January 21st, 2011
11:51 AM GMT
The Arab Economic and Development Summit was a venue for taking a longer term view on creating the conditions for pan-Arab integration and job creation. As a result of the Tunisian revolution - as many are labelling the groundswell for change – it quickly morphed into an emergency summit at the Red Sea resort of Sharm El Sheikh.
The secretary general of the Arab League used unusually blunt terms to jump-start a process that, candidly, has taken too long to gather traction.
“The issues causing the revolution in Tunisia are not far from the issue of this summit, which is economic and social development,” said Amr Moussa. “The Arab citizen has entered a stage of anger that is unprecedented.”
The previous summit on development in early 2009 was designed to focus on the rapid birth rates across the region and the impact on the rising jobless, especially those under 30 years old - 60% of the region’s population.
That effort went off the rails due to strained talks on the Palestinian territories and Israel and the ongoing struggles in Lebanon. While there is no doubt those issues need to be tackled for long-term stability, the leaders in Sharm El Sheikh admitted the youth cannot be ignored.
“It has become an issue of our future survival, self-determination and a necessity for Arab national security,” said Hosni Mubarak who has held the reigns of power in Egypt for three decades.
Investors have their eyes fixed on the region’s most populous state, since a quarter of the population remains below the poverty line despite more than five years of reform.
The country’s Trade and Industry Minister, Rachid Mohamed Rachid, says those reforms and a steady flow of foreign direct investment have led to the creation of more than three million jobs in a handful of years, but he believes it is time for another push that reaches a broader swath of the population.
Minister Rachid wants the private sector to have a larger say in the future. For this summit, he brought 30 Arab chief executives who lobbied for a faster pace of integration and funds to spark the creation of small and medium-sized enterprises (SMEs).
“If you don’t have stability, you don’t have investment, if you don’t have investment, you don’t have jobs. It is a vicious circle, so stability is key,” said the former Unilever executive.
Leaders attending the summit formalized a $2 billion fund for such activities, with Saudi Arabia and Kuwait providing half the seed capital. Some other Gulf States chipped in and added extra monies to their national budgets to subsidize their poor to stave off potential unrest as well.
Dubai-based Abraaj Capital launched its own effort in the SME space late in 2010 to foster the creation of new enterprises. Chief Executive Arif Naqvi said the response by the youth in Tunisia is reflective of a wider challenge.
“There are reasons why the unrest and upheaval in Tunisia happened. I think that economic disparity is part of it and I think that the more governments recognise and realise that the youth need to be productively channelled, opportunities need to be created for them.”
According to the World Bank, 100 million jobs need to be created for the jobless rate to stand still. Double digit unemployment for the Arab youth below 30 is the norm not the exception.
Did those leaders sitting around the table in Egypt get the message from Tunis and also from business leaders attending the summit? No doubt.
Can they move fast enough to make a difference? That verdict, unfortunately, is still out.
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