x Abu Dhabi, UAEThursday 27 July 2017

Call for Arab states to support business fund

Kuwait summit told that $2bn is needed to spur development in the region.

KUWAIT CITY // A billion-dollar fund for small and medium-sized businesses is ready to be launched but still needs more support from Arab states, the Arab League's secretary general, Amr Moussa, said at a summit in Kuwait yesterday. The fund was announced by Kuwait's emir, Sheikh Sabah al Ahmad al Jaber al Sabah, at a development summit for the Arab League's 22 states in January 2009. Kuwait agreed to donate US$500 million (Dh1.83bn) when the fund was announced and this was matched by Saudi Arabia in December.

Six other Arab countries have contributed to the fund, which now has more than one billion dollars of capital, Mr Moussa said, without specifying an exact amount. The figure is below the $2bn stipulated when the fund was launched in an effort to try to co-ordinate a response to the global financial crisis among Arab League members. The fund is intended to spur development in the region by increasing the role of the private sector.

Mr Moussa estimated that one third of the Arab world, or 100 million people, suffer from illiteracy and one-third lives on less than $2 a day. Kuwait's minister of finance, Mustafa al Shamali, said he would soon convene a meeting of Arab countries to work out the structural details of the fund so that it can be put into action as soon as possible. The leaders were speaking at a one-day meeting of the Arab League's social and economic council.

The council meets twice a year and many of the region's ministers of finance attended. Mr Shamali said the most important topics on the agenda were transportation, trade, unemployment, agriculture, water, the environment, electricity and road connections. In the opening speeches at the meeting, the leaders called for the speeding up of Arab economic integration and setting goals to establish a customs union by 2015.

"We must have a working programme with a timetable to implement joint Arab ventures and other economic integration projects," Mr Moussa said. He said inter-Arab trade "represents the weakest field in Arab economic integration efforts", but added that there had been successes in the areas of investment and capital transfer. Mr al Shamali told the meeting that "so far, achievements have been well below ambitions and expectations".

The Iraqi trade minister, Safaa al Deen al Safai, said during the conference's opening meeting: "Arab economic integration has become an urgent necessity dictated by the fallout of the global economic crisis," and called for the revision of the integration mechanisms. Mr Moussa said the meeting would discuss ways to implement resolutions made in the social and economic development summit in Kuwait last year before it convenes again in Egypt next year.

Arab leaders launched the Pan-Arab Free Trade Area about four years ago but it did not boost trade among Arab states, which represents around 11 per cent of the region's total trade. The Arab League was formed in 1945 in Cairo by six Arab states to increase economic and political co-operation. It has since expanded to 22 members but is often criticised for having failed to achieve any significant degree of integration.

When the league was created, its priorities were to free Arab countries from colonial rule and prevent the establishment of a Jewish state in Palestine. The most successful union in the Arab world is the Gulf Co-operation Council, but its membership is limited to the rich, oil-producing states of the Arabian Peninsula. @Email:jcalderwood@thenatonal.ae * With additional reporting by Agence France-Presse