Retrenchment and Reform

Two apparent fizzles in the drive for reform in the Arab world. Across the Bay calls the recent reformist gathering in Morocco a "victory of Arab pathology and stalemate." What happened? State's "'Powellites' had decided to basically dump any serious demands on democratic reform and opted to focus on economic reform. Needless to say,this is precisely what the Arab regimes wanted all along, and what the Europeans wanted as well."

Powell claimed the meeting was a great success. "[W]e have progressed to the point where this rather disparate group of nations can come around and say we will talk about these issues. That makes it a success."

"Please," responds Across the Bay, "contain your excitement! Again, Powell in a nutshell. Can you lower the standards any more?"

A wary Across the Bay hopes "that the M.E. liberals, and their hopes of a US commitment to democratic reform, have not been left out in the cold."

Meanwhile, Thomas Friedman weeps over what he reports to be the Bush administration's interference in an Arab Human Development Report on "the lagging state of governance in the Arab world." Friedman thinks "It is just the sort of independent report that could fuel the emerging debate on Arab reform." (A UN official confirmed Friedman's assertions, but the State Dept denies it has interfered in the report's release.)

Comments

[Warren]

Bah! No reform effort has any hope of success. There is a sizable fraction of the population that is committed to killing each other that will sabotage any and all reform efforts. Nothing anybody does will ever change that.

[thoreau]

What do people here think about giving higher priority to market reform rather than political reform? I have mixed feelings on it myself. I suspect that a significant number of people on this forum probably think it’s a fine idea, but some are probably torn because this idea was supported by ‘Powellites’ in the State Department.

[Stormy Dragon]

>What do people here think about giving higher
>priority to market reform rather than political
>reform?

I suspect that what the State Department is thinking of when it says ‘economic reform’ has very little to do with what most of the readers here are thinking of when they say ‘economic reform’.

[thoreau]

Stormy Dragon-

While the people in the State Dept. are certainly not libertarians, keep in mind that in economies as riddled with corruption, regulation, inefficient state run enterprises, and cronyism as many in the Middle East, the necessary first steps are pretty obvious. Even John Kerry would probably be able to spot some of the necessary first steps.

[SR]

But thoreau, Kerry would be much, much worse!

[Eric II]

“State’s “‘Powellites’ had decided to basically dump any serious demands on democratic reform and opted to focus on economic reform. Needless to say,this is precisely what the Arab regimes wanted all along, and what the Europeans wanted as well.”

Perhaps because they realize that without economic reform, and the cultural liberalization that tends to accompany successful implementations of it, democratic reform could bring about results similar to what happened in Algeria in ’92, and what looks set to happen in Iraq next month.

[matthew hogan]

“Bah! No reform effort has any hope of success. There is a sizable fraction of the population that is committed to killing each other that will sabotage any and all reform efforts. Nothing anybody does will ever change that.”

And here I thought Leon Uris was dead.

[Highway]

I think the economic reforms are a good idea, but how effective are they going to be in an overall sense if you still have thugs and thieves in charge of the country? They claim that this is following the China model, but aren’t most still saying that China is a communist country? Where there are severe lacks in freedoms? I’d be a bit more impressed if they weren’t claiming this was a success based on something else that I wouldn’t consider a success yet.

[Gary Gunnels]

Eric II may be right.

Anyway one’s answer would likely depend on what they mean by “market reforms.” What is the agenda of these states anyway? Is that detailed anywhere?

[Dan]

What do people here think about giving higher priority to market reform rather than political reform?

It seems like the two would pretty much have to happen at the same time in the oil-rich states. The rulers can’t give up control of the oil because they use oil wealth to maintain their power — and it’s hard to see how you can have serious market reform when almost the entire GDP is controlled by the people who run the country.

[Mo]

I think economic development is key to freedom. People don’t give a rats ass about freedom if they’re struggling to feed themselves. I think it was Nasser that said something about the desire for freedom is proportional to the price of a loaf of bread. He was a bloody communist, but he’s got a good point.

Without going into a right/left dictator debate, economic development is crucial. When people have free time after feeding themselves, they’re able to get agitated over lost freedom and they want cool shiny stuff to fill their time. Rich and middle class people are the ones that lead political change because they have the luxury too. We need to plant the seeds that will lead to the future leaders. Market reform is cruicial.

One more thing. If we could (highly unlikely) diversify the economies of oil rich nations sufficiently that the ruling government would actually need buy in from private citizens to their economy. Right now almost all economies that rely exclusively on mineral riches are kleptocracies.

Obviously, we H&Rers have way too much time on our hands, look how agitated we are. 🙂

[Eric II]

“They claim that this is following the China model, but aren’t most still saying that China is a communist country? Where there are severe lacks in freedoms?”

Similar things could have been said about Taiwan and South Korea 20 years ago, only you’d have to call them fascist instead. In both cases, economic development and cultural liberalization produced democracy over the long run.

The problem with China is the hard-core ultra-nationalism which the CCP has been using in order to maintain its grip on power, and the discontent and alienation found among the rural peasantry and urban poor, which could explode in the event of a recession or depression. Both of these problems are an indirect result of the Mao years. If they can be handled, then I suspect that China, too, will be holding free elections a generation or so from now.

[Gary Gunnels]

Eric II,

But such private ownership is uncommon anywhere outside the U.S. and Canada (even in liberal-democratic Europe). The problem for oil-rich countries in the middle east is not so much that they lack private ownership of the oil fields (which would nonetheless be a good idea) its that they are a one product economy. Invariably non-diversified economies are prone to corruption, political and economic upheavels, etc. (heck look at the boom and bust cycles of a state like Texas before it started its robust technology sector). Anyway, what makes Dubai so special is that as a trading port on lacks such uniformity; it allows for a thousand flowers to bloom.

[huskermet]

Thoreau, Mo, et.al…

I tend to agree with you (as well as Friedman and Fukuyama) that economic reform will prove to be mightier than the sword. It always has been and always will be. However…

The problem with economic reform in this context is that unlike mostly secular Communist states, the added x-factor of religious zealotry provides a large monkey wrench in the works.

One of radical Islam’s big gripes with us is that they are sick of our cultural influence. That translates into economic influence as well.

That of course brings up the $64K question: Can Islam live side by side with global market capitalism, or are the two destined to be at odds? If I knew the answer to that one, I’d be a richer man than I am.

[Eric II]

“The problem for oil-rich countries in the middle east is not so much that they lack private ownership of the oil fields (which would nonetheless be a good idea) its that they are a one product economy. Invariably non-diversified economies are prone to corruption, political and economic upheavels, etc.”

I don’t really disagree with that. However, I think there’s a relationship between the two phenomena. When there’s public ownership of significant oil reserves, it can:

a) Lead non-democratic governments to resist economic liberalization out of fear of losing political power. Witness the Iranian government’s resistance to economic reform for this reason, even as unemployment has become a major political problem for it.

b) Lead the electorates of democratic nations to vote for the creation of a leviathan welfare state that hampers economic development – which, in cases involving developing nations, can in turn hamper social development/liberalization.

Thinking about Dubai for a moment, perhaps the fact that about 80% of its residents are non-citizens, and thus don’t care much about local politics as long as they’re left alone, is a big reason why the ruling family has been willing to open up the economy. They can keep the other 20% weaned on the welfare teat without threatening their economic miracle.

Norway is obviously one case where major state-owned oil reserves coexist with a developed market economy. But as you know, the developed market economy existed before most of the oil reserves were found.

[Gary Gunnels]

Eric II,

Perhaps its a chicken and egg problem. Plus, I think we are all aware that nations get themselves stuck in ruts or cycles that are hard to get out of.

When I was thinking of non-diversified economies, I was thinking less of oil-rich countries, and more of places where crops dominate an economy – 19th century Jamaica or 20th century “banana republics.” Probably find similar dynamics there.

[John David Galt]

The notion that “the will of a majority of voters is always right” is the root of some of the worst abridgements of liberty in America, from the New Deal to drug prohibition. In a democracy, all it takes to destroy liberty is for somebody with plenty of money and media access to start a scare campaign against the people he wants to rob or the practices he wants to outlaw. For democracy to be an acceptable form of government, it needs some strong new mechanism to defend against this type of abuse.

The above is very relevant to the Middle East because nearly all the media and schools there are dominated by anti-American, anti-capitalist, and anti-freedom propaganda. Where the government isn’t behind that propaganda, it encourages it. So long as that is true, any movement toward democracy there will reduce freedom, not increase it.

Therefore the participants in the recent gathering were absolutely right to concentrate on economic reforms first — especially reforms that will let information media from outside the Middle East operate there.

Like all tyrannical religions, jihadist Islam depends utterly on their public never finding out that much more comfortable lives than they now have are easily available to them. Once a free market in news media makes it impossible for them to hide that fact from the Arab public any longer, all support for the bad guys will disappear. Then it will be safe to introduce democracy there.