OGJ Editorial: Arab world at crossroads

July 15, 2002
A new United Nations Development Program (UNDP) report deals sternly with Arab nations about important issues many of them would rather ignore. No less vital are messages it bears for the oil and gas industry and non-Arab world.

A new United Nations Development Program (UNDP) report deals sternly with Arab nations about important issues many of them would rather ignore. No less vital are messages it bears for the oil and gas industry and non-Arab world.

The report, whose authors are described as Arab scholars, duly reports improvements in conditions of human life in Arab countries during the past 30 years. Life expectancy, for example, has increased by 15 years. Death rates for children under 5 years of age have dropped by two thirds. Adult literacy has almost doubled. Abject poverty is lower in Arab countries than in any other part of the developing world.

Disparities

Avoiding the hazards of generalization, the report notes disparities among Arab countries in the UNDP's human development index-factors of which include per-capita gross domestic product (GDP), adult literacy, and life expectancy at birth. By that standard, Kuwait scores only slightly lower than world-leading Canada. Djibouti, the lowest ranking Arab country, has an index only slightly better than the world's bottom performer, Sierra Leone.

Those gains notwithstanding, the report asserts that Arabs haven't benefited sufficiently from the progress. Growth in Arab per-capita GDP during the past 20 years-the period after historic leaps of the 1970s in prices of crude oil-has been lower than anywhere other than sub-Saharan Africa. That's partly because Arab populations have zoomed and partly because Arab economies, without help from big jumps in oil prices, haven't grown at rates typical of the developing world. The 1999 GDPs of the 22 Arab nations studied, at $531 billion, totaled less than that of Spain.

The report further notes three "deficits": in freedom, in women's empowerment, and in human capabilities and knowledge relative to income. And it relates the deficits to economic underperformance, arguing, "The region's development prospects cannot significantly improve unless a dynamic process of vigorous human development is initiated and maintained."

These are important ideas-and not just because they challenge Arab traditionalism. They're important because they integrate economic health with human values such as freedom, sexual equality, and education oriented to the requirements of globalization.

The connections are central to the basic proposition of developing natural resources in someone else's country: that the host country and its people benefit from a fair share of the consequent wealth. This proposition justifies international exploration and development. And it too frequently goes unfulfilled.

Oil companies recognize the problem. For at least the past decade, the major international operators have worked to change the nature of their international presences abroad from benign invisibility to active but apolitical responsibility. The change is good. But it amounts mostly to reporting and accountability. There are limits to what visitors can do to effect political and cultural change in host countries. At least companies are now asking where those limits are.

In the Arab world, though, doesn't the boundary begin to waver with the realization that countries accounting for 63% of the world's oil reserves and 28% of its production generate less than 2% of its GDP? Isn't something wrong when the economic welfare of Arabs, as measured by national earnings per person, improves only in times of extraordinarily high oil prices? And shouldn't the debate broaden in view of the UNDP's linkage of economics, development, and regionally unmentionable topics such as freedom, women's rights, and education that prepares young people for, rather than isolates them from, the world? Oil companies, with their experience in the Arab world and the trust they have developed there, should be able to find places for themselves in such a discussion.

Systemic problems

For the non-Arab world in general, the UNDP report should represent insight, not ammunition. Lately, non-Arab extremists have been depicting all Arabs and Muslims as hateful and inclined toward terrorism. They'll abuse parts of the UNDP study critical of Arab institutions to justify their prejudice.

The study, though, is not a repudiation of everything Arab. Far from it. It's a careful articulation of systemic problems and a challenge to Arab countries to fix what needs repair, embrace globalization, and realize the potential of their peoples, cultures, and resources. The non-Arab world, encouraged by the oil and gas industry, should use the report not as a bludgeon, but as an invitation.