the Blog Papers of Dr. Michael Sakbani; Economics, Finance and Politics

Dr. Michael Sakbani is a professor of economics and Finance at the Geneva campus of Webster-Europe. He is a senior international consultant to the UN system, European Union and Swiss banks. His career began at the State university of NY at Stoney Brook,then the Federal Reserve Bank of New York followed by UNCTAD where he was Director of the divisions of Economic Cooperation, Poverty Alleviation, and UNCTAD`s Special Programs. Published over 100 professional papers.

Wednesday, May 18, 2011

the Arab Spring Four Months After: an Update

The Revolutions of the Arab Spring: are democracy,
development and modernity at the gates? An Update
Dr. Michael Sakbani*

The current revolutions of the Arab World are, according to many observers, the most important and exciting events the world has seen since the collapse of communism in 1989. By their sheer scale and potential, they are truly seminal events. If successful, they promise a radical change in the conditions of 340 million people and a transformation in one of the most significant areas of the world. For the Arab people, they might signal to rejoin history.

Placing the Current Arab Revolutions in a Historical Perspective

The Tunisian and Egyptian revolutions and the revolution- in-making now in Libya, Yemen, Syria and perhaps elsewhere, are to be seen as the fourth phase of the historical evolution of the Arab World in modern times. The first phase started with the Great War of 1914-1918 which broke up the Ottoman Empire and instead of realizing the promised and cherished goal of establishing an Arab state in Greater Syria and Iraq, the Sykes-Picot pact divided the Arab countries of the Middle East into five statelets. The years between the end of the Great War and that of the Second World War were times of struggles for national independence in Egypt and these statelets.
The priority attached to national liberation in countries suffering from underdevelopment due to over 700 years of multifaceted stagnation did not allow time for maturing an experienced leadership. In the event, a modest class of political leadership with limited horizons was in place. The nationalist leaders of the struggle for independence were rather sincere traditionalists who had little know-how and practically no living experience in how to build and run a modern state.
Emerging from the Second World War, the creation of Israel in 1947 and the war with the Zionists the year after, diverted the Arab World from following a development and modernization path into one of facing a national calamity. The establishment of Israel in 1948 and the war that followed it were cruel tests for the leaders of the newly independent states. It exposed their lack of seriousness and the deficiencies of their states and societies. In a short time thereafter, a series of coups-d’états started in Syria in 1949 followed by Egypt in 1952, Iraq in1958 and Yemen in1963. These brought forth a new nationalist leadership with instincts for reform. The new leaders, however, were militarists with more political nationalists zeal than know-how about state-building and societal transformation. Although Egypt had the luck of still having the state built by Mohamed Ali, the other Arab countries had to start from scratch. Nonetheless, the military coup in Egypt brought forth the charismatic leadership of Jamal Abdul Nasser, who was able to evolve his coup into a revolution and set in motion several important reforms in Egypt. Nasser espoused effectively a Pan Arab cause with a Pan Arab unification program and mobilized all the Arabs behind his leadership. However, the Pan Arab Program was not developed on the social, economic and political fronts. Whether it was the Baath or the Nasser variety, it lacked an effective development model and copied the socialist economic model without having the necessary preparations for growth led by a public sector. It also applied the model of one-party state dependent on the security apparatus and based on the absence of freedom. In the social arena, the new regimes held a truce with the traditions of the society without offering thereto any critical examination. This second phase continued till 1970.
The 1967 war tolled the defeat of this system militarily, but perhaps more importantly, sounded the failure of its programs. There was a significant rethinking of the model after 1967 but the division of views between advocates of opening up and those of more affirmation of the socialist étatist model did not allow the swift corrections necessary; the exigencies of the war of attrition in 1968-1970 dominated everything (Haykal, 2010) .
The unexpected demise of Nasser in 1970, allowed the emergence of new leadership with regional rather than national perspective and an enhanced sense of political domination and security preoccupation. Thus, the Arab World entered into the third phase of its modern development. The new leadership seemed to have an overriding mission: to abandon the previous policies in all the domains, foreign and domestic, social or economic. In Egypt, the traditional Arab leader, Sadat marked the end of the Nasser era. He played upon the contradictions of the society rather than dealing with them and abandoned the Arab leadership role of Egypt and changed Egypt's foreign policy.
In Syria and Iraq, the divided Baath regimes slumbered into more dictatorship, more control and more economic restrictions. The dominant public sector allowed no room for a market- based mixed system, and in itself, produced little economic development. Parallel developments took place in Arab North Africa and in Yemen. In the traditional monarchies and principalities of the Gulf, the rent based oil economies postponed any serious social and political transformation
Over almost three decades these systems became frozen in time. Their lack of legitimacy and popular accountability bred in them a sense of ownership of the state and its resources. In some countries, Syria for example, the President's budget became independent of the State budget and kept as a state secret. A beneficiary class developed around the regimes which operated a Wild West type of Capitalism with no regulations or effective market checks. This new class used its proximity to the regime and connections to its dominant public sectors to enrich itself and wallow into pervasive corruption.
A disturbing development was the abandonment of the concept of the modern citizen-state and the descent into a pre-modern norm of state based on family, region, tribe, sect or party. We saw that in Syria, Iraq, Libya, Yemen, Egypt and Algeria. One result was the disregard of Public Opinion and the total absence of the will of the populous in the regimes` choices and political calculations. As a matter of fact, support of foreign powers came to substitute for popular legitimacy; Mr. Mubarak spent his last two years, lobbying for US support for his succession by his son!! The other states close to the US believed that the US holds all the cards and all the power in the region and thus followed what it asked them.
The Arab regimes started after 1970 to cohabit with a dormant, but always present, current of political Islamists. This current started a societal movement towards authenticity based on backward- referencing to traditions and upholding the old historical Islamic state example as a political program. It bolstered its legitimacy with a clear reference to the failure of the prevailing autocratic regimes (Sakbani, 2007)1 .
With the advent of the Twenty-First Century and its revolution in communications, social networking, and information, the regimes lost their monopoly on information. The Arab societies started to realize that their governments have not only denied them political participation and control over their lives, but have produced very little in the social, economic and educational domains; the military regimes could not even protect them against Israel. The old references to nationalism, Palestine, the struggle for patriotic sovereignty and social redistribution of wealth, became empty and obviously self- serving slogans. Instead, the new generation, aware of the world and other societies and capable of expressing itself through the new media, and even the old generation with their disappointments and stoic sufferings, started to long for freedom, for liberal democracy for reforms of everything around them. It was no longer ideology that they sought but dignity and respect of the individual. This is how we enter with these revolutions the fourth phase of modern Arab development.
The current Arab revolutions, more than anything in recent memory, might reveal the irrelevance of much of the received political wisdom about the readiness of the Arab societies for democracy. One has often wondered why the Arabs, people of great wealth, talent and major civilization, have been so far behind others in the march to freedom, political liberalism and democracy. There was no dearth of facile explanations: ranging from the tired clichés about Islam, to the imperialist anthropology of condescendence espoused by the Orientalists, to the Islamic fundamentalists` rejection of democracy. The Tunisian and Egyptian successful but unfinished revolutions together with what is now unfolding in Libya, Syria and Yemen and elsewhere, simply discredit much of all that. The youths of these countries showed that the oppressive autocratic Arab regimes and their security apparatuses are not to be feared; they can be challenged and even thrown out. The psychological barrier of fear was thus broken. Henceforth, the tyrants who have been in power for a generation and plan to have hereditary republics could no longer sustain the status quo. While the ultimate outcomes of these popular revolts are yet unknown, the future will not include despots with a one-party system, militarists with the power of the gun, and even hereditary autocrats with wealth and tribal alliances. The Arab street is discovering its power to say: enough, no more.

Why have the despots collapsed so quickly?
Some observers have expressed their astonishment that such long repressive regimes could collapse so quickly as if they were made of carton. The observation is rather too simplified; for most of them have indeed stood for a very long time. When their end came, one could see that their accumulated failures and inability to change made the end inevitable. The failure was multifaceted enough that it left their citizens incapable of answering for themselves the purpose of having such governments. The irrelevance of government to the average citizen led to a stoic resignation enforced by fear and hopelessness. But living is all about hope; and this is especially so among the young. The young who could not immigrate were caught in Mohammad Bouazizi syndrome of despair. The Tunisian fruit vendor, harassed by the police had to choose between immolating himself or rising, at the peril of his life, against those who deny him a decent existence; the cost of the choice being the same, fear should no longer be there. This is what ignited the revolution
Of the despairing youth, the youth that has been outside the compass of the regimes and what is left of the feeble opposition.

A Catalog of Failures
The political system
In the catalog of failures, the political one is obvious to all; in the Arab world, politics ceased to exist. The one-party state anchored on the security apparatus and possibly the Army, which has been the norm in the Arab republics, has bulldozed the political and civil scenes and left no civil institutions. The old political parties were banned and, in time, disappeared. The permitted opposition parties live by the grace of the regime and in obedience to it and generally lack popular bases. Civil society institutions like trade unions, professional associations and advocacy institutions are under regime control. Without freedoms of expression, of assembly and of association, the society has no opinions, no views and above all no public debate. In short order, the insular leaders trusting only their cliques and beneficiaries and having no independent expertise in the public function, trapped themselves into a bubble. Their cut off from their people was semi-complete and their dispossessed citizens came to feel the alienation of the outsiders. In this world of the dysfunctional state living in the eternal status quo, the decision-making circles are the protectors and beneficiaries of the regime and they function in perfect insularity and often lack of expertise and empirical knowledge. We now know
the delusional hubris under which labored Saddam Husain, Bin Ali, Hosni Mubarak and Mouammar Gaddafi.

To a larger extent than the rest of the Arab World, Gaddafi dismembered the Libyan state institutions in addition to the institutions of the civil society. He replaced these institutions with popular committees, which are sort of his security militias. One of the main victims is the Libyan Army which has been kept weak and small. Mr. Gaddafi who holds no institutional position is however in full and single control of the country. In this system without institutions, Gaddafi and his son, who also claims no positions, appeared on Libyan public TV to threaten the revolutionaries and promise a fight to the finish. We are thus in the realm of a family state.

The Arab leaders did not come to power by popular choice; they came by military coups, party takeovers or hereditary means. On the whole, they seem to have had no vision or intellectual capital. Perhaps some, like Nasser, had an instinct for reform. In his book on
the years of the White House, Henry Kissinger remarked that one enters government service with a certain amount of intellectual capital and vision. After four to five years, according to Kissinger, one has to come out for renewal of one’s exhausted capital. In the Arab countries, the leaders did not have this problem; they entered free of vision and capital, and to govern they stayed until the onslaught of political Alzheimer. The people they saw and consulted were like themselves, exhausted old hands. Some Ministers and councilors were in the same place for two decades; the Prime Minister of Bahrain has been in office for 42 years. The insularity of the regime led to thinking that after the Pharaoh leader is no more, the best replacement is his son.
Political failure includes the absence of freedoms. Limitations on freedom in politics, civil society and the economy together with state domination over citizens, lock up the capacity of the society for self-help and deprive the country of its elites. It has been a sad specter to veterans of international fora as this author, to see so often under-qualified Arab representatives and officials in international meetings. Time and again, the lack of freedoms along with the dearth of economic opportunities, have been the driving forces of brain drain in the Arab World.

Failure of economic and social developments
Another class of failures is in the economic and social developments. In the early 1950`s, many Arab countries, like Syria, Lebanon and Iraq were as well off as South Korea, Malaysia and several Latin American countries. In some indexes: literacy and GDP per capita, Syria and Lebanon were favorably comparable to Turkey and South Korea. Five decades after, they remain underdeveloped while the comparers have become dynamic developed countries. The failure here is undoubtedly due to wrong policies, wrong choices of economic systems, enchainment of the society and inability to review and reappraise the choices. A closed system neither knows what is happening around it nor what is happening to it.
In Tunisia, Libya and Egypt, where half of the population is below thirty, the respective economies proved incapable of offering jobs, basic necessities, and hope for a better future. The rate of unemployment among the youth in Tunisia, according to ILO statistics, has been 31 % (among some university graduates 44%). In Egypt, youth unemployment is estimated at 21%, almost double the general unemployment rates (ILO, 2011)2. In Egypt, the economy creates 65 % of the jobs needed to accommodate the new entrants into the labor force, while in Tunisia it creates 75 %. In Libya, the unemployment rates were 40 % for the youth and 30% for the general population (ILO database, 2o11)3 . These dismal statistics are in the same league as the rest of the Arab region. In comparison to other developing regions, the Arab region has 10.5 % of its population unemployed- 10.5 in the Middle East and 10.2 % in Arab North Africa - whereas East Asia has 4.1 % and South Asia 4.3 % (Tzanattos et al., 2011)4 .
Interestingly, neither Egypt nor Tunisia nor Libya has been doing badly as regards their per capita incomes and their rates of growth. The rate of GDP growth in Tunisia has ranged from 3 to 4.7 percent in the last three years (ILO, Employment Statistics, 2010, CIA, 2011.)5 . In Egypt, the GDP growth rate over the last five years ranged from 4.5 to 7 percent; it has averaged 6% over the last decade (World Bank, 2010.) . In Libya, the GDP rate of growth has ran between 3.7 % in 2006 and 9.0 % in 2007, but an odd 2.1 % in 2009. The GDP per capita is a high $ 12020 (League, 2010.)6. These rates are higher than most European and developing countries. Yet, the growth of the economy has not generated enough jobs. In Egypt and Tunisia, this is due to the significant increases in trend productivity relative to labor inputs growth. In contrast, the Libyan economy generated a lot of jobs for trained and skilled workers, but those were filled by foreigners. According to the CIA, 30 % of the Libyan endogenous labor force is unemployed.
Perhaps, the spotty increase in income, by virtue of its skewed distribution, brought about rising expectations. In any event, the oligarchic nature of the ruling regimes seems to have skewed the distribution of income and wealth: thirty percent of income growth in Egypt accrues to the top 10 percentile of the population and 3.7 % to the lowest 10 percentile. In Tunisia, the respective figures are 33% and 2.3 % (World development Report, 2010)7. We know from comparative economic statistics that the distribution of wealth is usually considerably more skewed than income distribution. Mr. Bin Ali`s family, friends and other beneficiaries, became certainly very wealthy, as did the Mubarak’s and their business clique. The Press reported, without documentation, billions of dollars stowed away in various places. According to the Guardian, the Mubarak family has amassed a fortune of $ 30 billion, whereas the CIA places it at “a modest”$ 4 billion!! In the event, the skewed distribution of wealth and income created impoverished masses with disappointed expectations and withered away at the middle class. Forty percent of the Egyptian population lives below the poverty line, on less than two US dollars a day. Tunisia is better off, but not in relation to its per capita income, which is 3.7 times higher than Egypt’s. This descent into misery has taken place in full view of the social media, with the TV screens displaying daily the going and coming of the lifestyle of the rich and the corrupt.

Another aspect of economic failure has been the emphasis on imported consumer goods in the context of the total liberalization of trade. In 2010, Egypt ran a trade deficit of $22 billion and its current account was $ 5 billion in the red. Egypt's foreign debt exceeds now 75 % of the GDP (Central Bank of Egypt, 2010)8 . Tunisia`s deficit was $4 billion in 2010 (Banque Centrale de la Tunisie, 2010)9. Both countries were severely hit in 2010 by the increase in international commodity prices, in particular food prices. In 2010, overall inflation was 13 % in Egypt and 14% in Tunisia (W. Development database, Egypt, 2010)10 In both countries, however, given their dependence on food imports, the rise in international food prices, which has exceeded 25 % in some basic staples, hit the budgets of the poor consumers with full force. Had the two countries been to some extent self-sufficient in food and basic goods, the impact would have been significantly attenuated. In the event, the poor came to be squeezed mercilessly where their demand is perfectly inelastic. Economists and market analysts are unanimous that food prices will follow a rising trend in the foreseeable future. Thus, the Arab countries would be better served to work for substituting for food imports through local or regional food production schemes.

The industrialization of the Egyptian economy and the technological development of its agriculture and infrastructure started in the late fifties` under Nasser. It was led and dominated by an unprepared public sector. However, this process was effectively aborted in the 1967 war and its aftermath. At any rate, the public sector-led growth had only limited success. Thus, it was effectively abandoned under Sadat and rejected under Mubarak in favor of the private sector. The experience of Egypt over the last twenty years shows that the private sector has proved, on the whole, disinterested in agriculture or industry, except light two to three-digit type transformations. The bulk of investments have been in commercial activities and tourism. In Egypt, the value-added of the industry to the GDP ranged between 28 and 30 percent, whereas services ranged in the last five years from 66 to 70 percent of the GDP, and agriculture, only 4 to 5 percent (WD, database, Tunisia,2010)11. Given the limitations on arable land in Egypt and the size of its population, neglect of industry and technology-based products is rather the wrong choice. In Tunisia, the pattern of growth emphasized the service sector, in particular, tourism in addition to light transformative industries. Services accounted for 59 to 62 percent of the Tunisian GDP in recent years (World Bank,2010)12 .Tunisia also developed here and there pockets of its infrastructure, especially in human resources.
To be sure, it is perfectly acceptable for an economy to develop its service and commercial sectors. However, if economic dependence on foreign imports is to be at acceptable levels, it is imperative to couple that with productive real sectors capable of producing in a sustained fashion, jobs and essential real goods. Libya`s pattern emphasized its oil and oil derivatives industries. Lately, foreign direct investments have begun developing some service and transformative industries. It is telling to note that almost all the autocracies have palliatives like food and fuel subsidies to defray the burden of the populous instead of developing their productive capacities. This composite failure was on display in the recent revolts as we saw on the TV screens in Cairo and Tunis the coming together of the poor, the unemployed youth and the withered and diminished middle class.

Education, knowledge and R&D
In the non- oil economies, the above failures are associated with the deterioration of the quality of education and learning. Given the dearth of resources, pressure on the system of education due to the double coups of more egalitarian educational opportunities and galloping population growth, has resulted in deterioration of quality and neglect of specialized technical learning. According to UN reports, only two Arab countries, Libya and Bahrain, can provide all their youth with the opportunity to acquire appropriate education at high levels (Arab Education, 2010)13. The UN Report on Arab Education documents in table 3.3, the inferior results of test scores of degree holders; only 12% scored good results (Arab Education,2010)14. In higher education, there is not a single Arab university among the top four hundred universities in the world Academic ranking, (WCR, 2010)15. The picture is more somber if the oil-exporting countries are excluded, as they have spent in recent years significantly on education.

Of particular alarm is the widespread illiteracy of Arab women. The Human Development Report estimated that in 2005, 60 percent of females were illiterate (UNICEF, 2005)16 . Despite the increased enrollment of women in all levels of schooling, especially at the university level, their stock is still limited. The energy-exporting Arab countries plus Jordan and Tunisia, have boosted significantly the number of women in tertiary education, but the problem is that high education in the Arab countries remains separate from employment needs and in the case of women, not fully deployed. It should be recalled that many of the manifestations of social development are associated with the spread of literacy and the availability of jobs for females. Outside the agricultural rural sector, female labor participation rates are less than a fourth of the males’ rates. The received traditions of Arab societies with all their restrictions on women and their external role, are not helpful in this regard; women labor participation rates in the Arab countries are much below those of other developing countries, and ironically, Tunisia has one of the best. No society can become modern and fully productive if women are relegated to home and household work. On the basis of a capital-output ratio of 3 to 1, and using Ockun’s law, it can be shown that raising the participation rate of women to 40 % of the national labor force, would add 1.2 percent to the trend of GDP growth. The revolutionary republics proved to be just as backward in their orientations as the traditionalist kingdoms and principalities. Finally, the refuge over the past three decades into authentic traditions, known as “Islamic Awakening”, has reinforced the back -referencing to ancestral traditions in Arab societies, thereby increasing their cut off from contemporary modernity. This adds to the failure of modernization and feeds into social obsolescence.

The total expenditure on research and development in the Arab world does not exceed 1 percent of the GDP in the highest-ranking country, Tunisia. The UNESCO’s Science Report of 2010 estimates R &D expenditure in Egypt at 0 .23 of 1 percent of the GDP and in Libya at 1.2 % (Science Report, 2010)17 . This compares with an average of 2.2 percent in the OECD countries and higher than that in the US; Japan, Israel, Malaysia, China and South Korea. Qatar has set an ambitious 2.8 percent to be reached in five years. Saudi Arabia and Libya have also ambitious plans. But the rest of the Arab countries spending on R & D ranks among the lowest in the world. Absent governments’ commitment to R & D, the private sector expenditure operates in a vacuum. Development of knowledge and knowledge applications is the bedrock of advance and the source of growth of productivity which has historically accounted for two-thirds of GDP growth in almost every country. After the passing of the fossil energy era, the Arab countries’ future problems will be in water resources, in desertification, in food production and coping with climate change, all of which needs knowledge and research.
The failure of educational transformation condemns social and economic transformation. In the global economy, only the educated and well trained will have a chance and only economies with a capacity to export and trade have been successful. Egypt, Libya and Tunisia, like all other Arab countries, are insignificant participants in world exports outside the oil sector.

Egypt and the Arab Vacuum
Rounding up this catalog of failures, is the feeling of most Egyptians, and other Arabs, that the absence of Egypt under Mubarak from playing an Arab role has created a regional vacuum. Mubarak egged on the US in invading Iraq. The Wikileaks papers reveal his contribution to the false intelligence about Iraq’s claimed weapons of mass destruction (Wikileaks, 2010)18. He kept silent during Israel's attack on Lebanon. His foreign Minister and the Egyptian controlled media blamed the Lebanese resistance for provoking Israel’s attack on Lebanon. When Israel attacked and savaged Ghazza, Mubarak stood silent and continued his blockade of the tiny sector, thus, effectively becoming an objective ally of Israel. During the last five years leading to the division of Sudan, the strategic depth of Egypt, Mubarak was a passive observer toeing the US line. The same can be said regarding both Egypt’s role in Somalia and after the invasion of Iraq. The shrinkage of Egypt’s role in the region created a vacuum filled by the new non Arab players, Turkey and Iran, who have their own agendas. Egypt also abandoned under Mubarak its old role on the world scene. All of that rendered Egypt a third rate state.

The Social Media and Communication Technology

The widespread use of the new communication technology and its associated social media among the young turned out to be decisive in these youth revolutions. A quarter of the population in Tunisia has computers and there are an estimated 10 million users in Egypt. In addition, there has been an enormous spread outside government control of satellite TV (some one hundred such channels), some of which like Al Jazeera, are among the most effective in the world. Given the very high ownership of portable devices, the media brought the world to Arab citizens. It informed their vision of it and opened their eyes to their marginality in their own countries. On the other hand, they circumvented the restrictions of martial laws on assembly and association and opened a digital space of communications. Years of advocacy on Satellite channels of human rights, of lamenting the absence of representativeness of Arab governments and the lack of freedoms, entered the cultural consciousness of the youth. For this youth, rising expectations juxtaposed themselves against their reality of economic misery and, in the process, created the combustible material from which the sudden revolutions ignited. On the TV channels and on their smartphones, they saw the events in Tunisia. Their phones and computers also enabled them to communicate and spread the facts without censure or “retouch”. On the occasion of the death under torture of blogger Khaled Said, a day of rage was staged to coincide with the Day of Police. The youth went to Tahrir Square in the thousands and held there bravely for two days. The authorities’ response was violent repression. This violence elicited a popular reaction. Soon, the youth were joined by others and thus were set in motion the seminal events of the last weeks.
When the regimes faced large masses of the population, neither the Army was able or willing to protect them, nor were the security forces capable of killing enough people to maintain their masters. In the end, the people proved to be the only force that determines who governs.

Contagion and Prospects

The various Arab countries still under authoritarian autocracy, have different conditions and dissimilar backgrounds. But they share the failures expounded above. They also share, to varying degrees, the pervasiveness of corruption. This is both a source of susceptibility for contagion and caution about possible failure.

Candidates for the First Wave
On objective grounds of dysfunctionality, contagion is likely in Yemen, Sudan, Jordan and the Palestinian territories.
In Yemen, President Ali Abdullah Saleh has been in power for thirty-two years and despite his consummate skill in manipulating the various opposing groups and his gift for political theatre, he has achieved very little outside securing Yemen’ s unity and building the unified Yemeni state. Large chunks of the country are excluded from executive power and the North and South are in quasi-open rebellion against him in the center. He has run a family and tribal-based regime, which has perpetuated Yemen’s obsolescence.
Yemen is among the least developed countries in the world. It boasts an unemployment rate of 40%. Ninety percent of its exports are accounted for by the little oil it has and 75% of its government revenues come from this single source. Of the Arable land, 35% is used for cultivating the helucigenic Kat. Its tribal society has built-in fissures. Interestingly, however, during the recent demonstrations, Yemen’s national unity was not in question. President Saleh’s problem is lack of credibility; he promised much in the past but delivered little.
The political opposition, the “Joint Rally”, has used the freedom margins allowed by the regime to demonstrate and ask for political reforms. These on and off protests soon were joined by the youth from the Universities, in particular the University of Sanaa. Within a few days, various personalities and various other groups joined the demonstrations. By the third week of March, the protest movement had gathered momentum, become continuous and countrywide. On March 10, president Saleh offered to change the constitution and turn the system into a parliamentary democracy at the end of 2011. He also invited the opposition to join a national unity government. Finally, he proposed the full decentralization of administration into three regions. Had such a package been offered two months before, Yemen would have probably kept quiet. This is again too little too late.
The momentum of the drive for regime change has led the protestors to promptly refuse the offer and to insist on the President's immediate departure. As the protest became overwhelming, President Saleh’s regime, in obvious panic, struck with force against the demonstrators. Fifty-two people were killed, and hundreds injured Friday 18 March. In the wake of that, several Ministers and ruling party officials and deputies plus 6 army generals and 12 ambassadors, resigned in protest and joined the demonstrators. In the throes of the finale, President Saleh offered to resign in 2011 after organizing presidential elections. But again there were no takers.
Meanwhile, the demonstrations continue everywhere. The security forces once more struck in Taaz and Hudayda killing some thirty people and wounding hundreds. President Saleh has clearly lost legitimacy.
The armed tribal composition of Yemen does not permit the complete triumph of either party. Thus, a compromise must be worked out for an exit for Mr. Saleh that preserves Yemen`s unity and paves the way towards a federated sharing of power among its three regions. Indeed, the GCC states offered in April such a compromise, but President Saleh initially refused it. With unabated demonstrations calling for his exit, he changed his mind and accepted the offer. The GCC initiative produced a compromise that provides immunity for Mr. Saleh in exchange of his leaving power within thirty days to the Vice president provided that the Parliament approves that. It also calls for forming a national unity government. The compromise was accepted on April 25 by Mr. Saleh and the “Joint Rally” opposition but not by the revolutionary youth. The youth placed reservations on the provision of parliament approval and insisted on immediate departure with no immunity. The split in the Opposition prompted Mr. Saleh to change his mind once more. Obviously, this is a political maneuver to find a replacement acceptable to Saudi Arabia, the power behind Mr. Saleh. and to obtain maximum concessions. However, the Saleh- Saudi game of keeping Yemen in flux is a dangerous and destabilizing gambit. Mr. Saleh is bound to exit and the sooner that happens, the better off is every Yemeni.

In Sudan, President Omar al Basheer came with the Islamists to power in 1991. In a few years, he kicked out his original partners and clamped military control over the political life of Sudan. Over the past five years, he has managed to lose South Sudan by making
all kinds of wrong decisions. He has devastated Darfur and brought upon himself an indictment for crimes against humanity. Two months ago, he got himself re-elected unopposed for another term. And after the dismemberment of his country, he refuses even to change his cabinet.

The Palestinian authority on the West Bank and Hamas in Ghazza, have both become illegitimate as their terms expired more than a year ago. The Palestinian Authority has been negotiating with Israel for 19 years without results. As the WikiLeaks’ papers show, its policy seems to consist of offering Israel one concession after the other without a quid pro quo. Its lack of strategy and accomplishment is only matched by Hamas whose avowed resistance is negligible and its strategy leads nowhere. Meanwhile, the Palestinians `suffering continues under occupation and, given the split of the Palestinian leadership and the aggressive colonialization policies of Israel, their cause has never faced bleaker prospects. In full frustration, hundreds of thousands started on 14 March demonstrations in Ghazza and the West Bank to force reunification and new elections of the Parliament and the executive. Indeed, towards the end of April Fatah and Hamas announced that they have accepted an Egyptian paper to settle their differences, and this agreement was formally signed by all factions on May 4th in Cairo. According to the agreement, there will be a transitory independent unity government that will supervise elections for both the parliament and the president.

King Abdullah II of Jordan, who came to the Crown on a promise of openness and reform, has achieved very little on this score. He has used the same faces and families of collaborators as his father. He is far from a constitutional monarch and acts more like a dictator. To his rather modest economic record, he has added a deepening division among his citizens between Palestinians and Jordanians and tolerated rampant corruption. While Jordan has done well in education and public health and allowed a measure of freedoms, its social development has been rather modest. Right on the heels of Tunisia and Egypt, Jordanian youth started popular demonstrations asking for reforms, economic opportunity and ending corruption. After a security reflex, the King changed twice his cabinet and formed a Commission for Dialogue, which started to meet on 19 March to discuss comprehensive reforms. This Commission has so far discussed reforming the election and party laws and is working on constitutional amendments.

Candidates for the Second Wave
If the rulers of Syria, Algeria, and Iraq do not head the urgency of reforms, they might also be facing popular revolts. It will be more difficult and more bloody in these cases, but still inevitable.
Algeria, with its bloody experience of Islamists revolt, has a measure of freedoms, but its political system has been dominated by the same ruling party and the military oligarchy behind it for two decades. The country has a massive unemployment problem, especially among the youth, but holds $ 80 billion in Central Bank reserves!! President Boutaflika is facing riots and repeated protests. He has to start overdue political and economic changes. He abolished the emergency laws in effect for 19 years, distributed social state aid and promised more reforms.

Syria, long isolated and ruled for 41 years by the Asad family, has not been doing well economically since the mid 1990`s. After a vigorous growth of 360% for the two decades of the 60`s and 70`s, the real GDP retrenched in the 1980’s and reportedly went down by 33 % !! In the 1990`s, the average GDP growth per annum was only 1.1 % (Wikipedia,2010)19 . In the years since 2001, The GDP annual growth has averaged about 3.0 %, while the growth of the population has run 2.8 %. From 2008 to 2010, the GDP grew by 4.3 %, 5.0% and 4.0 % respectively (Economy watch & CIA,2011)20 . These are modest and unstable figures in comparison to well-performing developing countries (World Bank data)21. There is rapid population growth and consequent high, 20% unemployment (CIA & Sakbani`s comment)22. Adding to these problems is the secular decline in oil revenues and the failure of agricultural crops in the last four years. As a result, the Syrian per capita income has fluctuated at a staggering amplitude over the years. At any rate, over 2008-2010, the per capita income (on PPP basis) ranged from $4600 to $ 4800 (CIA, 2011)23 . It would be half that on current exchange rates.
The Syrian economy remains state-dominated, inefficient (54 of 93 public sector enterprises are in the red) and suffers of low investment rates. Part of the explanation is the decline in public sector investment in recent years and the modesty of domestic private sector investments. Despite laws and measures to encourage foreign investment, Syria’s share of all types of such flows is modest. The lagging investment was not helped by the domestic private sector seeming practice to exploit its connections to the decision-makers to invest where it gains quick monopoly profits rather than building up the economy. In general, an aura of mistrust and apprehension about the heavy hand of the public sector is still in evidence. The Syrian middle class is reputed for its entrepreneurial spirit. Yet, the policymakers have advanced hesitantly towards liberalizing and opening up the economy (WTO application)24. The liberalization efforts of the last four years, still fall short of what is needed and the government continues to lack economic credibility.
The Syrian political system is frozen into one party setup with nominal, essentially approved opposition. Despite Syria’s clever foreign policy and honorable stands on various Arab issues, its population needs besides that to see improvements in the living conditions. Official statistics put 12 % of the population below the UN poverty line. This is a rather counterintuitive underestimation (Sakbani`s Note)25. After 48 years of rule by martial law, Syria needs liberalization in the laws and practices covering expression, association and assembly as well as in the economy. There is also an urgent need for improving Syria’s record on human rights and the protection of individual dignity, as well as curbing rampant corruption.
Against this background, demonstrations erupted in Syria shortly before mid-March. They were first for releasing long-imprisoned political activists. Then on Friday 18 of March, they became about asking for political reforms, for stopping corruption and respecting human rights. The Government first dismissed the demonstrators as bands of terrorists and hired agents and reacted with a security reflex, killing several people. In the city of Daraa, after the security forces killed 12 people, they fired on the public funerals that ensued. Five days later, the security forces killed 21 people and injured more than a hundred in a crackdown on demonstrators barricaded inside the Omar mosque in Daraa.
On Thursday, 24 March, Ms. Buthayna Shaaban, a senior aide to President Asad, announced in a press conference several decisions of the Regional Command of the Baath Party. The important ones are to have a committee to study lifting the 48-year-old martial law, another one concerning the forming of political parties and a third for the freedom of the Press. She also promised laws and dispositions, fighting corruption and increasing salaries. These are positive steps, but they are promises from authorities that have been notoriously slow in everything. Part of what has to be reformed in Syria is the one-party system and yet, the reform seems to be under the auspices of the Baath Party. The power structure in Syria: the state security, the Asad clan and other beneficiaries and the party, have surely a vested interest in the status quo, and they may very well obstruct reforms.
Due to the absence of transparency in decision making in Syria, we do not know who in the regime is for or against reform. The day after Ms. Shaaban expressed the sorrow of President Asad for what has happened, the security forces opened fire on demonstrators in several Syrian cities killing and injuring dozens of people. So, is this double talk or are the security forces really in charge?
President Asad inherited a heavy history with a power set up afraid of change and avert to openness. He must face this reality assured in the observation that he has popular backing for overdue change. He faces now the choice of his life: will he announce to his public a clean break with the past, or will he make another set of promises to patch up the system, which like their antecedents probably remain unfulfilled
The Syrian regime faces unavoidable issues in need of immediate decisions even though some, like the economic issues, will take time to bear out their results. Nevertheless, the survival of the regime depends on its alacrity and decisive sense of the new reality.
The first issue is the abandonment of the special status of the Baath Party enshrined in article 8 of the Constitution; it cannot be acceptable anywhere in the world today that one party be the sole leader of the society and the state. Opening up the political system to the electoral competition is not only imperative; it is the guarantee of continuity for the Baath Party. After forty-eight years in power, if the Baath cannot compete in free and open elections, it should abandon the reins of power to others. The second issue is freeing the system of undue sectarian and family specificity. This has been started by the President but it needs continuity and further concrete demonstration. On this score, it did not help Mr. Asad that his cousin, the billionaire Rami Makhlouf, a man with no official status, gave an interview to the NY Times declaring that the regime will fight to the end with all it has. There are those who want to transform the political issues of Syria into sectarian ones; the type of deviate slope witnessed in Iraq. The Latakia riots on 26 March -12 killed- are a warning that Syrian sectarian pluralism can be exploited and activated by the forces of intolerance and clannish predilection. In this context, it is reassuring that the loudest chant of the demonstrators has been that Syria is one people united. The third issue is to convince all power centers of the regime that popular legitimacy under liberal democratic institutions offers them and everybody else the best protection. It is also the only guarantee for the safety and stability of Syria. The fourth issue is to embark upon fundamental economic reforms. That includes revamping the role of the public sector in a market economy along the lines of the successful models of Turkey, Malaysia, Brazil, Chile, Taiwan and South Korea and not on the empirically unfound claim of specificity of Syria espoused by the former Finance Minister. The economy needs to be further opened up and the state should do all it can to promote small and medium-sized enterprises, who generate everywhere in the world most of the employment. Syria needs to develop its export capacities, in particular technological-based products. The lagging investment can be helped by liberalizing, under wise regulations and enforced competition laws, access for both foreign and domestic investors. Syria should take advantage of Arab Foreign Direct Investment as well as FDI from technologically advanced sources and encourage through industrial policies, any investment of strategic economic potential. Another issue is to face up to the need to revamp the government security apparatus and terminate its practices outside the law; a state that seeks security through creating fear and mistreating its people is a failed state. Egypt has recently offered a good example of security reorganization. Finally, the regime must chart out a road map for democratic conversion, which includes new laws for parties and civil society bodies, new laws of the press and public assembly, assuring the independence of the judiciary and putting it in charge of future elections, new election laws which open up the electoral process to all and transforms the parliament to a fully elected and representative body. The present largely appointed Parliament disgraced itself when its members greeted every word of the President when he addressed them in a slavish and undignified mob scene. A truly representative new parliament should presage writing a new democratic constitution. President Asad, a modern man attuned to his times, has enjoyed until recently a favorable public image and important personal popularity. This should embolden him and the Party to move swiftly on reforms and attain due popular legitimacy.
On 30 March, the President gave before the Parliament a long-awaited speech about the Arab events and Syria’s reforms. The speech basically endorsed the need for reforms and explained that external circumstances changed priorities and caused delaying reforms. Nonetheless, it portrayed the pro-democracy events in Syria as a part of a conspiracy to seed sedition and division under the guise of demanding reforms. Regrettably, the speech announced nothing concrete and was largely disappointing.
In its wake, demonstrations continued. On Friday 8 April, pro-democracy demonstrations took place in several cities resulting in 37 dead and hundreds of injuries. Despite lifting the martial law and the state security court, demonstrations erupted again on Friday and Saturday of the third week of April in a dozen of Syrian cities and towns. The security forces once more opened fire on the demonstrators, killing, according to human rights and international press sources, more than 100 in one weekend. The pro-democracy demonstrations continued thereafter with a heavy human toll. By mid-May, the security and army units laying siege and fire to several cities and towns had killed close to 1000 and injured several thousand. These figures could not be reliably checked, as the Syrian authorities ban international press coverage on its territory and have not allowed the UN human rights investigative mission to carry out its mission. The heavy casualties together with the arrest of thousands put in question the real stance of the regime and the authority of its civilian officials. The authorities claim plots of foreign supported armed terrorists responsible for the killings. However, they have produced no credible evidence for supporting this claim, and many photos from the social media show faces of recognized security elements in civilian clothes.
The Syrian regime obviously faces in its ranks resistance to change. If the state and party officials do not wake up and learn the futility of their security responses and the lack of credibility of their narrative, they will lose out and join the failed regimes of history. The Party officials in particular should realize that if they do not embark on fundamental reforms, they would be sacrificing the last bastion of the Baath Party for their personal interests and authoritarian bent.
On 13 May, the Syrian Government announced that two Vice-Presidents will head a Committee for Dialogue with “acceptable” opposition leaders in various provinces. At this juncture, this is a futile and useless measure. The situation now requires, first of all, withdrawing the Army and the security forces from towns and cities and stopping the bloodbath. Simultaneously, certain officials, including the President's relatives, heading the security and army units, must be replaced and turned over to the courts. Besides, all political detainees should be released and opposition should be allowed beyond government approval. It is then that a national dialogue becomes possible. And that has to be prepared by a national conference representing all of Syria without restrictions imposed by the regime.
The regime has made great errors of judgment and acted in impulsive and poorly considered ways. It should admit its errors and face up to the situation with realism and sober dedication to the higher interests of Syria. Even if repression succeeds in calming down things in the short run, it will not succeed in shoring up the regime in the long run. With all the mixed signals, one cannot at this point predict the future course of reforms and events in Syria.

Iraq presents a special case. The invasion of Iraq broke up the institutions of the Iraqi state and ignited ugly sectarian divisions and brought Iran into influence in Iraq. It has also devastated the Iraqi economy and annihilated public services (Sakbani, 2010)26. One result of the US occupation was to put in place an imperfect political process. This process is exclusionist and plagued with corruption and political shenanigans. After a record eight months of no government, the irremovable sitting prime Minister, Mr. Nouri al Maliki, with help from Iran and acquiescence of the US, succeeded in forming a coalition with promises and political deals. As has become his style, Maliki reneged on some of the deals he cut and several key Ministries remain in his own hands.
In February, demonstrations took place all over Iraq protesting corruption, lack of public services and political abuse. In March, the demonstration spread to the Kurdish area as well. In their wake, Maliki promised a month ago that he will solve all the public service problems in 100 days; something he had not been able to do for the previous five years. This is indeed a bold theatrical gesture. It would be in character that he will use this probation period to fire at its end the Ministers he does not like.
Maliki’s twists and turns dealings and breaking promises is typical of the culture of the sectarian political class of occupied Iraq. These politicians have proven themselves incapable of building a state; of serving the public or running a clean government. Iraq’s future will only be clear after the US withdraws all its troops at the end of 2011. However, as this deadline approaches, some politicians, who came with the occupation, are broaching the postponement of withdrawal. Iraq, rich with natural and human resources, is, for the time being, the throbbing Arab tragedy.

Before the 17 of February, nobody would have picked Libya as the next eruption. But 42 years of Colonel Gaddafi’s dictatorship and rule without institutions or civilized norms, have been enough to mobilize another youth-led revolt. In Libya, it is not primarily economic misery that is the motive although Libyans are neither prosperous nor fully employed. The real problem is the dysfunctional non-system in control. Having squandered resources on adventures, misdeeds and corrupt use of public financing with no accountability of any kind, Gaddafi has run a type of feudal lordship in which he decides what to do with the public purse. Lonely in his bubble, he appeared one week after the revolution unaware of what is happening. He dismissed the revolution as riots of drugged youth and a conspiracy hatched by the US, Israel and al Qaeda, an imaginative combination indeed. With megalomania galore and psychopathic determination to defend his power even by bombing his people, he pledged to fight till the last person and the last house. The Libyan revolution, peaceful and unarmed, was forced by Gaddafi to defend itself against his all-out attacks. Although Libya is a tribal society that owes its present unity to Gaddafi and the Sanusi king before him, the revolution seems supported by all segments of the Libyan society and all its regions.
At the beginning of March, the revolution formed an Interim Libyan National Council to focalize its leadership. The composition of the ILNC is almost exclusively from East Libya and the young occupy only two seats out of 31. The ILNC is led by the former Minister of Justice and has in majority respectable former officials. It is still unclear what type of program for all Libya and what modalities of transition it can provide. The ILNC made some strides in securing international recognition, notably from France, Italy, Qatar and the European parliament and its envoys were received by countries, including the US. But it has a nasty war to fight with inferior weaponry, untrained volunteers and dependence on foreign support.
In his latest past midnight TV appearances, Gaddafi warned Europe about al Qaeda in Libya, illegal immigration swamping European shores and even discomfort for Israel if he goes. It seems that there is nothing the revolutionary colonel would not do or offer to stay in power.
From where we are now, it looks that Gaddafi’s time is up and he most likely will soon join the circle of despots in exile. The fighting has become bloody, costly and devastating to Libya’s future. The military difficulty of both the regime and the revolution is the vastness of the terrain. Occupying land is not as important as having an assured control of the four oil pipelines and the refineries in al Zawya, Ras lanouf, Brega and Tubrok, which quickly fell into the hands of the revolution. Aware of that, Gaddafi launched a counteroffensive to gain back these objectives.
The ILNC as well as the Arab League endorsed on March 12 the idea of requesting the UN Security Council to impose a no-fly zone over Libya to stop Gaddafi from using aerial bombardment, especially of civilians. On 17 March the Security Council passed with a majority of 10 to zero (5 abstentions) a strong resolution not only to impose the no-fly zone but to empower members “to protect the civilian population by any necessary means”. Gaddafi, who appeared on TV the day before, threatening vengeance, destruction and promising to wipe out the revolution in 48 hours, immediately declared a cease-fire; his calculations shifted when he was no longer facing armless people. Naturally, the cease-fire was a cloak under which he continued his assaults. In the event, the international community started military action on Saturday 19 March to enforce the SC resolution.
The international intervention in Libya raises several issues. The first is the demonstrated failure of the Arab States to take up the task of protecting Libyans. The Arab League once again showed itself as an umbrella of the Arab regimes. The second issue is that this will be a precedent for the UN Security Council to intervene for protecting the population from the actions of their governments, “le droit d’ ingérance”. This is a welcome evolution that might serve as a warning to abusive governments, like the Arab dictatorships, that crimes against their peoples will be punished. However, since military action is difficult to control and wind up, the impact on the countries at stake is uncontrollable. It is also a dangerous precedent as far as weak members of the international community are concerned. Finally, the Arab consciousness is seared by the catastrophic consequences of the Iraq intervention. Even though this one involves no land troops, it will bring destruction upon Libya and its population. Like Saddam before him, Gaddafi has brought this upon himself and his people.
The international action will eliminate Gaddafi’s offensive power, but will not in its present scope be sufficient to remove him. If the purpose is his removal, the no-fly zone will not do that; there have to be the means of land war to take him out. A prolonged struggle would be tragic for Libya. The revolution must prepare itself with Arab and international help, to march on Tripoli by force and in a short time. Any prolongation of war with Gaddafi threatens to split up Libya and rain destruction on all. There are two imponderables in the current stalemate: why is NATO not deploying sufficient means to get Gaddafi out and why are the Arab states so absent? It is legitimate to ask if dividing up Libya is in the compass of some NATO players.
It remains incomprehensible how can Gaddafi conceive of returning to power after all he has done. But at every turn, he has proved determined and psychologically prepared to inflict on Libyans any price for his survival in power.

The Monarchies

The monarchies: Saudi Arabia, Bahrain, Oman, Qatar, UAE, Kuwait and Morocco face the problem of lack of popular participation and basically, royal family monopoly of power. The struggle of the people there is about establishing constitutional monarchies rather than removing the kings. With the exception of Morocco, the economic conditions in these countries are quite good and the motive force of protestation is political.
Bahrain was the first to erupt. The central question is about freedom, political participation of all citizens and social modernization. Bahrain’s problem is compounded by its vertical sectarian divisions and the growing influence and mischief of Iran in the Gulf. Yet, if the King were to open up the political system and allow full equality and opportunity to all citizens regardless of sect, the country would not have perhaps experienced the current political protests. In response to the demonstrations and after initial repression, the Government formed a Commission of Dialogue under the Crown Prince to find a compromise.
The Commission came to a deadlock as the opposition raised the ceiling of its demands and the Government drew red lines around certain issues. Behind the back of the Commission and perhaps the Crown Prince, the Prime Minister took advantage of scattered acts of violence by a part of the opposition, which wants to establish an Islamic Republic, to repress the demonstrators. In addition, his government invited Gulf Council intervention. On March 14, Saudi Arabia sent 1000 soldiers to bolster Bahrain authorities. There is no doubt that if more soldiers are needed, more will be sent. With the arrival of these troops, the Interior Ministry dispersed by force the demonstrators and inflicted significant casualties. The next day, it arrested several of the opposition leaders. The GCC intervention might have unwittingly transformed the Bahrain problem into a sectarian conflict and furnished extra reasons for Iranian meddling and mischief. The challenge now is find a compromise forged by moderates from the opposition and the royal family. This must succeed, for Bahrain will not be allowed by Saudi Arabia to become an Iranian influenced state at any cost. Bahrain’s stability requires broad equal political participation of all its citizens.

Demonstrations took place also in Oman. The Omani Sultan promptly replaced twelve members of his cabinet and promised political reforms. He also announced the formation of a Commission to look into modifying the Constitution, including his own authorities and to set provisions for establishing a Parliament with unrestricted authority. Again, it is the representation of the people in the political decision that is demanded rather than changing the regime.

The biggest, richest and by far the most influential Monarchy in the Gulf, Saudi Arabia, will not be immune to the current wave for long. King Abdullah, a respected Arab nationalist and a potential reformer is hampered by his age (87) and succession, by some members of his family and by the religious establishment, from taking the necessary bold and far-reaching political and social reforms required by the times. Despite questions about the type of education instructed, the kingdom has generously spent on education and has produced an able and modern cadre. It has also built considerable economic and human infrastructures. In the recent past, King Abdullah has ordered many reforms and extended several social measures of aid. But the Kingdome remains tradition-bound and obsolete in many respects. The political system is based on the Royal family and allows only a nonbinding consultative role for others. Popular political participation and accountability are absent and expression of opposing views, public assembly and political parties are not allowed. The Saudi economy is in need of structural reforms and considerable reorientation for meeting the post energy era. Buying off people’s acquiescence by $32.5 billion of social expenditures, as done recently, is no substitute for deep reforms. Saudi Arabia’s increasingly educated population cannot be kept at bay forever; the royal family has to accept a partnership with the people.
In Morocco, King Muhammad VI has introduced many political reforms and has opened the records of the previous tyranny for national reconciliation. The political scene in Morocco is open to multiparty participation and there is a wide measure of freedom of expression. The Moroccan economy has been growing at a moderate pace, but there is persistent poverty in the country. Nevertheless, the regime is far from being a constitutional monarchy. To his credit, the king declared on 8 March that he is going to constitute a commission to modify the constitution so as to turn Morocco into a constitutional monarchy. He also said that he will have the government look into some pressing economic and social problems.

Pitfalls and hazardsFailure in Egypt, Libya and Tunisia are still possible. The leaderless popular revolutions in Egypt and Tunisia have no pre-thought-out programs, no charismatic leaders and, for the time being, no agreed tactical plans. Their visions of freedom, democracy and social
justice, are long term strategies without operational signposts. In effect, these three popular revolts do not obey the norms of revolution models. Revolutions require programs, leadership and popular insertion. These are partially absent in the event. Thus, they need in the transition common agreement and joint tactical aims among all the political participants. They need the emergence of political leadership and the mobilization of expertise, which has been for long absent from the public function. Unlike Iraq, they should attract and accept the participation of the uncompromised and able elements of the old regimes. Their aim must not be revenge and settlement of accounts, but turning a new page. But in all of that, they should take the necessary time to prepare for the organized participation in the future elections of all parties without exclusion. Without adequate preparations, the revolutions risk being high jacked by the better-organized groups, e.g., the Muslim Brothers, even if the latter play by the rules.

Democracy is an institutional envelope that requires many building- blocs: an independent judiciary, separation of powers, the rule of law, the existence of civil and political institutions, the freedoms of expression, assembly and association, free and universal elections and the vigil of a liberal society. The culture of Arab society has not always evolved along a liberal and multi-vision path. Its tendency to accord acceptance to traditions without critical examination is not conducive to acceptance of differences in thinking and in values. And this has been reinforced by the failure of the nationalist secular regimes and the closed horizons of their dictatorial orders. There should be full awareness of these self- limiting factors in perceiving the future. However, these shortcomings should not stop the march towards Democracy. Some commentators and the Arab regimes have made the false and historically invalid argument that Democracy needs special preparations; all peoples started from a zero point and learned by doing as they went along. India, for example, should still be nondemocratic according to this assertion.

The Challenges of the Transition

The responses of the authoritarian regimes in all the Arab countries were similar: they accused the demonstrators of following a foreign agenda or being at the service of subversive parties or as Gaddafi did, being drugged children and nobodies. Another common refrain was to accuse the Media, in particular al Jazeera, of fomenting the troubles. They all claimed specificity and differences from other Arab countries. In Tunisia, Egypt and even Syria and Yemen, the regimes acknowledged the shortcomings and the grievances and endorsed in principle democratic reforms. However, in all the cases the regime tried to play musical chairs by firing the cabinets and installing other old hands in power and promising future reforms. This was obviously an attempt to go around the revolutions and contain their impacts. The first reflex of all the governments was the security one; the police and state security charged the demonstrators opening fire and killing many of them. This was then followed by arresting many activists in an attempt at quelling what they thought are passing disturbances. By the time they realized these popular uprising for what they are, they came up with unacceptable promises; it was the case of too little too late.
In Egypt, Mubarak resigned on the 11th of February and handed over his authority to the Supreme Military Council. Ben Ali ran away after four weeks.
The SMC of Egypt had an auspicious start by dismissing the two Egyptian houses of Parliament and forming a commission to look into the Constitution. It also declared its aim of handing authority to elected representatives in six months if possible. Two weeks later it dismissed Mubarak`s last cabinet and appointed a respectable prime Minister, Dr. Isam Sharaf, who was nominated by the revolutionaries. The new Cabinet replaced the contested ex Ministers of Foreign Affairs, Interior, and Justice. The new PM started by dismissing the old State Security Service, which has focused on surveying the citizens rather than anything else. A new national service will replace it with the explicit mission of state not government security.
On Saturday 19 March, the proposed amendments of the Commission were put to popular vote. There were 8 articles in play and a ninth which, if accepted, would provide for a commission to change the whole constitution after the upcoming elections. The referendum was hurried and its scope severely limited. The Constitution in effect endows the President with enormous powers. It has many provisions that are questionable. Changing it in good time would have been a better choice.
The referendum took place in order and peace under full juridical supervision and by 77 % majority, the yes had it. It was an  overwhelming evidence of the populous embrace of Democracy and the feeling of empowerment. Instead of the miserable 15 % participation of the last Mubarak elections, the turnout was 41 %, modest, but the first time for most Egyptians. Thousands in various electoral districts were not able to vote due to limited polling time. Subsequently, the SMC put into effect a constitutional package of 62 articles including the nine passed in the referendum. The package spells out the transition authority of the SMC, the rules for the future elections and for political organization. Consequently, the date of the legislative elections was set for September 2011, followed by presidential elections and then drafting a new Constitution.
The old regime’s setup, laws and numerous faces are still much in evidence and in administrative charge. To be sure, it takes time to clean up the state. But cleaning up the state, revising the biased laws in effect and preparing politically to fight elections effectively, are the upcoming challenges. The revolutionaries must in short order, develop their program, their leadership and their tactical aims and force a true transition on a public scene short on political enlightenment and experience.
Nobody should underestimate the difficulties attendant upon creating viable democratic institutions and practices or the length of the road ahead. We know that the old dictatorships have fallen but we do not know yet whether their replacements will be another set of dictators in military or religious garbs. Nonetheless, the collapse of fear and public passivity will allow no renewal of authoritarian autocracy. If the Armies want to help their peoples, they should become the protectors of Democracy and constitutional legitimacy.
Egypt and all Arab countries need fresh faces capable of leadership, possessing of vision, exposed to the outside world and conversant with it. Many of the names of presumptive candidates in Egypt are unfortunately not of this type. The exception, Dr. al Baradie, would make an excellent candidate, but he lacks a popular support base and party organization. Egypt is rich in human resources. Let us hope it comes up with an excellent pick.
The Egyptian army has behaved well during the revolution. However, it has been the power behind the regime for 59 years. During this time, it has acquired privileges and vested economic interests. Will it allow the changes that people want and liberal democracy need? That is the question. The Egyptian revolution has succeeded in changing the government but it has not yet built a state; its task remains incomplete and the ultimate results are still unknown.

Implications for the Arab Future

The revolts of Egypt and Tunisia and the ones following them, in Libya, Bahrain, Syria and Yemen, will have significant historical implications. It took the French revolution 26 years to settle, the Bolshevik revolution 12 years to steady its self. The Arab masses, led by their youth, seem to have triumphed and ushered the beginning of liberal democracy in a few weeks. When the fresh new wind will have swept the others, it is likely that the Arab revolutions will be the briefest in history. Unlike military coups or party revolts or de-colonialization movements, the Arab street moved into a new path with minimal bloodshed and no national fragmentation. The revolutionaries were peaceful, civilized and non-ideological. They aim to free man and better his conditions rather than to transform societies and their governance into a new ideological state of being. These have been revolutions of modernization using the technologies of their age. They also constitute a new model for the genre: no leader, no ideological program and no organized popular bases, rather, an accumulated popular demand for change.
After the 1967 war and the demonstrated failure of Arab Nationalist regimes and their programs, Arab Nationalist consciousness appeared to many as a hallow sentimentality devoid of tenability on the ground. The revolutions have startlingly shown that Arabs feel in common their tragedies and their triumphs and experience some kind of joint destiny. The revolutions cascaded from each other bringing the same slogans and sounding the same cry for salvation. Thus, we are witnessing the emergence of a new Arab dawn. It is one of many commonalities, but differences as well. It evokes an interdependent destiny in decentralized future Commonwealth of cooperation. The political systems of this new dawn, as one gleans from the revolutionaries, stand on the respect of the citizen, on his right to choose his governors and to call them into account. The revolutions are instructing the citizens that their social contract is based on citizens-sovereignty and not on state subjugation and that open and liberal democracy is what gives expression to that. The way the various strata of the society came together, means that all freedoms must be rooted in tolerating differences in ideas, values and traditions. Hopefully, the Arabs will have no governments above the people and in disregard of public opinion; nor will they have governments tolerant of privileges and corruption.
The street revolutions proved that successful economic and social performance is what determines in the long run, the legitimacy and continuity of any government. Governments are there to serve their people and improve their economic well-being. The ushering of democracy in the Arab World with all types of freedoms will inevitably improve economic performance. Modern history shows that failure does not last long in democracies.
Given the labor and capital resources of the Arab World, there is no reason that real GDP growth should not be three to four percentage points above the growth of the population. We are therefore talking about 6 to 8 percent growth per annum in real terms. To achieve this range of growth, which many other developing countries have done, women must join the labor force. As we argued above, such participation can add 1.2 percent to the secular growth of the GDP and can also diminish population growth as demonstrated in all comparative demographic data. According to statistical evidence on growth and unemployment, Okun’s law, the Arab countries need some 3 to 4 percent growth in per capita income to tackle their unemployment problem.
In the long run, the Arab world is called upon to invest heavily in education, knowledge and public health. This has been the secret of the success of the emerging economies like China, India, Malaysia, Brazil, South Korea and Turkey and before that the US and Europe. Education has quantitative and qualitative dimensions. The quality side has been missing in Arab education as shown above. The decision to shift resources from armaments, privileged patronage and budget subsidies to health and education imply a shift of some 8 to 10 percent of the GDP into such expenditures. This will only be possible under Democratic authority.
The revolutions if successful will change the role of the Arabs in the contemporary world. Democracy will give expression to the will of the Arab masses and bring forth independent foreign policies for the Arab states. For the first time in three generations, the Arabs will determine on their own what happens in their region. The Palestinian problem will have a new lease on life. The new Arab state system will result in revising the institutions of Arab cooperation, the Arab League system, and will express the commonality of the Arab peoples in some form of meaningful regional Commonwealth of cooperation. The spread of democracy will bring Egypt back to its leading role. With that, both Iran and Turkey will have a smaller role than at present.
Fears are expressed in the West that the Islamists will take advantage of Democracy or high jack the Arab revolutions. These are understandable, but rather unjustified fears. The Islamists will be present in the future political scene; they are a part of the people. But they will be forced, by their minority status, to play by the democratic rules. Islamists prosper when they are oppressed opposition. If they are allowed to compete, their deficiencies will become apparent: they have no specified programs, they have no particular expertise, their record where they reached power is hardly impressive and their attachment to the past will always render them out of touch. It is not enough to be a good Muslim to run well a government. Among the young crowds in Tahrir Square, the Islamists were followers and not leaders and their appeal among the educated young was limited. It would seem that robust liberal democracy is the best protection against such fears.
The self-image of the average Arab has been for long warped by frustration and a deep sense of failure resulting in low self-esteem. There were Arabs and outsiders who wrote books psychoanalyzing the Arabs and the Arab mindset. For the entire modern era, the West, in particular its self-satisfied elites, have considered the Arab uncivilized, prone to emotionalism and irrationality and incapable of good governance. In the last two decades, Islamists succeeded in adding another slur: that Muslims are violent, intolerant and a good many of them, terrorists. These revolutions will transform these caricatures and discourage stereotyping. Their results will in time remove failure from being a fixture in the contemporary Arab condition and psyche and replace apathy with political involvement.
When achievement and success become apparent, the spirit and the face of the Arab world will shift. A period of failed nationalist militarist and dictatorial governments over the past 60 years will have come to end. This part of the world will no longer be associated with wealthy Petrol Sheikhs riding in dark limousines and holding absolute power, or megalomaniac psychopaths like Gaddafi and Saddam, who bombard their own people, or incoherent half-educated leaders incapable of sustaining serious thinking. The Arabs will be ruled and represented by their betters and not by the adventurists of fortune and beneficiaries of accidents of history. Their elites will undoubtedly participate in public function. The youth of the revolutions was the first installment of such a change; and what a difference in spirit, enthusiasm and hope that will make.
(Geneva, 17 /5/2011)

*Professor of Finance and Economics, Webster University- Geneva; former director of the divisions of Economic Cooperation, Poverty alleviation and Special Programs, UNCTAD-Geneva; senior consultant to the UN system, the European Union, the BIS and Swiss banks.

1.Mohammad Hasanain Haykal, the well known Egyptian collaborator, journalist and adviser of President Nasser, reported on these differences in his al Jazeera program: “With Haykal” in 2010.

2.See for an extended discussion, Michael Sakbani, Islamic Militancy and the Failure of Economic and Social Development in the Arab World., in, 2007.

3.ILO, Research Conference on Key Lessons from the Crisis and the way Forward,16-17 february,2011. Paper by Tzannotos, Haq and Schmidt, “Labor Market after the Crisis in the Arab States”, pp 2-4.

4.ILO`, International Employment Statistics,; also, CIA, World Factbook, country/Libya.

5.ILO, (Labor Market after), Op.Cit, p. 3.

6.ILO`, International Employment Statistics,; also, CIA, World Factbook, country/Libya.

7.The World Bank, Development Indicators Database, 2010, www.

8.League of Arab States, Arab Unified Economic Report, various issues; also World Bank, Egypt- Data & Statistics, 2010.

9.The World bank, World Development Report, various issues.

10.Central Bank of Egypt, Balance of Payments, 2009; available also in: www.,

11.Banque Central de la Tunisie, Rapport Annuel, 2010.

12.CIA, World Factbook, 2010.

13.World Bank, World Development indicators database,2010, country page: Egypt.

14.Ibid.,,, country page: Tunisia.

15.United Nations, UN Report on Arab Education, 2010, Ch.3


17.WRU, Academic Ranking of World Universities since 2003.
18.UNICEF., Human Development Report,2005 and various issues.

19.UNESCO, Science Report 2010.

20.Wikileaks, second set of papers in The Guardian.

21.Wikipedia, Economy of Syria. The decline in the GDP is a matter of common acceptance, but its magnitude is an open question on account of the unknown statistical methodology employed.

22.CIA, World Factbook/Syria, Also, Economy Watch, Syrian Economy.

23.World Bank, Economic Development Indicators, 2010, Also, CIA, Ibid.

24.CIA, Op. Cit. Syria’s population stood at the end of 2010 at 22.5 million. Since President Asad added two hundred thousand Syrian Kurds to the population in March 2011, the population must be at end of April about 23 million.

25.CIA, Op.Cit.

26.Syria has forwarded its candidacy for joining the WTO some time ago. The WTO decided in 2010 to take up the matter. It will be imperative if this candidacy is to go anywhere to liberalize the economy and decrease state sector domination.

27.The author believes this to be an underestimation in view of the unemployment and income distribution figures as well as the demographic growth relative to the GDP.

28.See for description and documentation of the impact of the occupation and the state of the economy, Michael Sakbani, Iraq : the Epilogue of a Tragic Decision.,, 2010.

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