The series of popular uprisings may help to kick-start a financial revival across the wider world
WHAT a difference six months makes. As Arab peoples rose up in rebellion against despotic repression earlier this year, the western world applauded fearfully. There was admiration for people risking their lives for freedom, but also fear that the outcome would be much bloodshed and even more chaos, adding more woe and soaring energy prices, to an already stricken global economy.
With the major exception of Syria, where prospects are grim, the countries where the revolutions have succeeded look to be remarkably calm and getting down to the hard work of reconstruction. There is a long way to go yet, but the extraordinary thought now arises that Arab rebuilding can play a part in global economic recovery.
The most striking figure that leads to this thought is that the total population of the Middle East North African (Mena) area is 350 million, not all that far short of the European Union population total of 500 million. Though overall education standards are low, there are a fair number of people, particularly in Tunisia, with higher education.
Though we in the West tend to be snooty about Arab cultural and work ethics, it is worth remembering that centuries ago, many Europeans trekked to the Muslim universities in Islamic Spain for an education, particularly in medicine. The Arabs also have a long enterprise tradition, being adept traders.
These qualities, arguably, have been suppressed by dictatorship, under which the only prospect for advancement was in subservience to the ruling elite. Freed from their smothering kleptocratic grasp, and with the inbuilt advantage of capital-creating oil wealth, there is no reason to suppose that Arabs should be any less ambitious and enterprising than any other people in the world.
The big fear was that Iranian-style Islamist theocracies would take hold but, while there is a long way to go, that no longer seems to be a threat. In Egypt, it is the Muslim Brotherhood that has led in articulating an economic policy which seems centred on a belief in free markets with strong social responsibility.
That’s because Islam teaches that it is a Muslim’s duty to help less fortunate Muslims, an emphasis which, when it focuses on voluntary work, can sound like David Cameron’s “Big Society”. Another Islamic party – Freedom and Justice – is talking about urban development, including in the Sinai, fostering economic links with Sudan, with the aim of developing agriculture, universal education and healthcare, and investment in research.
Given that Egypt’s private sector is quite strong and that there is a large domestic market, the fundamentals exist for fairly rapid economic growth. Foreign investors are, however, reluctant to make commitments – understandably so as the tensions between the military and civilian leaders have yet to be resolved.
It has also yet to be seen whether an elected government will have the courage to undertake the degree of economic restructuring that is needed. To outside eyes, the subsidy system that Hosni Mubarak used to buy subservient gratitude – more is spent on subsidising supplies of Butagaz, used in home cooking, than on higher education – needs to be dismantled, but ordinary Egyptians may see it differently.
Much the same story of steps towards moderate Islamic government and more economic liberty are apparent in Tunisia, and Libya seems to be headed that way as well. Interestingly, rulers in Jordan and Morocco, seeing which way the wind is blowing, are also heading down the liberalisation road.
They joined representatives from Egypt, Tunisia, and Libya at meetings organised by the French government last month in Marseilles in a grouping known as the Deauville Partnership. There was a clear consensus that the private sector will need to lead job creation and that economic reforms cannot be imposed, old regime-style, from the top down. There has to be greater ownership of, and involvement in, reform. The big prize – which can be relatively easily realised – is of boosting intra-regional trade which, in North Africa especially, barely exists.
While there are obvious risks that this can yet be derailed, the fact that this consensus exists is important because it will generate its own momentum that will become difficult to halt.
In this new Mena world, outsiders will have to learn to behave differently. Western governments and companies were used to obsequiousness towards the dictators, and imperiousness towards local people once they had permission from the elites to operate in their country.
This, patently, will not do now. Understanding the new sensibilities, and some old ones, is essential. I note, for example, that Alex Salmond’s visit to Qatar, Abu Dhabi and Dubai is described by the Scottish Government’s press office as a trip to the Arabian Gulf. Fine, if you want to curry favour with the people on that side of the Gulf; big mistake if you don’t want to upset the Iranians, who call it the Persian Gulf and regard the other terminology as a major insult to them.
For reasons such as these, the new authorities and the people are suspicious of the West. Its governments may be keen to help out, but guiding principle appears to be that the newly-free want to sort things out themselves first before they ask for outside assistance.
Will Syria travel down this road? The signs are not good. President Bashar al-Assad is holding on to power ruthlessly and seems to be keeping the revolt in check at a dreadful cost. So far, between 3,000 and 5,000 of his people are estimated to have been killed.
There also appear to be enough people loyal to his regime to make a Libyan-style military intervention unwise. This looks like a conflict that will only be resolved through diplomatic pressure, with the Arab League, which last week came up with an undisclosed plan to persuade Assad to go some way to meet oppositional demands.
But if some sort of resolution can be reached, the addition of Syria to the ranks of the liberated would be a significant addition to the burst of activity that now seems to be emerging from the Arab revolution. There is talk, for example, of the Gulf Co-operation Council, which embraces the Emirates and Saudi Arabia, financing an Arab Bank for Reconstruction and Development from their oil riches.
At the risk of belabouring the caution, there are many pitfalls and sidetracks ahead. But the will of the people in demanding political and economic liberty has been impressive. The Arab Spring could yet help lead a world economic spring.