The Achilles’ Heel of the Arab Spring
By: Mohammad Ali Qohastani
The Arab Spring has blossomed in three North African countries, bringing relative political freedom in Tunisia, Egypt and Libya. Dictators have been toppled and the breeze of democracy blows in these countries. The people of these countries aspire to a new era which is followed by political independence. How likely is the Arab dream of independence? What are the factors which could undermine their sovereignty? The Arab Spring, which sparked off in Tunisia because of unemployment, was followed by strikes and protestors’ blocking of the roads in urban areas. Consequently, investment took a nosedive in this Mediterranean country, European tourists stopped visiting the country, and unemployment actually soared.
The Tunisian Labor Ministry has reported that 19 percent of the labor force will remain jobless until the end of the year. Out of this job-seeking group-- which consists of 700 thousand people-- 10 thousand lost their jobs during the rise of political turmoil, and 150 thousand (including 80 thousand of higher education graduates) have just recently entered the labor market. The officials of the country announced that the 2011 GDP growth of will have fallen down to a flat zero percent.
The first free election of tyrant-free Arab countries was also held in Tunisia. It appears that there is a great burden on the shoulders of the Islamist party Ennahda, which won the majority of votes in the polls. Ennahda should immediately get the economy (and investments) up and running in the country, otherwise it will face serious challenges. Egypt’s situation is somehow different: it was the second country entering political transformation after a popular uprising led to the fall of Husni Mubarak. While Egypt-- as the most prominent nation in the Arab World-- tries to return to a normal state, many people inside and outside the country worry that economic problems threaten the fragile and shaky Egyptian policy in the transition phase.
The promises of billion-dollar financial aid by Western countries and the Arab states has not been fulfilled to a large extent, and most of the financial support is supposed to be delivered to the country in the form of long-term aid. In the short run, coping with the consequences of economic upheavals produced by the Egyptian revolution is a great challenge in a country where almost 40 percent of population lives below the poverty line.
The economy is a formidable challenge for Egypt whose economic structure differs from its oil-producing neighbors. In Egypt, there exists a diverse economy that enjoys an extensive domestic market. Situated at the crossroad of Asia, Africa and Europe, Egypt has always been different from its neighbors for its potential of turning into a cardinal regional power. Nonetheless, ruled by an inefficient dictatorial system, the country has remained underdeveloped due to lack of efficient economic management, a bloated bureaucracy and an ineffective educational system. The revolution’s state of uncertainty has caused the country’s economic growth to decrease by 4.2 percent and the unemployment rate to rise from 9 to 12 percent in the first three months of 2011. Investment fell to minimum and tourism figures took a nosedive. Foreign investment fell from 13 billion dollars in 2008 to a dire zero. Egypt has lost one third of its foreign exchange reserves and the International Monetary Fund has predicted a very slow economic growth for the country.
To meet the increasing expenditures in the current financial year, the government has submitted a draft for the development budget. In order to compensate for the 10.6 percent budget deficit (this number was 6.8 percent for the previous financial year), the government has negotiated with the IMF to receive a 3 billion dollar loan. Three weeks later, the loan request was withdrawn, since the military council in charge of administering affairs did not want to impose such a loan burden on future generations.
During the last 5 years of Husni Mubarak’s rule, the boom in tourism, the textile industry and construction projects led to a six percent annual increase in the real GDP, but it was much less than what Egypt needed for the employment of 650 thousand citizens. The Egyptian people are growing further impatient, as they were repeatedly inundated with exaggerated claims of high economic growth and unprecedented quality of life in Mubarak’s times, while they had no sense of receiving their deserved share from the assumed development happening. Although a legitimate demand, their call for a decent standard of living has coincided with their country’s passing through a historical phase, and changes never come without a cost.
In Libya, after four decades of dictatorship, the people’s blood reached the boiling point. Although the uprisings in Egypt and Tunisia were more peaceful, in Libya, the people and opponents fought against a dictator who had provided his subjects with welfare: the students enjoyed a salary during their education; unemployment salaries were paid; newly-married couples were given a free apartment by the government; overseas students were granted with a monthly 2500 Euro scholarship fund and a car. Libya had no debts to any country; free education was provided for the public, 25 percent of the population had academic degrees; there were no beggars and no homeless people. But in the last months of Qaddafi’s rule, the Libyan oil exports were cut; many of its assets were blocked, and the people received the brunt of the economic pressure.
Trading their welfare for freedom, Libyans, now seek a democratic, independent country. While freedom appears attainable, full independence is not a given. Just one day after Qaddafi’s flee from Tripoli, an eighty-strong ensemble of representatives from French oil companies visited Benghazi to hold negotiations with the Libyan revolutionary leaders on the extraction and sale of Libyan oil, one of the most cost-effective oils in terms of extraction. Such clues are enough for analysts to conclude that Libya will not be economically independent, as it is also certain that Egypt has no choice but to receive a loan from the IMF. In Tunisia, the Islamist leader Rached al-Ghannouchi realistically accepted that alcohol will be available and tourist resorts will stay open to keep the tourism industry running. The economy is revealing the harsh reality to Arab revolutionary leaders, and these challenges may lead the revolutions nowhere-- and become the Achilles’ heel of the Arab Spring.
Mohammad Ali Qohastani is a Middle East affairs expert.