I found a workaround.
After setting DB encoding to utf8_genereal_ci for the tables I am interested in to display Arabic characters,
then I updated the php code in the downloading Adwords reports and then insert it in the db page is as follows:
<html>
<meta http-equiv="Content-Type" content="text/html; charset=utf-8"/>
<body>
<?php
setlocale(LC_ALL, 'ar_AE.utf8');
///php code here
///var_dump array to check Arabic characters in values
?>
</body>
</html>
Now the var_dump array displays Arabic values from reading the csv Adwords report file and then the code inserts correct encoded values in the db.
Thank you!