Sunday, January 24, 2021

Arab world must avoid another lost decade | News from the Arab Spring

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Ten years ago, the Tunisian people revolted against President Zine El Abidine Ben Ali and overthrew him. They denounced his regime, corrupt policies and practices, and called for jobs, freedom and dignity. It was the cry of millions of young people frustrated by the arrogance of cronyism, the widening of the gap of economic opportunities and the stifling of freedom of expression.

Soon, the desire for change in North Africa and the Middle East sparked waves of protest across the region. These first waves of hope – which some have called the “Arab Spring” – led to the fall of governments in Egypt, Libya and Yemen. But as we now know, the wave crashed in a maelstrom of disillusionment, political opportunism, authoritarianism, violence and civil war.

A decade after these dramatic events, what happened to dignity and freedom? What happened to economic opportunities? Are MENA youth better off today than they were ten years ago?

Despite increased aspirations and limited political openness in some countries and despite substantial support from the international community, profound changes in governance and economic performance have not materialized over the past decade.

With very few exceptions, MENA countries have accumulated unsustainable public debt and increased their dependence on capital inflows. While some in the region, mainly in the Gulf, have shown improvements in the ease of doing business, the overall competitiveness of MENA countries falls short of the region’s potential.

According to a new opinion poll by The Guardian and YouGov, a majority of those polled in Sudan, Tunisia, Algeria, Iraq and Egypt do not regret the protest. Yet more than half of those polled in Syria, Yemen, Libya and Sudan say their lives are worse off than before the uprising.

Even in Tunisia – arguably the country closest to democratic success – 50 percent say their life is worse today, while just over a quarter of respondents say their life is better. And hope is waning: the majority of those polled in Yemen, Syria, Iraq, Libya, Sudan and Tunisia believe their children will face a worse future than before the protests.

This future is far from inevitable. But without a radical change of course, there will likely be another lost decade in the MENA region.

Building a new social contract

The discontent that brought about significant changes ten years ago is perhaps even stronger today. Young people in the MENA region suffer from a lack of opportunities and have low hopes for the future. To avoid another lost decade, governments in the MENA region must correct a broken social contract and the state’s distorting and corrupt role in the economy.

According to current demographic trends, the MENA region will need to create 300 million new jobs by 2050. This is a big challenge but far from distant. There is no time to prepare. The World Bank estimates that MENA countries will need to start creating 800,000 jobs per month – starting now – just to keep pace with new workers entering the market.

These millions of new jobs will neither be created by governments nor absorbed by the public sector. The only way to tap into the energy of the region’s youth is to revitalize economies, open more doors for the private sector, instill transparency, accountability and governance in the affairs of state, and to make the government play its role of equitable regulator.

Unfortunately, challenges abound. In much of the region, the education sector is still stuck using old curricula and outdated teaching methods. COVID-19 has painfully exposed the weaknesses of health systems. Social protection programs are cracking at the seams. The World Bank’s latest Human Capital Index report found that a child born today in the MENA region will be just under half as productive (57%) as it would be if it were granted ‘complete education and complete health.

Paradoxically, building human capital is one of the state’s most crucial roles. However, there is a glaring absence of state leadership in many countries in the MENA region. Governments, which are playing their rightful role, must make a huge effort to equip their young people to grow up and be competitive in an increasingly globalized world.

It must be more than a financial investment, as the MENA region already spends a large portion of its gross domestic product (GDP) on health and education, with largely unsatisfactory results. More rational use of resources and better governance of health and education systems are what the region needs.

Opening up more opportunities to women and their economic empowerment is another fundamental axis of progress. In the MENA region, a gender paradox remains: women are much more educated and perform better in academia than men, but only a fraction of them are economically active.

MENA governments also need to rethink their approach to social protection, which currently relies on expensive and misguided subsidies. For too long, states have chosen the politically easy and economically disastrous path to a flawed social contract, in which basic goods and services are made available at “protected” prices to buy political allegiances and “social peace” .

These policies are no longer viable. Governments cannot keep up with the price and people – especially young people – no longer accept a quid pro quo that silences their grievances and stifles their aspirations.

The failure of this outdated and flawed social contract, to a very large extent, caused unrest in the region 10 years ago. Now is the time to adopt empowering policies that would relieve the state of the burdens it can no longer bear and redirect scarce resources to building human capital and preparing today’s youth for the future. jobs of tomorrow.

The role of government in the economy

In a healthy economy, the private sector and entrepreneurship need space to develop. The government plays a key role as a regulator of the economy. This involves establishing clear and predictable rules, establishing market contestability to prevent monopoly practices, and empowering the judiciary to uphold the rule of law. These are the foundations of any open market economy and the conditions for attracting foreign and domestic investment.

There is a silver lining with some countries trying to bypass their development arc. Morocco stands out: it is in the process of opening up the country to the world and investing massively in modernity, while maintaining its macroeconomic stability. With most of the global effort today focused on managing the response to the COVID-19 pandemic in the short term, Morocco has implemented key new reforms that could potentially help transform the country’s future and his population.

However, it is important to stress that macroeconomic indicators can be misleading. They can hide harsh social realities and weak governance, as was the case in Tunisia 10 years ago. Across the MENA region, far-reaching economic and social reforms and a strong signal of zero tolerance for the unfortunately still endemic corrupt practices are in order.

Unfortunately, these policies are the exception rather than the rule. Large sectors of MENA economies are still poorly managed by public entities that function well outside of market realities. The region’s current economic landscape places a heavy burden on taxpayers and closes the door on far too many private investors.

No one is arguing for the automatic privatization of public enterprises. What MENA governments need to do is open up markets to competition, introduce public-private partnerships and revitalize segments of their economies that were inefficient or dormant. Governments must have the political courage and legitimacy to explain these reforms and adopt social policies to protect anyone left behind.

An unconsolidated decade

Ten years after the most significant change in a century, nothing is resolved in the MENA region. The frustrations that sparked the Arab Spring prevail, compounded by more violence, social unrest, and – in many cases – weaker and more corrupt governments. More young people, many of whom have university degrees, dream of a better future elsewhere in the world.

To avoid another wasted decade, a strong call to action must resonate throughout the MENA region – from “ocean to gulf”. The immediate task is to open the door to private enterprise, to overcome resistance to the liberalization of economies and to give young people opportunities corresponding to their unlimited potential.

Governments must enact fair laws, pass enabling regulations, and enforce them fairly. This will unleash the energy of millions of young people who will choose to create opportunity and wealth at home rather than transporting their talents abroad or risking their lives crossing the sea.

Countries in the region must leave it to entrepreneurs, creators, innovators and those willing to take high risks for high rewards to transform MENA economies. They will create jobs and give hope to young people in the region. Give them space and support, follow their lead and see what an unconsolidated decade will look like in the region.

The opinions expressed in this article are those of the author and do not necessarily reflect the editorial position of Al Jazeera.



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