Financial literacy is a vital skill that can help people build fiscal resilience and protect their savings and retirement funds from global economic crises such as that caused by the Covid-19 pandemic, experts from the Covid-19 said on Tuesday. the Arab Conference on Pensions 2021.
Smart financial skills can have a long-term positive impact on the future of people’s personal finances, as well as on the economic and social programs of governments, the experts said at a panel discussion at the event of two. days. Streamed online from Bahrain, the theme of this year’s conference is “What should Mena pension systems look like for the next 50 years?”
“Financial literacy… is a life skill and should be mandatory,” said Andrea Hasler, Associate Academic Director and Assistant Research Professor at the Global Center of Excellence in Financial Literacy at George Washington University in the United States.
The Covid-19 pandemic has tipped the global economy into its deepest recession since the 1930s, with millions of people laid off or on leave around the world as movement restrictions were introduced to prevent the spread virus.
However, the pandemic has also exposed people’s financial vulnerabilities and the lack of emergency funds to survive tough economic times, a Charles Schwab financial literacy survey conducted in August last year showed.
Half of all Americans would experience financial hardship if they were to face an emergency expense of $ 1,000 or less in the next 30 days, according to the survey.
“Financial illiteracy is insidious. The antidote is financial education, which gives people the skills they need to make smart financial decisions and can help improve their lives, ”said Carrie Schwab-Pomerantz, President of the Charles Schwab Foundation, during the event.
“The pandemic has underscored how essential basic personal finance skills are in preparing for the unexpected. Financial literacy is a survival skill that everyone needs.
In the UAE, financial literacy has emerged as a key social priority that was identified by the Abu Dhabi Ministry of Community Development as part of its Quality of Life survey.
A 2019 financial literacy survey by Visa showed that 43% of UAE respondents aged 16 to 24 thought they were not ready to manage their own money, while 53% said that schools were not preparing them enough to take care of their finances. .
“Even those who are highly educated do not know how to manage their personal finances, how much to save for retirement, because these are difficult decisions but also very consequential which we must make on a daily basis and not only in times of crisis” declared Mrs. Hasler. during the panel session at the Arab Pensions Conference.
“When the economy is doing well and we have record unemployment rates, these issues are still there and… need to be addressed and we need to do them so we are responsible for them. So that’s why, yes, financial literacy should be made compulsory and we can start right in schools.
The UAE has launched a number of financial education programs over the past three years to tackle rising personal debt levels in the country. This year, the Social Contribution Authority – Ma’an launched the third cohort of its Ghaya Financial Literacy Program which aims to equip Emiratis with smart financial skills to help them contribute to the long-term economic growth of Abu Dhabi.
In 2019, the UAE Central Bank signed an agreement with the Emirates Foundation to create a financial literacy program under the Esref Sah project, while the Federation of UAE Banks unveiled a financial literacy manual. in May 2018 to help consumers manage their money better. effectively.
Updated: November 17, 2021 8:08 AM