U.S. sees improvement in Arab economyies

U.S. SEES IMPROVEMENT IN ARAB ECONOMIES WASHINGTON — The Clinton administration appears encouraged by what it says is a steady liberalization of Arab economies. Administration officials said Arab countries are moving away from direct economic control and toward privatization and information services. They said the oil-rich countries are shifting from dependence on the energy sector to other industries. "Many countries are coming to realize that economic development strategies need to extend beyond the energy sector. As we enter the next century, we are learning that the ways of the old, single commodity and largely static economies are giving way to the highly dynamic, diversified and globally interconnected new economies," U.S. Commerce Department counselor Jan Kalicki said. Addressing a conference organized by the Middle East Economic Digest in New York on Wednesday, Kalicki said the Middle East could benefit from the development of Internet, privatization, and tourism. The official said the United States would encourage this trend in bilateral and multilateral agreements. Such examples are Internet City in Dubai, operations by Cisco Systems and Motorola in Egypt and Internet service competition in Syria. The U.S. officials also cited Jordan's privatization of 40 percent of its telecommunications system; Morocco's sale of 35 percent of its state telephone monopoly; Cairo's offering of 20 percent of Egypt Telecom; the public offering by Qatar of its telecommunications company Q-Tel, the largest IPO ever placed in a Gulf Cooperation Council member state. Kalicki said Arab states, however, continue to stand by policies that exclude foreign participation in oil and gas exploration and development. He said this is stopping the flow of technology to the Middle East. "Although I have highlighted some of the positive examples of privatization, quite frankly these examples are still the exception and not the norm," Kalicki said. "State control of industry remains a remnant of the old economy in the Middle East region that has a lagging effect on economic development." In Washington, U.S. Deputy Treasury Secretary Stuart Eizenstat said the United States intends to expand trade and investment with Algeria, Morocco and Tunisia, which he said are engaged in broad-ranging reforms.Eizenstat said North African has great potential in agriculture, service industries, regional tourism and energy and must implement sound economic policies that attract investment.