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The need for a new social contract

Ever since the first UN Arab Human Development Report was published in 2002, the reports have served as a key reference point for local, regional and international discussions on Arab countries. The reports, all written by Arabs, provided key insights into the region and, looking back, proved remarkably accurate.
The very first report, titled “Creating Opportunities for Future Generations,” identified three critical development deficits in the Arab world: The acquisition of knowledge, political freedoms and women’s empowerment.
The latest report, published on Nov. 29, makes for a deeply depressing — and equally alarming — read. It points to facts we all already know, and stresses that if we do not address the root causes, we will continue to dig ourselves in deeper.
As the report points out, we are already dug in deep, but we have an opportunity of historic proportions. I am not being dramatic, just quoting the report: “Young people between the ages of 15 and 29 make up nearly a third of the region’s population, another third are below the age of 15.  
This ‘demographic momentum’ will last for at least the next two decades and offers an historic opportunity, which Arab countries must seize.”
The report points out that unemployment among youth in the Arab region is the highest in the world — in 2014, it exceeded twice the global average, and the situation is expected to worsen by 2019. The report adds that by 2020, the region needs to create more than 60 million new jobs to absorb the number of workforce entrants and stabilize youth employment.
This is particularly significant because, as the report points out, “disgruntled individuals are less prone to resorting to peaceful, patient social action to change their environment. They may prefer a more direct, more violent means, especially if they are convinced that existing mechanisms for participation and accountability are useless.”
Arab thought leaders have flagged this very point, and have called for an urgent new social contract between rulers and the people they rule, one where innovation, critical thinking and challenging the status quo is expected — even celebrated — not punished.  
In the absence of this social contract, we will continue the current vicious cycle, digging ourselves in deeper as we continue our downward spiral. As current Arab thought leaders are pointing out, the rentier-state model prevalent in Arab countries is no longer sustainable, and unless Middle East nations start implementing material reforms, they will face severe economic collapse followed by social and political upheaval.
This really is a ticking clock. Currently in the Arab region, youth participation in the workplace is only around 24 percent, falling to less than 18 percent among young women — the lowest regional average in the world — while youth unemployment remains the highest in the world.
Not surprisingly, more than 75 percent of youth in the Arab region consider their economic situation — including poverty, unemployment and price increases — to be the most important challenge facing their country.
According to the latest UN report, young people in the Arab region “are coming of age in a context of widening income disparities, increasing inequality of opportunity, slowing average growth and shrinking job opportunities.  
These problems are weakening their commitment to preserving government institutions and their desire to participate in a political world that does not meet their needs or expectations.”
This builds on the earlier report, published in 2009, that demonstrated that the dominant focus in the region was on security of the state, not that of the people and society. Unfortunately, this seems to still be the case.
To put this into perspective, the report notes that the Arab region’s military spending between 1988 and 2014 — which it said amounted to around $2 trillion — is 65 percent higher than the global average, and represents a per capita increase by a factor of 2.5 over the period.
This focus on ensuring state security at the inevitable cost of developing our infrastructure, including our education and healthcare institutions, has left the region in a rut. Although the Arab region is home to 5 percent of the world’s population, as per the report, in 2014 we accounted for 45 percent of the world’s terrorist attacks, 57.7 percent of the world’s refugees and 68.5 percent of the world’s conflict-related deaths.
These numbers should shock us into action. Unfortunately, the Middle East’s elite continues to put the cart before the horse, investing in security to try and achieve stability, when we should be investing in stability to achieve security.
It is deeply depressing to note that despite all we have been through, we continue to refuse to learn from our mistakes.
• Khalid Abdulla-Janahi is the group chief executive of Dar Al Mal Al Islami Trust (DMI Trust), with over 30 years of experience in banking and financial services.