Tensions Between Development and Globalization in the Middle East

By Clement M. Henry

The University of Texas at Austin

Development and modernization have acquired a new urgency in the Middle East and North Africa, not so much because of the Johannesburg Summit as of the rise of transnational terrorist networks emanating from the region. The primordial American response of a War on Terrorism to September 11, 2001, may address some symptoms but do not attack the underlying conditions that give rise to the terrorist networks. The networks draw upon a massive sense of alienation in the region shared by much of the intelligentsia as well as unemployed youths. I do not wish to minimize the adverse impact of policies pursued by both the Clinton and Bush Administrations of confronting Iraq and supporting Israel at the expense of the Palestinians. Continued pursuit of these policies will surely aggravate the underlying conditions even were the countries in the region to achieve more self-sustainable human development. But the subject of this symposium, development and modernization, also immediately concerns the Middle East, although the Johannesburg Summit’s Key Outcomes virtually ignored it in favor of partnerships with Africa and Central Asia (UN/DESA September 2002).

The Middle East reveals a new clash of globalizations that frames the processes of development and modernization in much of what used to be called the Third World. The region is caught between the imperialistic impulses of the neo-conservative Bush Administration and other, apparently more benign, multilateral proponents of globalization such as the World Bank, the International Monetary Fund, and the United Nations family of organizations. Pitted against these forces are the states of the region, pressured to reform themselves, and some of their more radical Islamist oppositions. If in the 1960s, following Rostow (1958), developing countries could be viewed as so many little airplanes about to “take off” from their insulated runways, protected by a relatively benign international environment, they are all caught today in a global pressure cooker. Arab countries are doubly pressured, by regional forces of Arab nationalism and political Islam as well as by the challenges of globalization. They are less insulated than most other developing countries from one another as well as from the forces of globalization.

Regional constraints on development

The region is mired in an Arab-Israeli conflict that shows no sign of letting up. Despite the diminished appeal of Arab nationalism after the death of Nasser in 1970, the fate of the Palestinians during the Second Intifada (2000- ) is the prime daily news broadcast throughout the Arab world and beyond. The daily sight of the humiliations inflicted on Arab brothers and sisters steadily erodes the legitimacy of Arab governments, viewed at best as impotent onlookers if not as outright accomplices of the aggressors. The Arab-Israeli conflict is obviously not the sole obstacle to Arab development, but it contributed to the militarization of Arab politics in the 1950s and 1960s by justifying heavy military expenditures in Egypt, Iraq, Jordan, and Syria. Intra-Arab disputes so vividly described as the “Arab Cold War” by Malcolm Kerr (1971) probably contributed as much as fears of Iran or Israel to the huge military expenditures of the Arab Gulf states. Although the Middle East’s share of international arms markets has declined relative to those of East Asia in recent years, the region spends a greater proportion of its GDP, on average, than any other region in the world (Richards and Waterbury 1996: 337). The military expenditures of the Arab states and Iran are estimated to have totaled $420 billion from 1980 to 1995 exclusive of the “collateral” damage caused by Desert Storm (El-Ghonemy 1998: 108). These expenditures not only divert funds from development but also contribute to military industrial enclaves that defy efforts to liberalize their respective economies.

Fortunately these expenditures have slightly diminished in recent years, but the major reason for their reduction introduces yet another distinctively Middle Eastern blockage to development: oil rents. Of the ten countries in the region having populations of 10 million or more, only one (Morocco) does not have some oil, and only Tunisia, the smallest in population well as in oil production, is sufficiently diversified to be relatively unaffected by the volatility of oil revenues. The government revenues and balances of payments of Algeria, Egypt, Iran, Iraq, Saudi Arabia, Syria, Yemen, and most recently Sudan depend heavily on their respective oil exports. Oil revenues also buffet the inflows of remittances to the poorest of them and to Jordan and Lebanon as well.

Oil wealth led to unproductive investments and unsustainable expenditures, once the oil revenues plummeted in the mid-1980s. If the curse of oil hit Algeria economically the hardest, it also possibly tempted Saddam Hussein into his ill-fated invasion of Iran in 1980 in the belief that he could have both guns and butter. In addition to their deleterious economic impacts, oil rents may also help explain what the Arab Human Development Report 2002 calls the region’s “freedom deficit.” That is, even after factoring in inflated military personnel and expenditures induced by the Arab-Israeli conflict and by intra-Arab and Arab-Iranian rivalries, oil revenues still apparently contribute to the prevalence of authoritarian regimes in the region (Ross 2001: 350). Yet most economists, however much they believe in free markets, now understand that good governance, which is closely associated with the practices of constitutional democracy, is vital to make those markets work for sustainable human development (World Bank 1997).

In addition to wars and oil, a third major impediment to development is the region’s special colonial legacy, which also discouraged democracy and political pluralism. Close to Europe and too strategically located on the rim of Eurasia and Africa even before the discovery of oil enhanced its geopolitical significance (Drysdale and Blake 1985), the Middle East and North Africa were the principal battleground over which the great powers competed for influence in the nineteenth century (Brown 1984). Political development suffered as a result. Direct French rule smothered civil society in Algeria and united it against French occupation in Tunisia, thereby destroying pluralism there as well. Indirect rule in Syria and Iraq promoted vulnerable, isolated elites that would fall victim to military juntas. Egypt and Morocco were among the few to acquire legacies of political pluralism in opposition to somewhat more refined patterns of indirect colonial rule. Most of the other impositions of indirect rule generated monarchies that were either toppled by the military or remain precarious and corrupt, hardly agencies for promoting self-sustaining human development. Moreover, the memories of European imperialisms, not to mention more recent interventions against Nasser and Saddam Hussein (Lustick 1997), color the perceptions of most of its contemporary political actors, in regimes and oppositions alike, of globalization. Many view the intrusion into its internal affairs as a new form of imperialism, and some Islamist oppositions hark back to the Crusades. Thus the region has tended to be more reluctant than the rest of the developing world in accepting the structural adjustment that international financial institutions and bilateral aid programs advocate (For the Ten Commandments of the Washington Consensus, see Henry and Springborg 2001: 13).

Challenges to globalization

Globalization is not a sociological abstraction like modernization, although it is facilitated by new information technologies. Their predecessors, such as newspapers, telephones, and transistor radios, used to be principal indicators of the abstract but inevitable modernization of traditional societies (Daniel Lerner 1958). Globalization, however, is far from inevitable, for it largely depends on the political acts of states, notably those of the great powers. As John Gray (1998) and other have noted, the world economy is less globalized on some dimensions, such as capital flows, than in 1913. Globalization connotes the removal of barriers between states to the movement of capital, goods, and labor. The international debt crisis of the 1980s contributed to globalization by obliging debtor states to remove some of their barriers. In the Middle East and North Africa these pressures recalled similar ones in the nineteenth century when predatory European creditors imposed reforms leading to the colonial subjugation of Egypt, Tunisia, Morocco, and the Levantine and Turkish heartlands of the Ottoman Empire. The end results were not only policy but also regime changes. What is distinctive about this region in the 21^st century is that globalization is again raising specters of regime change, not only for Iraq but for many other shaky autocracies in the Arab world as well.

From the outside regimes are being pressured not only to change their economic policies but also to rectify their “freedom deficit” and improve their human rights records. Yet political liberalization, attempted cautiously in the 1980s in Egypt, Jordan, Morocco, Tunisia, and more vigorously in Algeria, had been reversed in all of these countries by 2001 (Freedom House 2002). Each regime except Algeria’s faced growing opposition from within assisted in part, perhaps, by another feature of globalization, the rise of transnational terrorist networks. It is often argued that it was to contain the discontent caused by structural adjustment that induced these regimes to “deliberalize” (Kienle 2001: 131-169). Forgotten, perhaps, is the anger against American imperialism, articulated by political Islamists, which flared across North Africa as well as elsewhere in the Arab world in response to Desert Shield and Desert Storm. It was following these military exercises in 1991 that Egyptian and Tunisian authorities cracked down on their Islamist oppositions. Any major military operations launched against Iraq in 2003 are likely further to tighten regimes in the region, some of them perhaps to the breaking point. Widespread Arab perceptions of US complicity with Israel have weakened support for regimes that are perceived to be America’s allies.

Tighter repression in turn renders more difficult any reconciliation within each country of the beleaguered reformers and supporters of globalization, on the one hand, and the various opponents, on the other, that reject them in the name of cultural authenticity, political Islam, or Arab nationalism. Many moderate political Islamists in fact favor market oriented reforms and a less intrusive, more accountable state along the lines suggested by the World Bank (1997), but the dialectics of globalization hardly favor any inclusive syntheses in the tense regional climate. International intervention in Iraq and possibly elsewhere may jeopardize the slow work of Arab technocrats to engineer necessary reforms.

Regional reform efforts

The analyses and prescriptions of leading Arab social scientists expressed in the Arab Human Development Report 2002 represent the most candid positive regional response to the economic and political challenges of globalization. As the authors are clearly aware, however, the reforms of governance needed to implement effective economic reforms are likely to endanger incumbent regimes and further exacerbate their respective oppositions. To the extent, moreover, that the United States pre-empts the gentle persuasion of multilateral institutions with direct military aggression and “regime change,” the incumbents are likely to harden their opposition to globalization.

The Report singles out three “deficits” that conventional economic growth indices overlook and that the United Nations Development Programme’s classic Human Development Index (HDI) also ignores. These are 1) the freedom deficit, 2) the women’s empowerment deficit, and 3) the deficit, at least relative to wealth, of human knowledge capabilities. Three of the Report’s eight chapters focus on this third deficit and try to tackle the problem of harnessing the region’s human potential to the tasks of economic growth and development. The Arab intellectuals writing this report do not shy away, however, from addressing the “freedom deficit” because they view civic and political freedom as intrinsic to human development: “Efforts to avoid the political aspects of governance when discussing the question sometimes reflect fear of expected or imagined consequences of dealing directly with the subject. However, restricting discussion of governance in this way does not serve the long-term interests of developing countries…” (AHDR 2002: 106). Constitutional democracy is viewed not only as an intrinsic good by the putative globalizers who drafted this Report; it is also an instrumental necessity if the region is to stop stagnating and begin to catch up with the rest of the world.

By focusing on the knowledge deficit, the authors also highlight the importance of good governance. The Arab world has consistently trailed the rest of the developing world in gross primary education enrollment ratios, despite outspending it until 1985. Arab spending went more to secondary and university education, where it outperformed the average of developing countries (although not Asia or Latin America). Obviously urban middle class rulers and administrators were looking after their own interests, not those of poor country folk, especially not their daughters. Illiteracy rates very slightly improved between 1980 and 1995 but remained wretched compared to the average of developing countries. Over half the women living in the region remained illiterate in 1995 (2002: 52-53). As the Report elsewhere discusses concerning alleviating poverty, the best way to correct such major bias is to deepen democratic participation.

An urban class policy bias may also help to explain the “mismatch” deplored in the Report between educational curricula and labor markets. Its widespread failure is explicable at least in part by the fact that parental and teacher pressures usually propel vocational schools into a dysfunctional academic status (Moore 1994: 62-83). The combination of inadequate vocational training and the declining quality of primary school helps to explain Arab unemployment, which is more severe than in other parts of the world. Too many aspiring but poorly trained youth, male and female, are graduating from secondary schools and universities to be constructively absorbed by the local economies, and labor productivity, like per capita income, has stagnated or, by one World Bank study, actually declined (AHDR 2002: 87). Workers tend to produce less for equivalent wages than in most other regions of the developing world. In turn, across the region from Morocco and Algeria to Saudi Arabia, unemployment, especially among the youth, is more widespread than in any other region of the developing world, and foreign direct investment outside the petroleum sector is minimal.

If, as the Report argues, the Arab world is to catch up with the rest of the developing world, it needs above all else to tackle the issues of governance that the region’s freedom deficit reveals. In the Report, as in the UNDP’s Program on Governance in the Arab Region (UNDP-POGAR 2002), the dimensions of good governance are laid out as objectively as possible as a reform agenda calling for: fair and free elections with “a solid electoral system that permits the peaceful rotation of power” (p. 115), an elected, representative legislature that can exercise some real control over the executive power, a constitution that effectively defines the rules of the game separating executive, legislative, and judicial powers, the rule of law and autonomy of judicial institutions, local self-government, and reforms to invigorate civil society and guarantee a free press.

Regime Change

The question is no longer whether but how to engineer significant political change in much of the Arab world. Evidently the Report is articulating new dimensions of globalization for the Arab world. As in the debt crisis of the 1980s, the region was being summoned to remove its trade barriers, to plug up its fiscal and current account deficits, to stabilize its macro-economic indicators and structurally to reform various sectors of the economy and privatize public enterprises. In addition, it is now being called not only to implement economic policies that few people understand but also to engage in major public efforts of political reform. Backed by citations from the Prophet’s son-in-law (appealing to both Sunnis and Shi’ites) the Report calls in essence for the transformation of Arab regimes into constitutional democracies like those of most OECD countries.

The UNDP will be continuing its benevolent political intervention through the Program on Governance in the Arab Region. UNDP-POGAR’s website (undp-pogar.org) fleshes out the country detail that the Arab Report on Human Development could not include. Mirroring the Report, UNDP-POGAR focuses on eight broad themes or substantive dimensions of governance that embody the normative principles of participation, the rule of law, and transparency and accountability. Although these standards all apply as yardsticks for evaluating political institutions and practices, their relevance varies with the nature of the concrete theme. Thus extending participation is the primary concern behind the themes of civil society, decentralization, elections, and the role of women in public life. Corresponding to the rule of law are themes of the judiciary and constitutions, while legislatures and financial institutions are primary agencies of transparency and accountability.

UNDP-POGAR documents the practices of twenty Arab countries concerning the eight themes of governance. Description is neutral, intended to be credible without being incendiary, because POGAR’s partners of course include the governments themselves. Behind its reform agenda may lie the hope that publicity will gradually induce changes that will in the end change regimes by changing mentalities and concrete behaviors and practices. The strength of this approach is that it enjoys legitimacy in the eyes of the concerned parties. POGAR is quietly expanding the scope of globalization, defined, it will be recalled, as the elimination of various state barriers, to include barriers of domestic government practices. It is more akin to Benthamite improvements of the early nineteenth century than to the rampant imperialism in the latter part of the century. In the spirit of the Enlightenment good ideas and practices are expected to drive out bad ones, and significant changes, such as Bahrain’s new constitution, are visible to all to be criticized or emulated by the neighboring monarchies.

Multilateral international and regional efforts to promote good governance gradually through exchanges of information may give way, however, to more rapid regime change either by American military intervention or by increases in domestic violence against regimes viewed as American collaborators. Globalization is now associated with regime change in the region, whether gradually through multilateral efforts or by more extreme methods. Underlying the clash between these alternatives is the conflict between the unilateralist tendencies of the Bush Administration and the proponents, in the United States as well as in the international community, of the gentler liberal conception of globalization.

Either way, the experience of globalization in the Middle East starkly projects the new dimension of regime change. If it does not happen with apparent spontaneity, pushed by internal forces and regional “snowball effects” as in Latin America and Eastern Europe, it may become directly associated with cruder forms of external intervention. These could conceivably have the unintended consequences of reversing globalization, which after all is the effect of the convergent policies of numerous states. Ironically the region’s oil fueled the first truly global industry, yet the region’s resistance to political change imposed from the outside may set examples that others will emulate, in opposition to a globalization perceived to be American imperialism. Freezing processes of internal reform by imposing them on Iraq from the outside could have a domino effect well beyond the Arab and Muslim world, heading us back to the 1930s.

References

Arab Human Development Report 2002: http://www.miftah.org/Display.cfm?DocId=906&CategoryId=8

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Alasdair Drysdale and Gerald H. Blake, The Middle East and North Africa: A Political Geography, Oxford: Oxford University Press, 1985.

M Riad El-Ghonemy, Affluence and Poverty in the Middle East, London: Routledge, 1998

Freedom House 2002: http://www.freedomhouse.org/ratings/index.htm

John Gray, False Dawn: The Delusions of Global Capitalism, New York: New Press, 1998

Clement M.Henry and Robert Springborg, Globalization and the Politics of Development in the Middle East, Cambridge University Press, 2001

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Ian Lustick, “The Absence of Middle Eastern Great Powers: Political Backwardness” in Historical Perspective,” International Organization 51, 4, Autumn 1997, pp. 653-83.

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Walt W. Rostow, The Stages of Economic Growth, Cambridge University Press, 1960.

UN/DESA, Johannesburg Summit 2002, Key Outcomes: http://www.johannesburgsummit.org/html/documents/summit_docs/2009_keyoutcomes_commitments.pdf (September 2002).

UNDP-POGAR 2002: http://www.undp-pogar.org/

World Bank, World Development Report 1997: The State in a Changing World, New York: Oxford University Press, 1997