Female labor force participation levels in Arab countries are the lowest in the world—despite the rising educational attainment of women reaching working age.
Indeed, young women across the Arab world exceed the education levels of young men, who are worrisomely falling behind.
Remedying the under-representation of Arab women in the labor force and reviving the educational motivation of young men are both social and economic imperatives.
The changes in the labor market have often come on the heels of big social movements—not unlike those in 2011 at the onset the Arab Spring and today in Sudan, Algeria and Egypt.
In all of them men and women demonstrated hand-in-hand for more social and economic freedom.
To realize the potential of Arab women, three dimensions should be acted upon.
First countries must amend laws and regulations that have discriminated against female labor force participation and women’s basic economic rights.
In recent decades, some countries in the Arab world have made strides in adopting legislations that went against the social tide and shook up centuries of old, legal impediments to women’s rights.
A number of other countries followed suit including Saudi Arabia which most recently allowed women to drive and travel more freely.
These changes are urgently needed, as these laws are often a pretext to discriminate against women, including in lagging areas.
Changing laws though, does not necessarily immediately change behavior.
Even as laws and regulations change, women, including those who are highly educated, encounter very few opportunities in the formal sector because rising debt levels and anemic growth result in shrinking public employment.
That means most employment opportunities for women are in the informal sector, which is perceived as unsafe and has very few social protections.
The failure of public transportation in many countries in the region has become a key impediment to freedom of movement for women.
Second, countries must instill fair competition in markets. Although this does not directly target discrimination against women, it speaks to a fundamental flaw in Arab economies: their inability to generate good jobs and to integrate women in its labor force that is the result of almost impenetrable barriers to firms entering or leaving crucial markets — or, as economists put it, the lack of contestability.
These economies have favored incumbent firms, whether private sector or state-owned. The lack of contestability leads to cronyism and what amounts to rent-seeking activities, which have little thirst for talent and investment, including research and development.
International financial institutions, donor countries and other development partners can help Arab countries, not only by supporting changes in laws and regulations, but also by helping them move to modern, digitized economies.
In a coordinated fashion they should raise the issues of contestability and of associated credible and independent local bodies to promote competition as a necessary step toward building more inclusive societies.
Arab countries are in the middle of massive social and economic transitions.
Empowering women is at the heart of both these transitions. To succeed, Arab countries should make a whole-hearted effort in laws and regulations, competition, and technology.