Jordan Times
May 23, 2005
WEF participants urge Arab economic integration supported
by homegrown reforms and liberalisation
By Rami Abdelrahman
DEAD SEA — Most sessions of the World Economic
Forum (WEF) urged Arab states to pursue regional economic integration supported
by homegrown reforms and liberalisation in order to achieve a better share in
the global economy, provide jobs and sustain growth.
“To achieve the greater levels of development that they need, Arab countries
must work hard to integrate themselves into the global economy and participate
much more actively in the World Trade Organisation,” according to a statement
summing up a session on Arab integration, published by the WEF.
The statement indicated that Arab states currently share a very low level of
regional integration, which must be corrected.
“The Arab world badly needs internal trade. If we want to move ahead on global
trade, we have to move forward on trade between ourselves first,” Sheikha Lubna
Al Qasimi, minister of economy and planning of the United Arab Emirates, said.
Stressing that the region needs to focus on a free trade agreement and dismantle
the many barriers that currently exist to each other's goods, Qasimi added: “We
cannot ask other people to help us. Unless we change ourselves, we won't move
forward.”
“We have been talking about an Arab market for years, but we don't have it yet
because we have been talking about it with our emotions and not with logic,”
said Rachid Rachid, Egypt's minister of foreign trade and industry.
Now that the Arab Free Trade Area Agreement was activated from the beginning of
this year, “Arab countries have to accept that developing regional trade means
that inefficient national producers may have to close down and that more
efficient trans-Arab firms will emerge,” Rachid added.
“The way to the global economy passes through effective regional trade and
regional agreements,” Rachid indicated.
European Union Trade Commissioner Peter Mandelson, highlighted services as an
area of tremendous potential for Arab nations. He said Europe, currently the
prime market for exports from the Arab states and their major source of imports,
will remain the Arab world's major trading partner.
Mandelson said he is seeking clearance from the union's 25 members to start
negotiations on opening up trade in that sector with the countries that are
involved in the ten-year-old Euro-Mediterranean Partnership, also known as the
Barcelona Process.
Qasimi agreed that development of services trade can open up new vistas for Arab
countries, offering possibilities for economic diversification and reducing
dependence on oil.
“Not many of us are placed to develop manufacturing, so definitely services is
the area of opportunity,” she told a session.
However, promoting service industries such as tourism, for example, will require
greater freedom of movement for labour as well as capital, according to Mohammad
Nouri Jouini, Tunisia's minister of development and international cooperation.
Freedom of labour movement should also help the region's alarming unemployment
problem, as 100 million new jobs need to be created in 15-20 countries to keep
the levels of unemployment as low as possible.
Agusto Lopez-Carlos, chief economist and director at the WEF stressed that for
the Arab world to be more competitive globally it should also develop its human
capital.
He suggested establishing better quality research institutes in the region for
this purpose, as well as increasing Internet penetration rates.
Lopez-Carlos added that, in general, the competitiveness of the region's
countries as a whole are lagging far behind most of the rest of the world,
including other developing countries.
Besides high levels of unemployment, he said, the low level of trade engagement
with the rest of the world, and real growth rates are some ten times lower than
that of China or India.
The economist saw bureaucracy and red tape as very serious problems across the
region and pointed to the lack of media freedom, which prevents the
dissemination of information vital for decision makers as well as the public.
Achieving better global competitiveness would increase the region's share of
foreign direct investment (FDI), which only accounts for just 1.3 per cent of
global FDI flows, down from 3.8 per cent 20 years ago.
“However, unless regional populations see tangible benefits, they may be
influenced by those who regard economic reform as code words for westernisation,
or even worse, the Americanisation of the region” argues Mohammad Ben Zubair,
adviser for economic planning affairs to the Sultan of Oman. Afterall, “leaders
cannot overcome obstacles without popular support,” he said.