Författare: Amr Saber Algarhi Senior Lecturer in Economics Sheffield Hal

When you think of modern, oil-rich Gulf states like Saudi Arabia, Qatar and the United Arab Emirates (UAE), you may picture a life of luxury. But beneath the shots of towering skyscrapers and splendid grand malls, there is a concerning reality: women are frequently missing from the economic picture.

Even though birthrates seem normal, with about 96 baby girls born for every 100 baby boys, a dramatic shift occurs in adulthood. For every 100 men in the Gulf, there are only 58 women. Qatar presents the most extreme case, with just 38 women per every 100 men.

This imbalance is caused primarily by an influx of workers from abroad. In certain Gulf states, foreign workers make up as much as 95% of the workforce, and most of these are men.

Nobel laureate and economist Amartya Sen developed the term “missing women” in 1990 to describe populations where women are demographically underrepresented. Our calculations, which use data from the World Bank on the global average gender ratio, suggest that approximately 13 million women are “missing” in total from the Gulf states.

A figure showing that in 2022, there are fewer than 80 women for every 100 men in Gulf countries, with Qatar having the lowest ratio.
Amr Saber Algarhi & Konstantinos Lagos / World Bank, CC BY-NC-ND

The roots of this gender imbalance are deeply entangled in the region’s cultural traditions. Despite recent reforms, many Gulf countries still maintain guardianship laws that require women to obtain male permission for basic rights like getting married, launching certain types of business, or catching a flight.

On top of that, cultural norms often confine women to household duties, which severely limits their opportunities to get a job.

This is not to say no women manage to secure employment – 40% of working-age women in the Gulf currently have a job. However, those that are in employment often receive smaller salaries than their male colleagues, partly because they are not expected to be breadwinners.

Research has also found that in-work training remains largely inaccessible to women. Many employers in the region are reluctant to invest in women’s professional growth, fearing they may leave work for family reasons.

Holding their economies back

The economic cost of keeping millions of women out of the workplace is huge. One study from 2013 found that removing barriers to women’s employment could boost growth significantly in south Mediterranean countries.

A higher number of people in the workforce can make wages more competitive, which helps businesses sell their products abroad more easily. And having more people in work means more spending and greater business investment too.

Indeed, a report from 2015 by American consulting firm, McKinsey & Company, found that improving women’s equality could add an estimated US$600 billion (£459 billion) to annual GDP in the Middle East and North Africa region by 2025, compared with a business-as-usual scenario.

By sidelining educated women, Gulf economies are also depriving themselves of fresh insights crucial for diversifying beyond oil. Recent research on the Gulf region suggests that having more gender diversity in the workplace leads to better financial decisions.

And restricting female employment exacerbates the Gulf’s heavy reliance on foreign workers. Migrants send much of what they earn back home, representing a substantial drain on Gulf economies. According to the World Bank, remittances from Gulf states amounted to US$669 billion in 2023.

The economic cost of keeping women out of the workplace in the Gulf is huge.
oneinchpunch / Shutterstock

Despite the deep-rooted obstacles that woman face, change is on the horizon. The UAE, for example, has achieved gender equality at the parliamentary level. And Saudi Arabia lifted its longstanding driving ban on women in 2019, which should increase their mobility and potentially their job prospects too.

Several Gulf countries are appointing women to senior government positions, offering visible examples of female success. For instance, Shihana Alazzaz was appointed deputy secretary-general of the council of ministers in Saudi Arabia in 2022, becoming the first woman to hold the position.

And women in the Gulf are building a strong talent pipeline, as they currently make up the majority of university students in the region.

The judicial system is also evolving, with Bahrain and Qatar both allowing women to work as judges. And the private sector is introducing initiatives to empower women, as well as offering more flexible working options.

Economic necessity will arguably speed up the pace of change, as Gulf countries wrestle with the need to diversify their economies beyond oil. However, the entrenched cultural norms and lingering legal hurdles that continue to hinder women’s full economic engagement still render these advancements incomplete.

Cultural norms still often confine women in the Gulf to household duties.
Vladimir Zhoga / Shutterstock

Bringing the missing women into the workforce requires a committed and comprehensive strategy. Legal reforms must dismantle the remaining guardianship laws and cement workplace safeguards. And education and training programmes need to align women’s skills with market demands, as well as providing targeted development opportunities.

A broader cultural shift is also essential, challenging traditional gender roles through the media, education and public dialogue. And workplace policies need upgrading, in order to incorporate family-friendly practices and transparent career advancement paths for women.

Economic incentives such as government grants or tax reliefs for firms achieving gender diversity targets could accelerate this shift.

The towering skylines of Gulf cities are a testament to rapid progress. Yet genuine advancement should not be measured in concrete and steel, but in the opportunities available to all citizens. The challenge now is to build economies that harness the talent of both sexes when driving innovation, growth and societal development. Läs mer…

After 11 months of war, Israel is facing its biggest economic challenge in years. Data shows that Israel’s economy is experiencing the sharpest slowdown among the wealthiest countries of the Organisation for Economic Cooperation and Development (OECD).

Its GDP contracted by 4.1% in the weeks after the October 7 Hamas-led attacks. And the downturn continued into 2024, falling by an additional 1.1% and 1.4% in the first two quarters.

This situation will not have been helped by a nationwide strike on September 1 that, albeit very briefly, brought the country’s economy to a standstill amid widespread public anger at the government’s handling of the war.

A graph showing the quarterly GDP growth for several OECD countries alongside the OECD average. Israel exhibits the most extreme fluctuation, with a sharp decline between October and December 2023.
Amr Saber Algarhi & Konstantinos Lagos / OECD, CC BY-ND

Israel’s economic challenges, of course, pale in comparison to the complete destruction of the economy in Gaza. But the prolonged war is still hurting Israeli finances, business investments and consumer confidence.

Israel’s economy was growing fast before the start of the war, thanks largely to its technology sector. The country’s annual GDP per capita rose by 6.8% in 2021 and 4.8% in 2022, much more than in most western countries.

But things have since changed dramatically. In its July 2024 forecast, the Bank of Israel revised its growth predictions to 1.5% for 2024, down from the 2.8% it had predicted earlier in the year.

With the fighting in Gaza showing no sign of letting up, and the conflict with Hezbollah on the Lebanese border intensifying, the Bank of Israel has estimated that the war’s cost will reach US$67 billion by 2025. Even with a US$14.5 billion military aid package from the US, Israel’s finances may not be enough to cover these expenses.

This means that Israel will face tough choices about how to allocate its resources. It might, for instance, need to cut spending in some areas of the economy or take on more debt. More borrowing will make loan repayments larger and more costly to service in the future.

Israel’s deteriorating fiscal situation has prompted big credit rating agencies to downgrade the country’s status. Fitch lowered Israel’s credit score from A+ to A in August on the grounds that an increase in its military spending had contributed to a widening of the fiscal deficit to 7.8% of GDP in 2024, up from 4.1% the year before.

It could also potentially jeopardise Israel’s ability to maintain its current military strategy. This strategy, which involves sustained operations in Gaza aimed at destroying Hamas, requires boots on the ground, advanced weaponry and constant logistical support – all of which come at a great financial cost.

Israel’s military expenditure has consistently been the highest in the Middle East region.
Amr Saber Alarhi & Konstantinos Lagos / SIPRI Military Expenditure Database, CC BY-NC-ND

Aside from macroeconomic indicators, the war has had a profound impact on specific sectors of Israel’s economy. The construction sector, for example, slowed down by nearly a third in the first two months of the war. And agriculture has taken a hit, too, with production down by a quarter in some areas.

Roughly 360,000 reservists were called up at the start of the war – though many have since returned home. More than 120,000 Israeli have been forced from their homes in border areas. And 140,000 Palestinian workers from the West Bank have not been allowed to enter Israel since the October 7 attacks.

The Israeli government has sought to fill the gap by bringing in workers from India and Sri Lanka. However, many key jobs are bound to remain unfilled.

It is estimated that up to 60,000 Israeli companies may have to close in 2024 due to staff shortages, supply chain disruptions and waning business confidence, while many companies are postponing new projects.

Tourism, although not a key part of Israel’s economy, has also been severely affected. Tourist numbers have dropped dramatically since the start of the war, with one in ten hotels across the country now facing the prospect of shutting down.

How this war affects the wider region

The war may have battered Israel’s economy. But the effect on the Palestinian economy has been far worse and will take years to repair.

Many Palestinians living in the West Bank have lost their jobs in Israel. And Israel’s decision to hold back most of the tax revenue it collects on behalf of Palestinians has left the Palestinian Authority strapped for cash.

Read more:
How Israel has brought the Palestinian Authority to the brink of financial collapse

Palestinian workers crossing into Israel for work in September 2023.
Anas-Mohammed / Shutterstock

Trade in Gaza has also ground to a halt, which means many Palestinians now rely on aid. While, at the same time, vital communication channels have been cut off and crucial infrastructure has been destroyed.

The effects of the war have stretched beyond just Israel and Palestine. In April, the International Monetary Fund said it expected growth in the Middle East to be “lacklustre” in 2024, at just 2.6%. It cited the uncertainty triggered by the war in Gaza and the threat of a full-blown regional conflict as the reason.

A flare-up in violence in Gaza has inflicted economic damage on an even wider scale than this before. Israel’s bombardment of Gaza in 2008, for example, pushed up the price of oil by nearly 8% and caused concern for markets all over the world.

Israel’s war in Gaza, which is fast approaching its first anniversary, is taking a heavy economic toll. Only a permanent ceasefire can repair the damage and pave the way for recovery in Israel, Palestine and the wider region. Läs mer…

The economic world recently turned its attention to the resort of Jackson Hole, in a remote Wyoming valley. The annual economic policy symposium of central bankers, policymakers, academics and financial gurus took place in this unlikely spot, producing outcomes that hold significant implications for economies worldwide.

This year’s focus on the effectiveness of monetary policy was timely, as countries grapple with economic challenges like rising living costs, high interest rates, a slowdown in hiring and sluggish economic recovery. Central banks are pivotal in responding to these challenges.

They play a huge role in keeping their countries’ monetary policy on track and serve as the linchpins of economic wellbeing. Their primary goals include curbing price fluctuations, tempering interest rate surges, boosting economic growth and safeguarding the stability of both financial systems and currency markets.

As such, the decisions of central banks like the US Federal Reserve (the Fed) bear significant weight. This is not only because they affect economic activity, but also because they can cause ripples far and wide in the interconnected global economy.

The Fed chair Jerome Powell grabbed the event’s spotlight with a speech signalling a change in US monetary policy. In the address, he made one thing clear: the Fed stands ready to cut US interest rates in September.

Central bank independence

Even though the lessons learned from tackling the most recent inflationary surge lay at the heart of the speech, Powell also alluded to a crucial but sometimes overlooked point – the issue of central bank independence.

This is often taken for granted. But as Powell implied, in order to ensure a successful monetary policy through a sound central bank operation, independence from political influence is key.

However, not everyone supports this approach. Some argue that having a completely independent central bank removes an important economic tool from democratic control and gives unelected officials too much power. In fact, the actions of monetary authorities and the principle of central bank independence, in particular that of the Fed, has been challenged numerous times – especially under the Trump administration.

Within this context, and with the US presidential election looming, the debate over central bank independence becomes even more crucial.

US presidential candidates Kamala Harris and Donald Trump each have their own hopes for what the Fed will do with interest rates in September. Both see the independence of the Fed very differently.

Harris, representing the current administration, most probably favours a swift reduction in rates. Lower rates could help businesses grow and might keep the economy from hitting a rough patch. She is also strongly against any proposal that gives the US president control over interest rate decisions, emphasising the importance of the Fed’s autonomy.

Trump, on the other hand, may have different views. He has suggested that economic instability might sway undecided voters towards his camp. And he has openly declared that the US president should be able to have a say on the Fed’s interest rate decisions.

However, these political preferences or the perceived effect of the Fed’s decisions on one party or the other should not affect the central bank’s choices. There are a lot of good reasons for this.

When central banks are free to make decisions based on long-term economic needs rather than short-term political gain, they can implement policies that, though unpopular at first, benefit the economy over time.

Central bank independence is also important for enhancing credibility and stability in the financial system. When businesses and investors perceive central banks as impartial decision-makers, they are more inclined to trust them when they claim they act in the best interest of the economy.

Finally, being able to make independent decisions also enforces accountability, which can in turn prevent potential reckless decision-making. This is why maintaining independence is crucial.

Why Jackson Hole matters

So why are the decisions made at events like Jackson Hole important? Central bank decisions on monetary policies will affect the economic conditions for everyone, but perhaps none more than young people. From job searches and the salaries on offer to buying a house or paying back student loans, most aspects of their lives will be affected by policy moves.

Jerome Powell delivers his keynote speech for 2024 at Jackson Hole.

Understanding the basics about central banking, monetary policy and global economic interdependence can help people make informed decisions and engage meaningfully in public debates on economic matters. In this context, young adults in particular have a vested interest in these policy discussions, as emerging voters and economic participants who can shape the future economic landscape.

Though the Jackson Hole gathering amid the beautiful Wyoming mountainscape might appear detached from everyday life, it addresses pivotal questions about maintaining economic stability and fostering prosperity in uncertain times.

Staying abreast of these matters is important because, given the fluid and interconnected nature of the global economy, the implications of decisions made at these events cascade through society.

And ultimately, they will affect everything from the price of a cup of coffee to the feasibility of owning your own home. Läs mer…