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WUAB Forum – Sustainable Bank: The Role of Internal Audit, Risk Management, and Compliance in Ensuring Prosperity and Stability

The World Union of Arab Bankers (WUAB), in collaboration with the Union of Arab Banks (UAB), PricewaterhouseCoopers (PwC), the Federation of Egyptian Banks (FEB), and the Institute of Internal Auditors – Egypt, successfully hosted its highly anticipated Annual Internal Audit Forum on November 20–21, 2024. Held at the esteemed Four Seasons Hotel Cairo – Nile Plaza, the forum attracted over 200 professionals from leading banks in the Arab region and beyond, making it a truly international platform for knowledge exchange and professional development.

A Prestigious Gathering of Banking Experts

The two-day event brought together a distinguished assembly of banking executives, internal auditors, compliance officers, and risk management specialists. More than 25 renowned speakers from various financial institutions, consultancy firms, and regulatory bodies delivered insightful presentations and participated in dynamic panel discussions. This convergence of expertise created a fertile ground for discussing the evolving challenges and opportunities in the banking sector, particularly in internal audit, compliance, and risk management.

Attendees included high-ranking officials from Arab and international banks, representatives from regulatory authorities, and professionals from leading organizations specializing in auditing and risk management. The forum also welcomed participants from emerging markets, reflecting the event’s commitment to fostering a global perspective.

A Robust Agenda of Key Topics

The forum’s agenda addressed some of the most pressing issues facing the banking industry today, focusing on how internal audit, compliance, and risk management can drive prosperity and stability in an ever-changing financial landscape. Key topics included:

  • Building a Future-Ready Internal Audit Function: Speakers explored how banks can modernize their internal audit functions to address emerging risks and leverage technology to enhance efficiency.
  • Bank’s Culture and the Role of Internal Auditors: Discussions emphasized the importance of cultivating a strong risk-aware culture and the pivotal role internal auditors play in fostering ethical and transparent practices.
  • Strengthening Internal Audit’s Role with Key Stakeholders: Panels highlighted strategies for enhancing collaboration between internal auditors and other critical stakeholders, such as boards of directors and executive management.
  • Combined Assurance Model: This session delved into the integration of various assurance functions to provide a cohesive and comprehensive approach to risk management.
  • Risk Management and Compliance in the Digital Banking Era: Experts shared insights into managing risks associated with digital transformation, including cybersecurity and regulatory compliance.
  • Leveraging Emerging Technologies for Internal Audit Efficiency: The forum explored how technologies like artificial intelligence, data analytics, and automation are revolutionizing the internal audit landscape.
  • Internal Audit Role in ESG and Sustainability Auditing: Participants discussed the growing importance of environmental, social, and governance (ESG) factors and how internal audit functions can ensure accountability in sustainability initiatives.
  • The Future of Governance, Risk, and Compliance (GRC): Thought leaders provided a forward-looking perspective on the evolution of GRC practices in response to global challenges and regulatory shifts.
  • Strategic Navigators in Uncharted Waters: This session examined the transformative role of internal audit across varying levels of risk maturity, offering strategies for navigating complex risk environments.
  • Internal Audit Quality Assurance and Continuous Improvements: Speakers presented best practices for maintaining and enhancing the quality of internal audit processes.
  • Building Digital Trust: Auditing Cybersecurity and Data Privacy: With digital threats on the rise, this session emphasized the importance of building trust through robust Cybersecurity and data privacy auditing.

A Platform for Knowledge Sharing and Networking

The forum’s structure facilitated not only the dissemination of cutting-edge knowledge but also meaningful interactions among participants. Each session was designed to provide actionable insights, with case studies and real-world examples underscoring the practical relevance of the discussions. Attendees had the opportunity to engage directly with speakers, fostering an interactive and collaborative learning environment.

Networking opportunities were abundant, with breaks, lunches, and evening receptions allowing participants to connect with peers and industry leaders. These interactions underscored the forum’s role as a premier platform for professionals to exchange ideas, share experiences, and forge valuable relationships.

Overview of the Forum’s Objectives and Impact

As the banking sector continues to navigate a rapidly changing environment, the need for robust internal audit, risk management, and compliance practices has never been greater. This forum, titled “Future-Ready Banking: Auditing, Risk, and Compliance for a New Era,” aimed to equip participants with the tools and knowledge necessary to strengthen governance and resilience within their organizations.

Through a meticulously crafted program, the forum addressed the critical challenges faced by financial institutions, such as adapting to technological advancements, meeting evolving regulatory requirements, and responding to societal demands for greater accountability. Participants gained a deeper understanding of how to integrate innovative practices into their operations, ensuring their institutions remain competitive and compliant in a complex global landscape.

The collaborative efforts of WUAB, FEB, PwC, and other partners ensured that the forum maintained the highest standards of excellence. By bringing together leading voices in the industry, the event provided a unique platform for attendees to gain fresh perspectives and develop actionable strategies to address their institutions’ most pressing challenges.

Insights into the Future of Banking

A recurring theme throughout the forum was the transformative potential of emerging technologies. Speakers emphasized the need for financial institutions to embrace innovation to remain competitive. From harnessing the power of artificial intelligence to implementing Blockchain solutions, the discussions underscored the importance of staying ahead of technological trends.

The forum also highlighted the growing significance of ESG and sustainability in the banking sector. As stakeholders increasingly prioritize environmental and social responsibility, internal audit functions must evolve to ensure comprehensive ESG oversight. This focus on sustainability reflects a broader shift in the industry towards creating long-term value for all stakeholders.

Building Resilience through Collaboration

One of the forum’s key takeaways was the importance of collaboration among internal auditors, compliance officers, risk managers, and other stakeholders. By fostering a culture of openness and cooperation, financial institutions can better navigate the complexities of today’s regulatory and risk environments. The forum’s emphasis on combined assurance models and stakeholder engagement provided attendees with actionable strategies for achieving this goal.

Conclusion: A Resounding Success

The WUAB Annual Internal Audit Forum was a resounding success, reaffirming its position as a cornerstone event for professionals in the banking sector. By addressing the critical issues facing financial institutions and providing a platform for knowledge exchange, the forum played a pivotal role in shaping the future of internal audit, compliance, and risk management.

For attendees, the event was more than just a learning opportunity—it was an inspiring call to action. Equipped with fresh insights and practical tools, participants left the forum better prepared to tackle the challenges of an ever-changing financial landscape. As the banking industry continues to evolve, events like this forum will remain essential for fostering innovation, resilience, and excellence.

Through its collaborative approach and forward-looking agenda, the WUAB Annual Internal Audit Forum set a high standard for industry events, ensuring its legacy as a catalyst for progress and transformation in the banking sector.

Link to Event: https://wuab.org/event/sustainable-bank-the-role-of-internal-audit-risk-management-compliance-in-ensuring-prosperity-and-stability/

 

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Shaping a Transparent Future: The AACI’s Mission to Elevate Ethical Banking

Interview with Mr. Mike Masoud, Anti-Corruption Expert at the American Anti-Corruption Institute (AACI)

1. Overview of The American Anti-Corruption Institute (AACI)

The American Anti-Corruption Institute (AACI) is a leading global organization dedicated to empowering board members, executive management, and managers—collectively referred to as decision-makers—with the cutting-edge anti-corruption knowledge and skills necessary to prevent and combat corruption and fraud. Established with a mission to equip decision-makers across various sectors, including banking, with the tools to effectively identify, manage, and mitigate corruption risks, The AACI offers a range of anti-corruption certifications. We aim to ensure that the tone at the top is proper and proactive in safeguarding organizations from the damaging effects of corruption. The Institute’s flagship programs include the Certified Anti- Corruption Manager (CACM), the Certified Anti-Corruption Fellow (CACF), the Certified Anti- Corruption Expert Manager (CACEM), and the Certified Anti-Corruption Entity (CACE), among others. These certifications serve to cultivate an informed, ethical, and proactive workforce capable of making sound decisions in the fight against corruption.

2. What does the recent Memorandum of Understanding (MOU) signed between The AACTI, the Union of Arab Banks (UAB), and Tomorrow’s Advice (TA) mean for the future of anti-corruption efforts in the MENA region?

The MOU signed on August 22, 2024, represents a significant step forward in our collective efforts to institutionalize anti-corruption initiatives across the banking sector in the MENA region. This partnership with the Union of Arab Banks (UAB) and Tomorrow’s Advice (TA) aims to advance anti-corruption learning and certification programs for UAB members. By promoting the culture of anti-corruption and disseminating knowledge about The AACI’s Ten Principles of Fighting Corruption, we seek to empower the banking sector with the necessary tools to prevent corruption proactively.

The MOU underscores the importance of collaboration between industry leaders, governance bodies, and institutions in creating a transparent, ethical banking environment. This partnership will enhance the integrity of the sector, fostering a stronger, more resilient financial system that aligns with global standards of anti-corruption and integrity.

3. How does this partnership with UAB and TA align with The AACI’s mission to promote integrity and transparency in the banking sector?

Our mission at The AACI has always been to empower decision-makers with the knowledge and skills to proactively prevent corruption and fraud. This partnership with the UAB is a natural extension of that mission, as the Union represents 360 member banks and financial institutions across the Arab League member states, Europe, and Turkey.

Through the MOU, we are working together to promote transparency, independence, and competence across the banking sector. By implementing anti-corruption certification programs and disseminating The AACI’s Ten Principles of Fighting Corruption, we aim to bolster the ethical foundations of the banking industry and ensure that it remains a trusted institution for sustainable economic growth and stability.

4. Why is the banking sector critical in the fight against corruption, particularly in the MENA region?

The banking sector plays a pivotal role in economic stability and growth, which makes it a critical player in the fight against corruption. In the MENA region, where corruption risks can be heightened due to complex political and economic dynamics, banks have a unique responsibility to safeguard the integrity of financial transactions and prevent the flow of illicit funds.

By fostering a culture of integrity, anti-corruption, and compliance with the relevant laws, rules, and regulations, we ensure that financial institutions remain accountable to their stakeholders, customers, and regulators. This partnership with the UAB helps to institutionalize anti-corruption practices within banking operations, enhancing both regional and global efforts to combat financial crimes such as money laundering and terrorism financing.

5. How do The AACI’s anti-corruption certification programs, like the CACM, play a role in promoting integrity within financial institutions?

The Certified Anti-Corruption Manager (CACM) and other certifications of The AACI are designed to equip professionals in the banking sector with the knowledge and tools to tackle corruption effectively. By addressing the CACM’s core areas of anti-corruption, internal control, governance, anti-money laundering, auditing and accounting for decision makers, Blockchain and AI, the United Nations Convention Against Corruption, the OECD Anti-Bribery Convention, Financial Actions Task Recommendations, and risk management, these programs empower managers and executives to implement robust anti-corruption frameworks in their organizations.

With the increasing emphasis on anti-corruption compliance from both regulators and the public, certifications like the CACM provide professionals with the skills necessary to meet and exceed these expectations. This is particularly important in regions like MENA, where the regulatory landscape is evolving and financial institutions must stay ahead of emerging risks and compliance requirements.

6. What impact do you foresee from this partnership on the sustainable development 4% goals (SDGs) and the broader economic stability in the MENA region?

This partnership has a direct alignment with the UN’s Sustainable Development Goals (SDGs), particularly Goal 16: Peace, Justice, and Strong Institutions. By promoting anti-corruption learning, integrity, and transparency within the banking sector, we are contributing to the creation of more stable, accountable, and transparent financial systems in the MENA region.

The long-term impact of this initiative will be felt not just in the banking sector but in the broader economy as well. A transparent, ethical financial system fosters investor confidence, supports sustainable economic growth, and strengthens the region’s ability to attract foreign investment. Ultimately, this partnership represents a vital contribution to both regional and global efforts to foster economic stability and prosperity.

7. How does the banking sector’s anti-corruption strategy align with national efforts to combat corruption?

The banking sector is a critical player in national anti-corruption efforts due to its role as a cornerstone of the economy and its responsibility to ensure the integrity of financial transactions. For an anti-corruption strategy to be effective, it must align with the broader national anti- corruption strategy.

At The AACI, we emphasize that a bank’s anti-corruption strategy should be designed, implemented, and evaluated in a way that supports not only the bank’s internal goals but also those of the broader banking sector and the country. This alignment fosters collaboration, ensures consistency in combating corruption across sectors, and strengthens national resilience against corruption. The AACT’s certification programs, including the CACM, equip banking professionals with the expertise to develop and manage strategies that contribute to this unified effort.

8. Why is addressing conflicts of interest essential in the fight against corruption within the banking industry?

Conflicts of interest are a corruption risk in the banking sector and can significantly undermine its integrity if left unchecked. They may arise in various forms, such as unethical decision- making or favoritism, which can ultimately lead to corrupt practices.

The AACI’s anti-corruption certification programs, especially the CACM, place significant emphasis on understanding the nature of conflicts of interest, identifying their sources, and implementing measures to mitigate their risks. By educating banking professionals on these issues, we ensure they are equipped to recognize and address conflicts of interest before they escalate into corruption. This proactive approach strengthens governance and fosters trust among stakeholders.

9. What role does institutional integrity play in fostering an ethical banking environment?

Institutional integrity refers to an organization’s adherence to the Ten Principles of Fighting Corruption and Standards on Fighting Corruption (SFCs) in its interactions with stakeholders, distinguishing it from the concept of individual integrity. For banks, institutional integrity is fundamental in building trust, maintaining a solid reputation, and ensuring sustainable operations.

The AACI champions the importance of institutional integrity through initiatives like the Certified Anti-Corruption Entity (CACE) program. This certification demonstrates an entity’s commitment to combating corruption and fraud while fostering a culture of transparency and accountability. Moreover, banks with more CACM-certified professionals are better positioned to enhance their institutional integrity, as these professionals bring expertise in designing and implementing effective anti-corruption measures.

10. How can whistleblowing strengthen a bank’s anti-corruption strategy?

Whistleblowing is one of the most effective methods for detecting fraud and corruption. Research shows that over 50% of fraud and corruption cases are uncovered through tips provided by employees, customers, or other stakeholders.

An effective anti-corruption strategy for banks must include whistleblowing as an integral component. The AACI’s CACM certification dedicates a comprehensive unit to the topic of whistleblowing, covering its nature, methods, and policy design. By implementing robust whistleblowing mechanisms, banks can deter, prevent, and detect corruption more effectively while promoting a culture of accountability and transparency. Encouraging and protecting whistleblowers ensures that concerns are raised without fear of retaliation, strengthening the organization’s defenses against corruption.

Conclusion

The signing of this MOU marks a turning point in our efforts to combat corruption and promote transparency within the banking sector. By joining forces with the Union of Arab Banks and Tomorrow’s Advice, The AACI is committed to ensuring that anti-corruption principles are firmly embedded in the fabric of the banking industry, not just in MENA but globally. Through initiatives like the CACM certification and the dissemination of best practices, we are empowering professionals and organizations to take proactive steps in safeguarding the future of our financial systems.

 

 

 

Press Release – The American Anti-Corruption Institute (AACI) and the Union of Arab Banks (UAB) sign a Memorandum of Understanding to Promote Anti-Corruption and Integrity

The American Anti-Corruption Institute (AACI) proudly announces the signing of a Memorandum of Understanding (MOU) with the Union of Arab Banks (UAB) and Tomorrow’s Advice Global s.a.l. offshore Lebanon (TA Global) alongside Tomorrow’s Advice s.a.r.l. (TA). This significant agreement was formalized on August 22, 2024, during the “Annual Forum of Combatting Money Laundering and Terrorism Financing: The Repercussions of Cash Economy on the Banking Sector” at the Phoenicia Hotel Beirut, Lebanon. The conference was held under the auspices of the Acting Governor of the Central Bank of Lebanon and Head of the Special Investigation Commission in Lebanon, Dr. Wassim Mansouri.

The MOU was signed by Dr. Wissam H. Fattouh, Secretary General of the UAB and Mr. Mike Masoud, Senior Director of the Middle East and Africa at The AACI, , and Mrs. Gina J. Chammas, CACM, Founding Partner of TA Global and TA, and Senior Adviser of The AACI in MENA. The signing ceremony was attended by Retired Brigadier-General PSC, Hassan Jouni, PhD, CACM, Advisor of The AACI in the MENA region.

The forum and the ceremony were attended by esteemed guests, CACMs members of The AACI, and professionals in related fields, highlighting the importance and far-reaching impact of this partnership.

The MOU outlines a collaborative effort to advance anti-corruption learning and certification programs for members and stakeholders of the Union of Arab Banks and the banking sector under the UAB’s jurisdiction. The parties have committed to a partnership that seeks to bolster the integrity of the banking sector by equipping its members with essential anti-corruption knowledge and tools. The Union of Arab Banks shall promote the culture of anti-corruption and disseminate knowledge about the Ten Principles of Fighting Corruption promulgated by The American Anti-Corruption Institute (AACT) to its members throughout its territory.

This MOU represents a pivotal step forward in the ongoing efforts to institutionalize corruption prevention, integrity, and transparency in the banking sector in particular, and in sustainable economic development in general.

About The American Anti-Corruption Institute (AACI): The AACI (theaaci.net) is a pioneering organization dedicated to empowering executive management and governance bodies with the knowledge and skills necessary to prevent fraud and corruption proactively. Through its premier anti-corruption certification programs for individuals and entities, including the Certified Anti-Corruption Manager (CACM) and Certified Anti-Corruption Entity (CACE), The AACI fosters institutional change and assesses corruption risks, guided by its Ten Principles and Standards on Fighting Corruption, and promoting transparency, independence, competence, and integrity. The AACI emphasizes corruption prevention as the cornerstone of effective corruption control.

About Tomorrow’s Advice Global s.a.l. offshore Lebanon and Tomorrow’s Advice s.a.r.l.: TA Global and TA are leading management and financial consultancy firms, specializing in strategic advice, development, sustainability, internal control, compliance, governance, and anti-corruption initiatives, particularly within the MENA region.

 

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Transparency, Innovation, and Resilience: Inside Banque de l’Habitat’s Journey

Chairman Antoine Habib reveals how the bank maintains credibility and secures funding in challenging times.

How do you evaluate Banque de l’Habitat’s role in fulfilling its commitments despite economic challenges?

Banque de l’Habitat has always been a model of commitment, staying true to the principle that “a promise is a debt of honor.” Since I were elected in 2022 to lead this institution, I have maintained a strategic goal of facilitating access to decent housing for families with low and middle incomes. Despite the economic difficulties, we explored various funding sources, both local and international, in collaboration with Arab, European, and international organizations.

Although initial efforts faced skepticism, we tackled challenges with determination and resilience. Banque de l’Habitat not only honored its commitments but also successfully dispelled doubts, solidifying its position as a reliable institution capable of overcoming crises. The bank has proven that challenges can be transformed into opportunities for growth and development, reinforcing its credibility and flexibility in effectively supporting the Lebanese community.

Can you share the details of Banque de l’Habitat’s collaboration with the Arab Fund for Economic and Social Development?

In 2023, at the invitation of Engineer Nabil Al-Jisr, Chairman of the Council for Development and Reconstruction (CDR), we participated in a meeting with a delegation from the Arab Fund for Economic and Social Development at the council’s headquarters. During this meeting, we presented a comprehensive report on the financial and administrative status of Banque de l’Habitat and renewed our request to reactivate a loan granted in 2019, which remains pending.

This meeting was characterized by transparency and positivity, allowing us to emphasize our strict adherence to financial management standards and reaffirm that Banque de l’Habitat has always honored its financial obligations to Arab funds and other institutions. The Arab Fund delegation also evaluated the bank’s assets, noting that all our branches across Lebanon are fully owned, which is a strategic advantage that strengthens the bank’s stability and sustainability.

It is important to acknowledge the visionary leadership of former General Manager Mr. Joseph Sassine, who spearheaded the acquisition of all bank branches. This achievement facilitated a thorough financial due diligence process, which confirmed the bank’s robust financial standing. Under Mr. Sassine’s leadership, successive boards meticulously fulfilled all financial obligations, including the repayment of borrowed capital and interest owed to donors. This financial discipline was pivotal in securing the Arab Fund loan in 2019.

Today, the current administration remains committed to the same prudent approach, guided by strong governance policies that ensure stability and sustainable growth for the bank.

What were the outcomes of the official mission to Kuwait and your meeting with the Arab Fund for Economic and Social Development?

During an official mission to Kuwait, we met with representatives of the Arab Fund for Economic and Social Development. The primary objective of the meeting was to finalize the disbursement of the second installment of the loan, valued at USD 16.3 million, aimed at supporting families with low and middle incomes. The Arab Fund confirmed that the installment would be transferred to our account upon receiving the official request, which was completed by the end of November 2024.

Adapting to the current economic conditions, the loan currency was converted from Lebanese Lira to US Dollars and will be disbursed over ten equal installments within five years, at an interest rate of 6%. This funding is a cornerstone of financial stability and allows Banque de l’Habitat to continue supporting Lebanese citizens seeking to own homes, reaffirming the bank’s ability to uphold its mission even amidst crises.

How has the new electronic platform simplified and streamlined the loan application process?

We launched an innovative electronic platform designed to simplify administrative procedures and make the loan application process more accessible for borrowers. Through this platform, Lebanese citizens, regardless of location, can submit their applications online with ease, receive immediate feedback on eligibility, and finalize procedures at the nearest bank branch. This initiative reflects our commitment to offering more efficient and transparent services that align with the evolving needs of our clients.

Are the current financial resources sufficient to meet citizens’ needs?

While current funding sources are limited, they are primarily allocated to support the purchase, construction, or renovation of housing in rural areas outside the capital, Beirut. This support aims to reduce rural-to-urban migration and encourage Lebanese citizens to remain in their hometowns, in line with the vision of late Presidents Salim Al-Hoss and Elias Sarkis, who established Banque de l’Habitat in 1977. Their vision sought to preserve Lebanon’s social fabric and promote local stability.

However, the available funds, totaling USD 165 million, are insufficient to meet the growing demand. To bridge this gap, we requested additional financing from international institutions, such as the Abu Dhabi Fund for Development and the Kuwait Fund for Arab Economic Development. The Lebanese Council of Ministers tasked the Council for Development and Reconstruction (CDR) with negotiating these loans to secure the necessary resources, ensuring sustained support for citizens and fostering sustainable development.

What strategies does Banque de l’Habitat employ to ensure the sustainability of new funding sources, both local and international?

Banque de l’Habitat follows a comprehensive and diversified strategy to secure sustainable financial resources by enhancing funding at the local, regional, and international levels. Domestically, the bank relies on certificates of deposit as a key funding source, supported by legislative initiatives such as Decree No. 9812, which mandates insurance companies to deposit guarantees with the bank. Additionally, Minister of Labor Mr. Mustafa Bayram raised the ceiling for certificates of deposit for individuals and companies, strengthening the bank’s capacity to support low- and middle-income families.

Internationally, we have built strategic partnerships with reputable organizations, including the U.S. Agency for International Development (USAID), UN Habitat, the European Bank for Reconstruction and Development, and the French Development Agency. These partnerships expand funding opportunities under favorable terms, enabling the bank to effectively support Lebanese families and contribute to economic and social stability in the country.

What are the main obstacles facing borrowers, and how can they be addressed?

One of the main challenges lies in administrative complexities associated with real estate records, as the required documentation often hinders borrowers’ ability to access loans. We call upon the Ministry of Finance to take decisive steps to resolve these issues and simplify procedures. Achieving joint cooperation among all relevant stakeholders is essential to overcoming these challenges and enabling Lebanese citizens to secure adequate housing that meets their needs and enhances their social stability.

What does the Excellence Award received by Banque de l’Habitat signify for its position among Arab banking institutions?

Receiving the Excellence Award from the World Union of Arab Bankers is a prestigious honor that reflects recognition of our ongoing efforts. This award, earned among more than 300 Arab banks and financial institutions, underscores our ability to fulfill our commitments and achieve our goals despite economic challenges, further enhancing our leadership position in the Arab banking sector.

What sets Banque de l’Habitat apart from other Lebanese banks, particularly in housing loans?

Banque de l’Habitat distinguishes itself through its exclusive specialization in housing loans, a sector that many Lebanese commercial banks have abandoned due to the current crises.

Furthermore, we have taken proactive steps to ensure transparency and integrity in all our operations. In collaboration with Ms. Joelle Fawaz, Chairwoman of the Legislative and Consultation Committee, we adopted the use of cross-border accounts to ensure that loan funds are transferred in US Dollars through accounts outside Lebanon. This measure enhances the transparency of our operations and ensures the highest levels of financial security for both borrowers and funding institutions, reaffirming our commitment to providing reliable and sustainable solutions that meet long-term needs.

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Arab Banks Awards & Commendations of Excellence 2024: Honoring Merit and Leadership in Banking

A Legacy of Excellence

In the dynamic and historic city of Cairo, the “Arab Banks Awards & Commendations of Excellence 2024” took place on a distinguished October evening, celebrating its tenth consecutive year. Organized by the World Union of Arab Bankers (WUAB), this prestigious event honored exceptional achievements and groundbreaking innovations within the Arab banking and financial sector. More than an annual ceremony, it stands as a cornerstone tradition, reflecting the unwavering commitment to excellence and the drive for innovation that define the Arab banking industry.

An Assembly of Distinguished Leaders

The prestigious awards ceremony took place at the renowned Four Seasons Hotel Cairo At Nile Plaza, a venue that brought together distinguished leaders from the Arab banking sector, prominent figures, and officials representing regulatory institutions and international bodies. More than a celebration, the event served as a strategic platform for fostering dialogue, exchanging insights, and cultivating long-lasting partnerships within the banking community.

The Selection Process: Celebrating the Best

Central to the event’s prestige is its rigorous selection process. A distinguished committee of economists, banking professionals, and the adept research department of the Union of Arab Banks and the World Union of Arab Bankers undertook the daunting task of evaluating nominees. This meticulous process, based on stringent criteria, ensures that the awards reflect genuine excellence and innovation in banking and financial practices, leadership, and strategy.

Spotlight on Achievements and Innovations

Each award was carefully curated to recognize different facets of excellence, ranging from innovative product development to sustainable banking practices and exemplary leadership in challenging economic climates. The ceremony highlighted individual success stories, providing a platform for sharing innovative ideas and strategies that have positively impacted the Arab banking sector.

Profiles of Excellence: Stories of Leaders and Innovators

Special segments of the ceremony were dedicated to profiling the achievements of individual banking leaders and institutions. These profiles served not only as recognition but also as inspirational narratives for the audience. They highlighted the resilience, ingenuity, and foresight of leaders who have navigated complex challenges to steer their institutions towards growth and success.

The World Union of Arab Bankers: A Unifying Force

Established in 2006 in Casablanca, the World Union of Arab Bankers has grown into a formidable force, unifying over 500 members from the Arab banking sector. This organization, through events like these awards, plays a pivotal role in promoting excellence, facilitating knowledge exchange, and shaping the future of banking in the Arab world.

The Banking Executive Magazine: A Decade of Illuminating Success

‘The Banking Executive’, as the English-language magazine emerging from the World Union of Arab banks, has been a beacon of insight and information. For over a decade, it has consistently highlighted the triumphs and advancements of the Arab banking sector, offering its readers a window into the dynamic world of Arab finance.

A Legacy and a Vision for the Future

The “Arab Banks Awards & Commendations of Excellence 2023” event is more than a ceremony; it is a reaffirmation of the Arab banking sector’s commitment to excellence, innovation, and leadership. As the event concludes, it leaves behind a legacy of inspiration and a vision for the future, motivating banking and financial professionals to continue pushing the boundaries of what is possible in the world of finance.

Dr. Sharif Farouk, Minister of Supply and Internal Trade of the Arab Republic of Egypt

During The Arab Awards and Commendations of Excellence ceremony, Dr. Sherif Farouk was honored with the “Arab Banking Excellence and Achievement Award for 2024” by the World Union of Arab Bankers (WUAB). In his acceptance speech, Dr. Farouk expressed his gratitude to the organizers for this prestigious recognition and praised the significance of the event in fostering collaboration and excellence across the Arab banking sector.

Dr. Farouk highlighted the critical role of transparency and oversight in strengthening the financial and commercial sectors. He emphasized that enhancing internal controls and governance practices is essential for ensuring institutional integrity and operational efficiency. In this context, he underscored the importance of internal auditing as a cornerstone for promoting accountability and achieving organizational success.

The Minister of Supply and Internal Trade also addressed the necessity of sharing best practices and expertise among Arab nations, noting that such exchanges are pivotal to achieving sustainable economic growth. He stressed that collaboration across borders creates opportunities to develop more effective oversight mechanisms, which are vital for adapting to the evolving global financial landscape.

Dr. Farouk showcased the ongoing efforts by the Ministry of Supply and Internal Trade to improve monitoring systems and upgrade infrastructure. These initiatives, he noted, are aligned with achieving the United Nations Sustainable Development Goals (SDGs). He emphasized that such improvements in governance not only enhance institutional performance but also contribute to broader economic development.

Concluding his remarks, Dr. Farouk highlighted the importance of events like this one in creating a platform for exchanging ideas and visions among industry experts, banking leaders, and policymakers. He noted that fostering dialogue and collaboration at the regional and international levels is key to strengthening the financial and auditing sectors. This, he explained, equips institutions with the tools needed to address future challenges effectively while advancing shared economic goals.

Dr. Farouk’s address reflected a clear vision for enhancing transparency, strengthening oversight practices, and leveraging knowledge-sharing to drive sustainable development and regional cooperation in the financial sector.

Dr. Joseph Torbey, Chairman, World Union of Arab Bankers (WUAB)

Dr. Joseph Torbey, in his opening remarks, warmly welcomed the distinguished attendees to The Arab Awards and Commendations of Excellence ceremony, held in Egypt, a country rich in history and culture. He extended his gratitude to participants from across the Arab world and the members of the World Union of Arab Bankers (WUAB) for their presence and participation in this prestigious celebration of excellence.

Dr. Torbey highlighted the significance of the event as an opportunity to honor visionary leaders and institutions in the Arab banking sector that have demonstrated resilience, financial strength, and exceptional contributions to the industry. He emphasized that these institutions remain a cornerstone of Arab economies, providing stability and growth amidst ongoing challenges.

Reflecting on the future, Dr. Torbey addressed the importance of preparing for a rapidly changing economic and technological landscape. He stressed that the Arab banking sector’s progress depends on developing skilled human capital, as capable individuals form the backbone of any successful organization. This, he stated, requires continuous investment in enhancing both professional and personal skills, as human resources are instrumental in achieving institutional goals and driving innovation.

He further underscored the evolving role of artificial intelligence (AI) in the global banking sector, noting its transformative potential in improving decision-making processes and operational efficiency. However, Dr. Torbey emphasized that AI must complement—not replace—human intelligence. While AI offers speed, precision, and advanced analytical capabilities, human creativity, emotional intelligence, and ethical guidance remain irreplaceable in steering technology toward serving humanity’s broader goals.

Dr. Torbey urged Arab financial leaders and decision-makers to embrace digital transformation, modernize operations, and integrate AI into their institutions to remain competitive globally. Drawing on international examples, he referenced initiatives aimed at reducing bureaucratic inefficiencies and fostering smart leadership focused on problem-solving rather than traditional credentials. He emphasized the need for visionary and adaptable leaders to navigate the challenges posed by rapid technological advancements.

In conclusion, Dr. Torbey expressed pride in the achievements of the honorees celebrated during The Arab Awards and Commendations of Excellence. He praised their dedication, innovation, and leadership in advancing the Arab banking industry. Dr. Torbey encouraged them to continue striving for excellence, contributing to the progress of Arab economies, and setting new standards of success for future generations.

The evening, he noted, was a testament to the spirit of leadership and distinction that defines the Arab financial sector, with the World Union of Arab Bankers playing a pivotal role in fostering such achievements.

Dr. Wissam Fattouh, Secretary General of the World Union of Arab Bankers (WUAB) and Union of Arab Banks (UAB)

At The Arab Awards and Commendations of Excellence ceremony, Dr. Wissam Fattouh, Secretary General of the World Union of Arab Bankers (WUAB) and Union of Arab Banks (UAB), delivered a speech that underscored the critical role of leadership, resilience, and innovation in the Arab banking sector. Dr. Fattouh began by extending his gratitude to Egypt’s leadership, government, and people for hosting the event, acknowledging their unwavering support for Arab unity and progress. He noted, “Cairo, this timeless city, has always been a meeting point for ideas, collaboration, and excellence.”

Addressing the current challenges in the Arab region, Dr. Fattouh spoke candidly about the difficult times many countries are enduring, describing them as “a period of immense difficulty, where tragedy has touched both stone and man.” Despite these hardships, he emphasized the need for collective resolve and collaboration, urging the Arab banking community to unite under a shared vision to navigate uncertainty. “Our response to these challenges,” he asserted, “must be grounded in dialogue, innovation, and a clear focus on sustainable development.”

Dr. Fattouh highlighted the World Union of Arab Bankers’ mission to strengthen and modernize the Arab banking sector, emphasizing the importance of equipping institutions with advanced tools and expertise to thrive in a rapidly evolving global economy. He stated, “We remain steadfast in our efforts to elevate the Arab banking profession, ensuring it meets international standards and contributes to the prosperity of our economies.” He further pointed out the necessity of investing in human capital, calling it “the cornerstone of progress, as no technological advancement can replace the vision, creativity, and leadership of talented individuals.”

The speech also celebrated the event as a platform to honor leaders and institutions that have made significant contributions to the Arab financial sector. Dr. Fattouh praised the honorees, describing them as “pioneers of excellence who have demonstrated an unwavering commitment to innovation, resilience, and leadership in advancing the Arab banking industry.” He commended their ability to “drive meaningful change, transform their institutions, and serve as role models for future generations.”

Highlighting the evolving role of technology, Dr. Fattouh called for a balanced approach to innovation, where technological advancements and human expertise coexist harmoniously. “While technology, particularly in the realms of digital transformation and artificial intelligence, offers us tools to enhance efficiency and analysis, it is human ingenuity that will guide these tools toward creating lasting value for our societies.”

Concluding his speech, Dr. Fattouh reaffirmed the WUAB’s commitment to fostering collaboration and recognizing achievements across the Arab world. He stated, “The path forward lies in leadership, innovation, and unity. Together, we have the power to overcome challenges, build resilient institutions, and pave the way for a brighter future for our economies, our people, and our region.”

Dr. Fattouh’s address was a call to action for the Arab banking community, urging leaders to embrace change, foster innovation, and work collectively toward sustainable growth. His words resonated with the audience, serving as both a reflection on current realities and a vision for a stronger, more unified Arab financial sector.

Link to Event: https://wuab.org/arab-banks-awards-commendations-of-excellence-2024/

3

Cop 16 in Riyadh – A New Outlook and a Water Focus

BY DR SOHA MAAD

Introduction

The 16th Conference of the Parties (COP 16) took place in Riyadh in Saudi Arabia, from 2 to 13 December 2024. The event was part of the United Nations Convention to Combat Desertification (UNCCD) and aimed to address global challenges like land degradation, drought, and desertification. COP 16 was notable for being the largest meeting in the history of the UNCCD and the first to be held in the Middle East. The conference brought together representatives from 197 countries to collaborate on solutions for rehabilitating degraded land and building resilience against drought.

COP 16 was a game-changer, marking a renewed global commitment to accelerate investment and action to restore land and boost drought resilience.

This article overviews COP 16. The overview covers the agenda, key participants, the water focus, challenges faced, the impact, climate diplomacy at COP 16, and the technology focus. The article concludes with COPS future outlook. The future of COPs holds promise for driving meaningful and transformative action on climate change. With continued ambition, collaboration, and innovation, these conferences will play a crucial role in shaping a sustainable and resilient future.

Cop 16 at a Glance

COP 16 key topics included sustainable land management, artificial intelligence, and the social and economic impacts of land degradation. It was an important and crucial event for global environmental efforts. The agenda for COP 16 in Riyadh was quite comprehensive and innovative. Key activities included:

 Negotiation Track

This included ministerial dialogues that involved discussions on drought resilience, finance, and migration. It also included critical decisions that focused on advancing global land and drought resilience through political declarations.

 Action Agenda

This included thematic days. Each day focused on a specific theme to drive action and collaboration as follows:

  • Land day: to address the role of healthy land in combating climate change, creating jobs, and reducing poverty.
  • Agri-food system day: for promoting sustainable farming for resilient crops and ecosystem protection.
  • Governance day: for inclusive land governance.
  • People’s day: to address the role of youth, women, and civil society in decision-making.
  • Science, Technology, and Innovation Day: for exploring innovative solutions for land health.
  • Resilience day: to formulate policies and approaches for climate resilience.
  • Finance day: for funding innovations for land and drought resilience.

  Additional Events

There were also additional events including:

  • Saudi Green Initiative Forum: Running alongside COP 16, focusing on global climate challenges under the theme “Action is in Our Nature”.
  • Green Zone: Engaging scientists, businesses, Non-Government Organizations NGOs, and the public in collaborative efforts.

Cop 16 Key Participants

COP 16 in Riyadh attracted a diverse array of key participants, including:

  • Government Representatives: from 196 Countries and the European Union.
  • United Nations Officials
  • Private Sector Leaders: including businesses and financial Institutions engaging in collaborative projects and innovative solutions for land restoration and drought resilience
  • NGOs and Civil Society
  • Experts and Academics
  • Host Country Representatives from Saudi Arabian Officials

These participants worked together to drive global action and collaboration towards sustainable land management and drought resilience.

The Water Focus at Cop 16

Water scarcity was a significant focus at COP 16 in Riyadh. The conference highlighted the critical role of water in combating desertification and land degradation. Key points addressed in the water focus included:

Key Themes and Initiatives

  • Water Scarcity and Desertification: Addressing the link between water scarcity and land degradation, emphasizing the need for sustainable water management practices.
  • Private Sector Involvement: Exploring the role of the private sector in innovative programs focused on water and food security. This includes partnerships between businesses, governments, and NGOs to implement best practices and collaborative solutions.
  • National Water Strategy: Saudi Arabia’s National Water Strategy aims to preserve water resources and promote sustainability through recycling projects and other initiatives.

 Side Events and Discussions

  • Addressing Water Scarcity in the Arab World: A side event focusing on the role of the private sector in combating desertification through innovative water management programs.
  • Ministerial Dialogues: Discussions on drought resilience and the importance of water in achieving land degradation neutrality targets.

The conference aimed to foster international collaboration and innovative solutions to tackle water scarcity and enhance drought resilience. It was a crucial step towards ensuring sustainable land and water management for future generations.

Cop 16 Challenges

COP 16 in Riyadh faced several challenges as it aims to address global land degradation, desertification, and drought. Key challenges include:

  1. Global Coordination and Cooperation

Bringing together 197 parties, including 196 countries and the European Union, requires significant coordination and cooperation to ensure that all parties are aligned and committed to the goals of the conference.

  1. Funding and Investment

Securing adequate funding and investment for land restoration and drought resilience initiatives is a major hurdle. Mobilizing financial resources from both public and private sectors is essential for implementing effective solutions.

  1. Implementation of Agreements

Translating agreements and commitments made at COP 16 into actionable and measurable steps is crucial. Ensuring that countries follow through on their pledges and implement sustainable practices on the ground is a significant challenge.

  1. Addressing Water Scarcity

Water scarcity is a critical issue that intersects with land degradation and desertification. Developing and implementing innovative water management solutions to address this challenge is essential for achieving the conference’s goals.

  1. Engaging Stakeholders

Involving a wide range of stakeholders, including governments, businesses, NGOs, and local communities, is necessary for comprehensive and effective solutions. Ensuring that all voices are heard and that there is broad-based support for initiatives is a complex task.

  1. Climate Change Impacts

The impacts of climate change exacerbate land degradation, desertification, and drought. Addressing these interconnected issues requires integrated approaches that consider the broader context of climate change.

  1. Monitoring and Evaluation

Establishing robust monitoring and evaluation mechanisms to track progress and assess the effectiveness of implemented measures is essential. This helps in making informed decisions and adjusting strategies as needed.

Despite these challenges, COP 16 represented a significant opportunity to drive global action and collaboration towards sustainable land management and drought resilience.

Cop 16 Impact

COP 16 in Riyadh made a significant impact on global efforts to combat desertification, land degradation, and drought. Key impacts include:

  • Renewed Global Commitment: The conference aimed to renew global commitment to land restoration and drought resilience. By bringing together representatives from 197 countries, it fostered international collaboration and set ambitious goals for environmental sustainability.
  • Innovative Solutions: COP 16 emphasized innovative solutions, including the use of artificial intelligence and sustainable land management practices. These solutions can drive practical and implementable actions to address urgent global crises.
  • Private Sector Engagement: The conference highlighted the role of the private sector in environmental efforts. Engaging businesses, financial institutions, and NGOs in collaborative projects is crucial for achieving sustainable land management and combating desertification.
  • Policy and Governance: High-level ministerial sessions and thematic days focused on critical issues such as drought resilience, financing, and governance. These discussions produced actionable policies and strengthened governance frameworks for land restoration.
  • Social and Economic Benefits: Restoring degraded land and building resilience against drought had significant social and economic benefits. This includes creating jobs, reducing poverty, and improving food security, which are essential for sustainable development.
  • Regional Impact: As the first UNCCD COP held in the Middle East and North Africa region, COP 16 brought attention to the unique challenges faced by this region. It addressed these challenges through regional cooperation and tailored solutions.

Climate Diplomacy at Cop 16

Climate diplomacy at COP 16 in Riyadh played a crucial role in addressing global environmental challenges in various respects as follows:

Multilateral Collaboration: COP 16 fostered international cooperation to combat desertification, land degradation, and drought. This multilateral approach is essential for achieving global environmental goals.

High-Level Ministerial Dialogues: The conference featured high-level ministerial dialogues on critical issues such as drought resilience, finance, and migration. These dialogues aimed to produce actionable policies and strengthen governance frameworks for land restoration.

Action-Oriented Agenda: COP 16 introduced a dual-track approach, combining formal negotiations with an action-oriented agenda.

Private Sector Engagement: Engaging the private sector was a key component of climate diplomacy at COP 16. Businesses and financial institutions collaborated on innovative projects enhancing land and drought resilience.

Regional Focus: As the first UNCCD COP held in the Middle East and North Africa region, COP 16 highlights the unique challenges faced by this region.

Funding and Investment

Securing adequate funding and investment for land restoration and drought resilience initiatives was a major focus of climate diplomacy at COP 16.

Geopolitics of Cops 16 Riyadh

The geopolitics of COP 16 in Riyadh are quite significant, given its location and the global attention it has gathered. Key geopolitics involved included:

Regional Significance: COP 16 was the first UNCCD conference held in the Middle East and North Africa (MENA) region.

Saudi Arabia’s Role: As the host country, Saudi Arabia positioned itself as a leader in environmental sustainability and climate action. The conference provided an opportunity for Saudi Arabia to showcase its initiatives, such as the Saudi Green Initiative (SGI) and the Riyadh Global Drought Resilience Initiative.

Global Collaboration: The conference brought together representatives from 197 countries, fostering international cooperation to address global environmental challenges. This multilateral approach is crucial for achieving sustainable land management and drought resilience.

High-Profile Participation: COP 16 features high-profile participants, including heads of state, ministers, and leaders from international organizations.

Economic and Political Implications: The outcomes of COP 16 made significant economic and political implications, particularly for countries in the MENA region.

Innovation and Technology: The conference emphasized the role of innovation and technology in addressing environmental challenges. This included the use of artificial intelligence, sustainable land management practices, and other innovative solutions to enhance land and drought resilience.

COP 16 in Riyadh was a pivotal event that highlighted the geopolitical importance of addressing environmental issues in the MENA region and beyond.

Technology Focus at Cop 16

Technology was a major focus at COP 16 in Riyadh, with several innovative approaches being highlighted to address land degradation, desertification, and drought. Key technological focuses included:

  • Remote Sensing and Drones: These tools enable precise monitoring of land health, providing actionable data for targeted restoration efforts and resource optimization.
  • Artificial Intelligence (AI): AI is being leveraged to analyze large datasets, predict environmental changes, and develop solutions for sustainable land management.
  • Carbon Capture and Hydrogen Production: Saudi Arabia is focusing on technologies such as carbon capture and hydrogen production as part of its circular carbon economy initiative. These efforts aim to balance climate tech investment with the country’s oil interests. The Science, Technology, and Innovation Day at COP 16 presented innovative solutions for land health and resilience, showcasing cutting-edge technologies and scientific advancements.
  • Sustainable Farming Technologies: Promoting sustainable farming practices for resilient crops and ecosystem protection was another key focus, with an emphasis on technology-driven solutions.

These technological initiatives have the potential to drive significant progress in combating desertification and enhancing drought resilience.

Cops Future Outlook

The future outlook of the UNCCD (United Nations Convention to Combat Desertification) after COP 16 in Riyadh is promising and ambitious in various respects along these directions:

  • Accelerating global efforts to restore degraded land by 2030
  • Enhancing drought resilience
  • Contributing to Sustainable Development Goals (SDGs)
  • Stressing Innovation and Technology role: Technology will play a crucial role in future UNCCD initiatives. Leveraging advancements in remote sensing, artificial intelligence, and sustainable farming practices will drive progress in combating desertification and land degradation.
  • Global Collaboration
  • People-Centered Approach: This involves engaging local communities, indigenous peoples, and youth in decision-making processes and ensuring that their needs and perspectives are considered.

The future outlook of the UNCCD after COP 16 will entail renewed commitment, innovation, and collaboration to address pressing environmental issues and promote sustainable land management.

In the context of environmental and climate change policies, COP is likely to be shaped by several key trends and priorities including:

  • Increased Ambition and Commitments: Future COPs will likely see countries setting more ambitious targets for reducing greenhouse gas emissions, enhancing climate resilience, and promoting sustainable development.
  • Focus on Implementation and Accountability: There will be a stronger emphasis on the implementation of commitments made at previous COPs.
  • Climate Finance: This involves increasing funding for mitigation and adaptation efforts, especially for developing countries. Innovative financial instruments and private sector engagement will play a key role in closing the climate finance gap.
  • Technology and Innovation: Future COPs will continue to highlight the importance of technology and innovation in addressing climate change. This includes the development and deployment of clean energy technologies, sustainable land management practices, and climate-smart agriculture.
  • Inclusive and Equitable Solutions: Ensuring that climate policies and actions are inclusive and equitable will be a priority.
  • Nature-Based Solutions: There will be a growing focus on nature-based solutions, such as reforestation, ecosystem restoration, and biodiversity conservation, as effective strategies for mitigating climate change and enhancing resilience.
  • Addressing Emerging Issues: New and emerging issues, such as climate-induced migration, loss and damage, and the intersection of climate change with health and security, will gain greater attention and require innovative solutions.
economy

Beneath the Surface: Uncovering Hidden Weaknesses in Today’s Global Economy

  • Global growth is fragile and uneven.
  • Hidden risks threaten economic stability worldwide.
  • Arab banks must act strategically and swiftly.

The global economy is presenting a paradox. On the surface, things seem to be looking up. Inflation has been easing, and overall growth is starting to gain momentum after a period of significant turbulence. Yet, beneath this seemingly optimistic exterior lie inconsistencies, weaknesses, and tension-filled dynamics that could disrupt progress. The situation demands a deeper analysis, especially for economists, bankers, and business leaders who seek to understand the broader picture and its implications for financial strategies in the Arab world.

Recent data from the Brookings-Financial Times Tracking Indexes for the Global Economic Recovery reveal that while global growth appears to be accelerating, it remains frail and uneven. The United States stands out as the most prominent driver, demonstrating robust economic performance, while many other regions are either stagnating or decelerating. The disparity among global economies has highlighted the unevenness of this recovery and raised questions about long-term stability.

In the United States, conditions are improving. Unemployment is at a low level, inflation continues to decline, and domestic demand remains strong. The labor market is experiencing substantial wage growth, and stock markets, anticipating healthy corporate earnings, are holding steady. All these factors paint a picture of sustained economic strength. Even the US Federal Reserve has the flexibility to continue cautiously reducing interest rates. However, the underlying narrative is not as rosy as it seems. Consumer confidence in the US remains tepid, reflecting dissatisfaction with economic conditions and uncertainty about future prospects. Moreover, the ballooning public debt poses a significant risk to economic stability, especially as political agendas appear set to exacerbate this issue.

Across the Atlantic, the eurozone struggles to find its footing. Germany, the region’s economic powerhouse, is battling high energy costs, aging industrial infrastructure, and a loss of export competitiveness, particularly against China. The challenges are compounded by stagnant productivity and rising fiscal pressures. France, too, is mired in economic uncertainty, with fiscal imbalances threatening to escalate into broader instability. The European Central Bank (ECB) has had to resort to further rate cuts to combat lackluster growth and declining inflation, but the dilemma is apparent: services inflation and wage growth remain persistently high, adding to the complexity of the economic situation.

The United Kingdom provides a mixed picture. While it has gained some economic traction, largely due to monetary policy easing, business investment is shrinking, productivity growth is lackluster, and fiscal risks cast a shadow over future prospects. Japan, on the other hand, has diverged from the trend. Its central bank has opted to raise interest rates in an attempt to support the yen and counter rising inflation. Yet, this move is unlikely to boost household consumption in a meaningful way.

China, a long-standing engine of global economic growth, is showing clear signs of strain. Despite new monetary and fiscal measures intended to stimulate the real estate and equity markets, deflationary pressures persist. Weak domestic demand and a battered private-sector confidence have undermined both household consumption and business investment. A lack of clear and consistent policy direction from the government has exacerbated these issues. The road ahead for China is fraught with difficulty, and turning the tide will require significant, well-targeted fiscal policy initiatives, such as income support for households and strategic tax reforms. At the same time, structural reforms aimed at boosting productivity and business confidence will be indispensable, but these will not be easy to implement.

Amid this uneven global landscape, India stands out as a beacon of strong economic performance. Infrastructure investment has been robust, and the rapid expansion of high-value-added manufacturing and services sectors has driven significant growth. Despite challenges such as high inflation and a weak agricultural sector, India’s financial markets have benefited from prudent fiscal and monetary policies. The country is also poised to gain from shifting global supply chains as major economies seek to reduce dependence on China. Meanwhile, nearby Indonesia is emerging as a stable performer, attracting foreign investors with a solid policy framework.

The situation in Latin America remains challenging. While Brazil and Mexico are poised for healthy growth, other countries in the region are grappling with budget deficits, unsustainable debt levels, exchange-rate volatility, and reduced demand from China. In contrast, Russia, though relatively resilient in the face of Western sanctions, is facing a grim long-term outlook due to its ongoing conflict with Ukraine.

Despite these complexities, the current period of relative global calm offers an opportunity for policymakers to address critical obstacles. Managing public finances responsibly, boosting household and business confidence, and creating policy frameworks that encourage productivity growth must become priorities. Concrete measures are needed to improve the functionality of labor, product, and financial markets.

Implications for Arab Banks and Economists: Crossing the Shifting Landscape

The complexities of the global economic environment have significant implications for financial institutions and policymakers in the Arab world. The region’s banks must brace themselves for volatility, while simultaneously seizing opportunities where they exist. The following recommendations can guide Arab bankers and CEOs as they navigate these economic currents:

  1. Strengthen Risk Management Frameworks: With uncertainties still looming large, Arab banks must prioritize robust risk assessment and management practices. Monitoring international debt levels and capital flows, as well as being prepared for sudden economic shifts, is essential.
  2. Invest in Productivity-Enhancing Technologies: As global economies grapple with productivity challenges, Arab financial institutions can get ahead by investing in technologies that enhance efficiency and service delivery. This could set a precedent for long-term growth and resilience.
  3. Diversify Investment Portfolios: Given the instability in some markets, diversification becomes even more critical. Exploring investments in high-performing economies like India and stable markets such as Indonesia could yield strong returns.
  4. Engage in Policy Advocacy: Collaborate with governments and policymakers to implement measures that promote business confidence and financial stability. Clear communication channels between the banking sector and policymakers can ensure that structural reforms have the desired effect.
  5. Monitor Geopolitical Developments: The global economic outlook is intricately linked to geopolitical tensions. Arab banks should keep a close watch on global trade dynamics and international policy shifts to make informed strategic decisions.
  6. Embrace Opportunities from Shifting Supply Chains: With major economies diversifying supply chains away from China, the Arab region could position itself as a strategic trade and investment hub. Capitalizing on this trend will require forward-thinking strategies and regional collaboration.

By staying vigilant and proactive, Arab banks and financial leaders can not only weather the uncertainties but also drive growth and innovation in a challenging global economy. The time to act is now, with a focus on sustainable, strategic, and forward-looking initiatives that safeguard long-term stability.

financ e 3

Rethinking Finance to Solve the World’s Pressing Issues

  • Global challenges demand innovative financial solutions.
  • Private investment is key to success.
  • Arab banks can lead with strategic finance.

Meeting Global Challenges Requires Financial Innovation

As we face a world marked by urgent and complex challenges, the demand for financial ingenuity has never been higher. Climate change threatens not just our environment but the stability of our financial systems. Meanwhile, developing economies continue to seek pathways to growth, often weighed down by financial vulnerabilities. It is a reality that economists, bankers, and decision-makers in the Arab world cannot afford to ignore.

The critical question at hand is: How can we mobilize the unprecedented levels of financial resources needed to address these global challenges? Public funds, constrained as they are by budgetary pressures, cannot carry this burden alone. In fact, the magnitude of the financial requirements extends far beyond the capacities of governments. Consequently, the involvement of private capital becomes imperative. However, attracting voluntary private investment calls for innovation and a fresh approach to financial instruments.

The Case for Multilateral Cooperation

We know that the challenges we face today are deeply interwoven. Climate-related risks, financial stability, and economic development do not exist in isolation but impact one another in complex ways. Multilateral cooperation, therefore, leads to more effective outcomes than fragmented national strategies. Institutions such as the United Nations, the International Monetary Fund, the World Bank, and the Financial Stability Board have delivered progress, but it has been inconsistent and insufficient.

For even the strongest advocates of multilateral efforts, it is evident that a more concerted and better-funded approach is necessary. We are at a point where traditional methods must give way to new financial models designed to attract private investors. And while multilateral institutions are essential players, the financial sector has a pivotal role to play, especially in the Arab world, where both opportunities and risks are unique.

Mobilizing Private Capital

The future lies in innovative financial tools that bridge the gap between enormous financial needs and the resources at hand. The Bretton Woods Committee has provided a framework for this. Their proposals, developed through specialized Working Groups, address the pressing need to attract private investment. Among these, state-contingent debt instruments (SCDIs) emerge as a promising avenue.

SCDIs present a practical and innovative solution. They adapt to the financial realities of the borrower, with repayment terms linked to the borrower’s economic performance or external conditions, such as climate impact. This design brings flexibility: If a country faces adverse conditions—say, a severe drought affecting agricultural exports—its debt obligations are adjusted accordingly. On the flip side, if the economic outcomes are better than expected, investors enjoy additional returns.

This dual benefit makes SCDIs particularly appealing in situations where the debtor’s ability to pay is influenced by factors beyond their control but can be measured accurately. For the Arab world, where economies are often impacted by fluctuations in oil prices, global commodity markets, or climate-related events, such instruments offer practical benefits.

Lessons from Value Recovery Instruments

Some forms of SCDIs have already been implemented with notable success. Value Recovery Instruments (VRIs) have been used by countries like Greece, Mexico, Suriname, and Zambia. VRIs offer lessons in both potential and the need for refinement. To truly maximize the benefits, these instruments must be designed with precision and clarity.

The Sovereign Debt Working Group of the Bretton Woods Committee has outlined areas for improvement. For one, “trigger events” that alter debt repayments must be defined explicitly and must genuinely reflect changes in a country’s ability to pay. The underlying metrics should be robust and directly related to the cash flows a sovereign borrower will have when the debt is due. In other words, any formula used must be grounded in measurable and reliable data.

Additionally, payout formulas should incentivize sound economic management rather than encourage complacency. The risk of moral hazard must be minimized. Embedding VRIs in fixed-income bonds can enhance their appeal by making them more liquid and attractive to a broader range of investors. Moreover, standardizing the documentation of SCDIs is vital. This reduces both the cost and risk associated with these instruments, paving the way for wider acceptance in the global financial market.

The Need for Continued Innovation

While SCDIs and VRIs represent significant progress, they are not a cure-all. Addressing global challenges will require a larger menu of financial innovations. The development of new instruments should be a priority, and financial markets must be prepared to adapt and respond to evolving global needs.

It is worth emphasizing that the Arab world, with its unique economic landscape, should take a proactive stance. Our economies face specific risks, such as exposure to energy price volatility and climate-driven changes. At the same time, there are ample opportunities for innovation, especially given the region’s increasing focus on sustainability and economic diversification.

Recommendations for Arab Banks and Financial Leaders

For bankers, chairmen, and CEOs in the Arab world, the time to act is now. It is crucial to engage with and understand these emerging financial instruments. Banks should consider how SCDIs can be incorporated into their portfolios, both as investment opportunities and as potential debt instruments for sovereign clients. Additionally, there is a need to support policies and frameworks that encourage financial innovation while maintaining market stability.

Arab financial institutions should also play an active role in global conversations on sustainable finance. Collaborating with multilateral organizations and exploring co-investment opportunities can amplify the region’s influence and ensure that our economies are better positioned to withstand future shocks.

In closing, the path forward requires a blend of caution and creativity. By embracing financial innovation and understanding its practical applications, Arab banks and financial leaders can contribute significantly to tackling global challenges while safeguarding regional economic stability. The world is watching, and our response will shape the future.

data 2

From Insight to Impact: Leveraging Data for Development Finance Success

  • Data can dramatically enhance financial efficiency.
  • Smart data use attracts vital private investment.
  • Investing in data yields extraordinary financial returns.

In a world where economic resources are increasingly stretched and traditional sources of finance are under immense pressure, a vital solution to development-finance challenges has been overlooked. For bankers, economists, and industry leaders across the Arab world, understanding and capitalizing on this solution could be the key to sustaining and even amplifying financial progress. This overlooked tool is not new but is rather an existing asset that requires a strategic approach: data. More specifically, leveraging advancements in data collection, analysis, and digital technology can reshape how capital is raised, managed, and distributed.

When world leaders and development specialists convened at a recent United Nations summit in Addis Ababa, Ethiopia, the conversation inevitably turned toward the pressing need for innovative finance strategies. Tight government budgets, looming debt crises, and the constant struggle to attract private investment cast a shadow over discussions, particularly concerning the economic futures of African and developing nations. But the dialogue highlighted an undeniable truth: the power of data remains largely underutilized.

Data’s Untapped Potential

Imagine if every Arab banking institution could optimize its financial models using real-time, highly accurate data. The United Nations’ Financing for Sustainable Development Report 2024 underlines a powerful concept: better data drive better finance. An investment in robust data systems can unlock new funding channels, optimize resource allocation, and bring much-needed efficiency to financial operations. As our world becomes more data-rich, so too do the opportunities to maximize financial outcomes.

The strategic use of data can unlock funds in three major areas: taxation, mobilization of private finance, and efficient resource allocation. These areas are crucial for meeting financial goals and driving economic progress in the Arab world, particularly as we strive to align with global development targets like the United Nations’ 2030 Sustainable Development Agenda.

Enhancing Taxation Through Data

One of the most pressing challenges governments face is establishing a sustainable source of revenue. Public services such as health and education cannot be delivered effectively without efficient taxation. Yet, for taxation to be fair and comprehensive, governments must have an accurate understanding of their citizens’ financial realities. This requires knowing where people live and how much they can afford to contribute.

In ancient times, tax collectors used clay tablets to record assets. Today, we have digital platforms that can handle this task with far greater efficiency. However, billions of people worldwide, including in some Arab regions, still lack a registered physical address. Investment in modern data systems can change this reality. A compelling example comes from a randomized trial in Ghana, where tax collectors equipped with advanced data-collection tools doubled tax revenues for local governments and created a more progressive system, ensuring that higher earners paid proportionally more. The implications for Arab economies are clear: modern data technology can revolutionize revenue generation, making tax systems both fairer and more efficient.

Mobilizing Private Investment

Data is equally crucial in mobilizing private-sector finance, a necessity for meeting ambitious development targets. The private sector often cites a lack of reliable data as a reason for hesitancy to invest in large-scale projects like digital infrastructure, sustainable transportation, or affordable housing. Without adequate data, investment decisions are based on speculation, making capital flows unpredictable.

Yet, the data do exist, albeit in fragmented and underutilized forms. For instance, in 2022, information provided by multilateral development banks (MDBs) was instrumental in setting up a $1 billion fund to draw private capital into sustainable investments. By refining and making these data more accessible, particularly at granular levels required by ratings agencies and investors, there is significant potential to stimulate private investment in vital economic sectors. This potential could be transformative for Arab economies, where private capital can play a crucial role in development.

Optimizing Resource Allocation

Finally, one cannot overlook the impact of data on the efficient allocation of resources. In a world where every dollar matters, relying on outdated or incomplete information can lead to wasteful expenditures. Reliable data, on the other hand, enable policymakers to prioritize spending based on actual needs and outcomes.

Consider Kenya’s use of data to tackle traffic fatalities. Using a blend of administrative and crowdsourced data, the authorities identified that half of all traffic casualties in Nairobi occurred on just 5% of the road network. By focusing on these high-risk areas, the government achieved much better results for their investment in road safety. The lesson here is clear: data-driven decision-making can optimize resource use, ensuring that investments yield the greatest possible impact.

In the Arab world, where infrastructure development and resource allocation are critical concerns, employing data-driven strategies can pave the way for more targeted and efficient projects. This is particularly relevant in sectors like healthcare, education, and transportation, where the right investments can have life-changing impacts.

The Way Forward: Investment in Data

What makes this all the more compelling is the return on investment. A recent study indicates that every dollar invested in data systems yields, on average, a $32 return. This is realized through increased tax revenues, enhanced private-sector investment, and more efficient resource use. With advances in artificial intelligence and other data-driven technologies, this return is likely to grow even further.

However, the onus is on governments, financial institutions, and private investors to make a deliberate commitment to data investment. This means more than just collecting data; it requires building integrated data systems, fostering cross-institutional data sharing, and developing public-sector skills to analyze and apply data effectively. This should be a strategic priority for Arab banks and governments, especially given the economic potential it holds for the region.

Recommendations for Arab Banks and Governments

For financial leaders in the Arab world, the call to action is clear. Firstly, invest in comprehensive data systems and digital infrastructure. These investments are not mere expenditures but assets that will drive future growth. Secondly, support policy frameworks that mandate efficient data-sharing practices across institutions. This will require coordination between public and private sectors, but the long-term benefits will be substantial. Lastly, build the analytical capacity within banking and government institutions to turn data insights into actionable strategies.

By prioritizing data-driven solutions, Arab banks and governments can not only unlock more financing but also deploy resources more effectively. In an era where every dollar counts, data is the key to smarter, more impactful financial strategies. The future of development finance is not about finding new resources but about using existing ones more wisely—and the data revolution is already here, waiting to be embraced.

Brics 3

The Future World Oder Shaped By 2024 BRICS and Euro-Gulf Summits

BY DR SOHA MAAD

Introduction

A new world order is emerging following the Euro-Gulf and BRICS (Brazil, Russia, India, China, and South Africa) summits held in 2024. Below we overview these summits and their final declaration, we assess their impacts, and highlight their major controversies.

We conclude with an outlook on the future world order shaped by the Euro-Gulf and BRICS summits and we put forward a roadmap for Arab banks in light of this new evolving world order.    

Euro Gulf Summit 2024 Overview and Declarations

The first-ever Euro-Gulf Summit took place on October 16, 2024, in Brussels. This summit brought together leaders from the European Union (EU) and the Gulf Cooperation Council (GCC) countries to discuss a wide range of issues, including trade, energy, climate change, and regional security. The summit aimed to strengthen cooperation and build a strategic partnership for peace and prosperity.

The final declaration of the Euro-Gulf Summit 2024 focused on building a Strategic Partnership for Peace and Prosperity. The key points from the declaration are:

  • Trade and Economic Cooperation: Both parties reaffirmed their commitment to enhancing trade and investment partnerships. They discussed the potential for a regional EU-GCC free trade agreement and explored tailor-made trade and investment agreements.
  • Energy Cooperation: The EU and GCC committed to intensifying their cooperation on energy security, including energy efficiency and renewable energies.
  • Regional Security: Leaders emphasized the importance of promoting global and regional security, preventing conflicts, and resolving crises through enhanced dialogue and coordination.
  • Humanitarian Efforts: The summit called for an immediate ceasefire in Gaza and Lebanon, and stressed the need for humanitarian access.
  • Multilateral Cooperation: The summit highlighted the need to work together to tackle global challenges and support multilateralism.

The summit was co-chaired by European Council President Charles Michel and Qatari Emir Sheikh Tamim bin Hamad Al Thani. It was seen as a significant step towards deepening the partnership between the EU and GCC.

Impact of Euro Gulf Summit 2024

The EU and GCC are currently among the most significant global blocs, given their vast capabilities and resources. Together, they represent a huge economic power, accounting for over 20% of the world’s gross domestic product (GDP). From a geostrategic perspective, the EU is an important and influential international power globally, considering its significant military capabilities and the technological and economic development level of its 27 member states, as well as its large population of over 450 million, making it the third-largest bloc worldwide. These capabilities enable the EU to play a leading role in addressing security, military, political, economic, and climate challenges facing Europe and the world.

Likewise, GCC countries are gaining increasing international importance, not only due to their significant economic potential and their position as a main source of fossil fuel globally but also due to their growing political role on regional and international levels. They have become active players and reliable partners for all international powers in facing major global challenges and crises.

The Euro-Gulf Summit 2024 was seen as a significant step towards deepening the partnership between the EU and GCC, with a focus on peace, prosperity, and addressing global challenges.

Euro Gulf Summit 2024 Controversies

The Euro-Gulf Summit 2024 did face some controversies and criticisms:

Double Standards: Critics from the Global South pointed out that while EU nations repeatedly called out Russia over violations of international law in the Ukraine conflict, they failed to apply the same standards in war in Gaza. This led to accusations of double standards in the EU’s approach to international conflicts.

Middle East Crisis: The summit took place amid an extremely dangerous escalation in the Middle East, with conflicts in Gaza and Lebanon dominating the agenda. While the EU and GCC leaders called for an immediate ceasefire and humanitarian access, some critics felt that the summit did not go far enough in addressing the root causes of these conflicts.

Humanitarian Concerns: There were concerns about the effectiveness of humanitarian measures and whether they would be implemented in practice.

Geopolitical Tensions: The summit highlighted the geopolitical tensions between the EU and GCC countries, particularly in relation to Russia’s war against Ukraine and the broader regional security issues.

These controversies underscore the complexities and challenges of fostering a strategic partnership between the EU and GCC countries.

BRICS 2024 Overview and Declarations

The 16th BRICS Summit took place in Kazan, Russia, from 22 to 24 October 2024, under the theme “Strengthening Multilateralism for Just Global Development and Security”. The summit brought together leaders from Brazil, Russia, India, China, and South Africa (BRICS) to discuss key global issues and strengthen their strategic partnerships.

Key points from the Kazan final declaration are:

Multilateralism and International Law: BRICS leaders reaffirmed their commitment to multilateralism and upholding international law, including the principles enshrined in the United Nation (UN) Charter.

Global Security: The declaration emphasized the importance of promoting global and regional security, preventing conflicts, and resolving crises through dialogue and diplomacy.

Economic Cooperation: The summit highlighted the need to reform the international financial architecture to make it more inclusive and just. This includes initiatives like the BRICS Grain Exchange and the BRICS Cross-Border Payment System.

Humanitarian Efforts: Leaders expressed grave concern over the humanitarian crises in the Occupied Palestinian Territory and Southern Lebanon, calling for immediate ceasefires and humanitarian access.

BRICS Plus: The summit included an “outreach” dialogue with emerging markets and developing countries (EMDCs) from Africa, Asia, Europe, Latin America, and the Middle East, under the theme of “BRICS and Global South: Building a Better World Together”.

The summit was seen as a significant step towards deepening the partnership between BRICS countries and promoting a more representative and fairer international order.

BRICS 2024 Impact

The BRICS 2024 Summit had several significant impacts on both the member countries and the global stage:

  • Economic Influence: With the addition of new members like Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates UAE, BRICS now represents nearly half of the world’s population and a significant portion of global GDP. This expansion strengthens BRICS’ position as a counterbalance to Western economic dominance.
  • Energy Security: The summit emphasized the importance of energy security and cooperation among member countries. This includes initiatives to develop alternative energy sources and reduce dependence on western energy markets.
  • Financial Independence: BRICS countries discussed reducing reliance on western financial systems, such as the United States US dollar and SWIFT (Society for Worldwide Interbank Financial Telecommunications) payment network. This includes promoting the use of national currencies for trade transactions and developing new financial institutions.
  • Global Security: The summit highlighted the need for global and regional security, with a focus on preventing conflicts and resolving crises through dialogue and diplomacy. This includes addressing humanitarian crises in regions like Gaza and Lebanon.
  • Multilateral Cooperation: BRICS emphasized the importance of multilateralism and cooperation among emerging markets and developing countries. This includes building new institutions and mechanisms to support global development and security.

The BRICS 2024 Summit showcased the bloc’s growing influence and its commitment to empower a more multipolar and just global order.

BRICS Expansion

The BRICS 2024 Summit marked a significant expansion of the bloc. The summit welcomed six new members: Egypt, Ethiopia, Iran, Saudi Arabia, the United Arab Emirates (UAE), and Argentina. This expansion brings BRICS’ membership to a total of 13 new countries, including Algeria, Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Nigeria, Thailand, Turkey, Uganda, and Vietnam.

This expansion is seen as a move to strengthen BRICS’ influence and create a more representative and inclusive global order. The new members are expected to contribute to the bloc’s economic, political, and strategic goals, further diversifying its capabilities and reach.

BRICS 2024 Controversies

The BRICS 2024 Summit faced several controversies and criticisms. The inclusion of Iran and the expansion of BRICS were seen by some western observers as a move to counter western influence and strengthen a multipolar world order. This raised concerns about the bloc’s alignment and potential geopolitical conflicts. Despite the expansion, there were disparities among the member states’ ambitions and priorities. The lack of substantial developments on core topics highlighted these differences, raising questions about the bloc’s unity and shared goals. Many western observers viewed BRICS as an increasingly anti-western organization, especially given the summit’s location in Russia and the inclusion of Iran as a full member. This led to accusations of double standards in addressing international conflicts.

The BRICS bloc faced challenges in reaching a workable economic and monetary consensus. The members did not share the political will to make this consensus a reality, which hindered progress on key economic initiatives. Moreover, the expansion raised questions about BRICS’ identity and shared values. The bloc’s diverse membership and varying political systems made it difficult to establish a unified vision and purpose.

These controversies underscore the complexities and challenges of fostering a cohesive and effective partnership among BRICS countries.

The Geoploitics of BRICS 2024

The geopolitics of BRICS in 2024 are complex and multifaceted, reflecting the bloc’s growing influence and the shifting global power dynamics. BRICS is seen as a driving force behind the transition to a multipolar world order by expanding its membership and strengthening its economic and political ties. BRICS emphasizes the importance of global and regional security, advocating for peaceful resolution of conflicts and coordinated international responses. The bloc’s commitment to multilateralism and international law is seen as a way to address global crises and promote stability.

The expansion of BRICS has brought together a diverse group of countries with varying political systems and economic interests. This diversity presents both opportunities and challenges for the bloc, as it seeks to maintain unity and coherence in its strategic agenda. The geopolitics of BRICS in 2024 reflect the bloc’s efforts to reshape the global order and promote a more inclusive and equitable international system.

World Order Following BRICS And EU Summits 2024

The BRICS and EU summits in 2024 have significantly influenced the global world order, highlighting a shift towards a more multipolar world.

The expansion of BRICS and the strengthening of EU-GCC ties indicate a move away from a unipolar world. This shift promotes a more balanced global power structure, with emerging markets and developing countries gaining greater influence.

The summits highlighted the need for energy security and cooperation. This includes developing alternative energy sources.

Both summits addressed global security issues, with BRICS focusing on preventing conflicts and resolving crises through dialogue and diplomacy, and the EU-GCC summit emphasizing regional security and humanitarian efforts.

The EU-GCC summit called for immediate ceasefires and humanitarian access in conflict zones, while BRICS expressed concern over humanitarian crises and emphasized the need for multilateral cooperation.

These summits reflect a growing trend towards a more inclusive and multipolar world order, with emerging markets and developing countries playing a more significant role in global governance.

Roadmap For Arab Banks In The New World Order

In light of the final declarations and impact of the BRICS and EU-Gulf summits held in 2024, the Union of Arab Banks suggests a new roadmap for Arab banks, focusing on several key areas:

  • Economic Diversification: Arab banks are encouraged to diversify their economies, reducing reliance on oil revenues.
  • Financial Independence: There is a push towards reducing dependence on western financial systems, including exploring alternative currencies and payment systems.
  • Sustainable Finance: Arab banks should adopt sustainable financial practices, aligning with global standards for environmental and social sustainability.
  • Financial Digital Transformation: Embracing digital transformation in the financial sector is crucial.
  • Regional Cooperation: Strengthening economic and trade ties within the region and with BRICS countries is a priority. This includes exploring new trade agreements and investment opportunities.
  • Energy Security: Collaborating on energy security initiatives, including renewable energy projects and energy efficiency measures, is essential for long-term sustainability.
  • Humanitarian Efforts: Arab banks are also expected to play a role in supporting humanitarian efforts, particularly in conflict zones, by facilitating financial aid and development projects.

These steps aim to position Arab banks as key players in a more multipolar and resilient global financial system.

76A.+collective+intelligence

Harnessing Collective Intelligence for Inclusive Growth in the Arab Financial Sector

Collective intelligence drives inclusive economic growth.

Redefine value creation for all stakeholders.

Ensure equitable rewards from innovation efforts.

In today’s rapidly evolving global economy, the concept of collective intelligence is gaining significant traction. It represents the culmination of efforts from diverse individuals and groups collaborating to tackle complex challenges, driving innovation and economic growth. However, as this notion becomes more widely accepted, it is imperative to critically examine who truly benefits from these collaborative efforts and how the rewards are distributed. This is particularly relevant for the financial and economic sectors in the Arab world, where the implications of collective intelligence are far-reaching.

For decades, economic activity has been structured in a way that socializes risks while privatizing gains. This approach, which has long been ingrained in policymaking, disproportionately favors shareholders at the expense of other stakeholders, including workers, taxpayers, and the communities in which businesses operate. As bankers, economists, and business leaders, it is crucial to recognize that this model is unsustainable. The Arab world, with its rich history of commerce and trade, must now reconsider the narratives surrounding value creation to ensure that innovation benefits all stakeholders, not just a select few.

Collective intelligence is often portrayed as the driving force behind the knowledge economy, where diverse minds come together to foster continuous experimentation and innovation. This romanticized view, however, obscures the true nature of collaboration. It begs the question: who is genuinely creating value, and how are the rewards of this value creation being shared? In many instances, those who contribute significantly to innovation, such as labor and the state, are overlooked or dismissed. The traditional framing of the private sector as the sole value creator, with the state relegated to a role of de-risker or impediment, is both misleading and detrimental.

In the Arab financial sector, this issue is particularly pertinent. The role of the state in driving innovation is often underestimated, despite its critical contributions. Consider, for example, the development of mRNA COVID-19 vaccines, which were significantly funded by public investment. This illustrates the need to reframe the narrative around value creation, recognizing that innovation is a collective effort that involves multiple stakeholders, including the state.

To ensure that innovation benefits all stakeholders, it is essential to move beyond mere rhetoric and implement tangible changes in how profits are distributed. One of the most pressing issues is the allocation of profits, which should be reinvested in the real economy rather than being funneled into share buybacks or tax havens. Between 2010 and 2019, share buybacks in the US alone totaled $6.3 trillion, diverting resources that could have been used to drive further innovation and economic growth. Additionally, tax havens collectively cost governments between $500 and $600 billion annually in lost corporate-tax revenue, depriving all stakeholders of the benefits of collective intelligence and collaboration.

In the context of the Arab world, where economic diversification is a key priority, it is vital to address these issues head-on. To do so, one must first understand how collective intelligence contributes to value creation. Collaboration thrives on knowledge sharing, yet the privatization of knowledge and research often hinders this process. While intellectual-property rights are necessary to incentivize investment and innovation, they can also be abused if they are too broad or too strong. This can lead to technologies becoming inaccessible, stifling discovery and innovation.

Patents, particularly in sectors such as medicine and technology, must be negotiated with a view toward promoting the common good. Rather than serving solely as a tool to address market failures, patents should be seen as part of a broader knowledge-governance system that facilitates innovation while ensuring that the rewards are distributed equitably. For the Arab financial sector, this approach could significantly enhance the region’s ability to compete on a global scale, fostering a more inclusive and sustainable model of economic growth.

A genuine collective-intelligence framework would ensure that the rewards of innovation are shared more broadly, reflecting the collective effort that went into creating them. This could take the form of profit-sharing or equity schemes, where the monetary rewards are distributed among all contributors. Alternatively, it could involve making knowledge more widely accessible or ensuring that the prices of final products reflect the collective investment that made them possible.

For instance, in the renewable energy sector, many companies benefit from generous tax incentives, which effectively means that the public is subsidizing their profit margins without sharing in the gains. In the digital domain, a common-good approach would ensure that new technologies, such as artificial intelligence, create opportunities for public value creation, rather than simply enriching a few private entities. The Arab world, with its growing interest in AI and digital transformation, should consider adopting such an approach to ensure that technological advancements benefit all stakeholders.

Voice and representation are also critical components of a successful collective-intelligence framework. In many cases, policy outcomes are distorted by those with the loudest voices, often those with the most resources to influence decision-making processes. This can lead to policies that serve narrow interests rather than the common good. In the Arab financial sector, where decisions often have far-reaching implications for the broader economy, it is essential to ensure that all stakeholders have a seat at the table.

As Arab banks and financial institutions pilot these challenges, there are several key recommendations they should consider. First and foremost, they must recognize the importance of collective intelligence in driving innovation and economic growth. This means moving beyond the traditional view of value creation and embracing a more inclusive model that benefits all stakeholders. Additionally, banks should advocate for policies that promote the reinvestment of profits into the real economy, rather than allowing them to be diverted into share buybacks or tax havens.

Furthermore, Arab banks should play a proactive role in shaping the governance of intellectual property and knowledge sharing. By advocating for a more balanced approach to patents and other forms of intellectual property, they can help ensure that innovation remains accessible and that its rewards are distributed equitably. Finally, banks should work to amplify the voices of all stakeholders, ensuring that decision-making processes reflect the diverse perspectives and interests of the communities they serve.

In conclusion, the financial sector in the Arab world has a unique opportunity to lead the way in embracing collective intelligence as a driver of innovation and economic growth. By adopting a common-good framework, Arab banks and financial institutions can help build a more inclusive and sustainable future for the region. The time for action is now, and the rewards of doing so will benefit not just shareholders, but all stakeholders in the Arab world and beyond.

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