70m Arabs live under poverty line

The Arab world’s population stood at around 351 million at the end of 2010 and nearly 70 million of them live under poverty line in the absence of sufficient growth in the local economy, a Saudi prince has said.

As the region lacks what are termed as “banks for the poor”, only around three million of those people benefit from existing financial services in most member states, said Prince Talal bin Abdul Aziz, chairman of the Riyadh-based Arab Gulf Program For The United Nations Development (AGFUND), “The latest estimates show that the combined population of the 22 Arab countries stood at around 351 million at the end of 2010,” he told Saudi newspapers.

“Around 19.7 per cent of them, or nearly 70 million, live under poverty line….about 35 million of those people are qualified for financial services (bank loans and other facilities) but only three million can get them.”

Prince Talal, the father of well-known Saudi billionaire Prince Al Waleed, estimated domestic personal demand for credit in the Arab region at $18-27 billion a year but he said only around $1.5-2 billion is utilized.

“What we need now is to introduce small sized loans to support the poor through special banks for the poor…these types of loans are now one of the most effective and successful solutions to tackle poverty,” he said.

“The Arab region does not have sufficient number of banks and other financial establishments….more such units are needed to be set up.”

According to the Cairo-based Arab League, many regional nations are suffering from poverty because of a rapid population rise and slow economic growth due to poor investment, low exports, flawed economic policies and other factors.

In 2009, the poverty rate was above 30 per cent of the total population in such countries as Sudan, Somalia, Mauritania, Djibouti, Yemen, Palestine and Comoros. The rate averaged around 19.6 per cent in Egypt, Lebanon, Syria, Bahrain, Jordan, Morocco and Algeria.

Besides those factors, many Arab economies have remained dormant because of conflicts and high defence spending, which was at the expense of development expenditure, the League said in a recent report.

Its figures showed defence and security allocation in all nations have averaged as high as 28 per cent of the current expenditure over the past eight years while economic affairs allocations have not exceeded eight per cent.

“Latest indications point to a decline in poverty rates in some Arab countries but an increase in others…despite the decline in those members, the poverty rates are still considered very high,” the report said.

“Poverty in the Arab countries is closely linked to economic growth rates and developments in wealth distribution…economic growth alone is not enough to reduce poverty as wealth re-distribution could not be to the advantage of the poor…Arab states should focus on even and fair distribution of wealth.”

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