Needless to say, the third version of the Arab Economic, Development and Social Summit held in Riyadh last week confirmed the determination of the 22 Arab nations of enhancing their bilateral economic cooperation on different fronts. The summit differs from regular meetings of the Arab League by solely focusing on ways of strengthening economic potentials amongst member countries.

Interestingly enough, the economic summits are a novelty for members of the Arab League. Better late than never.

In retrospect, Kuwait hosted the first such summit in early 2009, committing itself to pay $0.5 billion (Dh1.8 billion) of a fund designed to develop infrastructure projects amongst the needy Arab countries. For its part, Egypt hosted the second version in early 2011 only weeks prior to experiencing sweeping effects of the Arab Spring, leading to downfall of President Hosni Mubarak.

To be sure, there are noble causes behind the economic summits, hoping that they would remain intact notwithstanding differences amongst Arab countries like that of Syria. Put differently, the economic summits aim at discussing possible means through which more resourceful or rich countries notably those of the Gulf Cooperation Council (GCC) provide assistance to the less fortunate fellow Arab nations.

Surplus

Needless to say, some GCC member states are noted for sparing financial resources on the back of developments in the petroleum sector. For one, Saudi Arabia, in turn the largest Arab economy by virtue of boasting gross domestic product (GDP) of $727 billion, posted a record surplus in excess of $103 billion in fiscal year 2012 on the back of steady oil output and prices.

Also, Qatar prepared the budget for fiscal year 2012-13 with a projected surplus of $7.7 billion and likely to end up being considerably stronger. The authorities prepared the budget with a notably conservative figure of $65 per dollar whilst average oil is expected to hover around $100 per barrel by the end of the fiscal year in March. The petroleum sector contributes more than two thirds of treasury income in all GCC countries.

To its credit, the Riyadh summit paid considerable attention to the issue of doing away with restrictions impeding free flow of investments amongst Arab countries. This is a sort of requirement for ensuring that transferred financial resources end up in the right development projects. At the moment, a significant of outbound investments from GCC countries is destined to non-Arab countries notably in Europe and the US.

The portfolio of diverse Qatari investments entails ownership of Harrods in the UK, stakes in banks in Brazil and agricultural development in several countries in Southeast Asia. Certainly, Qatar has the resources to invest handsomely in Arab countries, in turn requiring the right business environment.

Integrating projects

As expected, the summit touched upon the long-awaited completion of two integrating projects, namely the customs union and common market. The ambitious projects are designed to ensure having standardised custom duties and unrestricted flow of factors of production but face fundamental challenges.

Part of the matter reflects the fact that Arab countries are facing different economic situations and hence the level of importance attached to the integrating projects. In reality, several Arab countries have like the Djibouti opted to shun the common market project altogether reflecting their own economic realities.

Showing traditional Arab hospitality, summit host announced a plan of willingly augmenting capital of various common Arab projects by half. Certainly, this covers the special scheme originally revealed during the first summit in Kuwait in 2009.

Clearly, GCC countries are at the cornerstone of integrating economic projects in the Arab world partly reflecting their willingness to share wealth with fellow Arabs.