Lack of trust is impeding Arab trade, experts say at UAE meeting

Lack of confidence in each other, poor legislative frameworks and politically motivated funding are just some of the factors at play.

DUBAI // Trade among Arab nations is suffering due to a lack of confidence in one another, poor legislative frameworks and politically motivated funding.

These are just some of the factors that have led to poor economic and political cooperation between Arab nations, experts said yesterday at the annual conference of the Arab Thought Foundation.

"Since 1953 there have been 122 bilateral agreements between Arab countries signed," said Dr Abdulaziz bin Othman bin Sager, chairman of the Gulf Research Centre. "Even until today, I can safely say that the majority of those treaties have not been realised," he told a panel discussion at the Grand Hyatt hotel in Dubai.

"Over 29 multilateral agreements have been signed at the Arab League throughout its history, on various economic initiatives, and these have also not been realised."

Other panellists included former Syrian minister of economy and trade, Mohammed Nidal Al Shaar, and Dr Mustafa Abu Nabaa, the director of Middle East programmes at the Global Foundation for Democracy and Development in the Dominican Republic.

The panellists agreed that there were many instances of funding made purely for political purposes, such as agreements between Syria and Turkey.

"When the relations between Syria and Turkey saw better times, a free-trade agreement was signed," said Mr Al Shaar. "That agreement was a politically motivated one because it served the governments' interests and not the people's.

"Many industries were completely wiped out after that agreement was put into effect. Now, after the decline in relations between Syria and Turkey, this agreement is suspended."

Dr Sager added: "The lack of confidence between Arab nations can be historically proven, as in the case of Egypt after signing the peace agreement [with Israel at Camp David in the US in 1979]. Also, various water and border issues have created a mistrust and weak confidence."

Egypt was boycotted by the majority of the Arab world after signing the Israeli peace deal as it was seen as betraying the Palestinian cause.

In addition, the panellists said that hot-headed individuals in positions of power could also affect ties between countries as agreements turn "hot and cold as per the politicians see fit".

"We have seen many instances, even recently, of agreements being suspended due to one politician not being happy with his counterpart in the other country," said Dr Sager.

The recent border dispute between the UAE and Saudi Arabia at Ghuwaifat was also raised as an example of poor relations. Despite customs and border agreements, lorries were lined up for days earlier this year, with many perishables and food produce being affected by the delay, which hurt investors and end users.

"Another factor adding to this is the variance in legislation between the Arab countries," said Dr Sager.

"Also, political instability in the Arab world has affected positive economic cooperation - the 1950s, 60s and 70s have seen a lot of instability and, therefore, a continuous change in policy towards each other was happening.

"Post-Arab Spring nations are also going through political and economic turmoil, mainly due to the non-adoption of economic plans."

Mr Al Shaar said that to evaluate economic competitiveness between Arab nations, it is first important to understand the economic dimensions of each country.

"Arab countries substantially differ economically and there is a need to study and understands these economies," he said.

"Egypt's economy, which is industry and agriculturally based, differs to the UAE's, which is an export economy."

He went on to contrast Arab nations with those of Europe. "The Arab world differs a lot to the European Union. EU countries have similar legislation or provide a mandate to future members to adopt these legislations. Furthermore, their economies are similar to each other in comparison to the varying Arab economies."

Dr Sager stated that Arab countries have to start by strengthening themselves domestically through development and adoption of new legislation, developing their local economies, increasing education levels and increasing local competitiveness through a model regulated by the government.

"There is still great potential for the Arab countries as there is a need for more manpower, therefore employment," he said.

"The GCC is the closest example in the Arab World to a proper beyond-borders economic policy as all member countries are diversifying from the oil economy and have homogenous political systems. Following that would be the North African example of Tunisia, Morocco and Algeria."