to about $5. In front of this sudden drop in the share price, Swvl announced the layoffs of 400 of its employees, or about a third of the company's employees, and the reason for taking this action, according to Swvl, because it would replace its laid-off cadres with fully automated systems, in order to reduce its expenses and focus on achieving profits starting from 2023. Commenting on the decline in its share price, Swvl's management stated, "The decline in the stock does not cause concern to the management, but we have a responsibility towards every shareholder who suffers a loss, and we try to separate the action plan that we are following and the fluctuation of the stock."

Swvl's announcement was not enough to stop the collapse of its share price. On the one hand, laying off 400 employees will not lead to immediate or certain results to achieve profits that satisfy investors and shareholders. Rather, the results of the layoffs need time to appear, in addition to the fact that the process of replacing automated systems in itself is a costly and complex process. On the other hand, Swvl did not stop expanding in new markets, as the company announced its acquisition of the Mexican company "Urbvan" for mass transportation [4]. This coincided with its announcement of its intention to enter the American market at the end of the same year, meaning that the goal of the company to focus on profits does not seem likely to be achieved in light of its continued expansion into new markets, which is one of the main reasons for the decline in Swvl's share price.

The major collapse in Swvl’s share price occurred on July 8, 2022, as the company’s share price fell to about a dollar and a half, and on September 20 of the same year, the share price fell below one dollar, and reached about 50 cents, thus losing Swvl about 95% of its value, as its market valuation fell from $1.5 billion to about $75 million. The downward path of Swvl's share continued with the beginning of 2023, bringing its share price to about 20 cents and its market value to about $9 million.

Why did Swvl stock fall?

In addition to the poor performance and management of the Swvl itself, specifically related to its rapid expansion policy, which cost the company hundreds of millions of dollars, the collapse of the share price of Swvl on the Nasdaq Stock Exchange is also attributed to the state of the global economy.

The COVID-19 pandemic hit the transportation industry hard, and Swvl was no exception. With lockdowns and social distancing measures in place, demand for public transportation plummeted, and Swvl was forced to suspend its services. In addition, the company faced financial and operational challenges, with its high operational costs and limited revenue streams putting it at risk of bankruptcy.

Also less than a month before the start of trading of Swvl shares on the Nasdaq, The Russian-Ukrainian war broke out, which caused a significant increase in energy prices, which negatively affected the operating costs of Swvl. The global economy in general entered a state of uncertainty and slowed growth, and many countries were affected by the global inflation situation caused by the Ukrainian crisis, including Egypt, Latin America and a number of countries in which Swvl is active. This situation also led to collapse of the prices of the national currencies of a large number of countries. Moreover, the US Federal Bank raised interest rates, which made it more expensive for startups to borrow and to finance their activities.

What also indicates that the crisis that Swvl went through is linked to external causes, is that the Nasdaq index itself lost nearly a third of its value in 2022 [5], in short, Swvl was not alone in this crisis, but rather it was doubly affected because its activities being linked to energy prices, which flew.

Swvl's actions did not achieve its desired goal, as we mentioned above, its share continued to decline, and it is known that the NASDAQ Stock Exchange prevents trading of shares of companies with a share price of less than one US dollar, which made Swvl exposed to the risk of being delisted from the NASDAQ Stock Exchange, especially since it received a warning in this concern from Nasdaq. Swvl's solution was a "reverse stock split" that turned every 25 shares into one. So that its shares have traded since March 2023, at a price ranging from two dollars to $1.07.

What fate awaits Swivel?

In view of the major collapse of Swvl, its CEO, Mustafa Kandil, decided on November 25 to lay off more than half of the workforce and sell, stop or reduce some operations in "smaller" countries, and focus mainly on Egypt and Mexico. Five weeks after this announcement, Swvl formed a panel of independent directors to explore potential sales, mergers and other options.

A reverse stock split may be a stopgap for Swvl from delisting from the Nasdaq stock exchange, but it may not last long given the company's plight.

According to Bloomberg, quoting a person familiar with the matter (who asked not to be named because the information is confidential), Swvl is now looking for new capital from investors, while it remains listed on the Nasdaq [6]. This may be hardly the only option for the continuation of Swvl, that is, obtaining new capital and turning into a private company, to restart again.

The company's leadership team recognized the need for change and embarked on a bold transformation strategy. They diversified their revenue streams, shifting their focus from bus rides to logistics and delivery services. They also implemented cost-cutting measures, streamlined operations, and renegotiated contracts with suppliers.

The company has also expanded its services to include last-mile deliveries, e-commerce logistics, and ride-hailing. Swvl's story is a testament to the resilience and adaptability of businesses in the face of adversity. It also teaches us the importance of diversifying revenue streams, being agile and flexible, and taking bold actions to survive and thrive in challenging times.

Sources:

* An economic term applied to emerging companies whose market valuation exceeds one billion dollars.

* Special purpose acquisition companies are public companies that have no business but to choose a private company to merge with, and the latter inherits the inclusion of the first.

[1] Swvl prepares to enter the Spanish market by purchasing Shotl buses, Wamda website, 08/19/2021, available at: https://bit.ly/407w5be

[2] Swvl acquires the English “Zilo” for $100 million, WAYA Arabic website, 08/05/2022, available at: https://bit.ly/3GNrfcd

[3] “Swvl” acquires the Turkish “Volt Line” for ride-hailing services, Lumberj Middle East, 04/25/2022, available at: https://bit.ly/3A0AIJw

[4] Swvl Acquires Mexican Urbvan to Penetrate Markets There, Arabia Inc, 07/18/2022, available at: https://bit.ly/3mBZUTA

[5] Sherif Othman, “The Nasdaq index lost nearly a third of its value in 2022,” Al-Araby Al-Jadeed website, 10/01/2022, available at: https://bit.ly/3GKrpRK

[6] Samuel Gebre at el, Middle East Unicorn Swvl’s Spectacular Rise and 99% Stock Tumble, bloomberglaw, 09/03/2023, Available at: https://bit.ly/43zVyNw

Reports, newspapers, and international economic magazines suggest that the major economies in the world will experience a slowdown in growth. According to a published report by the United Nations Conference on Trade and Development (UNCTAD), the world is heading towards a long-term recession unless monetary and fiscal policies that control some advanced economies change quickly. The World Bank also warned that the global economy for 2023 is at risk, with high inflation rates and interest rates, decreased investment, and ongoing war in Ukraine. The International Monetary Fund (IMF) expects economic growth to decline to 2.7% in 2023 compared to 3.2% in 2022. This global slowdown could lead to a decrease in gross domestic product (GDP) that is less than what it was before the coronavirus pandemic and will cost the world more than $17 trillion in lost productivity. The Fund says that growth expectations for 2023 will be the lowest since 2001. The Chief Economist at the Fund, Pierre-Olivier Gourinchas, warned in statements to the British Financial Times that there is a possibility that global growth could drop to less than 1% in 2023.

The major economies of the United States, Europe, and China are experiencing low growth expectations. According to the World Bank, the United States will face a growth rate of no more than 1% in 2023, while growth in Europe is expected to approach zero, and China's growth is expected to be no more than 4.3% (Figure 1). It is also expected that the unemployment rate in the USA will be around 3%, with a continuing increase in the current account deficit to more than $800 billion in 2023.

Although the discussion is about how all regions will be affected by this recession, the alarm bells are ringing louder for developing countries, especially with the worsening problem of debt. The report also cites another reason for economic concern, with the increasing impacts of climate change, where losses and damages are increasing within weak economies that lack the financial resources to deal with disasters.

The UNCTAD warns that excessive monetary tightening and insufficient financial support could expose the economies of developing countries to further consecutive crises. It is expected that middle-income countries in Latin America and low-income countries in Africa will suffer the effects of this slowdown, with the possibility that the problem of debt default will surface.

The Director of the International Monetary Fund, Kristalina Georgieva, warned, in her statements, that the global economy will witness difficult conditions in 2023, as economic stagnation and continued high levels of inflation will be its most prominent feature, and this is at a time when its engines, that is, the American, Chinese and European economies, have witnessed a significant slowdown since the last quarter in the last year.

These warnings align with other bleak forecasts released by a number of international financial institutions and European central banks, which also see the likelihood of a global economic recession very possible in 2023.

The billionaire and American investor Stanley Miller, who gained fame in 1992 after betting on the collapse of the British pound and making gains of up to ten billion dollars, says "If we don't see an economic recession in 2023, it will be like a miracle," because the expected growth scenario for next year will be 2.4% at best and could slow down to 1.2%, the same level of growth that existed during the global financial crisis in 2008.

War in Ukraine

The war in Ukraine is weighing heavily on the global economy, particularly in regards to grain supplies. The outbreak of war has led to higher prices for food and fertilizers, harming importers and prompting many countries to impose restrictions on exports. Around 345 million people are at immediate risk of severe food insecurity as a result. According to the World Food Programme, over 828 million people around the world go to bed hungry every night. The countries most affected are those that depend on food imports from Ukraine and Russia, amounting to 48 countries, mostly low-income countries[1].

Source: International Monetary Fund data.

Inflation rates and global debt

Inflation is considered a global phenomenon that has been exacerbated by the war in Ukraine and the disruption of global supply chains following COVID-19 closures in China. The International Monetary Fund (IMF) expects consumer prices to rise to record levels in emerging and developing economies, reaching 10% in 2022 before dropping slightly to around 8.1% in 2023. Although the gross domestic product (GDP) exceeded $100 trillion for the first time in 2022, growth is threatened to come to a halt according to the Centre for Economics and Business Research (CEBR) in Britain. Also, raising interest rates will increase the burden of new and existing loans, lead to a decline in overall demand and investment, and affect productive sectors and the labor market. It is expected that households and businesses around the world will face strong economic difficulties due to rising commodity prices, especially food and energy, and with continued central bank interest rate hikes to curb inflation, as well as supply chain crises and rising energy and food prices due to the war in Ukraine. In this context, statistics from the IMF show that Arab countries in the Middle East, Asia, sub-Saharan Africa, and Latin America are suffering from higher inflation rates than other countries.

In light of these circumstances, the issue of debt reemerges, as the IMF warns of the worsening global debt, which has exceeded 303 trillion dollars, or the equivalent of 350% of the global GDP. This will result in more cases of default in poor countries, with Sri Lanka and Lebanon serving as examples of this deficit.

According to World Bank data, the external debts of low- and middle-income developing countries exceeded 9.2 trillion dollars by the end of 2021, which is more than twice its value a decade ago.

Global Trade and Oil

The decline in global economic growth means that global trade is likely to decline, which will affect foreign investment and thus emerging economies. This is not to mention the possibility of trade wars between industrialized countries and their repercussions on emerging economies. Regarding the impact of the recession on the economies of countries, it is related to the degree of openness of these economies to the global economy. The more open they are, the more vulnerable they are to the consequences of the economic crisis. Moreover, countries that rely on oil exports in their economies are more vulnerable to the effects of the economic crisis, especially when it comes to oil prices.

After oil prices witnessed a significant increase due to the ongoing war in Ukraine, reaching its highest rate in 2022, which is around $100 per barrel, it is expected to decrease during 2023 to below $100 and is expected to decrease further if the economic recession continues, reaching below $70 per barrel by 2025. In general, oil-producing countries remain better off than other countries during the recession period due to the oil revenues that enable them to implement programs to support various sectors to counter the effects of the recession.

Arab Countries' Economies

While the major economies of the world are experiencing a slowdown in growth, including China, the European Union, and the United States, some unexpected Arab countries are achieving a breakthrough in economic growth. Comparing economic growth data for the Arab region in 2022 and 2023 reveals significant disparities in growth expectations between the two years, with clear variations among countries.

In 2022, several Arab countries, especially those in the Gulf Cooperation Council, Egypt, and Iraq, experienced relatively high growth, likely due to the post-COVID-19 recovery period. However, in 2023, significant changes are expected due to recent developments, as previously discussed.

Some countries, such as the Gulf Cooperation Council countries, especially Kuwait and Saudi Arabia, are expected to experience a recession. On the other hand, other countries will experience growth at different rates, particularly Libya, which is expected to lead Arab countries in achieving an unexpected breakthrough in growth, with a growth rate of approximately 18%. Djibouti and Mauritania will follow with growth rates of around 5%, followed by Egypt, the United Arab Emirates, and Iraq (Figure 2).

Unemployment is considered one of the main challenges facing Arab economies. According to World Bank data, there is significant variation in unemployment rates in Arab countries compared to major world economies. According to the ESCWA report, unemployment rates among the Arab population are the highest in the world, with Palestine and Jordan recording the highest unemployment rates in 2021 at around 26% and 24% respectively, followed by Sudan at 21%. According to the findings of several international economic reports indicate, the current economic situation in non-oil Arab countries is very poor today and does not seem to improve in the future unless effective national policies and favorable international conditions are available. On the other hand, it is expected that Egypt, Bahrain, and Kuwait will record much lower rates of 6%, 4%, and 1%, respectively (Figure 2).

Source: International Monetary Fund data.

It is expected that the unemployment rate in the European Union will reach around 7%, with Greece and Spain recording relatively high rates of 14% each, while it will reach around 10% in Italy and around 7% in France, Belgium, and Sweden. In the United Kingdom, it is expected to reach around 5%. On the other hand, both the United States and Canada are expected to record rates of 4% and 7% respectively, while this rate will reach around 3% in both Germany and Switzerland (Figure 4).

Despite the pessimistic economic forecasts, the economies of the Gulf Cooperation Council (GCC) countries have continuously grown over the past two decades, achieving significant leaps in GDP at current prices for all GCC countries combined from less than $400 billion in 2000 to more than $2 trillion in 2022, making the GCC economies among the world's top 10 largest economies. This significant achievement is driven by ambitious economic recovery plans, such as Saudi Arabia's Vision 2030 mega-projects, Dubai's Expo 2020, Qatar's investments related to the World Cup, as well as economic diversification programs.

 Source: International Monetary Fund data.

The Impact of Recession on Daily Life

During recession the important question remains about the impact on daily life. Climate shocks, regional conflicts, and the spread of pandemics have disrupted food production and distribution, as well as an increase in the cost of food. Layoffs are likely to be higher and more widespread, and employers may hold back on hiring, leading to a small to medium increase in unemployment rates. However, not everyone will be equally at risk. People vary in their exposure to the impacts of a recession based on their specialties and experience. Those with high demand for their specialties - whether they are front-line employees, IT engineers, or top-level executives - are likely to secure a job or keep their current positions and even receive salary increases and bonuses.

Source: International Monetary Fund data.

Summary

Reports and various sources indicate that major economies in the world, including China, the European Union, and the United States, will experience a slowdown in growth as a result of the blows that the global economy has received over the past two years, starting with the lockdowns due to the coronavirus pandemic, passing through the Russian-Ukrainian war, and currently, the likelihood of the global economy drifting towards recession due to inflation and interest rate hikes. The World Bank has warned of this recession amidst rising inflation rates and interest rates, declining investment, and the ongoing war in Ukraine. The International Monetary Fund expects economic growth to decline to 2.7% in 2023 compared to 3.2% in 2022, which is a global slowdown that could cost the world over $17 trillion in lost productivity.

Accordingly, households and companies around the world are expected to face strong economic difficulties. There are also expectations of a worsening of global debt, which has surpassed $303 trillion, leading to more cases of defaults in poor countries.

Regarding oil, after oil prices experienced a significant increase due to the ongoing war in Ukraine, it is expected to decrease to below 100 during 2023. Generally, oil-producing countries remain in a better position than other countries during the recession due to high oil revenues.

On the other hand, Arab economies have shown variation in growth rates. While some Arab countries will experience a recession after the post-COVID-19 boom, such as Gulf Cooperation Council countries, especially Kuwait and Saudi Arabia, there are Arab countries that will achieve significant growth, such as Djibouti, Egypt, Iraq, and Mauritania, with Libya expected to achieve a breakthrough in economic growth of up to 18%. In any case, despite the pessimistic economic expectations, Gulf Cooperation Council economies have grown continuously over the past two decades and achieved significant leaps, surpassing the trillion-dollar GDP threshold in 2022. Finally, in view of the pessimist economic growth expectations, there is an urgent need for economic programs to tackle the negative effects of the recession and mitigate its impact on poor households and small and medium enterprises.

Recommendations to confront the recession

The role of governments and policy makers is crucial in facing difficult economic times. The measures taken by the government will depend on the specific causes and characteristics of the recession, but the goal of these measures is to stabilize the economy, support individuals and businesses, and promote economic growth. Governments can play a role in mitigating the effects of a recession through a number of economic policies, including:

• Fiscal policy: Governments can use fiscal policy, such as increasing government spending or tax cuts, to stimulate demand and boost economic activity. Fiscal policy should target protecting the most vulnerable groups through targeted and temporary transfers, investing in enhancing productivity, and investing in human capital, digital transformation, green energy, and diversifying supply chains.
• Monetary policy: Central banks can use monetary policy, such as lowering interest rates, to make borrowing cheaper and stimulate economic activity (At a time when the economy is suffering from inflation, it will be difficult to use this policy).
• Infrastructure investment: Governments can invest in infrastructure projects, such as roads, bridges, and public transportation systems, to create job opportunities and stimulate economic activity.
• International cooperation: Governments can work together through international organizations to coordinate efforts and provide support during a recession, and to promote international trade to increase exports and stimulate economic activity.

For individuals and companies, here are some possible strategies to cope with a recession:

1- Cost-cutting: Review expenses and identify areas where spending can be reduced, especially non-essential expenses, and renegotiate contracts.

2- Increasing savings: Establish an emergency fund to help cope with financial difficulties.

3- Diversifying investments: Consider a diversified portfolio that includes both stocks and bonds to reduce overall risks.

4- Debt management: Prioritize paying off high-interest debts and consider repayment methods or renegotiating them to reduce monthly payments.

5- Embracing technology: Embrace new technologies and innovations to improve efficiency, productivity, and increase revenue.

6- Focusing on skill-building: Invest in personal and professional development to increase marketable skills and competitiveness.

7- Strengthening relationships: Strengthen relationships with customers, suppliers, and other stakeholders to increase flexibility and support during difficult times.

8- Seeking government support: Look into government programs, tax exemptions, or other financial incentives to help manage the recession period.

[1]International Monetary Fund: https://www.imf.org/ar/Blogs/Articles/2022/09/30/global-food-crisis-demands-support-for-people-open-trade-bigger-local-harvests.

The Arab Entrepreneurship Summit, the 1^st summit for Small and Medium Enterprises (SMEs) in the Arab world, were concluded in Amman under the auspices of Crown Prince Hussein bin Abdullah II and the presence of Jordanian Prime Minister Dr. Bishr Al-Khasawneh, representing the Crown Prince. The summit was organized by the United Nations Economic and Social Commission for Western Asia (ESCWA) in cooperation with the Jordan Enterprise Development Corporation (JEDCO). This summit was organized during from October 30 to November 1, under the title: Opportunities Beyond Borders.

This summit comes after ESCWA launched last April an e-Commerce Acceleration Programme (eCAP) to enable small and medium enterprises to take advantage of the opportunities offered by the digital economy, and to contribute to creating a vibrant environment for entrepreneurship in the Arab region. The program aimed to build the capacities of 100 small and medium enterprises from the Arab region to move to online selling, either by developing their own e-commerce websites, or by selling in the markets that already exist on internet.

The importance of the summit stems from the fact that it constitutes support for entrepreneurship for small and medium enterprises in the Arab region, at a time when entrepreneurship has become a global trend, especially in view of the enormous youth energy that the Arab world enjoys and the structural problems that the labor market suffers from. According to UNICEF figures, children and youth make up about half of the population of the Middle East and North Africa (the Arab region), which is home to one of the highest youth unemployment rates in the world.

Statistics of the International Labor Organization show that there are more than 14 million unemployed in the Arab countries, where the youth unemployment rate in the Arab region is almost double the global rate, and it has grown at a rate of 2.5 times, which is faster than the global average between 2010 and 2021. The region needs to create more than 33.3 million new jobs by 2030, to reduce the overall unemployment rate to 5 percent and to be able to absorb the large number of young people entering the labor market and stabilize youth unemployment rates (unicef).

Small and medium-sized enterprises are considered one of the most hiring projects for workers, and they help reduce unemployment rates, which have risen recently due to the prevailing political conditions in the Arab countries.

According to a study conducted by the Arab Youth Center, under the title “Priorities of Arab Youth”, on the eve of the International Youth Day, and reviewed the priorities of the young people surveyed in 21 Arab countries, strengthening sources of income and providing job opportunities was among the priorities of young people, as the youth’s suggestions included the need to provide financial incentives for those wishing to establish private projects and start-up companies, at a rate of 45 percent of the number of participants (arabyouthcenter).

With more than 135 million internet users in the Arab world, a new generation of tech-savvy entrepreneurs is emerging. This region is expected to record strong growth over the coming decades in terms of both population and GDP (refer to our previous article: Emerging Arab World and Business Opportunities in spite of the Political Turmoil SAE).

According to a report of the Economic and Social Commission for Western Asia (unescwa), the population size is growing rapidly in the Arab region. The total population of the region has more than tripled from 123.5 million in 1970 to 284.1 million in 2000 and 398.5 million in 2015. The Arab region is home to about 5.4 percent of the world's total population in 2015, compared to only 3.3 percent in 1970 and 4.6 percent in 2000. According to this report, these demographic trend is upward for the period 2015-2050, and population of the region is expected to exceed 520.7 million by 2030. At the same time, the real GDP is expected to grow during the coming period (on the basis of purchasing power parity) at amazing rates (we had talked about in a previous article, SAE).

Small and medium-sized companies constitute more than 90% of all companies in the Arab world, and they provide new job opportunities for young people, and they are considered an effective engine for change and development. However, despite the improvement witnessed by these companies in recent years, they still face great challenges that hinder their development.

The summit aimed to bring together the various official and private bodies in the Arab countries to help Arab small and medium enterprises to access regional and international markets, deal with various financing sources, benefit from regional and international networks, and increase their ability to expand in foreign markets.

This summit brought together about 650 participants, including entrepreneurs, owners of small and medium companies, representatives of financing organizations, as well as representatives of governments from across the Arab region, in addition to regional and international decision makers from the public and private sectors.

The summit was inaugurated by the Jordanian Prime Minister, Bisher Al-Khasawneh, who emphasized the interest that the Jordanian government attaches to supporting small and medium enterprises.

In his opening speech, Youssef Al-Shamali, Minister of Industry, Trade and Supply and Minister of Labor, Chairman of the Jordanian Corporation for the Development of Economic Enterprises, stressed the importance of small and medium-sized companies, and said that this summit is an attempt to use the most effective means to support small projects in the Arab region, pointing out the role of these projects in supplying the national economies in the Arab region.

Al-Shamali pointed out that these small companies constitute more than 70% of the available jobs in the region and that they face many challenges related to financing. For example, the percentage of banking facilities provided to small and medium enterprises is limited to 9% of the total banking facilities.

He also stressed the importance of the summit to facilitate dialogue on the most effective ways to enable small and medium enterprises to access regional and global markets, and benefit from the opportunities provided by international networks and build institutional capacities among Arab entrepreneurs.

The Under Secretary General of the United Nations and Executive Secretary of ESCWA, Rola Dashti, affirmed that the summit comes as a bridge between decision and policy makers and entrepreneurs looking to advance our societies to find ways to achieve the desired development goals.

She also confirmed that the contribution of small enterprises to the GDP in the Arab region is less than 10% and that most of these enterprises operate in the informal sector, stressing the role that small and medium enterprises can play in achieving higher economic growth and reducing unemployment among youth.

The main idea of the summit is cross-border opportunities. The organizers believe that ​​cross-border opportunities and connection of these projects and their products to global supply chains, will support these projects and their continuity and growth over longer periods of time.

Over the course of three days, the summit dealt with several topics, including environmentally friendly (green) entrepreneurship, facilitating the access of entrepreneurs to global markets, access to financing, and emerging technology trends. The means that can be used to strengthen partnerships and help Arab small and medium enterprises to access regional and international markets were discussed, in addition to mobilizing various financial resources, not to mention, discussions between governments and the private sector to develop frameworks for improved policies related to small and medium enterprises.

This summit constituted a regional platform for meeting local and international leaders from the private and public sectors, and a good opportunity to influence decision-makers in order to draw up the necessary policies and strategies to support small and medium enterprises.

During the summit, 20 main sessions and ten side activities were held, including an exhibition of many leading and emerging companies from the Arab world.

The first day witnessed series of specialized panel discussions on market access opportunities and global value chains. Examples of successful and inspiring projects were presented, such as Kuwait Flowered represented by Abdulaziz B. Al Loughani, Founder, and the Global Cargo, Travelers Services and subsequently Global Group, represented by Bahraini entrepreneur Huda Janahi. Which managed to become transboundary and expanded regionally and internationally, and it has received many praises and awards from regional and international organizations.

While Fabio Russo, Chief SME Development and Job Creation Unit, UNIDO, focused on the readiness of infrastructure for small and medium enterprises and the availability of electronic services.

On the other hand, Dana Al-Zoubi, Secretary General of the Jordanian Ministry of Industry, Trade and Supply, focused on the need to provide specialized programs for guidance and counseling for emerging projects to help them face the challenges and overcome the difficulties they encounter during the foundational stages.

The discussion touched on the importance of financing and stimulating entrepreneurial projects through the allocation of soft loans with easy terms, in a session attended by Nadia Al Saeed, CEO of Bank al Etihad, and Chair of Endeavor Jordan, and Abdullah Al-Awadi, Head of Change Management at Kuwait International Bank, and Amer Bukevik of the Islamic Development Bank. The sessions were also attended by Rafik Feki from Industrial Development Officer, Division of Digital Transformation and AI Strategies, UNIDO, and Rana Nawas, founder of the podcast 'When Women Win', Palestine. The sessions stressed the need to unify regulations in Arab countries, to facilitate trade and export operations, especially electronic payment operations and legislation regulating electronic commerce.

Abdullah Al-Awadi, from Kuwait International Bank, said that the bank found a gap in the Kuwaiti market in the early stages of small and medium enterprises, as the gap was bridged by establishing a center that supports entrepreneurs in the first stages of their projects to increase their chances of success, stressing that the importance of this conference in allowing the gathering all the pioneers and economic investors face to face to be able to communicate properly.

The second day included various workshops, starting with a session on opportunities for small and medium enterprises to adapt to the green environment, with the participation of international institutions from Switzerland (Johannes Heeb, Founder of Seecon International GmbH), Belgium (Lieve Fransen, Co-founder of Platform for Transformative Technologies), Germany (Aline Bussmann, Green Businesses Consultant, Germany) (Katja Muelheim, CEO of Prestel & Partner, Germany), Spain (Mohamed Wageih, PRIMA Secretariat Project Office), active in the environmental field. In another session, there were discussion about special programs to support small and medium enterprises, in which Fares Akkad, Regional Director for META in the Middle East, spoke. Mirna Sleiman, Chief Executive Officer of Fintech Galaxy, Lebanon, and Ramez El Serafy, CEO at Flat6Labs, Egypt, and Adi Ghuneim, Director of Governate Development Fund, from Jordan Enterprise Development Corporation.

In addition to the sessions and discussion panels, three specialized workshops were held on capacity building and exchange of experiences, in cooperation with specialized experts from the World Trade Center (ITC), the University of Cambridge and the Jordan Enterprise Development Corporation.

Al-Wessam International for Electronic Marketing was among the participants in the summit. It is a rising company working to promote Palestinian products in international markets through its brand “Ard Al-Khair” (https://ardalkhair.ch), with an office in Switzerland, it is looking forward to becoming a marketplace for Palestinian products and a gateway for doing business between Palestine, Switzerland and Europe, though helping Palestinian products to access global markets.

The summit included an exhibition for about 100 small and medium-sized companies to enable them to display their products and facilitate the exchange of experiences, networking, and strengthening partnerships. It was found that many of the participating projects are related to the environment, which indicates that Arab youth are aware of environmental issues and climate change, and that donors tend to support this type of project.

Donna Natural from Egypt was among the exhibiting companies. It seeks to enable women to feel good and express themselves by helping them take care of their skin and look decent, by creating a natural dry shampoo to clean hair and prevent damage due to frequent use of water (www.donnanatural.com). Another company, Sefpro, Egyptian, that specializes in textiles and clothing products made of Egyptian cotton. The company has branches in both the UAE and the United Kingdom. Its products are certified by Fairtrade and Gots. Another, Tia for Development and Management Consultancy Company, from Yemen, is specialized in developing humanitarian work and works on preparing humanitarian, social, economic and environmental studies and research, in addition to evaluating humanitarian projects (www.tiadsc.com).

It was noted that there are many companies, especially in the field of electronic commerce, educational technology and green technology. The Entrepreneurship Summit concluded with commitment to give financial support to SMEs by the partners and supporters of the summit and the United Nations Economic and Social Commission for Western Asia (ESCWA), a commitment of more than $130 million.

In conclusion, we believe that holding such conferences at the Arab level is important, and that the efforts being made to improve the business environment and support entrepreneurship in the Arab countries are exactly what the Arab world needs in light of these difficult times in the region.

In recent years, many Arab governments have already introduced regulatory reforms aimed at improving business environments, but there is more that can be done to reach the desired goals and create an environment that attracts entrepreneurship, especially in the digital field, such as removing barriers that prevent cross-border trade, improving the logistical environment between Arab countries, providing access to high-speed Internet services (broadband) for all residents, especially in rural areas, spreading digital payment systems, reforming electronic commerce regulations and consumer protection (look at the World Bank report on Middle East and North Africa[1]). There is also a need to accelerate the creation of a unified Arab market and supporting the competitiveness of small and medium enterprises to improve their chances of survival in light of the fierce competition they face on the international markets (read our article[2]).

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[1] World Bank, Middle East and North Africa Economic Update (read).

[2] For more information, please refer to our previous article: Emerging Arab world and business opportunities in spite of the political turmoil (read).

اختتمت فعاليات القمة العربية لريادة الاعمال في عمان برعاية ولي العهد الأمير الحسين بن عبد الله الثاني وحضور رئيس الوزراء الاردني الدكتور بشر الخصاونة مندوبًا عن ولي العهد، التي نظمتها لجنة الأمم المتحدة الاقتصادية والاجتماعية لغربي آسيا (الإسكوا) بالتعاون مع المؤسسة الأردنية لتطوير المشاريع الاقتصادية (jedco) خلال الفترة من 30 تشرين الأول/اكتوبر ولغاية 1 تشرين الثاني/نوفمبر، تحت عنوان: فرص عابرة للحدود.

تأتي هذه القمة بعد أن أطلقت الإسكوا في إبريل/نيسان الماضي برنامجًا لتحفيز انتشار التجارة الإلكترونية (eCAP)، لتمكين المشاريع الصغيرة والمتوسّطة في ظل النموّ الذي يشهده الاقتصاد الرّقمي، والمساهمة في إنشاء بيئة حيويّة لريادة الأعمال في المنطقة العربيّة. واستهدف البرنامج بناء قدرات 100 شركة صغيرة ومتوسطة من المنطقة العربية للانتقال إلى البيع عبر الإنترنت، إما عن طريق تطوير مواقع التجارة الإلكترونية الخاصة بها، أو عن طريق البيع في الأسواق الموجودة بالفعل على الشبكة العالمية.

تأتي أهمية المؤتمر من كونه يشكل دعما لريادة الأعمال للمشاريع الصغيرة والمتوسطة في المنطقة العربية، في الوقت الذي أصبحت فيه ريادة الأعمال تشكل توجها عالميا، خاصة بالنظر الى الطاقة الشبابية الهائلة التي يتمتع بها العالم العربي والمشكلات الهيكلية التي يعاني منها سوق العمل. وبحسب ارقام منظمة اليونيسيف يشكّل الأطفال والشباب حوالي نصف سكان منطقة الشرق الأوسط وشمال إفريقيا (المنطقة العربية) وهي موطن لأعلى معدلات البطالة بين الشباب في العالم.

تبين إحصاءات منظمة العمل الدولية بان هناك اكثر من 14 مليون عاطل عن العمل في الدول العربية، حيث يبلغ معدل بطالة الشباب في المنطقة العربية ضعف المعدل العالمي تقريبًا، وقد نما بمعدل 2,5 مرة، وهو أسرع من المتوسط العالمي بين عامي 2010 و2021. وتحتاج المنطقة إلى خلق أكثر من 33.3 مليون فرصة عمل جديدة بحلول عام 2030، لخفض معدل البطالة الإجمالي إلى 5 في المائة ولتكون قادرة على استيعاب العدد الكبير من الشباب الذين يدخلون سوق العمل وتحقيق استقرار معدلات بطالة الشباب (المصدر).

تعتبر المشاريع الصغيرة والمتوسطة واحدة من أكثر المشاريع توظيفا للعمالة وهي تساعد في الحد من معدلات البطلة التي ارتفعت مؤخرا جراء الظروف المتغيرة التي تشهدها البلدان العربية.

ووفقا لدراسة قام بها مركز الشباب العربي، تحت عنوان "أولويات الشباب العربي، عشية اليوم العالمي للشباب، واستعرضت أولويات الشباب الذين شملهم الاستطلاع في 21 دولة عربية، جاء تعزيز مصادر الدخل وتوفر فرص العمل ضمن أولويات الشباب، حيث شملت اقتراحات الشباب ضرورة تقديم حوافز مادية للراغبين بتأسيس مشاريع خاصة وشركات ناشئة بواقع 45 في المئة من عدد المشاركين (المصدر).

ومع وجود أكثر من 135 مليون مستخدم للإنترنت في العالم العربي، يظهر جيل جديد من رواد الأعمال المتمرسين في مجال التكنولوجيا. ومن المتوقع أن تسجل هذه المنطقة نموًا قويًا خلال العقود القادمة من حيث عدد السكان والناتج المحلي الإجمالي (يمكن الرجوع الى المقال الذي نشرناه في السابق: العالم العربي الناشئ وفرص الأعمال على الرغم من الاضطرابات السياسية - Emerging Arab world and business opportunities in spite of the political turmoil للمزيد).

ووفقا لتقرير اللجنة الاقتصادية والاجتماعية لغربي آسيا (المصدر) فان حجم السكان في نمو سريع في المنطقة العربية. فقد ازداد مجموع السكان في المنطقة أكثر من ثلاثة أضعاف من 123.5 مليونا ً في عام 1970 إلى 284.1 مليونا ً في عام 2000 و398.5 مليونا ً في عام 2015. وضمّت المنطقة العربية في عام 2015 حوالى 5.4 في المائة من مجموع سكان العالم، بعد أن كانت تضم ّ 3.3 في المائة في عام 1970 و4.6 في المائة في عام 2000. وفقا للتقرير فان هذه الاتجاهات الديمغرافية مستمرة خلال الفترة 2015-2050. حيث من المتوقع أن يتجاوز عدد سكان المنطقة 520.7 مليوناً بحلول عام 2030. وفي الوقت نفسه، من المتوقع أن ينمو الناتج المحلي الإجمالي الحقيقي خلال الفترة المقبلة (على أساس تعادل القوة الشرائية) بنسب مذهلة (كنا قد تحدثنا في مقال سابق للمزيد).

وتشكل الشركات الصغيرة والمتوسطة اكثر من 90% من الشركات في العالم العربي، وهي تقدم فرص عمل جديدة للشباب، وتعتبر محركا فعالا للتغيير والتنمية. لكن على الرغم من التحسن الذي شهدته هذه الشركات خلال السنوات الاخيرة الا أنها ما زالت تواجه تحديات كبيرة تعيق تنميتها.

وهدفت القمة إلى جمع مختلف الجهات الرسمية والخاصة في الدول العربية لمساعدة المشاريع العربية الصغيرة والمتوسطة للوصول إلى الأسواق الإقليمية والدولية، والتعامل مع مصادر التمويل المتنوعة، والاستفادة من الشبكات الإقليمية والدولية، وزيادة قدرتها على التوسع في الأسواق الخارجية.

وجمعت هذه القمة حوالي 650 مشارك ما بين رواد أعمال واصحاب شركات صغيرة ومتوسطة وممثلي لمنظمات التمويل وأيضا ممثلين عن الحكومات من شتى انحاء المنطقة العربية وبالإضافة الى صانعي قرار اقليميين ودوليين من القطاعين العام والخاص.

افتتح القمة رئيس الوزراء الأردني بشر الخصاونة، الذي اكد على الاهتمام الذي توليه الحكومة الاردنية لدعم المشاريع الصغيرة والمتوسطة.

وفي كلمته الافتتاحية اكد يوسف الشمالي، وزير الصناعة والتجارة والتموين ووزير العمل، رئيس المؤسسة الاردنية لتطوير المشاريع الاقتصادية، على أهمية المشاريع الصغيرة والمتوسطة، وقال بأن هذه القمة هي محاولة لاستخدام أنجع السبل من اجل دعم المشاريع الصغيرة في المنطقة العربية، مشيراً إلى دور هذه المشاريع في رفد الاقتصادات الوطنية في المنطقة العربية.

ولفت الشمالي إلى أن هذه الشركات الصغيرة تشكل أكثر من 70% من الوظائف المتاحة في المنطقة وأنها تواجه العديد من التحديات المتعلقة بالتمويل حيث تقتصر نسبةُ التسهيلات المصرفية المقدمة للمشروعات الصغيرة والمتوسطة على 9% من مجمل التسهيلات المصرفية.

كما أكد على أهمية القمة لتسهيل الحوار حول انجع السبل لتمكين المؤسسات الصغيرة والمتوسطة من الوصول الى الاسواق الاقليمية والعالمية والاستفادة من الفرص التي توفرها الشبكات الدولية وبناء القدرات المؤسسية لدى رواد الأعمال العرب.

بدورها اكدت وكيلة الأمين العام للأمم المتحدة والأمينة التنفيذية للإسكوا رولا دشتي ان القمة تأتي كجسر بين صانعي القرار والسياسات وأصحاب المشاريع المتطلعين إلى النهوض بمجتمعاتنا لإيجاد السبل لتحقيق الأهداف التنموية المنشودة.

كما اكدت بأن مساهمة المشاريع الصغيرة في الناتج المحلي في المنطقة العربية تقل عن 10% وأن معظم هذه المنشآت تعمل في القطاع غير المنظم، مؤكدة على الدور الرئيسي الذي يمكن أن تلعبه الشركات الصغيرة والمتوسطة أن تلعب في تحقيق نموّ اقتصادي أعلى وتخفيض نسب البطالة بين الشباب.

تعتبر الفكرة الرئيسية للقمة الفرص العابرة للحدود. يرى المنظمون ان فكرة الفرص العابرة للحدود وايصال هذه المشاريع ومنتجاتها بسلاسل الامداد العالمية مما سيدعم هذه المشاريع واستمراريتها ونموها على مدار فترات زمنية أطول بالإضافة.

تناولت القمة على مدار ثلاثة أيام عدة موضوعات، منها ريادة الاعمال الصديقة للبيئة (الخضراء)، تسهيل وصول الرياديين بمشاريعهم الى الاسواق العالمية، والوصول إلى التمويل، واتجاهات التكنولوجيا الناشئة.

وتم التطرق الى الوسائل التي يمكن اللجوء اليها لتعزيز الشراكات ومساعدة المشاريع العربية الصغيرة والمتوسطة على الوصول الى الاسواق الاقليمية والدولية اضافة الى تعبئة الموارد المالية المتنوعة ناهيك عن نقاشات بين الحكومات والقطاع الخاص لوضع اطر للسياسات المحسنة المعنية بالمشروعات الصغيرة والمتوسطة.

شكلت هذه القمة منصة إقليمية للقاء القادة المحليين والدوليين من القطاعين الخاص والعام وفرصة جيدة للتأثير على صناع القرار من اجل رسم السياسات والاستراتيجيات اللازمة لدعم المنشآت الصغيرة والمتوسطة.

عقد أثناء القمة 20 جلسة رئيسية وعشرة نشاطات جانبية من ضمنها معرض للعديد من الشركات الريادية والناشئة من العالم العربي.

وقد شهد اليوم الأول مجموعة من حلقات النقاش المتخصصة حول فرص الوصول إلى الأسواق وسلاسل القيمة العالمية. وتم عرض نماذج لمشاريع ناجحة وملهمة كشركة فوريد الكويت ممثلة بالمؤسس والرئيس التنفيذي عبد العزيز اللوغاني، والشركة العالمية للشحن ممثلة برائدة الأعمال البحرينية هدى جناحي، التي تمكنت من أن تصبح عابرة للحدود وتوسّعت إقليمياً ودولياَ ونالت إشادات وجوائز عدة من منظمات إقليمية وعالمية، بينما ركز فابيو روسو مدير المشاريع الصغيرة والمتوسطة في اليونيدو على مدى جاهزية البنى التحتية للمشاريع الصغيرة والمتوسطة وتوفر الخدمات الالكترونية. من جهة أخرى ركزت دانا الزعبي امين عام وزارة الصناعة والتجارة والتموين الأردني على ضرورة توفير برامج متخصصة للتوجيه والارشاد للمشاريع الناشئة لمساعدتها في مواجهة التحديات وتخطّي الصعوبات التي ستواجهها خلال المراحل التأسيسية.

وتطرّق النقاش الى أهمية التمويل وتحفيز المشاريع الريادية من خلال تخصيص قروض ميسرة سهلة الشروط في جلسة شاركت بها من الاردن مدير بنك الاتحاد ناديا السعيد وعبد الله العوضي من البنك الدولي الكويتي وعامر بوكيفيك من بنك التنمية الإسلامي. كما تطرقت الجلسات التي شارك بها رفيق الفيقي من وحدة التنمية الصناعية في منظمة اليونيدو، ورنا نواس مؤسسة المدوَنة الصوتية ’عندما تفوز النساء‘ الى ضرورة توحيد الأنظمة في الدول العربية خصوصاً الدول الحدودية لتسهيل عمليات التجارة والتصدير خاصة عمليات الدفع الالكتروني وتشريعات تنظيم التجارة الالكترونية.

وقال المتحدث عبد الله العوضي من بنك الكويت الدولي، أن البنك وجد فجوة في سوق الكويت في المراحل الأولى للمشاريع الصغيرة والمتوسطة، حيث تم سد الفجوة من خلال تأسيس مركز يدعم المبادرين في المراحل الأولى من مشاريعهم لزيادة فرصهم في النجاح، مؤكدا على أن أهمية هذا المؤتمر تأتي بما يتيحه هو تواصل كافة الرواد والمستثمرين الاقتصاديين وجهاً لوجه للتمكن من الاتصال الصحيح.

 
اشتملت فعاليات اليوم الثاني على ورش عمل مختلفة بدأت بجلسة عن الفرص المتاحة للمشاريع الصغيرة والمتوسطة في التكيف مع البيئة الخضراء بمشاركة مؤسسات دولية من سويسرا (يوهانس هيب، مؤسس Seecon International GmbH) وبلجيكا لييف فرانسن (المؤسس المشارك في منصة Transformative Technologies)، وألمانيا (الين بوسمان من شركة الاستشارات Green Businesses Consultant و كاتيا مولهايم المؤسس والرئيس التنفيذي لشركة Prestel & Partner المتخصصة بمنتديات مكاتب الشركات العائلية) واسبانيا (محمد وجيه من مؤسسة بريما (PRIMA) التي تنشط في المجال البيئي وتهدف من ضمن موضوعات عدة الى معالجة التحديات في تغير المناخ، والنمو السكاني والأمن الغذائي ضمن منطقة البحر المتوسط. كما تم الحديث في جلسة ثانية عن البرامج الخاصة لدعم للمشاريع الصغيرة والمتوسطة تحدث فيها فارس العقاد المدير الإقليمي لشركة ميتا (META) في الشرق الأوسط وميرنا سليمان من مؤسسة فينتك غالاكسي (Fintech Galaxy) في لبنان ورامز الصرافي المدير التنفيذي لحاضنة الأعمال فلات 6 لاب من مصر (Flat6Labs) وعدي غنيم من المؤسسة الأردنية لتطوير المشاريع الاقتصادية.

عقد بالتزامن مع الجلسات النقاشية ثلاث ورشات عمل متخصصة حول بناء القدرات وتبادل الخبرات بالتعاون مع خبراء مختصين من مركز التجارة العالمي (ITC)، وجامعة كمبريدج والمؤسسة الأردنية لتطوير المشاريع الاقتصادية.

كان من بين المشاركين في القمة شركة الوسام العالمية للتسويق الالكتروني، وهي شركة صاعدة تعمل على ترويج المنتجات الفلسطينية في الاسواق الدولية من خلال علامتها التجارية "ارض الخير" (https://ardalkhair.ch)، وهي متواجدة أيضا في سويسرا وتتطلع لأن تكون سوقًا الكترونية للمنتجات الفلسطينية وبوابة لممارسة الأعمال التجارية بين فلسطين وسويسرا وأوروبا، وهو ما سيشكل دعما للمنتجات الفلسطينية عبر الوصول الى السوق السويسري والأسواق العالمية.

 تضمنت القمة معرضا شاركت فيه نحو 100 من الشركات الصغيرة والمتوسطة الحجم لتمكينها من عرض منتجاتها وتسهيل تبادل الخبرات والتشبيك، وتعزيز الشراكات.

كان من بين الشركات العارضة شركة دونا ناتشرال (Donna natural) من مصر، وهي تسعى الى تمكين النساء من الشعور بالرضا والتعبير عن ذواتهن من خلال مساعدتهن على العناية ببشرتهن والظهور بمظهر لائق، عبر ابتكار شامبو جاف طبيعي لتنظيف الشعر والحيلولة دون تلفه بسبب استخدام الماء المتكرر (www.donnanatural.com)، وشركة سيفبرو (Sefpro) من مصر، متخصصة في المنسوجات ومنتجات الألبسة المصنوعة من القطن المصري. يوجد للشركة فروع في كل من الإمارات والمملكة المتحدة. وتتمتع منتجاتها بشهادة معتمدة من Fairtrade and Gots، وشركة تيا للاستشارات التنموية والإدارية، من اليمن، وهي مختصة بتطوير العمل الإنساني وتعمل على اعداد الدراسات والابحاث الإنسانية والاجتماعية والاقتصادية والبيئية، بالإضافة الى تقييم المشاريع الإنسانية www.tiadsc.com.

تبيّن أن العديد من المشاريع المشاركة متعلقة بالبيئة مما يشير إلى وجود وعي لدى الشباب العربي في قضايا البيئة والتغير المناخي، وإلى توجه الجهات المانحة إلى دعم هذا النوع من المشاريع.

لوحظ وجود العديد من الشركات وخاصة في مجال التجارة الالكترونية والتكنولوجيا التعليمية والتكنولوجيا الخضراء.

وقد اختتمت أعمال القمة لريادة الأعمال، بإعلان الشركاء والداعمين للشركات الصغيرة والمتوسطة للجنة الأمم المتحدة الاقتصادية والاجتماعية لغربي آسيا "الاسكوا"، عن الالتزام بقيمة تفوق 130 مليون دولار.

في الختام، فإننا نرى بان عقد مثل هذه المؤتمرات على المستوى العربي أمر مهم، وان الجهود التي تبذل في سبيل تحسين بيئة الأعمال ودعم ريادة الأعمال في الدول العربية هو ما يحتاجه العالم العربي بالضبط في ظل هذه الأوقات الصعبة التي تشهدها المنطقة. وقد قام العديد من الحكومات العربية في السنوات الأخيرة بإدخال إصلاحات تنظيمية بالفعل، تهدف إلى تحسين بيئات الأعمال لكن هناك المزيد يمكن عمله للوصول الى تحقيق الأهداف المنشودة وايجاد بيئة جذب مناسبة لريادة الأعمال، وخاصة في المجال الرقمي، كإزالة الحواجز التي تحول دون التجارة العابرة للحدود وتحسين البيئة اللوجستية بين البلدان العربية وإتاحة الوصول الى خدمات الانترنت الفائقة السرعة (النطاق العريض) لجميع السكان وخاصة في المناطق الريفية ونشر أنظمة الدفع الرقمي وإصلاح لوائح التجارة الالكترونية وحماية المستهلك (وهذا ما يؤكده تقرير للبنك الدولي المصدر)[1]  والتسريع في إيجاد سوق عربية موحدة ودعم تنافسية الشركات الصغيرة والمتوسطة لتحسين فرص بقائها في ظل المنافسة الشرسة التي تواجهها على الساحة الدولية (للمزيد)[2].

By: Mohammed Shabani

Translated by: Fairouz Alnajem

The economic implications of the Ukrainian-Russian war began to emerge from its earliest days through a dramatic rise in oil and grain prices. These implications were described as a provisional economic shock, that markets will correct prices in the foreseeable term, but with the war exceeding its second month with all the economic sanctions it carried on Russia and significant damage to the Russian and Ukrainian economies, the economic shock graded into a permanent shock, and lasting shock has consequences that will move the world economy to a different situation than it was, which means the markets will not return to their previous position in the foreseeable term.

Arab economies have been affected as much as the world economy. And as the Arab States' economies are different in structure and economic relationship with the two main parties to the war; Russia and Ukraine, the effects of the economic crisis on the economies of the Arab States have been divided between winners and losers. Through this article, we will determine who those countries are and why they can be described as winning or losing.

Effects on Arab-Russian Trade Exchanges

The total exports of Arab countries to Russia amounted to about $1.97 billion in 2020, a growth of more than 100% compared to 2010. In contrast, Russian exports to Arab countries in the same year amounted to about $15 billion, a growth rate up to 103% compared to 2010, tending the trade balance in Russia's favor by more than $13 billion.

As for the most important Arab trade partnerships with Russia, Egypt comes in the first place in terms of its share of exports and imports from Russia. as Egypt is considered responsible for 29% of Arab exports to Russia and about 27% of Russian imports. Followed by the UAE with 20% for imports and exports, Saudi Arabia ranked third with 10% for imports and 12% for exports, while fourth and fifth were Algeria and Morocco.

So, in terms of trade exchange with Russia, Egypt is one of the countries most affected by the Ukrainian crisis, with Egyptian exports to Russia amounting to more than $500 million, mostly focused on citrus and vegetables. As for Egyptian imports from Russia, it amounted to more than $4 billion, concentrated in wheat, sunflower oils, iron ores, and minerals.

The war in Ukraine has slowed down trade exchange between the two countries and created many logistical and remittance difficulties. which has led to a rise in the price of minerals and the iron factories in Egypt resorting to search for alternative sources of Russian minerals, while the most significant problem caused by the crisis was wheat prices, where Russia is the largest supplier of wheat. Russia's share of wheat supplies to Egypt was about 50% Egypt which is one of the world's largest importers of wheat because of its large wheat needs of 20 million tons per year, of which its domestic production covers less than 50%.

The Ukrainian crisis prompted the Egyptian government to buy 460 thousand tons of European wheat in an international tender in April, as the highest price per ton in this tender was $460 including shipping, which represents a 36% rise from the last deal to buy wheat made by the Egyptian government before the Ukrainian War. That is, Egypt's loss of wheat only could exceed $58 M of the last transaction only!

On the other hand, the UAE is one of Russia's leading trading partners in the Arab region, where economic cooperation between the two countries has expanded steadily in recent years, and trade exchanges between the two countries have grown to over $6 billion in 2020, with Russia's share of about $5 billion. Diamonds and gold along with foodstuffs and minerals are among Russia's most prominent exports to the UAE.

While Dubai became the most prominent transit trading hub to and from Russia. In general, the most significant implications of trade exchange between the Arab States and Russia are represented by the high prices of wheat and minerals, along with other commodities such as coal, and refined petroleum, which is among the most prominent commodities exported by Russia to the GCC countries. These economic damages have been reflected in varying proportions in all Arab countries. Egypt is also one of the most affected, particularly about its exports of fruit, citrus and vegetables to Russia, as well as the most affected by imports, because of Egypt's large need for wheat imported from Russia, which the war forced to seeking an alternative to Russian wheat at a high price.

Effects on Arab-Ukrainian Trade Exchanges

Arab-Ukrainian trade has witnessed considerable growth in the last decade, with Arab exports to Ukraine rising from $161 M in 2010 to more than $560 M in 2020, with more than 245%. While Arab imports from Ukraine for the same year amounted to about $5.8 billion, with growth up to 9.5% compared to 2010. Although imports from Ukraine is about 9 times larger than from Arab exports, they are slowly growing and have fluctuated in size from year to year.

Concerning the relative importance of trade between the Arab countries and Ukraine, Saudi exports constitute about 24% of total Arab exports to Ukraine followed by Morocco at 21%, Oman at 19%, and the UAE at 15%. Concerning the commodity structure of exports, oil derivatives from the GCC countries accounted for most exports to Ukraine, while fertilizers (natural and chemical), cars and fish accounted for most of Morocco's exports to Ukraine.

Egypt occupies the largest share of Ukrainian imports into the Arab countries, accounting for about 28%, followed by Saudi Arabia at 12%, Iraq at 10%, and the UAE at 8%.

So, in terms of imports, Egypt is the country most closely associated with Ukraine, as in the case of Egyptian-Russian trade exchanges, the trade effects of the war in Ukraine are the shortage of wheat imports and higher prices, which also applies to the case of Morocco, which imports about 12% of its wheat needs from Ukraine.

Biggest Winners and Losers of High Energy Prices

Although all Arab States have been adversely affected by high prices for minerals, wheat and many other essential agricultural and food commodities, non-energy-exporting Arab States have been further affected. The budget in Egypt, Morocco, Lebanon, Jordan and other countries has more burdens owing to high energy prices. In contrast, the GCC countries, Iraq, Libya, and Algeria have benefited greatly from this rise, with Iraq's oil revenues in March alone amounting to about $8.5 billion, the highest amount the Iraqi treasury has earned from oil imports since 1972.

Of course, not only Iraq, the oil-exporting Arab countries have achieved huge returns because of the dramatic rise in oil prices. Qatar and Algeria have also benefited from higher natural gas prices and increased European countries' need for Arab gas to reduce reliance on gas imported from Russia, where the two energy giants "Sontrac" and "Eni" of Italy have signed a memorandum of understanding to increase the quantity of natural gas exported to Italy.

The significant increase in energy prices provides Arab exporting countries the possibility of covering the overall rise in commodity prices, especially agricultural, food and minerals, and even achieving fiscal surpluses, particularly for the Gulf Cooperation Council (GCC) States, as their need for such commodities is lower than Algeria's and Iraq's need, which have a large population.

Tourism Sector Losses due to Ukrainian War

Tourism is an important economic sector for many Arab countries, especially Egypt, Morocco, Tunisia and Lebanon. The Ukrainian crisis has caused negative implications for the sector in general. But Egypt's tourism sector is the hardest hit, about one-third of Egypt's 13 to 15 million tourists per year are Russian and Ukrainian. Their numbers are expected to decline owing to both countries' economic distress and the difficulties of movement, travel and remittances for Russian tourists.

Implications of Capital Movements

The impact of the Ukrainian crisis has not only reflected on trade and tourism movements but has also extended to Arab mutual investments with Russia and Ukraine. The most important and general impact is investors' resorting to safe investments and away from investment risks in Arab developing countries. Capitals began to invest in treasury bonds, gold and bank deposits, especially after the US Fed raised interest rates, which has also raised the cost of heavily public debt on many Arab States, particularly Lebanon, Egypt and Tunisia.

Regarding Arab-Russian investments, figures show that the cumulative total of Russian investment projects in the Arab region in 2020 was about $40 billion.  as the United Arab Emirates is considered one of the most investment-oriented countries with Russia. UAE investments in Russia account for about 80% of total Arab investments in Russia. In contrast, Russian investments in the UAE account for approximately 90% of Russian investments in the Arab world. The number of Russian companies in the UAE reaches more than 4,000. More than 450 Russian companies in Egypt operate mainly in the tourism and energy sectors, with a total capital of about $60 M.

Russian investments in the Arab region are unlikely to be significantly affected, first because of its modest size, and second because of the exception of Western sanctions against Russia to the energy sector, which is the largest sector with which Russian companies are active in the Arab region, On the other hand, Russian capitalists were welcome in the UAE, where the Emirate of Dubai is more likely to benefit from the implications of the Ukrainian crisis for Russian VCs. As the number of Russian businessmen migrating from the West to Dubai is expected to increase in search of a safe haven for their money.