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ESCWA: Arab integrationboosts GDP

(The Daily Star/Mahmoud Kheir)

BEIRUT: Voicing support for Arab economic integration, a senior economist at the U.N’s economic commission for the Middle East (ESCWA) called for the gradual replacement of foreign workers with Arab nationals and for the cost of transport between Arab states to be cut by 50 percent.

“Adopting such procedures, in addition to coordinating macroeconomic policies, would be translated into a 3 percent increase in the region’s GDP within five years to a total of 6.1 percent, in addition to decreasing the unemployment rate in this area by 4.3-5.7 percent,” said Abdullah al-Dardari, director of ESCWA’s economic development and globalization division.

“This would be an historic achievement,” he said.

Dardari’s remarks came during a conference held by the Carnegie Middle East Center to launch a report released by ESCWA. Titled “Arab Integration: A 21st Century Development Imperative,” the report explains the opportunities offered by Arab integration and the political, economic, social and cultural developments needed to achieve it.

Dardari said that substituting foreign workers and cutting transport costs were viable policies.

“Their economic and financial cost is very low but the result that would be achieved is very effective.”

He argued that all Arab countries would benefit from such measures except for Oman.

“The population structure, the foreign labor structure and the diversity of the economy of Oman justifies this exception,” he said

Dardari, who is one of the main contributors to the report, said it called for the adoption of integrated national policies among Arab countries that would also create diversified economies and high competitiveness.

“The most important indicator of lack of diversity in our economy and lack of competitiveness is the exports index. The higher the index, the worse the situation,” he said.

“We noticed that between 2000 and 2010, the situation in the Arab world deteriorated, especially if we are talking about non-oil exporting countries that are supposed to have a diversified economy that produces and exports diversified goods. Nonetheless, the index is very high.

“In oil-producing countries, it is very clear that [the Middle East] is a region of non-diversified economies with low competitiveness despite improvements in some cases.”

He said inter-Arab trade amounted to less than Arab trade with sub-Saharan Africa.

Dardari highlighted the report’s focus on the need for an integrated comprehensive revival in cooperation at the economic level and in other aspects as well.

“An important challenge facing the region is the decrease in the productivity of labor. Unlike other countries in the world, we are a region that has seen negative or stable production growth and that has not improved in the last decade,” he said.

Rima Khalaf, under-secretary-general and executive secretary at ESCWA, said the report presented a strategic vision for Arab integration that would lead to a renaissance that could guarantee all Arab citizens a dignified living regardless of their religion or gender.

Khalaf outlined three pillars that would be necessary for the strategy’s successful implementation.

“The first pillar is political cooperation among Arab countries that support democratic governance.

“The second pillar is deepening economic integration starting with implementing Arab integration activities until we reach Arab economic unity that would work for the Arab countries’ economic prosperity and that of their citizens.

“The third pillar is educational and cultural reform to revive creativity and free our minds from extremism and despotism.”

Khalaf, who led the research, analysis and review of the report, said that simple initiatives such as decreasing transport fees and increasing the movement of labor between countries would boost production across the Arab world by more than $750 billion in the coming years, while also creating more than 6 million new job opportunities for workers.

Former Prime Minister Fouad Siniora said the report showed that one-fifth of the Arab population was living below the poverty line. He also noted that potentially fatal malnutrition had spread to affect over 50 million Arabs, including more than 1 million children in Somalia and Yemen, in addition to a large number of Syrian children.

“These results show that Arab economic integration isn’t a luxury or an option, but has become a dire need that will determine the destiny of our nation,” he said.

 
A version of this article appeared in the print edition of The Daily Star on June 18, 2014, on page 5.

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Summary

Voicing support for Arab economic integration, a senior economist at the U.N's economic commission for the Middle East (ESCWA) called for the gradual replacement of foreign workers with Arab nationals and for the cost of transport between Arab states to be cut by 50 percent.

Titled "Arab Integration: A 21st Century Development Imperative," the report explains the opportunities offered by Arab integration and the political, economic, social and cultural developments needed to achieve it.

Dardari, who is one of the main contributors to the report, said it called for the adoption of integrated national policies among Arab countries that would also create diversified economies and high competitiveness.

"In oil-producing countries, it is very clear that [the Middle East] is a region of non-diversified economies with low competitiveness despite improvements in some cases".

He said inter-Arab trade amounted to less than Arab trade with sub-Saharan Africa.


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