Industry in the Arab world, 1 May 1998

In a seminar recently held in Damascus under the title The Arab Common Market: Problems and Prospects, well-known Syrian industrialist Riad Seif talked about industry in the Arab world.

He said the Arab world had no chance to build any sort of industrial base before the end of the second world war due to its foreign colonization and occupation. The political circumstances that prevailed afterwards in the Arab countries, such as the absence of democratic representation, instability, fighting to achieve independence, military overspending due to the Arab-Israeli conflict and the consecration of political divisions and artificial national boundaries, did not leave the Arab world with enough resources or the basic requirements for building a sound, significant and sustainable industrial base.

Seif indicated that the growing role of petroleum in the national economics of some Arab countries and the sharp upsurge of its prices in the mid 1970s gave some Arab states a sense of abundant wealth, that unfortunately changed them into a big consumer markets, characterized by irrational spending on luxury and welfare with much wasting and squandering without serious and clear futuristic vision or serious attempts at building an industrial base.

He continued, saying the sharp rise of per capita income in the oil exporting countries contributed to diminishing the importance of work in industry because the revenue derived from industry without the availability of qualified labor could not reach anywhere near the income gained in trade and speculation. Following up the course of events, Seif noted that the aftermath of the crisis hit those countries as a consequences of price decline in the eighties, those countries attention was drawn to risks of relying solely on the oil for their economics.

They launched a campaign of industrialization, the most important of which was in the field of petrochemicals. The non oil producing countries also suffered heavily from price declines due to sharp decrease in financial assistance from the oil producers. This forced them to think of finding an alternative, building an industrial base, especially since those countries have enough work force but lacked the necessary capital for fast industrial development.

The sharp decline in oil revenues led most of the Arab countries to put an emphasis on industrialization. The result differed from one country to another according to each particular circumstance. However, it can be said in general that those results were small and did not commensurate to the immense human and material resources of the Arab world as a whole. Building an integral industry in the Arab countries remained a dream because of regional and nationalistic tendencies and dividing the Arab world into rich countries and poor ones. The gap between their respective per capita income is about ten fold, Seif stated.

On the effect of Euro-Arab cooperation on industry in the Arab world, Seif said the rising labor costs in the countries of the EU made it difficult to sustain industries that rely heavily on unprofitable labor and made it viable to move some of these industries to other countries with much cheaper labor.

Many of the Arab countries such as Tunisia, Syria, Egypt and Lebanon are qualified to take on these industries. It is easy to move technology available in Europe to those Arab countries and reexport the products to European markets. The best example of such industries is textile and ready-made garments and shoes, mostly in Syria, Seif added, noting that this would help these Arab countries build an industrial base than can be developed and expanded to include other industries.