• What one fears is political money  - an interview with Samir Aita
The regime cannot survive. But what is to be kept in society?

• Europe needs a new relationship with the Arab world  - Mariano Aguirre
The reintegration of Gaddafi's Libya into the international community was an example of the cynical concept of political dialogue.

• Jordan: the link between political and economic reform  - Hassan A. Barari
Successive governments have failed to address the two most burning issues: poverty and unemployment.

• Syria's growing economic challenge  - Jihad Yazigi
There must be no illusions.

What one fears is political money
an interview with  Samir Aita

BI: Can you speak some about the impact of international sanctions in Syria? Whom are they affecting?

Aita: They are affecting--in two major ways--the population more than the regime. First, there were sanctions from the [European Union], especially on oil and oil derivatives, imports and exports. Sanctions came at the beginning of the winter and hit very, very badly the population in a period when the weather was very cold. People could not heat [their homes]. Some of those who pushed for obtaining these sanctions were arguing that if you blocked the importation of gas oil, the tanks of the Syrian army will not function. My argument was that if [regime officials] have 2,000 tanks and they run them all day, this is nothing compared to the five million cars in the country. There will always be enough to run the tanks. This is not the right sanction.

The second thing [is that] the balance of energy for Syria before the uprising was negative, meaning that Syria used to import oil derivatives, meaning gasoline, in values much more than it exported oil. This, of course, hits the economy and makes things very difficult for the population and for the state. It doesn't really hit the regime guys who smuggle these products. There was no scheme like the one that was put in place in Iraq during its crisis, the "Oil for Food" program.

BI: Are some of the sanctions affecting the regime?

Aita: There were targeted sanctions against regime people, hitting the Assad family, their relatives, and some of the businessmen. These are good sanctions, if they are well-studied and well-designed. But the problem is, first, nobody is telling today how much money was seized in Switzerland, the US or wherever from Bashar Assad and his family. Nobody knows. No figures have been put out.

This is very damaging for the Syrian people--these sanctions are made in the name of the Syrian people and the Syrian people need to take this money back. How can they take this money back without knowing how much was seized and where? We had a meeting of the Syrian Democratic Forum, which is a civic political forum, and we asked the Friends of Syria and whoever is putting sanctions on personalities to declare how much they blocked and to be transparent. But [six months into the sanctions], no single figure has emerged.

The second issue is that not only are regime [figures blacklisted], but also businessmen. And sometimes one wondered who put the names, that there might be a fight between businessmen outside Syria and the businessmen inside Syria. Businessmen inside Syria are helping and advising [the opposition] much more than those outside.

BI: How can the average Syrian be expected to think about the uprising as the economy gets worse and what does this mean for the opposition?

Aita: The socioeconomic situation is one of the major reasons for the uprising. You have what I call a "youth tsunami" in Syria--300,000 people coming into the labor market every year. In the last 10 years, with all the [government] liberalization, the economy was creating 60-65,000 [jobs], which is really not enough. What is not said is that among those 65,000, there are only 8-10,000 real jobs, i.e., with a real contract and social security and so on. The rest of these are informal jobs, like that of [self-immolated Tunisian Mohamed] Bouazizi, who was university-educated. He was considered statistically as "working", not jobless, but he was only pushing a small [cart] to sell vegetables and fruits, which is a menial job. This is one of the major reason for the calls for "dignity".

The second thing is that Syrian society is an exceptional society, meaning that social networks are very, very strong. Syria received during the war in Iraq over two years, 2006 and 2007, 1.5 million Iraqis. [This is comparable to] 7.5 percent of the Syrian population. I don't know any other society that could receive such a flow of migrants without international aid. This is like saying France received four million people in two years, while France, because of 10,000 Tunisians who came here during the crisis in Tunisia and Libya, was shouting and changed Schengen [a border treaty that sets visa rules], etc.

But what is feared lately is that [Syrian] society has become really exhausted and some of its beautiful functions are deteriorating because of the political money and weapons that are being pushed by some countries, mainly the Gulf countries through Turkey. This is a big push--buying people for a cause, one cause against another. This is very dangerous. This is [making Syria resemble] Lebanon, where political money and foreign intervention have threatened not only to overthrow the regime, but also society.

The regime has already fallen, in my opinion. It cannot survive. But what is to be kept in society? If society collapses and, like [United Nations and Arab League envoy on Syria] Kofi Annan is saying, enters civil war, this is disastrous. But maybe some foreign countries want that.

BI: As an economist looking around the region, how can these societies, including Syria, lift themselves out of this situation where the demand for economic parity is so strong, but they remain in crisis?

Aita: Among Arab countries, you have two kinds: ones with population and ones with oil and money. The ones with population are all experiencing the youth tsunami, they are experiencing youth refusing to have dictatorships, or to have the son coming after the father if [the country] is a republic. Some countries have already initiated their transformation--Tunisia, Egypt. But already they are in trouble. They are indebted countries. They are hit by the situation of the transition and there is nothing to help them make this transition and stabilize.

What you can fear in Tunisia and Egypt is political money and, if you look at the details, political money is coming from the Gulf countries. It is pouring in at huge quantities. Some European diplomat told me about the Libyan crisis: who could imagine a year ago that it is now Qatar that is managing and controlling Libya? It looks like the Gulf countries failed to do things in the West and to build their industry of petrochemicals, whatever, and now they are buying countries.

Some countries have their thinkers, their institutions, and are behaving better than others during the transition, and some are really having a nightmare. The economy will be in trouble in Egypt for a long period, while the recovery in Tunisia could be easier. But even in Tunisia, there is no real push like what happened in Western Europe after World War II. There is no money in the US and Europe to help.

Some countries are in transformation but are not poor or not indebted--this is the case in Libya and in Syria. Syria had [foreign currency] reserves, which are declining sizably. It will likely be "bled" for a period and nobody is helping the situation to end. This does not necessarily mean by military means, but by sending the right message at the right moment and agreeing between the US and Russia on making the regime leave, instead of fabricating a false fight between the US and Russia to keep the situation in continuous degradation like it is now. In some sense, the countries that were not weak initially are weakened--maybe on purpose.

Will [democracy] happen? Sometimes I have doubts, especially when it is Saudi and Qatari media who are pushing for democracy. Can a non-democratic country push democracy in another country?

BI: What is your vision of the exit in Syria and are you optimistic about the opposition?

Aita: These days are very bad days for the opposition. They are very bad days for the Syrian National Council. It became a hope for the uprising for the people inside, but it failed to build democratic rules inside itself.

A few guys controlled the Syrian National Council completely from the beginning. There are [other] oppositions that are weaker. They have been hit first by campaigns of denigration by al-Jazeera and al-Arabiya, the Gulf media that supported the SNC, but also they failed on their own [to answer the needs of Syrians].

The opposition is somehow discredited--all of it. The situation is becoming not talking politics but talking weapons; the outcome of this will be determined by the weapons. No one knows who controls the armed opposition and what it wants, except overthrowing the regime. But the question is not only [one of] overthrowing the regime, it is what other regime should be built.

BI: You sound very pessimistic.

Aita: Some other path has to be found, built on international experience with conflict resolution, to get out of this messy thing. The US should be involved, but peacefully not militarily. My information is that the US will not intervene but is encouraging the flow of weapons into Syria. If Syria enters civil war, the image of the US will be [very] bad, like after Iraq, Afghanistan, etc. It brought war, not peace, stability and democracy.-Published 24/5/2012 © bitterlemons-international.org

Samir Aita is a writer, editor in chief of Le Monde Diplomatique Arabic Edition and president of Cercle des Economistes Arabes.

Almost a year and half after the Arab uprising began, Europe, like the United States, has yet to find new ways to deal with the countries that have started major political transformations: Tunisia, Egypt and Libya. Nor have these two players created policies for countries such as Morocco and Jordan that are implementing moderate change precisely in order to prevent social upheaval.

The European financial crisis seems to absorb all the time and a good part of the resources of the European Union. But the main problem is the lack of an official discourse from Brussels and individual European governments about establishing the necessary new relationship with the Arab countries.

Since the end of the colonial period, Europe has based its relationship with former colonies on obtaining cheap access to natural resources, selling weapons, and increasingly moving manufacturing production to "maquiladoras" or duty-free free-trade zone factories in some of these countries in order to profit from their cheap and tightly-controlled labor force. Politically, Europe's aim was to preserve stability, to do business in the region and to secure Israel´s geopolitical position (a role supported in particular by Egypt and Jordan). At the same time, Europe was the beneficiary of massive funds that repressive Arab elites transferred to banks, to investments (e.g., real estate), and to other operations that were not always clear and legal.

The crony elites of the rentist states in the South found perfect partners in the North. In the last several decades, the neoliberal economic model was promoted with equal enthusiasm by local governments as well as European and US investors and international financial institutions. The result in the region was a growing inequality and increasing impoverishment of the lower and middle classes. Even when Europe launched such initiatives as the Euromed conference, the outcome was the promotion of neoliberal economics more than an open dialogue about democracy and social justice.

The reintegration of Muammar Gaddafi´s Libya into the international community that was led by the United Kingdom, France and the US was an example of the cynical concept of political dialogue. And Europe's low political profile in the Israeli-Palestinian conflict has also not been helpful, particularly in recent years, in terms of portraying Europe as a respected actor in the region.

While many European governments and the private sector cultivated these relationships, the EU and its aid and cooperation agencies channeled funds for development and good governance programs that barely helped to soften the impact of repressive and predatory local governments. In parallel, since the 1950s Europe has absorbed a steady flow of immigrants from several Arab countries. A two-way and seemingly unconnected relationship was created: investments in Arab maquiladoras and arms went south, while profits and poor immigrants traveled north.

Although Europe is currently busy confronting its financial crisis and internal divisions, it urgently needs to redefine its relationship with the Arab world, demonstrating a shift from favoring elites to supporting democratic political change, democratic actors and an economic and social justice agenda. Europe and the Arab world need to jointly address a series of common issues, such as access to energy resources, environmental agreements in the Mediterranean region, reinvestment of energy benefits to create infrastructure, and promotion of higher education and other social services.

It is also crucial to establish rules for the arms trade and assistance for security sector reform that help consolidate the rule of law and transitional justice. Europe and Arab states need to support implementation of fair tax systems and reform of state institutions, reorientation of EU aid in the context of North-South agreements, the equal inclusion of women, recovery of assets that former dictators hid in Europe, and joint efforts to promote international justice. Agreements on immigration should take into consideration both that Islam today is part of European culture and that this is opposed by a racist wave.

EU institutions, governments, the private sector and civil society need to discuss with their Arab counterparts the kind of investments and policies that will create employment for the region's youth. This is a challenging issue, given that austerity policies promoted in the EU are creating a mass of youth unemployment there. Growth and investments, not to mention austerity measures, do not necessarily generate more employment. What are needed are policies of redistribution. Toward this objective, Europe must start cutting its links with Middle Eastern crony elites.

Politically, Europe could play an important role supporting the coalition governments that are emerging from the on-going Arab reform process. The experience of coalition governments in Europe and beyond could be shared and supported. But Europeans must be prepared to accept, first, that Islamic parties can participate in and even lead Arab coalitions, and second, that Arab democratic processes will take time and might adopt hybrid shapes that do not necessarily coincide with the liberal model.-Published 24/5/2012 © bitterlemons-international.org

Mariano Aguirre is director of the Norwegian Peacebuilding Resource Centre (NOREF) in Oslo, which deals extensively with the Middle East and North Africa.

The main driver of the "Arab spring" is not just the people's desire for freedom. There are also significant economic and socio-political factors that have reinforced the more overt political demands. Due to a lack of democracy and popular participation in decision-making processes in most Arab countries, even marked macroeconomic success in some countries has not translated into improved living standards.

Nowhere is this phenomenon clearer than in Jordan. Although Jordan's economy has achieved annual growth, serious problems remain at the micro-level. The gap between the haves and the have-nots has grown over recent years. Successive governments have failed to address the two most burning issues: poverty and unemployment.

Added to this has been a lack of transparency, cronyism, and pervasive corruption. When the state failed to convince the people that it has the genuine will to make a difference in the lives of people, protest movements mushroomed. Reform has been on the back burner despite King Abdullah II's stated commitment to the contrary. In other words, the state has paid lip service to the issue of urgent reform.

The winds of change in this part of the world have ushered in discussion of important structural factors such as accountability, solid governance, social and economic equality, lack of political and economic freedom, and weak job creation. These factors are the ones that each country should pay heed to.

In Jordan, polls clearly show that people's priorities are socio-economic. The lack of economic opportunities cannot be ignored. A great number of Jordanian university graduates cannot find jobs. Some of the graduates are unemployable because they lack basic skills. Even those who are employable have a hard time finding jobs.

The problem of unemployment and poverty has struck the south of Jordan more than elsewhere. In Tafileh, the most impoverished district in Jordan, people complain of the lack of economic and social justice.

Although these problems are of an economic nature, a growing number of people reason that political reform is the solution to the socio-economic problem. The running argument in Jordan is that people fall into poverty because of successive failed policies of government. In almost all demonstrations that have taken place over the last year and a half, protesters chanted slogans against the government's economic policies.

Traditionally, the state has played a rentier role that benefits many in the kingdom's "East Banker" population. With the retreat of the state from economic activities and the ensuing policy of privatization, a growing number of East Bankers have found themselves unemployed.

The dependent status of East Bankers, who have traditionally formed the foundation of support for the regime, has narrowed not only the leadership's room for maneuverability but, more importantly, the state's ability to maintain its traditional relations with society as well. If anything, the state-society relationship has entered a new era that demands genuine reforms.

Unfortunately, as was the case in some other Arab countries that have been hit by the tsunami of the Arab spring, the ruling elites in Jordan are in self-denial. Instead of expediting the process of reform, the state has adopted a strategy of wait-and-see. Since the protest movements never posed a serious threat to the status quo, consecutive governments have been too slow--to the extent that the king himself has criticized them for not implementing his reformist vision with suitable speed.

In a country like Jordan, the impact of economic change could not be more striking. In a changing world, the capacity of the state is no longer sufficient to supply people with their basic needs. People are taxed heavily. Nor has the government adequately addressed the social dislocation that resulted from the process of privatization. The socio-economic program that was adopted by the government and implemented by the Ministry of Planning and International Cooperation has failed to make a difference in people's lives.

Against this backdrop, many Jordanians have taken to the streets hoping to accelerate a process of reform that could lead to full empowerment. Granted, a majority of Jordan's economic problems have to do with conditions beyond the control of the state. But to avert aggravating the situation, the ruling elites must acknowledge that mismanagement of the economy and lack of reform go hand in hand. For stability to prevail in a very volatile regional environment, the king should step up the process of reform and not rely on dysfunctional institutions and corrupt decision-makers who
fear the Arab spring and the consequences of reform.-Published 24/5/2012 © bitterlemons-international.org

Hassan A. Barari is professor of Middle Eastern politics at the University of Jordan and the author of "Israelism: Arab Scholarship on Israel, a Critical Assessment" (London: Ithaca, 2009).

The geography of the Syrian uprising is a reflection of the significant economic and social crisis faced by large segments of the Syrian population since the early 1980s. While the essence of the revolution is largely political, in the sense that its backers are overwhelmingly demanding "freedom and dignity", there are also strong underlying economic factors that are determining its dynamic and will weigh on the post-revolution period.

It is, indeed, in the areas that historically formed the core constituency of the Baath party that the protests have been strongest, in particular the southern city of Daraa that sits at the heart of an agricultural plateau, the cities and rural areas of Homs and Hama, and the suburbs of Damascus.

The people, who in the late 1970s-early 1980s after two decades of strong government investment in economy and society remained solidly behind the regime against protesters led by the Muslim Brotherhood, are now in the streets calling for the demise of this same regime--following three decades of state divestment, trade liberalization, neglect of agriculture and of the rural areas and government priority to the services sector.

Hence, the few years of strong GDP growth enjoyed by the Syrian economy in the early 1990s (spurred by a growth in oil output) and in the late 2000s (spurred by the oil boom of the Gulf region and the cash surpluses it generated) hid the fact that since the early-1980s --i.e. for the last three decades--Syria has not been generating enough economic growth to employ its rising population.

While, according to most economists, the economy needs to grow by an average of eight percent per annum to generate enough jobs for new labor market entrants, it has not reached this level even once since 1980. In other words, unemployment has been increasing every single year in Syria for the last three decades.

These difficulties were compounded by poor government policy-making. The free trade agreements signed with Turkey and the Arab world in the mid-2000s, for instance, as well as a general reduction in custom tariffs, led to an "invasion" of foreign products in the local market that put countless industrial plants and workshops out of business and, consequently, thousands of people out of their jobs. Similarly, a reduction in agricultural input subsidies accompanied by a severe drought forced tens of thousands of farmers from their lands and reduced the contribution of agriculture from around 25 percent of GDP to 19 percent in less than a decade.

In addition, in order to respond to its dwindling revenues, the government drastically reduced its investment and spending and applied what in practice was a copy of the structural adjustment programs imposed by the International Monetary Fund on emerging countries. This contraction of the government's role in the economy was most obvious in rural areas, where the core constituency of the Baath party resided.

In the midst of all these difficulties and state divestment, there was one positive consequence: the government managed to accumulate billions of dollars in foreign currency reserves and save them for future generations, thanks to its short oil boom that lasted most of the 1990s.

This is exactly what Syria is set to lose through the international sanctions imposed on its crude exports. The loss of billions of dollars incurred by the government in the last few months because of the sanctions will render the reconstruction of the country and future investment requirements more difficult to fund.

The issues highlighted above point to the tremendous economic problems faced by Syria's society. There must, indeed, be no illusions. A happy end to the current protest movement, including the establishment of a democratic political system, will not mean an end to Syria's economic woes. Syrians must recognize the challenges ahead and adopt a new economic strategy that puts economic development and employment at its center.-Published 24/5/2012 © bitterlemons-international.org

Jihad Yazigi is the editor of the Syria Report.