THE MIDEAST IN THE NEWS

Arab League Ambassador Visits DC

According to the September 2011 World Economic Outlook, the region is experiencing “weakening activity in an uncertain environment” in addition to chronic, high unemployment as domestic instability continues and private financing and tourism receipts fall. Meanwhile the last five Arab Human Development Reports categorically stated that "reform in the region is necessary," that "sustainable change can only come from within," and that state and human security are interrelated. Changes like a rapidly expanding labor force and the global financial crisis have exacerbated the inherent need for economic reform in the Arab world, even as the perception of corruption and declining accountability among government officials have gotten worse, rather than better, since the start of the Arab revolutions.

Aslan Media sat down recently with the Ambassador of The League of Arab States Mission to the United States, H.E. Hussein Hassouna, who shared his thoughts on the regional body he represents. Rather than calling the Arab Spring a "revolution," Hassouna sees it as "…an awakening, and a chance to review their (Arabs) relations with the outside world."

Aslan Media: What have been the League's economic goals?

Ambassador Hassouna: The League is working towards achieving greater economic integration by creating a new mechanism: the Arab Development Bank. Each region has its own regional bank to support initiatives and leverage development goals for its member states, including the Asian Development Bank and the Inter-American Development Bank. Establishing a structure like that would support the economic goals for its diverse member countries.

AM: In 2012, will there be a new strategy for the LAS in advancing economic goals since the Arab Spring?

AH: Yes, the league is supporting the Arab Spring and its related goals for achieving human dignity and social justice. In fact, the League's 2004 Summit in Tunis had called for Arab economic, political, and social reform. The Arab Spring's root causes go back to economic causes--like unemployment-- and the goal to address social needs. Essentially, both look towards achieving social justice. The Arab Spring informs our discussions as we will focus on how to stimulate growth and create new jobs. Certain strategies will continue, such as the League continuing to encourage social and economic programs across the Arab countries.

We need small and medium enterprises (SMEs) to grow by supporting worker training programs. In particular, fast-growing SMEs are more likely to innovate and benefit from worker training programs. According to a World Bank study, fast-growing SMEs, also known as "Gazelles", are also more likely to adopt technology and adapt business practices that would leverage university graduate students--the largest component of unemployed individuals in certain Arab countries. Let us take the case of Egypt, a country in political transition that also provides real "Gazelle" observations.; there these Gazelles grew an average of 20% or more (either in terms of employment or sales) between 4-10 years.

In addition, we need strategies to help attract more foreign direct investment for all sectors--like the telecommunications sector. With the advent of the Arab Spring in some middle to low income countries, many demographics relied on the telecommunications sector. As such, the related markets, such as traditional and social media outlets received more attention and increased in its utility in both high and middle income countries. Therefore, the expanding role of telecommunications and its potential to flourish are already attracting entrepreneurs.

AM: Economists have differing opinions on what factors contribute to social capital. What is your definition of social capital? What efforts is the LAS undertaking to leverage your ideal of social capital?

AH: A number of definitions exist for describing social capital because there are many factors. As a result, there is no single definition. Hence, the particular elements of social capital are unique to each region. The Arab world is no different. Although there are several informal networks through different trade unions and civil society organizations in Arab countries, some economists would argue that social capital entails "an individual’s personal network and elite institutional affiliations"--but this is too narrow and might even be considered elitist. Fukuyama says that it is "the ability of people to work together for common purposes in groups and organizations'" ...this focuses on bonds and links of groups. That being said, social capital in the Arab region is predicated upon a few commonalities: 1) social relations that promote trust, and thereby produces benefits; 2) recognizes the power of networks; and 3) it must be voluntary. Thus, we have clearly seen this with respect to the Arab Spring in that the movements were socially engaging, organized, and voluntary.