On the economics of Arab economic integration

The elimination of economic impediments and dismantling of trade restrictions have increasingly become a common feature in the economic integration across nations in the world. Many countries in several regions in the world have increased their intra-flows of goods and also inputs. The Arab region has experienced an increase in their labour flows, in particular during the period of oil boom. Consequently, the remittances among the Arab countries registered a steady increase; especially remittances from the Arab Gulf countries (Gulf cooperation council region). Using the panel data fixed effects estimation, the study investigates the relationship between remittances and economic integration in the Arab region covering the period 1983-2003. Despite the rising tide in intra-Arab labour flows, we argue, the harmonisation of economic policies and the removal of further obstacles to intra-labour flows are necessary to give a further fillip to economic integration in the Arab world. Moreover, our work shows that a reduction of the gap between per capita gross domestic products of the Arab countries is important for enhancing Arab economic integration.