Arab Integration: A 21st Century Development Imperative Report

Inclusive economic integration in the Arab region would create six million new jobs by 2020 and increase regional gross domestic product by three per cent, the United Nations today reported arguing for a unified model like that of the European Union or other regional economic blocs.

The argument is part of a report launched today by Rima Khalaf, Executive Secretary of the Economic and Social Commission of Western Asia (ESCWA), entitled, Arab Integration: A 21st Century Development Imperative.

Cultivating a dynamic economic environment “would guarantee economic and social gains and ensure their place among the regional blocs that govern the global economy and contribute to shaping international structures and institutions,” the Beirut-based agency noted.

The report utilizes studies and economic models to compare potential growth if regional countries integrated with the effects of maintaining a status quo. It also identifies a number of potential strategies for promoting free trade in services, free movement in capital and workers, and the development of regional production chains.

In addition, the report presents scenarios for the completion of the Greater Arab Free Trade Area (GAFTA) and the establishment of an Arab customs union would redistribute revenue from tariffs among the various countries.

Under one of the scenarios, the deepening integration would reduce transport costs for Arab trade and replace a section of migrant labour force with regional workers.

These moves, combined with the creation of an Arab customs union, “would guarantee an increase of three per cent in Arab gross domestic product by 2020 and would reduce unemployment by over four per cent,” according to the findings. This additional growth would generate an additional $760 billion in Arab revenue, equivalent to more than the total revenue last year of Arab countries in North Africa.

“The report calls argues that these goals are within reach, so long as the political will exists to pursue economic integration as a path towards genuine sustainable development,” ESCWA wrote.

The report follows the release of the “Rethinking Economic Growth: Towards Inclusive and Productive Arab Societies,” produced by the UN International Labour Organization (ILO) and the UN Development Programme (UNDP). Those authors stressed that countries in the region must pay attention in particular to the social consequences of their economic policies, as the recent uprisings against various Arab Governments have exposed a lack of social protection and dialogue between citizens and authorities.