Tag: Bahrain
The rich get richer
Yesterday’s conference on investment prospects in the wake of the Arab Spring over at the World Bank’s Multilateral Investment Guarantee Agency (MIGA) was a lively couple of hours–these economic types are briefer and more to the point than their political counterparts–but the bottom line was gloomy: the GCC states and Iraq are likely to attract the lion’s share of investment while Egypt and Tunisia (Syria, Yemen and Libya weren’t even mentioned) go begging in the short term. There was disagreement on longer-term prospects, with Ian Bremmer registering a strong minority view that the geopolitics are unfavorable, both because of Iran and the Israel/Palestine conflict.
An upbeat and indefatigible Afshin Molavi started off underlining that we live in a world of surprisingly interconnected risk, that there is a lot of diversity in what we should not really label “Arab Spring,” and that the Middle East and North Africa region (MENA) has a young population, many unable to get married because of the lack of jobs and looking for “dignity.” Growth has now slowed, hurting their prospects.
Citibank’s Hamid Biglari said investors have adopted a wait and see attitude toward the more revolutionary part of the region and are shifting their attention towards the GCC and Iraq, whose prospects are good if Baghdad can get security under control. Multinationals are not pulling out. Egypt is a larger and better known market than Tunisia, which however is more homogeneous, more secular, more middle class and better educated. Tunisia is more likely to succeed economically, but Egypt is the bigger prize. The immediate concerns of investors are about legitimacy and whether the new governments will treat the old elite decently, but it will be a decade before “equilibrium” returns.
Ian Bremmer of Eurasia Group admitted enthusiasm for the Arab Spring (“it feels good”) but noted that Ukraine and Georgia felt good at first too. Tunisia seems to be moving in the right direction, Egypt less so but will likely muddle through. Iraq is the most exciting investment opportunity in the region. U.S. influence is declining, and Saudi influence is increasing. Saudi policy objectives and conditionality will differ from those of the U.S. Overall though the immediate political risks have been overvalued. The problem is in the longer term, both because of Iran and the Israel/Palestine conflict. Europe and the U.S. will increasingly be occupied with other problems.
Cairo-based Walid Bakr of Riyada Enterprise Development, Abraaj Capital, was more optimistic in the medium and long term. Egypt’s big market and tourist attractions are not going away. Half the population is under 24, well educated and internet savvy, with lots of entrepreneurial spirit. The revolution has unleashed strong feelings of national pride and dignity. Youth is the engine of growth and can contribute to the all-important creation of small and medium enterprises so vital to job creation and wealth distribution.
Dubai-based Yasar Jarrar of PwC Middle East underlined that we are still at the beginning of the changes in the Middle East, which suffered a long period of stagnation (not real stability). The GCC countries are moving well to kickstart job creation for youth, major infrastructure investments and dialogue between their governments and the citizens. But it is going to be a long spring in a region that really does matter. Philip Haddad of Mubadala Infrastructure Partners agreed that we need to take the long view, but in the meanwhile as much as $38 billion is being invested in infrastructure, which is not bad.
The Omani ambassador, Hunaina Sultan Ahmed al-Mughairy, led off with a very upbeat assessment of the Sultanate’s prospects. The message was “yes, we can” reform ourselves, if we put our minds to it. Jean Francois Seznec of Georgetown said he was very pessimistic about Bahrain, where the basic issue is governance. In recent weeks, only 5% of the hotel rooms in Bahrain have been occupied.
There was a good deal of agreement that the issue everywhere is at least in part governance. Citizens did not feel they were benefiting under the old regimes, because of a lack of accountability. Political and economic reform need to go together, but it is not clear that new parliamentary democracies will credit competence and choose economic reform, which is discredited because it is associated with the old regimes.
Wrapping up, Ravi Vish of MIGA confirmed the importance of governance, addressing social inequality and the income gap, and job creation, mainly through a stronger and more entrepreneurial private sector. He also reviewed MIGA’s portfolio of political insurance products, for which demand is naturally rising in the region.
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A brighter view of the Arab spring
I wrote yesterday about the pessimistic views of the Arab spring prevalent among experts at a Harvard/Carnegie Endowment event. They know a whole lot more about the Middle East than I do–that’s why I go to their events and write them up. But I think they are overly pessimistic. Why?
First, because I’ve seen things come out all right. I am not just talking South Africa, where admittedly Nelson Mandela’s leadership and stature counted for a lot, as did F.W. de Klerk’s. I am not seeing any Mandelas or de Klerks in the Middle East. Nor do there seem to be any Vaclav Havels or Lech Walesas. But in Serbia, Ukraine and Georgia protest leaderships that were notably lacking in vision and stature had at least temporary success and left their countries better off than they would otherwise have been.
Second, because it seems to me the protesters in Tunisia, Egypt, Syria and Yemen have shown a combination of nonviolent restraint and persistence that is laudable, and likely to lead in good directions. I am less convinced of the wisdom of the demonstrators in Libya and Bahrain, where it seems to me they fell victim to the temptations of violence and recalcitrance, respectively. But the Libyan Transitional Council shows at least some signs of promise. We’ll see if the Bahrainis can do better in the next “dialogue” phase.
Third, because I have more confidence in a bottom-up process than a top-down one. Here I disagree with Marwan Muasher, who explicitly prefers to see top-down reform. I don’t really know any place where that has worked terribly well in the transition from dictatorship to democracy, though obviously there are leaders like Gorbachev (or de Klerk for that matter) who made the process easier than it might otherwise have been. But people have to want democracy and freedom–it really can’t be given to them.
Nor do I think the consequences of the Arab spring will be quite as negative for U.S. interests as many of the experts say. Middle Eastern leaders who have to be more responsive to public opinion may be more supportive of the Palestinians, but they would be foolish to take their countries to war when the people they lead are looking for prosperity. So, okay, we’ll get Egypt opening the border with Gaza, but closing it was an approach that wasn’t worth a damn anyway. Hamas is likely to need to cut its margins on smuggled goods when they can enter more freely. Maybe an open border will serve American purposes better than the closed one.
I admit that it is hard to see how Yemen comes out of this anything but a basket case, which is where it was headed under Saleh anyway. Certainly it will be a while before any future government in Sanaa gets a grip on the provinces. Al Qaeda in the Arabian Peninsula may have a field day in the meanwhile, but they don’t appear so far to have been particularly effective at exploiting the chaos.
That said, the Arab spring is not about American interests, which will have to take a back seat for a while throughout the Middle East. It is however about American values. We should be happy to see them spreading among young Arabs willing to demand their rights. Let’s see where things go before we get too pessimistic.
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A soggy version of the Arab spring
Big Carnegie Endowment/Harvard discussion of Arab Spring yesterday. Outcome: pretty gloomy. But these are experts, who admittedly failed to see the budding of the Arab Spring and are unlikely to be able to predict its course either. They all acknowledged the many unknowns and the difficulties of prediction.
Marwan Muasher, who prefers reform from above, thinks doing nothing in response to the protests is no longer an option but also noted there is more “empire strikes back” (Libya, Yemen, Syria) and “buying time with money” (the Gulf) than “promises of reform” (thin in Jordan, a bit more serious in Morocco). And his criteria for successful reform from above were exacting: it has to be holistic and inclusive, power has to be shared seriously, it should be gradual and measurable. Nothing makes the cut yet.
No optimism from Marina Ottaway either. She noted that even in Tunisia and Egypt there are problems of political will to complete the reform process, that some of the politicians formerly associated with the ruling parties will be able to recycle themselves, that secular parties are weak and fragmented, that Islamists may be a bit stronger but also fragmented, with Salafi influence rising. It is not clear yet what the protesters will be able or willing to do politically, and it is too early to count the military out.
Tarek Masoud did not like what he sees in Egypt. He noted the intense conflict among political forces and between political forces and the military, with the military wary of democracy. They don’t want democratic oversight, fear the demand for justice and don’t want to break with past policy on Israel and the U.S. The military would like to reign without ruling, keeping out of the public eye and avoiding responsibility for governing. They have already made mistakes by scheduling the constitutional referendum, then having to fix the amended constitution with their own constitutional declaration. Early elections will favor Islamists, and opening the constitution to a constituent assembly will open the question of the relationship between state and religion, which is not a good idea. The future holds more discord.
So spring wasn’t so cheery. How about the U.S. policy response?
Nick Burns praised President Obama’s relatively rapid and thoroughly nuanced response in a difficult international situation. He was not too late to support the Tahrir protesters, correctly hesitated about Libya but signed on in response to the Arab League appeal in light of Gaddafi’s threat to Benghazi, and gave the Gulfies more slack because there was no rebellion to sign on to in Saudi Arabia, Oman or Qatar. Only under questioning did Nick state baldly that he could not understand why we hadn’t zapped Bashar al Assad earlier and admit that in Bahrain Washington had chosen interests over values. Nick urged that we focus on Egypt, decrease out focus on governments and security, increase our focus on development and outreach to people, move on Israel/Palestine and shift to a containment policy on Iran.
Agreeing that the case-by-case contextual approach was the right one, Steve Walt concluded that we would soon face Arab governments more sensitive to public opinion, that there would be no easy fixes for the problems of over-centralization and corruption in the Arab countries, Western governments are not flush and would find it hard to ante up, Israel’s position would be weakened as Egypt and Jordan became less compliant to U.S. wishes and that U.S. strategy in the region is obsolete even if its interests are the same as always: unhindered flow of oil and gas, nuclear nonproliferation, countering terrorism and protecting Israel. A more effective policy would pay more attention to Arab public opinion, embrace reform, sustain multipolarity in the region, get U.S. troops out (to an offshore balancing role, naturally, that would still prevent others from exerting control), internationalize the Israel/Palestine peace process (including encouragement of European support for the Palestine resolution at the GA and a possible settlement imposed by the Security Council). Most importantly: we need to stop threatening Iran, which gives Tehran incentives to build nuclear weapons and attempt more creative (unspecified) diplomacy. In response to a question, Walt said he also thought we need a residual force in Iraq to counter Iran.
Chris Boucek, focused mainly on Yemen, warned of economic meltdown, suggested we manage the Saudis better and noted that the youthful protesters are espousing our ideals.
There was a good deal more, but this gives you the flavor: the U.S. focus on stability, peace and democracy has failed: no stability, little prospect for peace and not much for democracy either. Burns and Walt, each in his own way, thought the U.S. could still play an important role, but no one was sanguine about the prospects for the Arab spring or U.S. interests in its aftermath.
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A right-minded but (mostly) forgettable speech
It is hard for me to knock a speech whose most frequently occurring words are “region” “must,” “change,” “people,” and “rights.” There has to be something to appreciate there. The President was particularly good on Tunisia and Egypt, supporting completion of their transitions to democracy and offering economic help, mainly through debt forgiveness, trade and investment. He was better on Bahrain than I might have expected, underlining that the destruction of Shia mosques there is unacceptable (thank you Roy Gutman for your reporting on that!).
On Syria, he was so-so, appealing once again for Bashar al Assad to lead reform (fat chance) or step aside (fat chance of that too). But that is farther than Obama has gone in the past. He gave President Saleh of Yemen a push toward the exit, but it did not seem to have any real force behind it.
The President was overoptimistic on both Afghanistan and Iraq, claiming we have broken the momentum of the insurgency in the former and established multiethnic and nonsectarian government in the latter. Both may happen, but they aren’t consolidated achievements yet.
On Israel/Palestine, the President took something like Shimon Peres’ approach: focus for now on defining Palestine’s territory and ensuring Israel’s security, solve Jerusalem and refugee return later. Rhetorical support for Israel was strong, as was opposition to the Palestinian effort to get the UN General Assembly to approve statehood. But there was really nothing new. That might be the best he can do for the moment, which is not propitious.
No mention of Saudi Arabia. A bit of talk about Iranian hypocrisy in providing assistance to Syria in repressing demonstrators, but no clarion call for rebellion there. Strong on women’s rights, inter-religious dialogue and rejection of political violence. Big throughout on self-determination (Palestinians take note), values as a focus for American policy in addition to interests, universal rights and strengthening the economic underpinnings of political transition.
A right-minded but I am afraid forgettable speech.
PS: I did not anticipate when I wrote this piece quickly this afternoon the furor that has erupted over the President’s endorsement of the ’67 borders of Israel as the basis for negotiations and eventual land swaps. It is still a bit hard for me to see what other basis there would be in a “land for peace” deal, but I take the point that this is the first time an American president has endorsed an idea that many of us take for granted. Those who object need to explain what other basis there might be for the territorial solution, other than “making the land whole.”
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Here are some bright ideas
This is OPI (other people’s ideas) day:
- Reinventing the Palestinian struggle as a nonviolent protest movement has been a good idea for a long time, but the Arab Spring may make it viable as a mass movement. It would put the Israelis in a tough spot: a harsh response would make them look like worse than your garden variety Arab autocrat. Real democracies don’t shoot at nonviolent protesters.
- Rethinking the war in Afghanistan in light of Osama bin Laden’s death was the subject of an excellent piece this morning: no evidence yet of changed attitudes among the insurgents (Biddle), but the personal connection with bin Laden was an important factor in the alliance with the Taliban. And Pakistan might stiffen its attitude toward al Qaeda presence (Khalilzad), if only to prevent further American raids.
- North Africa is Europe’s backyard. The Bertelsmann Foundation has asked eight North Africans for their views of how Europe can help the political transitions there. The resulting report makes interesting reading and reminds us that we need to follow the lead of host country nationals in thinking about how to make the Arab spring last into a more democratic summer and fall.
Still, there is a dearth of good ideas on several subjects: how to manage the U.S./Pakistan relationship in a more productive way (but see Dennis Kux’s blog post yesterday), how to hasten Gaddafi’s exit from Libya and what to do to stop the killing of demonstrators in Yemen and Syria, as well as their mistreatment in Bahrain. Anyone want to offer thoughts?
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Obama laps to the wrong side of history
While he is wisely not spiking the football, President Obama is still taking a few victory laps. The problem is that there are other races still going on in the stadium. He is supposed to be competing in those as well: the autocrats in Libya, Yemen, Bahrain and Syria should not be left to win their competitions. How do we think they will behave if they are successful in their current efforts to repress the demonstrations?
The picture is different in each of these countries. Obama has made it clear enough that Gaddafi must leave Libya, but the NATO military effort seems to be falling short and the diplomatic maneuvering hasn’t yet produced the desired result. In Yemen, the slippery president has refused to sign an agreement negotiated with the Gulf Cooperation Council to step down and has returned to beating up on demonstrators. King Hamad bin Isa al Khalifa in Bahrain is busy bulldozing Shia mosques, as if that will make the 70% Shia population go away. In Syria the supposed reformer Bashar al Assad has killed hundreds, rounded up thousands and subdued towns one by one using grossly excessive military force against civilians.
We are not hearing much from either President Obama or Secretary of State Clinton about these developments. I would argue that the outcome of the still ongoing rebellions in the Arab world are more important to U.S. vital interests than the killing of Osama bin Laden, who wasn’t living much better in Abbottabad than he would have in Guantanamo (though he was clearly in better communication with his network). Yemen is already a weak state where terrorists hide and Syria provides support to Hizbollah and Hamas. Libya has undertaken state-sponsored terrorism in the past and may well revert in the future. Bahrain? How does the Sunni king expect his Shia majority population to react once he is finished depriving it of its political rights as well as many houses of worship?
I won’t propose a full package of solutions. What it seems to me is needed is simpler than that: a Presidential decision to make the cause of democracy in the region his own, and a tasking to the State Department to come up with the (non-military) propositions that will make it real. Failing that, Obama risks lapsing to the wrong side of history.
PS: Jackson Diehl treats the Syrian case well in this morning’s Washington Post, as does Brian Whitaker in The Guardian.
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