The First Arab Economic Summit in Kuwait.. DEVELOPMENT FIRST

The First Arab Economic Summit in Kuwait.. DEVELOPMENT FIRST

Most - if not all - Arabs emerged successful from the Kuwait Economic, Social and Development Summit which was held on 19 and 20 January 2009. However, and as usual, Palestinians' profit was mixed with bitterness, as long as Israel and its international supporters will not recognize the full Palestinian and Arab rights unless conditions favourable to the Israeli occupation force and its "sacred security" are met.

To begin with, Kuwait has achieved an unprecedented Arab success in recent years as it was able to create an atmosphere for inter-Arab reconciliation that seemed almost impossible because of the huge differences that continued for at least four years.

The extraordinary Kuwait Summit has achieved what ordinary Arab summits have failed in since 2003. In that year the Iraq affair blew up and its unexpected repercussions reached all Arab capitals all of a sudden. In 2005, the gap widened further following the assassination of the former Lebanese Prime Minister Rafiq Al-Hariri, which destroyed an already fragile Arab understanding. In 2006, Israel's aggression against Lebanon caused deep disagreements over the causes and results. Disagreements continued as represented in the one between the Palestinian Fatah and Hamas movements and dispute over authority and for reasons related to the regional roles of the Islamic Republic of Iran which caused division among the Arabs as to their effect over axis polarizations.

Five years of argument and counter argument in which many tools -political, security and unfortunately media of course- were used with Arab differences rising to the surface each time.

Kuwait s initiative

Thanks to the efforts of His Highness Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, the Kuwait Summit gathered some leaders at odds with one another, as seen in the speeches they gave at the opening ceremony. Whoever followed developments must have felt as if he were watching a horror film which reached a climax until the Custodian of the Two Holy Mosques King Abdullah Ibn Abdul-Aziz Al-Saud said in his speech We have surmounted all differences and opened the door to unity . These words manifested Kuwait s initiative and shuttle efforts to bring the leaders together based on Kuwait s good relations with all the Arabs. It was a historic event by all standards in front of world cameras, the impact of which was similar to cold water spray in a hot summer. All that happened in spite of fiery, complicated and critical circumstances in which the Summit was held.

Fiery, in the light of the bloody massacre which Israel perpetuated in Gaza, ignoring widespread international condemnation, leaving more than 1300 martyrs and 4000 injured, with 90% of the victims children, women, old and innocent civilians.

Complicated, in view of the Arab divisions which deepened because of the different stances to the Gaza incidents, as if the cause were not the same and the Palestinians where several peoples, and Israel succeeded once more in classifying the Arabs according to its preferences and interests.

Critical, coinciding with the end of the term of office of the outgoing US President George Bush and inauguration of President Barack Obama, and related to the coming Israel elections in which each party had its own narrow calculations and security concerns in order to gain extra votes at the expense of Palestinian blood. The European role in this respect was almost futile, and the Russians and the Chinese were preoccupied with their own concerns away from divided Arabs and Palestinians.

Historic, because it combined a number of summits. It was originally intended to be economic development oriented but it became political par excellence as well, as it brought about Arab reconciliation and called for dialogue among the Palestinians and resolution to their serious differences.

As the above review shows, what this Summit achieved has been unsurpassed since the Arab League was established. Hand in hand, His Highness the Amir of Kuwait Sheikh Sabah Al-Ahmad Al-Sabah and the Custodian of the Two Holy Mosques King Abdullah Ibn Abdul-Aziz steered a ship on tumultuous waves to safety awaiting future developments and the ordinary Arab summit due to be held in Doha after two months, which will serve as a test of the reconciliation intentions declared. Meanwhile Gaza is healing its wounds with Arab medicine inspired by the Kuwait Summit, and the Palestinians recovering by Arab aid and initiatives designed to reach even minimum agreement to face the coming period.

A clear-cut response

Gaza s bloody massacre triggered one reaction : unity of ranks. Israel s barbarity, which shocked the whole world, led all participants in the Summit to surmount their differences and meet at a crossroads which Israel intended it to cause further Arab divisions, but the Arabs recognized the right direction and their response was clear-cut at all levels.

- utter, firm condemnation of Israel s aggression

- full material and moral support for the Palestinian brethren, calling on their factions to engage in dialogue to form a single government- or for national consensus.

- the Kuwait Summit acted ahead of the Gaza Reconstruction Conference: Saudi Arabia announced the donation of one billion dollars, and Kuwait pledged prompt aid as well, to announce the amount of its donation later together with other Arabs and friends worldwide.

As the rightful owner is the stronger party, the Summit reiterated its adherence to the Arab Peace Initiative which has now become, more than any time before, conditional on a neutral, impartial role of the US and the European Union. In this connection the Custodian of the Two Holy Mosques said This initiative will not remain on the table forever .

The first objective

The first objective which was agreed upon by Kuwait and Egypt over a year ago focused on economic and social development. The documents of the Summit and the forum which preceded it indicate that economic cooperation depends on the degree of its relationship with politics, the success of any joint initiative depends on firm belief in common interests, which in the Arab world, are not yet governed by rules similar to those applied by the Europeans in a European parliament and a European Commission, similar to a common government, whereas in the Arab world, most decisions are taken in a top-down style, i.e. politics has the first-and often the last-role.

In this context Kuwait and Saudi Arabia undertook two initiatives which are different in form but similar in objectives. The Amir of Kuwait Sheikh Sabah Al-Ahmed Al-Jaber Al-Sabah launched a development imitative to provide the necessary funds to support Arab small and medium-sized enterprises (SMEs) in an approximately $ 2bn fund, 25% of which ($500m) was contributed by Kuwait alone. The initiative will be managed by the Arab Fund for Economic and Social Development. King Abdullah launched a Gaza reconstruction and relief campaign, and Kuwait pledged prompt aid. The two noble initiatives are aimed to secure Arabs dignity a decent life.

Despite all these incessant developments, the Summit did not neglect the economic, social and development objective. Before the Summit, a forum was held and attended by over fifty lecturers, including prime ministers, ministers, presidents of financial and economic institutions, Arab and international experts, in addition to the Arab League, which, in conjunction with Kuwait s ministries and pertinent government agencies, provided the best conditions for the success of the Summit in terms of organization and preparation on which the League highly commended by all.

The global crisis

The forum s documents addressed the global financial crisis and its implications particularly as for as the Arab economy is concerned, though in non-specialist brief discussions, as the aim was not a prompt solution is an emergency crisis but rather to build an Arab economic structure which is not so integrated yet as to be affected by one type of the implications of the global crisis: Collapsing money markets and declining real estate prices here and there, but without the effect on Arab economy, which is not integrated into world economy.

However, falling oil prices could not be overlooked, as oil revenues are the major resource for Arab development not for Gulf and other oil producing counties alone but also for inter-Arab investment and development projects, in view of the fact that Gulf and Arab funds mainly financed by the oil-rich counties were the focus of attention in view of central role in such initiatives as the one launched by His Highness the Amir of Kuwait to finance SMEs.

Social development

Raising the living standards of the Arab citizens had been high on the Summit s agenda before the Gaza war was given priority. The Summit called for a programme of action to be implemented in the 2009-2015 period, with focus on the lesser developed countries. The Summit also stressed the need for providing low-cost housing through partnership between the public and private sectors, and real estate finance institutions, as well as for expanding primary health care projects and supporting joint Arab health institutions to raise the standard of the service provided and fight the diseases related to malnutrition and shortage of clean water and all other unfavourable living conditions.

Decision-makers were of the opinion that the above objectives required good governance and plenty of money, taking into account that life expectancy is only 50 years in Somalia, adult illiteracy rate is about 50% in Iraq, Morocco and Yemen and the percentage of those enrolled in different stages of education is less than 50% in Sudan and Djibouti. According to the UN Human Development Report published two years ago only five (Gulf) countries had development rates similar to those of developed countries, i.e. most Arab countries have moderate or low human development rates. These rates are mainly found in the poorest countries and in countries suffering from security and political instability which hinders sustainable development. On the other hand, oil-rich countries, especially in the Gulf, enjoy high human development rates, thanks to high expenditure on health, education and housing.

The Summit therefore stressed the key role of Arab finance institutions, such as the Arab Fund for Social and Economic Development which has been assigned the task of managing the SME fund, and well as the role or other funds which, as His Highness the Amir of Kuwait said are landmarks in joint Arab action .

However, that does not release governments from their obligations, particularly to restructure their budgets and allocate resources for human development. In this regard speakers at the forum gave comparative figures of expenditure on armament vs health and education. In addition, all Arab countries are placed low, behind 35 countries, in terms of anti-corruption and wastage, which represent drain on resources supposed to be spent on human development.

Accordingly, Kuwait launched a SME fund, and an extremely important initiative as it provides productive job opportunities. As world statistics show, 70% of the vital sectors of production in many industrial countries are based on SMEs. As for the Arab economy, which is not diversified enough and is mostly based on state-controlled sectors, does not cater enough for individual enterprises, particularly for the educated youth who seek employment in the public sector or immigration, due to the weakness of the private sector.

The Kuwait initiative is designed to tackle the acute unemployment problem. Unemployment rate is 22% with 1.5% increase p.a., and 54% of the jobless are youth. With the global financial crisis the total figure of the jobless in the Arab world now stands at 20m, which causes problems at all levels, especially the social one. The imitative, therefore, requires full support as it addresses the care of Arabs problems, in terms of shortage of funds for the youth eager to contribute to their country s production.

The private sector

One of the recommendations was about the private sector, which suffers from state domination of the economy and most of the production, which reduces private investment opportunities. In the Gulf, e.g., where oil is the main source of income, the private sector is very little allowed to engage in oil drilling, refining and marketing. In the Arab world in general, there is very modest investment in education and health, and some governments compete with the public sector in real estate, industrial and tourist investments. Despite the strong privatization trend during the last 20 years, over 60% of Arab production is directly or indirectly public sector based. To make things worse the global financial crisis made governments intervene more in the economy because of the private sector s inability to confront the credit crunch crisis which hit stock and property markets and reached real economy.

As Arab governments did not diversify their economics enough, there was heavy investment in the financial and real estate sectors, but when the bubble finally burst in many countries, assets lost trillions of dollars in value. As non-state economy is revenue rather than production oriented, revenue from financial services, stocks an real estate investments, showed the need for such sectors that are able to withstand crises. That s why the Summit stressed the promotion of real economy , value-added products and services which reduce imports.

Investment climate

The Summit stressed the need for the rapid adoption of laws and regulations designed to improve the climate for investment as this stimulates inter-Arab investments which now account for only 10% of Arab investments abroad. Laws which do not keep up with the globalization trend, cumbersome bureaucracy, widespread corruption, customs ad tax barriers and lack of incentives, often hinder the repatriation of Arab funds.

Customs union

A key objective for which the Summit fixed a date to achieve (a five-year period- from 2010 to 2015) is the customs union, which is designed to remove all deep-rooted remaining barriers to the flow of goods and services which support protectionism and undermine competition on the one hand, and hinder great marketing opportunities for Arab products, on the other. Inter-Arab trade accounts for only 12% of the total volume of trade between the Arab world and the outside world. Despite the progress made in the Arab common market project, customs and other barriers, including import licenses, transit regulations and different tariff standards, hinder inter-Arab trade. The customs union will help the Arabs form an international economic power in the age of blocks not individual countries, whatever their political and economic weight may be. It is a challenging and rewarding plan which has unlimited benefits as far as Arab production industrial, agricultural, etc. is concerned, and will put Arab producers in an integrated circle of competition for the first time, with survival for the best and most popular and not for the protected.


Related to the above, the Summit stressed the importance of the development of transport: shortening air routes, opening air space to Arab airlines, cutting or cancelling taxes to cut air travel cost by at least 15%, taking into account that about 90 million Arabs travel by air annually. As for land transport, road networks, especially those between the Arab counties, should be doubled, from 31,000 km to about 60,000 km within 15 years, with advanced logistic services, which can cut the cost of production by 40% (over $100bn). Ports are also in a pressing need for development, as only a third of the 95 Arab ports can receive ships carrying huge containers. As for the rail network, it, along with the African network, is the most undeveloped in the world.


One of the Summit s resolutions was to speed up the setting up of a pan-Arab power grid. The current production capacity, or the so-called installed capacity, is 160,000 MW, of which only 1,430 MW, i.e. less than 1%, is available. Therefore, strenuous efforts must be made. Steps to obtain nuclear energy for the production of electricity were also encouraged. As far as gas is concerned, the Arab production accounts for 40% of gas reserves, and in this connection the Summit urged the countries concerned to enhance and expand gas networks and boost private investments in this sector.


The Arabs face big challenges in this area. They should increase expenditure on research from 0.2% to 1.4% of GNP, to reach the international average, i.e. a sevenfold increase. Our universities should also increase in quality and quantity (there are 1700 universities and institutes currently) to be able to accommodate even a fraction of well-educated Arabs abroad, 40% of whom are university graduates and researchers, and 74% of Arab students abroad settle in European countries and the US, and as statistics show, the Arab world has become unwelcoming to its scholars and scientists.


The Summit has become an institution in every sense of the word, for, as Kuwait s Foreign Minister Sheikh Muhammad Al-Sabah said The balance sheet of the Summit is due after two years . That the Summit will be held biennially demonstrates the progress made in the area of economic cooperation and development. In the 1950s a few European countries agreed at a meeting to cooperate in industry in general, with focus on the then battered iron and steel industry. Over the years the meeting turned into a plan for European unity which became an international economic power. In the 1940s a number of Arab countries agreed to establish the Arab League which achieved mixed success as it was always influenced by politics. The League s Economic Unity Council was ineffective until the Kuwait Summit decided to reactivate it after at least fifty years of its inception, during which period the European countries became leading economically advanced countries. Will common Arab interests rectify what politics has damaged? This depends on what will be done until the next Economic Summit in 2011.

Pending that date, the historic Kuwait Summit called on all Arab states to develop such policies and procedures as necessary to important a programme of action in conjunction with the Arab League General Secretariat, ministerial councils, specialized Arab organizations and Arab finance institutions, along with the private sector and civil society organizations. The Economic and Social Council and the General Secretariat will monitor implementation. The Secretary-General was requested to lay out proper mechanisms for monitoring the implementation of the Summit s Declaration and resolutions and work plans and submit regular progress reports to the Arab summits.

The Kuwait Summit s final statement

The Kuwait Declaration affirmed the close ties and common objectives of the Arab world and stressed the need for fostering them to develop all Arab communities and secure their future. The Declaration, which was read out by Arab League Secretary-General Amr Moussa, said the leaders were committed to the Summit s resolutions out of new Arab economic development thought and in accordance with the League Charter and the agreements and treaties it entered into and the strategies adopted .

The Declaration lauded the Kuwaiti-Egyptian initiative which stressed the relationship between security and social peace, and economic and social development. The initiative was activated by the resolutions of the 2007 Riyadh summit and the 2008 Damascus summit to hold a special summit to promote development in the Arab world.

The Declaration stated that decision had been taken to raise the standard of living of Arab citizens give priority to joint projects and involve the private sector and the civil society in the development process. The Declaration stressed the need for supporting infrastructure projects and developing the sectors of production, commerce, service and social projects and environment protection, in addition to pan-Arab power projects, pan-Arab road network plans and water and food security programmes, all intended to achieve economic integration. The Declaration stressed that social development, mainly education and human development, are major factors in the achievement of overall development and added We are monitoring the progress achieved by a number of Arab countries in human development rates, particularly in the areas of education, health services and eradicating poverty and illiteracy. We are also monitoring the progress in economic development, particularly in setting up the pan-Arab free trade zone, and the progress made by Arab economic and regional blocs and in the area of international cooperation and international blocs .

The Declaration added that in view of the large scale of the global financial crisis, its implications, turmoil in money markets, the threat of recession, a number of countries, economic blocs and international financial institutions are trying to find right solutions to reduce its adverse effects, including the efforts made by Arab countries. There is therefore a need for adopting monetary and fiscal policies that enable Arab counties to face the consequences and actively share in international efforts to secure international financial stability and activate the role of Arab financial institutions to boost inter-Arab investments and support real economy. The leaders agreed to double efforts to achieve Arab economic and social integration, which is a key objectives and an essential ingredient for economic and social development which fulfils Arabs aspirations, helps them integrate in world economy and deal with international political and economic groupings.

The leaders praised the pioneering $2bn development initiative which His Highness the Amir of Kuwait announced at the Summit and Kuwait s $500m contribution to the capital of this initiative, which is intended to support SMEs.

The Declaration said that in spite of its achievements, the Arab world is still facing local and international challenges involving its security, stability and social peace, including at the local level poverty, unemployment, falling levels of commerce and inter-Arab investments, brain drain, poor infrastructure, low education standard and failure of graduates to meet the demands of development and international competition. Among the other challenges are food and water security, climate change, energy and absence of the optimum use of resources.

The Declaration underscored the need to encourage inter-Arab investments and create a favourable investment climate, facilitate the flow of Arab capitals and expand the scope of the unified agreement for the investment of Arab capitals in the Arab counties. It also called for promotion of the role of joint and national funds and financial institutions, developing their resources and easing loan terms and mechanisms to finance infrastructure and Arab economic integration projects in conjunction with the private sector and provide credit facilities.

Regarding statistics, the Declaration stressed the importance of developing statistics offices for providing accurate statistical data and indicators necessary for planning, policies and decision making in the area of economic and social development.

As far as the private sector is concerned, the Declaration reaffirmed the need for providing appropriate economic and legal ingredients, removing all barriers and facilitating the movement of individuals, especially businessmen, and capital. In this way the private sector can play an active role in development and Arab economic and social integration. The Declaration also focused on developing Arabs abilities in the context of the millennium development objectives of 2015 and the set of objectives approved worldwide for poverty reduction, women and youth empowerment, health and education development and raising real income.

The Declaration reaffirmed the need for education development to keep up with the latest developments in science and technology and carry out its mission effectively, and for implementing the plan for education and research development which was approved at the 2006 Khartoum summit and 2008 Damascus summit. The Declaration also highlighted the importance of research and the need for increasing its budget, facilitating access to knowledge, fostering the relation among Arab research centres, repatriation of modern technology and encouraging researchers and scholars.

Concerning health services the Declaration called for expansion of primary health care in Arab countries, supporting joint Arab health institutions to raise the standard of service, attaching importance to non-infectious diseases, particularly diabetes and to the production and easy registration of medicines and active ingredients to provide Arab medicine security.

The Declaration stressed the importance of improving the skills of the individual, who is the main wealth, through raising the standard of education and linking it to the demands of development, supporting training programmes to cut unemployment, boosting labour productivity to meet the needs of the labour market and create more job opportunities.

As for women s issues, the Declaration stressed every aspect of the empowerment of women economic, social and legal, in line with the principle of equality between the sexes. The Declartion also placed considerable importance on the empowerment of the Arab youth to play an active role in the development process.

The Declaration affirmed the rights of Arab immigrants and fostering the relation of Arab scientists and scholars abroad with their homeland to employ their expertise in development, and create a favourable environment for the repatriation and production of knowledge.

The Declaration underlined the importance of housing in economic and social development plans and supporting partnership between governments, the private sector and finance institutions as part of a comprehensive Arab real estate programme which includes low-cost housing for low-income families.

The Declaration called for boosting agricultural production, encouraging investment in agricultural development and speeding up the agricultural development strategy approved at the 2007 Riyadh summit to provide food security and self-sufficiency as Arab national security priorities.

Concerning industrial development, the Declaration underlined the need for the integration, coordination, diversification and expansion of industrial production, as well as for the implementation of the relevant strategy approved at eh 2005 Algiers summit.

The Declaration called for the immediate removal of all obstacles to the setting up of the pan-Arab free trade zone by the end of 2010, in preparation for the Arab customs union scheduled for 2015 as a crucial step towards the Arab common market to be completed by 2020, as well as liberalization of the inter-Arab service industry.

The Declaration focused on deregulation of the information and communications technology sector to enhance the competitiveness of the companies operating in this sector, to deal with the relevant legal aspects and encourage the private sector to invest in this field. National strategies for the protection of intellectual property is also stressed to achieve economic, social and cultural progress, in due compliance with international obligations.

The Declaration also focused on the policies of Arab tourist development, in view of the tourist resources the Arab world has-natural, cultural and historical. To encourage tourist investments, the necessary infrastructure should be provided, to contribute to economic and social development, taking the standards of eco-friendly tourism into account.

The Declaration stressed Arab cooperation in the area of energy, particularly with reference to efficiency and rational use, to secure sustainable development. The Declaration reaffirmed the need for setting up a pan-Arab power grid and natural gas networks with private sector participation and expanding the use of renewable and nuclear energy for peaceful means.

Regarding transport, the Declaration focused on inter-Arab road, sea and air networks as key elements of the movement of trade, tourism, investment and labour. The networks will be linked to regional networks, enhancing their competitive edge through liberalization of the transport industry, including opening the skies to acquire the largest international transport market share possible, taking advantage of the strategic geographical position of the Arab world.

One of the Summit s resolutions was to take the necessary measures for the protection of the environment and natural resources to achieve sustainable development and improve the quality of life and alleviate the adverse effects of climate change. Another resolution was concerning drawing up a strategy for Arab water security and acting at local and Arab levels to meet water shortage as a major challenge.

The Declaration stressed the importance of supporting civil society organizations, in view of the key role they play in economic and social development. It also called for promoting Arab-international cooperation, enhancing the role of Arab countries in regional and international organizations and giving full support to the Arab League and its organizations, to help it carry out its duties, to achieve economic and social integration and enable it to follow up implementation of the resolutions of Arab summits and ministerial councils.

The leaders expressed their thanks to the government and people of the State of Kuwait and to His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah for hosting the Summit and the competent management of the sessions, and commended the Arab League and its agencies for their continuous efforts, extensive consultations and elaborate preparations, which made the Summit a success.


Mounir Younis


The Arab leaders on their way to the hall where the Kuwait Summit was held

The leaders pose for a group photo

The leaders pose for a group photo

HH Sheikh Sabah Al-Ahmad the Amir of Kuwait receives the Syrian President Bashar Al-Assad

HH Amir of Kuwait receives King Abdullah of Jordan

Sheikh Nasser Sabah Al-Ahmad in conversation with the Arab League Secretary-General

The Sudanese, Algerian and Lebanese Presidents Omar Al-Bashir, Abdul-Aziz Bouteflika and Michel Suleiman

HH The Amir of Kuwait receives the Iraqi President

HH the Amir of Kuwait receives the Comoran President

The Arab League Secretary-General during preparations for the Summit

HH Sheikh Nawwaf Al-Ahmad Al-Sabah in the closing session of the Summit and HH the Prime Minister Sheikh Nasser Al-Muhammad (L)

Al-Kharafi, Sheikh Jaber Al-Abdullah Al-Jaber Sheikh Faisal Al-Saud, Sheikh Mishaal Al-Ahmad and Al-Ateeqi, prominent guests at the Summit

Moudhi Al-Hamoud, Nouriya Al-Sabeeh and Al-Heraiti among the audience

Abdul-Latif Al-Hamad, Chairman/Director-General of the Arab Economic Fund in one of the forum's sessions

HH the Amir of Kuwait before the Summit declaration is issued

Official Arab delegations continuing their discussions at a dinner banquet

The forum’s discussions continued everywhere

Part of the Summit’s preparatory meetings

HH Sheikh Sabah Al-Ahmad and Arab kings and leaders in the Arab reconciliation meeting

The Summit’s press centre attracted Arab and foreign media persons all the time

HH the Amir of Kuwait with the Sudanese President

Justice Adli Hussein, Governor of Qalyubiya (Egypt) and Dr. Ahmad Guwaili, Secretary-General of the Arab Economic Unity Council with media persons and participants being entertained by the Kuwait Banking Association

A participation in one of the forum’s sessions

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