Minding the gap

There are a few catchphrases that officials in the region say whenever anyone is listening: they call for a diversified economy, more corporate governance, sustainable development, and the creation of a knowledge-based economy (KBE). Most of us understand these issues, yet few have a grasp of what a KBE is and how to get to one - but we all know that the region needs it.

The magnitude of the knowledge deficit is on everyone's minds. Samson Samasoni, a senior advisor to the General Secretariat for Development Planning in Qatar, quotes the bleak conclusions of the 2003 UNDP (Arab Human Development Report): "Knowledge in Arab countries today appears to be on the retreat ... Based on their present performance, Arabs would remain in a marginal position in this next phase of human history."

In no way was this surprising to Arab leaders. Qatar has been on the forefront of transforming itself into a KBE, and its ruler is an outspoken champion of sweeping change. HH Sheikh Hamad Bin Khalifa Al Thani, Emir of Qatar, brought this up at the GCC Summit last week, and said that "the field of scientific research in particular remains in need of further attention and care. Real progress requires that we become a source of knowledge in its various aspects and being capable of developing it and not mere consumers of it."

This sentiment is echoed by many others in the region, and indeed the world. The World Bank is taking a deep interest in this issue and is spearheading programmes all over the world to assist governments in overcoming this seemingly insurmountable obstacle. The Arab Human Development Report described a scenario where a knowledge society could transform Arab states "to change the course of Arab history and afford the Arab people the decent lives to which they aspire and to which they are entitled".

This kind of language is powerful, but it needs powerful action to follow. Many countries have begun on the path to KBE by paying lip service to its lofty ideals - Qatar is actively implementing a strategic programme that, at the moment, looks very promising. A former vice president at the World Bank, Jean-Francois Rischard recently made a trip to Qatar and Dubai to share his experience in guiding and monitoring the KBE initiatives in Ireland, South Korea, and Estonia. He sees a difference between the triggers of transformation in those economies and those in the Middle East. "The other economies started their efforts after a crisis. There was a macroeconomic crisis in Ireland, another one in Finland, Korea started after the Asian crisis of 1997, and Estonia started after the fall of the Soviet Union. Here you have the opposite of a crisis - you have all that money coming in. The only crisis you have in this area of the world is the wealth curse", he tells Arabian Business at a conference at the Dubai School of Government.

With the wealth curse in full swing, Rischard applauds the diversification efforts of governments in the region, but doesn't believe that industrialisation, other than the odd aluminium smelter and desalination clusters, will happen on a scale that will markedly alter the economy. "I don't see any way out other than through KBE", Rischard says.

The World Bank uses its Knowledge Assessment Methodology (KAM) indicators to calculate where a country lies on the KBE scale. The assessment is based on key pillars that include the business environment, education system, innovation, and the information infrastructure. In the graph above Qatar and the UAE are plotted on several criteria along with Estonia and Finland, two of the top rated KBEs. The deficits are apparent; bridging the gap will require the formation of an ambitious knowledge economy vision to mobilise the country and foster both the existing and nascent initiatives.

This is where Qatar is shining. Rischard applauds the effort and notes that "they are bringing in medical units and foreign universities and they have done more than others in the Gulf by revamping the school system, essentially by creating a bypass system." (The bypass system is a government initiative that works around rigid bureaucracies to push through with transformational reforms).