Experts: Arab economies lag behind

Arab economies are lagging behind the fast pace of the world economy, according to experts attending the Arab Competitiveness Roundtable 2005 conference in Doha.

    The Competitive Roundtable was held for the first time in Qatar

    Organised by the World Economic Forum (WEF) on Saturday, the independent international organisation famously known for hosting the annual Davos meeting of the world's top business and political minds, said much more needed to be done to improve the economic and political climate of the Arab world.

    In the one-day forum, dedicated to discussing the WEF's Arab ranking index, which for the first time rates the competitiveness of regional economies,

    Qatar - represented by the Foreign Minister Shaikh Hamad bin Jasim bin Jabir Al Thani - acknowledged in the keynote speech that Arab capabilities had thus far been inadequate.

    He urged Arab governments as well as the political, economic and cultural elites of Arab countries to open up to the wider world and engage with globalisation.

    Time for change

    Speaking to on the sidelines of the conference, Samir Radwan, managing director of Egypt's Economic Research Forum, said traditionally Arab countries' priorities were not focused on development, modernisation, training and growth.

    The Arab world is home to a large
    chunk of the world's unemployed

    He said this perhaps was necessary when Arab countries needed to allocate a large part of their resources for security and defence.

    "It is high time, however, for these countries to embark seriously and firmly on rearranging their priorities and maximise utilisation [of their resources]," he added.

    In Radwan's view, the governments and peoples of the region need to open up to the outside world and interact with such developments as globalisation, rather than be content with expressing concern and fear from possible consequences of change.

    The 2005 Arab World Competitiveness Report, prepared by the WEF, which compared measurable economic and social indicators, found that government corruption, red tape and spiralling public debt topped the list of issues holding back development.

    Strategic position

    Arab countries were strategically positioned and possessed considerable human, natural and material resources, the report's co-author Augusto Lopez-Claros said at the launch of the report on Saturday morning in Doha.

    So why are Arab countries failing to improve their lot despite their problems having been identified a long time ago?

    "It's high time for the Arab countries to rearrange their priorities and maximise utilisation [of their resources]"

    Samir Radwan,
    Managing Director,
    Economic Research Forum

    Speaking to, Lopez-Claros said: "Quite simple, they have not been able, up to the present, to utilise their energies and wealth in the manner that other peoples in the world had utilised them, to serve their aspired national objectives."

    Besides providing good education, Arab societies need to promote the direct engagement of women in the process of development and modernisation.

    Pointing out "this is a region with the highest population growth rates in the world and home to more than one quarter of the earth's total unemployed young people between 15 and 24", Lopez-Claros said: "Without genuine home-grown reform, there would be little hope for the several million youths entering the job market each year."

    The female factor

    According to Shaha Ali-Riza, an external-affairs and communications expert for the World Bank, "The most complicated problem centres on the fact that our Arab communities suffer from the highest rates of unemployment in the world as well as from the lowest rates of women participating in the labour market".

    Many Arab states are feeling the
    heat of rapid population growth

    Speaking to after chairing a plenary session entitled, Women as Dynamic Agents of Change in the Arab world: A vision for 2020, she said p

    opulation growth had pushed unemployment rates to some of the highest levels in the world, and brought into sharp relief the urgent need for a reorientation of economic policies.

    Fellow panelist Tarik Yusuf, an assistant professor of economics at the School of Foreign Services at Georgetown University in the US, said there would be about 100 million unemployed in the Arab region by 2020.

    Radwan, of Egypt's Economic Research Forum, wondered whether rising oil prices would help governments absorb more people into the workforce. He said oil, which was priced at around $25 a barrel in 2002, could touch $100 by the end of the decade.

    Major problem

    To date the oil industry is the one area that Arab countries have developed successfully, but they have not done much to use the revenues to develop other important sectors, Radwan said.

    "Without genuine home-grown reform, there would be little hope for the several million youths entering the job market each year"

    Augusto Lopez-Claros,
    2005 Arab World Competitiveness Report

    The issue of employment generation was neglected in policymaking and policy planning by governments.

    He too said unemployment in Arab countries, which hovers around the 15% mark, is a major problem.

    In Egypt, Radwan's home country, the figure was 12%, with 80% of the jobless aged between 15 and 24. To absorb the estimated 600,000 new entrants into Egypt, the country needs a 6% growth in GDP, he said, but the policies being adopted have "very little" relevance to this market.

    Shaha Ali-Reza, of the World Bank, said while there was no solution that would make everyone happy, an increased emphasis on scientific research could help develop more practical tools.

    Risky business

    Female participation in the job
    market is among the lowest

    A Saudi delegate who attended the conference told in his country, research and planning was not really a considered field.

    The Saudi, who did not want to be named, said development will spearhead democratisation "but this is just what's said, not what is really planned for".

    He said the policy of Saudisation was up to now a failure.

    "You are risking your business by forcing companies to employ Saudis who cannot be fired," he said.

    "I don't care about policies that are half-baked. But they are having a detrimental effect on us economicaly, socially and politically. We Arabs must develop ourselves instead of revelling in past glories."

    SOURCE: Aljazeera


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