The World Bank has released a new flagship report examining the profound changes underway in the Middle East and North Africa (MENA) region. The report, titled "Embracing and Shaping Change: Human Development for a Middle East & North Africa Region in Transition," addresses how three global megatrends—population ageing, climate change, and technological disruption—are reshaping the region against a backdrop of economic stagnation, debt distress, fragility, and rising income inequality.
According to the World Bank, while MENA countries have historically viewed themselves as youthful societies, they are set to experience demographic transition more quickly than other regions over the next 30 years. This shift is driven by increasing life expectancy and falling fertility rates. The region is also highly vulnerable to climate risks such as rising temperatures, water scarcity, sea-level rise, and natural disasters. Additionally, there is uncertainty about how rapid technological changes—including artificial intelligence—will affect labor markets and education systems across countries with varying levels of digital readiness.
The report emphasizes that these trends do not dictate fixed outcomes for the region. Instead, governments can shape their impact through policies that focus on health, education, and social protection. "Their impacts are not fixed destinies—they can be shaped through smart, inclusive, and future-ready policy choices," states the report.
A proposed policy framework focuses on strengthening healthy, productive, and secure lives through forward-looking programs; expanding foundational human development services; institutional reforms; and improved financing for human development sectors.
Specifically, the report suggests that reforms should:
- Address demographic ageing with better management of noncommunicable diseases, lifelong learning opportunities, pension reform efforts, and well-managed migration policies.
- Support early childhood development and long-term care services to smooth demographic transitions while boosting job creation through women’s economic empowerment.
- Mitigate climate shocks by adopting adaptive social protection measures and developing green infrastructure while building workforce skills for a low-carbon economy.
- Invest in digital skills training and appropriate labor market regulations to benefit from advances in digitalization and artificial intelligence.
To implement these strategies effectively, agencies responsible for human development must enhance their capacity and accountability. The report notes that governance gaps persist across the region but recommends incremental reforms to improve service delivery coverage.
Another key finding is the need to reverse declining or stagnant investment in human development sectors throughout most of MENA. The World Bank proposes improving spending efficiency, better coordination of funding sources, and greater revenue collection—all reinvested into building people’s capabilities—to avoid larger costs down the line.
Human capital development in MENA remains below levels seen in other regions with similar incomes—a factor both driving and reflecting slow economic growth. Rapid population ageing alongside low retirement ages places additional strain on pension systems and healthcare providers. Climate-related threats such as extreme weather events also endanger human capital but present opportunities if countries develop green workforce skills.
Labor markets remain less exposed to automation due to high informality rates but risk losing productivity gains or facing job losses among low-skilled workers if digital readiness does not improve. These challenges are even greater in countries experiencing conflict or fiscal distress unless future-oriented policies are adopted.
The report calls for investments in early childhood services as well as green and digital skill-building initiatives to help young people—and especially women—adapt to evolving labor markets. Governments are encouraged to reform fiscal systems so they can prioritize investments that foster productive human development while redesigning tax-benefit schemes to reduce inequality over time.
Coordination between aid donors as well as expanded partnerships with private firms and non-governmental organizations will be vital for resilient service delivery—particularly in fragile settings. Given significant differences among countries within MENA—from high-income Gulf states to those affected by conflict—the World Bank urges governments to tailor reforms according to local needs: prioritizing issues like population ageing or digitalization where relevant or focusing on basic institutional capacity where necessary.
"By anticipating and preparing for what lies ahead," concludes the World Bank's analysis,"MENA countries can turn the risks of today into the opportunities of tomorrow."