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rfmcdonaldFrom the The Globe and Mail:
"It's the Arab economy, stupid (well, partly, at least)"
By RAMI KHOURI
Thursday, March 6, 2003 - Page A17
Economics may not always fully drive politics, but it sure plays a large role. New data on the Arab economic condition offers ugly reminders of this. The data is from an annual publication called the Unified Arab Economic Report, published jointly with the Arab Monetary Fund, the Arab Fund for Economic and Social Development, and the Organization of Arab Petroleum Exporting Countries. The latest issue (for 2001) reveals significant trends that are worrying for Arab economies and people.
I am not an economist, but I know enough about the interplay between an individual's well-being, perception of his or her political place in society, and sense of hope for the future to know that much Arab discontent in recent years can be explained by the statistical data in this report. It provides a window into the underlying stresses that drive political turbulence, and even violence, hopelessness, and terror in some cases. The phenomenon of hundreds of millions of people stuck in a cycle of economic stagnation and political ineptitude provides a richly fertile environment in which small groups of militants are born, and from which they receive continuing emotional and political sustenance.
So the report's data is important in a wider political sense. The 2001 figures are interesting only to a limited extent, because the Arab economy since the early 1970s has been very volatile (due to a heavy reliance on notoriously erratic oil prices and income, and broadly incompetent political-economic management.) More important is the economic trend over time, which is chilling.
Statistics for all Arab countries where data could be collected (Iraq, Palestine and Somalia are excluded in many cases, because of their battered condition) indicate that real living standards in the Arab world in the past two decades have, at best, remained stagnant. In most cases, they have declined. The gross domestic product per person (current prices) in the Arab world as a whole was $2,469 in 2001, a drop from $2,578 in 2000, and from $2,612 in 1980.
If these figures were adjusted for inflation and foreign-exchange-value declines since 1980, we'd find that the average income of Arab citizens has fallen substantially in real terms -- in contrast with significant quality of life increases in such areas as Western Europe, North America, the Far East and Israel. But even these figures are deceptive because they include the small populations of oil-producing Arab states, along with poorer states with large populations.
Here's what we find if we isolate six relatively low income, large-population Arab states (Algeria, Egypt, Morocco, Sudan, Syria, Yemen): The average per capita GDP for the 194 million citizens of these countries was $1,039 in 2001. If we could factor in Palestine, Iraq, and Somalia -- all economic catastrophes recently -- the average income would be even lower. And if we adjust for inflation and foreign-exchange-value declines, they'd drop even more.
The political meaning of this is striking. About three-fourths of all Arab people are poor, and have been getting steadily poorer in the past two decades. Other pan-Arab economic trends are equally problematic, including the high level of public spending on security and defence (25 per cent of current spending in 2001); the public-sector dominance of the economy (33 per cent of total GDP); consistently high foreign and domestic debt burdens; and the fact that income and corporate taxes represent just 28 per cent of total Arab government income.
If you wonder why the U.S. army is shooting missiles at jeeps in the Yemeni desert, chasing suspected Egyptian, Moroccan, and Somali terrorists all over the world, and is poised to attack Iraq while the majority of Arabs (and Turks, and Iranians) oppose the idea, part of the answer is this dreadful economy.
As Arab populations continue to grow at the rate of about 2.5 per cent a year, as the majority of Arabs remain poor with few prospects of improvement, and as virtually no Arab citizenry can freely elect its leadership and hold it accountable in a credible manner, the result, not surprisingly, is massive inner tensions that drive most Arabs to despair, some to revolt, and a handful to terror. American military attacks, domestic Arab repression, and heightened Israeli brutality will not dampen these sentiments, but rather hasten and exacerbate them.
Rami Khouri is editor of The Daily Star in Beirut.
"It's the Arab economy, stupid (well, partly, at least)"
By RAMI KHOURI
Thursday, March 6, 2003 - Page A17
Economics may not always fully drive politics, but it sure plays a large role. New data on the Arab economic condition offers ugly reminders of this. The data is from an annual publication called the Unified Arab Economic Report, published jointly with the Arab Monetary Fund, the Arab Fund for Economic and Social Development, and the Organization of Arab Petroleum Exporting Countries. The latest issue (for 2001) reveals significant trends that are worrying for Arab economies and people.
I am not an economist, but I know enough about the interplay between an individual's well-being, perception of his or her political place in society, and sense of hope for the future to know that much Arab discontent in recent years can be explained by the statistical data in this report. It provides a window into the underlying stresses that drive political turbulence, and even violence, hopelessness, and terror in some cases. The phenomenon of hundreds of millions of people stuck in a cycle of economic stagnation and political ineptitude provides a richly fertile environment in which small groups of militants are born, and from which they receive continuing emotional and political sustenance.
So the report's data is important in a wider political sense. The 2001 figures are interesting only to a limited extent, because the Arab economy since the early 1970s has been very volatile (due to a heavy reliance on notoriously erratic oil prices and income, and broadly incompetent political-economic management.) More important is the economic trend over time, which is chilling.
Statistics for all Arab countries where data could be collected (Iraq, Palestine and Somalia are excluded in many cases, because of their battered condition) indicate that real living standards in the Arab world in the past two decades have, at best, remained stagnant. In most cases, they have declined. The gross domestic product per person (current prices) in the Arab world as a whole was $2,469 in 2001, a drop from $2,578 in 2000, and from $2,612 in 1980.
If these figures were adjusted for inflation and foreign-exchange-value declines since 1980, we'd find that the average income of Arab citizens has fallen substantially in real terms -- in contrast with significant quality of life increases in such areas as Western Europe, North America, the Far East and Israel. But even these figures are deceptive because they include the small populations of oil-producing Arab states, along with poorer states with large populations.
Here's what we find if we isolate six relatively low income, large-population Arab states (Algeria, Egypt, Morocco, Sudan, Syria, Yemen): The average per capita GDP for the 194 million citizens of these countries was $1,039 in 2001. If we could factor in Palestine, Iraq, and Somalia -- all economic catastrophes recently -- the average income would be even lower. And if we adjust for inflation and foreign-exchange-value declines, they'd drop even more.
The political meaning of this is striking. About three-fourths of all Arab people are poor, and have been getting steadily poorer in the past two decades. Other pan-Arab economic trends are equally problematic, including the high level of public spending on security and defence (25 per cent of current spending in 2001); the public-sector dominance of the economy (33 per cent of total GDP); consistently high foreign and domestic debt burdens; and the fact that income and corporate taxes represent just 28 per cent of total Arab government income.
If you wonder why the U.S. army is shooting missiles at jeeps in the Yemeni desert, chasing suspected Egyptian, Moroccan, and Somali terrorists all over the world, and is poised to attack Iraq while the majority of Arabs (and Turks, and Iranians) oppose the idea, part of the answer is this dreadful economy.
As Arab populations continue to grow at the rate of about 2.5 per cent a year, as the majority of Arabs remain poor with few prospects of improvement, and as virtually no Arab citizenry can freely elect its leadership and hold it accountable in a credible manner, the result, not surprisingly, is massive inner tensions that drive most Arabs to despair, some to revolt, and a handful to terror. American military attacks, domestic Arab repression, and heightened Israeli brutality will not dampen these sentiments, but rather hasten and exacerbate them.
Rami Khouri is editor of The Daily Star in Beirut.
