Minister of Petroleum and Mineral Resources Ali Al-Naimi was recently quoted as saying that globalization has encouraged people to reflect on what the future holds for them. By just watching television people can easily follow world developments and predict what direction the world is taking. I was impressed with the statement that reflects the spirit of our time.
It comes at a time when global television stations are increasingly talking about our economic and social conditions. Some of the international stations are pre-occupied with redesigning our way of life. They are telling us how to behave and how the world should deal with us if we don’t.
Our silence may be interpreted as approval. And as long as we are tied up in the one crucial political issue that has been the source of trouble for the region for more than half a century, we may one day wake up to find that the initiative has been taken by others. This is the kind of economic trusteeship that our Arab region has long left behind. We need no body to tell us how to run our economy or invest our resources. However, we are ready to accept all that leads to mutual benefits away from any threats.
Wisdom suggests that the countries of this region need to attract foreign investment to meet their economic needs. However, over the first three months of this year the share of the entire African continent and the Middle East combined was a mere $80 million, out of a global total of $107 billion. We have to remember that these investments represent multinational companies who are mostly American, European and Japanese. They look for large markets with stable and favorable conditions, equal treatment of local and foreign investors coupled with a high degree of transparency and a skilled workforce. When even Europe can’t match the US, what do we expect from 22 different markets who, although being members of the same Arab League, have yet to form a single market? Reports by internationally acclaimed economists and experts paint a clear picture for the economic and social affairs of the Middle Eastern and North African countries. One very important and recent such report was ordered by the Council of Foreign Relations. This report suggests ways and means to overcome domestic regulatory problems that continue to cripple progress in a region rich in human and natural resources.
It views protectionism and high tariffs to be among the major obstacles facing the economies of the region. Other problems impeding investment and growth include continued state monopoly and entrenched red tape. It stresses the need for enhancing economic performance to enable these economies to link up with the rest of the world. It suggested this could be done in a manner that ensures mutual benefits through foreign investments and through trading in services and goods without being confined to natural resources such as oil, phosphate and agricultural products to generate income. Without accelerated development backed by comprehensive internal economic reforms, the removal of all barriers and ending monopoly the region would remain lagging behind.