Having been almost stationary for an hour in a Beirut traffic jam, I asked the driver about the difficulties of working with Uber. Much to my surprise, he defended the transportation and delivery service, claiming it has done away with sectarian tensions and prejudices that are prevalent in the local taxi market. Across the Arab world, the use of new technology in service delivery is balancing market imperfections, creating opportunity and equality.
Taxi drivers in Beirut have always faced inconveniences due to the myriad religious, ethnic and regional differences that make up Lebanon’s political situation. Drivers working for companies can expect jobs to be divided along sectarian lines, passengers will at times decline to use companies associated with a specific sect, and often companies will restrict their operations to neighborhoods familiar to them.
The advent of transportation apps has transformed this situation; drivers are allocated work based on their appetite and availability for it, and have only the faceless master of free-market economics to report to. Technology has increased opportunities for sections of society that have hitherto been marginalized or restricted from operating in an economic context.
According to the World Bank, different rules for men and women exist across the Middle East and North Africa, and only 17.4 percent of companies in the region employ women in high-level management. Women face difficulties starting businesses, registering properties and enforcing contracts. Gender gaps in women’s entrepreneurship and labor-force participation account for an estimated loss of 27 percent in total income across the region.
But social media has provided a new and burgeoning platform for both formal and informal economic activity to take place. In Saudi Arabia, where 57 percent of university graduates are female, Instagram businesses have created a competitive market among women; stay-at-home mothers are setting up profitable online businesses alongside foreign graduates and experienced businesswomen.
The boom has been so great that the Labor Ministry has yet to understand the contribution of these informal businesses on the national economy. In providing a channel for women to successfully impact the world of business, online companies have not only contributed to the economy but are also forcing an increased element of service-oriented delivery and sophistication in the market.
In such a geographically dispersed and politically and economically fragmented region, technology has allowed businesses to compete transnationally. Local businesses are able to market their items to regional customers inexpensively, offering international delivery on items that were previously stuck behind borders and suffered from over-regulation.
With the era of the rentier state drawing to a close, new business ideas and formats are a necessity for Arab economies to succeed.
Zaid M. Belbagi
The capacity of online businesses to deliver has allowed them to provide services to residents of more remote communities, or circumvent local postal systems and services that remain hopelessly inadequate. In the last five years, online payments in the region have grown by 20-40 percent. Forecasts predict that the total volume of online payments could increase nearly threefold by 2020, to reach more than $69 billion of transactions per annum.
From the perspective of economic inclusion and increasing economic connectivity, the positive effects of technology are clear. But the ease and flexibility of online platforms have led to a worrying trend regarding the transfer of sectarian and political tensions online.
Irresponsible information vendors and outmoded government apparatus unable to monitor digital material make the online arena a free-for-fall, compounding tensions and escalating the dissemination of fake news. Terror groups have exploited Twitter in particular to share their propaganda and messaging with international audiences, drawing in those vulnerable to radicalization.
Social media platforms have allowed groups to exercise influence that in many cases is hugely disproportional to their size and following. The broadcast of often-violent and graphic material allows such groups to attract international attention and inspires foreign recruits to carry out copycat attacks.
For example, despite international efforts the number of accounts attributed to Daesh remains unknown, and they still operate with impunity. In some circumstances, such as the lead-up to an attack, they tweet at a rate of 40,000 times a day.
The real issue is with the global nature of online social media platforms. They cannot be overly regulated due to the many millions of users they have. In this respect, efforts to control content are limited because they are heavily reliant on self-policing by users to identify objectionable content. Because of this, many of those banned simply open a new account and continue posting divisive and often-violent messages.
Online communication is here to stay, and governments in the region need to better comprehend the benefits along with potential threats. Worldwide, the ability of social media platforms to allow market participation needs to be harnessed so online businesses that use them do not remain in the informal economy, but rather make a positive impact on national economic prosperity. With the era of the rentier state drawing to a close, new business ideas and formats are a necessity for Arab economies to succeed.
• Zaid M. Belbagi is a political commentator. He also acts as an adviser to private clients between London and the Gulf Cooperation Council (GCC).