One crisis after another, development has become a do-or-die for Arab countries. Niveen Wahish reports from Sharm El-Sheikh on the Second Arab Economic Summit It is standard protocol during conferences to turn mobile phones off, but for Amr Moussa, secretary-general of the Arab League, that is quite impossible. During a meeting of the Economic and Social Council of the Arab League in preparation for the Arab Economic Summit, he said he could not turn his cell phone off because he continuously receives calls alerting him to emergencies. In fact the list of Arab crises seems to be getting lengthier by the day. No longer does the Arab League have to worry only about Palestine, Iraq or Sudan; Tunisia, with its recent unrest, figured out on the list as well. But although no direct statement was made on the internal situation in Tunisia, it was referred to as a lesson of the need to grow and boost growth through cooperation to create jobs and improve living standards. "What is happening in Tunisia is not far from what the summit is about," Moussa told Arab leaders at the Second Arab Economic Summit, adding that "poverty and unemployment have broken the Arab people." Moussa's words were illustrative of the frustration across the Arab world with poverty, unemployment and rising prices. Various men in Egypt and elsewhere have set themselves on fire throughout the past week emulating the Tunisian Mohamed Bouazizi whose self- immolation sparked outrage in Tunisia. The discourse throughout the summit reflected an urgency to concentrate on economic issues. As President Hosni Mubarak told leaders during the summit's opening session yesterday in Sharm El-Sheikh, "our visions have met, to work cooperatively to support economic growth." Concentrating on economic development may also be the solution after having "failed to achieve integration throughout the past 60 years, in a form that would satisfy the ambitions and the economic capability of the Arab people because political issues overshadowed economic cooperation," as Rachid Mohamed Rachid, Egypt's minister of trade and industry, put it. Attempts at Arab integration throughout 60 years have so far culminated in only an Arab Free Trade Area where non-tariff barriers have rendered the lifting of tariff barriers ineffective. In fact, inter-Arab trade does not surpass 12 per cent of their trade with the outside world. In comparison, trade among the EU members reaches 63 per cent of their total trade. That urgency stems from the fact that "no country will make it on its own," Rachid told a press conference. He said the need to integrate emanates not from an emotional stance, but from a practical point of view whereby individual country interest will not happen without cooperation. He added that today, cooperation may come about more easily not only because of greater conviction, but because Arab countries have all adopted an approach towards a market economy, though at different levels of development. "There is reasonable hope in the Arab development process," with joint projects being studied or implemented, Moussa said. Nonetheless, he said that efforts so far are neither comprehensive nor quick enough. He referred to the "majority of Arab people suffering unemployment, poverty and marginalisation." He added: "What Arabs need is a renaissance, to achieve a success that is felt by citizens in their standard of living." But as Rachid put it, "there are no quick fixes," and that "no jobs will be created without investment." He added that no one would be willing to invest unless there is an environment conducive to investment. He pointed out that what is keeping the region's wealthy investment funds from investing in the Arab region is the lack of an investment climate that could absorb that kind of money. Rachid's words indicated that should these obstacles be solved, hope lies with the private sector to achieve development. But these obstacles are not to be taken lightly. Demands by a group of some 30 major regional business players, who form part of the Arab Business Initiative (ABI) and were invited to present their view at the summit included the need for an Arab economic court, an investment guarantee mechanism and an arbitration mechanism. ABI was launched in the weeks prior to the summit to represent the voice of the Arab private sector. Although inter-Arab investments have grown in the past 10 years from $2 billion to $20 billion, they remain below their potential. According to Chairman of EFG-Hermes Holding Yasser El-Mallawany, who represented ABI during the summit, inter-Arab investments represent seven per cent of Arab global investment. They also called for the opening up of liberalisation of services, national treatment, allowing freer movement of labour and opening up of all sectors, including infrastructure, for investment. In fact, opening up infrastructure investments to the private sector is particularly crucial if the summit's ambitious plans for intra-regional infrastructure connectivity, including roads, railroads, marine ports and electricity is to take place. That would require reforming laws across the Arab world to allow for private sector participation. But Lamia Asi, Syrian minister of economy and trade, told Al-Ahram Weekly, that is doable. "Arab Countries are modernising their investment laws and the Arab investment environment is increasingly reaching international standards," she said. One area where cooperation will also pay off with time is that of food security. Tarek El-Dzajeli, director of the Arab Organisation for Agricultural Development, told the Weekly that the food gap is currently estimated at $28 billion and is forecast to reach $71 billion by 2030. "If Arabs put their heads together, they can achieve food security," he said, adding that "all it takes is that the countries with the financial resources yet lack the land, weather and water, can invest in countries that have those traits but lack the financial capability." El-Dzajeli, however, pointed out that this is a process which takes time, and that before it can happen, it needs the infrastructure to transport and store crops. Greater integration, though, according to Rachid, means making sacrifices for the sake of the greater good. He pointed out that it could mean small entities being hit by the competition on the regional level. Also on the long term, it will mean giving up some national sovereignty for the benefit of the regional sovereignty. "That is a challenge for the governments," he said. In fact, as Ahmed Galal, managing director of the Economic Research Forum told Al-Ahram Weekly, Arabs have to have a clear target in mind and move towards it slowly but surely. What caused efforts to fail previously, according to Galal, was that leaders placed targets that are too ambitious and they were unwilling to make the necessary sacrifices or they took modest moves not necessarily related to their target. In comparison, he said, the EU have reached where they are today after a lengthy process for which they had begun preparing years earlier. That process included the establishment of supranational institutions. For example, he said, no longer is monetary policy decided on the national level, but it is set by the European Central Bank. Whether Arabs will reach that far remains unknown. One participant at the meetings which preceded the summit, who preferred to remain anonymous, believes what is being said "is just talk," while officials have said the political will exists to make the needed changes. As Asi said: "We are in a world built on economic blocs. If we cannot make sacrifices to achieve higher goals, individual countries will not be able to make it in the global economy."
