12 of crude petroleum in many ME countries.<sup>5</sup> The fact that these plants require sizeable capital investments could make multi-country regional investment in jointly owned plants to process and refine petroleum an attractive option.

It is somewhat surprising that two of the fastest growing products over 1986-1992 (barley and rice) are foodstuffs -- although barley exports fell sharply from 1988 levels. Wheat meal, unmilled wheat, and milk and cream also record growth rates that are well above average.6 The fact that one-sixth of the dynamic products are foodstuffs, coupled with the Uruguay Round's tariffication and reduction of NTMs on agricultural trade, should focus attention on whether there are further agricultural export opportunities. Increased agricultural exports should assume special importance for Egypt, and several other middle-Eastern countries, since these goods could alleviate the situation of the rural poor.<sup>7</sup> Specifically, studies by the International Labor Office show that developing countries may use (on average) up to 30 times as much labor per unit of agricultural output as some developed countries. The ILO studies also conclude that the linkage and multiplier employment creation effects in the agricultural sector of developing countries are among the largest (with textiles) of all industry groups. These findings imply that an expansion of agricultural exports could make a significant contribution to alleviating the basic social and employment situation in developing countries (Lydall 1985).

One troubling aspect associated with Table 5 is that two countries (Turkey and Israel) are the major suppliers for most of the ME dynamic products. In only 9 of the 30 products do other countries register a presence -- often with either Turkey or Israel. This suggests that the recent rapid growth of exports from the region has been highly concentrated and that most countries are not participating in the associated benefits. Egypt appears as a primary supplier for only three dynamic products (rice, zoo animals and pets, and iron and steel forms) while Iran, Syria and the smaller regional countries fail to appear on the list for any product.

> **51n** 1992, OECD countries imported $1.2 billion of fresh fruit and nuts from the region and close to $400 million of fresh vegetables. There may be additional opportunities for further processing of these goods (freezing, canning, drying, etc.) that could increase their value added content and also have important job creating effects. Since food processing normally increases the usable life of a product further processing could also be an important factor reducing food spoilage. Other major crude material exports that may be suitable for further regional processing include unmanufactured tobacco ($432 million, undressed hides and skins ($112 rillion), raw cotton ($200 million), oilseeds ($60 million) and crude minerals such as natural asphalt, clays, borates and mica ($241 million).

6These agricultural product exports have varied destinations. Turkey receives all of the region's barley exports and over half the shipments of unmilled wheat. Over 40 percent of the region's rice exports go to Switzerland while more than two-thirds of the wheat meal exports go to the European Union.

7For example, Beissner and Hemmer (1981) note that "As clearly shown by many empirical studies the problem of absolute poverty in the developing countries is primarily a rural problem. Selective measures against absolute poverty must therefore focus on agricultural production. Not only must the production of food for domestic consumption be increased, but it should be examined how far an expansion of export-oriented agricultural production could contribute to improved living conditions in rural areas. There would, however, be no point in this if large economic regions like the European Community apply protectionist measures against the outside world."