This contributed to political agitation and led to the independence of most Arab states from the Ottoman Empire (1918) and from the European powers (by the mid-20th century). An important event was the founding in 1943 of the Baath Party, which formed branches in several countries and became the ruling party in Syria and Iraq. Another was the founding of the Arab League in 1945. Pan-Arabism's most charismatic and effective proponent was Egypt's Gamal Abdel Nasser.
Arab League
The Arab League or League of Arab States was a regional organisation formed on March 22, 1945 (Alexandria Protocol) and based in Cairo. It initially comprised Egypt, Syria, Lebanon, Iraq, Transjordan (now Jordan), Saudi Arabia, and Yemen; joining later were Libya, Sudan, Tunisia, Morocco, Kuwait, Algeria, Bahrain, Oman, Qatar, the United Arab Emirates, Mauritania, Somalia, Palestine, Djibouti, and Comoros. The league's original aims were to strengthen and coordinate political, cultural, economic, and social programs and to mediate disputes; a later aim was to coordinate military defence. The official language is Arabic. The total Population of the Arab League was estimated at 345.98 Million in 2007.
Emerging Arab world and business opportunities
The Arab world, a home to more than 360 million people, representing 5% of the world’s population, with an area of about 13.3 million km2 (about 10% of the world inhabited land), and around 2799 billion dollars Gross Domestic Product (3.7% of global GDP), is playing a greater role in the world economy. Moreover, the Arab world will be a centre to the Islamic economy, estimated at US$3 trillion, a new economic paradigm that is likely to have a significant global impact over the next decade.
The abundant revenues of oil and gas made of the Arab world the largest region in terms of sovereign wealth funds in the world, with total assets estimated at about $1970 billion (38% of the total world assets). If well invested, the available huge funds are the stone corner to diversify the local economies in the Arab countries. In terms of investments in the Arab world as a whole, they have increased from $6.1 billion in 2000 to $79.3 billion in 2009, this level is comparable to that of China ($95 billion 2009) (UNCTAD data). The ongoing pattern of global growth, with emerging economies grow faster than their advanced counterparts, and the shift in the global economic power, ensures that Middle East and Africa are expected to be the fastest growing regions in 2018, which means huge needs in terms of investments mainly infrastructure, renewable energy, health, education, etc… just to mention a few.
With more than 135 million internet users in the Arab world, a new generation of entrepreneurs, passionate about technology, is emerging. This region is expected to post robust growth over the next decade both in terms of population and GDP. By 2015 the Arab population is forecast to reach 371m, about 50% increase over the level in 2000. Whereas the real GDP (based on PPP) is expected to grow by about 190%.
Doing business in the Arab world becomes a corner stone for the local governments. The battle is now between the economic ministers in terms of the most business-friendly economy. Several Arab governments implemented regulatory reforms in the past years aimed at improving the business environment. Investing the Arab funds locally and attracting FDIs are very crucial in order to satisfy the increasing needs for infrastructure, transport, education, health care, housing, business services, logistics, agriculture, oil and petrochemicals, financial sector, defense, industrial output as well as Islamic products.
In spite of the numerous advantages of the Arab world, the ongoing political turmoil hit hard many economies of the region. The absence of a demonstrated international competitiveness in either manufacturing or services as well as corruption constitute one of the main obstacles for doing business. Institutional reform, capacity building, reforming the education and the regulations facing business remains essential.
Moreover, the Arab world needs to create a dynamic private-sector in order to create sufficient employment. This will be done through high competitiveness, an educational system which meets the labour markets’ needs, and through encouraging applied sciences to transform ideas into real business projects, as well as through more consolidated trade and economic relations with the external world.
If the Arab region’s employment challenge can be successfully addressed, the region’s young demographic could then turn from a potential liability to a bonus. I believe it is time more than ever to invest in this region, not only because of the high return on investment, but also because the birth of the new economic paradigm, the future “G7”, passes through this region.
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Arab world major Statistics for 2013
Arab World Population by country: 2012 source: World factbook, CIA
Arab World GDP at PPP ($ Billion): 2012
Source: World factbook, CIA, data for Libya and Somalia are for 2011.
Arab World GDP per capita : 2012
* Data for Somalia are for 2011.
Source: World factbook, CIA and International Monetary Fund.
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