ABSTRACT
Arab countries offer a wide diversity of production profIles and of ideological orientations. These have shaped their financial structures and the extent to which their economies have been open to their neighbours and to the outside world. Some, because of their oil wealth or their concentration on trade and services, have, on the strength of surpluses in their balance of payments, developed liberal trade and exchange regimes and a substantial fmancial sector. Others, whose production has been concentrated on primary commodities, mostly agricultural, have had to cope with such typical problems of underdevelopment as low export growth, inadequate savings and perSistent deficits. These countries have tended to be more restrictive in their policies and to have less developed fmancial sectors. Cutting across both the surplus and the deficit countries are two different economic orientations, one which is essentially market-based and decentralised and the other in which the public sector dominates economic activity. These distinctions have been blurred to some extent since 1973 by the pressure for liberalisation generated by the rapid increase in oil wealth in the region and the resulting intra-regional movements of factors of production.
