Watching the Arab League's leaders in their gathering last week in Riyadh, one had to consider the contrast between them and their counterparts from the European Union. The EU, whose 27 member states speak 24-odd languages and whose leaders routinely represent a rainbow of outlooks ranging from conservative to ultra-liberal, has usually been aware of its political limitations, and consequently focused on economic harmony. The result, an era of massive prosperity and cross-border engagement crowned by the launch of the once-unthinkable common currency, is arguably history's most successful exercise in political engineering. The Arab League, though its members speak one language, is nowhere near unifying currencies or abolishing borders, and in fact remains addicted to conflict, mistrust and acrimony. The gathering in Riyadh, with all due respect to its rehashing of the Saudi formula for Mideast peace, was no exception. With Lebanon sending two rival delegations, Libyan leader Muammar Gaddafi altogether absent and the president of Sudan (of all countries) suggesting his region's main problem is the Arab-Israeli conflict, the Riyadh summit seemed unprepared to address, let alone affect, reality. The reality is that the Arab-Israeli feud is but one of many conflicts across the Middle East, clearly a terminally ill region, but one whose root ailments are not this or that conflict, but its general economic degeneration, social stagnation and religious fanaticism. AT THE Riyadh summit, Saudi King Abdullah was more down to earth than Sudan's Omar al-Bashir, whose studious statement abut Israel conveniently ignored his own government's role in the mass murder of black Africans in Darfur. "Arab reality has never been so distant from unity," Abdullah candidly told the delegates, counting the crises in Sudan, Lebanon, Somalia and Iraq and laying blame with his colleagues: "It is we, the leaders of the Arab world, who did not know how to handle these problems." Unfortunately, there is more that Arab leaders have mishandled, and that in fact is the context in which they emerged with last week's "peace plan" - a non-starter that, like all Arab League "action," was designed to cost it nothing and lead nowhere. The Saudi plan is a non-starter for two reasons. In its substance, it scratches the most sensitive Israeli nerve, the refugees of the war waged in 1948 against the embryonic Jewish state in a declared effort to nip it in the bud. The implied expectation that any refugees be restored to Israel's pre-'67 borders is seen by all mainstream Israelis, including veteran land-for-peace preachers Amos Oz and A.B. Yehoshua, as a ploy to destroy them. It will never be accepted by any Israeli leader, just like no Russian, Czech or Polish government will ever restore any of the 12 million Germans their countries displaced in the aftermath of World War II. In its timing, the Riyadh Declaration was made while its writers knew full well that Prime Minister Ehud Olmert - beset by political and legal scandals - is in no position to lead a bold diplomatic initiative. With a 2 percent approval rating, the last thing Olmert can now do is launch a plan that Binyamin Netanyahu can be counted on to convincingly mock as a plot to shrink Israel physically and swamp it demographically. However, by focusing on Israel, the Arab League cunningly changed the subject from its chronic failure to treat the economic, diplomatic, religious, social and political problems that, if led by less cynical people, would have been its bread and butter. The Arab League's real problems should be that 250 million Arabs' combined GDP is smaller than Korea's, while their illiteracy rates are among the world's highest and their women are the world's least employed. Diplomatically, the real problem is that the Arab League has been passive at best, obstructive at worst in the face of universal demands for justice in Darfur. Religiously, the real problem is that the predominantly Sunni Arab League sheepishly praised Shi'ite Hizbullah's struggles, ignoring Lebanese Prime Minister Fuad Saniora's protestations that Sheikh Hassan Nasrallah is destroying his country. Socially, the real problem is that the Arab League is fine with the Arab world's constant export of immigrants into an increasingly hostile, crowded and explosive Europe. And politically, the problem is that the Arab League is fine with Egypt's newly constituted ban on religious parties. HAD IT meant business, the Riyadh gathering would have addressed such issues and raised the question a growing number of young Arabs ask: Why are we behind? A generation ago Arab economies were not unique in their blending of poverty and authoritarianism. Now, with China, India and Russia emerging as economic powerhouses, Arabs deserve to know why their leaders still insist on feeding them a diet of many slogans and few opportunities. The answer is simple: Progress threatens the elites. That is why the kind of Nike and Benetton conveyor belts than have become ubiquitous from Vietnam to Mexico, not to mention the kind of Fiat and Volkswagen production lines that are commonplace from Brazil to Poland, remain a rarity in Syria, Egypt and Yemen; that is why Saudi Arabia prefers to regularly import millions of non-Arab laborers while barring nearby Egypt's unemployed masses; and that is why the Arab world has yet to have its first independent university, newspaper, trade union, court of law, parliament or municipality. That is also why millions of Arabs remain destitute and a fundamentalist preacher's easy prey. And that is why the Riyadh Declaration is but a ruse, a monument to the Arab League's insistence that bickering with Israel is more urgent than industrializing the Arab world, encouraging its social mobility, modernizing its infrastructure and enlightening its people.