As lifestyle aspirations, easy access to digital credit and loans, and the need to finance education and real estate drive up consumer debt levels in Qatar, the case for bolstering financial literacy is becoming urgent. This growing weight of consumer debt, coupled with the ongoing paradigm shift in the social contract, underscores the importance of financial literacy as a tool for managing debt and ensuring financial stability. Research from the Global Financial Literacy Excellence Center finds that countries with higher levels of financial literacy have lower levels of household debt, higher savings rates, and greater resilience during financial downturns than those with lower levels of financial literacy.
Qatari institutions increasingly recognize financial literacy as a critical factor for economic empowerment and financial stability, and have begun to act. Witness, among other efforts, the financial literacy programs launched by the Qatar Central Bank, the Ministry of Education and Higher Education’s decision to add financial literacy as an elective for eleventh and twelfth-grade students, and the Qatar Stock Exchange’s commitment to raising the financial literacy of investors.
While dedicated programs are a good start, meeting increasing financial literacy across the country in a timely manner requires an overarching strategy and a holistic framework that incorporates a multi-dimensional view of life-stages and beneficiary contexts.
It is essential to realize that financial literacy is a skillset for navigating life’s economic complexities. Financial literacy goes beyond a basic understanding of mathematics and household budgeting. Indeed, benchmarking studies show that countries that perform well in the OECD’s Programme for International Student Assessment financial literacy test for school children, and S&P’s Ratings Services Global Financial Literacy Survey, aimed at adults, take a holistic approach to financial literacy. Thatrequiresadoping a lifelong framework for building and reinforcing financial literacy.
The content of financial literacy programs should change over time to accommodate different stages in a person’s life. In early childhood education, numeracy skills are often seen as the only foundation needed for financial literacy. However, early childhood is a period of behavior and attitude formation. It is a time when the development of socio-emotional skills, such as delayed gratification and executive function, are established as components of the ability to successfully manage financial health later in life. The top 10 countries in the PISA and S&P rankings promote an early emphasis on financial literacy, which promotes financial wellbeing in the long term.
As children grow, financial literacy programs need to focus on saving, budgeting, and understanding basic credit. In adulthood, programming needs to encompass homeownership, education funding, insurance, and retirement planning. In pre-retirement and retirement years, the focus of financial literacy should shift to maximizing retirement savings, managing retirement income, and legacy planning.
Along with the stage of a person’s life, financial literacy should also relate to other demographic factors, such as their family’s financial situation. Multifaceted solutions can link financial literacy to social insurance, employment assistance, and other support mechanisms to increase the economic wellbeing of people experiencing chronic and multi-generational poverty.
Such assistance and education should be part of a national strategy for financial literacy in Qatar. That strategy should integrate financial literacy into the educational curriculum, encourage collaboration across sectors, and use digital channels to deliver financial literacy education.
The national strategy should include centralized governance to set the agenda, facilitate coordination, and provide ongoing oversight and support. For example, the Australian Securities and Investments Commission led that country’s first National Financial Literacy Strategy.
The strategy’s custodian should assemble government agencies, financial institutions, educators, and community organizations to coordinate financial literacy efforts and maximize their impact. Private sector stakeholders, in particular, can provide the influence needed to improve the efficiency and sustainability of the strategy.
For instance, financial institutions, such as Mastercard and Visa, have foundations that are already delivering financial literacy programs and they may be willing partners in national efforts.
Lastly, a national strategy should recognize that advancing financial literacy could mean more than just disseminating knowledge. It also may necessitate
fostering a culture of financial empowerment and resilience by destigmatizing discussions around money, promoting open dialogue, and creating a supportive environment for informed decision-
making.
The relevance of financial literacy in Qatar transcends economic considerations. It embodies a pathway to individual empowerment, socioeconomic stability, and inclusive growth. By embracing a holistic approach that begins in early childhood, caters to diverse needs, and integrates seamlessly into life events, the government and its stakeholders can help Qataris achieve financial well-being and realize their aspirations.
— By Dr. Raed Kombargi, partner and Doha office director; Fadi Adra, partner; Swati Chaudhary and Rasha Salem, principals, with Strategy& Middle East, part of the PwC network.
