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Economic Commentary:
It's a long, lonely road from rhetoric to reality

Published by Daily Star on 2003-10-16

AMMAN: In many ways, the Jordan Economic Forum held here earlier this week mirrored last month's annual meetings of the World Bank and International Monetary Fund in Dubai. Both meetings were attended by the mandarins of money, powerful businessmen and government officials accustomed to attention and being heard. Both meetings featured the twinned themes of good governance and better institution building in the Middle East and North Africa. Both meetings elicited pledges from participants about greater transparency in the conduct of commerce. Both meetings lamented the lack of adequate foreign direct investment in the region's largely languishing economies.

And both meetings ended without possibility that things would change much after the delegates had engaged in their rituals of greeting, meeting and eating.

That shouldn't come as a surprise in this age of political bonhomie, of course, but it's disappointing nonetheless that, at a time of growing globalization when this region needs to integrate better into the world economy, these talkfests do not generate the political willingness to implement reforms. There was no shortage of such proposed reforms: Prime Minister Rafic Hariri of Lebanon won loud applause in Amman for his call to end protectionism in Arab countries and for less cumbersome bureaucracies so that inter-Arab trade could be expedited. The call was echoed by his Jordanian counterpart, Ali Abu El-Ragheb. Similarly, James D. Wolfensohn, the World Bank president, urged higher levels of sustainable development in the MENA region.

For a visitor who attended both the Amman forum and the Dubai meetings, however, it was tempting--however impolite--to ask what it was that prevented these senior officials from implementing their own palliatives for economic progress. All the feel-good resolves sounded fine and timely--especially in view of the World Bank's warning that unemployment was rising alarming in the Middle East and raising the specter of more social unrest--but words and statistics were about all there was to the perorations.

The private sector businessmen who came to the Amman and Dubai meetings weren't fooled by the rhetoric. They had, after all, heard much of it before at other forums. And they did not need to be educated by Prime Ministers Hariri and El-Ragheb, and by Wolfensohn, about the virtues of free enterprise and open markets. These were savvy, street smart merchants whose personal fortunes were made inspite of bureaucratic barriers, widespread corruption in the region, and the uncertainties spawned by volatile politics throughout the Middle East and North Africa. They were sharp businessmen who came to the meetings seeking new contacts--and new contracts.

And they didn't expect that the political conditions which shape the region's economics would change substantially, Amman and Dubai notwithstanding.

That may be an unkind assessment of these meetings. They were organized in good faith. They were meant to get people together. They were meant to review economic progress. They were intended to offer guideposts to coping with globalization. They were meant to issue warnings about the consequences of retarded economic growth and of thin foreign investment in the region. They were meetings of good intentions.

But the private sector participants--including some pretty high powered bankers who sit in judgment on making potentially important loans--weren't looking for good intentions. They wanted specifics. They wanted to hear how the region's countries planned to clean up their government corruption. They wanted something more besides abstractions about "reforms." They wanted, in the final analysis, political commitment to open markets, open economic systems, open political environments.

It was all very well for the politicians in attendance to articulate the language of assurance--but if they really thought that their vocabulary would convince the audience, then they seriously misjudged their listeners.

So are these economic forums and meetings pointless? After all, as Sami Haddad--the director of the Middle East and North Africa office of the International Finance Corporation--said to The Daily Star, private business deals do get done in the corridors and back rooms of these conferences. But the region's economies are mostly in such poor shape, requiring far more than the billion dollars or so that they now receive annually in foreign investment and development support, that local political leaders need to display something more than demagoguery.

They need to demonstrate tough, credible commitment to steady internal reforms of their economies' structures and setups. None of the businessmen in attendance at these international meetings is unsophisticated enough to believe that local politicians don't have their own domestic constraints. But leaders in other regions are successfully overcoming their indigenous handicaps, and successfully inviting foreign capital and support. The satraps of the Middle East and North Africa would do well to study how their contemporaries elsewhere practice that art of the possible.

Pranay Gupte,
Senior Writer and Global-Affairs Columnist

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