World Bank urges Arab states to eliminate development impediments
Regional, Economics, 12/8/2000
In its recent report the World Bank has called on the Arab states to continue reforms measures in order to eliminate obstacles that hinders the realization of higher growth rates.
The WB stressed that there are proper developments for a moderate growth in the short run in the Arab states, it indicates impediments for the long run due to several factors which contribute to limiting the possibilities of achieving stronger growth in the GNP of countries of varied exports.
The report explained that oil prices besides other factors including that the current cycle of the international economy has reached its peak and the demand force in the traditional exportation markets, especially in the EURO area and the revival of tourism movement in the Mediterranean basin all avail the Arab oil exporting countries and countries of varied exports optimum conditions to achieve moderate growth at the short run.
Economists expected that the total growth of the GNP in the Arab states to increase from 2% in 1999 to 3.1% in the current year. Besides economic of the region are expected to achieve a growth at a rate of 3.8% for the year 2001 and 3.2% for the year 2002.
The report explained that reasons behind oil countries's abilities to support its GNP are attributed to oil prices at the level of US $ 30 for each barrel that lasted for more than the expected time. A matter which has positively reflected on these countries financial conditions as the high oil revenues contributed to decrease deficiencies in their budgets.
The economists also expected that revenues of oil will continue to back the GNP of these countries even with the recession of oil prices to US $ 25 for one barrel in 2001 and to US $ 21 in the year 2002.
However, experts explained in that report that the increase in oil revenues necessitate not avoiding the need of the oil countries to proceed in restructuring its expenditures and implement economic reforms programs.
The report explained that the impediments also cover a stalemate of investment and a weakness in the private capital which is considered a basic factor in raising the efficiency of the economic activities and contributing to increasing growth average in the long run.
The World Bank economists concluded their view to the growth prospects in the Arab states saying " The high oil revenues are expected to be temporary and that oil prices will be reduced for the intermediate run. This makes it imperative for the exporting countries to make structural changes to improve their financial conditions and expand the participation of the private sector in the economic activity.
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