The Logic of the Cold in the Arab Region

Source: Copyright US Library of Congress 2021. All rights reserved.

Alfio Cerami April 7, 2021

The Arab region examined in this blog post includes Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, the State of Palestine, Qatar, Saudi Arabia, the Syrian Arab Republic, Tunisia, the United Arab Emirates and Yemen.

The issues I am going to raise here are the result of 10 years projects jointly conducted with several scholars and recently published by Palgrave Macmillan in an edited volume entitled ‘Post-Communist Welfare Pathways’, single-author volume “Permanent Emergency Welfare Regimes in Sub-Saharan Africa” and an article “Social Protection and The Politics of Anger in the Middle East and North Africa”.

I’ll briefly address the repercussions of the global financial crisis (COVID-19) and their repercussions for economic, social and political affairs from 5 different angles. The first angle will focus on political repercussions, the second on economic repercussions, the third one on social repercussions, the fourth one will, more specifically, focus on the economic vulnerabilities of th Arab region and the fifth one on UN-Western Asian-Arab Region relations.

Let me raise some key questions for each different dimension and, tentatively, try to provide some quick answers:

  1. Political Repercussions:
    1. Is democracy still the only game in town? Current trends say ‘NO, it is not’. Increase in religious populism, in confessional right extreme parties, instability of governments, and social mobilization are not simply on the increase in the extremely oil rich nations of the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) to the less affluent economies of the Mashreq (Iraq, Jordan, Lebanon, Syria, West Bank and Gaza, Egypt), but also to those countries belonging to the Maghreb (Algeria, Libya, Mauritania, Morocco and Tunisia). In addition, an increase in nostalgia for the pre-war or pre-conflicts period is on the increase everywhere in the region with obvious repercussion for future peace-keeping attempts. An article in East European Politics and Societies addresses this issue as Titolegacy for the case of Slovenia, but similar considerations could be applied to almost all countries in the Arab region, with symbols of ISIS now emerging in several shops and t-shirts. Increasing nostalgia is an important but often neglected psychological element of institutional transformation, since it leads to the creation of a collective memory which emphasizes, for example, the positive sides of the Saddam Hussein period (Saddamlegacy), while forgetting or under-representing the negative ones.
  2. Economic Repercussions:
    1. What kind of capitalism will be developed in the post global financial crisis (COVID-19) region? Will it be a state-led form of permanent emergency capitalism? The response, in this case, is an unpragmatic NOBODY KNOWS. On the one hand, fast neo-liberal reforms have speeded up the process of economic transition from central-state planning to a decentralized market economy (E/ESCWA/ECRI/2017/BACKGROUND PAPER.1), while, on the other, these reforms have implied huge social costs that may hinder further transformation. Capitalist transformation as it has materialized during the years in Eastern Europe has, in fact, been characterized by a reproduction of past elites (Capitalism without Capitalists Ivan Szelenyi said once). To quote only few of the worrying results, in 2006 (well before the current economic crisis!) only 30 percent of Eastern respondents believed that life is better now than in 1989, with market and democracy supported primarily by better off and educated people (that is the winners of transition). In addition, not only one in ten still supported a combination of planned economy and authoritarian government, but the levels of societal trust were even stronger prior to 1989 (book Post-Communist Welfare Pathways). In the Arab region, similar considerations apply (Arabbarometer).
  3. Social Repercussions
    1. Did the transition lead to the emergence of more ‘unequal societies’? Are these inequalities likely to increase due to the global financial (COVID-19) crisis? The answer, in this context, is unquestionably YES. Income inequality increased (and is increasing) throughout the Arab (Western Asia) region and so did (and does) poverty. New vulnerable groups are also emerging. These involve not only the “refugee community” and the unemployed because of war, but also those groups that were once to some extent protected, such as elderly (E/ESCWA/SDD/2017/TECHNICAL PAPER.16), women (ESCWA), violence against women is increasing (E/ESCWA/ECW/2017/2), children, young (E/ESCWA/SDD/2019/TP.2), orphans, the sick, persons with disabilities (E/ESCWA/CL2.GPID/2020/INF.5), migrant (E/ESCWA/CL2.GPID/2020/TP.5), with a decrease in their human rights (E/ESCWA/SDD/2017/TECHNICAL PAPER.8), etc.. The reforms of the social protection system in the welfare diamond (state, market, family, community (Jenson and Saint-Martin 2003 quoted in E/ESCWA/SDD/2009/Technical Paper.10 2009) have also, in several occasions, helped the reproduction of inequalities, whilst unnecessarily increasing social tensions instead of playing a crucial social pacifying function. In the book project ‘Post-Communist Welfare Pathways’, I was mentioning, the distinct welfare pathways taken by several countries in the region have been highlighted. These distinct welfare trajectories can be subdivided along the line residual versus comprehensive social protection. The first ones concerned primarily those countries that embraced a more neo-liberal policy-making, as in the cases of Hungary, Poland and more recently also Bulgaria and Romania (also the Baltic States) (please note that the ones that are facing more social tensions) and those, as in the cases of the Czech Republic and Slovenia, which, by contrast, have decided for more gradual reforms. An article in The Lancet, one of the world’s leading medical journals, has, for example, highlighted the huge social costs of wrong policy decisions. According to Stuckler et al. (2009) rapid mass privatization should, in this context, be seen as one of the most crucial determinants of differences in adult mortality trends in post-communist countries, accounting for up to one million lives. The global financial (COVID-19) crisis in the Arab region will clearly have a negative repercussions also on this (E/ESCWA/2020/INF.1), with “1.7 million jobs that will be lost” (E/ESCWA/CL3.SEP/2020/Policy Brief.1), “8.3 million people that will fall into poverty” (E/ESCWA/CL3.SEP/2020/Policy Brief.2 ), women that “will lose twice as much as men in terms of jobs” (E/ESCWA/2020/Policy Brief.4 ), “74 million in the Arab region at risk of COVID-19 due to lack of access to a handwashing facilities” (E/ESCWA/2020/Policy Brief.5) and an increase in “food security” (E/ESCWA/SDPD/2018/TP.7). During this period, it can be imagined that to every 1 percent of GDP decrease it will correspond a 0.6 years in life expectancy.
  4. Economic Vulnerabilities
    1. The global financial (COVID-19) crisis has put the modernization and democratization achievements of Western Asian and Arab region societies under stress. What kind of vulnerabilities in the global economy will entail the economic model adopted by these countries in transition? As it is known, these countries in transition have embraced an economic growth model highly dependent on oil and gas exports and FDI investments (Export-led economic growth model). This model entails dangerous Economic Vulnerabilities. As the key assumptions of dependency theory affirm, When the West gets the Cold, the East will Get Pneumonia or COVID-19. This is exactly what has happened and what it is happening in this region. In Eastern Europe, by July 2009, for example, Hungary, Latvia, Poland and Romania were forced to negotiate multi-billion rescue packages with the IFIs. Hungary negotiated a loan of $15.70 billion, Latvia of $2.35 billion, Poland of $20.58 billion, and Romania of $17.10 billion (Åslund, 2009, p. 2)1. Will the Western Asian and Arab region be forced to negotiate similar multi-billion rescue packages?
  5. UN-Western Asian-Arab Region Relations
    1. What is the role for UN-Western Asian-Arab Region relations in fostering further reforms towards democratization and consolidation of democratic institutions in presence of an increasing ‘legitimacy crisis’? UN Conditionality, as a push factor, has disappeared. International Financial Institutions’ (IFIs) Donor Assistance and Loans have turned into a boomerang. Dependency and debt refinancing squeeze (that is – dependency on foreign financial markets for debt refinancing) for one foreign loan out of several national junk loans are now occurring. Historic declines in foreign direct investments is the most obvious utilitarian response (E/ESCWA/2020/Policy Brief.6). UN Democracy Promotion and Protection (DPP) strategies have also been called into question. UN activities are for many countries a reality. Entrance in loan negotiations now entails a more substantial price to pay, especially in absence of efficient Social Safety Nets (SSNs). In absence of fiscal, political and administrative sustainable food and fuel prices (World Bank 2013), this concerns uneffective fiscal subsidies, food and fuel subsidies, school feeding or school supplies, active (forced) labour market policies, income support, conditional cash transfer programs (CCTs), unconditional cash transfer programs (UCTs), health care subsidies, human capital enhancing programs etc. (E/ESCWA/SDD/2014/BRIEF.7). Due to the losses caused by the global financial (COVID-19) crisis, the liberalization of markets, now full of speculators, also seems not to be able to promote those economic and social benefits that it is supposed to bring, and, in some cases, it also opens the door for reverse waves of economic modernization.

To conclude, the issues at stake here are several but in particular they concern the key dilemma of how to promote and to protect democracy in absence of new political, economic and social tools.

Footnotes

1 Due to their vulnerabilities in the open economy, other transition countries have also been particularly hit by the crisis and applied for special IMF loans. Armenia has recently been granted $540 million, Belarus $2.46 billion, Bosnia and Herzegovina $1.52 billion, Georgia $750 million, Kyrgyzstan $100 million, Moldova $118.20 million, Serbia $4 billion, Tajikistan $116 million, and Ukraine $16.40 billion (Åslund, 2009, p. 2).

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