Abstract
This paper investigates the socio-economic causes that have led to the recent political instability in the Middle East and North Africa (MENA) region. The MENA region is characterized as one which holds massive hydrocarbon resources and yet suffers from low economic growth and development and high levels of unemployment. This paper shows that the Arab uprisings are linked to the inequalities created by the opening up of the Arab countries to foreign capital and financial agencies, a project that is commonly referred to as the Washington Consensus. This neo-liberal globalization programme has been highly diverse in its effectiveness throughout the MENA region. However, the state still remains the dominant economic player in this region and the Arab population still regards it as the primary provider. The state has been able to hold on to its power by limiting the role of private enterprise and also by maintaining an exclusive nexus between itself and the few prominent private sector companies. Although the wave of disillusionment and frustration amongst the Arab youth washed over the entire region with the same passion and propensity, the reaction of individual governments has been very varied. The future of the region lies in how effectively and efficiently the interim or newly elected governments are able to move their country beyond the pincers of, on the one hand, the Washington Consensus and, on the other, the old, state-centric and inefficient developmental regime.
Highlights
The current political turmoil in the Middle East and North Africa (MENA) region has brought ‘democratisation’ and ‘economic liberalisation’ to the forefront of political debate
1990s, in line with the Washington Consensus, will continue on the same path or if the political transition triggered by the Arab Spring will force them to take an alternative route to economic growth
Egypt introduced a wave of new economic reforms in 2004 as part of structural adjustment programmes (SAP) steered by the International Monetary Fund (IMF)
Summary
The current political turmoil in the Middle East and North Africa (MENA) region has brought ‘democratisation’ and ‘economic liberalisation’ to the forefront of political debate. From the 1950s to the mid1980s the development strategy comprised of Import Substituting Industrialisation (ISI) policies which included strict controls on international trade, overvalued exchange rates and government controlled foreign exchange and credit markets[5] The objective of such a strategy was to develop capital intensive domestic industry producing goods and services in a highly protected business environment for domestic market consumption. Since the 1990s many MENA countries have embraced market-led, outward looking economic reform by adopting the structural adjustment programmes (SAP) introduced by the International Monetary Fund (IMF) and World Bank These reforms were based on the neo-liberal policies prescribed in the Washington consensus which encouraged trade liberalisation, fiscal discipline and privatesector driven growth. The Consensus included a list of policy reforms shown in table 1
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