Arab capital market integration: problems and prospects

Abstract

The Arab region comprises a group of developing countries which sought further socio-economic development through institutionalizing their cooperation. Within this context intensified efforts have been made toward their economic integration. The oil boom of the 1970s and the subsequent enormous wealth accruing to the region increased the pressures on the Arab States to institutionalize their financial cooperation and to integrate their financial markets.
The main objectives of this study are to examine the problems and prospects of the integrated Arab Financial Markets. We hold the view that the development of the national financial markets is the first step toward creating integrated Arab Financial Markets. And we assume that the primary objective of the Arabs in integrating their financial markets is to finance economic development and to achieve financial equilibrium for the region as a whole.
Accordingly, this study investigates three main areas of interest which are (a) the structure and performance of the region's emerging financial markets, (b) their role in economic development and the flow of funds from the high savings countries to low savings ones, (c) desirable policies and procedural changes to improve efficiency and create or strengthen the links between the national financial institutions in order to enlarge their contribution to national and regional development.