Inter-Arab investments up $2.4b in 2001

Inter-Arab investments jumped $2.4 billion in 2001 alone, boosting the cumulative investments among the 22-nation Arab League to $17 billion between 1985 and 2001.

"The investment climate in the Arab region is improving but there should be more measures to attract capital and encourage Arab investors to keep their funds at home," said Abdul Rahman Sabri, representative of the Arab League Secretary General.

Sabri hoped current economic reforms by most Arab countries will contribute to achieving that objective, upgrading the efficiency of the public and private sectors and increasing the chances of realising a balanced development.

"For this purpose, we need to continue our efforts to improve the investment climate and to create jobs for our people," Sabri told delegates at a conference on Industrial Civilisation & Economy organised by the Zayed Centre for Coordination & Follow-Up.

Noting that the combined Arab GDP grew to more than $500 billion in 1999 from $28 billion in 1969, Sabri said that in terms of real growth, the region lagged behind, citing the example of Italy whose GDP alone is higher than the entire Arab GDP.

"Arab economic co-operation has become more pressing than ever amidst globalisation and the growing tendency for global economic blocs. Such blocs pose a real challenge to the potential of Arab states as their protectionist measures will affect the exports of developing nations, including Arab nations."

Inter-Arab trade still accounts for only 10 per cent of the total Arab trade despite efforts to stimulate internal commercial exchange.

"At a time when a dollar is invested in the Arab region, around $56 are invested in the non-Arab countries which means that for the $17 billion invested in our countries, there was an investment of $670 billion in other countries."

This implied that joint Arab action is still weak and does not fullfill the region's ambitions.

"We also have not been able to build up a strong production base capable of facing competition from other countries and are still endeavouring to establish a free trade zone when the EU has gone a long way in such a field."

Arab states, he said, need to realise the importance of globalisation and integrate themselves into the new world economic system.

The Arab population in 2000 was some 280 million of which two-thirds being under 14 years of age. This age group will soon join the labour market, where around 15 million people are already jobless.

Such a situation requires measures to achieve an economic growth rate of seven per cent. This means an investment of around 35 per cent of the GDP is needed every year to accommodate the newcomers to the labour market and those unemployed.

"Since the rate of the Arab national savings does not exceed 22 per cent a year, the difference should come through foreign direct investment and that is why we need to be fully integrated into globalisation and the world economic order."