Arab countries, like others, are not homogenous but rather heterogeneous. This is true whether in terms of per capita income, market structures, income distribution, foreign trade, public finance, or monetary aspects, among others. Historically speaking, different international, regional, and local organizations have adopted different criteria with which to classify Arab countries into groups. These criteria include: oil and non-oil producing countries, labor exporters/importers, surplus/deficit balance of payments.

This chapter intends to survey a sample of the criteria applied in different regions of the world, including the Arab region. This survey is followed by a brief summary of the three papers presented in this book.

F. Vogel in his assessment of the criteria adopted by the World Bank has criticized the classification of countries into low-income countries, middle-income countries, high-income oil exporters, industrialized countries, and non-reporting non members. His argument is that such criteria depart from purely economic considerations. Moreover, the determination of per capita income used in demarcating the groups of countries is arbitrarily determined (Vogel, 1993, p. 307).

As an alternative, Vogel suggests classifying countries according to their stage of development. To identify this stage a set of demographic, social, economic, and political variables are analyzed through cluster analysis. Factor analysis has been refuted since it is not an â??efficient statistical instrumentâ?‌ (Ibid, p. 313). Accordingly, Vogel is able to classify 112 countries into five groups based on 57 variables, with reference to their stage of development. The five groups are developing countries in the strict sense (i.e., the least-developed countries) with one Arab country, highly developed countries (i.e., industrialized countries) with no Arab countries, type I threshold countries (i.e., with a deficit in the political sphere) with eight Arab countries, developed countries (i.e., political and/or geographically isolated countries) with one Arab country, and type II threshold countries (i.e., with a deficit in the economic sphere) with two Arab countries (Ibid., p. 313).

In contrast to the approach of Vogel, the Human Development Report of the United Nations Development Programme (UNDP) uses a different approach which is based on the Human Development Index (HDI). This index is weighted average of three variables: life expectancy, adult literacy, and per capita income. The HDI is calculated for almost all countries; then three groups of countries are established according to the value of the index. These groups are countries with high, middle and low HDIs.

Since the year 1991, the HDI has been modified in such a way to include a sensitivity to income distribution, and to provide for general-based calculation of the index. According to the 1996 Human Development Report, three, eleven, and three Arab countries failed under high, middle, and low HDIs, respectively (UNDP, 1996, pp. 136-137).
The work of Dellaportas, on the other hand, classifies 62 countries with reference to their level of development. Such level is determined by a number of social, economic nutritional demographic, cultural, and health indicators. The technique used in classifying these countries into most, more, and less developed countries is based on discriminant analysis. One Arab country is classified as a more developed country, whereas only two Arab countries are classified as less developed countries, and none are classified being among the most developed countries (Dellaportas, 1983, pp. 153-158).

The classification method followed by the United Nations Study on the Future of the World Economy is a bit different. Two main criteria are applied, i.e. per capital income and the share of manufacturing in the gross domestic product (GDP). Other supporting criteria are also used, such as gathering all oil producing countries in a single regional unit, and the criterion of average annual rainfall, in the case of African countries (Leontief et al., 1977, p. 17). This method resulted in 15 groups. The Arab world is classified under the group entitled â??The Middle East and Oil Producing African Countriesâ?‌ (Leontief and Duchin, 1983, pp. 11-12).

Speaking of Arab reports and research projects, the Unified Arab Economic Report has adopted the classification of Arab countries into members and nonmembers of the Organization of Arab Petroleum Exporting Countries, OAPEC (Arab Fund for Economic and Social Development, et al., 1997, p. 292).

The Interdependence Project conducted by OAPEC and an Italian company (ENI), divides Arab countries into three groups: (a) Arab economies with diversified resources, intensive population, and suffering from a balance-of-payment deficit, (b) Arab economies with a balance-of-payment surplus and a shortage of labor, and (c) Arab oil-importing countries with a tangible commercial deficit (Shawkat, 1986, p. 11).

Finally, the research project of the Center for Arab Unity Studies on the â??Prospective of the Arab Worldâ?‌ classifies Arab countries into four groups on a geographical basis. These groups are the Arabian Gulf and Peninsula (i.e., Saudi Arabia, Kuwait, the United Arab Emirates, Bahrain, Qatar, Oman, and Yemen), the Eastern Arab states (Syria, Lebanon, Jordan, and Iraq), and the Western Arab states (i.e., Algeria, Tunisia, Morocco, and Mauritania). Geographical, political and economic considerations were used to develop this type of classification (Haseeb, et al., 1988, pp. 293-294).
Having said that, the papers presented in this book are aimed at providing the information and data required to assess the main economic and social characteristics of the different Arab countries. This is done for the years 1970, 1980, and 1990, unless stated otherwise.

The paper on â??Foreign Trade, Exchange Rate and Balance-of-Payments Characteristics of Arab Countriesâ?‌ chapter two, presents a set of monetary and trade indicators on a number of Arab countries. Among these indicators are the value and price index of exports and imports; official exchange rate; degree of openness; GDP; net worker remittances; nominal and real effective exchange rates; exchange rate regimes; international reserves; portfolio in, out and net; capital outflow; direct investment out; trade and current balances; and consumer price index. Accordingly, this paper concludes that (a) recently, most Arab countries suffer from chronic trade deficits, even those that had been enjoying trade surpluses, (b) the dominance of Arab trade with industrialized countries is apparent, and comes at the expense of inter-Arab trade, and (c) there is a tendency toward removing legal and administrative obstacles facing the economic reform programs in Arab countries.

The paper entitled â??Human Resources: Demographic and Labor Market Characteristics in the Arab World,â?‌ chapter three, proves estimations for a wide range of labor market indicators. These include, among others, population, economically active population, distribution of expatriate population, birth and death rate of growth, economic participation rate, illiteracy rate, crude schooling rate, HDI, unemployment rate, people living in poverty, income distribution, and labor productivity. A number of population and labor characteristics can be drawn from this paper, which are (a) most Arab states share a relatively high population growth rate; (b) the active population ranges between one-third to one-half of the total population; and (c) the heterogeneity of unemployment, illiteracy, dependency, and labor productivity rates are obvious, and (d) the HDI varies.

To make use of the above-mentioned indicators and other external data, chapter four entitled: â??A Socio-Economic Taxonomy of Arab Countries,â?‌ explores the cluster and factor analysis techniques to operate an objective typology of Arab countries and to test the validity of common classification stereotypes. Based on the data and techniques used, the main findings of this paper are: (a) the classification based on oil and non-oil producing countries is the most meaningful criterion, and (b) the most important factors affecting the variation among Arab countries are those which reflect the development level, balance-of-payment conditions, population and labor structure, fiscal-monetary position, and general equilibrium conditions.

Finally, the editor would like to express his gratitude and appreciation to the three authors for their contributions, and the Arab Planning Instituteâ??s administration for providing the administrative and financial support to bring this publication to light.