Over the last century the world economy has encountered deep and rapid changes. Over the years these changes have internationally regionally and locally been transforming our global economic and social systems. These changes are in political and economic spheres. Since the last few years of the previous century a new phenomenon in international economic relations has been on the rise which aims to increase free international trade and eliminate trade barriers and restrictions between countries. In addition, joint efforts are afoot to increase the economic cooperation among nations in all possible ways. Towards this end, since World War II several international organizations have been established, such as the International Monetary Fund, Arab Monetary Fund, Arab League and the Arab Organization of Investment Guarantee. These organizations are involved, directly or indirectly, to promote and grow international trade by a gradual decrease of trade barriers. They have achieved significant improvements in the field of international trade, investment and economic growth.

The main objective of this study is to examine the extent of and the potential for Arab economic integration. It adds to the growing literature on the issue of economic integration by throwing the spotlight on several issues hitherto little considered in the existing literature. The study especially blends various aspects of economic integration with models of spatial competition economic geography regionalization and globalisation to explain the problems of and prospects for economic integration for the Arab countries. It is important to realise that economic integration has become an important aim for almost all countries in the world in particular less developed countries which need more economic efforts to be able to deal with the current international milieu and the gale of globalisation. The Arab countries have engaged in a number of initiatives to advance economic integration however despite this the degree of economic integration among them is still relatively insignificant. The study also attempts to offer theoretical models to explain the obstacles preventing economic integration in the Arab world.