text: other ventures. World inflation, "imported" consumption patterns and debt-service have on the other hand reduced the volume of domestic savings and impeded industrial capital accumulation and modernization. The outflow of skilled labour constituted a serious brain drain and reduced efficiency in industry. 26. The lack of finance and labour skills remains a major constraint to restructuring in euch countries as Egypt, which was particularly affected by the 1982 drop in wages. The move towards more liberal policies for foreign investments has not so far met expectations in repect of technology transfer and foreign investment. With the manufacturing sector weakened by rising domestic labour costs and inadequate investment in modernization, the foreign trade liberalization did not bring about any major improvements. ID/B/339 Page 10 27 • In the least developed Arab countries, little investible surplus is being generated domestically. More attention will probably be given in the years to come to mobilizing domestically greater invest ib le surpluses. Foreign aid, foreign investment and workers' remittances were the major sources of finance for industry, but were clearly inadequate to promote sufficient restructuring. 28. The key issues confronting policy makers in Arab States thus seem to be: (.!!_) Major constraints exist in the production system of many of those countries; (b) A partial bottlenecks utilization reallocation of investments is required to tackle production in lagging industries as an essential pre-condition for the efficient of installed capacities; (c) The upgrading and creation of managerial and labour skills in more sophisticated production areas are urgently required; (~) The large foreign debts and/or lower hydrocarbon revenues in some countries are likely to reduce the pace and options for industrial adjustments and development, at least in the short run; (!:_) Exports of chemicals, plastics, fertilizers and refined petroleum products seem to be facing growing trade barriers in developed country markets; 
analysis: The text discusses the challenges facing Arab countries in terms of industrial development, restructuring, and modernization. It highlights the constraints on domestic savings, lack of finance and labor skills, and the impact of foreign debt on industrial adjustments. The text also touches on the need for technology transfer and foreign investment. These themes suggest that the most fitting category is related to economic development and industry.