Building Collaboration Arab Entrepreneur Partnership Forum April 2-3, 2011

2 Normally I would have spoken about: Horizontal and vertical integration Networking Innovation and best practice Arab complementarities Competitiveness and regional clusters Corporate social responsibility (CSR) …………………But I am sure you know about all that! So, instead let’s talk about

3 Amartya Sen & Sustainable Development According to Sen, there are populations today that live in a state of 'unfreedom', unable to realize their capabilities. Poverty is “a deprivation of basic capabilities, rather than merely low income" Five freedoms: 1.Political freedoms 2.Economic facilities 3.Social opportunities 4.Transparency guarantees 5.Protective security

Population, Corruption and Freedom Indicators Country Population (Million) Population under 25 GDP per capita, 000 at PPP DemocracyCorruptionFreedom Index of 100=most unstable Algeria % Bahrain % Egypt % Iraq % Jordan % Kuwait % Lebanon % Libya % Morocco % Oman 3.3 M51.5% Palestine %2.993NA181NA Qatar % Saudi Arabia % Sudan % NA Syria % Tunisia % UAE % Yemen % The Economist Ranking of democracy ( out of 167 countries ) Ranking of corruption ( out of 178 countries ) Ranking of press freedoms ( out of 196 countries )

5 Democracy and GDP per capita in MENA Income is positively related to Democracy

GDP per Capita (PPP, 1000s) Source: IMF

Oil/gas Revenues Economies are dependent on hydrocarbon revenues Source: IMF

Military Expenditures as % of GDP

Foreign Direct Investment as % of GDP, 2009

% of Population Under the Age of 30

Quality of Education Index

Unemployment Rates (%)

Youth Employment Rates (%)

Youth Unemployment (%) vs. Political Stability

% of Population Below the Poverty Line

Development Equitable Growth Accountability Transparency Freedom of Speech Democracy A Thesis…

Collaboration? But… AgreementDate SignedMembers Pan-Arab Free Trade Area (10 yr transition period) January 1, 1998.All Arab states Agadir AgreementFebruary Egypt, Morocco, Tunisia and Jordan Unified Economic Agreement Signed 1981 and adapted December 2001 Gulf Cooperation Council (GCC) Arab countries resorted to intergovernmental approaches to integration due to reluctance of Arab leaders to transfer sovereignty to supranational bodies

Areas of Possible Cooperation: Evidence shows there is little gain from cooperating in manufacturing (goods): lack of competitiveness, low value added, little intra industry trade Integration in Services, Labor, FDI flows (Capital) have high potential gains from integration. Newly democratizing economies will most likely see greater economic integration with each other; the trend may spread throughout region.

Thank You