Osama Al Sharif
Economic volatility in developed and emerging countries is creating a global crisis that is manifesting itself in the unbridled rise in the price of crude oil, basic foodstuff such as wheat and rice and other strategic commodities.
The threat of hunger is now looming large over many countries in Africa, Asia and Latin America. We have seen strikes and social unrest in Europe, the Arab world and elsewhere. Many governments are feeling the pressure and only a few have come up with short-term solutions to offset the effects of price hikes.
Such volatility is hampering growth and economic reforms in developing countries where the battles against poverty, unemployment, illiteracy, crime, pollution and radicalism have been undermined. Many Arab countries and most Muslim states find themselves in the frontline of such battles and as such they now face the specter of political and social instability. This is a global crisis that is not going to ease soon, according to economists and development experts. Whether it is the ailing US economy or the overheating Chinese industrial complex, the problems of today’s economies are multifaceted and complicated.
The fantastic growth rates of the past decade have created new challenges to producers and consumers alike. Many societies are paying the price of their own success. The emergence of a new middle class has increased demand for services and commodities and by extension consumption of energy has reached unprecedented levels.
Unless major local, regional and global initiatives are launched the calamitous scenarios proposed by the UN and other organizations will begin to materialize soon. But this should not be the case for the Arab and Muslim worlds. Bold undertakings are in order and instead of thinking of charity, entrepreneurs should talk about opportunities.
Countries like Sudan, with its vast fertile land and abundance of water, should attract oil-rich Arab governments with their multibillion dollar investment funds. Similar opportunities in agriculture, mining, fisheries and food production lie in Tunisia, Algeria and Morocco.
For decades Arab politicians and economists, not to mention citizens, have dreamt about the need for a network of funds investing in Arab and Muslim countries and pushing toward economic complementarity. Where one Arab country is rich in soil and water, another has excess of funds and access to management. If the global marketplace is allowing Arabs to invest in China and India, it should make it possible for the same investors to seek chances in Egypt and Jordan.
There is a political expediency in all this as well as economic welfare. The Arab world has more than its fair share of political and social problems. If the current global crisis spreads to this region then we can expect more instability and risk that could overflow to reach more stable countries. It is not in the interest of any Arab country, rich or poor, affluent or not, to see a new crisis erupt in a neighboring country. The security of the pan-Arab order necessitates such bold initiatives.
The same applies to Muslim countries, some of which have huge untapped natural resources. It is logical to seek investments in Pakistan or Indonesia just as in Europe or Latin America if not more.
The nature of our world today requires that stability and security be accessible and enjoyed by all. And with the huge returns from the recent surge in oil prices, the possibility of setting up an investment fund to help troubled countries in the Arab and Muslim worlds becomes feasible and necessary.
There are individual initiatives here and there, but there is urgency to create momentum to facilitate the establishment of such a grand fund. The current global crisis can be averted but only if the rich countries spearhead a regional drive to direct investments in areas such as agriculture, cattle rearing, fisheries and related fields.
It is a win-win situation for all, but the political and social goals are becoming more important and pressing every day. Price hikes and inflation will drive consumers to despair and will eventually create social upheavals. Governments are running out of solutions but unless an economic initiative with a humanitarian face is launched soon, the Arab world will be sucked into the vortex.
No one wants to see famine and chaos in this part of the world. The root causes of radicalism and militancy can be found in economic deprivation as well as political disenfranchisement. The first will have to be tackled now and the Arab world has the tools to deal with it. But only if such a step is taken at the leadership level will the political will exist.
* Published in Saudi Arabia's ARAB TIMES on May 7, 2008. |
