Toward Arab Social Democracy

A. Ahram: Arab Social Democracy

ACROSS THE Arab world, the mantra of protests is the same: prices are too high, jobs are too scarce, and these autocracies are inept at solving the problem. Millions of people, especially young men, have been forced to accept menial jobs for unsteady and uncertain wages in the informal economy. Indicatively, Tunisia’s revolution was sparked when Mohamed Bouazizi, a twenty-six-year-old vegetable peddler, set himself alight in front of a provincial governor’s office to protest police confiscation of his cart and wares. Since then similar acts of self-immolation and massive protests have been seen in nearly every Arab capital. As dictatorships teeter and some crumble, the question now is how new leaders will refashion the socioeconomic contract between ruler and ruled.

Arab autocracies rested on a simple bargain struck in the 1950s and 1960s. Governments would ensure equitable and universal access to basic necessities like food, shelter, education, and health care, in return for political quiescence. In oil-rich states like Saudi Arabia, these bargains were relatively easy to keep. Even for those without oil, like Egypt, Jordan, and Syria, massive civil service corps guaranteed lifetime employment at livable wages. Subsidies kept flour, sugar, gasoline, and other commodities within everyone’s reach. Labor unions, which had played a critical role in many Arab anti-imperialist movements, were co-opted. Since they drew their members entirely from employees of state-owned enterprises, the unions became mere adjuncts of ruling parties. Such government intervention in the economy brought about dramatic improvement in human and economic development. Even as these measures solidified the authoritarian grip, they simultaneously helped establish public expectations that governments would act to limit inequality and promote public welfare through generous spending.

By the 1970s and 1980s, though, it was clear that neither the bloated civil services nor inefficient state-owned industries could absorb the next generation of workers. Urged on by the United States and international lending agencies, Egypt under Anwar Sadat turned to the private sector to drive economic growth in the mid-1970s. Other Arab states soon followed. Similar to China’s economic liberalization, though, reform was always calibrated to enhance regime control. State-owned enterprises were sold off, but to regime insiders, in order to cultivate a new class of dependent entrepreneurs. Education and social welfare were cut, but military pay and benefits remained unchecked to ensure the loyalty of this core constituency. The new era of Arab authoritarian capitalism had begun.

Thirty years since its inception, this experiment has clearly failed. While China enticed foreign investment with the promise of access to enormous markets and successfully built national firms into global competitors, the private sector in the Arab world never exhibited the kind of dynamism necessary to carry the economy forward. With a frozen public sector and sclerotic private industry, the main option for millions of young job-seekers is casual work. The effects can be seen on the streets of any major Arab city, as private cars double as unregistered taxis and teenagers tout pirated DVDs and knock-off clothing. Even university graduates, once assured stable civil service careers, have been forced to moonlight. By some estimates the informal sector comprises over a third of the economy in Algeria, Egypt, Lebanon, and Morocco, and nearly 40 percent in Tunisia. Beside the economic cost of underutilized labor, the informalization of labor has severe political consequences: toiling in the gray zone means being at the mercy of those who control entry to the legal sphere through an endless maze of licensures and certificates. Bouazizi’s story is emblematic of the kinds of harassment and humiliation that young people experience every day at the hands of venal bureaucrats and police.

The search for a new social contract for the Arab world will require drastic reform of current institutions. For one thing, employers will have to wean themselves from reliance on cronyism and find new ways to compete in a global economy that demands technological innovation and organizational flexibility. A reorientation of existing labor representation will also be critical. Officially recognized trade unions, though formidable on paper, have been discredited as regime stooges. As a result of decades of government repression, independent labor organizations are badly fragmented. Egypt in particular has seen over 3,000 incidents of labor agitation since 2004, most notably by the textile workers of El-Mahalla, but these failed to garner much support from the larger opposition movements. This week’s strikes by a range of industrial and professional workers are a welcome sign of labor asserting its place in the wider pro-democracy movement. Political maneuvering alone is insufficient, however. More fundamentally, labor unions will have to look beyond the public sector as a source of employment and ready their members for higher-skilled jobs in the competitive private sector. Finally, any discussion of a new socioeconomic bargain must include representatives from the informal sectors. Those in the informal economy, meaning the bulk of men and women under the age of thirty-five, have a different set of grievances and concerns than those who already benefit from legal recognition. Informal employers need protection from arbitrary state inferences, such as seizure of property or arrest, which can amount to simple extortion. Employees need access to the basic social safety net, namely a minimum wage, maximum working hours, pensions, and insurance, as well as incorporation within the existing structure of organized labor. No Arab democratic movement can afford to ignore these demands.

It is unlikely that the Arab world will embrace an American-style free market system that many there regard as reckless and ruthless—a sentiment confirmed when the U.S. occupation authority in Iraq eliminated food subsidies in the midst of an unfolding humanitarian crisis. Europe’s social democracies offer a more suitable example of markets restrained by cherished ideals of social protection. Still, these models cannot be imposed or adopted whole cloth, but must rather come about through free and fair negotiations in which the state acts not as an enforcer, but as a neutral arbiter. In sum, achieving Arab social democracy will require re-engineering existing institutions to express the norms of economic equity and social inclusion in a competitive and dynamic economic structure.

Ariel I. Ahram is assistant professor of political science and Middle East Studies Coordinator at the University of Oklahoma’s College of International Studies.