Political Economy
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]
Egyptian Political Economy
Robert Bianchi, Unruly Corporatism: Associational Life in Twentieth-Century Egypt (Oxford, 1989.)
Joel Migdal, Strong Societies and Weak States: State-Society Relations and State Capabilities in the Third World (Princeton, 1988).
These two important new books address some of the central questions concerning state/society relations in a Middle Eastern and, more widely, a Third World context. Both are written from the statist perspective found in most contemporary political science, but manage to ask new questions of relatively familiar material.
America’s Egypt
Open almost any study of Egypt produced by an American or an international development agency and you are likely to find it starting with the same simple image. The question of Egypt’s economic development is almost invariably introduced as a problem of geography versus demography, pictured by describing the narrow valley of the Nile River, surrounded by desert, crowded with rapidly multiplying millions of inhabitants.
A 1980 World Bank report on Egypt provides a typical example. “The geographical and demographic characteristics of Egypt delineate its basic economic problem,” the book begins:
Beinin and Lockman, Workers on the Nile
Joel Beinin and Zachary Lockman, Workers on the Nile: Nationalism, Communism, Islam and the Egyptian Working Class, 1882-1954 (Princeton, 1987).
Editor’s Bookshelf
Dipesh Chakrabarty’s well-documented, theoretically informed, innovative history of the jute mill workers of Bengal, Rethinking Working-Class History: Bengal, 1890-1940 (Princeton: Princeton University Press, 1989), poses this central question: “Can…third-world countries like India…build democratic, communitarian institutions on the basis of the nonindividualistic, but hierarchical and illiberal, precapitalist bonds that have survived and sometimes resisted — or even flourished under — the onslaught of capital?” (p.
The President and the Field Marshal
Husni Mubarak succeeded Anwar al-Sadat in October 1981 at a time of troubled civil-military relations. Sadat’s pursuit of a separate peace with Israel after the war in 1973 raised important questions about the military’s future role, size and sources of weapons. If Egypt was no longer at war, it would no longer need its huge military establishment. Over the following decade, the number of men under arms declined as Sadat began to convert the military into a rapid strike force that could intervene in the Horn of Africa, the Gulf or Libya.
Libya’s Revolution Revisited
When the United States sent its warplanes to bomb Libya last spring, a first and then a second invasion of Western journalists descended upon the country. With the media in box seats, the scenario conjured up visions of the 1830 French invasion of Algiers, when well-heeled citizens of the Republic hired luxury liners to observe the military proceedings first hand.
Egypt’s Infitah Bourgeoisie
A recent story illustrates the political power of the bourgeoisie in contemporary Egypt: At the beginning of 1985, the Egyptian minister of economy, Mustafa al-Sa‘id, unveiled a set of new trade and banking laws. They aimed, among other things, at imposing a greater degree of Central Bank control over the foreign exchange operations of private banks. Such controls were urgently needed by the state, which is facing acute shortages of foreign exchange and mounting financial pressures.
Private Capital in Israel
The overwhelming majority of big capitalists in Israel today emerged from a group of no more than 60,000 “veterans” of the Jewish settlement in Palestine who arrived before the creation of the state or are descendants of such veterans. Some, especially from Sephardic families who settled in Palestine without any connection to the European Zionist movement, already had prosperous businesses or land holdings in Jerusalem or Jaffa by the early twentieth century. Of the 160,000 immigrants to Palestine in the 1932-1935 period, many, especially those from Poland and Germany, brought significant amounts of capital with them. 41 million pounds, mainly in private capital, was imported into Palestine during this period.
Turkey’s Super-Rich
Turkey’s big businessmen are getting the best press they have had for decades. Their profiles are a regular feature in a number of publications. Nokta, the country’s most popular weekly, runs a yearly feature on Turkey’s 100 richest families. Businessmen exude a new self-confidence in public and are granting journalists easy access. High-powered public relations firms have helped give this new publicity increasing sophistication. Resources abound to pay for all this favorable attention, for Turkey’s wealthiest families are very rich indeed. The Koç and Sabancı families are worth more than $1 billion each and many other families have wealth in the hundreds of millions.
The Exile Bourgeoisie of Palestine
‘Umar ‘Aqqad is planning to export bottled water from Saudi Arabia. Not the kind of project you might expect in a desert kingdom where water is scarce. But then, ‘Aqqad is one of the shrewdest and most successful businessmen in the region. Not coincidentally, he is also a Palestinian. For Palestinians, stateless and living by their wits, have been among the leading capitalists of the Middle East. Their number has included Beirut’s greatest banking genius, partners in the foremost contracting firms of the Gulf, Jordan’s top banker, and several of Saudi Arabia’s leading managers and industrialists.
The New Bourgeoisie of the Gulf
A blue helicopter flies out over the harbor at Nice, landing gently on an enormous yacht of teak and mahogany, swaying gently at anchor. The passengers step out: A correspondent and photographer from the Spanish photo magazine Hola! are arriving to get a feature story on ‘Adnan Khashoggi, flamboyant Saudi millionaire, reputed to be one of the world’s richest men. Khashoggi emerges to greet them in a white suit, then shows them around his plush vessel, introduces his beautiful Italian wife and gestures to the many white telephones from which he does business all over the world. Amid the grandeur, Khashoggi admits he has recently had a few setbacks: A business deal in Salt Lake City has lost some $70 million. But overall business is prospering, he reports.
Morocco’s Bourgeoisie
From the elegant office towers of downtown Casablanca to the palatial villas on the outskirts of every major city, evidence abounds of Morocco’s owning class. The luxury cars of the bourgeoisie fill downtown streets. Nightclubs, posh restaurants and expensive boutiques flourish even in a time of national austerity. But all this should come as no surprise. Unlike many countries of the region that lay claim to “Arab socialism,” Morocco has always had an official commitment to capitalism and a clear policy of promoting capital accumulation in local hands. “Morocco has chosen the path of liberalism,” announced Finance Minister Mamoun Tahiri at a World Bank conference in the late 1960s.
State and Capitalism in Iraq
Isam al-Khafaji’s article is the most interesting essay on Iraq that I have read in a long time. It sheds much light on the actual workings of Saddam Hussein’s regime. From the vantage point of 1985, it appears clear that the pattern of spending of state revenues, particularly from the middle 1970s onward, has led to the strengthening of capitalism in Iraq. But can one infer from this that the social power or political weight of Iraq’s capitalists has commensurately increased? What power of leverage do these capitalists have over the state structure and to what degree do they influence the pattern of state spending? Are we witnessing the growth of an autonomous or of an essentially parasitic type of capitalism?
State Incubation of Iraqi Capitalism
The scene was the presidential palace in Baghdad, July 7, 1983. A campaign to solicit gold and money donations from ordinary citizens to support the Iraqi war effort had just begun. A furious Saddam Hussein was receiving a group of Iraqi contractors to convince them to increase their donations. He scolded them relentlessly, telling them the story of the literally barefoot man who had become a millionaire under “the revolution.” The 1968 Baath coup, it seems, had turned the man into a big contractor. Said Saddam:
Authoritarian States in the Third World
Clive Thomas, The Rise of the Authoritarian State in Peripheral Societies (New York: Monthly Review Press, 1984).
Anthony D. Smith, State and Nation in the Third World (New York: St. Martin’s Press, 1983).
Hangover Time in the Gulf
After a decade of soaring revenues and frenetic spending, the six “Eldorado” states of the Gulf (Saudi Arabia, Kuwait, Bahrain, Qatar, United Arab Emirates—the states of the Gulf Cooperation Council) are now in a tight economic and financial squeeze. Experts and analysts in the Gulf and around the world are feverishly studying the consequences of this new phase, including its political implications. Symptoms which began to show up back in 1982 are now quite apparent in the litanies of international experts and the lives of the countries’ six million immigrant workers.
Khuri, Tribe and State in Bahrain
Fu’ad Khuri, Tribe and State in Bahrain (Chicago: University of Chicago Press, 1980).
Fu’ad Khuri has provided us with a sensitive analysis of the recent history of Bahrain. He captures the broad sweep of socioeconomic and political change brought about by the colonial bureaucracy and the discovery of oil, and he comprehends the multiplicity of peoples, religious sects and classes in Bahrain and their responses to these changes.
Class and State in Kuwait
Over the past five years, Kuwait’s rulers have confronted a variety of crises. Declining oil revenues have forced the regime to engage in deficit spending, which may jeopardize both the state’s extensive system of social welfare programs and its efforts to encourage diverse industrial development projects. The war between Iran and Iraq poses a continuing threat to the country’s foreign commerce as well as to its position as one of the primary financial and service centers of the Gulf region. Attempts by groups associated with Iran to undermine the Sabah regime have led to heightened internal security. Two signs of this are the broader scope of police involvement in domestic affairs and the doubling of defense spending between 1979-1980 and 1983-1984.
Migrant Labor and the Politics of Development in Bahrain
Bahrain was, after Iran and Iraq, the first country in the Gulf to have its petroleum resources developed by Western companies. It has a longer history of economic and infrastructural development than any other state in the peninsula. Bahrain’s petroleum reserves and producing capacity are also the smallest of the Gulf oil producing states. Thus, Bahrain’s rulers were the first in the Gulf to confront the problem of building a diversified modern economy. Furthermore, while political legitimacy is problematical throughout the Gulf, it is especially so in Bahrain.
