Middle-east Arab News Opinion | Asharq Al-awsat

Drought - ASHARQ AL-AWSAT English Archive
Select Page

Has the Arab economy dried up, and is it no longer able to make big surprises happen? This question is logical and important, especially in light of the lack of [financial] news on giant projects or mergers [in our region]. The markets are concerned, and news and rumours are beginning to spread, the majority of this deals with attempts to analyze and explain the cause that had led to this [Arab financial drought]. The reason that is always being put forward is the absence of “motivators” which cause capital to be expended by those looking for investment opportunities, however there is still some legislation that is “restrictive” and inflexible, and in many cases this legislation is the entire problem.

In many cases, those holding a monopoly are legitimized, and given sufficient cover that allows them to acquire an even stronger competitive particular sector thereby preventing fair competition and denying the possibility of new “investment” and employment [in this sector]. Even the promise of foreign investment and a mechanism of luring [this type of investment] has not been enough to lure the big names in the important sectors, and so car manufacturing companies are absent [from the Arab economy], as are IT companies, media companies, airlines, universities, hospitals, and other [companies] required [by the Arab economy]. During times of recession, markets are capable of innovation and creativity, re-inventing themselves and [also] recognizing opportunities that enable them to generate [economic] strength, which creates greater competition.

The Arab markets are still emerging, and this can be seen in how they are regulated and perceived, and the [Arab] economy is sill being dominated by the “tax” industry, which means that tax is the most important thing. This is the role of the Treasury, with the assigned role being to collect this tax. This comes at the role of the economy which is to facilitate financial deals and remove restrictions and free us from the routine, this would result in the increase of investors initiating projects and investing in [the Arab economy] which would succeed in gaining the desired results. This is a model that is being implemented in a number of different regions around the world.

If the [bureaucratic] layers are removed and reduced with regards to the decision making process and the number of documents required by the [financial] institutions and laws are condensed, this would case a “revolution” in the investment opportunities. If this were to take place then investment would follow the famous proverb, you reap what you sow.

The [Arab] economic sector is still moving in its familiar circle of stocks and real estate, and this is what makes this a weak and fragile infrastructure that may collapse at any time as a result of the smallest crack. The economic sector will not be able to strengthen itself unless it improves the investment legislation and environment. A bold and adventurous heart is required for the [Arab] economic sector to expand to new areas and allow integration and agglomeration that is in the public interest, and which is against the monopolization of goods and services.

There are many lessons that we can benefit from, such as what is happening in Asia, Latin America, Europe, and North America. These lessons require deep reflection on what is currently taking place, and we must strongly engage with the policies of reform and development without fear or doubt, because confidence is the weapon of capitalism. Once this is gained, positive results will ensue.

Hussein Shobokshi

Hussein Shobokshi

Hussein Shobokshi is a businessman and prominent columnist. Mr. Shobokshi hosts the weekly current affairs program Al-Takreer on Al-Arabiya, and in 1995 he was chosen as one of the "Global Leaders for Tomorrow" by the World Economic Forum. He received his BA in Political Science and Management from the University of Tulsa.

More Posts