Summary Midterm Readings Economics of the Middle East and North Africa
Lec.1. Introduction: Conceptualising the Middle East Economy (14 Sep.)
- Hanieh, Chapter 1
- Djavad Salahi-Isfahani, “Rethinking Human Development in the Middle
East and North Africa: The Missing Dimension,” Journal of Human
Development and Capabilities, Vol. 13, Issue 3, 2013: 341-370
Hanieh Ch. 1
- Uprisings in 2011/12 with the slogan “bread, freedom and social justcee -- due to
social crises in the previous decade with high levels of unemployment, poverty, rising
food prices and the global economic collapse in 2008
- Capitalism and class played an important role in the Middle East, too
- Many authoritarian systems in the Middle East unlike other regions -- authoritarian
monarchies (Gulf Arab States, Morocco, Jordan) & authoritarian republics (Egypt,
Syria, Algeria, Yemen, Tunisia)
- However, also some democracies: Israel, Turkey, Iran, Lebanon and Iraq
- Reasons for more authoritarianism could be arguably the “Arab minde that likes
obedience to authority (Eurocentric!), religion (backward looking to Muhammad’s
ruling style, role of military, leaders’ ability to control certain groups and resources
- State/civil society dichotomy important in understanding ME and any state in
general
- Two-way causal link between authoritarianism and weakness of capitalism --
authoritarianism means that politcal and civil rights are weak or absent and state
control interferes with the operaton of a capitalist economy -- some groups
favoured by authoritarian rulers
- correlaton between economic performance and democracy -- the more open and
liberal a polity, the more efectve has been its economy in responding to
globalisaton
- Western governments did not see Arab revolts as protests against free market
economic policies by Western insttutons in the region, but presented it as politcal
due to authoritarianism
- This book focuses on class as the key social category from which to comprehend the
dynamics of any society
- According to Marx, class is understood as an expression of the relatons that people
form between each other around the process of producing society’s needs
- Capitalist society is characterised by the private ownership of the means and
products of social producton -- class division between those who own the means of
producton (capitalists) and those who sell their capacity to work (workers)
- Capitalists draw their proft by forcing workers to produce commodites that can be
sold at a greater price than the money spent on the producton itself
- Class is always a social relaton, which is contnually being made and remade in an
ongoing process of accumulaton and contestaton
- The state serves to represent and defend the class structure, it is not a separate
feature of society, but part of what consttutes it as a class
, - Internatonalisaton e.g. thought FDI, joint ventures, stock markets, etc. -- rethinking
of the nature of state functons within the world market -- internatonalisaton of
capital often means that processes of state formaton are strengthened
- Capital has to be seen not in locally specifc terms, hard in ME, but Gulf Cooperaton
Council has started with this rethinking
- There is a close connecton between the internatonalisaton of capital and its
concentraton and centralisaton -- imperialism consolidates the combined and
uneven nature of the world market in contemporary capitalism
- Imperialism characterised by the dialectc of rivalry and unity of interests shaping
the relatonship between major imperialist powers and increased interstate
competton due to heightened levels of competton between the large corporatons
dominatng the global economy
- internatonalisaton demands more coordinaton and cooperaton between states
- Imperialism is primarily a queston of exploitaton – one that necessitates, and is
principally bound up in, forms of economic dominaton
- Capitalist class formaton in ME has become increasingly ted to the ebbs and fows
of accumulaton at the global scale -- imperialism has generated a domestc
capitalist class internal to the ME that is aligned with the interests of global
(imperialist) capital
- Neoliberal policies: privatsaton, cutbacks to social spending, reducton of barriers
to capital fows, impositon of market imperatves throughout all human actvites
- Neoliberalism reconsttutes and strengthens class power in the favour of capital
- turn to neoliberalism refected accumulaton needs of capital in an era of
internatonalisaton, aimed to ensure the conditons for capitalist reproducton at a
global scale
Rethinking Human Development in MENA (artclee
- In the case of Tunisia, a country with success in educaton, health and rising incomes,
the intensity of popular dissatsfacton displayed during the uprising frst came as a
surprise but was later understood when the high levels of youth unemployment
became widely known
- Failure to improve educaton quality and promote acquisiton of productve skills lies
at the heart of the youth unemployment crisis -- this failure is related to labour
market policies that favour older workers at the expense of youth, which are well
disguised as egalitarian policies aimed at protectng jobs for older workers while
promotng inequality between generatons
- Characteristcs of MENA economies (interrelated!)
o High oil income -- wedge between individual productvity and consumpton
in countries that export oil and those that beneft from oil income indirectly
o Demographic factor e.g. delayed fertlity transiton and rapid growth of youth
populaton -- imbalances in markets for labour and marriage
o High investment in schooling with low productvity
- While oil income has enabled the oil-rich countries to improve average outcomes in
educaton and health, its efect on skill formaton has been much less impressive
- Rising incomes have expanded women’s educaton faster than men’s without
narrowing the gender gap in employment
,- In MENA region, youth issues are important to consider -- In some MENA countries,
youth unemployment rates are 4 tmes higher than the rates for adults
- Fairly homogeneous in terms of religion, demography, language and culture, but
high diference in per capita income
- Global relatonship between average country income and fertlity seems weaker in
MENA, due to the region’s oil wealth and its resilient gender social norms
- Delayed fertlity decline in some of the oil-rich countries despite their achievements
in health and educaton shows why income per person is a less adequate indicator of
human development in the MENA region than elsewhere
- Health outcomes respond to income regardless of its source, productvity or oil rent
- CMR has declined in MENA countries, educaton expanded faster in MENA than in
most other regions
- High rates of unemployment among the youth, low productvity of their educaton
- HDI for low income MENA countries has increased faster than any other region,
faster than their index of GDP per capita
- As with income, life expectancy had enormous variaton across the region
- Less educaton than predicted by their incomes (HDI indices conditonal on GDP per
capita), changed litle from 1990 to 2011
- Several MENA countries enjoy higher health status given their income
- high-income countries of MENA did partcularly poorly in these conditonal
comparisons given their income, they lagged in all HDI components
- youth is largely excluded from the economic life of their countries
- higher unemployment rates, longer waitng tmes for their job, involuntary delay in
marriage, even higher values in oil rich countries
- young women fare worse than men
- afected mainly due to demography -- because of past rapid populaton growth, rate
at which new workers enter the MENA labour markets has far exceeded the rate at
which employed workers retre plus new job creaton
- youth unemployment cuts across social class and afects youth from poor and
middle-class families alike
- youth from poor backgrounds with less educaton seem to fnd jobs faster
- in richer MENA countries, educaton is sometmes the escape route from unpleasant
unskilled work and the path to parent-fnanced unemployment
- low rate of turnover and small size of the MENA formal labour markets, which is the
prime destnaton for educated MENA youth
- difficult transiton from school to work, marriage age rising for both men and women
- in Egypt, the least educated have the lowest unemployment, usually highest among
secondary school graduates, followed by tertary graduates
- only in the high income group does unemployment fall consistently with educaton
- the immediate reason for why students are not accustomed to learning a wider set
of skills is that MENA schools only require and test a narrow set of skills (very litle
sports, art or writng)
- reducing labour market rigidity is not only important in ofering youth beter school
to work transitons and increasing their learning by doing: it is also important in
eliminatng the distortons in the signals that guide human capital acquisiton
, - most MENA countries have engaged in labour market reform e.g. in Egypt where
state dominaton of educaton and employment of the educated has been the
greatest, Iran had short-term contracts (but those created other problems in turn)
- involuntary delay in marriage can be very costly, especially in MENA societes where
sexual relatons outside marriage are prohibited
o this delay results from age imbalance (“marriage squeezee) and social
conventons that raise the cost of marriage
- recent decline in age at frst marriage of Egyptan men is in part due to increased
access to housing resultng from a 1996 housing market reform that made rental
housing more readily available to young men
- patriarchal societes with gender inequalites in economic, politcal and social
spheres
- certain aspects of Islamic laws treat women and men diferently
- even when unequal treatment at the macro level has not improved by much, women
have made signifcant progress in health and educaton
- the enrolment rates of MENA women are about equal to men in primary, lower in
secondary, but higher in tertary -- similar to middle-income countries
- with the excepton of East Asia, MENA educaton has expanded faster than other
regions, especially for women -- however, gender equality remains elusive
- MENA countries fall below the level of women’s partcipaton predicted by per capita
income, slow replacement of traditonal women’s jobs in agriculture and
manufacturing with modern manufacturing and service jobs
- As with youth unemployment, lower partcipaton rates of MENA women are in part
due to higher reservaton wages, especially in countries with oil income, patriarchal
social norms play a role, too
- Empowerment depends on the type of work women do, work in the professions and
not low wage jobs is what contributes to women’s social and economic status
o Low partcipaton of women in paid work in high wage MENA economies,
where low paid jobs in export sectors are lacking and other lower paid jobs
are gilled by immigrants, may not be a good indicator of low human
development of MENA women
- Average level of inequality of income is low in MENA compared with middle-income
countries and about the same as in low-income and high income countries
o On average more equal than other developing countries
- Source of the drop in IHDI is inequality in educaton, not health
- Private tutoring has become an essental part of preparaton for admission into
universites, expenditures naturally create inequalites in educatonal achievement,
as the poor are unable to aford these costs and thus may lose in the competton for
limited space in public universites
- Structural problems inhibit youth and women from leading productve and creatve
lives in accordance with their full potental
- Mismatch between skills learned in schools and skills demanded by the private
sector
