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Arab countries are facing, as most other developing countries, anumber of economic challenges inherited from the 12th century and which may beexacerbated in the 21st century. Among these challenges are globalisation,water crises and sustainable development, technological change, and economic consequencesof the peace process.
Globalisation, as a growing international integration of marketsfor goods, services and capital, can be driven by various forces. First is theunprecedented increase in the international trade flow of about fifteen-foldduring the last four decades (as opposed to a six-fold increase of theworldâ??s population). Developing countries increased their share of globaltrade to 30 percent in 1995, compared with 24 percent in 1985. One of theimportant features of global trade is the increasing share of intra-firm trade,encouraged by foreign direct investment (FDI). Multinational world tradeamounted to US$5.3 trillion in 1992, compared to world exports of US$4.6trillion (UNCTAD, 1998).