The Arab world must raise standards of accounting and transparency and move aggressively to identify business opportunities if it is to come up to speed and win foreign investment, Dubai's crown prince said Saturday.

Sheikh Mohammad bin Rashid al-Maktoum, who is also defense minister of the United Arab Emirates (UAE), said investment opportunities "must be nurtured" as Arab nations were lagging sorely behind their potential.

"It is only by applying best

practices that are tailor-made to the region in areas like accounting standards, corporate governance, laws and regulations and transparency that we can improve the investment climate in the region," Sheikh Mohammad told a business conference here in a speech read out in his name.

"Governments must create systems whereby opportunities are identified and categorized. We need to ensure that opportunities are correctly matched with the input they require -- whether it is capital or talent," he said.

The call was followed by an

announcement that Bahrain, Saudi Arabia and the UAE had proposed an Arab umbrella assocation to attract foreign direct investment (FDI) to the Middle East.

The idea came from the Arabian General Investment Authority (Sagia), the Economic Development Board of Bahrain and the Dubai Development and Investment Authority (DDIA).

Prince Abdullah bin Faisal bin Turki Al Saud, Sagia's governor, said Arab governments had taken few steps to unify their approach.