Economic Research Forum (ERF)

Arab development as freedom

978
There is widespread discontent and social unrest in the Arab world, a direct result of decades of failed economic and political transitions led by largely autocratic regimes. This column argues that economic development thinkers and practitioners need to present credible alternatives for a new Arab society that meets citizens’ aspirations and restores their essential freedoms.

In a nutshell

We live in a world where economic, political and military power is extremely concentrated in the hands of self-interested minorities.

Increasing the sustainable wellbeing of individuals and societies requires a correction of social and economic inequities – an objective that seems very far from the realities of today’s Arab world.

At the heart of a new Arab society should be rules that can aggregate preferences that respect citizens and their legitimate differences, and, most importantly, their basic freedoms.

Freedom is a basic human right and a cornerstone of human development. A human being born into this world has to be free from destitution, both economic and political, in order to live a better life and pass on a better world to future generations. Removing the barriers to essential freedoms should be the central goal of social and economic policies, as argued by Nobel laureate Amartya Sen in his 1999 book Development as Freedom.

Yet expanding freedoms cannot be achieved in societies where injustice in its different forms prevails. We live in a world where economic, political and military power is extremely concentrated in the hands of self-interested minorities. Increasing the sustainable wellbeing of individuals and societies requires a correction of all these social and economic inequities.

This objective seems very far from the realities of today’s Arab world. Widespread discontent and social unrest are still sweeping across the region – a direct result of decades of failed economic and political transitions led by largely autocratic regimes that survived for a long time.

These regimes succeeded in maintaining their grip on power by moving from social modernising populism to an alliance with elite capital. Governments embraced a consumerist culture at the expense of job-creating investments, with oversized real estate projects and shopping malls owned by state-linked business elites mushrooming everywhere.

This went hand in hand with various forms of repression, especially to control the grievances of the poor who were denied social progress, and a co-opting of the middle class through the use of economic transfers and subsidies. International support for these regimes also provided a lifeline on which they thrived.

The people of the region were therefore caught in a grand authoritarian bargain, where they were forced to trade their political rights against government-driven economic security. This state of affairs led to rising income inequality, rising inequality of opportunities, moderate growth with insufficient job creation, in addition to daily indignities.

Extremist ideologies became more popular in the shadow of oppression, because of their attractive moral critique of the system, and because regimes fostered them as a counterweight to revolutionary tendencies in society.

Young Arab men and women have been the face of the uprisings at least since 2011. They are increasingly raising their voices against their parents’ generation. They are holding them responsible for their social and political exclusion, as the old seem to have erected – with the support of the state – high barriers to entry to the labour market, housing, marriage and even the political sphere.

The 2016 edition of the United Nations Development Programme’s Arab Human Development Report carefully analyses the development outcomes and systematic social exclusion of the more than 105 million youth living in Arab countries. More Arab citizens and especially young people are living in conflict, forcefully displaced, unemployed and otherwise socially and politically excluded than ever before.

Yet at the same time, the Arab region is benefitting from extremely high electronic connectivity (more than 70% of young people in the region have access to social media); high education enrolment, especially among women; and better health outcomes in countries not afflicted by conflict and violence. This contradictory state of affairs offers a window of opportunity that should be seized.

But the route towards progress does not seem to be an easy one. The authoritarian bargain carefully crafted by the ruling regimes – under broad, often sectarian and/or partisan power-sharing umbrellas – has extended its dominance to the family level through the traditional patriarchal social contract.

Guaranteed public sector jobs, nepotism, subsidies and other regime-led economic interventions have allowed families to survive on one (male) breadwinner, thus eroding the bargaining power of women and youth. The rollback of the state and the repeated financial and political crises seem to have shaken this state of affairs.

Economic development thinkers and practitioners need to present credible alternatives for a new Arab society that meets citizens’ aspirations. They should find answers on how to create an attractive and moral economic system; how to reinvent an effective and inclusive state; and how to devise rules that can aggregate preferences that respect citizens and their legitimate differences, and, most importantly, their basic freedoms.

 

Tags: , , , ,

Most read

Trust in Lebanon’s public institutions: a challenge for the new leadership

Lebanon’s new leadership confronts daunting economic challenges amid geopolitical tensions across the wider region. As this column explains, understanding what has happened over the past decade to citizens’ trust in key public institutions – parliament, the government and the armed forces – will be a crucial part of the policy response.

Qatarisation: playing the long game on workforce nationalisation

As national populations across the Gulf have grown and hydrocarbon reserves declined, most Gulf countries have sought to move to a more sustainable economic model underpinned by raising the share of citizens in the productive private sector. But, as this column explains, Qatar differs from its neighbours in several important ways that could render aggressive workforce nationalization policies counterproductive. In terms of such policies, the country should chart its own path.

Small businesses in the Great Lockdown: lessons for crisis management

Understanding big economic shocks like Covid-19 and how firms respond to them is crucial for mitigating their negative effects and accelerating the post-crisis recovery. This column reports evidence on how small and medium-sized enterprises in Tunisia’s formal business sector adapted to the pandemic and the lockdown – and draws policy lessons for when the next crisis hits.

Economic consequences of the 2003 Bam earthquake in Iran

Over the decades, Iran has faced numerous devastating natural disasters, including the deadly 2003 Bam earthquake. This column reports evidence on the unexpected economic boost in Bam County and its neighbours after the disaster – the result of a variety of factors, including national and international aid, political mobilisation and the region’s cultural significance. Using data on the intensity of night-time lights in a geographical area, the research reveals how disaster recovery may lead to a surprising economic rebound.

The impact of climate change and resource scarcity on conflict in MENA

The interrelationships between climate change, food production, economic instability and violent conflict have become increasingly relevant in recent decades, with climate-induced economic shocks intensifying social and political tensions, particularly in resource-constrained regions like MENA. This column reports new evidence on the impact of climate change on economic and food production outcomes – and how economic stability, agricultural productivity and shared water resources affect conflict. While international aid, economic growth and food security reduce the likelihood of conflict, resource scarcity and shared water basins contribute to high risks of conflict.

Qatar’s pursuit of government excellence: promises and pitfalls

As Qatar seeks to make the transition from a hydrocarbon-based economy to a diversified, knowledge-based economy, ‘government excellence’ has been identified as a key strategic objective. This column reports what government effectiveness means in terms of delivery of public services, digitalisation of services, and control of corruption – and outlines the progress made to date on these development priorities and what the country needs to do to meet its targets.

A Macroeconomic Accounting of Unemployment in Jordan:  Unemployment is mainly an issue for adults and men

Since unemployment rates in Jordan are higher among young people and women than other groups, unemployment is commonly characterised as a youth and gender issue. However, the majority of the country’s unemployed are adults and men. This suggests that unemployment is primarily a macroeconomic issue challenge for the entire labour market. The appropriate response therefore is coordinated fiscal, monetary, structural and institutional policies, while more targeted measures can still benefit specific groups.

The green energy transition: employment pathways for MENA

The potential employment impacts of green and renewable energy in the Middle East and North Africa are multifaceted and promising. As this column explains, embracing renewable energy technologies presents an opportunity for the region to diversify its economy, mitigate the possible negative impacts of digitalisation on existing jobs, reduce its carbon footprint and create significant levels of employment across a variety of sectors. Green energy is not just an environmental imperative but an economic necessity.

Global value chains, wages and skills in MENA countries

The involvement of firms in production across different countries or regions via global value chains (GVCs) can make a significant contribution to economic development, including improved labour market outcomes. This column highlights the gains from GVC participation in terms of employment quality in Egypt, Jordan and Tunisia. Given the high unemployment, sticky wages and wide skill divides that are common in the MENA region, encouraging firms to participate in GVCs is a valuable channel for raising living standards.

Tunisia’s energy transition: the key role of small businesses

Micro, small and medium-sized enterprises (MSMEs) play a critical role in Tunisia’s economy, contributing significantly to GDP and employment. As this column explains, they are also essential for advancing the country’s ambitions to make a successful transition from reliance on fossil fuels to more widespread use of renewable energy sources. A fair distribution of the transition’s benefits across all regions and communities will secure a future where MSMEs thrive as leaders in a prosperous, inclusive and sustainable Tunisia.