Tag Archives: middle east

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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The great race for independence: the private sector in Kurdistan

Go cart racing in Erbil. Photo: http://bolen88.files.wordpress.com/

On a recent trip to the Iraqi Kurdish region, my friends invited me for a night out in Erbil.

Having been to Erbil many times, I thought I knew the drill. If lucky, I would go out to a nice restaurant. I would sit at a white table parked on lush, green grass. There, I would eat terrific kabobs until my heart was content. Sometimes, I would eat so much maskouf that my stomach would beg for mercy. I would drink coffee, listen to music, and make conversation.

While these relaxing nights cemented some of my closest friendships, I had never come close to using the words exhilarating or thrilling to describe a night out in the Kurdish region. On my last trip, that changed.

We headed out to Erbil Speed Center, a sprawling course of go kart race tracks adjacent to an upscale housing subdivision called Dream City. There were three types of go karts available and kilometers worth of tracks as wide as highways. Upstairs, there was a full restaurant and bar.

I popped on a helmet, thankful for once that I no longer have to worry about helmet hair, and strapped myself into a kart. Driving along so many others, so unsteady in these imitations of automobiles, was terrifying. I zipped around the track, laughing much of the way.

Having lived in Washington, DC for so long, I had forgotten that driving can be fun. More importantly, driving fast can be very fun. Driving on a world-class course that symbolizes the Kurdish region’s fast track to a better future, however, was nothing short of exhilarating.

After taking off my helmet and catching my breath, I pondered the future of a region that is changing so quickly. Indeed, there is a race underway in the Iraqi Kurdish region.

Above ground, the Kurdish private sector is flourishing. Often referred to as “the other Iraq” because it has been relatively unencumbered by the instability that has plagued the rest of the country, the Kurdish region has been a magnet for post-war investment. Joining the Erbil Speed Center are new stores and restaurants opening every day.

Already a vibrant national tourist destination, replete with brand new hotels and tourist operations, the Kurdish region appears poised to become an international attraction as well. This year, National Geographic named the region one of the twenty most enticing tourist destinations of the year. When a Washington Post reporter visited to confirm the region’s charm, she noted that in Erbil “businesses are flooding here to gain a foothold, and tourists from the rest of the country swarm here to shop in the rapidly proliferating malls and to eat and drink in safety at the restaurants, bars and outdoor cafes.”

The development of the region’s private sector is a good thing for its people. Throughout the Middle East, Arab populations have been rising up against their governments because those governments have largely denied them the ability to achieve dignity through high value employment. If granted the proper environment in which to develop, the Kurdish region’s private sector appears poised to offer that dignity.

Its ability to do so, however, may be under threat. In 2007, when the semi-autonomous Iraqi Kurdish Regional Government enacted an oil law allowing it to sign agreements with foreign companies and profit from them, it set off a race that could determine the fate of the Kurdish region. The Kurdish Regional Government’s budget will grow rapidly. The question remains whether the private sector can grow fast enough to keep pace.

Thus far, disagreements with Baghdad and growing pains in its technical capacity have limited the Kurdish region’s ability to generate significant oil revenue. That it will one day do so, however, seems clear. When former BP CEO Tony Hayward’s investment firm Vallares Plc announced that it was making a $2.1 billion investment in the Kurdish region of Iraq, he called the region “one of the last great oil and gas frontiers.”

Indeed, the riches under the ground that have investors salivating will soon pump the government full of cash to spend. This year, the budget for the Kurdish Regional Government sits just below $10 billion. Next year, some have predicted that it could nearly double. Whether that cash will benefit public officials or the Kurdish people holistically depends on whether the private sector can grow strong enough to compete.

Already, the government has used some of that revenue to benefit businesses in the short term. For example, the government has offered businesses no-interest loans, subsidized electricity and water, and even provided free land for those that fit the government’s strategy of development. Many businesses, noting the deluge of subsidized Turkish and Syrian goods entering the region, argue that this assistance is crucial if Kurdish enterprises are to survive what they perceive as a dirty fight. Some businesses have even argued that the level of their own subsidization is insufficient.

The danger, of course, is that these training wheels, designed to get Kurdish businesses moving, could become crutches as businesses become dependent on the handouts of an ever richer government. At this point, currying government favor would likely become more important to success than elevating efficiency and competitiveness.

The private sector, which in well-functioning democracies serves to provide job opportunities independent from public office, could become a supplicant. Waste, inefficiency, and misallocation of resources could stunt the economy. Corruption and abuses of power could destroy what could have become a promising democracy.

Of course, this dark scenario is not inevitable. It is certainly possible that businesspeople and public officials will determine at some point that the threat of Turkish and Syrian goods no longer merits the danger of resource misallocation posed by subsidies. Iraqis in the Kurdish region might also determine that their lives are better if they are served by a private sector that exists to meet their demands, such as the demand for a well-maintained go kart course, not to lobby for government subsidies.

Creating an environment that enhances the long-term competitiveness of Iraqi Kurdish regional firms will require the cooperation of the private and public sectors. A competitive, free market economy requires institutions that protect property rights, ensure secure contracts, facilitate freedom of entry and exit into the market, and assure freedom of information. The rule of law is essential in ensuring that laws and regulations are applied consistently and fairly to all citizens.

In addition, we’ll also have to see a change in the mentality of companies, where they demand a more competitive institutional and business climate that gives them a fair chance to grow and develop rather than hand-outs and protections from the government.

Currently, CIPE is working with a range of private sector and civil society organizations to identify the specific needs and opportunities facing Iraqi Kurdish regional businesses. These partners are in the process of drafting a provincial business agenda to articulate the needs of the full range of the private sector to government. By working together with the private sector, policymakers can help create an environment that fosters competitiveness and ensures that the growing Kurdish Regional Government is accompanied by a strong, independent, and increasingly competitive private sector capable of delivering the prosperity that its citizens need.

The Kurdish region remains appealing to investors for reasons that have nothing to do with oil. That means that Kurdish regional businesses still have ample chance to grow faster and stronger than their government’s budget. If the Kurdish region is to have a healthy economy and democracy, they must.

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.

Hope on Yemen’s horizon

Overlooking the Sana'a cityscape. Masjid Al Saleh (Saleh's Mosque) is brightly lit towards the middle of the shot. (Photo: CIPE)

After living in Egypt, Kuwait, Jordan and Oman, and traveling through other countries in the region, Yemen remains one of those still left on my list of places to visit. Since the country took a turn toward political uncertainty, I wonder what will have to happen before I get a chance to cross it off.

It is apparent to me that Yemen has democratic prospects on the horizon and that there are strategies to halt what may seem an inexorable march toward crisis. I was heartened to read Christopher Boucek’s testimony before the Senate Committee on Foreign Relations’ Subcommittee on Near Eastern and South and Central Asian Affairs. In his remarks this Tuesday, Boucek stressed that,

“Washington must do more to address the underlying sources of instability—a collapsing economy, rampant corruption, unemployment, and resource depletion—if Yemen is to avoid becoming a failed state and a breeding ground for terror.”

The Arab Spring has confirmed that there is no state stability when citizens live under regimes that squash their dignity and fundamental freedoms – the freedom to participate in the political process, and the freedom to work and provide for one’s family. At this unique point in history, it is becoming increasingly clear – not just for Yemen experts such as Boucek, but for representatives in Congress, the administration, and State – that a “Yemen strategy” focused solely on combating terrorism follows the age-old metaphor of the doctor who treats the symptoms not the infection itself.

Instead, Boucek offers reality-based solutions to address the systemic problems that Yemen faces: improve the legal system, support land reform, and build state capacity.

Some will inevitably say, “Great, but how?” But we cannot under appreciate the importance of correctly identifying Yemen (and the region’s) core challenges.

Only then can policymakers apportion government funds to most adequately support Yemen’s retreat from failed state territory.

Only then can international actors and local partners construct programs that adequately respond to issues that negatively influence daily life for Yemenis.

Only then do I have a chance of someday visiting Bab al Yemen.

CIPE’s groundbreaking film, Destructive Beast, exposes the economic and social costs of corruption in Yemen. Directed by acclaimed filmmaker Khadija al Salami, the 43-minute documentary film captures the toll that abuse of power, neglect, and bribery have taken on economic growth and development in a country already on the brink of collapse. Please e-mail Yemenfilm@cipe.org if you would like to view or download a copy of the film, available in Arabic with or without English subtitles.

Democracy, dissent, and digital media in the Arab World

"Τhrough the Western Looking Glass" Revisited by Spiros Derveniotis. (CartoonMovement.com)

An expert panel convened on Capitol Hill yesterday all agreed that digital media have been central tools in toppling autocrats in the Middle East and North Africa, but they do not replace the human agency and courage that are the true forces underlying change in the region.

The Center for International Media Assistance (CIMA) and the National Endowment for Democracy (NED) recruited a panel of two conventional media journalists, an information technology expert, and NED’s own program officer for the Middle East and North Africa. Senator Richard Lugar (R-Ind.), Representative Mike Pence (R-Ind.) and Representative Adam Schiff (D-Calif.) were honorary co-hosts for the event. Rep. Schiff delivered a brief statement for the occasion.

“One need only walk the streets of Tunisia to see graffiti on the walls saying ‘Merci Facebook’,” Schiff remarked.

NED President Carl Gershman introduced the panel, noting how social media made it possible for once-distant and isolated bastions of dissatisfaction to connect and mobilize against common problems.

Amira Maaty, NED program officer for the Middle East and North Africa, painted a broad context of youth-led civil society in the region, some of whom are NED grantees. Youth-led organizations aren’t very many, but they are very dynamic, Maaty said. Some are affiliated with older human rights organizations, some are student groups, and there are others. What intrigued Maaty most besides their energy and courage was how they have been using social media as place to find and exchange ideas and best practices for activism through training videos, notes, and messages through Facebook or YouTube.

Maaty also detailed how digital media allows new groups to challenge traditional media as sources of independent and grassroots reporting, and also allows new groups to challenge traditional civil society as outlets for self-expression and sources of personal and organizational support. She stressed the importance of supporting, through NED or other channels, the human backbone of emerging digital media-driven civil society, as digital media are just tools and authoritarian forces can make just as much use of them.

Egyptian Journalist and Blogger Mona Eltahawy emphasized the much overlooked traditions of both dissent and digital media usage in the region. She hearkened back to 2005, when she spoke publicly on a number of occasions about digital media in the region and how Al Qaeda’s ability to make use of it dominated conversations, yet at the same time she repeatedly encountered examples in Bahrain and Tunisia of individuals who had early on tapped the power of digital media tools to share stories of yearning and struggling for human freedom. Though digital communities in 2005 were small – she gave a figure of 280 bloggers in Egypt in 2005 – they learned quickly and grew even faster, as authoritarian governments kept a tight hold on the real world.

“In the virtual world, they could build the world that they wanted,” Eltahawy described. Activists could influence each other and share stories that could not have been shared otherwise. Eltahawy cited an example of LGBT groups forming among Saudi Arabians on digital media that had no origin in the real world. “Facebook and Twitter are tools,” she distinguished. “But they did not invent courage.”

“The human need to rise up against a regime has always been there,” Eltahawy went on. Digital media allows people to see others acting on impulses they have long shared and yet suppressed for sheer lack of real or virtual networks that can support and facilitate human agency. “Digital media didn’t invent courage,” Eltahawy continued, but it allowed people to gain a broader sense of just how many others shared the same concerns and thoughts and to find out where they could join each other in protest.

Georgetown University Visiting Professor of Internet Studies Michael Nelson picked up where Eltahawy left off by comparing the Middle East and North Africa’s current wave of change to the Reformation. Martin Luther’s ideas and dissent spread so much more quickly than ever before thanks to the printing press, which according to Nelson cut the cost of sharing information by 99 percent. “Today digital media has cut the cost of sharing information by 99.9 percent,” Nelson said.

The hunger for information sharing manifests itself in some unexpected but unsurprising ways, Nelson elaborated, such as the desire for online pornography that helped drive the process of creating and sharing ways to circumvent blocks and controls imposed by authoritarian governments. Nelson also told of group organizers using dating site profiles and messages as a means of disguising coded information about meetings and gatherings.

Of course, Nelson warned, autocrats can certainly find ways to stop or worse hunt down those they suspect of using digital media to subvert their grip on power and might even elicit the passive support of corporations that could supply them with tools to block content or track dissidents.

“Ninety percent of the people won’t be able to find what they want,” Nelson summarized. “But all it takes is for that 10 percent to find what they’re looking for and to share it with their own social networks,” and suddenly what had been just conversation fodder becomes fuel for change. They could be looking for pornography, for stories from other countries about LGBT experiences, for reformer training materials, for WikiLeaks cables, or for news about their childhood friends who have moved abroad and started their own businesses.

AlJazeera’s Washington Bureau Chief Abderrahim Foukara spoke last, emphasizing that, “We still don’t know why it happened when it happened in the region.”

He spoke about a recent trip to Iraq, where he was compelled to ask Iraqis whether social media would have made a difference in the 1990s when Saddam Hussein crushed multiple rebellions in horrific and violent ways. Foukara said he could not get a consensus on anything other than that Saddam was certainly a more deranged leader than even Libya’s Muammar Ghaddafi, who has hired mercenaries to slaughter his fellow Libyans.

Foukara also reiterated the role of digital media in allowing people – especially youth – in the region to see more and more of what life is like outside of their countries where so many have only ever experienced repressive autocracies. Such connections created ‘dots,’ according to Foukara, and in turn conventional media could play the role of connecting dots, where such outlets have been open to new media. Conventional media, Foukara said, can provide a broad context around individual stories, photos, and images shared via Facebook or Twitter.

Foukara also emphatically predicted that if democracy emerges successfully in the region, a debate is certain to emerge over the underlying forces that allowed so many to live under such harsh leadership for so long.

In responding to audience questions en masse, panel members agreed on the quality and durability of digital media-driven commitment to following through on democratic reforms. In a region where autocrats had long maintained a near-perfect monopoly on public political discourse, the virtual world has captured and reflected back so many thoughts, conversations, and desires for change.

“It’s now a process of cleansing and a process of accountability,” Eltahawy concluded, referring to the ability of Middle East and North Africa residents to obtain information from a diversity of digital media sources tracking what is happening in each country and what they can learn from watching each other. “But saying WikiLeaks or Facebook or Twitter caused revolutions takes away agency from the real human beings who have long been demanding freedom.”

What does wealth mean for MENA women?

New figures suggest that 22 percent of the Middle East’s assets under management (AUM)—or $700 billion—were held by women in 2010. And that figure is growing. In a region whose news coverage more often highlights the plight of women than their triumphs and progress, this statistic is heartening. The details are even more encouraging.

Women in the Middle East are not only controlling more wealth, but tend to invest in more sustainable ventures, says consultancy Carousel Solutions. It’s not that women are wooed by simply “doing good” and “giving back.” Rather, they recognize these projects as solid, lower-risk investments that have the added benefit of being socially responsible. Financial empowerment is in strong hands with these women, who, the consulting firm suggests, are more confident about their wealth today.

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Got 80 million jobs?

The UN says poor countries need to Unleash Entrepreneurship; the Kauffman Foundation calls for entrepreneurs globally to Unleash Ideas. For the Middle East and North Africa, unleashing entrepreneurs is necessary to create the 80 million jobs the region needs over the next decade. Published in 2007, Good Capitalism, Bad Capitalism and the Economics of Growth and Prosperity details what – and in many cases who – keeps entrepreneurs on a leash in the Middle East and elsewhere. Tomorrow at 12pm EST, CIPE will launch the Arabic translation of the book in Cairo, Egypt. Audiences around the world can watch the event live via webcast.

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