This paper aims at providing an objective evaluation and transformation of Higher Education in the Arab World with a focus on its contribution to knowledge and human development. It argues that despite the great expansion in the number of higher education institutions and the great increase in the number of students enrolled in them, the needs and aspirations of Arab societies have not been fulfilled as the contribution of these institutions to human development and applied science and technology does not measure up to international standards. In order to improve the quality of higher education provision, outcomes, and economic feasibility, the paper provides a survey of e-learning and blended education and argues that blended education should be adopted as the backbone of higher education in the Arab World due to its excellent content, methodology, outcomes, and economic feasibility.