Fulfiling the region's potential and reaching a global consensus on issues ranging from good governance to trade relations dominated the sessions of the World Economic Forum. Sahar El-Aloul reports from Jordan Under the theme "Facing the Real Challenges: Partnering for Change, Peace and Development", some 850 political, business, religious and cultural leaders from 51 countries gathered for this year's WEF-Jordan, held for the second year in a row under the patronage of Jordan's King Abdullah II. The three-day event, held on the eastern shores of the Dead Sea, witnessed a massive drop in levels of participation from last year's 1,800 delegates. The political situation in the region and the increased security considerations were blamed for this drop. Nonetheless, several world leaders were there, including United States' Secretary of State Colin Powell, United Arab Emirates' Crown Prince Sheikh Mohamed Bin Rashed Al-Maktoum, Egyptian Foreign Minister Ahmed Maher and Arab League Secretary- General Amr Moussa. An Israeli delegation also attended the conference for the second time, including Deputy Prime Minister Ehud Olmert and Foreign Minister Silvan Shalom. They were mainly involved in political panels concerning the Arab- Israeli conflict and the signing of an upgraded trade agreement with Jordan. Reform in the Arab world was the hottest subject of discussion as political and economic experts deliberated on how to reform a region in which one out of every two women is illiterate, 10 million children do not attend school and, after Sub-Saharan African, per capita income is the slowest growing in the world, according to the Arab Human Development Report (AHDR). But Arab officials insisted that they are on the right track as far as reform is concerned and that it was their intention to reform to begin with -- in a clear reference to the US- proposed Middle East reform agenda, expected to be unveiled at the G8 meeting this summer. "The train for reform has left the station. We don't need conferences to tell us to reform, we know that ourselves and we want it. Reform is our decision and we need you [the West] to help us," Moussa said during a WEF plenary session on reform. He added, however, that no reform could take place until the Palestinian issue has been solved and the question of Iraq has been properly addressed. "But this does not mean that we should hold back on reform until the Palestinian and Iraqi issues are resolved," he explained. Business leaders also gave their own perspective of the obstacles hindering economic reforms and investment in the region. WEF Co- Chairman and Chief Executive Officer and Chairman of US Fluor Corporation Alan Boeckman summarised these obstacles in the following categories: corruption, bureaucracy and political instability. World Bank President James Wolfensohn highlighted what he termed as the region's main needs as the empowerment of the private sector, the creation of an open society, the provision of a better education and the promotion of diversified economies. Arab business leaders agreed on calling on their governments to give them a "break" in economic policies and lessening restrictions on trade and services. Chairman and Chief Executive Officer of Egypt's Orascom Telecom Holding Naguib Sawiris suggested that instead of focussing on political reform, the Arab world should centre its efforts on liberalising its economies. "We [the private sector] should be given the right to liberalise our economies," Sawiris, who also co-chaired the WEF, said during a plenary session on the reform agenda. "Look at China for example. It is clearly not a democratic country but is the most rapidly growing economy in the world." In a poll taken at the session only 40.8 per cent of the audience believed that Arab leaders should open up their economies for the sake of reform, while 44 per cent called on them to give way to political reform. The remaining 15 per cent thought that social reforms are key to ensuring the success of the overall reform process. A staggering 94.4 per cent of the audience thought that the commitment to reform that Middle Eastern governments have expressed is merely rhetorical. Only 5.6 per cent thought they are fully committed. Unemployment was another recurrent issue during the forum's discussions, as governments are facing the daunting task of creating 100 million new jobs in the Arab world in the coming 20 years to accommodate the growing number of graduates and qualified workers. World Bank expert Mustapha Nabli thought that creating these jobs is too huge of a task for any government to undertake, but many of the Arab participants thought it possible should all stakeholders, including governments, the private sector and society commit themselves to this goal. Nabli's observation came in light of what he termed as the private sector's inability to create new jobs without the support of governments on the one hand and the attraction of foreign direct investment to the area. Enhancing economic freedoms and opening up markets were another proposed solution, not just to unemployment and the lack of direct investment, but also in order to nourish democratic trends through trade. " [Milton] Friedman used to say the solution was to privatise, privatise, privatise," noted Fred McMahon, director of the Centre for Globalisation Studies, The Fraser Institute, Canada. "But he later corrected himself to say that nothing would work without the legal reforms to make it possible." He added that people need to release ownership from their Islamic legal system. They need to adapt these codes to a changing world through a separation of powers. And they need to know that the law is a protective tool of the people, he said, not an oppressive tool of the state. Salem Ben Nasser Al-Ismaili, director of Oman Oil Company, agreed with McMahon, adding that securing financing, allowing the flow of foreign currency, lowering taxes, streamlining bureaucracy and creating strategic alliances and partnerships with foreign investments are but a few of the directions Arab governments could take to liberalise their economies. Small steps towards economic reform, however, were taken at the Dead Sea meetings, including the engagement of regional governments with work of the newly incepted Arab Business Council (ABC), a community born under the WEF in the 2003 meeting and which comprises some 50 business leaders from the Arab world. Egypt, Jordan, the UAE and Morocco appointed coordinators with ABC to act as focal points between their governments and the council whose goals include enhancing regional competitiveness and the economic integration of the region in the global economy, as well as engaging private sector leaders with regional governments and civil society. ABC Executive Committee Chairman Shafiq Gabr commented on the designations by saying: "The government coordinators will not only provide support from the four governments, but will also give us a strong mandate to work with our governments to effect key reforms." The council is expected to meet in September this year in Morocco to discuss pan-Arab trade and competitiveness. The meeting is expected to provide critical feedback towards the launch of WEF's second Arab World Competitiveness Report. Although much of the focus was on this part of the world and what can be done to remedy its stagnant political and economic state, many of the forum's panels integrated into the regional discussion a larger, global perspective. The session on US-Arab economic relations saw an active debate on why American investors shy away from the region, which they perceive as dangerous, unfamiliar and dominated by energy-extracting businesses. One way of enhancing economic relations with the US, WEF participants believed, would be through bilateral agreements. Financial leaders should put pressure on governments that are reluctant to sign. Moreover, the US can help encourage trade relations with the Arab world by providing technical assistance for economic reform, the promotion of the private sector, the provision of financial aid and helping to achieve peace and stability, according to Abdallah El-Maaroufi, senior adviser to the US Conference Board. "The last issue is obviously much more political, but I don't think we can duck it. Without security and stability there cannot be much prosperity," he said. Participants at the forum agreed that transparency, accountability and an educated work force are the main keys to the creation of an investment-friendly environment. Above all, he emphasised the importance of finding a just and peaceful solution to the Arab- Israeli conflict in Palestine and achieving stability in Iraq, so that any economic progress can take place. Jordan is expected to host the World Economic Forum by the Dead Sea in May 2005, while another meeting will be scheduled in Qatar, with a special focus on global competitiveness.
