The prospects for Arab economic development in the nineties is a highly complex subject that does not easily lend itself to generalizations valid for all countries. As is well known, the countries of the region vary greatly. For the oil countries, development will depend to a very large extent on what happens in the oil markets. Despite intensive efforts to diversify their economies, these countries are still heavily dependent on oil as the major source of income. Other countries may not be so heavily dependent on oil, but a good part of their growth is derived from the oil countries through workers’ remittances, development assistance, and Arab investment and trade. Still another group of countries is only remotely affected by the fortunes of the oil countries and is more concerned with developments in the export markets for their principal products. In addition to variations based on oil resources, Arab countries differ a great deal with respect to levels of development, per capita incomes, whether they export or import capital, and the extent to which they follow inward-looking or export-oriented development strategies. These variations complicate the task of assessing development prospects in the current decade.
International Monetary Fund. Middle East and Central Asia Dept.
The MENAP oil exporters were directly affected by the global financial crisis through a sharp drop in oil prices, a contraction in the global economy, and a sudden drying up of capital inflows. Although activity in the oil sector will likely drop by 3.5 percent in 2009, strong countercyclical macroeconomic policies have helped mitigate the impact of the crisis on the non-oil sector, which is projected to grow by 3.2 percent. Looking ahead, higher oil prices, a revival of global demand, and continued government spending will provide the basis for stronger growth in 2010. The crisis also revealed some vulnerabilities in the banking and corporate sectors, requiring countries to undertake exceptional stabilization measures and highlighting the need to strengthen financial sector supervision, enhance corporate governance, foster resource mobilization, and diversify risks.
On April 15, 1994 at Marrakesh, Morocco, more than one hundred countries signed the Final Act of the Uruguay Round. This marked the conclusion of a complex and protracted process of negotiations that began in September 1986 with the Punta del Este Declaration. The Uruguay Round was the eighth round of multilateral trade negotiations conducted within the framework of the General Agreement on Tariffs and Trade (GATT). Since its establishment in 1947, the GATT endeavored to achieve three principal objectives:
Despite adverse exogenous factors, Arab countries have achieved important economic gains in recent years. Nevertheless, many of them remain subject to internal and external constraints that prevent the full realization of their considerable economic potential. The welfare gains forgone are of particular relevance in the current environment, characterized, inter alia, by rapid population growth in some countries in the region, concerns about the availability of natural resources (namely, water), uncertain oil prices, and a move outside the Middle East toward regional economic blocs combined with slow progress in multilateral trade liberalization efforts.