Saturday, 23 April 2011

The Real Problem for Arab Countries

As privileged Westerners we tend to look at the Arab revolt with a certain detachment. Few of us have any strong connections with countries like Libya, Bahrain, Syria, Yemen and Algeria. We applaud their fight against oppressive or totalitarian regimes because we believe in democracy but, although the West has intervened in Libya, it is unthinkable that it would do the same in Syria, Yemen or Algeria! 

Syria is an ally of Iran, it finances Hezbollah and it has a border with Israel.  Yemen is already an Al-Qu'eeda stronghold and its terrain is, like Afghanistan and unlike Libya, easy to hide in.  The generation of French soldiers who did their military service in Algeria is now in their late sixties and early seventies, they don't often talk about what they did there. In addition the Algerian terrorist campaigns of the 90's, when the inhabitants of whole apartment blocks were massacred, are still very fresh in the minds of most people. There would be no support in France for any intervention in Algeria.

But let’s assume that the populations of these countries are sufficiently courageous and determined to carry on demonstrating under fire, and that, like Tunisia and Egypt, they succeed in overthrowing their corrupt regimes and are capable of managing a transition to democratic rule. Then what?

They all share two fundamental problems that regime change will not immediately solve.

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• Firstly, they have populations which are highly skewed towards young people,
• Secondly, after years of stifling government control, they have lost the entrepreneurial instincts and social infrastructure to enable the creation of new businesses, and hence employment for the young.

Some countries like Libya and Algeria have oil wealth, which they will be able to spend on infrastructure for many years to come. This could absorb a large part of the current generation of young people in construction and development projects, whilst others are training in softer skills or other technologies.

So, if one looks forward six or seven years, countries without oil, like Syria and Yemen, will face, head on, the difficult problem of how to find employment for their youth. Private foreign capital investment will be scarce, unless it originates from other sympathetic Arab countries; Western businesses are likely to feel that the political risks outweigh the potential rewards.

Against this background, further social unrest, stemming from ever increasing youth unemployment, is very likely. They can't all emigrate to Europe, so where will the young turn for solutions? Having rejected dictatorships and then discovered that democracy does not provide the answers, isn’t it possible that Islamists will appear, to the young, to present a viable alternative? Can we expect a wave of religiously inspired fervour to sweep though the Arab world in 2019 similar to that which launched the Iranian revolution in 1979?

Unfortunately, whilst it is clearly in the interests of the G20 developed economies to promote growth in the newly democratic Arab countries by capital investment, it's not easy to foresee the mechanisms for doing so!

One of Sarkozy's more far-sighted ideas in 2008 was a Meditteranean Union. Originally proposed as a grouping of countries having a Meditteranean coastline, it was Sarkozy's response to Turkey's desire to join the EU.  The idea was not warmly received in France or in Europe but it was reborn, in a different form, as an alliance of the EU with North African and Eastern Meditteranean countries.  Currently, it's not much more than a talking shop but, with sufficient political committment from member states, it could help to promote stability and economic development in the region. 

I'm not optimistic, however, that the EU will see this as an opportunity not to be missed, and react positively.  Apart from stringent budget cutbacks, which limit the politician's freedom of action,  there are far too many right wing politicians playing up fears about Islam and immigration!  Even if it is in the West's long term interest, basically there are no votes in helping Arab countries economically!


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