Paper: The problematics of alternative economy in the Arab region
Maan Dammag
Algeria ,Egypt ,Iraq ,Jordan ,Lebanon ,Morocco ,Tunisia ,Yemen
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Economic policies played a major role in the revolutions staged in 2011 in Tunisia, Egypt, Yemen, Libya, and Syria as well as protests that took place in other countries in the region such as Bahrain and Morocco. However, Arab revolutions are still mainly attributed to the authoritarian nature of ruling regimes. With the collapse of socialism in the Eastern Bloc, chances at finding an alternative to the capitalist system dwindled. Even the 2008 financial crisis did not lead to serious attempts at replacing the economic system that triggered this crisis and most of those attempts were associated with partial changes from within the system even as several major capitalist countries were forced to adopt policies that contradicted their neoliberal principles. Neoliberal policies were also adopted in the Arab region where the official discourse constantly marketed an alternative as nonexistent even after these policies were dealt a fatal blow following the 2011 uprisings.[1]

Economic conditions in Arab countries got worse after the revolutions even in Tunisia, which is seen as the only success model in the region. True, Tunisia was saved from the destruction that befell many countries such as Syria, Libya, and Yemen and unlike Egypt, in which a more authoritarian regime came to power, managed to embark on a number of political reforms that opened the door for democracy and pluralism, yet most economic indicators have become worse, unemployment rates are growing, and living conditions deteriorated. That is why political changes without parallel social and economic reforms have proven not to be enough.

Thirty or forty years ago, talk about alternative economy would have mostly been associated with socialism or state capitalism adopted in the Soviet Union, China, and Eastern Bloc countries. However, this is not the case today since the alternative is not a model that is currently being applied on the ground.

Going back to Arab revolutions, many of which failed and were challenged with counter-revolutionary waves, it is noticeable that there is a link between current discussions about alternative economy and earlier talk about revolutionary organization where both were characterized by a naïve form of optimism. During the revolutions, there was an assumption that popular protests alone are capable of effecting a real change. The absence of a leadership in the Arab revolutions was thought to have been compensated by the organization of protestors in public spaces like the squares in which the rallies took place. The same applies to alternative economy as several experiences of social and economic resistance are seen as a way towards challenging the current system. These include the Association for the Protection of the Djemna Oases in Tunisia, self-administration of several factories in Egypt. Revolutionaries were not capable of protecting the revolutions from their enemies or of resisting counter-revolutionary attempts nor was it possible to prevent the rise to power of reactionary Islamic factions or the return in different form of pre-revolutionary authoritarian regimes. This proves that over-optimism without proper planning is never sufficient to guarantee the success and sustainability of a particular alternative. This applied to Arab revolutions and will apply to alternative economy.

There had been several attempts at establishing an alternative economy on state level, which was demonstrated in socialist experiences in a number of Arab countries such as Nasser’s Egypt, the Baath Party in Syria and Iraq, the National Liberation Front in Algeria, and the People’s Democratic Republic of Yemen[2] . The latter was a socialist regime presided over by a Marxist party that became part of the Eastern Bloc and nationalized all sectors including small stores and fishermen’s boats. In addition to the one recognized party, there were local popular councils and popular militias in addition to the state army.  Despite how promising such experiences were, they were doomed with failure for a number of reasons, on top of which was their inability to evaluate the international situation and to estimate how possible it is to break away from dominant powers.

In Tunisia and other Arab countries, there is an assumption that replacing the current political class is alone capable of effecting the required change. However, this is not realistic in the light of the subordination of Arab countries to external powers that go beyond the ruling classes in addition to the traditional capitalist division of the world into center and peripheries and how the center is constantly persistent in undermining any development attempts in the peripheries. That is why it is impossible to seek an alternative without dissociating the center from the peripheries and breaking this arrangement that made Arab countries, maybe with the relative exception of Egypt, lacking in the main conditions required for development and independence.

This lack of independence makes Arab countries incapable of making their own political and economic decisions. This is especially the case with the restrictions imposed by international financial institutions such as the World Bank and the International Monetary Fund and which mainly serve the interests of capitalist centers and consolidate an economic and structural subordination that is supported by local capitalist elites.

The issue of development and alternative economy is linked to sovereignty since it is not possible to achieve real development without eliminating subordination to more developed powers and establishing balanced economic relations. This necessitates severing ties with the neoliberal system that is founded on market economy and gives precedence to the private sector. Sustainable development also requires the existence of a real democracy and popular participation so that the goals of development plans prioritize the interests of the people[3].

The experience of the People’s Democratic Republic of Yemen is quite telling in many ways. It was a country of three million in which large swathes were almost uninhabited, located in the Arabian Peninsula at the borders of one of the most conservative regimes. Despite its integration into the socialist camp on both the political and military levels and despite promises of independent development, the country remained impoverished and neither industrialization nor economic progress materialized. This is mainly because all plans for development were designed within already established limits and without taking into consideration international balances of powers and the historical and political contexts that played a major role in determining the success or failure of this experience.

The evaluation of state socialism in different Arab countries such as Yemen, Algeria, Egypt, Syria, and Iraq is generally not positive and the same applies to state capitalism inspired by the Soviet Union and the Eastern Bloc. Nationalist post-independence regimes in the Arab region were doomed to failure as they gradually lost touch with the modernization project they promised and turned into tribal and clan-based systems that are not different from the ones they were resisting. Eventually, those regimes undermined the principle of Arab unity and nationalism. However, it is important to note that many of the issues raised by nationalist regimes as far as the link between development and independence were quite valid and that Arab nationalism remains a framework through which sovereignty can be achieved as long as it is implemented within a democratic system.

Arab revolutions were either followed by the rise to power of Islamic factions or the return in different form of pre-revolutionary authoritarian regimes. In both cases, there was a remarkable increase in the adoption of neo-liberal policies, which was mostly manifested in privatization, the devaluation of local currencies, and less public spending on social services such as education and healthcare. The situation was aggravated as international financial organizations imposed more conditions that led to giving precedence to local and foreign capital. Even though the 2008 financial crisis surpassed that of the 1970s, it did not lead to discarding the neoliberal system. In fact, the neoliberal system was not rendered as accountable for the 2008 crises as Keynesianism was in the 1970s. On the contrary, supporters of neoliberalism claimed that the crisis happened because neoliberal policies were not properly implemented and that a stricter implementation of such policies is the only way to avoid any future drawbacks.[4]

The alternative model:

Seeking an alternative model is looked upon by many as a utopian vision that cannot materialize on the ground. This is mainly because no comprehensive model is available to replace the capitalist system, which is seen as too dominant to be surpassed. Some also assume that looking for an alternative is necessarily equated with emulating a particular socialist regime, but this is not the case since an alternative is mainly about examining the failures and limitations of capitalism then looking for a system that subverts them. Socialism in this case is dealt with in a broader sense rather than as a political system implemented in particular parts of the world such as the Soviet Union, China, and the Eastern Bloc.

In order to dissociate the set of social and economic principles from the political system, political philosophers such as Antonio Negri and Michael Hardt replace “socialism” with the term “the common.”

It is important to start with examining and critiquing local capitalism, a rentier system made up of mafia-like groups that accumulate wealth whether through military power, bureaucracy, tribalism, or authoritarian rule. These groups are closely connected to the global economic system. This type of arrangement is called “crony capitalism”.[5]  It is also important to study the segments of society that are victimized by crony capitalism. This cannot only be done through economic indicators and growth rates, which do not reflect the reality of the living conditions of the people. Such discrepancy was particularly demonstrated in the case of Tunisia in which Arab uprisings started, yet was the country with one of the highest growth rates in Africa for more than a decade. The same applies to Egypt, which was being compared to Asian Tigers. Therefore, it is important to identify the classes that are harmed by the capitalist system because the members of those classes are the ones who would want to bring down this system.

While emulating conventional socialist regimes such as the Soviet Union, China, and the Eastern Bloc might be discarded, some argue that more recent experiences are worth examining. This can be applied to Latin American countries such as Brazil and Venezuela and to Greece. However, looking at these examples show that they did not succeed in offering the required alternative. For example, despite the theories put forward by Syriza in Greece, it was still unable to counter the capitalism and the hegemony of the European Union and had to surrender at the end. This is mainly because it operated within the existing balance of power and could not take the matter as far as declaring bankruptcy for example.

Industrialization is an important aspect of establishing an alternative economy, which cannot be achieved without modernizing society. Most Arab countries are still in the agricultural stage and existing industries are only marginal and plans for moving to the post-industrial era are only theoretical. The problem is that it is not possible to overlook the role of the state in industrialization and if the state does not have the will, it will be difficult to initiate such an effort.[6]

Establishing an alternative economy requires going beyond national borders, which in many cases hinder the conditions of development. This necessitates forging regional alliance between, for example, countries of the Maghreb (Tunisia, Morocco, Algeria, Libya, and Mauritania) or between countries of the Levant. Such alliances, which can last for a specific interval, can temporarily compensate for lack of immediate action as far as resisting subordination and dissociating from global capitalism are concerned. An alternative economy is also not possible without resisting authoritarian regimes and promoting democracy so that people can take part in the decision-making process and make sure that the alternative can serve their economic, political, and social interests rather than those of the capitalist elites.

In addition, an alternative has to include industrialization in its comprehensive plan for modernizing society as well as to invest in educational institutions.

It is important to remember that social and economic policies adopted by the state played a major role in the eruption of the 2011 uprisings, which provided the most flagrant proof of the failure if neoliberal policies. Those policies proved to have been hindering the achievement of real and sustainable development since they mainly catered to the needs of capitalist centers rather than improving the living conditions of the impoverished. It is also important to take into consideration that the continuation of these policies is bound to trigger more protests that are expected to be more intense.



[1] Wael Gamal. “The Foundations of an Alternative Economy [Arabic].” Arab Forum for Alternatives and Rosa Luxemburg Foundation- North Africa Office: Rawafed for Publication and Distribution: p. 3.

[2] Few studies tackled the experience of the People’s Democratic Republic of Yemen, the most prominent of which were Ali al-Sarraf’s South Yemen: Political Life from Colonization to Union (1992) and Ahmed Attia al-Masry’s  The Red Star above Yemen: The Revolutionary Experience in the Democratic Republic of Yemen (1986), both in Arabic.

[3] Gilbert Achcar. “Sovereignty and Development [Arabic].” Arab Forum for Alternatives and Rosa Luxemburg Foundation, 2017: pp.11-13.

[4] Ibid. p. 8.

[5] Mahmoud Abdel Fadil. Crony Capitalism: A Study in Social Economy [Arabic]. Dar Ain for Publishing, 1st edition, 2012.

[6] Salameh Kaileh, “Industrializations as the Core of Alternative Economy [Arabic].” Arab Forum for Alternatives and Rosa Luxemburg Foundation, 2017: pp.17.

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