Integrating the Arab World for Sustainable Growth
At a time of severe economic challenges and deep political uncertainty, revitalizing the Arab world’s integration agenda might seem like a pipe dream. But, as other regions have shown, it is achievable, and if Arab countries want to address the challenges they face in an efficient and sustainable way, there is no alternative.
AMMAN – The Arab world has a massive natural-resource endowment and a total GDP of nearly $2.5 trillion. The region is highly diverse in its wealth distribution and levels of economic development, with pockets of exceptional prosperity existing alongside some of the world’s poorest places. The key to closing the gap – and boosting sustainable economic growth – is integration.
Efforts to achieve economic integration in the Arab world began more than 70 years ago, with the establishment of the Arab League. Formed by seven countries in 1945, the group now has 22 members (though Syria was suspended in 2011 in light of the political developments in the country.) In 1974, the Arab Investment & Export Credit Guarantee Corporation was established to promote inward foreign direct investment by providing risk insurance to Arab and non-Arab investors and lenders, and to Arab exporters.
Arab integration reached another milestone in 1998, when the Trade Facilitation and Development Agreement entered into force. In 2005, that deal was upgraded to the Greater Arab Free Trade Agreement (GAFTA), which eliminated customs duties among its 17 member countries.