Arab states attract only 1.0 percent of global foreign investment despite the need to cut sky-high unemployment because reforms required to make them more attractive have not been made, bankers said on Friday.
Leading bankers from several Arab countries including Saudi Arabia, Egypt, Kuwait, Lebanon, Morocco, Algeria, Sudan and Yemen, gathered in Casablanca for a Thursday-Friday conference to assess investment and business environment in the region.
"Red tape and lack of clarity in property rights make investors flee the region," Mahmoud al Nouri, Kuwait's former finance minister and head of the International Arab African Bank, told the gathering.
He added: "The solution is to give a leading role to the private sector and implement a clear programme of privatisation and reform of the administration and a crackdown on corruption and respect of property rights."
Some bankers gave the example of Singapore, which they said attracted $30 billion in foreign investment per year while the whole Arab world got only $9 billion.
They said that underlined how poor the business climate is in the region, where unemployment is at 15 percent, the highest of any region in the world.
"All the Arab countries have together managed to lure only 1.0 percent of the global flow of foreign direct investment," said Aissa Hidouci, chief executive officer of the Tunisian-Saudi Investment Bank.
Abdelhadi Sheif, a leading Egyptian banker, said some Arab countries offer better incentives to foreign investors than to their Arab counterparts, forcing Arab investors to pool resources with foreigners to invest in Arab countries.
Leading bankers created on Thursday the first Arab union of bankers to expand financial co-operation and bolster the influence of the banking community in the region.
The new body, called the International Union of Arab Bankers, named Egyptian banker Fouad Shaker Amine as the secretary general of the union which will be headquartered in Beirut.