ABSTRACT
During the last decade, Arab economies, with the exception of those performing under conflict conditions, 3 have shown some improvement in their macroeconomic indicators. Real GDP has experienced a growth rate in the range of 4–6 per cent, inflation has been kept at single digit and both internal and external balances seem to have been kept under control. At the same time Arab governments have implemented several measures, aimed at liberalizing trade, privatization of the public sector establishments and reforming financial markets. Nonetheless, Arab economies have not been able to attend to the most urgent needs of reducing unemployment and poverty. Presently, the Arab region has the highest unemployment rate among other regions in the world. This situation has raised serious questions regarding the trade–growth–employment–poverty nexus in the Arab countries, and raises a number of fundamental questions: to what extent has trade liberalization enhanced growth in the Arab economies; why have recent episodes of growth in most Arab countries been characterized as ‘jobless growth’; what is the relation between the process of growth and distribution of income in Arab countries; has recent experience of growth been associated with increasing inequality of income; what is the relationship between growth and poverty; are the majority of the poor excluded from the benefits of growth?
