Understanding sustainability in a broader sense, as relating to the nature and quality of economic growth, and drawing on the recent literature on the fundamental determinants of growth, this paper looks at the achievements and prospects of the internal sustainability of Arab countries. The countries are classified in four broad categories depending on their production structure. The relevant indicators for sustainability used in the paper are: the level of pre capita income; inequality in the distribution of income and poverty; economic structure; investment; institutions; and, technological capacity.
The evidence shows that the Arab countries are relatively well positioned regarding the distribution of income, the incidence of poverty, human development and investment rates. However, given the definition of an ideal growth and development society, and given the scientific and technological nature of the twenty first century, it is shown that the Arab countries lack conspicuously in the areas of institutions and technological capacity. These, together with a currently distorted production structure, present Arab policy makers with major challenges for the future.