February 18th, 2011
05:53 PM GMT
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As an active observer and a consistent visitor of the Middle East, one asks a simple question: Why does it have to be this way?

I am not talking about Shiite/Sunni divides, the Palestinian/Israeli conflict or Iran’s growing influence in the region, but persistent and unacceptable levels of poverty in a region blessed with nearly half of the world’s oil and gas reserves.

First it was Tunisia, then Egypt, Yemen, Algeria, Libya and stretching into the Gulf with Bahrain.

There are major historical and cultural differences, of course, and even vast differences in per-capita income – Bahrain for example is high at $38,400, Yemen low at $2,500. But a few common threads can be found: the region’s youth lack opportunities, power is concentrated at the top and the inner circle around them, and most waited too long to embrace the winds of change brought on by globalization.

A small but influential group of business people from the region formed the Arab Business Council (ABC) within the World Economic Forum in June 2003. I attended one of its first major meetings, ironically, in Manama, Bahrain, in 2005, where the co-founders and architects of the initiative rang alarm bells about rapid birth rates and the need to create 100 million jobs by 2020. That number was not to lower unemployment but to only tread water in terms of double-digit jobless rates amongst the region’s youth.

During a series of panels and interviews and in our coverage on Marketplace Middle East, we consistently asked how it would be possible to create that many jobs in such a short span of time. In sum, the symptom was easy to identify, the remedy much more complex. The ABC talked of PPPs, public-private partnerships, accelerating reforms and opening up governments - especially the monarchies in the Gulf States – to a wider swath of the population.

In fairness, economic reforms have taken place. In Egypt, nearly $50 billion dollars flowed in as a result of lower taxes, labor reforms and the setting up of industrial zones and improved infrastructure.

A visit to Bahrain would clearly lead one to believe it earned a reputation as the “Switzerland of the Middle East.” Tax rates are fair, the labor force educated and meetings start on time. No wonder both of these economies grew during the global downturn, whether it was Egypt with 80 million people or tiny Bahrain with about 800,000 nationals.

But it would also be fair to say that reforms were started too late and have certainly not benefited everyone equally. While Emirates, Qatar Airways and now Etihad have set up large fleets, fly into first class airport hubs for travellers between Europe and Asia and connect the Middle East to the world, the region until very recently was bypassed by foreign investors. China and India were beckoning, as well as an ASEAN market of 600 million consumers in Southeast Asia.

To be frank, a potential market of 350 million consumers in the Middle East has not come together fast enough. Old rivalries amongst the region’s royals still persist and until this social media revolution kicked off the power brokers of North Africa have been (and some still are) unwilling to open up their economies and their societies to change.

During a wide-ranging interview with the Crown Prince of Bahrain two years ago, Sheikh Salman bin Hamad bin Isa Al Khalifa noted that change has to be managed.

In his words: “Change is never easy but I think it must be tackled with the right ambition, must be tackled with the right energy as well to achieve success.”

His answer pertained to a question on why some senior Sunni legislators were resisting efforts by the ruling Khalifa family to open up parliament to more of their Shiite counterparts.

The government - unusually for the region – has made efforts to put forth economic and political reforms, but in this new environment, with populations viewing their neighbors' actions online and on their TV set top boxes, the pace of the change in the recent past is proving too slow for a younger, educated generation which is not asking, but demanding more.

soundoff (12 Responses)
  1. morristhewise

    Saudi Kings will end the revolution by offering a bounty for the heads and ears of infidels and apostates. A thousand for the head of an infidel and fifteen hundred for the ears of an apostate.

    February 18, 2011 at 6:12 pm |
  2. john dahodi

    Obama-Hillary Wake-Up, it is too late to pickup 3 am call. The phone is ringing, ringing and ringing for the last 20 days but no one has time to pickup the call and answer decisively. The white house is worrying about her own dictators, thugs, Khalifs, Kings and puppets rather than freedom, democracy, human rights, killings and humanity. Obama and Hillary are worrying more about Saudi Kingdom and Israeli dictate rather than support millions of people, who are crying for their human rights and rights to speak and right to have freedom. These human beings are not ready to sacrifice their lives to save any religion or race but to demand their voice, employment and right to live with dignity and respect. Obama and Hillary has shown their cowardliness and timidity in dealing with this crises. Shame on me I voted for him, believing his speeches and messages, but found to be full of lies, lies and LIES.

    February 18, 2011 at 7:17 pm |
  3. john dahodi

    It is very strange to note that Obama and Hillary got cold footed when the entire middle-east erupted and cried loudly for freedom and democracy. Obama found to be paper tiger, only talking but has no guts to act. He is supporting whole heartily the thugs, dictators, kings and puppets, who can accept our hegemony but has no courage to come out openly in favor of masses who have been oppressed for decades and are ready to sacrifice their lives for freedom and democracy. It is shameful to say that being Shias we can not help, because they may support Iran and Mullahs, But it is wrong, basically America and the west has paid enough by Sunnis fanaticism including Bin Laden's 9/11 and other terrorists attacks but shias have not done any thing like that to the American or western interest. America has to note that not only in Bahrain, shias are in majority but around all the gulf oil wells areas, shias are in majority and they have been mercilessly kept under iron fist by the dictators and kings. If Bahrain revolt is not resolved peacefully, other shias areas around the middle east including Saudi Arabia, Oman, Abu Dhabi and Kuwait will erupt more fiercely.

    February 18, 2011 at 10:02 pm |
  4. Sophos

    Well said...John Dahodi.... When will American Foreign Policy stop its hypocrisy? It is almost as if there is a conspiracy....as soon as the next administration takes office....we are back to the same old crap....the FACE of Democracy (as in theatre mask) and the actions of an Imperial Colonial power...slurping up the oil and squatting ourselves on other's lands with nuclear backed military weapons... Disgusting

    February 19, 2011 at 5:27 am |
  5. Justina

    Decent democracy is possible only with literate people with Judeo-Christian values. Not with other species.

    February 19, 2011 at 8:38 am |
  6. babak

    dictatores not only killed their people even they keep their countries without progress and they dont care about natural resources like mountaines ,rivers and forests ..if you see iran natural resources you can understand many of rivers in this country are polluted by dirt and debris ,even they destroyed more than 70% of meditranian forest in south of caspian sea

    February 19, 2011 at 4:13 pm |
  7. babak

    really dictatores leaders make this world dark and black and even wild animals and birds sufferening from dictatores and uneducated leaders .

    February 19, 2011 at 4:15 pm |
  8. J.F. Dimitriou

    Very insightful article on the comparison of Tunisia, Egypt and Bahrain. Comparing per capita GDP as well as regime offers further thought on these developments. Perhaps the most powerful message is that of the social media itself and its ability to reach such a wide audience! Bahrain may be at the crossroads of the future, as well as a test for the remaining monarchies of the gulf. Democratization and representation is a must in all reformations of government and regime. Enlightened leaders should head the warning that force will not stop these events, only enlightened leadership may hold the key for survival.

    February 19, 2011 at 4:51 pm |
  9. Nostromo45

    Yes, all very nice, Mr. Defterios, but you are looking at the problem from the wrong end of the telescope. Studying the Middle East/North Africa from a western investors point of view, where you chum up at the ABC/WEF picnics, has nothing to do with the people at mass population level: it just affects the few rich at the top who pull all the strings and wield all the power.
    Now, let's look at it from the bottom end up.
    Many countries in the process of evolving towards what today we like to call "democracy", had to go through stages of development, often with unrest and killings, and at times terrible civil wars – France, USA, Russia, Spain...... or even industrial revolution – UK, or fantacism – Hitler's Germany. Each of these phases were brought about through social evolution, development of thinking people, NOT through kings, queens, presidents, mullahs, sheiks, emperors, and so on. The level of social thinking among the population gradually reaches new social awareness, and it is this that causes revolution, whether peaceful or otherwise.
    A reasonably educated barrow-boy in Tunisia burnt himself to death, which woke up social awareness and consciousness: it was the trigger which set in motion the ideas of injustice, of being merely vassals, whilst their rulers lived in luxury, pillaging the resources of their lands, and using any force to keep their subservient masses down. It is this feeling of being duped, tricked, cheated, which Tunisia exported: the masses had come to the conclusion that something was very wrong.
    The surprising thing is that the Middle East/North African unrest has not been brought about by opposition parties, islamic groups, but spontaneously by ordinary people in the street, without specific political or religious affinities. This is very important in order to begin to understand what is going on. The Arab people are not as stupid as they were: they have grown up and know how to use Internet – Facebook, Twitter and e-mails have been useful tools in their hands.
    Once Mubarak fell, it was obvious that the whole upheaval was going to spread like wildfire through the whole region. The only thing which has surprised me is that it has reached Bahrein so quickly. This must put Qatar, Dubai, Abu Dhabi on the alert: they are now not safe, and the Saudi King can start packing his suitcases and get his camels ready.
    The domino effect has only just started. Other countries in Africa may well begin to fall, and Iran.
    I wonder what Iraq and Afghanistan will do?
    Even worse: what is Al-Qaeda doing? I dread to think...

    February 19, 2011 at 8:23 pm |
  10. Otto from Germany

    I think the next dictator leader in Africa to go is Paul Biya of Cameroon. Cameroon is such a rich Country in resources but this dictator has made the population to suffer for such a long time now.28 years and his still going in for the election in October. There can't be any reasonably change in Cameroon with this dictator still running for presidency.
    Cameroonians are very intelligent but need to stand up for a change. How can Paul Biya sign a contract with South Koreans for the exploration of Diamonds in east Cameroon for 25 year? For crying out laud this are resources of the country and not a personal property. Cameroonians please take this man out.

    February 20, 2011 at 8:41 am |
  11. P Panos

    The observations of John Defterios left me with many questions about the future of this region, and similar situations that may begin to unfold in other parts of the world. I remember hearing a statement from someone in the travel industry in Singapore; "Ten percent of the people control ninety percent of the wealth." I was reminded of this fact when I read the article by Mr. Defterios. If the region of the Middle East is in a similar situation, something has to give eventually. If the citizens and subjects of the region do not see themselves as being shareholders of the wealth, then what we have been seeing unfold politically in the past weeks may spread causing an extreme economic collapse and freezing of energy assets. The time to form a Middle Eastern Economic Union is now upon the decision makers and leaders of this region. A Union with cultural and religious differences set aside in the hopes of creating a stable economic environment that can compete on a global scale with countries like China. Why can't the Middle East attract high-tech manufacturing to the region? Since there are not enough jobs in the oil industry for everyone, this region must think of new and creative ways to utilize the large labor potential available to them.

    February 20, 2011 at 2:27 pm |
  12. George Thompson

    The truth in my opinion, as it resonates in other people's opinions is that the mindset of the super power nations is not to resolve the issues of the human being but tio resolve their own personal issues, dictated by their own policies and thinking.

    it is about time that the world starts questioning their integrity.

    Lets see what happens in the future, but a superb place like the Middle East with some of the best people in the world (as far as their integrity, truthfulness and heart is concerned) is really facing a hard fall.

    We hope that the future brings about a welcome change to the atmosphere and more importantly in the mentality of Obama, Hiliray and their like,

    July 11, 2011 at 4:10 pm |

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