What is the future for post-Arab Spring economies?
It is a common misconception that the ruling regimes toppled by recent revolutions in Egypt, Tunisia, Libya and other Arab countries were either capitalist or socialist. In fact, these regimes, that monopolized power after the colonialist armies withdrew from the region and the era of direct colonialism ended, came up with their own economic systems.
These systems seemed to converge on state subsidies of essential goods, particularly fuel and food. Their aim was to impose a social contract based on “buying” people’s obedience. Of course, each of these regimes also developed the necessary security claws to “convince” people to accept this one sided social contract: subsidized bread as an alternative to freedom.
The prevailing international order does not accept the use of public money to subsidize the poor.International economic development and the globalization of the economy upset this equation.
The prevailing international order does not accept the use of public money to subsidize the poor. It prefers to support the rich, nowadays the real rulers of the world. The new international order imposed its economic vision on the Arab security regimes despite these regimes’ attempts to explain to their masters that this approach would lead to their destruction.
Revolutions erupted and the regimes changed, the security state was overturned and democracy spread in our part of the world. However, the new rulers found themselves facing the same dilemma: can commodities and food be subsidized in this age of high cost of living and inflation?
This is the question raised by Matthieu Brun in an analytical paper published recently by the International Center for Advanced Mediterranean Agronomic Studies (CIHEAM) where he studies the history of subsidies in the Arab world and proposes possible scenarios for the future.
The picture is still not clear and there are questions over whether the new rulers can swim against the neoliberal current. From what we have seen so far, it would seem that the Arab regimes brought in by the revolutions will not adopt radical economic policies genuinely different from the ones prevalent at the time of their predecessors.