The economics of the Arab spring
Open for business?
Economic reform in the Middle East could prove harder than in eastern Europe. The West needs to help it along
Jun 23rd 2011
Jun 23rd 2011
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I remain unconvinced that any nation can form a modern and effective government while tied directly to a specific religion that dictates what is legal or not and included laws against blasphemy. No modern government can coexist with Islam's restrictions on women's rights, Indonesia notwithstanding. Israel, while declaring itself a Jewish nation, restricts its laws to secular things, limiting the damage but not eliminating it.
The comparison between EE 1989 and the ME 2011 only makes sense for superficial observants.
The Economist forgets the most obvious differences:
- Geographic proximity and ethnic relationship of EE to WE (they form a natural unit).
- Culturally, Central-Europe and the Baltic countries already belonged to the West (see Huntington)
- In the Orthodox and Muslim countries of Eastern Europe (with some smaller exceptions like Kosovo, Chechnya Tadzjukistan) most people were already trained to think in a socially modern way, thanks to - communism and industrialization.
- The education system in "Eastern European" countries belongs to the best and most egalitarian of the world, only matched by Scandinavia, Israel, Japan and Korea.
- In EE, there was a clear ideological opponent in the form of communism. In the the ME, the systems are very different ideologically, so the resistance won't be get a common ideological aim either.
- There is a general benevolent view of the West and of progress in Eastern Europe.
- There is no reactionary Islam in Eastern Europe, not even in the Muslim countries like Albania, Bosnia or Kazachstan.
None of these are true for North Africa or the Middle East.
RE: Economic liberalisation has a poor reputation, thanks to reforms earlier this decade whose fruits flowed largely to the well-connected.
That was the case in Eastern Europe (EE), except very few countries (Czech Republic, Estonia) that legally barred communist nomenklatura from higher offices (that is the notoroius rent-seeking behavior by well-connected communists) after the fall of communism. So EE can teach what NOT to do in this area.
Whether they are friend or foe is yet unclear with these new "spring" governments. In all likelihood, the freedom seeking students have long since been replaced by al-qaeda leaning religious fighters. I have not seen ANY woman's right movements nor have I seen much freedom being spread in any of these new governments yet.
Until we know whether we are building a stronger friend or building a stronger foe, I am happy to sit on the side.
only one thing is certain-israel will be blamed for all the problems. thank g-d the Jews are around to blame.
Not a valid comparison, and superficial. For starters there is no mention of the way business is conducted person to person in the Arab world. This will not change because of policy or regime change. The familial approach has other parallels in Europe however, specifically in Italy, and to a lesser extent, Greece.
Both Egypt and Tunisia were doing well before "Arab spring" began and had high growth figures. So I don't think there is a short term need for structural economic reforms.
Their main problem now is that all this political upheaval is bad for business.
For my taste the Economist is a victim of system thinking. East and South East Asia have also been able to grow despite heavy corruption and a clearly illiberal economy.
" Vengeance against fat cats " is right.That is why,both the Tunisian and Egyptian revolutions are stuck where they are now like a damaged gramaphone record and unable to move forward to areas of substantial reform. The grip of religion is also a vital factor affecting the democratic and economic development of these countries.
The West needs to help it along!!!!
You must be kidding. The WEST and Japan needs a reform real bad.
Best wishes
Kishore from Mumbai
In the arab street , the prevalent idea is that the whole Corruption in the Arab Economy is caused by the West policies , this idea is emphasised every day in the mosques around arab world , that is a major point which creates hatred and leads to encouragement of terrorism attacks against the Western Countries
The Arab spring was caused by too many graduates expecting guilt edged jobs without the ability of them, firms or the state to create them. Ideals aside, it is highly unlikely that bumping off a despotic regime will do much good.
Sadly the arab world is still full of 'overdeveloped states', the term aptly coined by Hamza Alavi in the seventies. The military society (or whatever the kleptocratic leader chooses to call his goons) has it's finger in too many pies to allow civil society to develop. Knock off the military society and the place will fall apart as there is nothing strong enough to replace it.
It is no suprise that the powerhouse economies that emerged from Asia all did under benevolant dictators.
Are there parallels between North Africa in 2011 and Western Europe in 1848? http://en.wikipedia.org/wiki/Revolutions_of_1848
There are certainly some parallels: totalitarian regimes, rampant capitalism combined with massive inequalities between the working & ruling classes, and discontent among the middle and upper-middle class at the disproportionate power held by the head of state, and food shortages.
Are there lessons to be learned from that era?
I don't pretend to be an expert on all of this - and because it's such a charged situation, it's hard to come by facts unencumbered by opinion. But it does seem that negotiating with the Taliban was always on the cards as as I said, like with Vietnam with such a large and hostile amount of people against you, you can't win without killing most of them. agree with you though - announcing that you're going to leave surely means that you'd lie low until 2013 and then attack after the bulk of the troops are gone. It's a bit like the Allies in WW2 announcing when and where the D-Day landings are taking place, isn't it? Let's hope that there are a lot of things going on behind the scenes. But a war where the ultimate victory was based on the US nation building in a very different culture was destined to fail. What a mess and a tragedy. Let's hope that the last 10 years don't result in permanently hobbling the US. For better or for worse, they are a force for good in the world (if you are in the West, admittedly) and it's foolish to think otherwise. I thank you Firozali A.Mulla DBA
@European Citizen,
"without the allure of a EU membership,things will get even worse".
Oh yeah,Saoudis women can not drive a car, few days ago in KSA just beheaded a poor maid i think from Indonesia,Copts are systematically attacked in Egypt,70% of Bahrain is Shia and is crushed daily,let alone what is happening in Syria and Libya.What Turkey represents to some ,is wrong because Turkey up to now did not recognise the Genocide of the Armenians,let alone the bad treatment of the Kurds.What the region needs is Democracy,and democracy first.
"The West needs to help it along"
THAT was an inane comment...
Hundreds of billions of oil money landing from our pockets every year do not seem to be enough?
Skeptics like Mexico's Calderon says that the military-industrial complex in the Imperialist West are creating Wars and conflicts in developing countries primarily to serve its own end rather than helping to develop those countries. As Imperialists, these countries normally do not respect the sovereignty of other nations and seeks to capitalise on the conflicts under the guise of promoting democracy and protecting civilian rights. In most cases, the victims end up as failed states that are not able to sustain its own development due to lack of resources.
As a case of point, the Hegemon claims to have spent over a trillion dollars to promote democracy among the Iraqi. However the recent auditor office claims that over 200 billion US dollars Iraqi asset is unaccounted for. In fact, the Iraqi government is also trying to claim back similar amount from oil sales but probably to no avail. In Afghanistan, the Hegemon is finding hard to leave the place after their geologists claims that there are 10 trillions of mineral deposits lying to be explioted. In Libya war, the Anglo-French are targetting Gaddafi after selling him huge amount of arms. At the end, the imperialists knew they could recoup the costs of using their increasingly obselete weapons from future oil for weapon sale from whoever in charge of Libya.
"Vibrant market economies" in Eastern Europe? That's the exception, not the rule. In most countries in the region, a few oligarchs own the economy through their political connections which you can easily trace to the former communist party and its state security services. Indeed, without the allure of EU membership, the situation in the Middle East might end up to be even worse.
Re: Conditional aid...
If anything has a poor reputation it is aid given with conditionality. This form of neo-colonialism is what has ruined the reputation of the IMF and the World Bank. While I agree aid should be given with some conditions, it shouldn't be on private enterprise. That merely opens up the country to predatory investment and the capture of national assets.
You could argue that Western corporations would be too nervous to investment heavily so they will naturally find a local partner to aid their investment. And you can guarantee that local partner will look remarkably similar to the present oligarchy. Nothing would really change.
There is a huge difference between eastern Europe and middle east in many respects. Education and healthcare standards in eastern europe were in late 80s early 90s on a same level than in west, when in MENA its lagging 100 years behind. Arabs prefer to build towers and armys for their oil money not schools and hospitals.
And that's exactly why EU membership should be possible for them. Let's rename the union. If they can meet admission criteria then that would be a huge boon and not just for those countries but for the lethargic union as well. Europe ought to export the model.