ON Monday (Jan. 21), Riyadh hosts the third Arab economic summit. The first such summit was held in Kuwait in January 2009 and the second in Sharm El-Sheikh (Egypt) in January 2011. By agreement, Arab summits are held every two years, but what have they achieved until now? What future do they have?
There is a lot of cynicism about the ability of Arab League-organized meetings to produce much. But last week such skepticism was expressed by none less than the most senior Arab League economic official, who said last week in Riyadh that references to “Arab economic unity” was just “empty talk,” because of the lack of basic building blocks of such unity.
Earlier, the same official decried the lack of progress in implementing past decisions by Arab summits. When asked to what extent resolutions by earlier Arab summits were implemented, he said flatly, “Zero percent.” He bemoaned the lack of progress on almost all the key economic projects announced in previous summits. For example, the Arab League announced in the past 2015 as target date for implementing a customs union and 2020 for the common market, but according to this official, nothing has been done to make such target dates achievable!
While such pessimism is common among average citizens, it was surprising that senior officials shared the same assessment.
The reasons for these disillusions can be found in the checkered history of the League. There has always been a tremendous gap between its ambitions (and those of Arab masses) and its ability to deliver.
The Arab League is one of the oldest regional organizations in the world, established in March 1945, before the United Nations or European Union. While famous for its catchy slogans, it rarely managed to follow up. For example, in February 1957, the Arab League adopted the “Arab Economic Unity Treaty,” just two months after the adoption of the European Common Market. According to that treaty, several steps were envisaged to be taken toward the establishment of a full-fledged “Arab Common Market” in 1965.
Needless to say, none of those dreams ever materialized.
The Arab League has attributed those failures to circumstances such as:
- Outside intervention limited the League's ability to work towards Arab unity.
- Preoccupation with the intractable Palestine question and recurrent Israeli aggression.
- Civil wars and wars of aggression.
- Preoccupation with the struggle to liberate Arab countries from foreign occupation and colonial rule.
Some of these factors make sense, but some could not justify the slow pace of Arab League achievements, certainly in the economic field. For example, there is no question that Israel has never hidden its desire to frustrate attempts by the Arab League to take unified action against it. It is also true that Israeli aggression has been a drain on Arab political and economic efforts. However, there is little evidence that other outside forces had a deciding role in diverting the Arab League from doing its work. In fact, in its early years the League so enjoyed the support of Great Britain that it was falsely accused of being a British invention!
Similarly, while most Arab countries lived under colonial rule for much of their modern history, they have all had their independence for some time now. The last vestiges of foreign rule (other than Israel) ended with the end of British rule in 1971, over 40 years ago.
What then are some of the real reasons for the slow progress toward Arab economic unity? The Arab League rarely talks publicly about those reasons, but one of the most important reasons is disagreement between Arab governments over the right path toward economic reform. While some preferred quick revolutionary fixes, others preferred deliberate and evolutionary reforms. For some time, several Arab countries adopted a version of socialist central planning, collective ownership of farms and nationalized industries. The rest adopted regulated capitalist models.
On trade, most Arab countries advocated protectionist policies, while a few have followed a laissez faire trade path.
All of these reasons have made it difficult to reach the degree of harmonization that an economic union requires. In addition, the growing gap between rich and poor countries has also made it difficult to adopt common positions on issues such as mobility of capital and labor, which is an important ingredient in economic unity.
The most important obstacle, however, has been the entanglement of politics and economics. The famously fractious Arab political system has held economic unification hostage to its own internecine political differences and endless machinations.
A few years ago, the Arab League and its member stats became convinced that its previous unitary approach, since its inception in 1945, had failed to produce the desired outcome. An alternative bifurcated approach was presented by Egypt, Kuwait and Saudi Arabia a few years ago. Consequently, the Arab League decided to hold separate political and economic summits, so as to remove that obstacle and allow economic unification to move separately.
Unfortunately, this momentous change in Arab League style has been difficult to carry out. One of the main reasons is that it was difficult to teach this old institution new modalities. Until its bureaucracy is re-tooled and re-trained to go with the new bifurcated approach, it is going to be slow going, to the frustration of average citizens and its own high officials alike! That is why high hopes are pinned on the Riyadh Summit this week to change this unlucky streak!