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Policies advocating Middle East economic integration aim to bring about peace, stability, and prosperity in the
Middle East The Middle East ( ar, الشرق الأوسط, ISO 233: ) is a geopolitical region commonly encompassing Arabian Peninsula, Arabia (including the Arabian Peninsula and Bahrain), Anatolia, Asia Minor (Asian part of Turkey except Hatay Pro ...
, which they believe can only be sustained over the long run via regional economic cooperation.


Background

Former U.S. Secretary of State
Warren Christopher Warren Minor Christopher (October 27, 1925March 18, 2011) was an American lawyer, diplomat and politician. During Bill Clinton's first term as president, he served as the 63rd United States Secretary of State. Born in Scranton, North Dakota, ...
said that, "Governments can create the climate for economic growth... utonly the private sector can produce a peace that will endure."


Benefits of integration

Countries seek greater regional integration in order to: *make economic welfare gains, *increase the region's collective bargaining power in global issues, and *maintain security and prevent conflict.
Economic integration Economic integration is the unification of economic policies between different states, through the partial or full abolition of tariff and non-tariff restrictions on trade. The trade-stimulation effects intended by means of economic integrati ...
requires good
governance Governance is the process of interactions through the laws, norms, power or language of an organized society over a social system ( family, tribe, formal or informal organization, a territory or across territories). It is done by the g ...
,
education reform Education reform is the name given to the goal of changing public education. The meaning and education methods have changed through debates over what content or experiences result in an educated individual or an educated society. Historically, t ...
, social investing,
knowledge economy The knowledge economy (or the knowledge-based economy) is an economic system in which the production of goods and services is based principally on knowledge-intensive activities that contribute to advancement in technical and scientific inn ...
,
market economy A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers ...
,
privatization Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
and
freedom of press Freedom of the press or freedom of the media is the fundamental principle that communication and expression through various media, including printed and electronic media, especially published materials, should be considered a right to be exerc ...
.


Objectives

In 1993, Israeli Prime Minister
Shimon Peres Shimon Peres (; he, שמעון פרס ; born Szymon Perski; 2 August 1923 – 28 September 2016) was an Israeli politician who served as the eighth prime minister of Israel from 1984 to 1986 and from 1995 to 1996 and as the ninth president of ...
, a leading architect of the Oslo peace plan, envisioned that:
The next stage, after
bilateral Bilateral may refer to any concept including two sides, in particular: *Bilateria, bilateral animals *Bilateralism, the political and cultural relations between two states *Bilateral, occurring on both sides of an organism ( Anatomical terms of l ...
and multilateral relationships have been established, will entail formation of regional industries through the cooperation of international bodies and independent international consortiums. At this point, the regional economic process will be upgraded and the new reality, in which business precedes politics, will be instituted. Ultimately, the Middle East will unite in a common market after we achieve peace. And the very existence of this common market will foster vital interests in maintaining peace over the long term.


Integration and peace

A prerequisite to economic integration is the establishment of peace. To date, several initiatives have enabled rapprochement among former enemies: The Oslo Peace Accords and the 1994
Israel–Jordan peace treaty The Israel–Jordan peace treaty (formally the "Treaty of Peace Between the State of Israel and the Hashemite Kingdom of Jordan"), he, הסכם השלום בין ישראל לירדן; transliterated: ''Heskem Ha-Shalom beyn Yisra'el Le-Yarden'' ...
have promulgated greater economic interactions between Israel and its Arab neighbors. Despite this progress, problems like the
Israeli–Palestinian conflict The Israeli–Palestinian conflict is one of the world's most enduring conflicts, beginning in the mid-20th century. Various attempts have been made to resolve the conflict as part of the Israeli–Palestinian peace process, alongside other ef ...
continue to be a hindrance to peace and development. Furthermore, the instability created by the
war in Afghanistan War in Afghanistan, Afghan war, or Afghan civil war may refer to: *Conquest of Afghanistan by Alexander the Great (330 BC – 327 BC) * Muslim conquests of Afghanistan (637–709) *Conquest of Afghanistan by the Mongol Empire (13th century), see al ...
, civil wars in
Syria Syria ( ar, سُورِيَا or سُورِيَة, translit=Sūriyā), officially the Syrian Arab Republic ( ar, الجمهورية العربية السورية, al-Jumhūrīyah al-ʻArabīyah as-Sūrīyah), is a Western Asian country loc ...
,
Libya Libya (; ar, ليبيا, Lībiyā), officially the State of Libya ( ar, دولة ليبيا, Dawlat Lībiyā), is a country in the Maghreb region in North Africa. It is bordered by the Mediterranean Sea to the north, Egypt to the east, Suda ...
,
Yemen Yemen (; ar, ٱلْيَمَن, al-Yaman), officially the Republic of Yemen,, ) is a country in Western Asia. It is situated on the southern end of the Arabian Peninsula, and borders Saudi Arabia to the north and Oman to the northeast and ...
and
Egypt Egypt ( ar, مصر , ), officially the Arab Republic of Egypt, is a List of transcontinental countries, transcontinental country spanning the North Africa, northeast corner of Africa and Western Asia, southwest corner of Asia via a land bridg ...
and the 2003 U.S. invasion of Iraq are considered negative factors to be overcome before the establishment of an economic union in this region.


Middle East and North Africa (MENA) Economic Summits

Following the Israel–Jordan peace treaty in 1994 s series of Economic Summits were organised, to promote regional economic development and economic cooperation with Israel. * The first Economic Summit was held in
Casablanca Casablanca, also known in Arabic as Dar al-Bayda ( ar, الدَّار الْبَيْضَاء, al-Dār al-Bayḍāʾ, ; ber, ⴹⴹⴰⵕⵍⴱⵉⴹⴰ, ḍḍaṛlbiḍa, : "White House") is the largest city in Morocco and the country's econom ...
, Morocco, on 30 October to 1 November 1994. * The second was held in
Amman Amman (; ar, عَمَّان, ' ; Ammonite: 𐤓𐤁𐤕 𐤏𐤌𐤍 ''Rabat ʻAmān'') is the capital and largest city of Jordan, and the country's economic, political, and cultural center. With a population of 4,061,150 as of 2021, Amman is ...
, Jordan on 29-31 October, 1995 * The third was held in
Cairo Cairo ( ; ar, القاهرة, al-Qāhirah, ) is the capital of Egypt and its largest city, home to 10 million people. It is also part of the largest urban agglomeration in Africa, the Arab world and the Middle East: The Greater Cairo metr ...
, Egypt on 12-14 November 1996 * The forth was held in
Doha Doha ( ar, الدوحة, ad-Dawḥa or ''ad-Dōḥa'') is the capital city and main financial hub of Qatar. Located on the Persian Gulf coast in the east of the country, north of Al Wakrah and south of Al Khor (city), Al Khor, it is home to m ...
, Qatar on 16-18 November 1997 Following the 1997 conference, the Middle East peace process suffered a serious setback due to
Benjamin Netanyahu Benjamin "Bibi" Netanyahu (; ; born 21 October 1949) is an Israeli politician who served as the ninth prime minister of Israel from 1996 to 1999 and again from 2009 to 2021. He is currently serving as Leader of the Opposition and Chairman of ...
government's policies that alienated the Arab countries (namely the refusal to work towards establishment of an independent Palestine State), which refused to discuss economic cooperation with Israel unless it made some concessions. As a result no more summits were held. In the 1995 summit the actions agreed included: * The establishment of a Bank for Economic Cooperation and Development in the Middle East and North Africa will be established in Cairo. * The establishment of a Regional Tourism Board, the Middle East-Mediterranean Travel and Tourism Association, to facilitate tourism and promote the region as a unique and attractive tourist destination. * The establishment of a Regional Business Council to promote cooperation and trade among the private sectors of the countries of the region. * The formal inauguration of the Economic Summit Executive Secretariat, which is located in Rabat and works to advance the public-private partnership, promoting contacts, sharing data and fostering private sector investment in the region.


Regional characteristics of MENA

*Despite many attempts since
World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposi ...
to promote economic integration and political cooperation among states in the MENA region, economic interactions have remained limited. The scale of regional merchandise trade is limited, amounting to a mere 7–8% of total exports and imports. (For comparison, regional trade in
Europe Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a Continent#Subcontinents, subcontinent of Eurasia ...
amounts to about 60%.) *Capital transactions have also been relatively limited, with the exception of large official flows from the oil-exporting economies to other Arab countries, particularly after the 1973–4 and 1979–80 oil-price increases. Financiers estimate that up to US$2 trillion in investable assets originate in the
Persian Gulf The Persian Gulf ( fa, خلیج فارس, translit=xalij-e fârs, lit=Gulf of Fars, ), sometimes called the ( ar, اَلْخَلِيْجُ ٱلْعَرَبِيُّ, Al-Khalīj al-ˁArabī), is a mediterranean sea in Western Asia. The bo ...
region, the bulk of which is parked abroad, often as American
Treasury bill United States Treasury securities, also called Treasuries or Treasurys, are government debt instruments issued by the United States Department of the Treasury to finance government spending as an alternative to taxation. Since 2012, U.S. gov ...
s and in places like
Switzerland ). Swiss law does not designate a ''capital'' as such, but the federal parliament and government are installed in Bern, while other federal institutions, such as the federal courts, are in other cities (Bellinzona, Lausanne, Luzern, Neuchâtel ...
and
London London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...
.http://www.middleeastconversation.org/?p=1749 Increasingly, however, Arabs are investing in their home region; governments are also spending billions on infrastructure and national investment agencies are looking for opportunities. *
Tourism Tourism is travel for pleasure or business; also the theory and practice of touring (disambiguation), touring, the business of attracting, accommodating, and entertaining tourists, and the business of operating tour (disambiguation), tours. Th ...
and other non-factor service-flow patterns have been quite segmented. Some countries—primarily
Egypt Egypt ( ar, مصر , ), officially the Arab Republic of Egypt, is a List of transcontinental countries, transcontinental country spanning the North Africa, northeast corner of Africa and Western Asia, southwest corner of Asia via a land bridg ...
,
Jordan Jordan ( ar, الأردن; tr. ' ), officially the Hashemite Kingdom of Jordan,; tr. ' is a country in Western Asia. It is situated at the crossroads of Asia, Africa, and Europe, within the Levant region, on the East Bank of the Jordan Rive ...
,
Lebanon Lebanon ( , ar, لُبْنَان, translit=lubnān, ), officially the Republic of Lebanon () or the Lebanese Republic, is a country in Western Asia. It is located between Syria to the north and east and Israel to the south, while Cyprus lie ...
,
Morocco Morocco (),, ) officially the Kingdom of Morocco, is the westernmost country in the Maghreb region of North Africa. It overlooks the Mediterranean Sea to the north and the Atlantic Ocean to the west, and has land borders with Algeria to A ...
and
Tunisia ) , image_map = Tunisia location (orthographic projection).svg , map_caption = Location of Tunisia in northern Africa , image_map2 = , capital = Tunis , largest_city = capital , ...
—have received substantial tourist flows from MENA countries. For others, particularly
Israel Israel (; he, יִשְׂרָאֵל, ; ar, إِسْرَائِيل, ), officially the State of Israel ( he, מְדִינַת יִשְׂרָאֵל, label=none, translit=Medīnat Yīsrāʾēl; ), is a country in Western Asia. It is situated ...
, political and security considerations limit regional tourism. * Labour flows have been important, taking the form of: #Flows from non-oil economies to the
Cooperation Council for the Arab States of the Gulf The Cooperation Council for the Arab States of the Gulf ( ar, مجلس التعاون لدول العربية الخليج ), also known as the Gulf Cooperation Council (GCC; ar, مجلس التعاون الخليجي), is a regional, interg ...
 (GCC) economies, and #
Palestinian Palestinians ( ar, الفلسطينيون, ; he, פָלַסְטִינִים, ) or Palestinian people ( ar, الشعب الفلسطيني, label=none, ), also referred to as Palestinian Arabs ( ar, الفلسطينيين العرب, label=non ...
labour working in
Israel Israel (; he, יִשְׂרָאֵל, ; ar, إِسْرَائِيل, ), officially the State of Israel ( he, מְדִינַת יִשְׂרָאֵל, label=none, translit=Medīnat Yīsrāʾēl; ), is a country in Western Asia. It is situated ...
. In the 1990s, these flows have been subject to major restrictions and there has been recent substitution of Asian labour for Arab labour in both cases. MENA does not have the kind of labour mobility found, for example, in the
European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...
, where the citizens of one country have the right to work in others. *Other than the GCC and
OPEC The Organization of the Petroleum Exporting Countries (OPEC, ) is a cartel of countries. Founded on 14 September 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela), it has, since 1965, been headqua ...
, there has been little in the way of regional economic policy coordination.


Initiatives for integration


Examples

#
Council of Arab Economic Unity The Council of Arab Economic Unity (CAEU) (Arabic: ) was founded by Egypt, Iraq, Jordan, Kuwait, Libya, Mauritania, Palestine, Saudi Arabia, Sudan, Tunisia, Syria, United Arab Emirates and Yemen on May 30, 1964, following an agreement in 1957 by ...
: Established in 1964, with the ultimate goal of achieving complete economic unity among its member states. An intermediate objective of
customs union A customs union is generally defined as a type of trade bloc which is composed of a free trade area with a common external tariff.GATTArticle 24 s. 8 (a) Customs unions are established through trade pacts where the participant countries set up ...
has been set for 2015. # Economic Cooperation Organization: Established in 1985. The common objective is to establish a single market for goods and services in
West Asia Western Asia, West Asia, or Southwest Asia, is the westernmost subregion of the larger geographical region of Asia, as defined by some academics, UN bodies and other institutions. It is almost entirely a part of the Middle East, and includes ...
, like the European Union. #
U.S.–Middle East Free Trade Area The U.S.–MEFTA initiative started in 2003 with the purpose of creating a U.S.–Middle East Free Trade Area by 2013. The U.S. objective with this initiative has been to gradually increase trade and investment in the Middle East, and to assist ...
: Established in 2003 by the United States, this aimed to gradually increase trade and investment in the Middle East by assisting countries to implement domestic reforms and protecting private
property rights The right to property, or the right to own property (cf. ownership) is often classified as a human right for natural persons regarding their possessions. A general recognition of a right to private property is found more rarely and is typically h ...
. #
Euro-Mediterranean free trade area The European Union-Mediterranean Free Trade Area (EU-MED FTA, EMFTA), also called the Euro-Mediterranean Free Trade Area or Euromed FTA, is based on the Barcelona Process and European Neighbourhood Policy (ENP). The Barcelona Process, developed ...
: The initial aim is to create a matrix of
Free Trade Agreement A free-trade agreement (FTA) or treaty is an agreement according to international law to form a free-trade area between the cooperating states. There are two types of trade agreements: bilateral and multilateral. Bilateral trade agreements occ ...
s. The next step would be a single free trade area of 600–800 million people, including, eventually, the
European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...
.


Challenges and opportunities

*
Governance Governance is the process of interactions through the laws, norms, power or language of an organized society over a social system ( family, tribe, formal or informal organization, a territory or across territories). It is done by the g ...
: Good governance attracts capital. Some Middle Eastern countries such as
Saudi Arabia Saudi Arabia, officially the Kingdom of Saudi Arabia (KSA), is a country in Western Asia. It covers the bulk of the Arabian Peninsula, and has a land area of about , making it the fifth-largest country in Asia, the second-largest in the Ara ...
have made positive steps in reforming their
judicial system The judiciary (also known as the judicial system, judicature, judicial branch, judiciative branch, and court or judiciary system) is the system of courts that adjudicates legal disputes/disagreements and interprets, defends, and applies the law ...
s or adapting their
capital market A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold, in contrast to a money market where short-term debt is bought and sold. Capital markets channel the wealth of savers ...
laws to international standards. Building efficient and capable public institutions needs to be a priority. *Raise competitiveness levels of these economies. This can be achieved through overhauling and aggressively investing in the region's education system. If the education policies of the region deliver unwanted skills to the market, international investors will not be keen to come in, especially in the services sector.
Unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the refe ...
runs as high as 40% in at least seven Arab nations. Social investing should be planned in order to produce more
entrepreneurs Entrepreneurship is the creation or extraction of economic value. With this definition, entrepreneurship is viewed as change, generally entailing risk beyond what is normally encountered in starting a business, which may include other values t ...
, engineers, scientists, and
MBA A Master of Business Administration (MBA; also Master's in Business Administration) is a postgraduate degree focused on business administration. The core courses in an MBA program cover various areas of business administration such as accounti ...
graduates and expand the
middle class The middle class refers to a class of people in the middle of a social hierarchy, often defined by occupation, income, education, or social status. The term has historically been associated with modernity, capitalism and political debate. C ...
. *Raising competitiveness also entails accelerating the
privatization Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
programs, trade liberalization, investing in the
infrastructure Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and priv ...
, deepening and linking capital markets and uprooting
corruption Corruption is a form of dishonesty or a criminal offense which is undertaken by a person or an organization which is entrusted in a position of authority, in order to acquire illicit benefits or abuse power for one's personal gain. Corruption m ...
. *Facilitate the usage and penetration of new technologies. This would enhance the free flow of ideas, information and harness the forces of entrepreneurship. New technologies spur innovation and increase productivity which investors seek. *Linked to this is increasing the freedom of the press and media which provides checks and balances against governments and business. New technology and freedom of the press would have a particular impact on youth and would encourage participation in the definition of future strategies at national and regional levels. Cooperation among Middle Eastern countries would be enhanced, advancing towards the knowledge economy. Increasing the use of new technologies would also reduce bureaucratic hurdles often cited by businesses as deterrents to investment.


See also

*
African Economic Community The African Economic Community (AEC) is an organization of African Union states establishing grounds for mutual economic development among the majority of African states. The stated goals of the organization include the creation of free trade ...
*
Arab Cooperation Council The Arab Cooperation Council (ACC) was founded on 16 February 1989 by North Yemen, Iraq, Jordan, and Egypt. The ACC was created partly in response to the four countries being left out of the Gulf Cooperation Council ( GCC), partly out of a de ...
*
Arab Maghreb Union The Arab Maghreb Union (AMU) or simply the Maghreb Union (MU) ( ar, اتحاد المغرب العربي ', french: Union du Maghreb Arabe) is a political union and economic union trade agreement aiming for economic and future political unity am ...
*
Arab Union The Arab Union is a theoretical political union of the Arab states. The term was first used when the British Empire promised the Arabs a united independent state in return for revolting against the Ottoman Empire, with whom Britain was at war. ...
*
Cooperation Council for the Arab States of the Gulf The Cooperation Council for the Arab States of the Gulf ( ar, مجلس التعاون لدول العربية الخليج ), also known as the Gulf Cooperation Council (GCC; ar, مجلس التعاون الخليجي), is a regional, interg ...
*
Council of Arab Economic Unity The Council of Arab Economic Unity (CAEU) (Arabic: ) was founded by Egypt, Iraq, Jordan, Kuwait, Libya, Mauritania, Palestine, Saudi Arabia, Sudan, Tunisia, Syria, United Arab Emirates and Yemen on May 30, 1964, following an agreement in 1957 by ...
*
Economic integration Economic integration is the unification of economic policies between different states, through the partial or full abolition of tariff and non-tariff restrictions on trade. The trade-stimulation effects intended by means of economic integrati ...
*
Economy of the Arab League The economy of the Arab League is the economy of the member states of the Arab League. The economy is primarily dependent on exports of oil and natural gas; in recent years however, tourism has grown rapidly, becoming the fastest growing sector in ...
* Economy of the Middle East *
Economy of the Organisation of Islamic Cooperation The economy of the Organisation of Islamic Cooperation (OIC) combines the economies of 57 member states. 53 are predominantly Muslim states. , the combined GDP (nominal) of 49 Muslim majority countries was US$5.7 trillion. , they contributed 8 ...
*
Euro-Mediterranean free trade area The European Union-Mediterranean Free Trade Area (EU-MED FTA, EMFTA), also called the Euro-Mediterranean Free Trade Area or Euromed FTA, is based on the Barcelona Process and European Neighbourhood Policy (ENP). The Barcelona Process, developed ...
* List of free trade agreements *
List of Trade blocs A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where barriers to trade (tariffs and others) are reduced or eliminated among the participating states. Trade blocs can be stand-alone ...
*
Middle East and globalization Globalization has been internalized in Arabic as “awlaama:العولمة” and refers to the spread throughout the globe of ideas, customs, institutions, and attitudes originated in one part of the world which are usually Western in origin. Fo ...
*
Middle East Economic Association The Middle East Economic Association (MEEA) is a private, non-profit, and non-political organization of scholars interested in the study of economies and economics of the Middle East. The geographical term "Middle East" is used in its widest us ...
*
Pan-Arabism Pan-Arabism ( ar, الوحدة العربية or ) is an ideology that espouses the unification of the countries of North Africa and Western Asia from the Atlantic Ocean to the Arabian Sea, which is referred to as the Arab world. It is closely c ...
*
Pan-Islamism Pan-Islamism ( ar, الوحدة الإسلامية) is a political movement advocating the unity of Muslims under one Islamic country or state – often a caliphate – or an international organization with Islamic principles. Pan-Islamism wa ...
* South-South Cooperation *
U.S.–Middle East Free Trade Area The U.S.–MEFTA initiative started in 2003 with the purpose of creating a U.S.–Middle East Free Trade Area by 2013. The U.S. objective with this initiative has been to gradually increase trade and investment in the Middle East, and to assist ...


References


External links


Middle East/North Africa Economic Summit
-
Al-Monitor Al-Monitor ( ar, المونيتور) is a news website launched in February 2012 by the Arab American entrepreneur Jamal Daniel and based in Washington, DC, United States. Al-Monitor provides reporting and analysis from and about the Middle East. ...

MENA Report

Trade policy and economic integration in the Middle East and North Africa
By Hassan Hakimian, Jeffrey B. Nugent (2001)

(1998)

* ttp://www.payvand.com/news/10/jan/1220.html 2010 Economic Prospects for the Middle East and North Africa Region-
World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...
;Videos
Vali Nasr - Rise of Muslim Middle Class
{{Economic integration Economic integration Integration
Economic integration Economic integration is the unification of economic policies between different states, through the partial or full abolition of tariff and non-tariff restrictions on trade. The trade-stimulation effects intended by means of economic integrati ...
Economic integration Economic integration is the unification of economic policies between different states, through the partial or full abolition of tariff and non-tariff restrictions on trade. The trade-stimulation effects intended by means of economic integrati ...
Economic integration Economic integration is the unification of economic policies between different states, through the partial or full abolition of tariff and non-tariff restrictions on trade. The trade-stimulation effects intended by means of economic integrati ...
Neoliberalism