Regional crises impede pan-Arab economic growth — Central Bank governor

AMMAN — Regional political and security unrest has negatively affected the development processes of most Arab countries and the wider pan-Arab economy, Central Bank of Jordan (CBJ) Governor Ziad Fariz said on Sunday.

In a speech delivered on behalf of Prime Minister Hani Mulki at the inauguration of the 2017 Arab Banking Conference, Fariz said that Arab sustainable development has faced unprecedented challenges that have led to a rise in the level of risk, a drop in economic participation and higher rates of poverty and unemployment.

Economic growth rates in Arab countries dropped to below 3 per cent in comparison to the pre-2009 period, which led to the fall of gross domestic product per capita by 13 per cent in 2015, the CBJ governor noted, as reported by the Jordan News Agency, Petra.

During the conference titled “Mechanisms and Requirements for Sustainable Development in the Arab World”, Fariz added that the Arab summit, held at the Dead Sea last week, called for increasing pan-Arab commercial trade, which still accounts for less than 12 per cent of total Arab trade.

On the Kingdom’s banking sector, the governor said that it maintained high levels of consistency, with 2016 financial consistency indicators showing that the sector improved and registered a 19 per cent capital efficiency.

The sector registered a decline to 4.4 per cent in non-working debts  when compared to 2011, when it stood at 8.5 per cent, he said, adding that the rate of covering non-working debts stood at 78.2 per cent and banks achieved post-tax revenues of JD521.2 million.

Chairman of the Board of the Union of Arab Banks, Sheikh Mohamed Al Sabbah, said that estimates show that the Arab banking sector offered $1.9 trillion in credit facilities in 2016, constituting 77 per cent of the total Arab gross domestic product, mainly targeting women-owned projects and small- and medium-sized enterprises. 

The assets of Arab banks, which stood at a total of $3.4 trillion in 2016, “greatly” contribute to economic development and constituted 140 per cent of the total Arab GDP, Sabbah noted.