The Atlantic Council’s Freedom and Prosperity Project, on October 28, 2021, in collaboration with the Rafik Hariri Center for the Middle East and the Tunisian Council for International Relations, hosts the second in a series of virtual workshops on strengthening economic freedom, rule of law, and representative government in different regions across the world.
This workshop focuses on the Middle East, and convenes a small group of former senior officials, business leaders, and scholars from across the region to discuss the credibility of the project’s message and how to communicate the message to stakeholders in the region.
Here are the key takeaways:
Why the message is needed
The Middle East is facing a race against time. For many years, oil-rich Arab states have been able to sustain themselves on fossil-fuel revenues and provide a comfortable living for their citizens through well-funded government bureaucracies. In the 21st century, this delicate balance is under threat. The Middle East’s population is growing, and there will soon be some 300 million people in the job market. Population growth, coupled with diminishing fossil-fuel revenues, means that already bloated government bureaucracies will struggle to provide employment to a younger generation of citizens.
The solution is to foster entrepreneurship, provide more individual freedoms, and increase the role of private business in the economy. The existing bureaucracy will have to be overhauled to make way for an expanded private sector. Basic business permits or licenses now take months to secure and may require bribing government officials. Large oil revenues have counterbalanced the state’s drag on the economy to some extent, but with the primacy of fossil fuels set to diminish, Middle Eastern countries will have to open their economies or risk stagnation.
What can be done
The private sector will have to play a larger role in the region. There are several economic measures that can be implemented. Regional integration should be increased to improve cross-border collaboration and trade among private businesses. Needless regulations and red tape should also be rolled back to incentivize startups and lower the cost of doing business.
However, greater economic openness must go hand-in-hand with political and legal reform. Meaningful economic improvement will not be possible if elites are able to hoard state wealth and guarantee their family members cushy government jobs. As Middle Eastern economies liberalize, it is imperative that state-owned enterprises are not transferred into the hands of elites (as it happened in Russia). To address this challenge, more transparency, especially around economic data, and good governance are needed. Corrupt elites disincentivize foreign investment, and greater transparency will both diminish opportunities for corruption and improve the ability of private firms to fairly compete.
Likewise, free markets require property rights and rule of law to assure investors that their gains will be secure. In pursuing stronger rule of law, it is critical that laws be reflective of Islamic cultural values. Many Arab nations inherited legal systems from colonial rulers, where law centered on harsh punishment meant to deter uprisings. If laws do not resonate, they are less likely to be obeyed. Judicial reform is sorely needed, but for it to be effective, citizens must feel that their legal systems are true to their existing culture.
A longer term solution is education reform that encourages greater individual responsibility. Arab children could be made to clean their classrooms as school children in other countries do. Likewise, Arab schools could hold elections for class president as is common in democracies. These solutions may seem trivial, but they would help to instill in young children the values of openness, agency, and accountability to others, which are essential for entrepreneurship and good governance.
Obstacles to reform
The most significant obstacles to reform are the powerful elites invested in maintaining the status quo. Chief among these are members of the military and security apparatus whose outsized influence in the economy allows them to enrich themselves and their cronies at the expense of the general population. Unfortunately, these groups may be willing to resort to violence in order to protect their positions.
It is not just corrupt elites who defend the status quo. Many citizens fear economic liberalization will result in privatization. They worry that introducing market forces is tantamount to handing state-owned industries over to government cronies. These fears are not unfounded. If people are to support meaningful economic and political reforms, they must first be confident that elites will not reap the benefits at the expense of the populace.
In addition, many citizens throughout the region support a greater role for the state, not less intervention. As a result of COVID-19, roughly seven-in-ten citizens in Algeria, Morocco, Tunisia, and Jordan now think the government should be allowed to limit freedom of movement and support governments tracking citizens’ location. Whereas open market democracies were once held up as a model to be emulated, their fumbling response to COVID-19, has greatly reduced their appeal and, for some, highlighted the benefits of a centralized system.
Even where there is appetite for reforms, leaders may exhaust their political capital long before populations see any tangible benefits. People throughout the region have seen the chaos of the Arab Spring and are reluctant to push for drastic change. No country wants to replicate what has happened in Syria, and many fear the instability that arises from political upheaval. People in Iraq and Libya now look back fondly on the days of dictatorship, when, despite the repression of the state, there was at least order and stability. While people want more freedom, they must feel sure that it will not come at the price of stability.
How to generate support
Despite the challenges, it is still possible to generate support for reforms. First and foremost, any message of reform must make people feel as though they have a chance at upward mobility. If people are to support meaningful reforms, they must see themselves as the beneficiaries.
Messages for economic liberalization should be communicated as part of a push for increased transparency, open governance, and legal protections. This will convince people that economic liberalization will help them enrich themselves and not only benefit elites.
To convey these messages, outreach should be primarily digital. Young people are a key demographic to reach and they form their opinions almost entirely through what they see online. YouTube is the new public library and Twitter the first port of call for news. Longer form articles and wordy reports are not engaging enough to catalyze people to support reforms. Short and engaging videos, combined with endorsements from influencers, will be the most persuasive way to push people towards change.
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