Many countries that are on the road to be a developed country are mostly situated in the Arab world. Most of the countries are either in conflict, near any conflict, or just got free from any conflict. Even they don’t undergo in any war but their development is highly affected by these conflicts. Besides these conflicts, they have small risky markets with the scarcity of financial capital. Most of these Arab countries are dependent on their economic growth by exporting primary goods in other countries. The most common product is oil. When there is a decrease in oil prices the economic growth of the Arab world is also affected. As these are already poor countries so they have to face another setback.
The Anti-Development Economic Policies
There are many anti-development economic policies that are prevailing in these countries. Due to these policies, the idle resources are not utilized as they should be. As a result, they are facing a high level of the unemployment rate. The solution to this problem is that these countries should utilize their productive capabilities. It does not mean they have to overproduce because it is definitely not needed. The decision-making bodies should include the cross-national parties with them so that they can eliminate war from the Arab world. It will definitely place a very pleasant impact on social, financial, and political aspects of these countries.
Rapid Economic Growth and Industrialization
The most important conditions for economic development in the Arab world are industrialization and technical advancement. This seems to be pointless when the government is participating in cold war and the valuable human functioning is not attained. This cold war competition is a big barrier to efficiently utilize resources and to achieve the social targets that are highly desirable.
The Income Inequality and Unemployment in Arab World
The Arab world is an area where there is acute income inequality. The share of labor in income is continuously declining to abut 25% from the year 1980-2014. There is an unequal distribution of wealth in many sections of society. So to achieve economic growth and stability achieving equal distribution of wealth is very important.
Besides these conflicts and wars, there is a high rate of unemployment that is affecting the economy of the Arab world. The reason is same the more attention of the government is toward war and the resources are not utilized properly. As a result, there is a high rate of unemployment from the past three decades.
Low Labour Productivity
It is another unpleasant characteristic of Arab World. There is a slow increase in labor productivity. In most case sit is observed that there is negative productivity growth rate. This growth can be increased by the introduction of Research and Development. Another reason is that these Arab countries are not introducing modern techniques of production in industries.
The economic growth of these countries largely depends on oil revenues and there is no quality job in the field of technical skills and related categories. So to achieve growth cum economic development these should be institutional transformation and technical progress.