The decision by the Arab economic summit hosted by Riyadh recently to raise the capital of joint Arab organizations and funds carries a great challenge. This also provides an opportunity to look seriously into the issue of human development in Arab countries. The issue is debated in various aspects such as education, employment, poverty reduction and so on.
The main joint organizations were created following the increase in oil prices in the 1970s that enabled Arab exporters, in particular, to provide the needed funds and allow such organizations to operate in different fields from monetary to agriculture to various forms of socioeconomic development.
Over the past three decades, these organizations have disbursed some $ 90 billion on their various activities, thus contributing to improvement in the lives of many in the region.
But still the outcome is far from satisfactory given the poor performance of some of these institutions on one hand and the high expectations of Arab people coupled by their rising numbers and the growing need for more services and job opportunities on the other.
It was no surprise these developments happened at a time when economies in many Arab countries were government-led, where bureaucracy had the upper hand in dictating the rules of the game and obstacles, real or imaginary.
Some of these institutions resorted to the easy option of putting their money in investment accounts in foreign and international banks to generate some income that maintain their principal capital against inflation on one hand and on the other hand generate some income, though modest, but enough to provide some proof that these organizations remained well, live and kicking.
But the main problem remains that such attitudes represent a wasted opportunity on two counts — that money was not put where it should in a productive field, be it in agriculture, industry or human development of any kind. And secondly, more time was wasted while these amounts were sitting idle in foreign banks.
However, over the past two decades new developments started to show in two areas in particular.
The private sector-led economic activity began to gain ground at the expense of the traditional government domination that was about to strangle any economic development. Privatization became the call of the day and governments opted to reduce their roles, if not going out completely of some economic sectors.
In addition and out of sheer realities created by experience there is more tendency now to look for integration in a more serious way, where countries with some competitive edge can have the opportunity to develop and attract capital and expertise where they can do best.
This attitude became clear in the initiatives taken by some Gulf states, led by Saudi Arabia, to invest in farmlands abroad to secure their food imports instead of relying on world markets with their fluctuating supplies and prices and more important without resorting to expensive trials of producing their food needs in their homeland that lack natural resources in terms of arable land and water.
The Riyadh summit decision is expected to add some $ 10 billion to joint Arab institutions and funds.
That is not much compared to deposits by Arab countries in foreign money markets. Available figures show that during the 2008 world financial crisis, the Arab countries lost an estimated $ 300 billion almost in a blink of an eye.
That figure alone was estimated to fund one-and-a-half times programs intended to address unemployment in the region in two decades period up to 2030, according to a UNDP report two years ago.
It is a good indicator that Arab summits started to look seriously into the economic and social issues.
Back in 2009, the first Arab summit in Kuwait endorsed recommendations on food security and other socioeconomic issues.
Riyadh summit ended up with the decision on increasing the fiscal resources of Arab joint organizations.
These moves provide the needed framework for more cooperation in the region, especially now as there is a good realization out of sheer experience on the need to let every country or region concentrate on what it can do better and that others can help with movable assets be they capital or expertise. And with the growing emphasis on the role of the private sector and businessmen, better results could be expected.
Though it may well help to have a general development outline adopted by Arab countries given their shared history, cultural and social factors to meet the aspirations of some 350 million people provide them with job opportunities, decent education, health services and an overall development, but in reality each country has its own circumstances that dictate the way it wants to pursue its political and economic development policies.
After all, the much talked about European Union continues to face challenges that even raise question marks regarding its very usefulness and potential survival.
n This article is exclusive to Arab News.
Arab coordination or solo approach
Arab coordination or solo approach
