Arab Economic, Development and Social Summit to be held in Kuwait next month would focus on the global financial crisis, infrastructure in the Arab world and social issues, coordinator general for the summit said on Tuesday.

In an exclusive interview with Xinhua at the headquarters of the Arab League (AL) in Cairo, Mervat Tellawi said, "this is the first summit to be held to discuss and address all these issues," adding "businessmen, intellectuals and civil associations with politicians and state leaders to exchange thoughts and solutions."

The Kuwait gathering scheduled for Jan. 19 and 20 would be the first for heads of state of the 22-member AL to devote to economic and social development.

Tellawi said the leaders would discuss the impacts of the global crisis on the Arab economy and map out collective steps to address the crisis.

The crisis makes both Arab individuals and governments to reconsider how to invest their funds instead of investing in international markets "which they wrongly believed were stable and secure," she said.

It has been proved that the return in the international markets is much lower than that in Arab markets, even in normal circumstances, she said. "This may be an incentive for the Arab states to invest their funds within the Arab region in particular."

Western countries were resentful of the Arab sovereign funds that buy stocks and bonds in European financial institutions, citing the Arabs seek to control or influence the financial policies of the West, according to Tellawi.

The Middle East holds the largest sovereignty funds in the world, with the United Arab Emirates boasting some US$900 billion of such funds, Kuwait holding US$200 billion and Qatar 60 billion. The Saudi Arabia established its first sovereignty fund of US$5.3 billion this year.

The Arab nations currently invest most of their sovereignty funds in the European and American markets, eying purchasing assets at cheap prices while the West was suffering from the sluggish economy.

Tellawi disclosed that finance ministers and central bank governors from Arab nations would meet several days prior to the summit to decide what collective steps to be taken in face of the crisis.

As for the plunging oil prices, Tellawi said low oil prices will certainly affect the budgets and development plans of Arab countries, but it will lead to the reduction of high inflation which has plagued many Arab countries, especially the oil-rich Gulf ones.

"We must work to address negative impacts and maximize the positive aspects and use them," said the former Egyptian minister of social affairs and insurance.

Oil prices has witnessed dramatic ups and downs during the past year, which fell to around US$100 a barrel in September and dropped below US$50 in November, declining by more than two-thirds since their mid-July peak.

The Kuwait summit has been in preparation for two years, the coordinator said, noting that Arab leaders agreed to hold such a summit during the annual Arab Summit in Riyadh in March 2007 as they found Arab national security has been affected by the economic and social underdevelopment.

"The Arab world needs reform and modernization to tackle a number of challenges," including increasing rates of poverty and unemployment, deteriorating living conditions, limited volume of intra-Arab trade and modest domestic investment, capital outflow and brain drain and poor infrastructure, she said.

The summit secretariat has so far received over 400 proposals and projects from unions, intellectuals, investors and research centers, but would only select and submit very limited number of projects to the summit for approval, according to Tellawi.

The projects to be chosen would benefit all Arab countries and cover Arab power linkage, roads and railways networks and food security plans, she said.

"We import 60 percent of our food needs from abroad and therefore must boost agriculture in Arab countries, such as Sudan, Syria, Egypt and Morocco, to ensure the food security," she said.

Also among the chosen are education and manpower training projects to reduce the unemployment rate and provide manpower suitable for Arab labor markets, said the coordinator.

Projects on reducing poverty is the most important to be presented to the summit, she said.

Economic reports have showed that the Arab population, which currently stands at around 300 million, would double in three decades.

The number of jobless Arabs is estimated at 60 million and Arab countries need to create more than 80 million jobs by 2020, according to the reports.

In pursuit of Arab economic unity, Tellawi said the Arab nations have a roadmap to establish the Customs Union between 2015and 2020 and thus to set up the Arab common market afterwards.

The summit would not be held regularly, but there will be a follow-up mechanism, she said, noting that Egypt has officially applied to host the next economic summit two years after the Kuwait one.

(Xinhua News Agency December 24, 2008)