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Beirut, 29 August 2003 (United Nations Information Service)--In
a study released today by the United Nations Economic and Social
Commission for Western Asia (UNESCWA), the main analytical and
empirical results indicated that institutional barriers and
political tensions, in particular, are the major contributors to
poor economic growth in the region.
This result should be understood within a pattern of growth that
is particular to the ESCWA region; one in which there exists an
inverse relationship between instability and growth. For economic
growth to take hold in this region, oil prices and revenues should
more than cover the instability premium. It is, therefore,
possible to grow under stable conditions with low oil prices
because the "reduced tensions" dividend, including repatriated
financial resources, could be channeled into infrastructure and
productive activity, but the opposite should also hold.
The four-chapter document entitled "Analysis of Performances and
Assessment of Growth and Productivity in the ESCWA Region"
considers that apart from political tensions and risks, lower
investment rates; poor trade integration; continued volatility of
GDP and oil prices; relatively minor contributions of technology
and other knowledge-based activities to growth, represent the
remaining but, albeit, related causes behind slow growth in the
region.
The study says that poor growth does little to alleviate poverty.
With the onset of the poor growth period beginning in the
mid-1980s, progress in many social areas including education,
gender equality and developments in civil society either stood
still or declined. Regress in the social domain contributed, in a
spiral manner, to poor growth. Breaking the vicious circle
requires a break with the old institutional frameworks
underpinning economic growth. There is considerable evidence to
suggest that setting the path of capital accumulation at a higher
level will raise labour demand and, subsequently, entice more men
and women to participate more fully in the economy.
The study points out one essential policy recommendation and four
auxiliary but related suggestions aimed at reversing the poor
growth performance of the ESCWA region. Principally, the study
sees that when risks, real or perceived, are high, insurance
provision either through public safeguards or a practicable
regional security arrangement represent a necessary buffer that
would re-instill investors' confidence and revive growth. Other
related policy recommendations include providing a solid
background to raising investment; exercising a gradual and
selective approach to trade integration preceded by concrete
measures to accede into the global economy as a regional block;
bringing volatility under control through harmonization and
deepening of the de facto functions of the Arab macroeconomic and
monetary cooperation frameworks; putting emphasis on investment in
research and development (R&D) and human capital;
In the 2001 G8 Summit (United States of America, Japan, France,
Germany, United Kingdom, Canada, Italy and Russia), the key
development issue was "the Marshall plan for Africa". The growth
rates in this region are lower than Africa's and, what is more,
the highest global rate of new entrants into the labor market is
set against the lowest global rate of per capita GDP growth. Much
like Africa however, the resources of this region can only become
effective means for development when repatriated to the region
under predictable and stable conditions. If, on account of high
risks, national private resources cannot be garnered for that
purpose, then official sources should fill the gap.
Chapter I of the study reviews growth, globalization and the past
performance in the ESCWA region. Chapter II examines and presents
the empirical evidence. The logic of growth and capital
accumulation in the ESCWA region is assessed in Chapter III, while
Chapter IV evaluates policies and draws conclusions.
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