January 14th, 2011
12:05 PM GMT
Let’s simply say this is not the way in which the leaders of Tunisia and Algeria wanted to start 2011. Both had experienced varying degrees of protests, violence and killings. In Tunisia, it was a lack of opportunity. In Algeria, trouble brewed around not getting access to food at a reasonable price.
It is not a pretty picture, but what is framing the debates in these countries and the need in Tunisia and Algeria for protesters to take to the streets?
The answer, not surprisingly in the Middle East, is both complex and simple at the same time. The countries don’t have a track record of political openness, which at the end of the day eventually comes back to haunt those in power.
“The challenge is, if we don’t have the global governance systems that can come to the party in terms of dealing with that level of interconnectedness, we could see small trigger events of local crises turn into regional or global crises and that is the real fear our report expresses,” says Nick Davis, co-author of the Global Risks 2011 from the World Economic Forum.
Davis is referring to a “retrenchment from globalization” as one of the five risks to watch in the medium term. This past week, it happened in the present. This is not a move away from the WTO, or the IMF, by countries in the region, but something more tangible on the ground – the younger generation has had enough. Access to the internet and information from outside combined with a lack of opportunity inside is a volatile cocktail.
The math is stacked against the Arab youth. On our program, we have talked about the need to create 100 million jobs to just stand still on the unemployment front, since birth rates in the region are at the top of the global league tables.
For example, in Tunisia unemployment is at 14 percent in the general population and nearly double that amongst those below the age of 25. That pressure underscores another risk in the WEF report, demographic challenges.
This tale of unrest and the use of extremely heavy government force to quell protests is even more complex because in Tunisia, President Zein al-Abidine Ben Ali's government has had economic reform on the priority list.
The Mediterranean country of just 10 million people has grown an average of five percent during the past decade. The “Made in Tunisia” label can be found in global retail chains in shopping malls throughout Europe - ditto for the country's agricultural products. The President has been trying to move his people up the so-called value chain to more high-end industries and has signed trade agreements with the U.S. and European Union going back to the early1990s.
But in reality, according to Middle East veteran Jeremy Greenstock, results have taken too long in a less than open political climate. Greenstock ended his diplomatic career as Britain’s ambassador to the United Nations, but spent years in the region.
Leadership, says the former ambassador “is usually around one personality or one president. Creating a dynasty out of that is more dangerous.” He referenced the 30-year rule of Egyptian President Hosni Mubarak as a prime example.
Tunisia, Algeria and Egypt fit into what I call the middle-bulge countries of the world in terms of per-capita income. Ranked in the latest IMF survey at at 82, 97, and 103 respectively, they have certainly made sizable gains with, for example, per-capita income in Tunisia at $9,500 per year.
Look further down the list and you will find Yemen, ranking at 135, with a per-capita income of $2,500 per annum and you can see why elements of al Qaeda have moved in. This goes back to the point made by the WEF’s co-author Davis, when he referred to local problems becoming regional or global problems.
And this, says a long-term player in the region, Saeb Eigner of Lonworld, holds back investment. “In North Africa, the issue from a business perspective in order to have a medium-term investment rather than a short-term investment is creating a degree of sustainability and institutional building.”
Sustainability and institutional building both sound a bit too predictable for those seeking high returns for high risks, but after what transpired this week in North Africa being "boring" and more open might just have avoided unrest and violence.
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