Authoritarianism, economic liberalization, and the roots of the 2011 uprisings

A más de 10 años de los levantamientos de 2011 en Oriente Medio y el Norte de África, ¿cómo podemos entender sus causas profundas?¹ At the time, many commentators and policy-makers answered this question with reference to the simple mantra of ‘political and economic freedom’. While much of the world appeared to move away from authoritarian state structures through the 1990s and 2000s, the Middle East had remained largely mired in autocracy and monarchical rule – ‘the world’s most unfree region’ as the introduction to one prominent study of politics in the Arab world put it.² The problem, according to these frameworks, lay in the stifling effect of authoritarianism over capitalist markets, which prevented the emergence of a vibrant private sector and held back the region’s economic potential. The popular rage expressed on the streets of the Middle East in 2011 could thus be understood as a desire for both ‘free’ political systems and ‘free’ economies.

In this vein, then-US President Obama noted in a major policy speech on the Middle East in May 2011 that the region needed ‘a model in which protectionism gives way to openness, the reins of commerce pass from the few to the many, and the economy generates jobs for the young. America’s support for democracy will therefore be based on ensuring financial stability, promoting reform, and integrating competitive markets with each other and the global economy.’ Likewise, the president of the World Bank at the time, Robert Zoellick, argumentó that the revolts in Tunisia occurred because of too much ‘red tape’, which prevented people from freely engaging in capitalist markets. Western policy-makers have repeated this basic argument incessantly since 2011 – autocratic states smother economic freedom, and ‘free markets’ are essential for any sustained transition away from authoritarianism. As part of this narrative, Western governments and international financial institutions (IFIs) are recast as benign and benevolent actors – ready to support the ‘transition’ to democracy and willing to provide the necessary technocratic expertise to construct open economic markets.

In what follows, it is argued that this standard framing of the Middle East’s political economy is false. It is certainly true that the region’s political structures were (and remain) highly authoritarian, but this kind of political system is directly reflective of how capitalist development occurred in the region over the last few decades. Central to this development trajectory were the far-reaching economic shifts that began in the 1980s under structural adjustment packages (SAPs) supported by the leading IFIs. Locked into these agreements, Arab governments moved through the 1990s and 2000s to reorient their economies in line with market-driven principles. The policies adopted in the region differed little from those found elsewhere around the globe – the prioritization of private sector growth, fiscal austerity, opening up to foreign capital inflows, privatization, and the deregulation of markets (including labour). There was no essential contradiction between these economic policies and political authoritarianism – indeed, the opening up of markets and the steady creep of neoliberal policies throughout the region depended precisely upon authoritarian rulers (as it still does). Crucially, this process was fully supported by Western governments, who applauded the coming to power of autocratic rulers in the region in the 1980s and continued to laud the direction of economic policy-making in the decades preceding 2011.

Any analysis of the contemporary Middle East needs to begin with the region’s centrality to the world economy. Long a strategic crossroads of trade, the area took on special importance following the discovery of large supplies of hydrocarbons during the early twentieth century. Oil and gas were to become essential commodities underpinning modern industrial production and transport following World War 2 and, in this context, control and influence over the region shaped the balance of global rivalries in the postwar period. The United States, which emerged as the dominant power at this time, placed particular emphasis on building privileged relationships with countries across the region.

The 1950s and 1960s saw both a deepening of the region’s importance to the world economy and, at the same time, the coming to power of Arab nationalist movements in Egypt, Yemen, Algeria, Syria and Iraq. These new governments overthrew regimes allied to former colonial powers and attempted to pursue economic models based upon statist forms of development – emphasizing domestic control of industry, support to education and employment for university graduates, subsidies for basic consumer items such as food, and state control of land and other resources. Nonetheless, despite the frequent reference to ‘Arab socialism’ made by these new governments, their economic strategy was still very much capitalist in orientation.³ These policies led to an improvement in living conditions for much of the region’s population, but they were also characterized by repressive forms of rule aimed at curtailing any independent political action.

Western governments – led by the United States – initially confronted these nationalist struggles through strengthening relations with three key regional allies: Saudi Arabia, Iran and Israel. In the Gulf, the Saudi monarch, King Saud, had long been reliant on US political and military support, and was all too willing to undercut Arab nationalism through the corrupting influence of oil revenues. Saudi funding of pro-Western movements in the region enabled these forces to deny any direct link to Western governments. The Saudi government was also encouraged to deploy Islam as a regional counterweight to nationalist and left-wing ideas, organizing ‘Islamic summits’ that asserted Saudi influence and challenged Egypt’s role as the leading Arab state. A vitriolic propaganda war opened up between the Saudi and Egyptian governments. This proxy conflict with Egypt took its most vivid form during the eight-year North Yemen civil war, where Saudi Arabia was the main supporter of the royalist, pro-British forces that had been overthrown in 1962, while Egypt backed the republican movements arrayed against the ousted monarchy.

In the case of Iran, the United States (and Britain’s M16) engineered a coup against the Iranian Prime Minister Mohammad Mosaddegh in 1953, bringing to power a pro-Western government that was loyal to the Iranian monarchy, headed by Mohammad Reza Shah Pahlavi. The US explicitly conceived of Iran as its principal base of control for the Gulf region, with a 1969 report by the RAND Corporation – a prominent think tank closely connected to Washington policy-makers – noting that Iran could ‘help achieve many of the goals we find desirable without the need to intervene in the region’.⁴ This role was convincingly demonstrated in 1973 with the dispatch of the Iranian military to Oman to assist British troops in the repression of the Dhofar rebellion – a powerful struggle that was at the heart of left-wing movements in the Arabian Peninsula. The Iranian troops, supplied with US helicopters and other weaponry, succeeded in crushing the rebellion. US military support to Iran skyrocketed from 1973 onwards, amounting to more than $6 billion annually between 1973 and 1975. This close relationship continued up until 1979, when the Iranian revolution ousted the Pahlavi monarchy and removed Iran from the sphere of US influence in the region.

The other major pivot of US power in the broader region was the state of Israel. As a settler-colonial state, Israel had come into being in 1948 through the expulsion of around three-quarters of the original Palestinian population from their homes and lands. Inextricably tied to external support for its continued viability in a hostile environment, Israel could be counted on as a much more reliable ally than any Arab state. During the 1950s, Israel’s main external support had come from Britain and France. But the 1967 war saw the Israeli military destroy the Egyptian and Syrian air forces and occupy the West Bank, Gaza Strip, (Egyptian) Sinai Peninsula, and (Syrian) Golan Heights. Israel’s defeat of the Arab states encouraged the United States to cement itself as the country’s primary patron, supplying it annually with billions of dollars’ worth of military hardware and financial support.

Israel’s victory in 1967 signalled a decisive turning point in the evolution of Arab nationalism. While pro-Western regimes continued to be challenged from below by various radical movements, and new nationalist governments came to power in Southern Yemen (1967), Iraq (1968) and Libya (1969), Israel’s victory dealt a devastating blow to the notions of Arab unity and resistance that had been crystallized most sharply in Nasser’s Egypt. The military defeat was symbolically reinforced by Nasser’s death in 1970 and the coming to power of Anwar Sadat, who subsequently moved to reverse many of Nasser’s more radical policies. The priority given by the United States to its relationship with Israel was further highlighted in 1973, when another war broke out between Israel and a coalition of Arab states led by Egypt and Syria. Despite initial Egyptian and Syrian advances in the opening salvos of the war, US airlifts of the latest military equipment led to Israel’s eventual victory.

Throughout this period of economic transformation, large and persistent disparities opened up in the ownership and control of wealth, access to resources and markets, and the exercise of political power. Alongside consistently high unemployment, rising poverty, and substantial levels of rural dispossession, a tiny layer of the region’s population benefitted considerably from the new economic policies. Privatization and new market opportunities presented lucrative openings for well-connected business groups involved in areas such as trade, finance and real estate speculation. State elites and militaries also came to wield significant economic power, building a web of highly opaque relationships with private capital groups.¹¹ These patterns of inequality were sustained through authoritarian rule and state repression. Indeed, it is impossible to separate the highly autocratic political structures of the region from the policies (and outcomes) of the market-led development models implemented from the 1980s onwards.

One important illustration of these patterns can be seen in jobs and employment statistics. Before the global economic downturn of 2008, the average official unemployment rate across Egypt, Jordan, Lebanon, Morocco, Syria and Tunisia was higher than in any other region in the world. Young people and women were most affected by unemployment – with around one-fifth of all Arab women and one-quarter of youth in the region unemployed. These figures hide large regional disparities: in the Mashreq sub-region (Egypt, Jordan, Iraq, Syria, Lebanon and the West Bank and Gaza Strip), over 45 per cent of all young females were unemployed in 2011, more than double the rate for young men. The Middle East also ranked at the bottom of the world for labour market participation rates, with less than half of the region’s population considered part of the labour force. Only about one-third of young people and 26 per cent of women were in work, or actively seeking employment. This profound marginalization of young people and women carried deep social implications in countries where elderly men monopolized political power.

The region’s labour markets were also marked by a widespread prevalence of informal and precarious work. In 2009, the United Nations Development Programme reported that the growth of informal work in Egypt, Morocco and Tunisia was among the fastest in the world (reaching between 40 and 50 per cent of all non-agricultural employment). In Egypt, three-quarters of new labour market entrants from 2000 to 2005 joined the informal sector, up from only one-fifth in the early 1970s.¹² Not only did these trends affect the character of employment, they also carried important implications for the way urban space was used, and the kinds of social and political movements that emerged in the Middle East – the residents of densely-packed informal settlements across cities such as Cairo, Casablanca, Algiers and Beirut were viewed by governments with deep mistrust and suspicion.

These highly unequal employment and labour market outcomes contributed to worsening overall poverty levels in the region. The proportion of the population without the means to acquire basic nutrition and essential non-food items (the ‘upper poverty line’) averaged close to 40 per cent across Jordan, Morocco, Syria, Tunisia, Mauritania, Lebanon, Egypt and Yemen in the decade prior to the uprisings.¹³ Health and educational outcomes also reflected unequal access to state services and social support. Between 2000 and 2006, around one-fifth of all children in Egypt and Morocco exhibited stunted growth as a result of malnutrition. Across the Mashreq countries, undernourishment increased from 6.4 per cent in 1991 to 10.3 per cent in 2011. In 2010, on the eve of the uprisings, a striking 30 per cent of all adults in the region were illiterate (rising to 40 per cent for females aged 15 and above). Educational access was also marked by clear inequalities. In Egypt, for example, UNESCO noted that ‘one in five of the poorest [children] do not make it into primary school at all, while almost all rich children get through to upper secondary’.

It is essential to stress, however, that alongside this widespread deterioration of social conditions throughout the 1990s and 2000s, many of the region’s leading economies were experiencing very high growth rates and were being lauded as successful cases of economic reform, worthy of emulation by other countries in the Global South. Egypt, for example, was ranked by the World Bank as the ‘world’s top reformer’ in its 2008 Doing Business report, and continued to rate within the top 10 global reformers until the overthrow of Mubarak. Likewise, the World Bank’s 2010 Development Policy Review on Tunisia praised the country for its ‘steady structural reforms and good macroeconomic management’ that had earned Tunisia a place ‘among the leading performers in the group of emerging economies’ and led to ‘enviable achievements’ for the country’s poor. This kind of support to authoritarian governments continues to mark IFI policy in much of the Middle East today (such as the Sisi regime in Egypt) – a fact that it is crucial to remember in the light of attempts by these institutions to rewrite their historical record in the region.

The economic policies imposed by IFIs on the Middle East throughout the 1990s and 2000s did not just reconfigure social structures at the national scale, they also precipitated new economic and political hierarchies at the regional level. A key feature of these emergent hierarchies was the growing weight of the six Gulf Arab states (Saudi Arabia, the United Arab Emirates (UAE), Qatar, Kuwait, Bahrain and Oman) in the regional political economy – and the linkage between capital accumulation in the Gulf and processes of class and state formation elsewhere in the area.

Taken as a whole, the Gulf Arab states are marked by features that set them apart from the rest of the region. All these states are monarchies whose rich and relatively cheap hydrocarbon resources (both oil and natural gas) made the Gulf a critical focus of Western strategy in the Middle East throughout the twentieth century. At the same time, the social structures of the Gulf monarchies differ considerably from those found elsewhere in the Middle East. Most significant is the Gulf’s reliance on a large number of temporary migrant workers, mostly drawn from South Asia and to a lesser degree neighbouring Arab countries, who now make up more than one-half of the Gulf’s total population of 56 million. When considered as a percentage of the labour force, non-nationals make up from 59 to 86 per cent of the employed population in Saudi Arabia, Oman, Bahrain and Kuwait, increasing to around 92 to 95 per cent in Qatar and the UAE. Denied labour, political and civil rights, these migrant workers have been fundamental to patterns of urban growth and capital accumulation in the Gulf; they have also underpinned the ‘vertical segmentation’ of Gulf societies, with citizens incorporated into the surveillance and control of migrant populations through the kafala system.¹⁴

Over the past several decades, growing international demand for the Gulf’s hydrocarbons – underpinned by a near continuous increase in the price of oil from 2000 to mid-2014 – has massively increased wealth levels in the Gulf.¹⁵ This has helped nurture the development of large capitalist conglomerates in the Gulf, closely linked to ruling monarchies and the state, whose activities span sectors such as construction and real estate development, industrial processes (particularly steel, aluminium and concrete), retail (including import trade and the ownership of shopping centres and malls) and finance.

While much of the surplus capital held in the Gulf has been invested in North America and Europe, large amounts also flowed into neighbouring Arab countries throughout the 2000s.¹⁶ Critically, this regional expansion of Gulf capital was predicated upon the SAPs discussed above, and the subsequent liberalization and opening up to foreign direct investment flows throughout many Arab countries in the 1990s and 2000s. As a result, Gulf capital was a prime beneficiary of the neoliberal turn throughout the wider region – becoming intimately involved in the ownership and control of capital across the Middle East as a whole.

These regional hierarchies are crucial to understanding the impact of the 2008–09 global economic crisis on the Middle East. As noted, in the years preceding this crisis the region was already facing very high levels of social and economic inequality. In addition to issues of youth unemployment, social exclusion and poverty, rising costs of food and energy placed considerable pressure on the livelihoods of many families.¹⁷ Growing import bills meant that Arab governments faced enormous difficulties in maintaining already reduced subsidy levels; simultaneously, the cost of living for poorer families also rose. This precipitated a large jump in the number of the region’s poor – one estimate from the African Development Bank calculated that a total of 1.11 million additional people had fallen below the poverty line in Egypt, Jordan, Palestine, Syria and Yemen immediately prior to the 2008 global crisis itself.

As the 2008–09 crisis unfolded, these pre-existing patterns of economic development influenced how different parts of the region experienced the global turmoil. Non-oil exporting states were hard hit by the drop in global demand for goods such as agricultural products, textiles and garments, and other manufactured items. Simultaneously, overseas remittance levels fell as the crisis enveloped agriculture, construction and low-skilled manufacturing sectors in Europe, where many Arab migrants (both documented and undocumented) were located. Finally, financial liberalization throughout the neoliberal period had exposed many countries to potential fluctuations in foreign capital inflows, notably of tourist spending and foreign direct investment.

In the Gulf, however, the crisis was experienced differently. Gulf countries were initially shaken by a short-lived drop in oil prices from July to December 2008 (and the associated fall in global demand), as well as a pull-back in foreign capital inflows that led to a collapse of the Gulf’s real estate bubbles (particularly in Dubai). But, in response, the Gulf utilized accumulated financial surpluses to support the large private and state conglomerates threatened by the crisis, launching massive programmes of spending on real estate and infrastructure projects (concentrated in Saudi Arabia and the UAE). Moreover, the Gulf monarchies were able to make use of their structural dependence on temporary migrant workers to shift the burden of the crisis onto neighbouring countries – the hiring of new workers slowed and existing workers could simply be sent home as projects were cancelled. By 2010, oil prices had begun to move upwards once more, further consolidating the Gulf’s path out of the global crisis.

Taken together, these different regional trajectories of the global crisis meant that the Gulf states were able to emerge in a regionally strengthened position in the years following 2008, whilst neighbouring Arab countries faced growing fiscal and social burdens. It was in this context that mass protests first emerged in Tunisia in December 2010, spreading rapidly throughout the entire region. The first phase of these protests in 2011 saw the overthrow of the Ben Ali regime in Tunisia and the Mubarak regime in Egypt. Governments in Syria, Bahrain, Jordan, Algeria, Oman, Morocco, Yemen and Libya were also faced with uprisings and protests expressing opposition to autocratic patterns of rule and the deteriorating socioeconomic conditions experienced by much of the population. In this sense, the uprisings targeted both the economic policies that had been so heavily promoted by Western financial institutions over the preceding decades, as well as the political structures with which they were twinned. Not all participants in the uprisings thought about the protests in this manner, of course, but the ubiquitous slogan of aish, hurriyah, ‘adalah ijtima’iyah (bread, freedom, social justice) make this fusion of the economic and political spheres quite evident.

Despite the aspirations of those who took part in the extraordinary struggles of 2011, the extreme polarization of wealth and power in the region has not been fundamentally altered. A recent study has shown that the Middle East is now the most unequal region in the world, with the richest 10 per cent of income earners capturing 64 per cent of total income – compared to 37 per cent in Western Europe, 47 per cent in the United States and 55 per cent in Brazil.¹⁸ The figures are even starker for the ultra-rich population of the region: the income share of the top 1 per cent stands at about 30 per cent in the Middle East, compared to 12 per cent in Western Europe, 20 per cent in the US, 28 per cent in Brazil, 18 per cent in South Africa, 14 per cent in China and 21 per cent in India.¹⁹ These unprecedented levels of inequality are present both at the regional level – between the wealthy countries of the Gulf and the rest of the Middle East – as well as within individual countries.

These high levels of inequality are directly attributable to the market-based development models of recent decades, which have remained essentially unchanged following the uprisings and which continue to be promoted by major IFIs. Such continuities were clearly demonstrated by the IFI-led Deauville Partnership, an initiative launched at the May 2011 G8 summit in France that promised up to $40 billion in loans and other assistance towards Arab countries ‘in transition’. The core premise of the Partnership was a redoubled effort towards market opening in five target countries – Egypt, Tunisia, Jordan, Morocco and Libya – with goals such as ‘remov[ing] existing structural impediments’, encouraging a ‘vigorous private sector’ as ‘the main engine for job creation’, and pursuing ‘regional and global economic integration [as the] key to economic development’. In this manner, and strikingly reminiscent of how the political and economic crises of the 1970s and 1980s had opened the path to structural adjustment in the region, the post-2011 crises were viewed as an opportunity to extend the policy trajectories of past regimes. As the European Investment Bank noted not long after the overthrow of Ben Ali and Mubarak, ‘moments of political change can also represent an opportunity to reinforce or improve already existing institutional frameworks’.

Backed by initiatives such as the Deauville Partnership, IFIs have moved since 2011 to expand their position in the region with the offer of new loan agreements and other forms of assistance. Long-established institutions such as the World Bank and IMF have led the way in this process, while working alongside other institutions that have only begun operating in the region during the last decade (such as the European Bank for Reconstruction and Development). The evolving discussions around post-conflict reconstruction in countries such as Syria, Yemen, Libya and Iraq are also marked by the same kind of market-driven logic, and – as history amply illustrates – the aftermath of war, conflict and crisis (including the current global pandemic) is frequently viewed as an opportunity to rework power arrangements and accelerate economic change.

A decade on, the experience of the 2011 uprisings demonstrates that it is not sufficient to focus solely on political demands (such as new elections or governmental corruption) without simultaneously tackling the social and economic power of capital (nationally, regionally and globally). There can be no fundamental break with authoritarian state structures under an economic system that continues to promote unfettered growth and so-called ‘free markets’ at the expense of social justice and equality. One of the major weaknesses of the 2011 revolts was a failure to recognize this strategic lesson. But more recent cycles of political protest – notably the 2018–21 uprisings across Lebanon, Sudan, Algeria, Morocco and Iraq – appear to have learnt from the 2011 experience, explicitly linking the challenge to autocratic political elites with the need to reverse the extreme disparities in the control and distribution of wealth. In this sense – while the aspirations of 2011 remain wholly unfulfilled – the lessons, experiences and hopes of that moment will form an indelible part of struggles to come.