Neoliberal Authoritarianism in the Middle East

[Islam Imamate]

Came across an article on the resurgence of Arab authoritarianism in the aftermath of the Arab Spring.

July 3, 2017 marks the fourth anniversary of the coup that brought down Egypt’s first democratically elected president, Mohammad Morsi, and brought then-General Abdel Fattah el-Sisi to power. Since the coup, President Sisi has been at the forefront of efforts to return the Middle East to the pre-Arab Spring status quo. But, rather than learning lessons from these revolts, the world is acting like they never took place.

Here's the aspect that I found particularly interesting

In a similar fashion, economic lessons from the Arab Spring have been forgotten. A major tenet of the 2011 uprisings was a rejection of neoliberal economic restructuring that had cut social services and increased poverty. During the revolutions, protesters voiced their rage at autocrats and their families who had enriched themselves by privatizing state industries.

In 2014, the International Monetary Fund (IMF), the driving force behind this economic restructuring, published a paper entitled “All in the Family: State Capture in Tunisia.” The paper acknowledged that neoliberal restructuring in an authoritarian context leads to the sort of crony capitalism and corruption that prompted the 2011 revolutions.

But, the IMF seems not to have heeded its own warnings. In November 2016, it extended a three year, $12 billion loan to Egypt. The money is conditioned on the same neoliberal restructuring that dominated the country under its previous rulers. Just as these old autocratic rulers did, Sisi is using this foreign financial aid to enrich himself and his close associates.

tl;dr The Arab Spring was about rejecting autocrats and the neoliberalism they enacted under the guidance of institutions like the IMF but the West is repeating its policy of backing these autocrats on the condition they enact the same sorts of neoliberal policies.

Muftah is a left leaning, anti-imperialist publication so they obviously see this as a mistake but I wonder what the WR thinks.

Should the West not only continue to back strongmen like Sisi in Egypt or Hafter in Libya but also encourage them to continue the same sorts of economic reforms that produced the grievances that lead to the Arab Spring? Or is this a mistake? If so, what would be the alternative? Support either the strongmen or neoliberal restructuring but not both? Or support neither? Or maybe revive the ole Arab Socialist social contract of cheap bread and good jobs for political acquiescence(which sort of survives in the GCC countries)?

 

[Jack V Savage]

Isn't the thread title misleading? It's about anti-"neoliberal" authoritarianism.

 

[Quipling]

Worth noting that neoliberalism appears to be being used differently here than it was commonly used in the past election + aftermath in the us.

 

[Jack V Savage]

Worth noting that neoliberalism appears to be being used differently here than it was commonly used in the past election + aftermath in the us.

Also worth noting that it is evolving into a meaningless term of abuse. Or at least there are so many different meanings being attached to it that it doesn't help with communication.

I think the sense that it's used in the OP has been useful but is losing its value.

 

[Islam Imamate]

Isn't the thread title misleading? It's about anti-"neoliberal" authoritarianism.

These autocrats exploited the structural adjustment plans recommended to them so I don't see why they'd be anti-neoliberal. Obviously the outcome of their implementation is counter to what was envisioned by institutions like the IMF and World Bank but when their policies reliably produce those outcomes I'm going to start blaming the policies themselves and those who push for them despite the past failures.

 

[Jack V Savage]

These autocrats exploited the structural adjustment plans recommended to them so I don't see why they'd be anti-neoliberal. Obviously the outcome of their implementation is counter to what was envisioned by institutions like the IMF and World Bank but when their policies reliably produce those outcomes I'm going to start blaming the policies themselves and those who push for them despite the past failures.

There was a wave of "neoliberal" reforms, and autocrats rose the wave of opposition, right?

This is the kind of thing (when it happened in Central America) that I first heard the term "neoliberalism" in reference to. Don't want to get bogged down on either the meaning of the term or the thread title anyway, though. I tend to agree that the IMF is fucked up here.

 

[TheGreatA]

Autocrat socialism funded by oil money is about the only effective system of governing for the Middle East that I can think of.

Capitalism will never take root there, and the people are too easily swayed by their religious inclinations and emotional pandering, to have a proper democracy for a prolonged period of time.

They just better hope the oil never runs out.

 

[Islam Imamate]

There was a wave of "neoliberal" reforms, and autocrats rose the wave of opposition, right?

This is the kind of thing (when it happened in Central America) that I first heard the term "neoliberalism" in reference to. Don't want to get bogged down on either the meaning of the term or the thread title anyway, though. I tend to agree that the IMF is fucked up here.

Not exactly. It was in fact the Islamists that rode the wave of opposition because they are often the most resilient and well organized opposition force in these countries against the autocratic regimes which had enriched themselves under the structural adjustment plans.

It was the fear of Islamists coming to power, either through force as they're trying in Syria and Iraq or through the ballot box as the Brotherhood in Egypt and Tunisia successfully did, that scared the Western governments into turning their backs on their calls for democratization and to instead back the autocrats. Part of the reason is these autocrats, like their predecessors, make an effort to portray themselves as willing partners with the West and part of that effort is acquiescing to the structural adjustment plans of the IMF.

So even though initially Western governments saw the Arab Spring as an opportunity to push through democratization in countries that long resisted it, when they learned what the implications of democratization were(more often than not increased influence for Islamist groups like the Muslim Brotherhood) they had a change of heart and acted to turn the clock back on the whole mess by backing actors like El Sisi in Egypt who wished to recreate the pre-Spring status quo.

 

[Stoic1]

What would Ghadaffi be considered?

 

[TheGreatA]

What would Ghadaffi be considered?

Socialist autocrat.

 

[Islam Imamate]

What would Ghadaffi be considered?

Socialist autocrat.

Even though he did start out as basically an Arab socialist in the footsteps of Nasser, Qaddafi also eventually acquiesced to the kinds of structural adjustment policies that many other MENA countries were trying out especially in the 90s and 2000s.

 

[Islam Imamate]

I'm gonna bump this thread with a question to @Jack V Savage but of course anyone else can respond if they want.

Given that pushing forward these policies of structural adjustment and privatization reliably lead to the entrenchment of the autocratic elite and wider wealth inequality what kinds of policies could the IMF recommend to such countries that would actually produce growth? The old Arab socialist social contract of cheap bread and good public jobs for political acquiescence to autocracy seems unsustainable for countries like Egypt and Tunisia which don't have the oil resources to support those of policies unlike the GCC countries which can so is there a third option?

 

[ReAnimator Reagan]

Came across an article on the resurgence of Arab authoritarianism in the aftermath of the Arab Spring.

Here's the aspect that I found particularly interesting



tl;dr The Arab Spring was about rejecting autocrats and the neoliberalism they enacted under the guidance of institutions like the IMF but the West is repeating its policy of backing these autocrats on the condition they enact the same sorts of neoliberal policies.

Muftah is a left leaning, anti-imperialist publication so they obviously see this as a mistake but I wonder what the WR thinks.

Should the West not only continue to back strongmen like Sisi in Egypt or Hafter in Libya but also encourage them to continue the same sorts of economic reforms that produced the grievances that lead to the Arab Spring? Or is this a mistake? If so, what would be the alternative? Support either the strongmen or neoliberal restructuring but not both? Or support neither? Or maybe revive the ole Arab Socialist social contract of cheap bread and good jobs for political acquiescence(which sort of survives in the GCC countries)?

Leaders are raised to power by their populace.

 

[Rod1]

I'm gonna bump this thread with a question to @Jack V Savage but of course anyone else can respond if they want.

Given that pushing forward these policies of structural adjustment and privatization reliably lead to the entrenchment of the autocratic elite and wider wealth inequality what kinds of policies could the IMF recommend to such countries that would actually produce growth? The old Arab socialist social contract of cheap bread and good public jobs for political acquiescence to autocracy seems unsustainable for countries like Egypt and Tunisia which don't have the oil resources to support those of policies unlike the GCC countries which can so is there a third option?

First and foremost i would demand the creation of a truly autonomous central bank as prequisite to any form of loans.

Then i would ask for liberalization as its been done, sure there will be crony capitalim, but crony capitalism is worse under a socialist structure.

 

[Rod1]

@Kafir-kun Also what sort of neoliberalism is being asked of these countries? because you dont go into specifics.

Neoliberalism is a word thrown by the left like socialist is thrown by the right.

I dont think the IMF failed to learn its lessons from what they did in latin America, where they were trying things that not even first world countries were trying.

 

[Islam Imamate]

Then i would ask for liberalization as its been done, sure there will be crony capitalim, but crony capitalism is worse under a socialist structure.

The Arabs would seem to disagree. There was less mass domestic unrest before the structural adjustment plans increased inequality. In fact there were riots in response to specific measures of the SAP like the reduction in bread subsidies triggering the bread riots. Seems like the old social contract of subsidies for basic goods and a bloated public sector that provides decent jobs for the masses was acceptable to them but the IMF reforms were not.

@Kafir-kun Also what sort of neoliberalism is being asked of these countries? because you dont go into specifics.

Neoliberalism is a word thrown by the left like socialist is thrown by the right.

Tbh I couldn't describe them in detail, just the major points that they asked for the reduction of subsidies for basic goods and the privatization of state owned firms. That can mean a lot of different things in different countries but the general effect was the reduction in livings standards of the masses while the ruling elite enriched themselves by buying state owned firms far below market value off of contacts in the state and then using them to direct the flow of FDI into the hands of these regime insiders which only strengthened the state. The intention was for the opposite, for the liberalization to produce a middle class which would build a civil society and democratize the country but it backfired fairly reliably.

I dont think the IMF failed to learn its lessons from what they did in latin America, where they were trying things that not even first world countries were trying.

I think the article is saying they failed to learn the lesson from the Middle East in particular.. They acknowledged that the policies they made their loans contingent on lead to crony capitalism and widening wealth inequality that lead to the Arab Spring and yet they approved a similar strings attached loan to Sisi not long ago. How would providing the same sorts of loans to the same countries with more or less the same autocratic political structures produce different results?

 

[Rod1]

The Arabs would seem to disagree. There was less mass domestic unrest before the structural adjustment plans increased inequality. In fact there were riots in response to specific measures of the SAP like the reduction in bread subsidies triggering the bread riots. Seems like the old social contract of subsidies for basic goods and a bloated public sector that provides decent jobs for the masses was acceptable to them but the IMF reforms were not.

Tbh I couldn't describe them in detail, just the major points that they asked for the reduction of subsidies for basic goods and the privatization of state owned firms. That can mean a lot of different things in different countries but the general effect was the reduction in livings standards of the masses while the ruling elite enriched themselves by buying state owned firms far below market value off of contacts in the state and then using them to direct the flow of FDI into the hands of these regime insiders which only strengthened the state. The intention was for the opposite, for the liberalization to produce a middle class which would build a civil society and democratize the country but it backfired fairly reliably.

I think the article is saying they failed to learn the lesson from the Middle East in particular.. They acknowledged that the policies they made their loans contingent on lead to crony capitalism and widening wealth inequality that lead to the Arab Spring and yet they approved a similar strings attached loan to Sisi not long ago. How would providing the same sorts of loans to the same countries with more or less the same autocratic political structures produce different results?

I found this.

https://www.nytimes.com/2016/11/12/...al-imf-approval-for-12-billion-loan.html?_r=0

Reluctantly, Egypt turned to the monetary fund.

To meet the fund’s requirements, the government agreed to painful policy changes that it had long avoided. It created a value-added tax. It raised the price of gasoline, to about 21 cents from 16 cents per liter — still extremely cheap, but expensive for low-paid Egyptians. It has progressively peeled back electricity subsidies.

The government floated the currency this month, and it lost nearly 50 percent of its value, wiping out savings and halving salaries. From a fixed exchange rate that had the Egyptian pound officially trading at 8.8 to the dollar, the pound has now been devalued to 16.7 against the dollar.

None of those really cry neoliberalism.

And wtf, Egypt had the liter of gas at 0.21 cents? thats Venezuelan levels of irresponsibility.

 

[Islam Imamate]

I found this.

https://www.nytimes.com/2016/11/12/...al-imf-approval-for-12-billion-loan.html?_r=0

Reluctantly, Egypt turned to the monetary fund.

To meet the fund’s requirements, the government agreed to painful policy changes that it had long avoided. It created a value-added tax. It raised the price of gasoline, to about 21 cents from 16 cents per liter — still extremely cheap, but expensive for low-paid Egyptians. It has progressively peeled back electricity subsidies.

The government floated the currency this month, and it lost nearly 50 percent of its value, wiping out savings and halving salaries. From a fixed exchange rate that had the Egyptian pound officially trading at 8.8 to the dollar, the pound has now been devalued to 16.7 against the dollar.

None of those really cry neoliberalism.

And wtf, Egypt had the liter of gas at 0.21 cents? thats Venezuelan levels of irresponsibility.

But that sounds eerily similar to what I described happened before. The IMF comes in and offers a loan contingent on policies like reducing subsidies for basic goods(though to be fair the article says the IMF at least supports food subsidies) to incentivize FDI. And as the article said when foreign investment came in it disappeared as it flowed through the corrupt system. Most likely its going into the hands of "private firms" that happened to be owned by "private citizens" who work in the army. So the military regime gets richer and the poor suffer as a result of the IMF's policy that calls for reduction in spending on subsidies and public sector jobs and for privatization and foreign investment.

There seems to be the attitude that any foreign investment is better than none but is that really the case when it makes the autocrats even stronger while sizable portions of the population suffer as a result?

 

[Gregolian]

There seems to be the attitude that any foreign investment is better than none but is that really the case when it makes the autocrats even stronger while sizable portions of the population suffer as a result?

The non-oil producing countries are really stuck between a rock and a hard place. They have no real way to gain their own money, at least that I can see.

 

[Rod1]

But that sounds eerily similar to what I described happened before. The IMF comes in and offers a loan contingent on policies like reducing subsidies for basic goods(though to be fair the article says the IMF at least supports food subsidies) to incentivize FDI. And as the article said when foreign investment came in it disappeared as it flowed through the corrupt system. Most likely its going into the hands of "private firms" that happened to be owned by "private citizens" who work in the army. So the military regime gets richer and the poor suffer as a result of the IMF's policy that calls for reduction in spending on subsidies and public sector jobs and for privatization and foreign investment.

There seems to be the attitude that any foreign investment is better than none but is that really the case when it makes the autocrats even stronger while sizable portions of the population suffer as a result?

The thing is that even if there was no loan coming in, these measures are just basic sense.

And subsidies, for subsidies sake arent worth it, i mean USD 21 cent gas is ridiculous, no matter how you spin it.