How are these files being exposed to the Terminal.app? If by "$ TYPE",
then VMS doesn't know anything about the file contents other then its
record structure. The information in it will be transmitted as bytes
of some value. There is no interpretation of that data upon output.
"$ TYPE" just pumps the file data into the terminal driver.
If the file contains the appropriate UTF for some Arabic letter, that
would be output to the Terminal.app. THere may be some need for codes
that tell the Terminal.app to use the Arabic fonts; however, I believe
even that is handled by the accepted UTF encoding.
FWIW, VMS does handle arabic numerals. :)
Basically the end result is the same whether I do a 'cat salam.txt' locally or
'type salam.txt' on the VMS host. The correct letters display, they're just
not joined together like they should be.
It's a bug in Terminal, it doesn't handle ligatures for Arabic (which are rather
trick, but then again they are built into OS X, so it's odd)..