The chairman of the Arab Monetary Fund (AMF) yesterday called for an Arab Customs Union as a prerequisite to creating an Arab Common Market and a unified Arab currency. Dr. Jassim Al Mannai, AMF chairman and director-general, also said the Arab-Israeli conflict has affected the growth prospects of the Arab world.

"Political instability in the Arab world and the Arab-Israeli conflict have been strong obstacles to economic growth in the Arab world," Al Mannai said during an address on the Arab Common Market at the Zayed Centre for Coordination and Follow-up yesterday.

Referring to the dream of achieving an Arab Common Market, he said, "Although there have been many attempts since the 1950s towards this goal, until now it has not been achieved. There should be some steps before coming into the Arab Common Market and the unified Arab currency. These steps include establishing an Arab Customs Union."

Al Mannai said the Arab economies can best grow if "we open the way for the private sector, have more exchange markets and review our financial and economic policies." He pointed to the importance of supporting joint Arab action to face the challenges which have been imposed by on-going economic developments worldwide.

Joint Arab action to face these challenges could be achieved by adopting suitable measures such as the policy of a free economy and privatisation of some important economic sectors.

Al Mannai pointed out that the International Monetary Fund and World Bank meetings, which will be held in Dubai in 2003 will be of great significance because this will be the first time these meetings will be held in an Arab country.