DUBAI, 30 October — Financial experts attending the Dubai Strategy Forum yesterday called on the Middle East states to embrace globalization if they want to escape the economic malaise gripping the region.
"It is obvious that self-sufficiency has become an obsolete notion — but this region has largely escaped this," Saudi businessman Prince Alwaleed ibn Talal told the three-day forum, which opened here on Monday. "The Middle East has an economic malaise. Trade is stagnant and there is anemic growth," he said.
Prince Alwaleed urged governments to tackle the economic plight of the world’s nearly 300 million Arabs. "The sad part is that the Middle East and North Africa region are not historically like this," he said, recalling bygone trade routes to Europe, Africa and Asia.
"Colonialism with its operative principle of divide and rule must carry a very large share of the blame. However, let’s not lose sight of the fact that we have been sovereign states for over half a century," Alwaleed said.
Saudi Arabia, the main power in the Gulf with by far the biggest population, was "facing big issues", such as high unemployment, the prince said.
"There are the issues of high debt, GDP per capita going down from $27,800 to $7,900," and unemployment, he said.
"We have reached the stage where issues have been diagnosed, and have been put on the table openly and bluntly. We should now go into the remedy phase. The speed is still slow," he said.
Politicians, businessmen and intellectuals at the forum repeated calls for greater political and economic openness.
"Arab governments have no choice but to reform. Change will take place with or without government participation," said Rima Khalaf Hunaidi, a former minister of the Jordanian government. "There is a high level of disenchantment and frustration. What is needed is a genuine and orderly process of reform," she told the forum.
Hunaidi was the co-author of a United Nations report published earlier this year, which painted a gloomy economic and political picture of the Arab League’s 22 states. The report said real per capita income in Arab countries grew by a mere 0.5 percent a year between 1975 and 1998 against a global average of 1.3 percent. Only sub-Saharan Africa fared worse.
Other speakers accused Arab governments of corruption and a lack of accountability. They said Arab youth, especially the unemployed, felt alienated. "These have created a generation which has given up," said Shafeeq Ghabra, professor of political science at Kuwait University.
"We won’t be the same five to 10 years from now. Everybody is being challenged but no one knows where we’re going. The transformation will be violent if we don’t re-examine the situation," Ghabra said.
Nemir Kirdar, president and chief executive officer of Investcorp, argued that the economic policy of retaining the same production capacity with burgeoning populations did not work. "We should not be looking to the government to provide jobs," he said.
A government "should not indulge itself in the economy", but establish a regulatory, supervisory and legal framework to enable the private sector to flourish. "They should not be the engine," he said.
But speakers could not agree on the pace of change. Edward Walker, a former US assistant secretary of state for Near Eastern affairs, cautioned against hasty reform. He pointed to Algeria, where political reforms brought Islamists to the cusp of victory in a 1992 election which the government then scrapped. More 100,000 people have died in the ensuing civil war. "We saw what happened in Algeria when you pushed too far," said Walker.
