Sheikh Mohammed bin Rashid al-Maktoum, the ruler of the tiny Gulf state of Dubai, has launched an Arab development foundation with an endowment of US$10bn (£5bn) - one of the largest charitable donations in history - to raising educational standards in the Middle East.

Announcing his effort to help build a "knowledge-based society", Sheikh Mohammed said the Mohammed bin Rashid al-Maktoum Foundation's programmes would tackle illiteracy and unemployment and enhance the standing of scholars and intellectuals in the Arab world.

Sheikh Mohammed, who is also the prime minister and vice-president of the United Arab Emirates and one of the world's richest men, told the World Economic Forum meeting in Jordan on Saturday that he was especially concerned by illiteracy rates - 18% among under-15s in Arab countries and 43% among women.

"The foundation's mission is to invest in knowledge and human development, focusing specifically on research, education and promoting equal opportunities for the personal growth and success of our youth," he said. The $10bn endowment puts him in the same league as philanthropists such as investor Warren Buffett and Microsoft's Bill Gates.

UN figures show that for every 100,000 books published in North America there are 42,000 published in South America and just 6,500 in the Arab world.