Which campaign will more successful and effective in Arab countries: one created by Arab creatives or foreigners, and why?

I believe it takes both and neither.
While Arab creatives will have the distinct cultural advantage regarding obvious aspects (such as language) and the more subtle idiosyncrasies of the people as a community, it sometimes takes an outsider's perspective to catch rare insights that might otherwise be seen as commonplace.
But a truly effective campaign will be one done FOR Arabs, regardless if it were done BY locals or foreigners.

It is not about where the creative is from, but the amount of research that has been done, the amount of thinking put into the campaign, and the access to local insights.
Talent doesn't know any border! Advertising is a big international family, , and the mix of different cultures nurtures creativity.

I think it doesn't matter if campaign creator is foreign or domestic ...
what really matters is how simple, clear, and to the point the campaign are ...
I do believe if the creator is domestic will have the advantage of knowledge of the target group such as Principles culture and language and by language i mean even the street language and vocabulary .
I CANT AGREE MORE with Ernie Mauricio answer ...
(^_^) ...
Ernie Mauricio: " But a truly effective campaign will be one done FOR Arabs, regardless if it were done BY locals or foreigners." VOTE UP FOR YOU SIR.