The first phase of the aid for trade Initiative for Arab states began with the meeting of its board at the Islamic Development Bank (IDB) headquarters here on Wednesday. It was organized by IDB Group’s International Islamic Trade Finance Corporation (ITFC).

“The initiative is for enhancing and developing both intra-Arab and international trade,” Waleed Al-Wohaib, CEO of ITFC, told Arab News.

“Saudi Arabia is one of the main Arab leading countries supporting the initiative, which was approved by the Arab Summit held in Riyadh last year. It is the Arab effort with the support of the international community to enhance trade among Arab States. This kind of initiative will help achieve it,” he added.

In his opening remarks, IDB President Ahmad Mohamed Ali stressed the importance of enhancing intra-Arab trade, and said that it had received “great support” from Custodian of the Two Holy Mosques King Abdullah, who has instructed that it be implemented as soon as possible.

Since its inception in 1975, IDB has been giving priority to trade between member countries, and it was the first bank to create program to finance trade, Ali said, adding:. “It was criticized because they said trade has nothing to do with development.”

The Arab region faces a number of challenges that hinder their capacity to reap the benefits of regional and international trade. The 22 members of the League of Arab States (LAS) have the lowest level of intra-regional trade in the world, despite preferential market access.

According to COMTRADE data, most countries in the Arab region have majority of their trade directed to other regions - primarily Asia, EU, Japan, and the United States. Less than seven percent of the exports of Arab countries are destined to other countries within the Arab region.

Stressing that Arab States have immense potential and human resources, Al-Wohaib said this was a unique partnership between 22 countries plus seven donors — Saudi Arabia, the IDB, ITFC, Kuwait, Egypt, Sweden and the UNDP.

He added that different projects will be presented to the donors, and a unit will be established in Jeddah to follow up the progress of projects.

Mohammed Ibrahim Al-Twaijri, assistant secretary general for economic affairs at the League of Arab States, said at present intra-Arab trade was mostly in commodities, and that there were plans to promote trade in services as well.

Wafa Bassim, ambassador and permanent representative of Egypt to the United Nations Office and specialized institutions in Geneva (on behalf of the Arab Group to the WTO), said it was necessary to develop job markets in Arab States, create more jobs for the youth and eradicate poverty. At 16 percent, unemployment in Arab countries is the world’s highest.

She said it was a strategic initiative to elevate Arab States’ employment and economic levels.

Speakers, including Adel Abdellatif, chief of the regional program division, regional bureau for Arab States (RBAS), UNDP (implementing agency), and other high level representatives from the United Nations Inter-Agency Cluster on Trade and Productive Capacity, besides Saudi Arabia, Kuwait Sweden and Egypt as donors, shed light on the objective and expectations of the initiative, management, implementation and monitoring arrangements as well as the integrated work plan.

By bringing together five UN agencies, four Arab regional and sub-regional organizations (League of Arab States, GCC, Agadir Technical Unit and Maghreb Arab Union) and seven donors, the initiative has created a cooperation framework for the implementation of large multi-disciplinary projects.