POMED Notes: An Economic Perspective On The Arab Spring One Year Later

On Monday, the Stimson center hosted a panel event to launch a new joint initiative with the George C. Marshall Foundation: “Pathways to Progress:  Peace, Prosperity and Change in the Middle East.” This initiative seeks to address the multiple challenges facing the Arab world at a time of significant change. The event began with comments from Mona Yacoubian, Director of Pathways to Progress: Peace, Prosperity and Change in the Middle East, and Olin Wethington, Egyptian Elections observer, Member of the Board of Trustees of the International Republican Institute. Then Robert D. Hormats, Undersecretary of State for Economic Growth, Energy and the Environment at the Department of State, gave remarks and featured Ambassador Thomas R. Pickering, Vice-chairman of the Board at the Stimson Center. Ellen Laipson, President and CEO of the Stimson Center, moderated the event.

For full event notes, continue reading below. Or, click here for the PDF

Yacoubian offered four general observations about the Arab Spring. First, the events are watershed events. The power balance equation between rulers and the ruled is being rewritten. Second, there are three general models for change: peaceful popular protest (Tunisia and Egypt), violent uprising (Syria, Yemen and Libya), and preemptive reform (Jordan and Morocco). Third, there are two countries that hold a disproportionate amount of influence: Egypt and Syria. Last, there are critical challenges that lie ahead, such as the threat of resurgent authoritarianism, threat of civil war, socioeconomic rebuilding and issues of identity (sectarianism, tribal identity, etc). Yacoubian then spoke about the efforts of Pathways to Progress, and the five core aspects of the Marshall Plan (European Recovery Program) that can be applied to the Arab Spring: holistic integrated whole of government approach, emphasis on partnerships, emphasis on multilateral cooperation, focus on regional economic integration, and understanding that there is indigenous creativity and entrepreneurism in the region. She concluded by saying that ideas generated in the U.S. can only be foundational to pursuing open dialogue in the Arab region.

Wethington discussed his personal observations of the Egyptian parliamentary elections. It was Wethington’s opinion that the elections were conducted credibly, being generally fair, reasonably transparent, and generally absent of fraud (with the exception of a few minor violations.) In briefly addressing the upcoming presidential elections, Wethington brought up several key ideas. First, that Egypt has a history of strong and powerful presidents, a tradition that he doubts the Muslim Brotherhood will want to see continued. Second, despite not having a candidate, the results of the elections will still be of high concern to the Muslim Brotherhood. Third, regardless of whether or not the military puts forth a candidate for President, but it is indisputable that its interests must be taken into consideration. Wethington said the question to ask is whether or not there is a candidate who can appease the needs of both of these entities who could be publically endorsed by them. Wethington then spoke about Egypt’s grim economic landscape. He said there needs to be stability in the nation in order to fully address the economic concerns, but that it depends on three factors: reality and perception of a parliamentary coalition that shows some governing capability, a demonstrable return to the rule of law and availability of emergency outside support. To conclude, Wethington emphasized the importance of good policy in a stable government. In order to drive true reform, good ideas need to be identified and initiated by those who are under pressure to govern for the people.

Hormats discussed several important facts that must be remembered amid the Arab Spring: the U.S. is deeply committed to a long-term partnership with the people of the Middle East and North Africa, the people of the region should be leading the movement while the U.S. is there to offer support, and the U.S. has had historic economic relationships with countries in the region. Hormats then delved into the challenges that have presented themselves: an exclusive economy that has left much of the population behind, especially the youth; an irrelevant education system that is not adequately preparing young adults to enter jobs for which they are trained; beyond oil, there is very little that is driving the economy of the region, and to make matters worse, tourism has significantly declined, which has contributed to higher levels of unemployment. Due to the strain the U.S. is experiencing in resources, Hormats said it needs to be innovative and creative in the ways it provides aid to countries in the Arab region.

He referenced the Marshall Plan, saying the success of the Plan was that it encouraged countries within the region to do things internally to serve their own reconstruction and development. Hormats then laid out the goals of the Deauville Partnership and stated that the U.S., in collaboration with other nations and international entities, has already made significant progress in providing countries like Egypt and Tunisia with resources. To conclude, he emphasized that the U.S. needs to continue developing creative methods of giving aid to Arab countries, that all parts of society need to get involved – private sector and small business owners included – to support a growing region. The international community “must respond to the aspirations of the people of the region.”

During Q&A, Ambassador Pickering brought up the concern that there is no regional economic institution that binds the Arab nations (whereas the Europe had the EU), and therefore a lack of incentive for leaders to change their nations. Hormats agreed that it is a problem to consider, however, explained that there hasn’t been significant interest in the region to form such an institution. He mentioned the Arab Bank as a possible starting point, but said that the establishment of a regional economic institution, though not impossible, is very far away.

Another question was asked concerning the changing political climate in the U.S. and the ongoing presidential campaigns’ affects on efforts in the region. Hormats said there is an underlying assumption that all efforts are undertaken with American interests in mind, and that results of those efforts will serve American interests. Therefore, it is also assumed that regardless of who is President, American interests should be preserved and prioritized, which is why it is of utmost importance that the reasoning behind U.S. efforts in the region is clearly articulated to the American people.