Middle Eastern countries need “to put their house in order” and the West should pump more Foreign Direct Investments (FDI) into the region to help bridge economic inequalities that are at the root of the prevailing mistrust between East and West, said Mohamed Ali Alabbar, director general of the Dubai Department of Economic Development.
“We need to ask ourselves: do the events of September 11 in the United States constitute the real cause for the demise of that confidence or is it one symptom of a bigger problem?” Alabbar was speaking today at the 38th International Advertising Association (IAA) World Congress being held in Beirut May 22-24, inaugurated by Lebanese President Emile Lahoud and Prime Minister Rafic Hariri.
Quoting international figures on FDI to highlight the need for more Western investment in the region, Alabbar said direct capital flows into the developing world surged an average of $48 billion a year in 1985 to a peak of nearly $240 billion in 1999. That is a fourth of a total of $865 billion of total worldwide investments. However, less than five percent of the capital invested in the developing world was channeled into the Gulf and other Arab countries, which accounts for just 0.3 percent of the Arab Gross Domestic Product (GDP).
“I think the real cause for the lack of confidence between developing countries and the West is the existence of inequalities in all aspects of life but more acutely in the economic sphere,” stated Alabbar. He said the process of bridging these inequalities “requires establishing a strong, sustainable and mutually beneficial relationship that must be built brick by brick by both the developing economies of the Middle East and the developed ones of the West.”
Alabbar said Arab countries must “Integrate our economies with the West; create the most efficient and transparent system of governance; deregulate core sectors; improve production systems; respect the dignities of our citizens; uproot corruption from within public institutions; and most importantly, focus on education to create an intelligent and efficient workforce to fuel further economic growth.”
He also called on the West to provide “every possible assistance” to help implement those reforms in the most effective way “through its financial institutions, increasing its flow of Foreign Direct Investment and technical know-how and opening its markets for the exports of the developing economies.”
Pointing the way forward, Alabbar said: “Although other factors such as political stability, economic growth and high per capita income play a key role in integrating our economies with the west, there is a strong need for the Arab and Gulf states to show commitment to reforms and market new incentives and promotional programs.”
“We need to quickly put a plan to attract FDI to our region. By adopting reform policies and taking the appropriate measures to create the most conducive atmosphere by deregulating our industrial sectors, encouraging openness, providing incentives, education and training of our labor force we can make an attractive offering.“ — (menareport.com)
© 2002 Mena Report (www.menareport.com)
