Women returning to the workforce following a career break have the potential to contribute nearly $385 billion to aggregate gross domestic product of nine countries in the Middle East and North Africa region, according to PwC Middle East.
This indicates a “significant” economic potential, if organisations can adopt “supportive” measures to ensure a smooth transition for women back into the workforce, the consultancy said in its latest report.
The survey of 1,200 women across the UAE, Saudi Arabia, Qatar, Egypt, Bahrain, Jordan, Kuwait, Lebanon, and Oman found that nearly half of women in the Mena region have taken career breaks, typically due to family and caregiving responsibilities.
More than two thirds of those women have job experience on higher than entry-level posts, and more than 82 per cent of those who re-entered the workforce said they aim to advance their careers to senior positions.
In recent years, countries in the broader Mena region have experienced a rise in women's participation in the workforce. The World Bank said last November that the GCC countries in particular have witnessed "a remarkable increase" in female labour force participation as the region seeks to rapidly empower its non-oil sectors.
According to the International Monetary Fund, the GCC has increased its average female labour force participation by more than 10 per cent over the past two decades.
However, women’s role in economic activities still falls short when compared to countries with a similar GDP per capita.
PwC said nearly half of those surveyed said they had had job applications rejected due to gaps in their resumes.
Returning to the workforce poses challenges such as employer stigma, inflexible working arrangements and the risk of slower career progression or reduced earnings due to being “mommy tracked”, the report said.
Survey findings indicated that longer periods of unemployment made re-entry more difficult.
“Women returning to work face obstacles to career advancement as employers do not view career breaks favourably, which results in negative impact on earnings and career progression,” said Norma Taki, a Middle East inclusion and diversity leader, transaction services partner and consumer markets leader at PwC.
“However, career breaks can offer profound personal growth opportunities,” Ms Taki said.
PwC said that providing alternative work models such as flexi or remote working can help women balance their work and home responsibilities in a way that suits them.
Allowing women to work additional hours by granting them flexibility could also lead to GDP gains of up to $4.3 billion, the report said.
“To encourage women to return to the workforce, it's important to have more equitable parental leave policies, along with well-designed returnship programmes,” PwC said.
“Businesses must also address the risk of unconscious bias by implementing inclusive workplace policies and training for teams, leaders, and talent acquisition,” the report added.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Like a Fading Shadow
Antonio Muñoz Molina
Translated from the Spanish by Camilo A. Ramirez
Tuskar Rock Press (pp. 310)