Tag Archives: MENA

The New Middle East: An Uncertain Future

Map of Middle East Region

By Bahaa Eddin Al Dahoudi, CIPE-Atlas Corps Think Tank LINKS Fellow

What future awaits the Middle East? This question remains pivotal following the outbreak of the Arab revolutions four years ago. It keeps popping up as regional developments arise, especially with the decline of democracy and presence of revolutionary forces in many Arab countries. The region’s resort to military tools is increasing due to the rise of terrorism, violence, and political polarization, a decline of charismatic leaders, and a lack of support for institutional structures and democratic transitions. In a Middle East where “there is no winner,” two vital questions emerge: Is the Arab revolution the reason behind the chaos and collapses? And, what are the future scenarios for this inflamed region?

I would argue that the Arab revolution is not the reason behind the current chaos. Knowing the history of revolutions, it can be understood that the development of a revolution is subject to consecutive waves of ups and downs. Resistance from old patterns against new revolutionary movements seeking a change are to be expected. In other words, what happened in the Arab world was historic but also unavoidable. Regimes that refused to change and reform – and instead accepted the equation of corruption and the status quo— had to fall one day. If it hadn’t happened in 2011, it would have happened another time. Thus, it is not beneficial to simply look back at the past and remember the good old days. Instead, one must look to the future and start preparing for what will come next. Thus, the real question we must ask is: What future awaits us in the Middle East?

What future awaits the Middle East? It is a region where Syria has collapsed, Iraq and Yemen are divided, Libya is shattered, and Egypt and the Gulf countries face huge security, economic, and political challenges. What future awaits countries where oil is the main determinant of the principles and rules of political games? All while international statistics say the region is witnessing explosions in population, rising unemployment rates, and declining quality of health and education services.

Are we about to witness an Islamic Middle East ruled under a Caliphate model? Will there be a democratic Middle East where people will again revolt against dictatorship in hope of creating a change? Or will the Middle East become a sectarian region filled with disputes, conflicts, and divided small states?

There are many outstanding questions and no one can definitively predict the outcomes. Undoubtedly, the years to come will carry more ambiguity in the political, socioeconomic, and cultural spheres in that region. In the meantime, we can continue to support freedom of speech of the people with the hope that the ultimate outcomes reflect the choices of the people of this region.

CIPE-Atlas Corps Think Tank LINKS Fellowship brings talented young professionals with strong research backgrounds to shadow researchers and experts at leading U.S. think tanks for six months. Bahaa Eddin Al Dahoudi is serving at Project on Middle East Democracy (POMED).

A Way Forward for a Viable Syria

From left to right: Abdulwahab Alkebsi, Ayman Tabba, Ellen Laipson, and Geneive Abdo discussing the role  of private sector and civil society democrats in reshaping Syria and countering extremism.

From left to right: Abdulwahab Alkebsi, Ayman Tabba, Ellen Laipson, and Geneive Abdo discussing the role of private sector and civil society democrats in reshaping Syria and countering extremism.

“We hear a lot about Syria— we hear the narrative of the Syrian government, we hear the narrative of ISIS, we hear the narrative of some of the opposition groups, but we don’t usually hear from the private sector, about what’s going on.”  

With this introduction, CIPE Regional Director for the Middle East and North Africa Abdulwahab Alkebsi opened a panel discussion on May 21 co-hosted by CIPE and the Stimson Center entitled “A Way Forward for a Viable Syria: An Insider Perspective from the Private Sector and Civil Society.” The panel featured Chairman on CIPE partner, the Syrian Economic Forum (SEF) Ayman Tabbaa, President and Chief Executive Officer of the Stimon Center Ellen Laipson, and Middle East Fellow at the Stimson Center Geneive Abdo. The panelists discussed the role of democrats from the private sector and civil society in reshaping Syria and countering extremism.

Tabbaa spoke of SEF’s role as the first independent economic think tank in Syria working to change the trajectory of the conflict and rebuild a better Syria for the future. “We have to go back to the roots of this conflict,” he told the audience. Under the regime of Bashar Al Assad, citizens are oppressed and disenfranchised— they lack opportunity for meaningful political and economic participation. But after four years of war, people are wondering what it means to be a Syrian anymore. It is crucial, in this context, to redefine the social contract and the relationship between the citizen and state. As a think tank, SEF is playing a leading role in doing so.

“…after four years of war, people are wondering what it means to be a Syrian anymore.”

Syrians are looking for democratic alternatives to the forces tearing the country apart. Every day we see news about atrocities and violence in Syria. Much of the media focuses on sectarian violence and ISIS-created mayhem. But, even with the chaos and human suffering, Tabbaa offered signs of hope through examples of SEF’s work during the conflict.

He spoke about the recent memorandum of understanding (MOU) that SEF signed with the Ministry in Local Administration of the Syrian Interim Government (SIG). SEF has a network of liaisons inside Syria who provide the SIG and Local Councils with economic data, analysis, and recommendations. Providing this on-the-ground information to decision-makers supports improvement of local governance and enhances the democratic legitimacy of the Councils

Another SEF project helps Syrian youth develop solutions to the challenges in their communities through civic education. SEF has provided 600 young Syrian high school graduates with training in entrepreneurship, leadership, and civic skills. The course offers an alternative to the regime’s propaganda and the empty promises of extremist ideology.

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A Ray of Hope on Health Care from an Unlikely Source

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Health care professionals in Egypt conduct a stakeholder analysis to help spell out governance principles for Egyptian hospitals.

A hip replacement in the United States, paid for out-of-pocket (i.e., without health insurance), would cost anywhere from $11,000 to $125,000, depending on what hospital you go to, according to a 2013 survey of 100 hospitals featured on National Public Radio.  And that was among the hospitals that, when asked, could actually produce a quote – 40 of the 100 hospitals surveyed couldn’t quote a price at all.

Those fortunate enough to have insurance don’t need to worry about price-shopping.  When I go to my primary care physician, I pay a $20 co-pay.  (Under our previous insurance, provided by my wife’s former employer, it was $10.  Why the difference?  Who knows?)  I have no idea how much my insurance company pays the doctor.  I suppose I could find out, but… honestly?  There’s really no compelling reason for me to do so.  It’s $20 no matter who I see.

And it turns out that, even if there were more incentive for me to price-shop, more expensive hospitals aren’t necessarily better hospitals, according to a 2014 study.

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Sesame Street, Swine Flu, and Unintended Consequences in Egypt

Zabbaleen boys in Mokattam Village in 2009. (Photo: Wikipedia)

“The law is not feeding me.”  That was the quote that really caught my eye.  At CIPE we talk about “Democracy that Delivers,” but I have never seen such a fundamentally honest and genuine expression of the concept – a democracy will not work unless it is delivering in tangible ways for its citizens.

“The law is not feeding me.”

The source was a black market pig farmer quoted in a fascinating article on a garbage collection crisis in Egypt in Monday’s Washington Post.  (And no, I didn’t know there was such a thing as a black market pig farmer, either.)  It seems that pigs raised by Cairo’s Coptic Christian Zabbaleen community used to consume a significant portion of the city’s garbage.  Reacting to the global swine flu epidemic in 2009, the Egyptian government slaughtered all of the country’s pigs and, from then on, banned ownership of trash-fed pigs.  This usurped the livelihood of the Zabbaleen – and resulted in a city-wide backlog of unconsumed, uncollected garbage.  To make matters worse, in the current economy, government-contracted sanitation firms are being short-changed by a full half of their fees and have had to cut back service accordingly.

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What do Libya, Norway and El Dorado have in common?

(photo: NewsWarped.com)

Husni Bey, a Libyan entrepreneur, employed the language of legend to express confidence in his country’s ability to rebuild itself after decades under Gaddhafi. “Definitely, Libya is an El Dorado,” he said.  “It has great resources that [will] really allow it to turn around in no time.” Indeed, with vast fields of oil beneath it, Libya’s natural wealth is substantial. While many countries would buckle under the weight of a post-civil war reconstruction that some estimate will cost $80 billion, Libya should have no problem paying its bills.

Yet, while this oil revenue should ease the costs of Libya’s reconstruction, many observers are concerned that it could make Libya’s path to democracy hazardously slick. That’s because all too often an abundance of natural resources, oil in particular, allows wealth and power to gather into the hands of the few and prevents the development of democracy. El Dorados usually make poor democracies.

Indeed, since the 1960s and 1970s when many states began to seize control of their oil resources from Western oil companies, many scholars have noted an inverse relationship between oil export revenues and freedoms in a given country. Headed by countries such as Saudi Arabia and Iran, a perusal of the world’s largest oil exporters reads like a roll call of autocracies. This relationship is more than a correlation.

In these countries, oil distorts the relationship between state and citizen. States that do not require tax revenue to provide services to their citizens are less likely to feel accountable to them. When citizens express frustration, the state can co-opt them with handouts. If that fails, these states are able to lean on their disproportionately well funded coercive apparatuses. Unaccountable to their citizens and flush with revenue, resource-rich states can become incubators for corruption. Such was the case under Gaddhafi whose nationalization of Libya’s oil allowed the country’s descent into kleptocracy.

Fortunately, the connection between oil and corruption is not a fait accompli in Libya. In the wake of Gaddhafi’s fall, some have shifted their attention to Norway, which has largely broken the link between oil and corruption, as a possible model for Libya. By limiting the amount of oil companies may drill and shielding oil revenues from the reach of government officials, Norway has managed to facilitate the growth of a diverse economy and transparent political system.

In Libya, a country in which tribal identity is an important means of social organization, the distribution of oil revenue has the potential to combust. The distribution of oil revenue has already emerged as a source of contention: Businessmen based in Benghazi, an eastern city that suffered disproportionately under Gaddhafi and ultimately spawned the now ruling National Transitional Council (NTC), have launched a campaign to pry the state-owned National Oil Company away from Tripoli.

The Norwegian model cannot and should not be applied directly to Libya, a country whose similarities to Norway may start and end with its oil wealth. Still, it is heartening to know that by fostering transparency and accountability, a country can avoid succumbing to the oil curse. With critical decisions regarding the distribution of oil revenue among Libya’s many tribes looming, the time to focus on instilling and institutionalizing these values is now.

Libya will likely resume oil exports in the next week or so. The International Energy Agency projected that Libyan oil production, currently operating at about ten percent capacity, will reach 1.1 million barrels a day by the end of next year. While this amount would still be below capacity, it would nevertheless represent a massive flow of revenues into the economy.

Should consequential decisions about oil revenues be made by the consensus of representatives of all Libyans in an atmosphere of transparency and accountability, they could infuse Libya’s fragile transition with the confidence of its people. Should it appear that the victors of Libya’s civil war are merely collecting their spoils at the expense of the losers, however, Libya’s transition to democracy will have been made more difficult. Libyans would be wise to focus on creating a transparent system that limits opportunities for abuse before the oil resumes its free flow. Many El Dorados have become miserable places in which to live. With transparency and good governance, Libya – like Norway – can become an exception.

Entitled to accountability

Two generations of Bedouin men at camp in Wadi Rum, Jordan. (Photo: Dorothy Smith)

It was my first visit since the Middle East’s wave of popular uprisings began, and I was curious to see if I felt anything different. Of course, the conference on corporate governance I was attending took place in Jordan, perhaps the quietest front in the Arab Spring spectrum, so it wasn’t really a fair test. Yet that didn’t prevent me from gaining a sense of change.

One Egyptian that works for a multinational organization noted, “What’s different these days is the demand for accountability. Nobody wants to sign his name to anything unless he’s certain that everything is in order and can be justified – both in the government and the private sector. People feel they will be held accountable for their decisions, and this is a radical difference.”

Surrounded by another Egyptian, a Tunisian, and a Jordanian – all participants in the conference from the business community or development organizations – they all nodded their heads in agreement.  Yes, they concurred, people are no longer willing to turn a blind eye to abuse of power and there is a sense of entitlement to open access to information.

My Egyptian colleague continued, “Of course, the downside to this is that nothing is moving in the economy. Since everyone is so cautious, there is little activity taking place and the result is a bit of stagnancy. But, this is a normal reaction, and the pendulum will swing back toward the middle and momentum will pick up again. Even with the short-term pain people are feeling, it is worth it. Nothing will ever be the same – we will never go back to the way we were before. Now we know we can make our own future.”

After reading report after report about dire economic forecasts for Egypt, Tunisia, and Yemen, I was encouraged by his sense of optimism.

Over the past several months, the initial euphoria from the youth revolutions has waned in Washington, and a tendency towards cynicism has emerged. My colleague leaned forward and relayed his story about joining the demonstrators in Tahrir Square in the early days of the revolution, about thousands of people streaming in from all directions and joining together in an unplanned, spontaneous moment. As his eyes lit up and his voice gathered strength talking about the sense of momentous change and invincibility in the air, I couldn’t help but be swept up by his excitement.

There is no doubt that it will be a long, bumpy ride for Egyptians and others in the region, and there will surely be many setbacks and disappointments ahead. But with a new generation of leaders and reformists like those I met in Jordan, there is a fighting chance that great progress lies ahead.

The 128th most influential Arab

Click. Scroll. Click. Scroll.

I sat paging through Arabian Business’s list of the 500 most influential Arabs. #2 Wael Ghonim – Google exec made famous by his role in the Egyptian protests. #21 Amr Diab – played his pop music on repeat while in Egypt. #22 Amin Maalouf – one of my favorite authors. Click. Scroll. But the most powerful Arab names in business, science, media, sports, and culture soon became less and less recognizable. I began to become discouraged: Do I really have such a narrow understanding of this region after years of study, learning Arabic, and living abroad?

Then I got to #128 Elia Nuqul. Here was a prominent, though likely lesser known, businessman of whom I knew a disproportionate amount. Elia Nuqul is the founder and current chairman of Nuqul Group, a Jordanian firm established in 1952 that has grown to encompass more than 30 companies. No, I don’t follow the region’s corporate developments with microscopic attention, though I wish I could. But Nuqul Group made a powerful impression on me after I read about the group in CIPE’s case study guide Advancing Corporate Governance in the Middle East and North Africa: Stories and Solutions, and listened to Vice Chairman Ghassan Nuqul explain the group’s self-discovery of corporate governance.

In fact, on June 12, CIPE Program Officer Danya Greenfield presented alongside Ghassan Nuqul at the Third Strategic Corporate Governance & Responsibility Forum, which took place in Amman, Jordan. Danya launched the case studies guide and accompanying DVD on a panel that included Philip Armstrong, Head of the Global Corporate Governance Forum (CIPE’s partner in producing the case studies), and Slim Othmani, chairman of NCA-Rouiba (an Algerian company also profiled in the case studies and DVD).

I was not surprised to find Elia Nuqul listed as one of the most powerful individuals from the Arab world. I remembered from the case studies that Nuqul Group had undergone a rapid expansion since its establishment, but found that implementing corporate governance practices allowed for the decentralization of decision-making and formalization of roles and procedures to allow the group to sustain its growth. As Vice Chairman Ghassan Nuqul explained, “I can tell you in my case what developed and what evolved in Nuqul Group was done in response to challenges and actual needs on the ground — and it turned out to be what you call corporate governance.”

I wouldn’t be astonished to find that many more of the 500 most influential Arabs were implementers of corporate governance in their corporations.