Would the Arab world have been more stable, more democratic and more advanced?
Nope. The shiite’s and sunni’s would still try to kill each other. On the flip side, Jordan might have become a world financial center with all those brilliant Palestinians.
There was a moderately funny movie long ago, Americathon, where the “Hebrabs” were very wealthy and successful. As mentioned in the Wikipedia entry, the movie predicted many trends and events with chilling accuracy.
http://en.wikipedia.org/wiki/Americathon