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Arab Economies Face Obstacles in Creating Jobs for Growing Population

The Peterson Institute, a respected Washington-based research agency, Tuesday released a study showing that over the next decade Arab economies need to create jobs for a population that could increase by 150 million. VOA's Barry Wood has more.

The report says the population of the Arab world from Morocco to Iraq could rise by up to 50 percent by the year 2020. That huge increase is equal to the population of two additional Egypts.

Marcus Noland, the report's co-author, says Arab economies face formidable institutional and political obstacles in economic development. Over the past two decades Arab economies have generally stagnated with per capita incomes in 2000 no greater than they were in 1980. From 1960 to 2004 per capita incomes in Arab countries rose by about 1.5 percent per year. East Asian economies, by contrast, saw per capita incomes rise by over four percent annually.

Noland says the Institute's examination of Arab economies found no evidence that Islamic religious belief holds back economic development. "Islam directly does not appear to impede economic performance. Indeed one could argue that it yielded an institutional legacy that is actually useful," he said.

But Noland is quick to add that in recent years a radical Islamic critique of the western world has impacted public attitudes towards integration with the world economy. "Over the last several years there has been a clear rise in the number of people in the public who regard the west itself-and the United States in particular-as attacking Islam. So in that sense it matters," he said.

Among the non-oil producing Arab countries per capita incomes are highest in Tunisia and Jordan while from 1990 to 2000 economic growth rates were highest in Lebanon (5.3%) and Tunisia (3.1%).

The authors say that high political risk discourages the foreign investment needed for rapid economic growth. From 2000 to 2004 eight Arab economies (Algeria, Egypt, Jordan, Kuwait, Morocco, Saudi Arabia, Syria and Tunisia) attracted only 15 percent of the investment that went into Brazil, which has a much smaller population.

The study finds that within the Arab world cross border economic integration is modest.