By Andy Sambidge
United Nations says closer economic integration would also raise regional GDP by 3%
Inclusive economic integration in the Arab region would create six million new jobs by 2020 and increase regional gross domestic product by three percent, the United Nations has said in a new study.
The UN argued for a unified model to be created like that of the European Union or other regional economic blocs.
The argument is part of a report launched by Rima Khalaf, executive secretary of the Economic and Social Commission of Western Asia (ESCWA).
Cultivating a dynamic economic environment “would guarantee economic and social gains and ensure their place among the regional blocs that govern the global economy and contribute to shaping international structures and institutions,” the Beirut-based agency said.
The report used studies and economic models to compare potential growth if regional countries integrated with the effects of maintaining a status quo.
It also identified a number of potential strategies for promoting free trade in services, free movement in capital and workers, and the development of regional production chains.
In addition, the report presented scenarios for the completion of the Greater Arab Free Trade Area (GAFTA) and the establishment of an Arab customs union would redistribute revenue from tariffs among the various countries.
Under one of the scenarios, the report said the deepening integration would reduce transport costs for Arab trade and replace a section of migrant labour force with regional workers.
These moves, combined with the creation of an Arab customs union, “would guarantee an increase of three percent in Arab gross domestic product by 2020 and would reduce unemployment by over four per cent,” according to the findings.
This additional growth would generate an additional $760 billion in Arab revenue, equivalent to more than the total revenue last year of Arab countries in North Africa.
“The report calls argues that these goals are within reach, so long as the political will exists to pursue economic integration as a path towards genuine sustainable development,” ESCWA wrote.