Only time will tell whether Arab leaders will be able to achieve better standards of living for their people, Manal Fayez reports from Kuwait As its title indicates, this week's Arab Economic, Social and Development Summit was originally scheduled to discuss social and economic issues related to the means of improving Arab citizens' standards of living. However, the situation in Gaza imposed itself on the event and added a new political dimension that was not originally included in the agenda when the summit was first proposed two years ago by Kuwait and Egypt. Still the event brought together some 440 Arab think tanks, economists, politicians and academics to discuss a wide range of urgent economic and social issues. Participants made serious attempts to map out Arab economic integration, to draw upon the EU model, and to work towards figuring out how best to face the numerous challenges posed by the international situation. The result was some 442 proposals that cover different sectors, including energy, trade, investment, water, food security and finance. More concretely, the proposals materialised in 10 major regional projects including an inter-Arab electricity grid to connect the countries of the region, a railway connection network, a unified vision to deal with issues related to energy, security, water and food security, the environment, and the creation of an Arab Customs Union to be effective in 2015. Moreover, an initiative of $2 billion fund was announced by Sheikh Sabah Al-Ahmed Al-Sabah of Kuwait to finance Arab development projects and Small and Medium-Sized enterprises (SMEs), to which Kuwait contributed $500 million. The main event was preceded by a number of significant preparatory and specialised meetings, including a joint meeting of the ministers of finance and governors of central banks to discuss the repercussions of the current financial crisis and its implications on Arab countries. Participants agreed unanimously that Arab economies are no island, and that the negative impact of the global crisis includes a slowdown in growth rates and trade movement, lower demand on raw materials, a drop in oil prices and a decline in investments. The meeting discussed means to promote coordination among Arab countries in the fields of monitoring and supervising financial systems, and to coordinate fiscal and monetary policies among them. "The summit is believed to be a new start to consolidate Arab integration. Greater attention should be given to the legal and legislative environment, the means to attract more foreign and Arab investment. The private sector has a major role to play in sustaining development, particularly in developing countries," Mustafa El-Shamali, Kuwaiti minister of finance, told conference participants. On the whole, Arab economists agree that trade and investment movement within the Arab region is not as it should be. Removal of obstacles before a free movement of labour, commodities, services and capital were underlined as major tools to boost development. Regrettably, bureaucracy continues to hamper the private sector's potential. Notably, the private sector and civil society associations, perceived as key tools in development efforts, had a prominent presence at the event. In his address to the summit, Egyptian Minister of Trade and Industry Rachid Mohamed Rachid stressed the fact that inter-Arab trade constitutes 10 to 15 per cent of the total trade volume of the Arab countries, while Arab investment in neighbouring Arab countries does not exceed 25 per cent of the total Arab investment worldwide. "We need to reconsider the existing framework of Arab economic cooperation and a greater role should be given to the private sector that managed to achieve in a few years what governments failed to realise in five decades," said Rachid. Director of the World Bank's Economic and Social Development Group for the Middle East and North Africa Region Ritva Reinikka agreed. "An effective private sector in the region is the only guarantee that more job opportunities are created," said Reinikka, who added that the World Bank has been involved in programmes aimed at simplifying government procedures and reducing bureaucracy to facilitate commodity movement among Arab countries. For his part, secretary-general of the Arab Economic Unity Council, Ahmed El-Guweili, underlined that the significance of the summit is derived from its ability to draw upon major Arab concerns such as unemployment, poverty and education. "There is a need to move forward from verbal integration into deeper and more factual levels of integration. Developing an effective transportation network would form a good start," said El-Guweili who underlined that lack of easy accessibility among Arab countries is a typical obstacle to be resolved before integration. "Initially, air, land and maritime fees should be reduced," said El-Guweili who added that the "Arab Investor's Card" issued by the Arab League's is a good example of how movement among different Arab countries without a passport can be made more accessible. Notably, Arab businesswomen had a say in the event. Some prominent views related to strengthening the Arab women's role in economic development and encouraging small and medium-sized enterprises were presented by the Arab Businesswomen's Association during the Private Sector and Civil Society Forum, held on the margin of the main event. "Small and medium-sized funds have proven to be a good tool for developing small-income groups into creating their privately-owned projects," said Sheikha Hessa Saad Al-Sabbah, chairperson of the Arab Businesswomen Council, who added that the association has been effectively contributing to women's small- sized enterprises as a means to promote women's role in developing their societies. The water scarcity issue featured strongly during discussions as one of the major and perhaps most serious challenges facing a water-scarce region. A study submitted during the summit has shown that while the quantities of fresh potable water in the Arab region remain the same, demand for water is increasing rapidly due to an ever-growing population, agricultural and industrial expansions. "An international water crisis will definitely have serious implications on food security, health, social, economic and political welfare of the Arab region," the study said. In the meantime, agricultural experts were deeply concerned about the agricultural policies and strategies adapted in the Arab region. They made it clear that a food crisis is imminent if these policies continue as such. The situation may be aggravated by desertification and draught. More investment in the agricultural sector is a must. On the banking sector, Fouad Shaker, secretary-general of the Union of Arab Banks, indicated that the volume of losses in Arab banks due to the current financial crisis did not exceed one per cent. "The big problem remains with the negative impact of the crisis on different economic sectors, particularly those already in recession." Shaker underlined that the banking sector's prime responsibility in the next phase is how to strike the right balance while financing companies and institutions so as not to invoke more recession. Nevertheless, Shafik El-Ghabra, former Kuwaiti ambassador at the United Nations, believes that unless the final results of the summit are interpreted into actions with tangible results to guarantee a more promising Arab future, this summit and others will remain good wishes. "We are all engaged in providing solutions, but no breakthrough is achieved," said El-Ghabra, who added that while aiming at achieving sustainable development, Arab nations' needs, freedoms and rights should be the ultimate goal to pursue. "Promoting education and releasing creative abilities of Arab youth is a good point to start with."
