The Unfortunate State of the Arab World

For all their oil wealth, the Arab world has suprisingly little economic development.

This year, the United Nations Development Program (UNDP) released its first-ever Arab Human Development Report, and it could not be more damning. Specifically:

• With a GDP of $531 billion in 1999, the report's Arab authors note, the 280 million citizens and 22 nations of the Arab League produced less than Spain.

• Adjusted for purchasing power parity, the income of the average Arab citizen was just 14 percent of the average citizen of an Organisation for Economic Co-operation and Development (OECD) country.

• If the Arab world's per capita growth rate of 0.5 percent annually over the past two decades continues, it will take the average Arab citizen 140 years to double his income, while citizens of other regions are on track to achieve that in less than 10 years.

Meanwhile, Arabs lack access to the knowledge that might enable them to compete in the modern economy. They lag behind sub-Saharan Africa even in the number of Internet connections per capita, while fewer books have been translated into Arabic over the past millennium than Spain translates in an average year.

Even more shocking are the report's policy conclusions. Rather than blame a lack of aid from the First World, as both the Arabs and the UNDP have been wont to do in the past, the report identifies the lack of democratic and efficient governance as a major obstacle to economic growth. The Arab Region needs to abandon the vestiges of the old dirigiste approach and foster private enterprise with "beneficial regulation" to curb both public and private monopolies. To do so, the Arab states need a transparent rule of law, a fair and fast legal system with a professional judiciary.