The Arab Spring in the Global Political Economy

L. Talani

• Publisher: Palgrave Macmillan
• Year: 2014
• ISBN:
  9781137272195
• Topic: Política y relaciones internacionales
• Subtopic: Comercio y aranceles

Although it is still early for an established academic account of the motivations behind the dramatic events in the Arab world in 2010/11, Leila Simona Talani believes that it is about time to try and place this issue into the broader picture of the latest changes in the global political economy.

1

The Chinese Butterfly and the Arab Spring: Bread and Globalisation

Bread and the Arab Spring

There is no denying the role that the economy played in the revolts going under the name of the Arab Spring. The two people who set fire to themselves in Tunisia and Egypt, sparking the uprisings, did so for economic motivations.¹ The protesters who took to the streets in Cairo, did so screaming ‘Bread’ (Aish) as one of their main slogans. Even in the academic literature on the Arab Spring there seems to be now some agreement on the relevance of economic factors (Noueihed and Warren 2012: 5–6; Maloney 2011: 66).²

Furthermore, it is impossible to deny that the global economic crisis which started in 2008 as a consequence of the global financial crisis played a fundamental role in the outburst and spreading of protests across the region (Lagi 2012). The price of oil increased significantly, reaching a peak of $147 per barrel on 11 July 2008, as a consequence of investors’ crave for secure assets, and speculative investment followed in other commodities. This characterised the 4th phase of the development of the global financial crisis and certainly contributed to the unsustainable rise in the cost of basic foodstuffs which produced a wave of protest in many Middle Eastern and North African (MENA) countries in the Spring of 2008 (Orlowski 2008: 11; Talani 2013).³

In Egyptian the word for ‘bread’, Aish, is also the word used for ‘life’. Bread is life for Egyptians in many ways; Egypt is the world’s larger importer of wheat and Egyptians are the world’s larger consumers of it (FAO 2011). It is no surprise, then, that increases in the price of bread have often meant mass demonstrations in the country. Previously, in 1977 ‘Bread Riots’ had broken out in Egypt, though the reason was not so much scarcity of bread itself, but the decision of President Sadat, within his Infitah policy,⁴ to end subsidies for basic food staples (Roccu 2012). In this case, a reversal of Sadat’s decision put an end to the riots. In the wake of the global financial crisis food prices soared and food riots again swept across cities of the Middle East. In Egypt, worries about the scarcity of flour and bread generated massive and deadly demonstrations, such as in the Nile delta town of Al-Mahalla Al Kobra where eleven people were killed in clashes and many more were arrested.⁵ Similarly, the deprived parts of central Tunisia had been witnessing strikes and protests since January (Noueihed and Warren 2012: 24–25). In 2009 and 2010 a relaxing of speculative pressures on commodities and on oil meant that cereals’ price inflation lowered from 10.2 per cent to –0.8 per cent,⁶ but by 2011 food prices were increasing again.⁷

In 2011, global food prices were incredibly high, even higher than in 2008. Taking 2005 as the base year, in 2011 the real world food price index of the World Bank had achieved a level of 170 (see Figure 1.1 below).

Figure 1.1 Real world food/wheat/grains price indexes, 1980–2011 (2005=100) 2005 US$

Source: World Bank

The spike in food prices of 2011 has been identified as a main determinant of the riots leading to the Arab Spring (Lagi et al. 2011). Correlating instances of social unrest with the UN Food and Agriculture Organization’s (FAO) nominal global food price index between 2004 and 2011, a working paper by New England Complex Systems Institute, ‘The Food Crises and Political Instability in North Africa and the Middle East’ found that food riots were likely to occur when the index equalled or was greater than 210. When, in 2008, the FAO global food price index rose above 220, more than 60 food riots occurred in 30 different countries. This happened also in late 2010 and early 2011, allegedly triggering the Arab Spring uprisings. According to this study, there was less than a 6 per cent probability that the Arab Spring occurred by chance during an episode of high food prices (Lagi et al. 2011).

The main criticism leveraged against this thesis is that in countries like Egypt the prices of basic food staples were subsidised by the State, making price increases less dramatic (Noueihed and Warren 2012). In the case of Egypt, for example, it is estimated that the transmission of global food inflation to domestic food inflation is relatively low over the long term, lying between 13 per cent and 16 per cent, whereas in the short term, after 6 months, it is around 29 per cent. Moreover, international food price shocks explain only a small portion of domestic inflation shocks in both the short and long terms, and international price inflation has asymmetric effects on domestic prices (Al-Shawarby et al. 2012). This limits the applicability of models identifying a direct causal relation between global food inflation and the Arab Spring (Lagi et al. 2011; Jacks et al. 2011).

In this book it is argued that the increase in food prices is just one side of a broader underlying phenomenon represented by the marginalisation from globalization of the MENA region and the countries considered here.

The question this book will try to answer is to what extent the difficulties and inequalities plaguing the area at the onset of the uprisings were also a consequence of globalisation. The Arab Spring will thus be contextualised within the broader global political economy. To reference a well-known metaphor, it will try and find out whether the movement of a butterfly’s wings elsewhere in the world, maybe in China, could eventually have led to the events of the Arab Spring.

However, the debate about globalisation is an ongoing one and the globalisation thesis does not come in a single, universally accepted version in the social sciences (Busch 2008: 5; Dicken 2007: 5). Before proceeding to the consequences of globalisation for the MENA area, it is therefore important to define what globalisation is from different perspectives in the field of international political economy (IPE), and to examine what the implications are of the different definitions of the concept on the capacity of the nation state to carry out relevant policy-making, which is the subject of this chapter.

What is globalisation?

As characterised by Anthony Giddens in a lecture entitled ‘Globalisation: The state of the debate’,⁸ the globalisation debate has gone through three phases. The first phase saw opposition between the so-called ‘sceptics’, who questioned the very existence of the phenomenon, and ‘globalists’ who firmly asserted that its existence was undeniable. In the second phase, the idea that globalisation was a new phenomenon became consensual and the debate moved into the streets, where anti-globalists violently opposed its advent, commonly identifying it with the spread of political imperialism and economic neo-liberalism. In the third, and current, phase of this debate even the anti-globalists have come to terms with the inevitability of globalisation and discussions have shifted to tackle the question of how to govern globalisation so that it can be beneficial for everyone. Summing up, the debate moved from the questions, ‘Does globalisation exist?’ and ‘What are the consequences of globalisation?’ to ‘How to govern globalisation?’

Giddens’s characterisation is interesting, but reveals that the author is himself a globalist and adopts a neo-institutionalist perspective.⁹ In fact, there is still not a widely agreed definition of what globalisation is, nor there is consensus on whether it is a completely original phenomenon, neither among the different disciplines in social sciences nor, more specifically, among the different approaches in IPE. In the next sections we will therefore try and answer Giddens’s questions with reference mainly to theories of international political economy and to see what their relevance is for the study of the recent Arab uprisings.

Does globalisation exist?

Although in the general public discourse the question of whether globalisation exists may seem straightforward, in the academic debate the answer depends on the theoretical standpoint adopted. Limiting the analysis to IPE perspectives, scholars’ positions on the subject can be classified into three broad groups (Dicken 1998: 5, 2007: 5). The first group includes those who continue to deny the existence of the phenomenon of globalisation and are often referred to as ‘sceptics’ (e.g. Hirst and Thompson 1999a; Hirst et al. 2009). The second group is represented by the ‘globalists’ and is composed by those who support the globalisation thesis but provide a quantitative definition (e.g. Held and McGrew 2000; Holm and Sørensen 1995; Garret 1998). Finally the ‘transnationalists’ consider globalisation a structural phenomenon which requires a qualitative definition (e.g. Mittelman 2000; Dicken 1998, 2007; Hay and Marsh 2000).

Those who tend to deny globalisation rely on considerations underlying the historical recurrence of periods of increased international and cross-border interactions. Thus, the ‘sceptics’ refuse to characterise globalisation as a new, original phenomenon. In some cases, they might even deny any ‘global’, ‘globalised’ or ‘globalising’ nature to the current phase of capitalist development. This attitude is typical of realist approaches to IPE which see globalisation as a convenient myth in the hands of politicians in the most powerful states who spread it among public opinion with the aim of consolidating their hegemony. In essence, the notion of globalisation is much exaggerated in both the public and academic debate by those who demonise it as the mother of all evils as well as those who proclaim it to be the resolution to all problems. Realists would instead maintain that globalisation is hardly a new phenomenon and that even where the international political economy shows new trends these can easily be governed by traditional intergovernmental solutions (Gilpin 2000; Hirst et al. 2009).

The realist perspective draws on a quantitative definition of globalisation, one that is concerned about ‘quantifying’ globalisation through the identification of suitable measures for all of the elements which are generally included within its scope. Then (neo)-realist scholars have proceeded by comparing the ideal type of the ‘globalised economy’ with the ideal type of the ‘internationalised economy’, using data on the performance of the real economy to verify to what extent one or the other ideal type corresponds to the actual state of the world economy (Hirst and Thompson 1999a, b; Hirst et al. 2009).

Similarly, Gilpin (2000, 2001) demonstrates the extent to which the relevance of economic globalisation is grossly overstated. In fact, he argues, the world economy still fundamentally relies on the centrality of the nation state, the interests of which are increasingly catered for within integrated regional schemes. Starting always from a quantitative definition of globalisation, Gilpin identifies it with the increase in the integration of the world economy produced by a multiplicity of factors, such as increases in trade flows, in the developments of international finance and in the activities of multinational companies (Gilpin 2001). Evidence allows the author to conclude that such an increase has been ‘highly uneven, restricted to particular economic sectors and not nearly as extensive as many believe’ (Gilpin 2001: 364). Indeed, there is no doubt in his mind that the level of economic integration was much higher during the period of the gold standard; in relative terms, the level of financial transactions and trade flows was greater even in the late 19th century (Gilpin 2001). Further, despite the fact that in the 20th century these flows were larger and faster in absolute terms, they were mainly concentrated within clearly defined regional economic areas dominated by regional hegemons.

With respect to financial globalisation, Gilpin notes how integration of financial markets is still limited to speculative and short-term investment. Yet if globalisation were a reality, he claims, the so called ‘law of one price’ would be respected. This is considered often the most important measure of economic integration, according to which identical goods would have identical prices in a perfectly integrated economy (Gilpin 2001: 368).

Hirst et al. (Hirst and Thompson 1999a, b; Hirst et al. 2009) are the main proponents of the thesis that globalisation is essentially a myth. In fact, for them, globalisation does not exist even as the ‘end’ of an ongoing process, whereas there is a clear trend towards regionalisation as the bigger and more powerful states seek to maximise their power. By contrasting the notion of a globalised economy with that of an ‘internationalised’ world economy (Hirst et al. 2009: Introduction) in which ‘the principal entities remain national economies, or agents that continue to be primarily located in a definite national territory’ (Hirst and Thompson 1999b: 140), these scholars come to the conclusion that the latter is still prevailing over the former.

This result is obtained by first identifying the main components of the two ideal types of world economy and then measuring them (Hirst et al. 2009). One way to measure the degree of integration of the world economy is, for example, the stock of foreign-owned productive capital. The data shows that until 1995, when the stock of inward foreign direct investment (FDI) as a percentage of GDP in the world was only 10.1 per cent, this figure did not seem dramatic enough to justify claims of the ‘death’ of the national economy. It is true that by 2005 this figure had more than doubled to become 22.7 per cent. However, Hirst et al. argue that many ...

Table of contents

• Cover
• Title
• Introduction
• 1  The Chinese Butterfly and the Arab Spring: Bread and Globalisation
• 2  The Paradox of Regionalisation within Globalisation: Some Theoretical Concerns
• 3  The Paradox of Marginalisation: Globalisation, Marginalisation and Civil Society in the MENA Area
• 4  The Economic Marginalisation and Lack of Regionalisation of the MENA Area
• 5  Tunisia: At the Roots of the Arab Spring: Economic Restructuring without Integration
• 6  Egypt: From Liberalisation to Marginalisation
• 7  Libya: The Political Economy of Isolation
• Conclusion
• Index