Return To: 2025 Handbook
2025 Handbook Economic and Social Commission of Western Asia (ESCWA)
Topics
The Economic and Social Commission for Western Asia (ESCWA) is one of five regional commissions of the Economic and Social Council (ECOSOC). ESCWA is responsible for promoting economic and social development through regional and subregional cooperation and integration. The Commission provides a framework for harmonizing Member States’ sectoral policies, while focusing on meeting Arab States’ needs and emerging global challenges in development. ESCWA reports to ECOSOC on Western Asia’s economic challenges, progress and proposals for the future.
War on Gaza: tenets and essential elements for sustainable recovery War on Gaza: tenets and essential elements for sustainable recovery
In the years since the start of the 2023 War on Gaza, the infrastructure within the Gaza Strip—the coastal portion of the State of Palestine located along the Mediterranean sea between Israel and Egypt—has been devastated from the ongoing conflict. Increased attacks on healthcare centers, roads, homes, food sources and water services threaten the viability of public health in Gaza and diminish efforts towards sustainable recovery. The World Health Organization reports that major hospitals have suspended medical service and that of the 36 hospitals in Gaza, only 19 remained operational as of March 2025. These hospitals continue to face supply shortages, a limited number of health workers and a surge of casualties they can treat only with basic care. The damaged roads and fuel blockades are creating conditions for mass starvation with trucks carrying food unable to reach Palestinians in Gaza. Severe constraints on water, sanitation and hygiene services persist, with 67 percent of related infrastructure destroyed between October 2023 and July 2024. In line with the mandate to monitor, analyze and document the repercussions of the Israeli occupation on the Palestinian people, the United Nations Economic and Social Commission for Western Asia (ESCWA) is committed to developing a plan for sustainable humanitarian recovery and development in Gaza that addresses the root causes of the conflict, the immediate needs of the people and the systemic challenges to development.
During the International Conference on the Question of Palestine held in September 1983, the United Nations Member States convened to seek effective ways to enable the Palestinian people to exercise their inalienable rights. The Conference highlighted the right to self-determination, the withdrawal of Israeli military forces and the establishment of the Palestinian Authority over Gaza and other occupied territories as important facets for successful implementation of sustainable recovery efforts. In 1992, bilateral and multilateral negotiations commenced in Madrid and Moscow to rebuild relations in the region and generate conditions for which security, water, refugee issues, environmental protection and economic development could be adequately addressed. In 1993, the Declaration of Principles on Interim Self-Government Arrangements prompted some military withdrawal by the Israeli government. To alleviate the scarcity and improve the quality of water in Gaza, the World Bank Group proposed the Emergency Recovery Program for the Occupied Territories and approved funding to improve water management and sanitation services in Gaza.
The 2007 blockade on the Gaza strip, imposed by Egypt and Israel, hindered recovery by restricting the entry of dual-use goods such as concrete, construction machinery and medical supplies— greatly impairing economic development in the region. Combined with the ongoing military attacks, the ban on dual-use goods limited the ability of Gazans to rebuild their homes and service buildings. The United Nations remained heavily involved in efforts to address the impact of the blockade. The United Nations Relief and Works Agency established the Infrastructure and Camp Improvement Programme, which helped coordinate the entry of construction materials to build 34 schools and 3 health centers, aiming to improve living conditions for displaced Palestinians and expand access to education and healthcare. Given the blockade’s restrictions on humanitarian aid delivery, ESCWA called for the reopening of border crossings to ensure the sustained and regular flow of persons and goods—particularly humanitarian assistance—into Gaza.
The situation in Gaza dramatically escalated on 7 October 2023, when Hamas launched a raid into Israel, killing and capturing a large number of civilians. In response, Israel launched a series of ground and air offensives in Gaza. The General Assembly responded with a resolution focused on protection of civilians during combat operations in Gaza. Recognizing that meaningful reconstruction efforts usually follow a lasting peace, the United Nations remains committed to creating and implementing recovery strategies despite the ongoing destruction of Gaza’s built environment. The United Nations Committee on the Exercise of the Inalienable Rights of the Palestinian People stated that a permanent ceasefire is necessary for reconstruction.The repeated bombing and ground campaigns in Gaza have resulted in perpetual de-development, destruction of 81 percent of the economy, forced displacement of Palestinians and an estimated 57,000 people killed and over 100,000 injured.
Amid the ongoing war in Gaza, ESCWA produced a report in December 2023 detailing essential elements for sustainable recovery and laying the groundwork for post-conflict reconstruction. The report emphasized the importance of enabling Palestinians to define their own comprehensive damage, loss and needs, rather than having these assessments imposed by donors and other humanitarian actors. Despite intervention from United Nations agencies and programs, Gaza still faces severe food scarcity, surging malnutrition and rising demands for medical assistance. The need for humanitarian assistance is high. ESCWA further recommended that the planning and distribution of humanitarian aid not be bound by Israeli policies and procedures, especially when they violate international law, such as the blockades on dual-use resources. In December 2023 the United Nations Security Council approved a resolution to strengthen the logistical capacity for humanitarian aid delivery in Gaza. In this resolution the United Nation Security Council adopted fundamental aspects of sustainable recovery including the removal of the blockade, a call for the reconstruction of infrastructure and a push for political stability that would encourage economic revival of Gaza.
Some United Nations actions and recovery efforts have focused on the legal obligations of Israel as an occupying power, however historically these approaches have had limited success in changing conditions on the ground. The complete scale and impact of the War on Gaza is yet to be fully measured. ESCWA continues to work on implementing strategies for sustainable recovery; however, various States have put forward differing proposals regarding reconstruction in Gaza. Israeli officials have proposed direct control of the territory for an indefinite period, disregarding previous calls for the Palestinian Authority to govern, and conflicting with ESCWA’s recovery plan, which aims to strengthen Palestinian institutions. In contrast, Arab countries are convening to discuss possible funding for Gaza’s recovery and to propose alternatives that respect and prioritize the rights and perspectives of the Palestinian people.
Questions to consider from your country’s perspective:
- How can reconstruction efforts navigate the concerns of some Member States about inadvertently benefiting Hamas, while also addressing objections from others to normalizing or legitimizing the Israeli occupation of Gaza?
- What steps can be taken during ongoing fighting to lay the groundwork for a successful reconstruction of Gaza?
Bibliography Bibliography
- Amnesty International (7 June 2017). Israel’s Occupation: 50 Years of Dispossession.
- Bunkall, Alistair (5 May 2025). Benjamin Netanyahu Says Israel Plan to Seize All of Gaza and Hold It Indefinitely Will Be ‘Intensive’. Sky News.
- Efron, Shira, and Jess Manville (11 March 2025). The Gaza Gray Zone: Between War and Recovery. Think Global Health.
- Lederer, Edith (2 May 2024). The unprecedented destruction of housing in Gaza hasn’t been seen since World War II, the UN says. AP.
- Murphy, Matt, and Kevin Nguyen (May 2025). How the controversial US-Israeli backed Gaza aid plan turned to chaos. BBC.
- United Nations (5 February 2025). International community must keep pushing for permanent ceasefire, work towards Gaza’s reconstruction, Secretary-General tells Palestinian Rights Committee.
- United Nations (6 April 2024). Planning the Post-war Reconstruction and Recovery of Gaza.
- United Nations (1983). Report of the International Conference on the Question of Palestine (ICQP).
- United Nations Relief and Works Agency for Palestine Refugees in the Near East. Microfinance.
- United Nations Relief and Works Agency for Palestine Refugees in the Near East. What We Do.
- United Nations, The Question of Palestine. UN Committee on the Exercise of the Inalienable Rights of the Palestinian People.
- World Bank, et al. (June 2021). Publication: Gaza Rapid Damage and Needs Assessment,. Open Knowledge Repository.
- World Bank Group (9 December 1993). Water, Sanitation and Municipal Roads Component Technical Assistance Activities.
United Nations Documents United Nations Documents
- United Nations, Economic Commission for Western Asia (28 November 2023). War on Gaza: tenets and essential elements for sustainable recovery. E/ESCWA/31/9.
- United Nations, Economic Commission for Western Asia (12 April 2019). Social and economic situation of Palestinian women and girls (July 2016 – June 2018). E/ESCWA/EC.6/2019/10.
- United Nations, Economic Commission for Western Asia (15 December 2016). Justice for the Palestinian people: fifty years of Israeli occupation. 326 (XXIX).
- United Nations, Economic Commission for Western Asia (October 1985). FOOD SECURITY in the West Bank and Gaza Strip. E/ESCWA/AGR/85/4.
- United Nations, General Assembly (19 December 2023). Protection of civilians and upholding legal and humanitarian obligations. A/RES/ES-10/22.
- United Nations, General Assembly (9 January 2023). Israeli practices affecting the human rights of the Palestinian people in the Occupied Palestinian Territory, including East Jerusalem. A/RES/77/247.
- United Nations, Security Council (22 December 2023). The Situation in the Middle East, Including the Palestinian Question. S/RES/2720.
- United Nations, Security Council (11 October 1993). Declaration of Principles on Interim Self-Government Arrangements . A/48/486.
- United Nations, Economic Commission for Western Asia (1985). FOOD SECURITY in the West Bank and Gaza Strip. E/ESCWA/AGR/85/4.
Economic governance: market competition challenges in the Arab Region Economic governance: market competition challenges in the Arab Region
Creating and maintaining a healthy and competitive economic market is critical for the Arab region to continue to meet development goals. Competitive markets allow Member States to enable market access for entrepreneurs and create productive employment and reduce poverty by increasing employment opportunities and breaking down barriers to access. However, there are challenges to effective market competition and adequate competition law and policy implementation which perpetuate conditions for low economic integration in a time when Member States are seeking greater participation and influence in the global economy. A continued reliance on state-owned enterprises, typically running monopolies in critical industries including telecommunications, finance and oil, poses a large barrier to robust market competition in the Arab region and limits the extent of innovation, productivity and expansion into digital markets for those industries.
Arab countries notably came together to form the Arab League in 1945 with the aim of improving coordination in multiple areas including economic cooperation. To mark their commitments to economic integration, fourteen members of the Arab League signed the 1997 Greater Arab Free Trade Area (GAFTA), an agreement that worked to remove tariffs and other non-tariff barriers and toward the liberalization of agricultural markets supported by institutional development. While GAFTA provided a framework to increase macroeconomic gains, challenges of volatility persist. In 2001, the United Nations Economic and Social Council for Western Asia (ESCWA) published the report Competition Laws and Policies in the ESCWA Region recommending that Member States adopt competition policies to promote and diversify private sector participation, including antitrust laws and remedies to restrictive business practices. These competition policies were in line with those prescribed by international institutions like the International Monetary Fund and the World Bank. However, weaknesses in economic policy and institutional frameworks created barriers for growth, particularly for non-oil exports.
Guided by the United Nations Millennium declaration, ESCWA adopted a Revised Mid-term Plan for the period 2002-2005 in 2002 aimed at nurturing comprehensive, integrated equitable and sustainable economic and social development. The Revised Mid-term Plan outlined the need for tools to measure, identify and outline achievements and ways to improve. During that time, the Arab region’s oil and energy industries experienced dramatic fluctuations that were further exacerbated by the 2008 global economic crisis. With uprisings sweeping through the region in early 2011, citizens expected their national governments to address both their political and economic demands. However, governments facing transitions prioritized stabilizing domestic political conditions which resulted in lagging economic standards and liberalization policies and thus low economic growth and high unemployment.
Informed by the 2030 Agenda for Sustainable Development, in 2015 ESCWA produced the Competition and Regulation in the Arab Region report reaffirming the commission’s commitment to market competition. However, state-owned enterprises continued to dominate the economic framework of the Arab region. ESCWA noted in the 2018 report on Economic Governance for Entrepreneurs in the Arab Region that the regulatory practices and policy priorities were not favorable for entrepreneurial endeavors, undercutting previous efforts to promote and diversify the private sector. The report further identified that firms with political connections leveraged these connections to secure funding, support and approval at a rate that distorted the market. These practices enabled monopolies to persist in the Arab region and hindered the effective implementation of competitive policies in both the public and private sector. The policy frameworks that perpetuated these dynamics reduced incentives to invest in new technologies and to improve productivity.
In 2020, ESCWA, UN Trade and Development (UNCTAD) and the Organization for Economic Co-Operation and Development, established the annual Arab Competition Forum, intended to promote the exchange of policy, enforcement and developmental knowledge to promote liberal market competition. To further help Member States access a repository of legislative regulations pertaining to anti-corruption, competition, consumer protection and foreign direct investment, ESCWA launched the Arab Legislations Portal in 2021. The Arab Legislations Portal offers domestic comprehensive assessments in an effort to enhance corporate governance and enable strategic reforms that improve the business environment and promote substantial economic growth.
Although the Arab region continues to affirm commitments to improving economic governance and the necessary conditions for successful market competition, there are still challenges. In 2023, ESCWA submitted a report on Economic governance: market competition challenges in the Arab region. The report weighed the contributions of state-owned enterprises, noting that some demonstrate outstanding performance and efficiency while others were burdens to the public budget and discourage private investment. The report recommended that Member States commit to strengthening the capacity of competition authorities to implement and enforce policies within their jurisdictions. While many Arab countries are advancing their economic capacities, ESCWA reports that there are structural challenges including large informal sectors, lack of competition policy incentives and limited enforcement of competition policies. These challenges limit potential business development and the economic benefits expected from strong market competition policies, while also creating conditions that enable corrupt practices.
Questions to consider from your country’s perspective:
- What can be done to further promote market competition when monopolies and state-owned enterprises dominate most industries?
- How can growing e-commerce be used to promote sustainability goals and market competition?
- How can Member States ensure that political and economic reforms are carried out simultaneously?
Bibliography Bibliography
- Abdelbary, Islam, James Benhin (2019). Governance, capital and economic growth in the Arab Region. The Quarterly Review of Economics and Finance.
- Economic and Social Council of the Arab League (1997). Arab Free Trade Area Agreement.
- Economic Commission for Western Asia (March 2024). The Arab Business Legislative Frameworks.
- Economic Commission for Western Asia. Arab Legislations Portal.
- International Monetary Fund (10 October 2013) Arab Countries in Transition: Economic Outlook and Key Challenges.
- International Monetary Fund (10 May 2010) Regional economic outlook: Middle East and Central Asia.
- Khan, Moshin (February 2014). The Economic Consequences of the Arab Spring. Atlantic Council.
- Organisation for Economic Co-operation and Development (2013), State-Owned Enterprises in the Middle East and North Africa: Engines of Development and Competitiveness?
- Organisation for Economic Co-operation and Development. Arab Competition Forum.
United Nations Documents United Nations Documents
- United Nations, Economic and Social Commission for Western Asia (31 October 2023). Economic Governance: Market Competition Challenges in the Arab Region. E/ESCWA/31/6.
- United Nations, Economic and Social Commission for Western Asia (2023). Competition law The Arab Business Legislative Frameworks. E/ESCWA/CL6.GCP/2023/ABLF/1/Series.1/Overview.
- United Nations, Economic and Social Commission for Western Asia (26 September 2018). Economic Governance for Entrepreneurs in the Arab Region : Prioritizing Policy Challenges. E/ESCWA/EDID/2018/TP.6.
- United Nations, Economic and Social Commission for Western Asia (2018). Rethinking Fiscal Policy for the Arab Region E/ESCWA/EDID/2017/4.
- United Nations, Economic Commission for Western Asia (2015). Competition and Regulation in the Arab Region. E/ESCWA/EDID/2015/5.
- United Nations, Economic and Social Commission for Western Asia (19 March 2002) Revised Medium-Term Plan For The Period 2002-2005. E/ESCWA/S-4/3.
- United Nations, Economic and Social Commission for Western Asia (23 August 2001). Competition Laws and Policies in the Escwa Region. E/ESCWA/ED/2001/10.
- United Nations, General Assembly (21 October 2015). Transforming Our World: the 2030 Agenda for Sustainable Development. A/RES/70/1.
- United Nations, General Assembly (18 September 2000). United Nations Millennium Declaration. A/RES/55/2.
Topics
The Economic and Social Commission for Western Asia (ESCWA) is one of five regional commissions of the Economic and Social Council (ECOSOC). ESCWA is responsible for promoting economic and social development through regional and subregional cooperation and integration. The Commission provides a framework for harmonizing Member States’ sectoral policies, while focusing on meeting Arab States’ needs and emerging global challenges in development. ESCWA reports to ECOSOC on Western Asia’s economic challenges, progress and proposals for the future.
War on Gaza: tenets and essential elements for sustainable recovery War on Gaza: tenets and essential elements for sustainable recovery
In the years since the start of the 2023 War on Gaza, the infrastructure within the Gaza Strip—the coastal portion of the State of Palestine located along the Mediterranean sea between Israel and Egypt—has been devastated from the ongoing conflict. Increased attacks on healthcare centers, roads, homes, food sources and water services threaten the viability of public health in Gaza and diminish efforts towards sustainable recovery. The World Health Organization reports that major hospitals have suspended medical service and that of the 36 hospitals in Gaza, only 19 remained operational as of March 2025. These hospitals continue to face supply shortages, a limited number of health workers and a surge of casualties they can treat only with basic care. The damaged roads and fuel blockades are creating conditions for mass starvation with trucks carrying food unable to reach Palestinians in Gaza. Severe constraints on water, sanitation and hygiene services persist, with 67 percent of related infrastructure destroyed between October 2023 and July 2024. In line with the mandate to monitor, analyze and document the repercussions of the Israeli occupation on the Palestinian people, the United Nations Economic and Social Commission for Western Asia (ESCWA) is committed to developing a plan for sustainable humanitarian recovery and development in Gaza that addresses the root causes of the conflict, the immediate needs of the people and the systemic challenges to development.
During the International Conference on the Question of Palestine held in September 1983, the United Nations Member States convened to seek effective ways to enable the Palestinian people to exercise their inalienable rights. The Conference highlighted the right to self-determination, the withdrawal of Israeli military forces and the establishment of the Palestinian Authority over Gaza and other occupied territories as important facets for successful implementation of sustainable recovery efforts. In 1992, bilateral and multilateral negotiations commenced in Madrid and Moscow to rebuild relations in the region and generate conditions for which security, water, refugee issues, environmental protection and economic development could be adequately addressed. In 1993, the Declaration of Principles on Interim Self-Government Arrangements prompted some military withdrawal by the Israeli government. To alleviate the scarcity and improve the quality of water in Gaza, the World Bank Group proposed the Emergency Recovery Program for the Occupied Territories and approved funding to improve water management and sanitation services in Gaza.
The 2007 blockade on the Gaza strip, imposed by Egypt and Israel, hindered recovery by restricting the entry of dual-use goods such as concrete, construction machinery and medical supplies— greatly impairing economic development in the region. Combined with the ongoing military attacks, the ban on dual-use goods limited the ability of Gazans to rebuild their homes and service buildings. The United Nations remained heavily involved in efforts to address the impact of the blockade. The United Nations Relief and Works Agency established the Infrastructure and Camp Improvement Programme, which helped coordinate the entry of construction materials to build 34 schools and 3 health centers, aiming to improve living conditions for displaced Palestinians and expand access to education and healthcare. Given the blockade’s restrictions on humanitarian aid delivery, ESCWA called for the reopening of border crossings to ensure the sustained and regular flow of persons and goods—particularly humanitarian assistance—into Gaza.
The situation in Gaza dramatically escalated on 7 October 2023, when Hamas launched a raid into Israel, killing and capturing a large number of civilians. In response, Israel launched a series of ground and air offensives in Gaza. The General Assembly responded with a resolution focused on protection of civilians during combat operations in Gaza. Recognizing that meaningful reconstruction efforts usually follow a lasting peace, the United Nations remains committed to creating and implementing recovery strategies despite the ongoing destruction of Gaza’s built environment. The United Nations Committee on the Exercise of the Inalienable Rights of the Palestinian People stated that a permanent ceasefire is necessary for reconstruction.The repeated bombing and ground campaigns in Gaza have resulted in perpetual de-development, destruction of 81 percent of the economy, forced displacement of Palestinians and an estimated 57,000 people killed and over 100,000 injured.
Amid the ongoing war in Gaza, ESCWA produced a report in December 2023 detailing essential elements for sustainable recovery and laying the groundwork for post-conflict reconstruction. The report emphasized the importance of enabling Palestinians to define their own comprehensive damage, loss and needs, rather than having these assessments imposed by donors and other humanitarian actors. Despite intervention from United Nations agencies and programs, Gaza still faces severe food scarcity, surging malnutrition and rising demands for medical assistance. The need for humanitarian assistance is high. ESCWA further recommended that the planning and distribution of humanitarian aid not be bound by Israeli policies and procedures, especially when they violate international law, such as the blockades on dual-use resources. In December 2023 the United Nations Security Council approved a resolution to strengthen the logistical capacity for humanitarian aid delivery in Gaza. In this resolution the United Nation Security Council adopted fundamental aspects of sustainable recovery including the removal of the blockade, a call for the reconstruction of infrastructure and a push for political stability that would encourage economic revival of Gaza.
Some United Nations actions and recovery efforts have focused on the legal obligations of Israel as an occupying power, however historically these approaches have had limited success in changing conditions on the ground. The complete scale and impact of the War on Gaza is yet to be fully measured. ESCWA continues to work on implementing strategies for sustainable recovery; however, various States have put forward differing proposals regarding reconstruction in Gaza. Israeli officials have proposed direct control of the territory for an indefinite period, disregarding previous calls for the Palestinian Authority to govern, and conflicting with ESCWA’s recovery plan, which aims to strengthen Palestinian institutions. In contrast, Arab countries are convening to discuss possible funding for Gaza’s recovery and to propose alternatives that respect and prioritize the rights and perspectives of the Palestinian people.
Questions to consider from your country’s perspective:
- How can reconstruction efforts navigate the concerns of some Member States about inadvertently benefiting Hamas, while also addressing objections from others to normalizing or legitimizing the Israeli occupation of Gaza?
- What steps can be taken during ongoing fighting to lay the groundwork for a successful reconstruction of Gaza?
Bibliography Bibliography
- Amnesty International (7 June 2017). Israel’s Occupation: 50 Years of Dispossession.
- Bunkall, Alistair (5 May 2025). Benjamin Netanyahu Says Israel Plan to Seize All of Gaza and Hold It Indefinitely Will Be ‘Intensive’. Sky News.
- Efron, Shira, and Jess Manville (11 March 2025). The Gaza Gray Zone: Between War and Recovery. Think Global Health.
- Lederer, Edith (2 May 2024). The unprecedented destruction of housing in Gaza hasn’t been seen since World War II, the UN says. AP.
- Murphy, Matt, and Kevin Nguyen (May 2025). How the controversial US-Israeli backed Gaza aid plan turned to chaos. BBC.
- United Nations (5 February 2025). International community must keep pushing for permanent ceasefire, work towards Gaza’s reconstruction, Secretary-General tells Palestinian Rights Committee.
- United Nations (6 April 2024). Planning the Post-war Reconstruction and Recovery of Gaza.
- United Nations (1983). Report of the International Conference on the Question of Palestine (ICQP).
- United Nations Relief and Works Agency for Palestine Refugees in the Near East. Microfinance.
- United Nations Relief and Works Agency for Palestine Refugees in the Near East. What We Do.
- United Nations, The Question of Palestine. UN Committee on the Exercise of the Inalienable Rights of the Palestinian People.
- World Bank, et al. (June 2021). Publication: Gaza Rapid Damage and Needs Assessment,. Open Knowledge Repository.
- World Bank Group (9 December 1993). Water, Sanitation and Municipal Roads Component Technical Assistance Activities.
United Nations Documents United Nations Documents
- United Nations, Economic Commission for Western Asia (28 November 2023). War on Gaza: tenets and essential elements for sustainable recovery. E/ESCWA/31/9.
- United Nations, Economic Commission for Western Asia (12 April 2019). Social and economic situation of Palestinian women and girls (July 2016 – June 2018). E/ESCWA/EC.6/2019/10.
- United Nations, Economic Commission for Western Asia (15 December 2016). Justice for the Palestinian people: fifty years of Israeli occupation. 326 (XXIX).
- United Nations, Economic Commission for Western Asia (October 1985). FOOD SECURITY in the West Bank and Gaza Strip. E/ESCWA/AGR/85/4.
- United Nations, General Assembly (19 December 2023). Protection of civilians and upholding legal and humanitarian obligations. A/RES/ES-10/22.
- United Nations, General Assembly (9 January 2023). Israeli practices affecting the human rights of the Palestinian people in the Occupied Palestinian Territory, including East Jerusalem. A/RES/77/247.
- United Nations, Security Council (22 December 2023). The Situation in the Middle East, Including the Palestinian Question. S/RES/2720.
- United Nations, Security Council (11 October 1993). Declaration of Principles on Interim Self-Government Arrangements . A/48/486.
- United Nations, Economic Commission for Western Asia (1985). FOOD SECURITY in the West Bank and Gaza Strip. E/ESCWA/AGR/85/4.
Economic governance: market competition challenges in the Arab Region Economic governance: market competition challenges in the Arab Region
Creating and maintaining a healthy and competitive economic market is critical for the Arab region to continue to meet development goals. Competitive markets allow Member States to enable market access for entrepreneurs and create productive employment and reduce poverty by increasing employment opportunities and breaking down barriers to access. However, there are challenges to effective market competition and adequate competition law and policy implementation which perpetuate conditions for low economic integration in a time when Member States are seeking greater participation and influence in the global economy. A continued reliance on state-owned enterprises, typically running monopolies in critical industries including telecommunications, finance and oil, poses a large barrier to robust market competition in the Arab region and limits the extent of innovation, productivity and expansion into digital markets for those industries.
Arab countries notably came together to form the Arab League in 1945 with the aim of improving coordination in multiple areas including economic cooperation. To mark their commitments to economic integration, fourteen members of the Arab League signed the 1997 Greater Arab Free Trade Area (GAFTA), an agreement that worked to remove tariffs and other non-tariff barriers and toward the liberalization of agricultural markets supported by institutional development. While GAFTA provided a framework to increase macroeconomic gains, challenges of volatility persist. In 2001, the United Nations Economic and Social Council for Western Asia (ESCWA) published the report Competition Laws and Policies in the ESCWA Region recommending that Member States adopt competition policies to promote and diversify private sector participation, including antitrust laws and remedies to restrictive business practices. These competition policies were in line with those prescribed by international institutions like the International Monetary Fund and the World Bank. However, weaknesses in economic policy and institutional frameworks created barriers for growth, particularly for non-oil exports.
Guided by the United Nations Millennium declaration, ESCWA adopted a Revised Mid-term Plan for the period 2002-2005 in 2002 aimed at nurturing comprehensive, integrated equitable and sustainable economic and social development. The Revised Mid-term Plan outlined the need for tools to measure, identify and outline achievements and ways to improve. During that time, the Arab region’s oil and energy industries experienced dramatic fluctuations that were further exacerbated by the 2008 global economic crisis. With uprisings sweeping through the region in early 2011, citizens expected their national governments to address both their political and economic demands. However, governments facing transitions prioritized stabilizing domestic political conditions which resulted in lagging economic standards and liberalization policies and thus low economic growth and high unemployment.
Informed by the 2030 Agenda for Sustainable Development, in 2015 ESCWA produced the Competition and Regulation in the Arab Region report reaffirming the commission’s commitment to market competition. However, state-owned enterprises continued to dominate the economic framework of the Arab region. ESCWA noted in the 2018 report on Economic Governance for Entrepreneurs in the Arab Region that the regulatory practices and policy priorities were not favorable for entrepreneurial endeavors, undercutting previous efforts to promote and diversify the private sector. The report further identified that firms with political connections leveraged these connections to secure funding, support and approval at a rate that distorted the market. These practices enabled monopolies to persist in the Arab region and hindered the effective implementation of competitive policies in both the public and private sector. The policy frameworks that perpetuated these dynamics reduced incentives to invest in new technologies and to improve productivity.
In 2020, ESCWA, UN Trade and Development (UNCTAD) and the Organization for Economic Co-Operation and Development, established the annual Arab Competition Forum, intended to promote the exchange of policy, enforcement and developmental knowledge to promote liberal market competition. To further help Member States access a repository of legislative regulations pertaining to anti-corruption, competition, consumer protection and foreign direct investment, ESCWA launched the Arab Legislations Portal in 2021. The Arab Legislations Portal offers domestic comprehensive assessments in an effort to enhance corporate governance and enable strategic reforms that improve the business environment and promote substantial economic growth.
Although the Arab region continues to affirm commitments to improving economic governance and the necessary conditions for successful market competition, there are still challenges. In 2023, ESCWA submitted a report on Economic governance: market competition challenges in the Arab region. The report weighed the contributions of state-owned enterprises, noting that some demonstrate outstanding performance and efficiency while others were burdens to the public budget and discourage private investment. The report recommended that Member States commit to strengthening the capacity of competition authorities to implement and enforce policies within their jurisdictions. While many Arab countries are advancing their economic capacities, ESCWA reports that there are structural challenges including large informal sectors, lack of competition policy incentives and limited enforcement of competition policies. These challenges limit potential business development and the economic benefits expected from strong market competition policies, while also creating conditions that enable corrupt practices.
Questions to consider from your country’s perspective:
- What can be done to further promote market competition when monopolies and state-owned enterprises dominate most industries?
- How can growing e-commerce be used to promote sustainability goals and market competition?
- How can Member States ensure that political and economic reforms are carried out simultaneously?
Bibliography Bibliography
- Abdelbary, Islam, James Benhin (2019). Governance, capital and economic growth in the Arab Region. The Quarterly Review of Economics and Finance.
- Economic and Social Council of the Arab League (1997). Arab Free Trade Area Agreement.
- Economic Commission for Western Asia (March 2024). The Arab Business Legislative Frameworks.
- Economic Commission for Western Asia. Arab Legislations Portal.
- International Monetary Fund (10 October 2013) Arab Countries in Transition: Economic Outlook and Key Challenges.
- International Monetary Fund (10 May 2010) Regional economic outlook: Middle East and Central Asia.
- Khan, Moshin (February 2014). The Economic Consequences of the Arab Spring. Atlantic Council.
- Organisation for Economic Co-operation and Development (2013), State-Owned Enterprises in the Middle East and North Africa: Engines of Development and Competitiveness?
- Organisation for Economic Co-operation and Development. Arab Competition Forum.
United Nations Documents United Nations Documents
- United Nations, Economic and Social Commission for Western Asia (31 October 2023). Economic Governance: Market Competition Challenges in the Arab Region. E/ESCWA/31/6.
- United Nations, Economic and Social Commission for Western Asia (2023). Competition law The Arab Business Legislative Frameworks. E/ESCWA/CL6.GCP/2023/ABLF/1/Series.1/Overview.
- United Nations, Economic and Social Commission for Western Asia (26 September 2018). Economic Governance for Entrepreneurs in the Arab Region : Prioritizing Policy Challenges. E/ESCWA/EDID/2018/TP.6.
- United Nations, Economic and Social Commission for Western Asia (2018). Rethinking Fiscal Policy for the Arab Region E/ESCWA/EDID/2017/4.
- United Nations, Economic Commission for Western Asia (2015). Competition and Regulation in the Arab Region. E/ESCWA/EDID/2015/5.
- United Nations, Economic and Social Commission for Western Asia (19 March 2002) Revised Medium-Term Plan For The Period 2002-2005. E/ESCWA/S-4/3.
- United Nations, Economic and Social Commission for Western Asia (23 August 2001). Competition Laws and Policies in the Escwa Region. E/ESCWA/ED/2001/10.
- United Nations, General Assembly (21 October 2015). Transforming Our World: the 2030 Agenda for Sustainable Development. A/RES/70/1.
- United Nations, General Assembly (18 September 2000). United Nations Millennium Declaration. A/RES/55/2.