Many Arab countries face development challenges related to structural factors such as the predominance of primary sectors, non-productive services, low productivity and competitiveness, modest human and physical capital, and poor institutional arrangements, governance, accountability, and planning. All these challenges combined generally result in modest economic growth, slow structural transformation, high levels of inflation and unemployment, and high levels of public debt. Globalization and openness have brought an additional burden through the contagion of external shocks. Addressing all these challenges in a way that allows for sustained increases in incomes and higher levels of welfare requires a national agenda of financial and economic reform programs based on an objective and scientific diagnosis of all the constraints and imbalances facing the financial and economic system. In addition, a reform program must be developed based on an integrated, coherent, and credible set of policies that can be financed, taking into account their economic and social effects, especially on the weaker segments of society.
Economic and financial reforms generally revolve around achieving macroeconomic stability through flexible exchange rate policies aiming at adjusting the balance of payments imbalance and absorbing external shocks. Reforms also require a fiscal policy geared to growth without disrupting the government's financial balances, through a review and rationalization of expenditures, mobilization of tax and non-tax revenues, and wise management of the public debt. Monetary policy should be aimed at combating inflation, providing liquidity, and promoting productive investment. In the area of development and income growth, reforms must be based on modern industrial policies based on the development of modern high-tech industries, organized in industrial clusters, integrated into global chains and export oriented. These reforms also require developing infrastructure, developing human capital, reforming the banking and non-banking financial system to be able to finance large production operations, as well as setting up financing institutions that are concerned with providing opportunities for new entrants to the labor market, preparing to face future environmental challenges, encouraging investment in renewable energy, and developing a green economy. All of these reforms must be formulated within the framework of a long-term national development strategy that will be implemented through successive plans and periodically evaluated to achieve these development goals. The Arab Planning Institute provides specialized technical and training support in this field through the implementation of several relevant training programs and through direct advisory and institutional support to Arab countries upon their request.