Politics vs economics: The Arab world dilemma

In 2019, the Arab world GDP was at $2.817 trillion. Yes. That is the entire Arab world; 22 states. That is almost equal to the GDP of a single country like France, whose GDP in the same year was $2.716 trillion.

Of course, countries like Germany ($3.8 trillion) and Japan ($5 trillion) each registered more than double the Arab world’s GDP. Forget about China and the United States. Their numbers are astronomical compared to the relatively meagre total combined GDP of 22 Arab states. Why is that?

What do these countries have that we don’t? Why do these countries enjoy massive wealth that is spent on generating more wealth to ensure the wellbeing of their people while in many Arab countries the people cannot even get decent basic services?

Fortunately, some Arab countries have been paying attention to the gap and have been trying to increase their national revenues. Some of those countries, like the UAE, have been doing very well on this front. But the painful fact is that many other Arab countries are oblivious to this fact and continue business as usual.

Business as usual

So, what is the ‘business as usual’ that made those Arab countries lagging far behind most other countries in the world? It’s basically ‘the business of politics’. Let me explain.

If we look at the growth of the GDP in a country such as Tunisia, we’ll find out that in 2009 it was $42.6 billion. However, the country’s GDP has grown less than 20 percent in the past 10 years. In 2019, Tunisia’s GDP was $51.5 billion. Meanwhile, a country like the UAE whose GDP in 2009 was $253.5 billion, has managed double that in 10 years. I think it’s because the focus is completely different.

We all know that Tunisia has had popular protests in late 2010 that overthrew the regime of president Zine El Abidine Ben Ali, kicking off what is now being called the Arab spring. Ever since the country has been embroiled in political struggle between the various parties that attempt to control the new system.

There is the Muslim Brotherhood, under the banner of Ennahda Party, on one hand and a coalition of liberals and old regime conservatives on the other. The growth of economy doesn’t seem to be one of their priorities, which is squarely focussed on grabbing and consolidating the power.

The same can be said on several other countries that have been consumed by the business of politics rather than economic and social development. Lebanon and Iraq are just two examples among many others. Lebanon, for example, is sliding rapidly into a failed state status.

The national currency has become close to junk. A year ago, one dollar was worth 1,500 Lebanese Liras. Today, that one dollar is worth over 10,000 Liras. The political elite, which has monopolised power in Lebanon for the last 30 years has even failed for the past 8 months to form a new government.

Similarly, Iraq has been in and out of wars since 1980. And since the US invasion of 2003, corruption, nepotism, and sectarian politics have led the country to near disintegration. There is a glimmer of hope however that the new government, led by Mustafa Al Kadhimi, will be able to initiate a rescue program with the help of key Arab states.

Creating sustainable development

These countries have been busy doing politics for so long while ignoring the actual reason d’etre of any government, which is managing the people’s affairs and ensuring their wellbeing- the economy including creating jobs, diversifying state revenues and creating a sustainable and strong economic development.

The region sadly is one sorry picture of wars, civil strife and, in some countries, hunger. Regional government must rise above the politics that has been driving many of the Arab countries backward for decades. It is high time they shifted their resources and energy to develop viable economies.

The modern world is done with politics. There is a global competition (China vs the US) is the economic sphere. The real power lies with those who are able to leverage their economic influence. We are completely non-existent. It is time we dump the politics and focus on the real thing, the economy.

Fortunately, not all is grim in the Arab scene. There are some of us who have been paying attention to the evolving global equation. There are countries such as Saudi Arabia, Egypt, and the UAE that have been taking a different approach in the past decade.

They are seriously tackling the economic gap with solid planning and long- term strategies that will definitely pay dividends.

Operation 300b

One of those ambitious plans is ‘Operation 300b’. it is an industrial strategy announced by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai few weeks ago to support the setting up of 13,500 industrial entities and will help increase spending on research and development in the industrial sector from Dh21 billion to Dh57 billion in the coming years.

The announcement said the 10-year comprehensive strategy “aims to empower and expand the industrial sector to become a propeller of a sustainable national economy,” increasing its GDP contribution from the current Dhs133bn to Dhs300bn by 2031.

According to Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology Future industries, ‘Operation 300b’ will focus on important industries such as food and beverage, medical supplies and pharmaceuticals, petrochemicals, hydrogen production (clean and renewable energy), space technology, machinery and equipment, electronics and electrical gadgets among others.

The UAE is of course well positioned to push forward with a competitive industrial sector due to its geographical location, its advanced logistics capabilities, world class infrastructure and technological solutions in addition to its reputation as a credible economic player, he told a media briefing last week.

This innovative plan was not conceived out of thin air. It builds on the UAE success story. The country has for decades been at the forefront regionally in attracting investment and creating a diversified economy that is no longer dependent on oil revenue.

Instead of the business of politics on which other countries have spent their resources, the UAE has been working hard to grow its GDP to create a sustainable economic model to ensure prosperity.

It is a model worth of emulating by other countries in the region that would help make this important region competitive. It is never late for Arab countries to close the economic gap with the rest of the world.