Transcript Slajd 1 - OpEc.ru

Center for Social and Economic Research
Marek Dabrowski
What can Arab countries learn
from the
post-communist transition?
Presentation prepared for the Annual International HSE
Conference,
Moscow, April 2, 2013
Plan of presentation
• Paper’s origins and geographical coverage
• Similarities and differences between “Arab
socialism” and Soviet-type socialism
– In political sphere
– In economic sphere
• Differences in transition agendas
• Long-term development challenges
• What kind of lessons can be learned?
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Paper’s origin
• One of the outputs of the EU FP7 funded project on
“Prospective Analysis for the Mediterranean Region
(MEDPRO)” – WP5 on “Economic development, trade
and investment” but based on earlier (2007) work
• Published as CASE Network E-Brief No. 9/2012 and
MEDPRO Commentary No. 1/ May 2012
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Geographical coverage
• Countries of the former Soviet block (CEE & FSU)
vs. Arab republican regimes that emerged (1950s1960s), as a result of military coups or anticolonial resistance and considered themselves as
“socialist”
• The latter include: Tunisia, Egypt, Libya, Yemen,
Syria, Iraq and Algeria
• Jordan, Lebanon and Morocco do not represent
“socialist” past but affected by the Arab Spring
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Similarities between Arab socialism
and Soviet-type socialism - politics
• Dictatorship/ hegemony of one political party (lack of
democracy and political pluralism)
• Manipulated election processes
• Political dependence of the judiciary
• The excessive power of the army, security agencies and police
• Censorship, tight administrative control of grass-roots citizen
initiatives
• Massive violations of human rights; organised repression of
certain social, political, ethnic or sectarian groups
• However, similar characteristics of the authoritarian regimes
in other regions (Asia, Africa, Latin America); communism
was not unique in this respect
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Similarities between Arab socialism
and Soviet-type socialism - economy
• Dominance of politics and ideology over economic criteria
• Price controls, subsidies, price distortions (especially food
and energy)
• Key role of public ownership, political/ party/ military/
security nominations for managerial positions
• Autarky, import-substitution industrialization,
protectionism
• Burden of military/security spending
• Social employment in public sector
• Some of these characteristics present in non-socialist Arab
countries
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Where Arab “socialist” economies
differed from Soviet-type economies?
• Greater role of private sector (agriculture, trade, services,
small and medium size manufacturing)
• Private ownership never condemned and market
institutions/ legal infrastructure largely in place
• Less distorted prices, less acute shortage of basic goods
• Higher income and wealth inequalities
• Less acute macroeconomic disequilibria
• Less over-industrialization and less structural distortions
• More economic openness and more contacts with the West
(economic relations, education, personal contacts)
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Arab reforms since 1980s - triggers
• Sharp decline in oil prices in mid-1980s
• End of Soviet support (end of 1980s)
• Reforms in CEE/FSU, China, India and other
developing countries
• Pressure of the IFIs, US, EU etc.
• Ineffectiveness of the previous model
• Interest of elites to enrich themselves
• Seeking macroeconomic and social stability
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Arab reforms since 1980s – major steps
•
•
•
•
Less price control, cutting subsidies
Towards unified exchange rate
Tighter fiscal and monetary policies
Trade liberalization (unilateral, WTO, FTA with
the EU, US, within the region)
• Greater role of private investment, including FDI
• Privatization (also with foreign participation)
• Financial sector reform, opening stock exchanges
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Agenda of Arab transition
• Major political challenge: building stable liberal democracy
• Economic challenges less dramatic comparing to CEE/FSU
in 1990s but:
– Post-conflict reconstruction (especially Libya and Syria)
– Avoiding populism (subsidies, reversing privatization, “witch
hunting”)
– Continuation of previous reforms in more fair and transparent way
– Addressing fundamental development challenges
• Major difference with the CEE (but not with FSU): absence
of “European anchor”
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Socio-economic challenges in Arab world
• Low-to-medium-level of GDP per capita (apart from Gulf
monarchies)
• High population growth
• Low education level (including continuous illiteracy)
• Gender discrimination
• High unemployment, especially among women and youth
• Poor business and investment climate
• Remaining trade protectionism (tariffs, NTBs, LGI)
• Poor infrastructure
• Unsolved political conflicts between neighbors
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GDP per capita in PPP terms, current international dollars, 2010
16,000
15,168
14,435
14,384
14,000
12,000
11,151
10,000
9,454
9,220
8,000
7,112
6,417
5,767
6,000
5,041
4,794
4,000
3,548
2,599
2,000
0
Lebanon
CEE
Libya
CIS
Tunisia
MENA
Algeria
Egypt
Jordan
Syria
Morocco
Iraq
Yemen
Abbreviations: GDP – gross domestic product, PPP – purchasing-power parity, CEE – Central and Eastern
Europe (including Turkey but without Slovenia, Czech Republic, Estonia and Slovakia), CIS (Commonwealth of
Independent States, including Georgia and Mongolia).
Source: IMF World Economic Outlook database, April 2012.
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Literacy rates in selected Arab countries, compared to worst-performing post-communist country
(Albania)
Adult total ≥15
100%
99%
99% 99%
Young female 15-24
100%
100%
99%
98%
Young male 15-24
96%
94%
96%
99%
98%
96% 96%
93%
92%
90%
90%
89%
89%
88%
87%
85%
82%
80%
84%
80%
78%
78%
73%
72%
72%
70%
66%
62%
60%
56%
50%
Algeria
(2006)
Egypt (2006)
Iraq (2009)
Jordan (2007)
Lebanon
(2007)
Libya (2009)
Morocco
(2009)
Syria (2009)
Tunisia
(2008)
Yemen
(2009)
Albania
(2008)
Source: World Development Indicators database (http://data.worldbank.org/indicator).
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Indicators of Gender Inequality
Population with at least secondary education (% ages
25+), 2010
Country
Female
Male
Algeria
36.3
49.3
Egypt
43.4
61.1
Israel
78.9
77.2
Jordan
57.6
73.8
Lebanon
..
..
Libya
55.6
44.0
Morocco
20.1
36.4
Palestinian Auton. ..
..
Syria
24.7
24.1
Tunisia
33.5
48.0
Turkey
27.1
46.8
Labour force participation rate
(%), 2008
Female
Male
38.2
83.1
24.4
76.4
61.1
70.1
24.7
78.3
24.1
74.8
25.1
81.1
28.7
83.6
16.7
72.4
22.0
82.1
27.7
74.2
26.9
74.6
Source: El Laithy (2012)
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Lessons to be learned
• Post-communist experience, especially of CEE not so
relevant for Arab countries (more similarities with FSU) but
some general lessons remain useful
• Democratisation may prompt economic reform, but no
automatic guarantees. Populist democracies are usually selfdestroying
• Timing and speed of reform: do not miss political window
of opportunity when is open, time works against reformers,
reforms should be comprehensive
• The role of external support (EU, US, IFIs, Gulf countries).
However, reforms serve country’s own benefit and cannot
be used as the bargaining chip in negotiations with donors.
Building the domestic pro-reform constituency is a key
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