Against a backdrop of a looming world food crisis and many socioeconomic challenges, the second Arab Economic Summit will start tomorrow in the Egyptian resort of Sharm el-Sheikh amid tight security measures. More than 338 million Arabs in 22 countries are waiting for results that would hopefully improve their living standards. There's always room for crucial agreements, but carrying them out is the real dilemma, one analyst said. Preparation committees have made clear that the summit will be an opportunity "to boost joint Arab efforts to combat poverty and unemployment". But other issues have come to the surface, i.e. the global food situation and rising unemployment rates, reminiscent of the crisis in 2008. "The most important issue in the Arab world is food security. Food supply shortages are a threat in all Arab countries, as they rely heavily on food imports," Hany Riyad, an analyst at Cairo-based Financial and Legal Consultants Centre, told the Egyptian Mail in an interview. In 2009, Kuwait hosted the first Arab Economic Summit, focusing on railway linkage and small-and medium-size enterprises (SMEs). "Unemployment is another issue that needs concerted efforts from all Arab governments. Boosting SMEs would reduce unemployment rates in the long run. But there should be an urgent solution," Riyad said, referring to Kuwait's initiative to create a fund for SMEs worth $2 billion. The fund was launched in 2010; roughly $1.29 billion have been collected from member countries so far, according to Arab League officials. Earlier this month, Egypt's Beltone Financial said stock markets in the Middle East and North Africa (MENA) regions would "likely rebound in 2011, amid more stability in the macro economy, backed by higher oil prices". The investment bank added that Arab economies would grow at a faster pace in 2011 and 2012 in light of an increase in hydrocarbon revenue and infrastructure expansions. "Economists are upbeat about growth rates in the Arab Gulf, as oil prices are forecast to rise to more than $110 per barrel," he said, adding that higher oil prices may trigger a food crisis. The summit is expected to launch an urgent food security programme worth $27 billion in its first round between 2011 and 2016, the official Middle East News Agency (MENA) reported, citing Arab League officials. The second and third rounds of the programme will cost $65.4 billion each by 2030. A power grid linking Arab countries is also a main item on the agenda. Egypt has begun the construction of transmission towers, or electricity pylons, worth 80 million euros, linking Libya, Tunisia, Algeria and Morocco, according to the Ministry of Electricity. Egypt and Saudi Arabia are carrying out a project worth $1.5 billion to link the power grids of both countries. In its analysis of MENA economies, the World Bank said this month that an increase of around $18 in crude oil prices had boosted the income of hydrocarbon producers by nearly 28 per cent in 2010, while their economies noted a slight pick up. "From around $450 billion in 2009, the oil export earnings of MENA countries surged to nearly $575 billion in 2010," the Washington-based World Bank said. The bank forecasts for all MENA countries' real gross domestic product (GDP) growth rose to 4.3 per cent in 2011 and 4.4 per cent in 2012 from 3.1 per cent in 2009 and 3.3 per cent in 2010. The summit comes at a time of global and regional challenges, as Egypt's Minister of Trade and Industry Rashid Mohamed Rashid was quoted by local media as saying this week. "These developments and changes make the summit a real opportunity to speed up the achievement of common Arab integration," Rashid said. "Over the past 60 years we have failed to achieve this integration in a way that fulfills the ambitions of Arab peoples and reflects our economic capabilities, because political considerations prevailed over economic issues," Rashid said. While Arabs failed to unite over the past 60 years, Europe managed to become an entity under the umbrella of the European Union. In 1951, Belgium, France, Italy, Luxemburg, the Netherlands and West Germany (at that time) signed the Treaty of Paris, launching the European Coal and Steel Community (ECSC) a year later. The ECSC created a free trade area for several key economic and military resources: coal, coke, steel, scrap, and iron ore. Over the past 50 years, the ECSC turned into the European Union, comprising 27 member countries, generating a GDP of 11.8 trillion Euros, according to the International Monetary Fund (IMF).
