The best investments: Education, research and development
Regional, Economics, 11/1/2003

The Arab states should emulate the success of the Asian "tiger" nations by adopting a policy of "early intensive investment in education, accompanied by sustainable and rapid improvement of its level," said the authors of the latest Arab Human Development report 2003 (AHDR 2003).

The report which was published in Amman, Jordan, on October 20 also notes the damaging impact on the region's knowledge base caused by excessive dependence on oil and the accelerating emigration of educated professionals.

In the last three decades, the Asian Tigers ( Hong Kong, Singapore, and South Korea ) dramatically raised incomes and living standards, largely, the report's authors argue, because of sustained investment in education and research.

By contract, the income gap between the Arab states and industrial countries has dramatically widened during the same period.

Despite the popular perception that the Arab states were rich, overall GDP at the end of the 20th century ( 604 billion dollars was little more than that of Spain ( 559 billion ), with less than 15 % of the Arab population. After the oil boom of the 1970s, most of the economies of the Middle East and North Africa either stagnated or declined.

Highlighting the education gap, the reports says that efforts to measure the quality of Arab education are limited, which in itself is an indication of a crisis in education in the region. But contrasting quantitative measurements show key deficiencies relevant to economic development and knowledge production: for example fewer than one in 20 Arab University students are pursuing scientific discipline, while in the Republic of Korea the figure is one in five. The relative lack of well- funded and well- attended science education has a direct impact on technological achievement: one indication is the limited number of industrial patents registered by Arab companies and individuals.

Still, the authors of the report note that it is "evidently possible for societies to make substantial advances in knowledge, even when their standard indicators of knowledge capital are modest -- as in the case of large countries such as China and India. This suggests that valuable knowledge achievements might depend crucially on matters that involve political will and leadership, the capacity to raise and mobilize material, technical and human resources; and the drive to focus national efforts on attaining an indigenous societal renaissance, both people- centered and patriotic."

The AHDR 2003 says it may be possible for Arabs to emulate some of the "striking knowledge outcomes of other developing countries whose conventional knowledge indicators do not surpass those found in the Arab world." Looking at the Arab states today, the report points to Jordan and Kuwait as countries that have relatively better educational systems and higher societal motivation for education, indicating the potential for progress elsewhere in the region.

The Arab Human development report noted that the emigration of large numbers of qualified Arab professional to the West greatly undermines economic development in the region. The reason is a lack of attractive work opportunities at home and a stifling political environment. The result is that Arab economies and societies remain stagnant, causing more emigration. Between 1998- and 2000, for example, more than 15,000 Arab doctors migrated abroad..

"Arguably, emigration of highly qualified Arabs to the west has been one of the most serious factors undermining knowledge acquisition in Arab countries," the authors say.

The Arab brain drain constitutes a form of reverse development aid, they note, since receiving countries clearly benefit from Arab investments in training and educating their citizens. More significant, however, is the lost potential contribution of the emigrants to their countries of origin. The authors call for concentrated action to reverse this trend, and provide Arab expatriates with incentives to return.

The report point out that the overwhelming dependence on oil extraction stifles innovation and production in the region. One of the main features "of the production pattern prevailing in Arab countries, which influences knowledge acquisition, is the overwhelming dependence on the extraction of raw materials chiefly oil," the authors note. This rentier system encourages spending and acquisition providing little incentive to stimulate local investment and production. By contrast, creating indigenous knowledge requires time, effort and financial resources.

Almost all the Arab states "have relinquished key knowledge - intensive aspects of oil production to foreign firms, " say the authors with negative consequences. Most production in the Arab states is based on traditional, primary commodities that do not require advanced skills or technology, while consumer goods are mainly produced under foreign franchise, a practice that "stimulates knowledge development abroad and stifles it at home."

Excessive dependency on oil and other export commodities discourages broader international trade relationships and limits competition in the internal market, the authors add. "Resistance to opening up to the outside world by Arab economies and their lack of exposure to foreign competition, coupled with at times excessive protection for local production through import substitution policies, have also slowed the advancement of productivity and the employment of knowledge to that end."

Oil dependence has also led to the excessive concentration -- and exportation -- of wealth." Demand for knowledge has been weakened not only by faltering economic growth and productivity in the Arab states during the last quarter- century "but also by the over- concentration of wealth in few hands," the authors argue. The vast amount of Arab capital invested in industrialized countries and, therefore, denied to the Arab states, is strong evidence that, in human development terms, it is not possession of money and wealth that matters but how productively such wealth is invested."

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