Gulf states need to create armies of homegrown economists

Gulf states need to create armies of homegrown economists

Above, decorations around Dubai’s Burj Khalifa in this photo taken on January 2, 2019. (AFP)

In the Middle East, and perhaps more specifically in the Arabian Gulf, there is a general lack of awareness as to why economics is important to understand and pursue as an academic field of study and as a profession. In the broader social context, few around us are aware of how economic changes affect our day-to-day lives. Not until crisis strikes are we forced to see the links between the economic climate and social norms and well-being. Economic activity is so intertwined with social structures, behaviors and norms that a branch of economics known as social economics (or socioeconomics) has emerged.

Throughout history, economic changes not only impacted people’s daily lives, they had the power to change social perception of what is acceptable and what it is not; affected (whether positively or negatively) freedoms and rights granted to minorities; and even caused some social classes to shrink or disappear.

The First World War, for example, had a profound impact upon British society. Prior to the war, Britain was a global political and economic superpower. In the wake of its territorial expansion and following its victory in the Seven Years’ War of 1756-63, British statesman, colonial administrator and diplomat George Macartney wrote of “this vast empire on which the sun never sets, and whose bounds nature has not yet ascertained.” With the rapid growth and strength of this empire, the country enjoyed significant levels of wealth and resources.

With all its might, it was seemingly impossible to foresee the economic impact the First World War would have both on its global position and its apparently solid class structure and traditions. The war swept away much of the old Victorian and Edwardian order and brought in many of the features that we associate with modern Britain. The financial demands of the war affected the social classes of the UK and changed the landscape of the class system forever.

Perhaps one of its greatest effects, however, was felt by the women of Britain. During the war years, with many jobs left vacant due to British men joining the army, women proved they could do the work just as well as their male counterparts. Between 1914 and 1918, an estimated 2 million women replaced men in the job market, resulting in an increase in the proportion of women in total employment from 24 percent to 37 percent in those five years. As a result of their contributions during the war, and due to their rapidly growing importance to the economic well-being of the country, they eventually gained the grounds to demand and win the right to vote through two laws in 1918 and 1928. In the end, though women’s suffrage groups had been calling for their right to vote for decades before war broke out, it was a shift in the economic tectonic plates that gave women the opportunity to demonstrate their value to British economy and society, and resulted in the abolishment of this form of gender discrimination.

While the value of STEM subjects cannot be contested, we must not systematically understate the value of economics

Maria Hanif Al-Qassim

A decade or so later, across the Atlantic, the Great Depression that began in 1929 devastated the US economy. Unemployment rose to 25 percent, housing prices plummeted and international trade fell by more than 50 percent. How did this impact the country from a social standpoint?

To start with, the average family income in 1933 was 40 percent less than the 1929 average of $2,300. Millions of families lost their savings as numerous banks collapsed. Unable to make mortgage or rent payments, many were deprived of their homes or evicted from their apartments. Married women increasingly went to work outside the home during this time in order to support their families, in spite of the widespread condemnation of the employment of married women and the refusal of many organizations (including government agencies) to employ them. In addition, marriage and birth rates declined exponentially during the 1930s. Although divorce rates also declined, this was largely attributed to people’s inability to pay legal fees.

The cases of post-war Britain and the US during and after the Great Depression provide great examples of how our livelihoods, rights and well-being can be dictated by the economic climate. Economics has grown so much as a discipline, and from it have emerged countless branches including behavioral economics, social economics, regulatory economics and others. Unfortunately, recent years have witnessed an unbalanced movement toward STEM (science, technology, engineering and math) subjects and away from other important disciplines such as economics. While the value of STEM cannot be contested, we must not systematically understate the value of such social sciences to our development.

Recognizing the important insights economists bring to the table, many tech companies around the world are including them in every aspect of their business. Amazon, for example, has hired more than 150 Ph.D. economists to work on specific problems across the company. Their scope of work ranges from design choices around reviews to estimating demand for products. Other companies, such as Google, Facebook, Airbnb and Uber, have all followed suit and now also have large teams of economists in-house.

Given the unique features and realities of the Arabian Gulf states, their societies and their economies, it is vital that we encourage people from the region to pursue careers in economics through scholarships, clear career paths and other benefits. The Arabian Gulf states are at a turning point; we must limit our dependency on global consulting conglomerates that provide us with packaged economic solutions and interventions, and instead invest in creating our very own armies of local economists who possess exceptional knowledge of the distinctive regional social, political and economic context.

• Maria Hanif Al-Qassim is an Emirati from Dubai who writes on development, gender and social issues. Twitter: @maria_hanif

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