Opinion .. How can social and economic reforms in the region be achieved through blockchain technology?

This article was written by Baha Hamadeh, Vice President of Communications, Insights Group, and the following views are those of the author and do not necessarily reflect those of CNN.

Blockchain technology is rapidly gaining momentum in the MENA region, despite the fact that there are relatively low levels of public awareness and knowledge of this type of application at the regional level. The growing support of the region from this technology depends to a large extent on the availability of regulatory frameworks and the enabling ecosystem, as well as on the belief in the added value and security that this technology offers.

New economic activities, cost reduction, transparency and security are among the most salient benefits that encourage institutions within the public and private sector to adopt blockchain technology. While many expect this technology to revolutionize many sectors, it is still in the “concept test” phase and on its way to the “mainstream”. However, this is encouraging news for our region, which faces many long-term social and economic challenges, where a revolutionary technology like “Blockchain” can offer a valuable opportunity to bring about positive change.

The blockchain revolution and its applications across sectors

Globally, blockchain technology continues to influence key sectors with pilot projects in place to assess its feasibility. Countries like the United States, Canada, China, Japan and countries in Western Europe are seeing amazing growth in Blockchain investment.

Insisting on developing a global supply chain platform, enterprise software giant SAP was among the first to create a blockchain consortium that includes companies such as HP, Intel, UPS and Airbus. Today, there are dozens of such associations around the world, which unite businesses from different sectors such as banking, transport, hospitality, etc.

Blockchain solutions have not yet been expanded to offer comprehensive and workable applications in the region or even globally. However, our region has begun to embrace transformational technology which can have a positive impact on local communities and economies.

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How does Dubai transform the Blockchain from a theoretical tool to an operational solution?

We are currently seeing the prevalence of blockchain technology in the region, mainly within digital currencies, fixed tokens (NFT) and the financial services sector. Being an early adopter of this technology, the financial services sector is taking advantage of Blockchain through banking transactions, remittances, securities and investments.

In the coming years, massive blockchain spending is expected to focus on the manufacturing, retail and professional services sectors. Business and IT services will also benefit from the bulk of this year’s technology spending. Other sectors such as food and healthcare may benefit from this technology.

The potential of “Blockchain” in meeting the social and economic challenges in the region

Poverty, conflict, unemployment, poor quality of education and lack of resources such as electricity are among the most common social and economic issues facing a number of countries in the MENA region. In the face of these challenges there must be opportunities, as there is no doubt that a number of sectors will benefit from the so-called Web3 applications.

Governments and supply chains

For example, governments may use the blockchain to record records such as real estate transactions, budgets, student loans, and humanitarian aid tracking. These use cases can reduce corruption, fraud and cost by eliminating ambiguity and confusion about typical government transactions and the use of paper. In another example, port authorities in some parts of the world are using blockchain technology to track shipments by developing methods protected from tampering. The purpose is to ensure that payments reach the parties involved and that fraudulent accounts and money laundering are eliminated.

AWARD

Corruption is a widespread problem in many Middle Eastern countries, especially those in conflict, which despite the willingness of donors to support their humanitarian efforts, they are often reluctant to do so for fear of misusing their donations. Blockchain provides donors and charities with a high level of transparency about how their contributions are distributed among beneficiaries. Technology is likely to play a key role in increasing donations such as food, medical supplies, education and infrastructure. This step can alleviate poverty and improve the quality of life in marginalized communities.

Property rights

Hacking is another form of corruption. Anti-piracy organizations and local authorities work side by side to crack down on music, counterfeit movies and more. Purchasing cryptocurrency songs and music can eliminate copyright infringement. As a result, a favorable environment can be created for emerging artists, allowing them to reach their audience directly without incurring costs to distributors and losing piracy.

Health care

Blockchain can also serve as a global platform for patient medical records, eliminating the risk of security breaches, deletion or data manipulation. The availability of decentralized restrictions on medical records can help generate ideas for disease control by supporting the delivery of humanitarian aid to countries experiencing conflict or war.

real estate regulation

Land ownership records in our region are shrouded in mystery and are vulnerable to bribery manipulation. Blockchain technology allows tracking of land ownership history, verification of records, background checks for parties, payments, ownership documents and taxes. In more developed markets such as the UAE, some real estate developers list properties as a means of trading. Owners can now issue blockchain-based arguments, which represent the value of their stock in a specific asset. In addition, many developers and real estate agencies have started selling land and virtual properties in the form of NFTs.

Energy and the “sharing economy”

Another major challenge in the region, especially in countries experiencing or emerging from unrest, is the lack of a regular energy source. But with the help of blockchain, consumers can share their energy with their neighbors for a fee upon request. This is a useful option not only in volatile environments but also within developed regions, where the modern “common economy” model of consumption is becoming increasingly popular, especially among millennials. By increasing short-term rents for some products and services and gradually replacing them with full ownership of a person or entity, the use of Blockchain can achieve positive results for companies and individuals in the region in terms of addressing pollution and maintaining resources.

Reducing the unemployment rate

Any new technology can have a huge impact if it can provide financial inclusion. Blockchain technology has proven useful for lenders who want to provide small loans to people in marginalized communities who do not have access to banking services. For example, street vendors require minimal financial support to set up food stalls. Blockchain allows small business owners to borrow without undergoing the comprehensive and complex credit assessments that banks are currently seeking, thus reducing unemployment.

According to the World Bank, there are 1.7 billion people without bank accounts worldwide. For those living in remote areas or conflict zones where there are no banks, blockchain can provide a useful solution. Technology also facilitates faster and more cost-effective transactions, such as remittances on which many households across the region rely to ensure a decent living.

food sector

Furthermore, consumers can track their food from farm to kitchen through blockchain technology. For our particular region, consumers may be able to distinguish whether a food is halal based on the food source and preparation methods. They can also control various aspects of food safety and quality or the source of food contamination.

Many benefits and a long way to go

The potential benefits of blockchain technology are quite clear. Although this technology has been around for almost 15 years, we have to be patient to perfect the applications it offers in all sectors.

When a new drug is produced or an innovative treatment is developed, it undergoes a series of rigorous tests and approvals before being given to patients. It can take months or even years before tangible benefits are realized. Even the most promising innovations face obstacles during their pilot phase. The nature of “Blockchain” is no different from a pioneering medicine that is on its way to reaching its full potential and this technology seems to be a promising medicine for a range of social and economic issues facing our region.

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