The Middle East’s Lost Decades: Development, Dissent, and the Future of the Arab World

Maha Yahya. Foreign Affairs. Volume 98, Issue 6. Nov/Dec 2019.

Since the 9/11 attacks, the Arab world’s relative economic, social, and political underdevelopment has been a topic of near-constant international concern. In a landmark 2002 report, the un Development Program (UNDP) concluded that Arab countries lagged behind much of the world in development indicators such as political freedom, scientific progress, and the rights of women. Under U.S. President George W. Bush, this analysis helped drive the “freedom agenda,” which aimed to democratize the Middle East-by force if necessary-in order to eradicate the underdevelopment and authoritarianism that some officials in Washington believed were the root causes of terrorism. Bush’s successor, Barack Obama, criticized one of the cornerstones of the freedom agenda- the U.S. invasion of Iraq in 2003-but he shared Bush’s diagnosis. In his first major foreign policy speech as president, delivered in Cairo in 2009, Obama called on Middle Eastern governments to make progress in democracy, religious freedom, gender equality, and “economic development and opportunity.” Implicit in his remarks was a widely shared view among Western observers of the Middle East: that the Arab world’s dysfunction was a product of social and political arrangements that thwarted human potential, furthered inequality, and favored a small elite to the detriment of the broader population.

During the first decade of this century, progress was slow. Under the surface, however, discontent was rising. This discontent culminated in the protests of 2010-11, commonly known as the Arab Spring. In countries as diverse as Egypt, Libya, Syria, and Tunisia, ordinary citizens took to the streets to challenge their authoritarian rulers and demand dignity, equality, and social justice. For a moment, it seemed as if change had finally arrived in the Middle East.

Yet in the aftermath of the Arab Spring, development stalled. Although some countries, such as Tunisia, were able to consolidate democratic systems, authoritarian leaders in much of the region successfully counterattacked. In Egypt, the military led a coup in 2013 to depose the democratically elected government; in Libya and Syria, dictators responded to peaceful protests with violence, precipitating brutal civil wars that turned into international proxy conflicts. Even in countries that did not descend into violence, autocrats clamped down on dissent and poured resources into suppressing their own people and undermining democratic transitions across the Middle East. Meanwhile, progress on the human development indicators prioritized by both international experts and U.S. policymakers either stagnated or went into reverse.

Today, nearly ten years later, the situation in the Middle East looks even worse than it did before the Arab Spring.

Political repression is more onerous. Economic growth is sluggish and unequal. Corruption remains rampant. Gender equality is more aspiration than reality.

Yet something fundamental has changed. Arab governments have traditionally rested on what political scientists call an “authoritarian bargain,” in which the state provides jobs, security, and services in exchange for political loyalty. This bargain is based on the assumption that ordinary people will remain passive. But today, that assumption no longer holds. Citizens no longer fear their governments. Now more than ever before, ordinary people across the Middle East are politically engaged and willing to voice dissent. And as the massive protest movements in Algeria and Sudan earlier this year showed, they remain willing to take to the streets to demand a better future, even in the face of repression. The Arab Spring may not have ushered in the immediate reforms that many had hoped for, but in the long run, it may have accomplished something more important: awakening the political energies of the Arab world and setting in motion the long process of Arab revitalization.

Before the Spring

During the second half of the twentieth century, Washington’s attitude toward Arab development was essentially pragmatic and cynical. Although it favored the Middle East’s economic growth, the United States believed that the region was best governed by friendly autocrats, such as Egypt’s Anwar al-Sadat and Iran’s Mohammad Reza Pahlavi, who could provide political stability and protect Western interests.

This attitude changed after 9/11. Drawing on the work of international experts, such as those at the UNDP, U.S. policymakers concluded that the extremism emanating from the Middle East was, in part, a byproduct of the Arab world’s dismal development record: its repressive governments, entrenched inequalities, and stagnant, state-managed economies, which denied opportunities to ordinary Arab citizens. Democratizing the Middle East and unlocking the human potential of its citizens were touted by the Bush administration as a justification for its wars in the region. After invading Afghanistan in 2001 and Iraq in 2003, the United States cast its subsequent occupation of both countries as an extended exercise in democracy building. Bush announced the broader freedom agenda for the Middle East, creating programs, such as the Middle East Free Trade Area Initiative, to promote free markets and the growth of civil society.

The freedom agenda did not work out as planned. After the United States deposed the Iraqi dictator Saddam Hussein in 2003, Iraq sank into a decade of civil conflict that combined an anti-U.S. insurgency with a regional proxy war. This led to a decline in many of the key development indicators that the UNDP had identified as the source of Iraq’s problems. But the Middle East’s difficulties went deeper than this high-profile debacle. Throughout the first decade of this century, the authoritarian bargain that had long been the foundation of the region’s governments began to come undone. During this period, the region came to be defined by three key trends: growth without well-being, lives without dignity, and liberalization without freedom.

On the economic front, many Arab countries, encouraged by experts at institutions such as the International Monetary Fund, began to privatize state-owned firms, liberalize their trade policies, and end price controls in an effort to spur growth and reduce budgetary pressures on the state. In Egypt, for instance, the share of people employed by the government dropped from 32 percent in 1998 to 26 percent in 2006.

Yet although these policies produced some growth, they did not result in the sort of “trickle down” prosperity promised by their architects. Instead, well-connected insiders captured nearly all the benefits of these reforms. In Tunisia, 220 firms affiliated with the family of President Zine el-Abidine Ben Ali captured close to 21 percent of all net private-sector profits between 2000 and 2010-a fact that was revealed only when the firms were confiscated after the revolution that began in late 2010. State-connected firms also managed to evade $1.2 billion in import taxes between 2002 and 2009. A similar pattern held in Egypt and Lebanon, where insider firms were able to secure lucrative contracts for housing and construction projects and receive government licenses to invest in key sectors, such as oil and gas and banking.

As part of this push to liberalize their economies, Arab states also ended their employment guarantees and scaled back on the provision of public services, education, and health care. This led to declining living standards among large swaths of the region’s middle class, which was composed mainly of employees in the public and security sectors and which had historically been the biggest defender of the status quo. By 2010, 40.3 million people in the Arab region were either at risk of or suffering from multidimensional poverty, as defined by the UNDP and the Oxford Poverty and Human Development Initiative (OPHI). Between 2000 and 2009, overall living standards declined across the region, as did levels of health and education. In Egypt, the percentage of people living below the national poverty line rose from 16.7 percent in 2000 to 22.0 percent in 2008; in Yemen, the poverty rate rose from 34.8 percent in 2005 to 42.8 percent in 2009.

The withdrawal of public-sector employment guarantees and the reduction in the range and quality of public services resulted in a number of interconnected development challenges. Although literacy and school enrollment increased overall, education did not translate into opportunity. Between 1998 and 2008, the number of unemployed youth in the Middle East increased by 25 percent, with that increase concentrated among the better educated. By 2010, one in four of the region’s young people were unemployed, the highest rate in the world. The paucity of employment opportunities forced millions of men and women to turn to the informal economy, where workers typically earn low pay, have unstable incomes, and lack basic social protections, such as health insurance and pensions. In 2009, at least 40 percent of nonagricultural workers in Algeria, Egypt, Morocco, and Tunisia were employed in the informal economy; in Syria, the number was 20 percent.

Yet for most of the Middle East, a more liberal economy did not result in a more liberal political sphere. Modest protest movements in Egypt and Syria were quickly suffocated by the government. Civic initiatives were stifled, whereas the work of Islamic charities and other faith-based organizations was encouraged, especially in social and emergency assistance, poverty alleviation, and microfinance programs. For the leaders of these states, economic liberalization was not intended to promote free markets and free minds; instead, it was seen as a means to maintain the cohesion and loyalty of the regime’s elite. As state resources came under strain, privatization became a strategy for funneling assets to those already in power.

This unraveling served as the backdrop to the Arab Spring. In December 2010, a Tunisian street vendor set himself on fire to protest his mistreatment at the hands of a local official. His act set off a tsunami of protests. In the ensuing months, people across the region-in Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Sudan, Syria, Tunisia, Yemen, and the Palestinian territories- took to the streets to demand justice, equality, and an end to their countries’ repressive political regimes.

Déjä Vu All Over Again

The economic and political conditions that produced the Arab Spring have only worsened in recent years. With the exception of Tunisia, where the opposition succeeded in establishing a democratic political system that remains in place today, many countries of the Middle East have seen an autocratic restoration since 2011. In Egypt, in 2013, the military overthrew the country’s first democratically elected government, replacing it with a dictatorship under the control of President Abdel Fattah el-Sisi. Since taking power, Sisi has ruled the country with an iron fist: between 2013 and 2018, the security forces disappeared over 1,500 Egyptians. And in July 2019, the country’s parliament approved a draconian law curtailing the influence of nongovernmental organizations by limiting their scope of action and freedom of movement.

The starkest example of autocratic restoration is in Syria. In 2011, the country saw massive protests against the dictatorial regime of President Bashar al-Assad. Yet rather than step down or meet popular demands for reform, Assad ordered his troops to fire on peaceful demonstrators, launching a bloody civil war that has killed more than half a million people and displaced millions more. Today, the once tottering Assad regime is mopping up the last remnants of opposition and reestablishing control. Thousands of political prisoners have been disappeared or languish in regime dungeons, and the government is preventing around 5.6 million refugees and 6.2 million internally displaced people from returning home.

Meanwhile, the Saudi and Emirati regimes, faced with domestic criticism of their stalled war in Yemen, have jailed bloggers, human rights activists, journalists, and lawyers for criticizing the government online. In perhaps the most notorious example of this increased intolerance of dissent, Saudi agents murdered the journalist Jamal Khashoggi at the Saudi consulate in Istanbul in October 2018. In Lebanon, often touted as a beacon of freedom in the region, the government has begun to crack down on freedom of speech. In 2018, 38 people were prosecuted for their online posts, four times the number in 2017. Most of these posts criticized politicians, the president, or the country’s security agencies. And according to Freedom House, freedom of the press declined in 18 of the Middle East’s 21 countries between 2012 and 2017. This regional regression is captured by the Economist Intelligence Unit’s Democracy Index, which shows that together the Middle East and North Africa continue to make up the lowest performing region in the world on all measures of democracy: civil liberties, the electoral process and pluralism, the functioning of the government, political culture, and political participation.

As political freedoms have eroded, so, too, have the development gains of the past few decades. A 2018 global report on multidimensional poverty by the UNDP and OPHI found that nearly one-fifth of the population of the Arab states, or 65 million people, lived in extreme poverty, defined by the World Bank as people earning less than $1.9 per day. Another one-third was either “poor” or “vulnerable.” In fact, the Arab region was the only region in the world to experience an increase in extreme poverty between 2013 and 2015, with the rate rising from around four percent to 6.7 percent. In Egypt, recent data indicate that the poverty rate has risen from 28 percent in 2015 to 33 percent today, largely as a result of austerity measures and the devaluation of the Egyptian pound in 2016. In 2016, more than 15 million children in the Middle East and North Africa were not in school, a regression to 2007 levels. When one takes gender and wealth inequality into account, conditions in the region look even more dismal. Along with the Palestinian territories, 11 Middle Eastern countries-Algeria, Egypt, Iran, Iraq, Jordan, Lebanon, Morocco, Saudi Arabia, Syria, Tunisia, and Yemen-fall into the worst-performing category on the UN’s Gender Development Index, which measures the difference between a country’s male and female score on the UN’s Human Development Index (HDI), a composite measure of development statistics.

The worst declines have been in countries such as Syria and Yemen, which have both experienced violent conflicts over the past decade. Syria dropped 27 places between 2012 and 2017 on the HDI; Yemen dropped 20 places. Nearly 85 percent of Syrians and 80 percent of Yemenis now live in poverty. And in 2018, 10.5 million Syrians and 20 million Yemenis were food insecure.

This stagnation or regression on key development indicators is coupled with sluggish economic growth. According to the Economist Intelligence Unit, economic growth in the Middle East and North Africa has been steadily declining following a drop in oil prices between 2014 and 2016. The region averaged 3.6 percent growth in 2015-16, but that number fell to 1.6 percent in 2017 and 1.3 percent in 2018. This stagnant growth has put a strain on government finances. Lebanon’s public debt is now equal to more than 153 percent of GDP, the third-highest level in the world. Even resource-rich countries, such as Saudi Arabia, are feeling the pinch. To refill state coffers and finance its growing budget deficit, the kingdom is planning to issue more than $31 billion in debt this year. And earlier this year, Moody’s downgraded Oman’s credit rating to “junk” status, citing low oil prices and the country’s ballooning deficits.

Faced with mounting economic challenges, governments in the region are stressing the need for entrepreneurship in the private sector. The United Arab Emirates has turned itself into a destination for startups and now boasts major success stories such as the ride-sharing app Careem, the e-commerce platform Souq, and the real estate platform Property Finder. Egypt, too, is a growing regional hub. According to a report by MAGNiTT, an online community for Middle Eastern start-ups, in 2018, Egypt was the fastest growing in the region “by number of deals.” And governments from Bahrain to Lebanon and Saudi Arabia have unveiled initiatives, such as Riyadh’s Vision 2030, to promote private-sector investment.

This modest expansion of the private sector, however, has not been enough to provide good jobs for citizens. Unemployment in the Arab states is still high-in 2018, it averaged 7.3 percent; excluding the oil-rich states of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, it sat at 10.8 percent. Foreign direct investment remains low; in 2018, according to the International Monetary Fund, foreign direct investment in Arab countries amounted to only 2.4 percent of the global total.

It should come as no surprise, then, that Arab citizens’ confidence in their governments is collapsing. According to Arab Barometer surveys of nationally representative samples from six Arab countries (Algeria, Egypt, Jordan, Lebanon, Morocco, and Tunisia) and the Palestinian territories, public trust in government has decreased over the past decade. In 2016, more than 60 percent of the respondents said that they trusted government “to a limited extent” or “absolutely [did] not trust it,” compared with only 47 percent in 2011. On the other hand, 60 percent of the respondents in 2016 said that they trusted the military to “a great extent,” up from 49 percent in 2011. In a December 2018 Zogby poll, a majority of the respondents in Egypt, Iraq, and Tunisia said that they were worse off than they were five years earlier. And earlier this year, a BBC survey of ten Arab countries found that more than half of the respondents between the ages of 18 and 29 wanted to emigrate. Thousands of others have been conscripted into the region’s wars.

Power to the People

In many respects, then, the Middle East looks worse on many development indicators than it did a decade ago. Yet there is one key difference. Although the protests of the Arab Spring did not lead to the reforms that many had hoped for, they did succeed in fostering a culture of political activism and dissent among Arabs, especially the young, that persists today. Governments can no longer assume that their citizens will remain passive.

In 2018 alone, there were protest movements in Iraq, Jordan, Lebanon, Morocco, Sudan, and Tunisia. Earlier this year, protesters in Algeria and Sudan forced their countries’ respective leaders, Abdelaziz Bouteflika and Omar al-Bashir, to step down. In both countries, the protesters took care to remain peaceful-even in the face of violent government responses-while at the same time demanding genuine democratic reforms rather than a new form of military rule. And in both countries, the protesters seemed to have learned from the failed democratic transitions in Egypt and Syria.

In Sudan, protesters continued to call for a peaceful political transition and an accountable government, even after a massacre in June that left at least 100 dead and scores injured. On August 17, the Sudanese military and the opposition reached an agreement on a three-year transitional period, during which civilians and the military will alternate turns in power.

In Algeria, despite the resignation of the ailing Bouteflika in April, citizens have continued to demand the ouster of key figures of the old guard. Some members of Bouteflika’s inner circle have resigned or been arrested, and elections have been announced for December. Many protesters are skeptical of the elections, which they see as an effort by the military to bring a pliant president to power. Yet they have already shown that they are not willing to be cowed into accepting a modified version of the old regime.

This new culture of protest is also on display in Syria, which has seen a wave of civilian protests in former rebel strongholds now under the control of the Assad regime. Earlier this year, for example, hundreds of Syrians in the southern city of Daraa-the birthplace of the anti-Assad protests in 2011- turned out to oppose the installation of a statue of Assad’s father, the longtime dictator Hafez al-Assad. The regime may have won the civil war, but these demonstrations suggest that it will struggle to restore its authority.

The Middle East today is witnessing a perfect storm: as social and economic conditions erode and regimes double down on the repressive policies that provoked the Arab Spring, a new generation is coming to the fore. The young Arabs of this new generation are accustomed to voicing their dissatisfaction. They have seen both the promise and the failures of the 2010-11 revolts, and they are resistant to their leaders’ attempts at manipulation. Those leaders, moreover, no longer have the means to buy off their populations. What today looks like a regional regression since 2011 may well, in the future, be regarded as the initial phase in a much longer process of Arab revival. The road to that revival will likely be a difficult one, paved with pain. But if there is one thing that Arab populations know, it is that the status quo cannot be sustained.