Political economy and its role in Arab development

Politics is an effective tool for national development. Driven by globalisation, the opening of new markets, and the widespread trading of commodities and currencies across borders, the role and importance of politics has increased remarkably in recent years, leading to the emergence of international political alliances and conglomerates based on mutual economic interests - such as the BRICS grouping of countries, Shanghai Cooperation Organisation, and the European Union.
These developments lead me to wonder where Arab economic and developmental alliances are today, if any exist at all? What is it that hinders their formation despite the critical necessity of such associations for our economies and in our socio-cultural context? Undoubtedly, a development project can only exist with the widespread participation and engagement of society. Similarly, Arab development efforts must be embedded in Arab culture and identity and remain flexible to establishing partnerships across the region.
Politics is simply defined as an effective response by decision makers to changes and developments in each historical era. In today’s context we face several critical developments. These include the continuing crises in the Arab world and their profound impact on progress and the socio-cultural climate, the consequences of the global financial crisis with projections of a future marked by stagnation and reduced growth levels, as well as transformations in regional relations such as the nuclear deal with Iran that has added a staggering $400 billion to the global markets.
If we analyse these developments, we will definitely find them deeply rooted in the region’s history. Changes do not happen suddenly - crises and conflicts are caused by a series of factors that are related to development. The weak performance of Arab economies, lack of social progress and the fragile social fabric of the region have rendered the Arab culture vulnerable to external interferences. The main cause of the conflicts we are currently witnessing is the lack of a joint Arab development project that provides the people of this region with financial security, general well-being and prospects of a bright future.
The above factors have emerged as a result of the divide between politics and development, as well as between the development rhetoric and a reality that needs action rather than words. To combat such challenges we need to focus on two key areas.
First, we need to enliven Arab society and strengthen it with our identity, heritage, culture and sense of belonging. Development is simply a culture of belonging before it becomes an economic outcome. A strong cultural identity leads to stronger and more robust nations, and fortifies their position on the global political and economic landscape.
In order to witness steady progress, knowledge, science and technology must form an integral part of our national cultures. Through focusing on these areas, we can build strong human capital - comprising individuals that are truly worthy citizens combining science, knowledge and a pride in their national culture. These individuals will certainly prioritize the progress of their nations on all levels.
Second, we need to find solutions to the challenges that hinder the cumulative development of the Arab world. Economic systems that work independently have limited influence in an era that is witnessing new alliances and formations.
We all remember the impressive growth levels witnessed by the economies of Asia, Europe and South America in the not-so-distant past. A crucial factor for this growth was an integrated economic system as a result of alliances. This system led to the expansion of national economies, opening up of the employment market, a surge in trading activities, and most importantly to a political immunity from any external disturbances.
This is a critical time for us to launch an inter-Arab political, economic and cultural dialogue that mainly aims to resolve current and imminent challenges and establish Arab relations that are on par with global economic consortiums. To be truly effective, such a platform must spring from our shared destiny and historical roots. Furthermore, it is a necessary first step towards the next phase of the Arab development journey.
The inter-Arab regional dialogue should consider changes in international markets, such as the drop in oil prices. We have to think out-of-the-box to build an economy that is based on investments, production of commodities and services and cooperation between the Arab world and wider region. We have to accept that in this global village, our future depends on our collective decisions and actions.
We may lack an actionable programme at present or indeed even an understanding about how to implement such a mega project. However, I am confident that it will happen eventually given our shared circumstances spell out such an imperative. - Exclusive to Times of Oman

- The author is the Chairman of National Bank of Oman and an International Advisor to the Brookings Instituition. All the views and opinions expressed in the article are solely those of the author and do not reflect those of Times of Oman