Table 1: Some SWOT among Arab countries


These weaknesses create obstacles to free trade among the Arabs.



Arabs cannot expect the distinctions of politics, geography and history to vanish overnight. Therefore, what they ought to do is to start acting seriously and conscientiously to cut distinctions to size, and consequently to get them marginalized so that they may be able to have them eliminated altogether. To protect the Arabic and Islamic values which are at present subject to cultural, intellectual and social onslaughts, the greatest responsibility of leadership of the Arab world is to bring together the disfranchised, the un-integrated, and at times, antagonistic elements of Arab society into a harmonious whole. To do that Arabs have to bridge the gap between what they preach and what they practise and they must fill the great gap of disagreement and trouble between the masses and their leaders. If they want to achieve such a goal, regardless of ideological beliefs or philosophy, it is their duty to build a bridge between the leaders and their people, a bridge across which both the leaders and followers can interact.

What is a regional collaborative relationship, RCR

Creating a regional collaborative relationship is an efficient way to cooperate through strategic networks, as long as the sum of production and organizational costs is less than 'going it alone'. [23] For the purpose of this research, a regional collaborative relationship (RCR) is defined as:
'An ongoing relationship between different independent countries and their economic organizations (collaborators) from different ends of the region that involves a mutual goal and commitment, mutual trust, a mutual sharing of information, risks, and rewards of the relationship. The committed collaborators cooperate, coordinate activities, and collaborate to create new value and to be more effective in the global world. RCR emphasizes a win-win situation where all the collaborators get value from others who do not lose it.'
The essence of the RCR system is its collaboration and regional integration through networks and alliances. This collaborative system is viewed as an arrangement by which countries set up a web of close economic collaborator relationships in an efficient coordinated manner. Such integration and relationships offer countries opportunities to globally compete and cooperate (co-opetation) with other global countries and organizations. [24]

The regional economic integration relationship includes components or elements of activities and inputs-outputs. It also includes networks, coordination, integration, adaptation, linkages, interactions, feedback, system and structural- adjustment, survival, and growth. Emphasized are the integration of components and relationships that tie the components and activities of the whole system. The relationship between a country and its collaborators or strategic partners must be a mutually rewarding connection. All actors, however, within the regional and global collaborative relationship system contribute to the creating of more value for the whole global system. This can, ideally constitute a mutual interdependence and ongoing collaborative relationship between different regional or global collaborators.

When regional counties are used to dealing with each other, they are more likely to be able to adapt to each other's needs and to reach an agreement quickly and easily. The partners actively participate in an interaction and value creation process. The process of interaction and value creation between the collaborators will depend not only on the characteristics of each party (e.g. technology, population size, structure, strategy, position in the region or in the global market, organizational experience, internal relationships, individuals and their personalities, experiences, motivations, attitudes and behavior). It also will depend on episodes or factors such as the external environment surrounding the collaborators such as other economic blocs and agreements (e.g. WTO, GATT).

The relationship and interaction process between the collaborators are also influenced by the atmosphere in a specific environment where they co-operate and operate. In turn, the atmosphere is influenced by the characteristics of the parties involved and the nature of the interaction itself. The atmosphere can affect the relationship by improving it or by making it worse. This atmosphere can be described in terms of power/dependence relationship which exists or emerges over the life cycle of a relationship between the countries (parties), the technological leadership, skills and competence, the institutional structure, political and social stability, economic growth, unemployment and inflation, strategies and experiences, the state of cooperation or conflicts, uncertainty, closeness or distance, as well as by the collaborator's mutual expectations at both the individual and organizational/institutional level. The whole regional integration system has to be considered together, for it acts together.

Sherman (1992) stresses that the biggest stumbling block to the success of networks and alliances is the lack of trust. [25] Trust according to the classic view is a generalized expectancy held by an individual or an instituion that the word of another individual or instituion can be relied on. [26] Confidence on the part of the trusting party results from the organization or institution belief that the trustworthy party is reliable and has high integrity, which are associated with such qualities as consistent, competent, commitment, honest, fair, responsible, respect, helpful, and benevolent. [27] , [28]

Morgan and Hunt (1994) define relationship commitments as:

' exchange partner believing that an ongoing relationship with another is so important as to warrant maximum efforts at maintaining it; that committed party believes that the relationship is worth working on to ensure that it endures indefinitely.' [29]
The main key to the success of such regional and global cooperation is to take full advantage of the information technology, skills and financial and human resources each country brings to the regional relationship, overcome cultural differences between countries, and protect joint economic activities and trade secrets. Therefore, the information confidence as well as trust between partners are of great importance to the success of such global collaborative relationships.

The basic criteria for regional collaborative survival

The creation of a strong regional collaborative relationship through networks and alliances does not, of course, guarantee its long-term survival. A long-term relationship does not always promise heavens. The simple (and may be difficult) key to run a mutually beneficial or a non-zero- sum game relationship is trust and commitment. Some features of integration partnership relationships among countries are that the parties adapt their processes and socio-economic systems to achieve a better match with each other, sharing information and experiences, eliminate or minimize the sources of insecurity and uncertainty.

However, there are diverse forms of economic cooperative agreements or networks which can be categorized as either unilateral or bilateral cooperation. Unilateral agreements involve minimal amounts of partner interdependence and have quite specific tasks, whereby each partner could terminate the agreement without great cost. Bilateral agreements, on the other hand, involve a large amount of partner interdependence. Strategic alliances, free trade zones, a common market are examples of bilateral agreements. Such agreements include non-equity cooperative agreements, whereby the partners make substantial investments in developing a long-term collaborative effort, and common goal orientation or direction.

It should be noted that these modes of economic cooperation allow countries to cooperate with each other in order to harness and coordinate the internal and external resources, skills and power to perform their economic activities more efficiently and effectively than before (or, to some extent, than others). In short, the collaborators believe that their success does not require others to fail. They also have a philosophy that, in the spirit of collaboration, a win-win approach is most effective way to create a bigger pie and then obtain a bigger share of it.

Collaborators can establish an alliance to develop collaborative programs beyond their legal boundaries in research and development, production and joint sourcing. This will lead to significant access to superior engine technology, access to new markets, greater customer value-added is achieved at less total cost, and hence ensuring profit for all partners in the alliance or network. The main principle of RCR is to seek out opportunities to create new value together.

By creating such regional collaborative integration among countries, organizations are able to spread a given amount of investment across a large number of locations, thereby reducing the risks. This form of cooperation is established on the basis of a reciprocal tactic agreement or 'reciprocal dependency'. It allows more flexibility, series of structural adjustments, an excellent knowledge of a country and its organizations and procedures of the other collaborators. The parties of this relationship develop specific strategies with the object of reducing perceived risk for each other and achieving synergy effects. Such relationships can also entail a huge burden and problem potential for one or more of the involved partners. The main question is how should a country develop an effective process for establishing and maintaining strategic economic relationships among countries.

Trust, commitment and marriage vs economic regional relationship

It is imperative for a successful marriage relationship as well as strategic business relationships between the partners to communicate and cooperate in an atmosphere of frank debate, trust, interdependence, and mutual positive expectation so that the mutual benefits and interests may be achieved.
'The relationship of the partners, as in a marriage, is a key to the success of the arrangement. It may not be a sufficient factor itself, since the successful alliance needs positive quantifiable results, but it is certainly a necessary condition. An appropriate attitude has two major components, commitment and trust (Faulkner, 1992)'.
Confidence, trustworthiness, mutual respect, ethics, and the way in which crises and difficulties should be treated and solved between the partners are central factors of relationships between people (e.g. friendship, romance or marriage) as will as economic regional relationships. A country must consider all of these factors in order to effectively create, manage, maintain, sustain, and enhance its relationships with other countries. Trust does not imply naïve revelation of country secrets outside the regional arrangement, but it implies the belief that the partner will act with integrity. It does not either imply 'blind trust'. Trust and trusting behavior cannot be forced or imposed. It has to be earned. Thus, developing trusted relationships will probably imply a long-term process or an evolutionary pattern, where stage by stage, the risk and uncertainty decrease, and commitment and trust increase.

A sustainable partner relationship offers the partners with advantages and opportunities. [30] Partners can establish an alliance to develop collaborative programs beyond their legal boundaries in research and development, technological, production and joint sourcing. This will lead to significant benefits in terms of access to superior engine technology, access to new markets, greater customer value-added is achieved at less total cost, and hence ensuring profit for all the partners in the alliance or network.

When there is trust, the need of pre-specifying every possible future detail or outcome is greatly diminished. Thus, collaborators which have set up a regional collaborative relationship system (RCRs) based on cooperation, collaboration, openness, flexibility, trust, commitment, and interdependence are generating trust to sustain a network or an alliance. Indeed the best successful collaborative relationships, like the best marriages, are true partnerships that tend to meet certain criteria. Some of these criteria are:

1.The privatization of economy and industry

The problems of public sector inefficiency in the Arab world call for increase attention should be a broadly acceptable conclusion. But, as one might expect, the common-sense element in the new vision of privatization reveals that if a society lacks entrepreneurship, there is no competence of the private sector. For example, Japan launched its development by setting up a series of government-owned industries but, as economic growth speeded up, it gradually sold them to the private sector; for many years, the Dutch government operated publicly owned coal mines more profitably than the private mines. Indeed, too quick and unplanned privatization process can cause more disadvantages than the expected advantages. There are some proper government activities such as the control of the money supply, the provision of basic health and education services, the establishment of basic communications and often agricultural extension work. The privatization in the Arab world should be run gradually.

2. Balancing physical and human capital

The imbalance of physical capital and human capabilities in most of Arab countries is frequently seen as a symptom or a cause of social pathologies. Arab countries like other developing countries should find a closer balance between the human skills and the technological advancements.

3. Redesigning government economic controls

All markets are made within some legal, social and political framework of institutions. The governments of the Arab region have to reform the institutional framework of economic life in order to be able to implement the appropriate free market policy. Government intervention in markets has unacceptable political consequences, particularly the concentration of economic as well as political power in the hands of politicians and administrators who, being human, will not use it wisely.

4. Political and social willingness, motivation, and strategic fit

The partners should have a strong motivation for entering the integration relationship. They should have something of value to contribute to a successful relationship. The collaborators should have a clearly identifiable source of sustainable competitive advantage and it should develop an increasing level of interdependence. They should have a common long term goal and they want to make the relationship work to achieve this goal.

5. Interdependence

The partners should have complementary assets and skills. Neither can accomplish alone what both can together. They invest in each other to demonstrate their respective stakes in the economic cooperation or integration relationship and each other. They need each other and they interdependence on each other. Power and dependence can also be viewed as conflict sources. One party can use its power (e.g. technical, political, economical, financial, or emotional) to force another party to act in a way that is not the counterpart's economic best interest.

6. Cultural fit

Cultural fit requires that each partner carry out its commitments and shows its trusting behavior and attitude. They should be able to share the information and knowledge required to enhance and sustain the relationship. Many economic cooperations have failed because the partners have not shared the needed information and have not allocated their best people/knowledge to the project or have placed it low on the priority agenda.

7. Institutional arrangements

The collaborative relationship is given a formal status. The partners have to defined very clearly responsibilities and designed a good dispute resolution mechanism to be agreed on by them to ensure that when the first problem emerges it will not sour the atmosphere and lead to a decline in trust.

8. Integration and integrity

For best survival opportunities the partner develop linkages and shared ways of operating so they can work together smoothly. They should build an effective communication system between many units at many institutional levels. They should show a mutual integrity behavior and attitude toward each other in honorable ways that justify and enhance mutual trust and commitment. They should not abuse the information and resources they gain, they are flexible, and they respect each other's identity.

There is need for greater regional economic integration. Outside investment will occur only in large and liberal markets. But, opening the doors to more freedom of trade without establishing a competitive edge could prove costly, as in the Mexican experience with NAFTA. The Arab countries need to build a stronger base of skillful employment to be able to ride the wave of unrestricted international trade movements. Better education and more focused national guidance to businesses are very necessary to bring the commercial and industrial sectors to a competitive level when the doors are open to foreign trade. Liberalizing the economies has to be drawn carefully and sooner than ever. Conservative liberalism is what they need given the conditions of the Arab's political, social and, most importantly, educational circumstances.

The evolutionary pattern of a strategic economic relationship

Creating and maintaining successful regional cooperative relationships and networks between companies and countries- constitutes a major shift in economic, marketing and management theories and practices. RCR require cooperation and coordination which refer to situations in which different independent parties or countries have to work together, coordinate different activities and collaborate to achieve mutual goals. In the global economy, a well-developed ability to create and sustain fruitful regional collaborative integration and relationships gives a country and its organizations a significant competitive advantages.

It is expected that Arab countries, as developing countries, would benefit from economic integration in terms of synergy effects such as increased production due to specialization, better exploitation of economic of scale, higher efficiency and quality due to a higher degree of competition and better allocation of resources in addition to economic gains resulting from improvements in their terms of trade with the rest of the world.

The process of establishment and development of trade and business relationships can be described by considering and reviewing different phases of the relationship. Many scholars have also compared a business-relationship to that of love affairs and marriage which, ideally, based on shared interest, ethics, mutual trustworthiness, and commitment to continue the relationship. [31] Such a relationship is a dynamic, constitute a mutual interdependence and usually result in a mutual loyalty.

'Relationships between companies begin, grow, and develop-or fail-much like relationships between people...Like romances, alliances are built on hopes and dreams- What might happen if certain opportunities are pursued.' [32]
The relationship paradigm must be seen as a process rather than as an event. Understanding the dynamics of a relationship and the factors that influence the interaction and the relationship provides important economical and managerial implications. This relationship is a dynamic process which demands actions, interactions, trust, adaptations and commitment.
'...a relationship strategy is often based on mutual trustworthiness, cooperation, shared interest and objectives, closeness, and a commitment to doing business with each other on an ongoing basis.' [33]
However using of evolutionary pattern and life cycle metaphors to describe and analyze the development of a close and long-term economic integration relationship between people, organizations, or countries is interesting because of their similarity, intuitive appeal and simplicity in teaching, consulting, and application situations. [34] No one, surely, would doubt that building a business relationship is no longer a decision to have a one-night stand, but a commitment to a marriage. Business or economic commitment offers a high possibility that the parties bond themselves in such a way as to encourage their continued investment in the relation. The partners may agree upon a regional strategic network, alliance or cooperative arrangements. [35] The involved partners (countries or organizations) have to recognize that through commitment, cooperation, coordination and collaboration, as well as ethical standards, synergy effects and new value can be effectively achieved. [36]

The concept evolution is, originally, connected to the scientific idea that plants and animals develop gradually from simpler to more complicated forms, (e.g. Evolutionary biology). Evolution can also be defined as the gradual change and development of an idea, situation, or object (or plants and animals). Establishing healthy, close, and strong relationships are supposed to evolve through different phases- each of which represents a major transition in how the parties involved are connected to each other. [37] It is a dynamic exchange process where the relationship takes, to some extent, an evolutionary pattern and moves progressively from one phase into another, depends on how the parties deal and treat each others. A poor atmosphere will negatively affect the progress of any natural organism, as well as any regional relationship.

Almost any relationship begins with recognizing or identifying needs and desires and ends with satisfaction or disappointment and failure. Between the stage of need to the stage of satisfaction/ dissatisfaction, it will be expectations, communications, adjustments, actions, co-actions, reactions, commitment, problems, conflicts, and other activities associated with the willingness/unwillingness of one or both of the involved partners to overcome the problems inherent in the different stages of the relationship.

In essence, the Regional Collaborative Relationship Evolutionary Pattern (RCREP) proposes a very similar life cycle for creating and enhancing healthy relationships, i.e. that infant relationship is born and then goes through various phases, e.g. childhood, growth, and maturity in its life and becomes an economic integration relationship (Se Figure 1). These phases are:

  1. The initial phase, Pre-cooperation phase
  2. The development phase or the basic relationship phase (engagement)
  3. The commitment phase (marriage)
  4. The ongoing strategic business relationship phase (old-married). Total integration phase
It may be possible and useful to describe an enduring regional economic relationship between two parties or more as a dynamic romantic relation or a commitment to a marriage and that the partners acquire a great deal of information that would be impossible to transfer to other parties without such a cooperation. The behaviors and actions expected from the parties engaged in a relationship have been compared to the behaviors and actions expected by a man and woman bound by a marital contract. Relationships between countries too, begin, grow, and develop-or fail-much like relationships between people... Like romances, alliances are built on hopes and dreams.

Figure 1. The regional collaborative relationship evolution process (RCREP)


* Divorce or dissolution may occur.
** It is possible for a relationship to switch into the development phase or directly move to phase four if either party is able and willing to respond to new or different requirements and needs.

It should be noted that a person can only be married to one other person at any point in time whereas a country can maintain relationships with many different parties at one time. Countries must consider each relationship as part of a portfolio of relationships and develop separate strategies and expectations of the contribution of each one to that. It should also be noted that, originally, the concepts and ideas of the evolutionary theory which describes development for instance as gradually and incrementally proceeding change (Darwin's evolution Theory) have contributed in simplifying and explaining the process of relationship development. But, the process described here does not propose that a regional economic relationship development is a deterministic, inevitable evolution where the relationship moves progressively from one clear phase to another until decay. Also, the model is a theoretical one, based on an ideal view of relationship between people, companies or countries. The real life is, in some what, different.

Depends on the countries previous experience about each other; the relationship can move directly from phase 1 (the initial phase) to phase 4 (the integration phase). Most well established relationships will probably have gone through several period of development and several period of partnership and stability. But it is also essential to note that not all relationships will reach the integration phase. Some will not develop or will die, either because one or other partners have no enough resources or because one of the parties simply does not appreciate the value of what it is getting from the other and allows the relationship to fail. Relationships can fail to develop or regress/dissolve depending on the actions of either partner or other external political or economical forces. Divorce between a marriage couple can occur at any stage.

A regional relationships between countries may develop and come into existence because the relationship is planned, i.e. partners realize at the onset of the relationship that a regional economic relationship is desired. On the other hand a regional relationship may evolve, gradually developing, based on mutually satisfactory performance and mutual dependence between the parties during the previous phases. In terms of the evolution of a regional relationship through a life cycle, this research does not make a distinction between the activities of planned and evolving strategic business relationships.

The phases of relationship development and the duration (length) of each phase may vary considerably among involved partners, the nature of potential relationship (simple or complex, Joint venture, free trade zones, common markets, etc. For example, moving from one phase into another can take a months or years. This also has implication in allocating of resources. The progress of the relationship between the potential partners will depend on various internal and external factors, e.g. previous experiences, expectations, uncertainty, trust, mutual interest, mutual dependence, competence, commitment, and overall closeness or distance of the relationship. Hence, this evolutionary pattern emerges in more of a bottom up self-organizing manner than in a top down managed and directed way. From a strategic marketing management perspective, RCREP can be a useful tool for understanding the behavior of the involved parties at each phase.

The main phases required for initiating the processes toward total economic integration are:

Phase 1. The discovery phase. SWOT analysis

The parties will conduct a SWOT analysis and will face uncertainty about what they hope to gain from the relationship. If they discover that this is effectively and successfully achieved then the relationship enters the second phase of the life cycle. However, if at this phase the parties discover that they do not understand each other's needs and wants, fail to develop an appropriate offering or act in a manner inconsistent with the expectations, then the next phase probably will not occur.
  1. A SWOT analysis has to be conducted by each Arab nation as well as for the region as a unit.
  2. Creating a popular will to cooperate and integrate, under the leadership of the state supported by the socially- and economically- oriented entrepreneurs and private sector, involving the masses in productive work and fuller utilization of natural and human resources. Emphasizing national and regional pride.
  3. Control unnecessary consumption, both private and public, and guaranteeing a minimum level of consumption to all, accompanied by fiscal discipline ensuring the channelisation of the additional incomes generated to capital formation. Emphasizing 'effective need' rather than 'effective demand' in development planning.
  4. Transforming the individual through a massive educational drive, aiming at 100 per cent literacy, commitment to social goals and emphasis Islamic values and identity. Emphasizing the people at a grass-root level and their Islamic values in a particular cooperation with others as well as in a development context.

Phase 2. The development phase

Experience in the pervious phase provides the basic criteria by which the potential and performance of each party are now judged in relation to their expectations. This phase is marked by increasing experience between the parties. Positive interaction between the parties is critical at this stage, because this phase establishes the basis and ground rules for the future cooperation and collaboration. The goal of the development phase is to formulate the relationship and explore whether a mutually beneficial relationship is possible. In this phase, the parties are becoming familiar with each other and they are sure that they can cooperate. The structural adjustments and adaptations required to achieve the goal of each partner will have become more apparent. An effective communication infrastructure and the barriers that will be eliminated must be identified. Each party will be more able to judge the adaptations, risks, and abilities of problem solving and creating new values for each others.

If the outcome is negative, the next phase will not occur. If the outcome is positive, the probability that the economic relationship will continue. The parties are satisfied and more likely to feel an allegiance to each other. This takes the potential partners into the next phase. Some possible key strategic implications in this stage are to:

  1. Improve the interaction environment and atmosphere as well as the communication tools
  2. Establishing of stronger socio-economic bonds
  3. Strengthening the Arab states through a mutual trust and commitment and powerful Islamic values and norms resulting in popular democratic regimes committed to the Islamic principles of life which is the Arabic main identity. Emphasizing integrated rural development because bulk of the people live there.
  4. Regional planning to ensure economic cooperation and coordination of the countries to effect a balanced development of the entire region making it self sufficient in food and agricultural products and most of the manufactured goods. Emphasizing socio-economic appropriateness in technology; self-innovation and integration of modern technology in Arab countries must take into account the socio-economic values of Islam.

Phase 3.The commitment phase

Based on a successful development phase, the partners will enter the commitment phase. If the relationship moves to this phase, a strong, close and interactive relationship has developed characterized by mutual trust, respect, and satisfaction. Now they are moving into the closer phase. They draw up plans and close the deal. At this phase, the partners may agree upon an closer strategic network, alliance or cooperative arrangements such as free trade zones, customs, unions, or a common market.

The potential partners recognize that through commitment, cooperation and coordination, synergy effects and new value can be effectively achieved. Thus, the partners have the opportunity to build and maintain an ongoing and mutually beneficial total integration relationship with each other.

At this phase, the relationship deepens through having established role behavior. However, some strategic issues are:

  1. The communication infrastructure at each country and among them is developed
  2. The future strategic direction and commitment to the relationship is becoming accepted by each country
  3. The degree of commitment and loyalty is higher at this phase and an enduring collaborative economic relationship should be achieved
  4. Trust, ethical values, mutual dependence increase rapidly as the relationship gains strength
  5. Monitoring technological development and new legislation. These can be potent sources for innovation and for moving to the following stage
  6. Decreasing the dependence of the region on the developed countries by providing aid to the oil-poor countries to the surpluses of the oil-rich countries and promoting trade between the countries of the region. Oil-rich and human capital-rich countries have together to create more and real opportunities for the populations of the region. They have to recognize what sectors of their society require large investment in order to develop, sustain and expand new and diverse industrial establishments.
  7. National planning within the framework of the regional plan to ensure growth with justice, environmental balance and improvement of the cultural life. Emphasizing the gradual adoption of the new economic liberalization policy; the gradual relaxation of Tariff barriers, import restrictions and other projectionist measures, and then create the free trade zones, Arab common market and union which open the door to strong regional and global competitive forces. Also strengthen the link between research effort and industrial application which is recently weak.

Phase 4. The ongoing strategic business relationship phase

The relationship is now an integrated economic relationship. Commitment, experiences, expectation, flexibility, adaptations, capability and ability of creating added value together are very high. The main goal of this phase is to maintain and stabilize the relationship, while each partner achieve the benefits of the close cooperation and association. Less contact is necessary between partners because expectations, strategy and nature of arrangement and involvement have been well established in the previous phases of the relationship evolution. Some key strategic implications at this phase are:
  1. The degree of uncertainty, risk, distance (social, cultural, technological, geographical and time) is low or eliminated.
  2. Mutual interdependence, social bonds, complex psychological and interpersonal relationships across multiple level of functions will exist.
  3. Flexibility and high ability of commitment and problem solving must always exist.
  4. Ongoing institutional relationships are constituted.
  5. Technological innovation is a most important factor to maintain the relationships in this phase.
  6. The ability of global competition and cooperation is higher
  7. Increasing cooperation with all the countries of the world through trade, aid and other suitable means with a view to decreasing inequalities between nations.
  8. Strength participation in the efforts to secure a new global world order ensuring peace, progress and social justice.
Doing so, trade liberalization and economic integration will allow the Arab region to be more competitive in the global market. Instead of having 20 Arab countries, with 20 different economies, rules and regulations, there will be 20 Arab countries with one strong economy.

This strong united Arab economy might be the only way to confront the coming period of peace among Arabs and Israelis. If it happens. The Arab strength is not only to have a strong army, or to boycott Israelis, it is also in their economic unity as Arabs.

This unity will open all Arab economic borders to each other. And as a result, nor only the Western and European countries will look at Arabs in a different perspective. In the light of these steps, reform should probably start with: a relaxation of unnecessary controls and barriers; simplification of administrative procedures.

An essential component of the development of an economic integration relationship is that each country involved evaluates the quality of the relationship over the life cycle period. The value placed on the relationship may fluctuate over time. If the partner is satisfied, the probability that the relationship will continue and the partner commitment will be stronger. If one party is dissatisfied, the probability of leaving the relationship is higher.

It should be recognized that the evolution pattern/model described is a considerable and relevant tool in describing, analyzing, managing, and adjusting the different phases of the total regional economic integration relationship. A strategy based on establishing or improving such a relationship requires considerable management skills and patience and may yield benefits only after a long period of persistent effort.

RCREP relies on its ability to suggest strategic guidelines for managing and adjusting the relationship evolution within a regional economic integration context. Thus, RCREP is a considerable and relevant tool in describing, managing, adjusting, and suggesting economic, marketing and management strategies when facing partner relationship situations.

It is clear that a world-wide trend towards globalisation and economic integration is well underway. However, trends, like elephants, are easier to ride - in the direction they are already going. Thus, new countries intend to ride the 'elephant' of economic integration, it is critical for them to remember that the potential synergy effects of such relationships is dependent upon harnessing intensely human variables which can service to minimize destructive competition and maximize desirable cooperative behavior.

Work on implementing these targets will gradually gain momentum as things begin to improve and with the growth of confidence and the elimination of doubts and vain thoughts. Doing so, trade liberalization and economic integration will allow the Arab region to be more competitive in the global market. Instead of having 20 Arab countries, with 20 different economies, rules and regulations, there will be 20 Arab countries with one strong united economy. This strong united Arab economy might be the only way to confront the coming period of peace among Arabs and Israelis. If it happens. The Arab strength is not only to have a strong army, or to boycott Israelis, it is also in their economic unity as Arabs. This unity will open all Arab economic borders to each other. And as a result, nor only the Western and European countries will look at Arabs in a different perspective.

In the light of these steps, reform should probably start with: a relaxation of unnecessary controls and barriers; simplification of administrative procedures. It is also obvious that each phase logically implies a high level of cooperative effort as well as differences in information, expectations, experiences, needs, wishes, values, strategy requirements and consequences. The main point, is that, just as successful human marriages require clarity of needs, purpose, maturity, preparation, patience, nurturing, flexibility, commitment, trust, and compromise, so too will such prerequisites apply to successful organizational strategic business relationships.

It is clear that a world-wide trend towards globalisation and economic integration is well underway. However, trends, like elephants, are easier to ride - in the direction they are already going. Thus, new countries intend to ride the 'elephant' of economic integration, it is critical for them to remember that the potential synergy effects of such relationships is dependent upon harnessing intensely human variables which can service to minimize destructive competition and maximize desirable cooperative behavior.

Finally, the development of an regional economic integration relationship requires enough trust and a willingness not to try to exploit the new relationship at the expense of long term cooperation, patience-payoff often takes time. As the development of such relationship depends on how either partner interprets and re-interprets different acts and behaviors during the life cycle of the relationship, the problem of maintaining a collaborative atmosphere may, therefore, be far greater than that of creating one in the first place, and it is principally in this that the challenge lies.


Today, the old nature and boundaries of countries and organizations become less and less useful in organizing economic activities. In effect, an economic alliance or network based on- cooperation, collaboration, flexibility, adaptation, risk and cost reduction, shared interest and objectives, and a commitment between different countries (collaborators) on an integrating ongoing basis-, has been emerged as a more effective approach to meet the new global environment.

As the new century approaches, there has been a considerable shift in the economic and political equation. Groups are coming together all over the world with the idea of defending themselves economically against the competition of other blocs in their areas. These groups also want to increase their influence in their own areas as well as outside. Examples are: European Union and its single currency and economy; the Far East and their own regional trade agreements and free trade zones; and the Pacific Trade Agreement (PTA).

Considering the seriousness of such a threat, Asian countries have adopted necessary protective measures to protect themselves. Even the US has felt the need for a regional grouping. Witness its teaming up with Canada and Mexico to form North American Free trade Agreement (NAFTA).

Arab countries, on the other hand, are not being changed quickly enough. They have not participated fully in the drive to liberalize trade and so have not derived the benefit they might have by doing so.

Thus, the future awaits the Arabs. Whether it will be good or bad depends on how effectively an economic strategy is formed. Such a strategy is essential in order to counter the policies of other already-formed economic blocs. A single country, standing alone, could never hope to achieve anything against a large economic bloc. Without socio-economic integration between Arab countries there is no interdependence relationship between Western and Arabs. Too dependent on western nations or blocs is not of the benefit of the Arab countries.

Globalisation of Western countries can cause more problem and crisis for the developing countries, unless Arab countries are able to compete or cooperate with developed countries.

Against these trends and in order to provide an effective counter to European, Asian, or American designs, the immediate formation of An Arab Common Market becomes a most pressing imperative. There is no choice. Either Arabs can get their acts together or they will remain forever watching the participants in the world trading system (e.g. GATT and WTO) and globalisation movements move forward while they are left behind.

This goal of cooperation and economic integration cannot be achieved while Arab or Muslim countries continue to have conflicts with each others and to be politically and economically subservient to the world super powers. Before the economic liberalization, they have to achieve the political and economic independence and liberalization.

One of the most important issue for Arab countries to help its Arabic house to recover its health is to review their present conditions and problems with honesty. If such a cooperation is to survive, a regional SWOT (Strengths, Weakness, Threats and Opportunities) analysis, and a regional development plan should be prepared, taking into account each country's comparative advantage and preventing lateral competition between Arab countries.

Unless Arabs create mutual trust and commitment and learn from other nation's economic experiences, they will always remain the last in everything and ultimately the biggest losers.

Four phases of the evolution of the integration relationship can be identified in its life cycle. It is also obvious that each phase logically implies a high level of cooperative effort as well as differences in information, expectations, experiences, needs, wishes, values, strategy requirements and consequences.

The major conclusion of the paper is that each phase needs a specific strategy. The success or failure of such a relationship lies directly with the management competence in the strategic partners. In essence, a regional economic relationship require a redefinition of each country and its culture. Confidence, trust, commitment, ethics, and the way in which crises and difficulties should be treated and solved between among the region's countries are central factors of this relationship.

When asymmetries in power (or dependence) exist, relationships will not be mutually beneficial and will be unstable. A country who dominates the region through its size, economic power, and strong political forces can achieve systemic economies and may exercise considerable power over other countries even though they are independent.


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23. Jarillo, 1993 [*]

24. Zineldin, 1998 [*]

25. Sherman, 1992 [*]

26. Rotter, 1967 [*]

27. Sherman, 1971 [*]

28. Altman and Taylor, 1973 [*]

29. Morgan and Hunt, 1994 [*]

30. Jüttner and Wehril, 1995 [*]

31. Guillet de Monthoux, 1975 [*]

32. Kanter, 1994 [*]

33. Zineldin, 1995 [*]

34. Zineldin, 1996 [*]

35. Fulkner, 1992 [*]

36. Takala et al, 1996 [*]

37. Zineldin et al., 1997 [*]

Mosad Zineldin
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