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Middle East sees digital transformation of economy

wuzhenwic.org Updated: 2021-01-22

The digital economy of the Middle East, including online shopping, online education and online healthcare, has seen significant growth during the COVID-19 pandemic, and has become a highlight of regional economic development.

Analysis shows that the digital economy in the Middle East has broad development prospects in the future, as the number of young consumers in the area is huge and the use of internet infrastructure is gaining increasing popularity.

The latest statistics, released by Egypt's Ministry of Supply and Internal Trade in December 2020, showed that the electronic commerce market in Egypt has reached 40 billion Egyptian pounds ($2.54 billion). It is estimated that the annual growth of Egypt's electronic commerce consumption will reach over 30 percent between 2019 and 2022.

Turkey is now establishing software platforms to allow shopping centers to open online pages, offering non-contact shopping services for customers. The initiative is expected to create more than 6,000 jobs in the delivery business. 

Noon Academy, an online learning platform started in Saudi Arabia, has recently seen an increase of 3 million in its student numbers, following deals signed with the education departments of countries throughout the Middle East. In June 2020, it received $13 million in a new round of financing.

The Digital Cooperation Organization was set up by Saudi Arabia, Bahrain, Jordan, Kuwait and Pakistan, aiming to promote cooperation in innovation-driven fields and speed up the growth of the digital economy.

The Gulf Information Technology Exhibition took place in the United Arab Emirates in December 2020. It attracted representatives of 1,200 companies from more than 60 countries and regions around the world to carry out discussions on the development of digital technologies spanning artificial intelligence, smart cities and 5G.

The rapid development of digital economy industries and relevant companies has shown proof of the flexibility of digitization schemes when facing new markets born out of crises. It is expected that the digital transformation of the economy will play an important role as countries in the Middle East pursue economic diversification.

Several Middle Eastern countries have increased policy support to facilitate digital transformation during the COVID-19 epidemic, by taking initiatives such as expanding the construction of internet infrastructure and building an excellent business environment for the digital economy.

The Egyptian government has allocated 12.7 billion Egyptian pounds during the 2020 to 2021 fiscal year to support digital transformation, and has launched a "Digital Egypt" project.

Telecom Egypt has announced it is to build the largest international data center in the country in the western part of the capital Cairo. The center is scheduled to be put into operation at the beginning of 2021.

Banks and network operators in Egypt are now promoting "e-wallets" on television and online, and have released discounts to encourage merchants and consumers to use QR codes for payment.

The country will also set up an electronic system to trace cargo and handle cargo tariff issues. The system is expected to begin experimental operation in April 2021.

According to the economic revival project released by the UAE, the government will encourage investment in the digital economy over the long term. Particular attention will be paid to the development of advanced technologies such as 5G and AI, to promote digital transformation and economic revival after the pandemic.

Saudi Arabia's cabinet approved the country's digital economy development plan in December 2020. The plan establishes detailed targets in areas spanning establishing digital platforms, promoting innovation, cultivating talents and opening markets.

Saudi Telecom Company has started first-phase construction of three large-scale data centers in Riyadh, Jeddah and Medina at a cost of 1 billion riyal ($266.67 million) with the aim of helping governments and private organizations achieve digital transformation while offering infrastructure support for the development of the local digital economy. Four more data centers will be built during the second construction phase.

The Algerian government has also launched its digital transformation plan, noting that digital service platforms for the public will be built by linking data from different government departments, in order to increase efficiency in handling affairs.

Oman will spend the next five years looking at online education, taking measures such as digital platform construction, personal training, and the research and development of lessons.

The website of Gulf Business, a business magazine from UAE, pointed out that the pandemic has had a big impact on industries such as tourism, aviation and hotels in Middle Eastern countries, but the digital economy has gained great momentum against this trend, making regional countries realize the urgency and necessity of developing their digital economies.

The website of an Egyptian business newspaper said that China has taken the lead in developing the digital economy around the world, and has gained a lot of advanced experience in areas such as e-payments and digital ecology.

"We are looking forward to carrying out more communication with China on the digital economy and to deepen exchanges and cooperation," said the UAE Ambassador to China, Ali Obaid Al Dhaheri.

Fruitful outcomes have already been achieved in digital economic cooperation between Middle Eastern countries and China.

Huawei has now signed technical protocols with more than 10 telecom operators from countries including Kuwait, UAE, Saudi Arabia and Bahrain to build their 5G networks.

The Saudi Data and Artificial Intelligence Authority has signed agreements with relevant Chinese companies and institutions to conduct cooperation in areas such as smart city construction and the development of AI technologies in Arabic.

Egypt's Ministry of Education teamed up with Net Dragon Websoft Holdings Ltd, a company from China's Fujian province which manages online gaming and mobile internet industries, to launch a suite of online education products, offering support to more than 22 million students and one million teachers all over the country when schools were closed due to the pandemic.

Exhibitions such as the China-UAE Economic and Trade Digital Expo and the China-Middle East & North Africa (Morocco) International Digital Trade Fair have been held in quick succession, using advanced technologies and new models including the internet, online exhibitions and online negotiations to deepen the digital economy cooperation between China and the Middle East. 

Media outlets from the Middle East have widely recognized that the cooperation potential between the Middle East and China is huge.

Cyberspace Administration of China
People's Government of Zhejiang Province
United Nations Department of Economic and Social Affairs
International Telecommunication Union
World Intellectual Property Organization
Secretariat of World Internet Conference (Preparatory Office)
Cyberspace Administration of Zhejiang Province
Economy and Information Technology Department of Zhejiang Province
Tongxiang Municipal People's Government
National Internet Emergency Center
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