Timur Kuran, The Long Divergence: How Islamic Law Held Back the Middle East (Princeton, 2011).
Readers looking at the title of Timur Kuran’s new book might be forgiven for thinking it had come from some pre-Orientalism time warp where it was still possible to make essentialist generalizations about Islamic law and Middle Eastern backwardness. And they would be mostly correct.
A fashionable description of the Islamic Republic of Iran is “garrison state,” a concept that originated in the West in the early 1940s. In a garrison state, the ruling elite is mainly composed of “specialists in violence,” and military bureaucrats dominate the social and civil spheres. In Iran’s case, the term is meant to refer to the Islamic Revolutionary Guards Corps (IRGC) and its rise in the state apparatus. After World War II, however, a group of social historians revised the consensus concerning the social effects of war. Observing the total mobilization of society in wartime, scholars such as Richard Titmuss noticed an increased effort by Western governments to reduce inequality.
Article VI, Item 2 of the 1993 Oslo accords concluded between Israel and the Palestinians states, “After the entry into force of this Declaration of Principles and the withdrawal from the Gaza Strip and Jericho area, with the view to promoting economic development in the West Bank and Gaza Strip, authority will be transferred to the Palestinians in the following spheres: education and culture, health, social welfare, direct taxation and tourism.”
On the streets of Turkish cities, the cigarette packs being traded and tucked into shirt pockets are adorned with the familiar brand names of Philip Morris and British American Tobacco. The ubiquity of foreign brands is remarkable, for Turkey is the world’s leading producer of Oriental tobacco—the sun-cured, small-leaf variety that once filled nearly every cigarette on the planet.
One would imagine that, of all the countries in the Middle East, Lebanon would be among the hardest hit by the global financial crisis. Famous for its weak central state and ferociously capitalist private sector, Lebanon has the closest thing to a free market in the region. It has a dollar-based economy that is highly integrated into global markets and is heavily dependent on the remittances of expatriates in the rich countries where the crisis came first. And the origins of the downturn in high finance would seem to augur especially poorly for Lebanon: The banking and financial sectors are the cornerstone of the country’s economy, and the banking sector relies on foreign and non-resident depositors.
Kuwait has its diwaniyyas, Yemen its qat chews. But for languorous trade in rumor, gossip and flashes of political insight, there is no substitute for chain-smoking and eating Iraqi masgouf.
At one of several Iraqi establishments in Sharjah, a down-market cousin of Dubai in the United Arab Emirates, the host centered the bulging fish upon a table for six. “Iraq’s economy is like the fish,” he said, laughing. “How much you get depends on how quickly you eat.” It is an apt description of today’s Iraq — the country’s patrimony is literally being divvied up and devoured.
The Middle East and North Africa have been hit hard by the global recession. Several of the oil-rich Gulf states are in the midst of an economic contraction, with their famed sovereign wealth funds having lost 27 percent of their value in 2008. The Gulf states, along with the European Union, buy most of the non-oil exports of the Middle East and North Africa, so recessions in the importing countries mean depressed trade throughout the region. According to the World Bank, the average growth rate for the middle-income states of Egypt, Jordan, Lebanon, Morocco and Tunisia, which have little or no oil, is projected to fall to 3.9 percent in 2009, far below the levels of the 2001-2008 boom.
Between the summer of 2008 and the beginning of 2009, oil prices plummeted from a high of $147 per barrel to a low of $33. This extraordinary reversal of fortune announced the end of the second oil boom for the countries of the Gulf Cooperation Council (GCC) — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates — precipitated, of course, by the broader global financial crisis. How these oil-exporting countries will weather this dual economic challenge is a live question. From the time that the Gulf economies took off in 2003, there were growing worries that their rapid rise was a massive investment bubble built on high oil prices and cheap credit.
In 2008, Egypt’s Mediterranean port city of Damietta saw escalating protest against EAgrium, a Canadian consortium building a large fertilizer complex in Ra’s al-Barr. Ra’s al-Barr sits at the end of an estuary, where the Damietta branch of the Nile River joins the Mediterranean. It is a prime destination for vacationing Egyptians in the summertime and the location of the year-round residences of the Damiettan elite. Fishermen ply the waters offshore. When plans for the fertilizer complex were announced, a coalition of locals feared that all three sources of income—tourism, real estate and fishing—would be jeopardized by emissions into the air and water.
Since the 2005 election of President Mahmoud Ahmadinejad, the burning economic issue in Iran has been the privatization of public assets and, more recently, the elimination of subsidies for a vast array of goods and services. Leading figures, including the Supreme Leader, Ayatollah Ali Khamenei, have called the privatization program “an economic revolution.”  But it is not only the economy that private ownership is supposed to rescue. There seems to be a consensus across the political and ideological spectrum that public ownership of economic assets is the cause of a host of social and political ills, from authoritarianism to corruption and nepotism.
I want to begin with a story. Like the best of stories, it is true.
It was business as usual for Orascom, a gigantic Egyptian conglomerate with major interests in everything from Cairene highway construction to Red Sea luxury resorts to cell phones in Iraq.
For the second time in less than a year, in the final week of September the 24,000 workers of the Misr Spinning and Weaving Company in Mahalla al-Kubra went on strike—and won. As they did the first time, in December 2006, the workers occupied the Nile Delta town’s mammoth textile mill and rebuffed the initial mediation efforts of Egypt’s ruling National Democratic Party (NDP). Yet this strike was even more militant than December’s. Workers established a security force to protect the factory premises, and threatened to occupy the company’s administrative headquarters as well. Their stand belies the wishful claims of the Egyptian government and many media outlets that the strike wave of 2004-2007 has run its course.
Surprisingly, what first strikes one upon landing in Dubai is not the skyscrapers going up at a dizzying pace. It is the sheer bustle of humanity.
On May 26, 2003, L. Paul Bremer declared Iraq “open for business.” Four years on, business is booming, albeit not as the former head of the Coalition Provisional Authority intended. Iraqis find themselves at the center of a regional political economy transformed by war. Instability has generated skyrocketing oil prices, and as US attitudes to Arab investment have hardened in the wake of the September 11 attacks, investors from the oil-producing Gulf countries are seeking opportunities closer to home. This money, together with the resources being pumped in to prop up the US occupation, is fueling an orgy of speculation and elite consumption in the countries surrounding Iraq.