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Badr Ibrahim

Economics versus the Arab Spring

Unemployed graduates demonstrated against the governing Ennahdha movement in Tunis earlier this year [AFP]

Date of publication: 30 December, 2014

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The failure to address fundamental economic issues has undermined the revolutions of the Arab Spring.

There are many reasons behind the explosion that was the Arab Spring, the popular revolts and revolutions in the Arab World that began in 2011. Some include the deteriorating economic situation in many Arab countries, widespread corruption and the absence of social justice.

Despite the importance of economic factors in understanding and analysing the situation of the countries that experienced revolutions, most analysis on the failures of the Arab Spring neglected these. This lack of insight enabled the return of former regime members to power in a number of Arab countries.

A region of rentier states

Most Arab states are in one way or another rentier states, that is, they derive a substantial portion of their revenues from what economists term "rent". In the Middle East, the largest source of rentier income is oil. However, this is not the only source of rent in the region.

The term includes any economic activity that results in profit without substantial production costs. Economic activities such as real estate, tourism, foreign remittances, international assistance like grants and soft loans from other countries or international organisations are all economic rents. By analysing the economic activity of Arab countries, one finds that non-oil producing countries generally rely on these forms of economic activities and do not encourage local productivity and industry.

     Traditional political forces presented themselves an alternative to the authoritarian systems, but failed to deliver a better economic deal.

Since the 1970s, many Arab countries have been exposed to multiple forms of corruption, in which rentierism has played a major role.

Business owners competed to obtain a larger piece of the "rent" the state awarded through government contracts to the oligarchic kingpins closest to those in power, while officials exploited their political power and connections to increase their personal wealth, often in competition with each other.

This contributed to the creation of an economic elite tied to the authoritarian regimes. This also entrenched poverty and developmental failure. The popular revolutionary movement was in part a response to this corrupt economic situation, in which states are transformed into the private cash cows of the ruling elite and their business collaborators.

Traditional political forces, which presented themselves as an alternative to the authoritarian systems, failed to understand people's need for a better economic deal and were not able to achieve the two things that directly affected the course of the Arab Spring.

They did not dismantle the basis of former regimes' economic power and retrieve the wealth they stole. Neither did they work to achieve social justice by redistributing wealth and putting corrupt officials on trial.

Corrupt former officials were not held accountable, and so they were able to utilise their considerable financial resources and influence within state institutions to orchestrate a political comeback through the ballot box. Examples of this can be seen in the support for Ahmed Shafik in the 2010 Egyptian presidential elections and the victory of Beji Caid Essebsi's Nidaa Tounes party in Tunisia.

The lack of alternatives

The second thing that affected the course of the Arab Spring was that political forces did not present an economic alternative, a developmental model that transcended rentierism.

No political party focused on the pressing question of the economy. They mostly traded accusations and played identity politics, increasing ethnic and religious tension within Arab societies. There were plenty of promises to improve living standards, which sometimes resulted in wage increases under pressure from trade unions. But no economic plan to end rentierism was put in place.

The economic situation was further destabilised by the political instability of the revolutions. Economic institutions closed, unemployment increased, investment in sectors such as real estate and tourism decreased - in many countries key sources of income for the state.

The political forces created by the revolutions did not present alternatives or take advantage of the revolutionary moment to create economic change. Instead, political forces continued to follow failed neoliberal policies, requesting additional foreign financial aid. It was at this point that remnants of former regimes took advantage of the poor security and economic situation to win over the segments of society that longed for security and economic stability.

     The political forces created by the revolutions did not take advantage of the revolutionary moment to create economic change.

After the 1952 revolution in Egypt that toppled King Farouk, the Free Officers quickly turned their attention to the feudal land owners.

Just 45 days after the revolution, they initiated land reform to redistribute agrarian land and end the monopolisation of feudal owners. In the Arab Spring, political forces did not notice the importance of quickly translating demands for social justice into action, such as holding corrupt officials accountable and ending their pernicious influence.

They did not present an alternative economic project based on increasing productivity and national competitiveness, and developing local capabilities in various fields to achieve a degree of self-sufficiency.

Opinions expressed in this article remain those of the original author and do not necessarily reflect the opinions of al-Araby al-Jadeed, its editorial board or staff.

This is an edited translation from our Arabic edition.

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