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Arab integration: A 21st century development imperative Part II

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DNE publishes the second part of ESCWA’s Arab Integration Report: A 21st century development imperative

A compound crisis of fragmentation

In the second decade of the millennium, the Arab order is in the throes of a compound crisis of fragmentation. Its divided political systems do not enable Arabs to stand tall in the world or face threats within the region from a position of strength. Its economies can no longer meet its material needs individually; its cultural system is too divided to fulfill its moral needs; and its educational systems are unable to prepare knowledgeable, creative and productive minds to build its future. The effects of these accumulated crises have sent the Arab people into the streets and squares of Arab cities and towns to make their voices heard. If not addressed comprehensively, this compound crisis will leave a legacy of injustice to future generations who had no hand in causing it.

Weak Arab cooperation has produced a regional system incapable of defending Arab interests, development or the sovereignty of Arab countries. This has created major challenges to the security of citizens and the freedom of nations. The failure of Arab countries to adopt unified positions has made them acutely vulnerable to foreign interference.

A Palestinian man holds up a sign in support of the Palestinian request for UN membership during a protest at an Israeli army checkpoint in the centre of the divided West Bank city of Hebron, on 14  September  2011 (AFP File Photo)

A Palestinian man holds up a sign in support of the Palestinian request for UN membership during a protest at an Israeli army checkpoint in the centre of the divided West Bank city of Hebron, on 14 September 2011
(AFP File Photo)

Palestine is still under Israeli occupation that is based on settlement-building and substitution, in flagrant violation of international charters and resolutions. Israel’s violation is not limited to direct occupation of Arab land and its repeated attacks on neighbouring countries. It consists of policies that threaten the security of Arab citizens across the region. These policies have led to civil wars, such as that in Lebanon, in an attempt to divide the region into sectarian mini-states. By pushing for an exclusive Jewish state, Israel propagates the concept of religious or ethnic purity of states, a concept that inflicted on humanity the worst crimes of the last century. This concept undermines human development based on equal rights for all citizens, and non-discrimination against any person on the basis of religion or ethnicity. Furthermore, the Israeli nuclear arsenal is a growing threat to the security of the region as a whole. Israel is the only country that has threatened to use nuclear weapons against Arab capitals, and has taken preparatory measures to that end.

Poor Arab cooperation has also undermined the region’s independence. Many Arab countries now host major foreign military bases or are under the sway of foreign powers in other respects. Their subservience entrenches dependency and threatens national security.

A direct result of deteriorating Arab national security is the worsening problem of refugees and forcibly displaced persons. More than 53% of the world’s refugees come from the Arab region, which is home to less than 5% of the world’s population. These numbers are alarming. Yet, they fail to reflect the magnitude of the misery of these people, who are mostly women and children.

The absence of Arab integration, along with inadequate economic policies stifled development. Achievements fell short of their official goals. Rampant corruption, unemployment, poverty and social injustice became commonplace in many cases.

Perhaps the most serious threat to Arab cohesion in recent years is cultural distortion. It has created sectarian and ethnic feuds that threaten to tear Arab societies apart. External aggression, domestic policy failures and a cultural crisis that distorts the concepts of jihad and ijtihad have led to the emergence of extremist groups.

These groups adopt radical and exclusionary doctrines based on narrow readings of scripture. Their intolerance restricts public rights and freedoms, especially for women and non-Muslims, while their rhetoric fuels sedition, subverting the unity of the region. The damage these intransigent groups cause does not end at their bully pulpits. Some have resorted to violence against Arab Christians and followers of other Islamic sects, taking their license to kill from radical fatwas. Stoked by fanatics, the fire of division in the Arab region has spread along sectarian and confessional lines.

The Arab popular revolts: bridge to integration or additional barrier?

The Arab popular revolts that arced across the region in 2010-2011 led to unprecedented changes that took the world by surprise. Contrary to theories of Arab exceptionalism, Arabs had shown themselves capable of joining the world’s so-called “third wave” of democratisation, which had long seemed destined to pass them by. In the first year of transition, hopes for sweeping change were high; but as the rebellions morphed into violence and infighting in some countries, and democratic reforms faltered in others, initial optimism began to wane. All the Arab countries in transition to democracy were hit by economic crises, for which they were not prepared. These setbacks affected incomes, employment, food prices and general growth, prompting disappointed protesters to return to the streets where they were often joined by supporters of the old guard. The impression that the tide of revolution had ebbed began to spread, and counter-revolutionary elements took the opportunity to announce its end.

There is, however, a difference between failure and incompletion. The forces of change may have found themselves temporarily stalled by events; but that does not mean they have been deterred. By its nature, democratic transition is accompanied by multiple constraints and pressures, frequently encountering setbacks. Economic conditions almost always deteriorated in times of revolution, as world experience shows. For example, countries of Central and Eastern Europe lost more than a quarter of their cumulative gross domestic product during their transitional phase before rebounding and recovering growth.

Revolutions, by nature, are a departure from the status quo. Their initial stages often involve dismantling corrupt and resistant old orders, and establishing new structures to fulfill the aims of the people. But this task of demolition and reconstruction is neither easy nor quick. The initial stages of transition have high price tags and few immediate gains. But people can bear these costs with extraordinary resilience when they can see that the potential gains of transition far exceed its price.

Democratic transition in Arab countries has proven more difficult than in Eastern Europe or other regions of the world. Arab transitions are not only taking place amid the worst global recession in decades, which has created sharp spikes in the price of imported food and other commodities and depressed overseas remittances; they are also beset by hostile and influential forces in the region with vested interests in restoring the status quo. This is quite unlike the situation faced by democratic transformations in Europe, for example.

Eastern European countries in transition received substantial material support and political encouragement from their neighbours, eventually joining them in an economic union. Arab countries, however, are mostly going it alone in a regional context suspicious of Arab democracy and a global context uneasy about its implications for foreign strategic interests. When these countries stumble, many applaud; and when they succeed, their opponents wait for the next economic crisis or security threat to stoke popular discontent and turn people against their new leaders.

Seeing new leaderships struggle to navigate in difficult waters may give the impression that the tide has gone out on them, and that a return to tyranny is possible. However, this notion confuses a temporary phase of transition, often fraught with crises and passing victories for opponents, with an inexorable historical transformation. Such transformations are seldom linear; but one or two steps back do not signal a new trajectory or different goals. Democracy in the Arab countries will encounter obstacles and pitfalls, as was the case everywhere else in the world, but there is little doubt that it will ultimately prevail. The Arab uprisings broke once and for all the shackles of tyranny and fear that had bound the Arab people to autocrats. It is no longer possible to re-subject the Arab public to oppression. That public, especially its younger cohort, has flexed its muscles, tasted freedom and demonstrated the power of active civil resistance in the face of injustice. It will not brook a counter-revolution on its watch.

Egyptian protesters in Tahrir square (AFP File Photo)

Egyptian protesters in Tahrir square
(AFP File Photo)

There is a direct and strong link between the Arab revolts and Arab integration. That historic wave of change portends a shift towards democratic political systems built with broad popular participation in political and economic decision-making. This, in itself, constitutes an opportunity to revive Arab integration and increase its scope and effectiveness, leading to a renaissance in those countries, and perhaps in the entire Arab world. This can be achieved if good democratic governance is complemented with broad and deep social reform. Representative political leaderships that express people’s goals and interests would be the first to understand that economic and cultural integration complement national economic development and popular welfare. In fact, democratic establishments would likely seek to develop more advanced and comprehensive forms of Arab integration transcending narrow economics in order to reap benefits for all citizens.

Economic integration paves the way for comprehensive integration

The benefits of comprehensive integration are not quantifiable. However, those of economic integration are, and can be identified through econometric simulations. Using the best available models, this report presents standard quantitative estimates of the consequences on the economies of Arab countries of keeping current modalities of integration, which are limited to trade liberalisation and the establishment of an Arab customs union. It then runs different scenarios for enhancing economic integration by other means and compares their results with the estimated consequences of the status quo. The proposed scenarios include such small steps as achieving free movement of labour, at least partially, and eliminating some of the non-tariff obstacles to Arab intraregional trade.

The analysis shows that the expected returns on completing trade liberalisation and establishing an Arab customs union by 2015 are modest at best. In other words, the status quo is not the best scenario. This is not because trade liberalisation is irrelevant, but because customs tariffs are no longer the only obstacle to Arab intraregional trade. The biggest obstacles to the movement of goods between Arab countries are behind-the-border hurdles such as non-tariff barriers and the high cost of transport.

The analysis concludes that no significant increase in gross domestic product and income would result from trade liberalisation unless Arab States eliminated all restrictions and protectionist measures in parallel with the lifting of customs tariffs. Moreover, the analysis indicates that even a slight liberalization of non-tariff barriers would yield important benefits. For instance, reducing the cost of transport by 5% per annum, and replacing 20% of the future influx of expatriate workers in the Arab region with Arab workers, would double the rate of income rise compared to trade liberalization alone. It would also lower unemployment rates by more than 4% on average for all Arab countries. This increase in income and welfare may multiply if additional measures recommended in this report are taken, such as the liberalization of trade in services, and the development of regional value chains.

Remarkably, the evidence shows that such measures would deliver significant benefits for all Arab countries, both rich and poor, a conclusion that dispels the notion that Arab integration would help the least developed countries at the expense of the most affluent ones.

As examples, the United Arab Emirates is one of the countries that would benefit most from increased income, Saudi Arabia, from gains in human welfare, and Tunisia, from increased job opportunities and hence lower unemployment rates.

This report is the result of combined efforts in research, analysis and review led by Rima Khalaf, Executive Secretary of ESCWA. An advisory board of Arab thinkers contributed to setting its methodological framework and enriched its material with their valuable inputs. Arab experts participated in drafting the report, and ESCWA staff assisted in providing substantive research, statistics and economic models, as well as in the coordination and support. 

  Daily News Egypt is publishing the report in three parts. Read Part I here


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