Arab Knowledge Report 2009: Towards Productive

nations continue to occupy their presentposition on the world map of freedoms anddemocracy. No distinction can be drawnbetween democracy in the broad meaningof the word and the democratization ofknowledge, with all the latter carriesin terms of opportunities for politicalparticipation and, in particular,communicativeness, since the latter cannot be achieved in isolation from thefirst.ECONOMIC ENVIRONMENTS:TOWARDS RESPONSIBLEFREEDOM AND A BALANCEDECONOMYThe economic environment whichstimulates the production and spread ofknowledge is based on a cluster of freedoms,such as free enterprise, the freedom toinvest, the encouragement of competition,and fair trade. These are practiced throughthe agency of a judicious and responsibleadministration that imposes transparencyand accountability. The existence of sucha cluster leads to the creation of the properclimate for advancement in knowledgeperformance and for connectedness witha rapidly evolving world which is growingever more open and interdependent.There is no doubt that the globaleconomic crisis has put the subject ofeconomic freedom on the docket forreview and has produced doubts aboutthe credibility and effectiveness of thisfreedom as a matter of principle. Somehave even gone so far as to call for theabolition, or restriction, of economicfreedoms. This logic is, to a great extent,fallacious. It is not reasonable to demandthat freedoms be abolished simply becausethey have been abused by an irresponsibleminority. In this context, as with allother freedoms, we differentiate betweenresponsible and irresponsible uses ofeconomic freedom. We look at economicfreedom as an enabling tool for the properexploitation of resources, which includescatalyzing a healthy business sector andpromoting a varied and vibrant economy.We cite the outstanding economicperformance built over the course ofseveral decades on economic freedomin industrialised countries and even inthose of recent growth, like South Korea,which have realised the greatest benefitfrom economic freedoms by focussing ondevelopment, which has led to outstandingeconomic performance derived largelyfrom knowledge industries of advancedtechnical content.Those countries most open and mostcommitted to the cluster of responsibleeconomic freedoms record high averagesof success in participating in and benefitingfrom the global knowledge reserve. Thisconfirms the assertion that economicfreedom and the encouragement ofcompetition within a stimulating economicenvironment are elements of success inconnecting with the world on the basisof knowledge. This is particularly so inlight of international entanglements andthe appearance of new business modelsin the global economy which dependprincipally upon technology and ideas,and in which knowledge performanceplays an important role in promotingdevelopment.On the economic front, competitivemarkets and open economies stimulatecompetition for domestic and foreignmarkets among companies in any givencountry. As a consequence, the relativegrowth of open economies depends onthe ability to innovate and acquire marketshare among consumers. Knowledgeplays a fundamental role in penetratingthese markets by virtue of its role inthe production and development ofcompetitive products. On the otherhand, knowledge itself is regeneratedas a result of this competitive processthrough new, ‘dynamic and sequential,’models and the economy moves ‘fromone temporary equilibrium to another.’According to economist Paul Romer’stheory of endogenous growth, up-to-dateknowledge is an essential element of thedevelopment process; this differs fromneo-classical theory, which focuses onThe global economiccrisis has put thesubject of economicfreedom on thedocket for reviewand has produceddoubts about itscredibility andeffectivenessEconomicfreedom and theencouragement ofcompetition within astimulating economicenvironment areelements of successin connecting withthe world on thebasis of knowledgeThe relative growthof open economiesdepends on theability to innovateand acquire marketshare amongconsumersARAB KNOWLEDGE PERFORMANCE ENVIRONMENTS67