ABSTRACT
This chapter analyses the Arab economies at the turn of the century, and sheds some light both on developmental challenges facing these countries and on the proper strategies to face them. The chapter focuses on the economic and social challenges facing Arab countries (ACs) in addressing these issues. The ACs are entering a new millennium with mixed fortunes. The sources of growth in ACs are believed to be the result of horizontal expansion, and to a lesser extent the product of increased productivity. Some of the Arab governments resorted to a series of stabilization and structural adjustment policies designed to ease the impediments and constraints on growth and efficiency. Arab stock markets have experienced major changes as reflected in the unprecedented growth in market capitalization and trading volume. ACs are facing a major challenge with regard to the development of the technological means to achieve higher economic growth rates and build modern diversified economies.
