MAIN DRIVERS OF TRANSITION AND CONFLICT IN THE MENA REGION: SOME CHALLENGES AND OPPORTUNITIES

ISHAC DIWAN

Massive roll back of the state in the 70s-80s

Diwan, 2013

0

10

20

30

40

50

60

70

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Egypt-Expenditures by Types (% GDP)

Capital Expenditures Goods and ServicesWages and Salaries Interest Payments (I)Subsidies OtherTotal Expenditures

Poor opinion of entrepreneurs tends to be correlated with perception of corruption in government as well

Diwan and Nabli 2013

The formal private sector stayed small

World Bank

Secular Nationalism resurgent (mean for total population)

.30

.40

.50

.60

.70

.80

.90

1.00

18-24 25-34 35-44 45-54 55+

Egypt (.59)

Iraq (.75)

Lebanon (.76)

Pakistan (.53)

Saudi Arabia (.66)

Tunisia (.49)

Turkey (.69)

Source: Moaddel and de Jong 2014

Basis of identity (Moaddel) is based on two questions, one which asks if belonging above all to a nation (eg Egypt), a religion (eg Christian), or an ethnic group (eg. Kurd, Berber, Arab); and a second question about whether respondents see themselves mainly as a citizen of the world, a citizen of their country, a citizen of the Islamic Umma(or world-wide Christian community for Christian respondents), or as a citizen of an ethic community.

Source: Al-Ississ and Diwan, 2014, WEF

Rising levels of social polarization

The complex effect of rents3 types of countries

From a broad-brush political economy perspective, the Arab region has 3 types of countries wt

different problems and constraints *:

Labor abundant, resource poor: such as Egypt, Jordan, Lebanon, Morocco, Tunisia, WBG

Labor importing, resource rich: GCC countries

Labor abundant, resource rich: such as Algeria, Iraq, Syria, Yemen , Sudan, Libya

* cut-off are $300 and $6000 oil per capita in 2010

Repression, freedoms and rights

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

1989

1987

1985

1983

1981

LARP

LARR

LPRR

Source: Cingranelli-Richards Physical Integrity Index

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

1989

1987

1985

1983

1981

LARP

LARR

LPRR

Government effectiveness

-1.2

-1

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

2011201020092008200720062005200420032002200019981996

LARP

LARR

LPRR

Source: World Bank Governance Indicators, Government Effectiveness Estimates, various years

Corruption, Rule of Law

0

1

2

3

4

5

6

2012201120102009200820072006200520042003

Source: Transparency International, Corruption Perceptions Index, various years

-1.2

-1

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

20112010200820062004200220001998

LARP

LARR

LPRR

GROWTH

7.25

5.03

3.79

3.52

1.52

3.37

4.66

4.92

5.60

4.42

5.26

5.45

4.51

5.60

2.86

1.76

0.84

1.31

0.90

2.81

2.28

2.08

1.30

2.80

2.77

2.54

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

East Asia & Pacific (developing only)

South Asia

Latin America & Caribbean (all income levels)

Sub-Saharan Africa (all income levels)

Europe & Central Asia (developing only)

Low income

Middle Income

Middle East & North Africa (all income levels)

LPRR

LARR

LARP

Israel

Turkey

Mean GDP per capitagrowth1960-2010 (%)

Mean GDP growth1960-2010 (%)

(3.76)

(3.35)

(4.02)

(4.09)

(3 78)

(1.58)

(2.13)

(5 54)

(2 08)

(2.49)

(2 63)

(4.09)

(): Standard deviation of Mean GDP growth 1960-2010 (%)

(3.99)

Effect of endowment on political settlement and governance

.

countries voice Growth repression Rule of law

Statecapacity

Reaction to uprisings

RRLP

GCC Very low

high low high high More patronage

RPLR

EgyptTunisiaMoroccoJordan

low medium

medium medium medium Morecompetition,

RRLR

IraqAlgeriaIranSyriaLibya

Very low

low high low low More repression, civil wars

Ongoing work with Melani Cammett

A typology of conflictual transitions

Multi-group divisions Secular/Islamists Of which distributional

Oil rich Bahrain, Libya all

Oil medium Iraq, Syria, Sudan, Yemen Algeria, Egypt all

Oil low Lebanon, Jordan, Somalia Tunisia, Morocco all

Additional Slides

Main points

Difficult transitions from prolonged autocracy – wars, strife, refugees, instability, and economic decay. Many deep problems unresolved – in most countries, there is no workable political settlement in place.

Four domains to think about:

• The State• Countries with medium levels of oil are the most problematic

• Society divided: identity (ethnic, tribal), social policies (secular/religious), economic policies (income/wealth distribution)

• Where did all the revolutionaries go?• Political fragmentation and polarization• But resurgent nationalism

• Individuals – exclusion and intolerance• Rising SE• But high intolerance to differences

Low levels of Happiness

JOR -0.02

MAR -0.09***

EGY -0.11***

LBN -0.02***

QAT -0.00

TUN -0.04***

LBY -0.01

YEM -0.02*

IRQ -0.16***

DZA -0.03***

SAU -0.04

Rising Self expression

JOR -0.02

MAR 0.02

EGY -0.03

LBN -0.01**

QAT -0.01

TUN -0.01

LBY 0.01

YEM -0.02***

IRQ -0.09**

DZA -0.00

SAU -0.05**

High levels of Electronic connectivity with knowledge and information

Collapse in values of obedience

obedient

JOR 0.05***

MAR 0.02

EGY 0.04**

LBN -0.00

QAT 0.09***

TUN 0.02***

LBY -0.03

YEM 0.02*

IRQ -0.05

DZA -0.03***

SAU 0.01

Religious tolerance – behind and no progress

Global gap

Rel. tolerance

-24%

Religious tolerance is an index of two questions, whether all religions should be taught in our public schools, and whether people who belong to different religions are as moral as the respondent.

Social tolerance – behind with little progress

Global gap

Social tolerance

-26%

Social Tolerance. An index based on questions on the desirability of having neighbors that are: people of a different race; Immigrants/Foreign workers; People of a different religion; Unmarried couples living together; People who speak a different language;

“Socio-political returns” to education low

Total effect Individual effects

Global gap youth Education

Piety +31% -/+ -/--

Obedience +11% -/0 -/--

Gender Eq. - 30 +/+ +/++

Civic engagement

0 +/0 +/++

Democracy -9% +/+ +/++

Political Islam +18% -/+ -/--

Diwan, 2014, UNDP Arab Development Report

Progressive values: Youth catching up faster than in ROW, but effects of education more muted than in ROW

Autocratic bargain have reinforced conservative aspects of core social institutions to defend the status-quo

Mukhabarat, but alsoPatriarchySchoolsmosques

To conclude

Towards new political settlements: Consensualism (and its detractors), and coalitions;

federalism; competitive elections; return of authoritarianism.

Role and type of engagement of Bank and international community. The whole gamut of

violence and conflict actions (from the program, in order of appearance): promoting

shared societies; decentralization as a catalyst for peace; new approaches to justice;

the security-development nexus; national dialogues for new political settlements;

development response to forced displacement; specter of religious extremism (as in

west Africa); resilience through safety nets and jobs; youth in peace-building;

incentives for service delivery; amplifying the voice of civil society; private sector

centrality (and corruption); gender-based violence; conflict in rural communities and

agriculture; nexus religion and peace.