Delegation from
The League of Arab States
Represented by
New Mexico State University
Position Paper for the General Assembly Economic and Financial Committee
The issues before the General Assembly Economic and Financial Committee are: Combating Illicit Fund Transfers;
Integration of Markets of Developing States into the Global Economy; and Macroeconomic Policy Issues and International
Trade and Development. The League of Arab States looks forward to working with its member states and the greater global
community to address these very important issues before the Second Committee.
1. Combating Illicit Fund Transfers
The ability to transfer illicit funds empowers criminal and terrorist organizations. Currently, in the LAS member state of
Iraq, the violent insurgency is being funded by outside sources that send money through banks or organizations or the unique
Hawala trust-based system. The Hawala system is an informal system that allows the transfer of money across borders with
little or no paperwork, nor promissory notes, all conducted on the honor system. The nature of transnational illicit fund
transfers is to exploit those developing states that are unable to put in place adequate oversight within their legal systems to
combat this phenomenon. UN frameworks have already begun to address this problem globally through the International
Convention for the Suppression of Financing and Terrorism, UN Convention against Transnational Organized Crime, UN
Convention Against Corruption and the Forty Recommendations of the Financial Action Task Force (FATF). Additional
recommendations by the FATF, such as actively working to implement current UN conventions and treaties and
strengthening customer identification measures in international and domestic wire transfers, are meant to augment
international efforts. Another important development in the fight against illicit fund transfers is UN Security Council
Resolution 1617, which focuses on Al-Qaeda specifically but has general ramifications for all states dealing with financial
sponsorship of organized crime and terrorism. Within the LAS, the 1998 Arab Convention for the Suppression of Terrorism
defines terrorism and provides an initial framework to addressing the problem of terrorism. More recently at the 11th UN
Crime Conference, in addition to the adoption of the Bangkok Declaration, the LAS praised the outcome of the Riyadh
Conference on Terrorism held in February of 2005. The League of Arab States has also called for a follow-up conference to
continue to deal with terrorism by addressing illicit fund transfers.
In combating illicit fund transfers, the League of Arab States, acknowledges the leadership provided by Egypt and Saudi
Arabia on this issue. The LAS therefore recommends all member states that have not done so to sign and ratify the UN
Convention for the Suppression of the Financing of Terrorism. The LAS would like to create an all-Arab oversight
committee to assist those countries with limited resources to sign and ratify this Convention and to further expedite
compliance with other international agreements, particularly the forty recommendations outlined by the FATF. The LAS
also recommend the creation of Financial Intelligence Units (FIUs) within all states of the Arab League that comply and
adhere to the standards and operating procedures of the Egmont Group. The Egmont group is a consortium of FIU’s that
facilitate and coordinate FIU’s from across the globe. We also call on member states to pass national legislation, similar to
that enacted in Egypt and Saudi Arabia to criminalize illicit fund transfers and money laundering. The LAS furhter
recommends that UN member states begin a process to make legal standards, similar to those recently adopted in Egypt and
Saudi Arabia, more uniform so that there is no incentive to move across countries to engage in criminal or terrorist activity.
Finally, the LAS proposes a conference to study the Hawala System of transferring illicit funds, so that developing countries
with little or no banking infrastructure, such as Afghanistan, will not continue to be exploited by these trust-based illicit fund
transfers. The proposals will help weaken the dangerous terrorist and insurgent groups currently threatening many member
states and will make financing of these organizations more difficult.
2. Integration of Markets of Developing States into the Global Economy
Globalization is here to stay. The merging of world markets has benefited many developed countries but many developing
countries are still waiting to receive the benefits of globalization. For example, according to the 2002 Arab Human
Development Report, Gross Domestic Product in all Arab countries combined stood at $531.2 billion in 1999, less than that
of a single middle-size European country, Spain, ($595.5 billion). Palestine’s developing economy, for example, continues to
be hampered by Israeli policies which restrict economic integration, such as restrictions on movement and refugees. Another
devastating toll on development are the 65 million Arab adults that are illiterate, two-thirds being women. This widening gap
between the developed and developing countries is the basis of many efforts to integrate markets of developing states into the
global economy. Major agreements such as the Millennium Development Goals (MDG), the 2002 Monterrey Consensus, the
Brussels Program on Least Developed Countries and the Doha Declaration of 2001 have provided a firm base upon which
all countries may begin to address equitable integration. However, the continuing problem of implementation has
unfortunately slowed this process. Other efforts such as the UN Conference on Least Developed Countries, General
Agreement on Trade in Services, Integrated Framework (IF) for Trade Related Technical Assistance to Least Developed
Countries, The Tunis Declaration and The Arab Business Council Declaration have served to augment and expedite the
integration process.
The League of Arab States recommends continued support for the Doha Declaration and its Work Program, the Monterrey
Consensus and the Tunis Agreements. The LAS would also like to see a renewed spirit and vigor in implementing these
agreements. In order to better facilitate implementation, the LAS asks that Egypt’s request to allow the League of Arab
States observer status in the World Trade Organization’s negotiating body be approved. However, our member states will
continue to reserve the right to not trade with Israel. The LAS offers to facilitate a recommitment to the Brussels Work Plan
among its members, and in that spirit strongly encourages all developing member states to enter into negotiations with
developed countries for the purpose of allowing developing member states duty-free, quota-free market access to all
products, and ending non-tariff and trade barriers. The LAS must strengthen cooperation with the Arab Fund for Economic
and Social Development (AFESD), which works in coordination with other Arab entities including the Islamic Development
Bank to assist with development projects that will benefit Arab countries. The LAS encourages more developed countries to
grant work visas to our skilled and unskilled laborers so that those who are unable to secure adequate work within their own
country may work outside the country legally. Lastly, the LAS would like to strongly recommend the support of the One
Laptop Per Child (OLPC) program. In the 2005 World Summit on the Information Society held in Tunisia, SG Kofi Annan
displayed a prototype of a $100 laptop, with wireless capability and hand crank for power that could be distributed across the
developing world to assist in their integration and development into the globalized economy.
3. Macroeconomic Policy Issues and International Trade and Development
Macroeconomic issues, such as international trade and development continue to place the economies of developed and
developing countries against the backdrop of numerous multilateral agreements. One of those agreements is the United
Nations (UN) Millennium Development Goals (MDG). The MDG, among other objectives, has advocated forming a global
partnership for development to reduce poverty by 2015. In addition, the Monterrey Consensus of 2002 calls for the
liberalization of trade so that developing countries may have an equal footing within the global economy. The UN
Conference on Trade and Development (UNCTAD) is also working to promote multilateral trade agreements that adhere to
those guidelines outlined in the MDG and the Monterrey Consensus. The WTO’s Doha Summit issued the Doha Declaration
and the Doha Work Program to work for global consensus on trade policy that includes developing nations and continues to
support the WTO as the central institution for international trade.
The League of Arab States would like to propose a comprehensive solution that begins with a recommendation to the WTO
to grant the LAS and other regional institutions the designation of observer status in all processes that might affect any of our
twenty-two members. We continue to support agreements such as the MDG, the Monterrey Consensus and the Doha
Agreements and will strive to meet the MDGs by the target date of 2015. The LAS would also like to begin negotiations
with developed countries to investigate the removal of tariffs, quotas and all non-tariff barriers such as anti-dumping duties,
so that our member states, especially those such as Sudan, Yemen, and Djibouti that are among the League’s least developed,
will have the ability to sell their goods within the economies of the developed world, thereby improving their opportunities
for economic competitiveness. We would also like to encourage those remaining members of the League who have not yet
joined the Arab Free Trade Zone to do so; this will facilitate trade liberalization and encourage FDI so that standards of living
for Arabs collectively may begin to rise. The LAS continues to call for debt forgiveness for the poorest of our member states
freeing them from the chains of structural poverty. The LAS also calls for the members of the UN to adhere and give the
minimum .7 percent of GNP standard for the Oversees Development Assistance.