Economy
Funding Fundamentalism
While Islamic fundamentalism has become a major political force in the Arab world in recent years, particularly in the countries of the Maghrib, it is in Sudan where the Islamist movement has realized its greatest ambition: controlling the levers of state power and setting itself up as a model for similarity oriented movements. Its leaders in Sudan have actively supported groups elsewhere — reportedly helping to plan a recent failed military coup in Tunis and convening meetings with high officials of Algeria’s Islamic Salvation Front (FIS) in Khartoum. [1]
A Tale of Two Families
Virtually every aspect of life in North Yemen has changed dramatically since 1977, including those aspects of Yemeni society which represent continuity with the past: tribalism, rural life and use of qat. [1] The driving force for change has been economic. By 1975, Yemen was caught up in the dramatic developments that affected all Arab countries. Rising international oil prices generated enormous surpluses in the producing countries, enabling them to initiate ambitious development plans and forcing them to import workers.
Arab Economics After the Gulf War
On February 6, 1991, Secretary of State James Baker admitted before the House of Foreign Affairs Committee that economic factors, particularly widespread Arab resentment that oil wealth was not more equitably distributed, had played a role in the dynamics leading to the Gulf war and would remain one of the primary “sources of conflict” in the region. To ease these tensions, he proposed the creation of an economic organization through which oil-rich states could fund the reconstruction and development of their poorer neighbors. [1] The following day, Baker advocated the creation of a multinational “Middle East Development Bank” to attain these objectives. [2]
Economic Impact of the Crisis in Egypt
Egypt was facing a severe foreign exchange shortage when the Gulf crisis broke out. Its debt arrears were piling up and it was finding it more and more difficult to obtain new loans. The Gulf crisis threatens to make this situation even worse. Here’s how:
Remittances sent home by some 1 million Egyptian workers in the Gulf amounted to at least $4.25 billion in 1989. About half of these workers have returned home, causing an estimated annual loss of $2.4 billion.
Suez Canal tolls were $1.38 billion in 1989. The government expects a 10-20 percent drop over a year due to the loss of Iraqi and Kuwaiti oil tanker traffic and the decline in shipments of goods to those two countries.
Iraq Since 1986: The Strengthening of Saddam
In June 1986, we wrote that the situation in which Iraq found itself “underlines the vital need for the establishment of democracy…however broadly this may be defined.” Four years later, this plea has become more urgent; the regime has become even more powerful and repressive and has now extended its rule to Kuwait, initiating a crisis whose possible consequences for the region, if not the world, are fearful to contemplate.
“We Are Willing to Pay for Settlements But Not for Health Care”
One key to understanding how the Israeli economy (malfunctions is that the Histadrut (The General Federation of Workers in Israel; up to 1965 the “Jewish Workers in Israel”) was never simply a trade union.
ESCWA, Economic Integration in Western Asia
ESCWA, Economic Integration in Western Asia (New York: St. Martin’s Press, 1985).
This collection of papers from ECWA’s December 1981 Expert Group Meeting on Feasible Forms of Economic Cooperation and Integration in Western Asia includes a useful review of various schemes for Arab economic integration — the Arab Common Market, the Arab Trade Convention and so on — and chapters on inter-Arab trade, labor migration and financial flows.
Books on Saudi Arabian Economics
Michael Field, The Merchants (London: John Murray, 1984).
John R. Presley, A Guide to the Saudi Arabian Economy (New York: St. Martin’s Press, 1984).
Books on Arab Economies
Samir Amin, The Arab Economy Today (London: Zed Press, 1982).
Ismail-Sabri Abdalla et al, eds., Images of the Arab Future (New York: St. Martin’s Press, 1983). (Translated from Arabic)
Adda Guecioueur, ed., The Problems of Arab Economic Development and Integration (Boulder, CO: Westview Press, 1984).
Robert Aliboni, ed., Arab Industrialization and Economic Integration (New York: St. Martin’s Press, 1979).
“Poverty Is Not the Issue”
Henry Selz was for the last nine years the Middle East representative of American Near East Refugee Aid, based in East Jerusalem. He spoke with Joe Stork and Tom Russell in Washington in late August 1985.
You worked in the West Bank for nine years. How has your assessment of the situation changed from when you first got involved?
When I came, I thought it was a transitional situation. It certainly seems to me that any resolution is farther off now than it was when I arrived nine years ago.
How does Israel’s economic crisis affect the situation for the people under occupation?
Israel’s Economic Crisis
In the middle of August 1985, Minister of Science and Development Gideon Pat called on the Israeli public to disregard government declarations that the shekel would not be devaluated. The minister, on national radio, advised the public to purchase American dollars. The broadcast was aired on Friday night, during prime time. Pat’s advice was unprecedented, since trading in US dollars is a violation of Israeli law. Pat is a member of the Liberal Party, which is part of the Likud and represents merchants, industrialists and businessmen. The leader of the Liberal Party, Treasury Minister Yitzhak Modai, demanded that Prime Minister Shimon Peres fire Pat. Pat argued that his statement was taken out of context and he remained in the cabinet.
Sudan’s Economic Nightmare
Ten years ago, Sudan was described in a Food and Agriculture Organization report as a potential “breadbasket of the world.” Hopes for the development of Sudan’s economy were running high at the time: the investment of Arab oil-generated revenues in Sudan's agricultural sector seemed to hold immense promise. Vast quantities of hitherto unused arable land could be brought under cultivation. This would transform the Arab world from an area of food deficit into one of food surplus, laying the basis also for the development of extensive processing industries in Sudan.
Davis, Challenging Colonialism
Eric Davis, Challenging Colonialism: Bank Misr and Egyptian Industrialization, 1920-1941 (Princeton: Princeton University Press,
1983).
Eric Davis intends his study to answer a wide range of questions concerning capitalism and industrialization in the Middle East. Two issues in particular are central to his analysis: “what were the social forces behind the formation of the Bank Misr” and “why did the bank experience a period of rapid economic growth only to later face financial collapse?” (p. 5)
Winter of Discontent
Nineteen eighty-four began in a bloody fashion in the Maghreb. Violent demonstrations erupted in the impoverished southwest and south of Tunisia at the very end of December and spread throughout the country during the first week of January. These followed the Tunisian government’s introduction of measures to remove food subsidies. Bread prices suddenly doubled.
States of Emergency
A crisis had been building in Tunisia for many months. By the end of 1983, the economy was in serious trouble, support-for the regime had been eroding and the International Monetary Fund had proposed austerity measures. Within the government, corruption and personal luxury were rampant. President-for-life Habib Bourghiba was intent on preparations for a lavish celebration of the 50th anniversary of the ruling Destourian Socialist Party, while ministers vied with each other over the succession to the 81-year-old leader.
Two Economic Histories
Charles Issawi, An Economic History of the Middle East and North Africa (New York: Columbia University Press, 1982).
Roger Owen, The Middle East in the World Economy, 1800-1914 (New York: Methuen, 1981).
Gran, Development by People
Guy Gran, Development by People: Citizen Construction of a Just World (New York: Praeger, 1983).
This ambitious book seeks to serve as a guide to building new societies in the Third World (and ultimately everywhere else) based on grassroots participatory development and the democratic empowerment of non-elites. Gran follows the tradition of Branko Horvat, Ivan Illich and E. F. Schumacher in his dual critique of both capitalism and state socialism and his advocacy of the “planned market economy.” Local self-reliance and the rejection of specialization in production will be key to making Gran’s new forms of social organization work.
Turkey’s Economy Under the Generals
In September 1981, on the first anniversary of the military coup, the Economist summarized the succession of events that set Turkey’s critically ailing economy of-the late 1970s on its new course.
The first step was an economic package announced on January 24, 1980. Designed by the government of Süleyman Demirel, it was the brainchild of his finance minister Turgut Özal. The second step was the freeing of interest rates on July 1, 1980. And the third was a series of measures introduced after the military takeover on September 12, 1980. [1]
International Finance and the Third World
The foreign debt of the less developed countries (LDCs) of the Third World now stands at around $600 billion. More than half of this—about $350 billion—is owed to private international banks. Events like the strikes and demonstrations in Brazil this summer, or the labor unrest that triggered the military coup in Turkey in 1980, demonstrate the critical relationship of the foreign bank debt to political developments within the LDCs themselves. The crisis, however, is not confined to the debtor countries alone.
