• The global economy has witnessed a tectonic shift in economic geography over the past few decades. The G7 nations, which used to account for around half of global gross domestic product (GDP) (in purchasing power parity terms), have seen their share decline to less than a third in recent years.

• Arab countries display large differences in natural resources and factor endowments. The convergence hypothesis suggests that other things equal, countries with lower per capita incomes grow faster than higher per capita income countries, leading to a secular convergence of per capita income between countries.

• Arab countries did not substantially benefit from greater global or regional integration during the pre-COVID-19 period. A tectonic shift to Asia is an important change, given that Asia is a leading trade and economic partner.

• As China increases its investments in the Gulf Cooperation Council (GCC) subregion and the wider Arab region as part of its Belt and Road Initiative, the Arab region should build on those linkages to further integrate into global value chains.

• The COVID-19 pandemic resulted in a sharp deterioration in fiscal balances in the Arab region: across all countries, decline in economic activity and domestic demand meant a decline in revenues, while oil-exporting countries also suffered a massive drop in oil revenues.