PM Fuad Siniora in London Business School : The prospects of Arab spring

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It is a real pleasure for me to be here with you today at the London Business School. I would like to thank the Dean Sir Andrew Likierman, and Mohamad El Rafei, the co-chair of the LBS Middle East Conference, for giving me this opportunity.
I will focus my intervention around three questions: First: is the Arab Spring suffering from a setback and is it true that it is quickly turning into a long and dark winter? Second: what are the embedded risks to the transformation that the Arab world as a whole is undergoing? Third what can the Arabs as well as the international community, do to optimize the chances of success of the transition to democracy and development, and why is that relevant to everybody?
Regarding the first question on whether the Arab Spring is turning into a winter; first we need to understand the nature of the transformation taking place in the Arab world.

The revolutionary movements have launched a process that is irreversible: we have seen elections, televised debates as well as chants and demonstrations on the streets in countries where these things were unimaginable only a couple of years ago. So let us start with the fact that things have changed: the genie is out of the bottle. Now the question is how will this process evolve and does it risk being hijacked by the Islamist-parties through the election process?

Surely we may or we may not like some or all elections results, but that is part of the democratic process. That is part of getting used to elections that don’t end with 99.7% going in one direction. It is also part of the process of growing up and maturing. Years if not decades of repression and marginalization in the Arab world have given way to significant frustration. This frustration has driven the newly found voice of the majority, prompting the parties that seek the refuge in religion, ethnicity or race, to do much better in the first free elections than the liberal, modern and open parties. But that is expected: just like anywhere else in the world, we see that in times of crisis and tensions, people seek the comfort of the more radical parties because these parties tend to always have ready-made simplistic answers that appeal to the people and provide the anchor of perceived certainty that is so much needed in times of uncertainty.

In addition, let us not forget that all these Arab Islamic movements were for a long time forced to go underground and were subject to decades of repression and prosecution; they learned in the process to become more organized and better connected with the people. Now they are surfacing, and we will have to expect some soul-searching period in which, I believe, they will learn to adapt to the new circumstances domestically and also to the new facts of the world, and they will come to see the difference between driving from the back-seat and driving from the front-seat.

We have to recognize that we have already some encouraging signs: starting from Tunisia where an enlightened Islamic party (that is outspokenly inspired by the Turkish experience) has chosen the path of power sharing during this important transition, and then Syria where the Syrian Muslim Brotherhood have released an important manifest making the establishment of a civic state the epicenter of their political agenda, despite the horrible atrocities and crimes still being committed by the regime in Syria.

Further very encouraging signs have come out of Egypt, where the Azhar (which is the highest Islamic religious institution) has really stepped up to the historic circumstances and published a series of progressive statements on the future of Egypt, then on the Arab Spring movement, and then the last one on liberties. One on the role of women is soon to be released.

To put it in plain English: as democracy becomes more enshrined in our culture, Islamist parties coming to power in the Arab world will have to either change by espousing modernity and openness, or they will ultimately be changed. Meanwhile, the liberal parties will learn to be better organized and more focused and clear in terms of message, and hence able to move to the forefront of political life.

I believe that with time, the Arabs will demonstrate that Islam can be compatible with democracy, just like the Turks and the Indonesians have already proven: there is nothing in Islam that is inherently anti-democratic.

Most Arabs are moderate pious Muslims, not extremists. If given a chance to practice democracy, and as long as the process is respected, I truly see no risk of the nation turning towards fundamentalism. But there are certainly other risks, and I will move now to the second question and I define two major risks to the historic transformation taking place in the Arab world: The first is the fast deteriorating socio-economic conditions in countries that have witnessed a revolution; and the second additional risk is that of civil war in countries that remain under the old regimes, in particular Syria.

Concerning the first risk of fast deteriorating socio-economic conditions, as underlined by collapsing growth rates, deepening fiscal deficits, ballooning balance of payments deficits, rising unemployment, and dwindling foreign reserves; it is important to understand that this condition has been amplified rather than created by the Arab Spring; it is the result of the interaction between deep-rooted economic problems that were neither properly nor adequately tackled for a long time and the uncertainties that were evidently created by the process of change.
Let me stress that socio-economic factors were also at the heart of the revolutions though not necessarily at the forefront of people’s demand. The economic and social factors brewed for a long time and they have also become intertwined with the political factors. In fact the political and economic marginalization reinforced each other as the lack of political democracy, human rights, accountability and justice was combined with (and also facilitated by) crony capitalism and poor governance. This has led the benefits of the half-baked economic reforms such as non-transparent privatizations and sales of state assets to be partly channeled into the hands of the select few.
So while macro indicators of growth, fiscal deficit, and exchange rates were often ok in Arab Spring countries, most socioeconomic indicators such as unemployment rate, poverty levels, and food security kept deteriorating. Indicators were reaching alarming levels in Egypt, Jordan, Lebanon, Morocco, Syria and Tunisia. An IMF paper illustrates that more than half of the working-age youth population is unemployed.
The accumulated causes of unrest have created pent-up demand and high expectations by the people in the countries in transition as well as in other countries that face similar conditions. This presents a great challenge on how to manage the transition in times of actually deteriorating economic conditions, collapsing investment flows and rising unemployment, but yet more and more demands and higher expectations. The truth of the matter is that more awareness creates even more expectations and managing this fine balance is one of the key challenges of the policy makers in general and during the times of transition in particular for these countries.
The main responsibility in facing these challenges falls on the newly elected governments to put together a road map that moves from stabilization to growth and development. The plan should include the implementation of key reforms that first make sure that this transformation promotes better social safety nets for those in our society that are most vulnerable to change. The plan also needs to promote better quality education and vocational training so that we can prepare today for the challenges of tomorrow. Most importantly, the plan needs to fast track the necessary reforms to the political and administrative institutions, to the judiciary and to the business climate that help boost investments and create employment opportunities in order to face the biggest challenge facing the Arab world, which is the need to create a minimum of 50 million jobs over the coming decade in order to absorb the new entrants of young men and woman into the labor market.
The second risk to the transformation is civil unrest, but first we need to ask ourselves how really divided are our societies? No doubt there are certain differences among the constituents of our Arab societies, be it religious, ethnic or ideological. But these differences are not deeper than those that exist within other nations. The additional factor in the Arab world has been the blackmailing that the outgoing regimes have for so long practiced by magnifying these differences, bidding the various constituents of our societies against each other, and then building their legitimacy on their fake ability to provide stability.

It is important to understand that minorities’ rights are not guaranteed by a dictator, or a party or a sect; but rather by abiding to the constitution that clearly grants equal citizen rights to all, including protecting the rights of the various constituents of our Arab societies to freely practice their beliefs without any segregation. It is very unfortunate that some including many in the West have fallen for this ploy of “dictators as protectors of minorities” for a very long time, and some still do. We have seen this in Egypt against the Copts and we see it more clearly in Syria.

Let me elaborate by a specific example. Recently in Lebanon certain events have intentionally triggered mass anger, causing strife, and making it look that Lebanon, and in particular the North, is an extension of an Islamic fundamentalist front that the regime in Syria is fighting. By these events, the Syrian regime is simultaneously weakening the moderate Muslims and causing fear to the other constituents of society such as the Christians in order to justify its existence.

The real challenge to moderate Muslims in Lebanon is to keep the situation under control, and real efforts are being undertaken but it also requires the support of the West, and of the international community. Unfortunately and as clearly indicated by some statements by senior officials or by opinion pages in leading international papers, the West continues to fall into the “fundamentalist-scare” trap.

This brings me to the third question I attempt to answer, what can you, the international community, as well as the Arabs do to optimize the chances of success and why is that relevant to all parties?

The West and the world have an interest in seeing the region move towards openness and prosperity for security as well as for economic reasons. There is a real strategic interest that has to do with neighborhood policy but also with global security that starts in the Middle East and doesn’t end in Europe.

As far as we are concerned, the utmost priority for the West is in being faithful to its own principles: the principles of democracy, inclusion and human rights. It is not important to just state these principles, but rather to effectively practice them in dealing with the Middle East.
The Arab Spring has launched the process of change through free elections. Now what is more important than election results (that we may or may not like) is to sustain the process and learn to respect it. The greatest virtue of democracy as compared to any other form of government is that it has the ability to self-correct.

The West has a responsibility in pushing towards a comprehensive, just, and final solution to the Palestinian question; an act that will ultimately strengthen the voices of moderation in the region, and withdraw the pretext from parties or nations that have been using this noble cause as an open wound to patronize other groups or other countries, and promote their own agendas under the excuse of fighting Israel.

A concerted International effort to pressure Israel to accept a just, comprehensive and sustainable peaceful solution to this pending conflict will support the forces of stability and moderation in the region and pave the way for the sustainable success of democratic movements. This is moral obligation on the West.

I have had very recent meeting with senior officials from Arab Spring countries, the Tunisian Prime Minister, the Libyan Deputy Prime Minister, and the Egyptian Foreign Affairs Minister, and they have all affirmed that despite all pressing challenges, the question of Palestine and Jerusalem remains the key and vivid issue in the Arab world, again against the belief of many observes in the West.

The Palestinian question runs deep in the conscious of Arabs, much deeper than many international observers comprehend. The Arab spring is a movement against marginalization and a movement to regain dignity; the history of the Arab-Israeli conflict and the role played by both the West and the Arab leaders have left most Arabs feeling marginalized with significant damage to their dignity. Unless this wound completely heels, no spring can lead to sustainable democracy and development.

In parallel to the efforts that are needed to bring peace to the region, other efforts are needed to foster stronger economic integration within the Arab world as well as stronger ties between the Arab world and Europe are needed to provide a framework for shared prospects and a leap forward in our people standards of living.

I have launched during the Arab Economic Summit that took place in Kuwait in 2009 an initiative regarding stronger Arab economic integration that touches on all sectors, especially those related to energy, transport and food security, bringing closer the Arab world and bridging the gaps among its people. It is essential to note that this initiative is in no way based on a concept of charity from those who have to those who have not; but is rather based on a concept of a region investing in its own well being, in its security in the broad sense, in its development and welfare.

There is an urgent need to invest in cross-borders megaprojects in the key sectors such as transport, energy, and water, which are crucial to society but are also important factors of production for the other sectors. These megaprojects should attempt to bring our Arab countries closer together, reducing the cost and increasing the efficiency in sectors that are important for the wellbeing of society. They are also essential for the other productive sectors of the economy such as manufacturing and agriculture. In this context, they could be important triggers for broad economic development by trickling down into higher private sector investment and SME creation and development.

I know that in light of the fiscal crisis engulfing Europe, we cannot hope for a Marshall Plan or even financial assistance from our natural neighbors. Still the West has a strategic interest in a stable and prosperous Middle East, and it can do a lot to promote integration, mostly through partnership, technical assistance and transfer of know-how. The experience of the European Bank for Reconstruction and Development that helped the integration of post-soviet European countries into Europe could be very useful in this regard.

Ladies and Gentlemen,

We live in extraordinary time where socio-economic, political, religious, and cultural factors are coming all together to shape a new Arab world. Our actions today will determine our future for generations to come. A generation ago, the West has won the cold war battle in Afghanistan which was one of the key triggers to winning the cold war battle after the collapse of the Berlin War. However, while the West won the Development battle in Eastern Europe, it lost that development battle in Afghanistan with repercussions that exploded in New York, London and many other places. I hope we learn from the successes and failures of the past.

We have two options: we either choose to close borders and decide to live in our own cocoon, or we choose to really open the borders and invest in the well-being of one another through a better understanding and acceptance of the other.

Half closed, half open borders, just like half-solutions have failed to deliver results across the various continents and they have failed to meet people’s expectations; there is obviously an ongoing search by many around the world for something new.

The world of tomorrow as I see it is one where political borders are respected but are also rendered irrelevant by economic and cultural ties. Such a world can bring development and progress while fostering security, and acceptance of differences as a source of enrichment rather than a source of strife. Let us all work together today to make this world possible.

I thank you for your attention this morning and I wish you a successful conference.

تاريخ الخطاب: 
31/05/2012