Financial literacy vital to region’s economic resilience
One of the strategic themes discussed during this year’s World Economic Forum Annual Meeting in Davos was the subject of strengthening financial resilience as a tool for safeguarding the long-term well-being of global populations.
A global study led by S&P, in partnership with the Global Financial Literacy Excellence Center, revealed that a mere 33 percent of people worldwide are deemed financially literate. Additionally, a survey conducted by S&P across 81 countries last year highlighted the potential ramifications of aging societies, with governments facing fiscal setbacks of up to 9.1 percent of gross domestic product by the year 2060, compared with 2.4 percent in 2025, if they do not address the costs associated with social services, healthcare services and public benefits.
Regionally, there is a need to lay the groundwork for delivering financial literacy programs catered to various target audiences. As people face an ever-evolving landscape of economic uncertainties and personal disruptions — including resignations, job losses, career breaks, illnesses or unexpected retirement — possessing sound financial literacy can help them navigate these events and avert the negative financial risks associated with them.
The cumulative impact of financial literacy programs is significant and positive. Due to the nature of money management as a juxtaposition that intersects with many facets of an individual’s life, financial literacy programs should, therefore, be seen as a cornerstone of any educational system that seeks to empower individuals with the knowledge and skills to make informed financial decisions that will have a positive impact on their lives, their societies and the broader economy.
Typically, such programs delve into many fundamentals, including budgeting household finances, saving for important long-term purchases, responsibly managing loans and debts, setting aside emergency funds and maximizing investment returns. The knowledge and skills acquired during these programs can offer actionable insights for individuals in many settings.
To illustrate, employees can be enlightened about their rightful workplace benefits, while also negotiating more attractive salaries, accepting new career moves that are advantageous and preparing for their retirement. On the other hand, enterprise owners with a sound understanding of financial management can better lead their businesses and make viable decisions, leading to profitability. By empowering individuals to build wealth and attain self-sufficiency in an economic sense, countries can boost economic growth, while also reducing many costs pertaining to welfare systems.
Many governments have launched successful financial literacy programs targeting diverse audiences, in line with their economic resilience strategies. Launched in 2003, MoneySense is Singapore’s signature national financial literacy program, spearheaded by the Monetary Authority of Singapore and the Ministry of Manpower. It covers the essential pillars of financial literacy, which include basic money management, financial planning and investment strategies. To extend its reach, MoneySense collaborates with community organizations, financial industry associations, institutes of higher learning and workplaces to design and disseminate educational materials to the public. People can also avail of free one-on-one consultations.
Regional governments have also launched programs to boost financial literacy among their populations. For example, Saudi Arabia’s Ministry of Education last year introduced a mandatory “Financial Knowledge” course into the common first-year curriculum for secondary tracks, aligning with the educational goals of Saudi Vision 2030.
Drawing inspiration from international best practices, the course aims to illuminate students about fundamental aspects concerning financial literacy. The curriculum imparts valuable skills, such as explaining the diverse sources of income, assessing future job offers, seizing investment opportunities, setting aside emergency funds, budget tracking, managing loans and pursuing wise purchasing strategies. To support educators, the ministry has provided teachers with a comprehensive guide, including presentations and supplementary materials for each chapter.
Meanwhile, Abu Dhabi’s Authority of Social Contribution is delivering the “Ghaya” financial literacy program to various social segments with the aim of equipping individuals with essential knowledge of money management in order to achieve their personal financial goals. It tackles themes such as understanding financial priorities, budgeting and expense management, identifying savings goals, setting emergency funds and spending wisely. The program is delivered in partnership with the Abu Dhabi Global Market Academy, the London Institute of Banking and Finance, the Abu Dhabi Social Support Authority and the UAE Banks Federation.
Regional governments should prioritize financial literacy as a key component of their economic resilience strategies, aiming to create prosperous societies and improve the overall quality of life for their citizens. A multifaceted suite of solutions could include a number of key programs. National public awareness campaigns can highlight the importance of financial literacy and nudge individuals to seek advice on various platforms and channels.
At its heart, financial literacy should be embedded within school curricula from a foundational stage in order to ingrain skills and share knowledge with students on the basics of money management. Community-based workshops and seminars could target the wider society, especially employees, informal carers and elderly groups, to provide practical advice outside of formal education pathways.
At the same time, governments could leverage online educational platforms to facilitate accessibility with user-friendly courses and resources. And financial literacy apps could cater to the tech-savvy population, offering interactive tools and information on budgeting, saving and investing.
Governments could collaborate with financial institutions, experts and advisers to create the comprehensive content required for such programs, in addition to partnering with them to deliver tailored and sponsored initiatives. Governments could also offer free one-to-one financial coaching services so that individuals can seek personalized guidance. At workplaces, employer-sponsored financial literacy programs are opportune ways to offer financial guidance to masses of employees. Furthermore, specialized programs targeting entrepreneurs could enhance their financial skills in managing enterprises.
Financial literacy programs should be seen as a cornerstone of any economic resilience agenda that aims to build a financially informed and empowered population, contributing to overall economic and social prosperity.
Published in Arab News.