Political Economies of the Middle East and North Africa

Robert Springborg

• Publisher: Polity
• Year: 2020
• ISBN:
  9781509535613
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Globalisation
• Index: Politics & International Relations

Despite its oil wealth, the Middle East and North Africa is economically stagnating. Growth rates are comparatively unfavorable and insufficient to substantially improve citizens' lives. Whether this economic inertia can be overcome or will continue into the indefinite future is a vital question that confronts both the region and the world. In this book leading Middle East scholar Robert Springborg discusses the economic future of this region by examining the national and regional political causes of its contemporary underperformance. Overgrown, weak MENA states, he explains, have been unable to escape their unfavorable historical legacies. "Limited access orders" and the deep states based in the means of coercion that underpin them undermine state capacities and constrain beneficial, autonomous political and economic activity. Increasingly challenged by their populations, MENA states face the daunting and so far unmet challenge of diversifying non-sustainable, rentier political economies away from direct or indirect dependence on oil and gas revenues. Stagnation of those revenues and failure to generate alternative income sources, combinedwith rapidpopulation growth, presents the region with an economic challenge that can only be overcome by profound political change.

1
ACCOUNTING FOR DEVELOPMENT IN THE MENA

Polities and economies in the Middle East and North Africa are dramatically underperforming. As a group those polities are the world’s most authoritarian and violence prone. The Arab world alone contributes 11 times the number of global refugees, almost ten times the number of internally displaced persons, ten times the number of terrorist attacks and 14 times the battle deaths predicted by its population, while spending triple the global average on militaries. The MENA accounts for two-thirds of the world’s known executions. MENA economies have, according to the World Bank, “stayed below potential for at least 40 years.”¹ GDP growth has been moderate and misshapen, resulting almost entirely from demographic and structural change, not from productivity growth, which has lagged behind all other developing regions.² As a consequence, the MENA has the world’s highest rate of youth unemployment, with about a third of its youths overall and over half of young women seeking employment in several of its countries unable to find jobs.³

Political and economic underperformance are interrelated, as the nexus between inadequate economic growth, youth unemployment, authoritarianism, radicalization and violence suggests. The Human Freedom Index, which measures both political and economic freedom, ranks the MENA as the least free of the 17 regions it compares. Of the bottom ten on the index of 159 countries, seven are in the MENA.⁴ The effort to understand dual political and economic underperformance should, therefore, be grounded in political economy, which was “the old name of economics … or the study of the political management of the economy.”⁵ As the italicized emphasis suggests, politics were deemed by the founders of the discipline of economics to be a if not the prime cause of economic outcomes. As that discipline became more “scientific,” so did the primacy of politics become obscured behind allegedly “apolitical” technical economic considerations and calculations.⁶ This obfuscation has been reflected in much contemporary academic analysis of MENA economies, including especially that supported by the international financial institutions, in which politics are commonly downplayed in accounting for economic performance. The approach of this book is to draw upon the intellectual origins of economics in emphasizing the primacy of politics in understanding why most MENA economies—those that stretch from Morocco across North Africa, through the Levant and on to Iran, therefore including both Turkey and Israel—have not lived up to their potential.

MENA Endowments

That potential is both historical and in the form of economic endowments. If long-established historical patterns, so-called “path dependency,” were the sole determinant of a region’s contemporary economy, the MENA would be richer than it is. Two of its states, Egypt and Iran, are virtually unique in being modern countries based geographically on traditional empires, the only other in the world being China, which has drawn upon indigenous historical models to guide its dramatic economic growth over the past 30 years.⁷ Turkey is the inheritor of the core of the once mighty Ottoman Empire, still capable at its demise in WWI of defeating Allied forces, as it did at Gallipoli in 1915–16. In the ancient world, areas controlled then or subsequently by these three empires were among the world’s most developed and prosperous, serving as breadbaskets for the Greek and Roman Empires and as conduits for trade between the Mediterranean and China. Morocco from medieval times was the principal corridor of trade between West Africa and Europe. The MENA was the core of the Islamic world, which in the medieval era was at least the equal of the West in economic prowess, the size and sophistication of its cities, the accomplishments of its intellectuals, the development of its legal/judicial systems, and in military power.

From the early nineteenth century, imperialism and colonialism began to reshape MENA political economies, both for the better and for the worse, as it did throughout the world. The region became more closely integrated with Europe and various of its economies became richer and more developed than most others in Africa, Asia and Latin America. By the 1860s, for example, Egypt was the world’s largest cotton exporter, its railways more extensive than Japan’s and its GDP per capita higher. Some two generations later Morocco was being touted as the California of North Africa, as intensive irrigation made possible a surge of horticultural crops for export. Beirut came to serve as a principal entrepot for the region, being dubbed the Switzerland of the Middle East. When decolonization began in earnest after WWII, several MENA states came to lead that global movement because of their relative political and economic sophistication, to say nothing of their military capacities. In the 1950s and into the 1960s much of the MENA was wealthier than East Asia and seemed poised to emerge as a global economic center. Syria, for example, despite political instability, had one of the world’s most rapidly growing economies in the early 1950s as more of its Jazeera, or central steppe land south of the Euphrates River, was brought under irrigated cultivation. Their streets choked with large American cars, Damascus and Aleppo appeared to mimic Havana, but with economies more broadly based and less corrupt. So, if path dependency established by long if discontinuous historical precedent is truly determinative, it is hard to explain the region’s political and economic deterioration that commenced in earnest some two generations ago, just as its enormous oil resources were brought under national control and began to generate huge increases in export earnings.

The path-dependency explanation of the MENA’s current travails has more purchase regarding the region’s politics. None of the pre-colonial empires or states were democratic, although some had competent institutions of governance as well as civil societies that shared with government some responsibilities for the administration of justice as well as economic regulation and management. Colonialism and indigenous attempts to Westernize, such as that by Egypt’s Muhammad Ali in the first half of the nineteenth century, destroyed much of this pre-existing political infrastructure, substituting in its place models imported from Europe, most of which never gained the traction they had in their lands of origin.⁸ But other countries and regions in the developing world with even poorer initial endowments of governance capacities emerged from their colonial encounters with stronger governmental institutions and political organizations. Any investigation of the path dependency of MENA political development, therefore, must carefully consider whether the particulars of its colonial encounter had especially negative consequences.

If economic endowments were more determinative than the political management of them, the contemporary MENA should be wealthier. Of those endowments, three stand out—fossil fuels, geographical position and a youthful population. The MENA holds far and away the biggest share of the world’s oil and gas reserves and is the largest exporter of them. Since the outset of the twentieth century, “black gold” and subsequently natural gas have propelled rapid economic development in a host of settings, from Texas and California to Norway, Russia and Indonesia.

The relative value of MENA hydrocarbons, as well as its overall economies, is enhanced by the region’s strategic global location straddling the Asian and African continents and adjoining Europe. For millennia the region has served as the trade crossroads linking those continents, while in modern times its proximity to markets for oil and gas, whether by pipeline or tanker, combined with the easy accessibility of major MENA oil and gas fields, have provided it with substantial economic advantages.

Finally, the MENA’s “youth bulge,” which began to swell a generation ago, is at least demographically if not economically analogous to that which two generations ago was a key driving force behind the Asian “economic miracle.” At present the MENA is enjoying the same “demographic gift” of an increasingly favorable ratio between those of working age, on the one hand, and dependents either too young or too old to work, on the other. Indeed, this potential boost to development is now more pronounced in the MENA than in any other region. Yet, as noted above, this hypothetical demographic gift has been, as to some extent has oil, more curse than blessing. Instead of contributing to economic growth by working in productive jobs, a remarkably high proportion of MENA youths have joined the very young and the old as unemployed or underemployed dependents.

Whether by virtue of at least some its historical inheritance or its present factor endowment, the MENA should be enjoying more rapid economic growth than it is. The mystery of why it is not has generated considerable interest among historians and social scientists, who have offered various explanations.

Explanations of Inadequate Growth

The “father” of the field of economic history of the Middle East, Charles Issawi, spent much of his career investigating why economic growth in the region failed from the thirteenth century to keep pace with more rapid development in Europe.⁹ He identified a range of socio-cultural, geo-political and economic contributing factors. In the first category he focused on the ideational context within which Middle Eastern political economies operated, noting that “by the beginning of the Twelfth Century the scientific and intellectual life of Islamic society was already showing signs of fatigue and rigidity, and its religion becoming more dogmatic and intolerant.”¹⁰ The hypothesized relationship between religion and development has subsequently been extensively investigated, as we shall discuss below.

The key geo-political force Issawi identified was that of “prolonged warfare with Mongols, Crusaders and Tatars,” the consequence of which was that Arab countries “transformed themselves into militaristic, ‘feudalistic’ societies whose institutions were much less conducive to economic and social development.”¹¹ In this assessment he also presaged contemporary analyses, both of why warfare in Europe stimulated development of state capacities whereas it did not in the Middle East, and of the vital economic role of governance.¹² On this latter point Issawi himself went on to argue that the decay of central Ottoman institutions of government from the seventeenth century onwards exacerbated the rate of economic decline by creating “petty dynasties and quasi-independent governors.”¹³ Another geo-political factor was the loss of control of maritime transport in the Mediterranean and the Indian Ocean by the Muslim Middle East, initially to the Byzantines and Venetians, subsequently to the Portuguese, Dutch and English. Trade, a key contributor to the wealth of the Muslim Middle East for centuries, thus passed out of Muslim hands not only with other regions, but within the Middle Eastern Muslim world itself, where non-Muslim minority protected communities, chief of which were Christian and Jewish, assumed preponderant commercial roles.

The third category of factors listed by Issawi—so presumably those he considered least important in explaining the Middle East’s decline—were of a more direct economic nature. He noted that the region’s resource endowment did not include sufficient forests, minerals and rivers, among the consequences being overdependence on land as opposed to water-borne transport, and inadequate development of watermills, the key source of inanimate energy in Europe.¹⁴ The Middle East thus depended much mo...

Table of contents

• Cover
• Contents
• Title page
• Copyright page
• Preface and Acknowledgments
• Map: Middle East and North Africa
• Introduction
• 1 Accounting for Development in the MENA
• 2 The Origins of State Effectiveness
• 3 Colonialism, Post-Colonialism, Globalization and the State
• 4 Limited Access Orders and the Rise of Deep States
• 5 Deep States: Types, Resources and Impacts
• 6 Inclusion, Human Resources and State Power
• 7 State Capacities for Economic Management
• 8 The MENA: Regionalized But Not Integrated
• 9 Survival Strategies in Weaker MENA States
• 10 Survival Strategies in Stronger MENA States
• Conclusion
• Selected Readings
• Index
• End User License Agreement