DUBAI: Saudi Arabia, the UAE and Qatar have the opportunity to become engines of growth in the Arab world in the aftermath of the Arab Spring, said Nasser Saidi, chief economist at the Dubai International Financial Centre (DIFC) and executive director of the Hawkamah-Institute for Corporate Governance.
He was speaking at an exclusive forum hosted by the Capital Club Dubai, the region's private business club and a member of the ENSHAA group of companies, to discuss the need for policy reforms, institutional change and extensive investment in the region in the wake of the Arab Spring.
"The GCC has big incentive to do it," said Saidi, who is a member of the IMF's regional advisory group for MENA and co-chair of the Organization of Economic Cooperation and Development's MENA Corporate Governance Working Group.
He said that the idea goes back to Egypt of 1953. But Egypt couldn't become the engine of growth. That opportunity has come to the GCC countries now.
"The GCC member states should take more active role, economically. They should widen the net and include countries like Egypt, Yemen, Jordan and Morocco into the GCC fold," he said.
He suggested that the GCC countries should prepare a roadmap for countries like Egypt and Yemen and present it to their governments while making it clear that they would have to follow the roadmap if they want to join the group.
Saidi, who was also named among the 50 most influential Arabs in the world by The Middle East magazine for the third time, this year, suggested privatization and more public-private partnerships to develop infrastructure in the countries torn by war and violence.
He also suggested setting up a MENA bank dedicated to reconstruction and development of the region. He pointed out that the US, Asia, Africa and Europe all have their own financial organizations for reconstruction and development. But MENA is the only region that doesn't have a bank for the cause.
Stressing upon the need for setting up the bank, Saidi said, "This is the time when we need an institution like this, because the transition is going to take years and we have to address all the challenges and vulnerabilities."
He said that the oil exporting countries in the GCC might be the main stakeholder in the bank. "We the Arab countries have to do it on our own. We cannot wait for people from other parts of the world to come and resolve our problems. This is the time that the Arab countries play their role in transformation, build their own institutions and bring the change.
"Although it seems very challenging at the moment, we need to realize that we are very rich, and have the natural resources. The potential is also certainly there," he added.
In the wake of the looming fear of global sovereign debt crisis, Saidi said that the increasing stature of Asian countries like China and India are the saving grace for the MENA region.
He said that the UAE has benefited from the recent political turmoil in the Arab region because of its political stability. The UAE remains an important hub for India and China to enter the GCC countries and the MENA region.
The economist said that Dubai recovered from the financial crisis much faster because of its strong links to India and China. He pointed out that Dubai's multinational companies like Dubai World, Emirates and Dubal are doing well in the emerging markets and tourist flow from Asia has increased substantially.
He suggested the GCC countries should benefit from the growth of India and China because they are growing much faster. The growth rate of the emerging markets is two to three times faster than the advanced economies of the world.
"The trade policies as well as economic and investment policies should be reoriented toward Asia, because that is where the growth is coming from. If you strengthen your links to the Asian giants, you will be less vulnerable than you were five to 10 years ago to what is happening in Europe and the United States," he said.
Source: Arab News, Saudi Arabia, October 22, 2011. Changes were made in keeping with the editorial policy of www.memrieconomicblog.org.