Will the Arabs Recover Their Economies?

Decremental Decline or Free Fall?

Unrest in most Arab nations impacted squarely on their economies, and none have fully recovered. Food is too expensive, fuel scarce, and many fewer affordable professionals. Millions of jobs need to be created. Millions of new homes/ But what is happening? Syria and Libya, once the most oppressive of Arab regimes, are wracked by war and unrest. Others, like Yemen, are losing their modern sector: short of NG, propane, diesel, aviation fuel, kerosene and gasoline, and wood, the people of Yemen have to remember the ways of their ancestors. Once they were able to thrive in this complex little world, without oil and power. Is it decremental decline – or free fall? Here we look at an Arab summer.

Tunisia, Egypt, Syria, the Yemen, Sudan, Bahrain – these are countries hoping to recover from the economic damage wrought by the unrest. We are worried that they are falling into a black hole, from which they cannot climb out. Many poor countries just cannot get out of their poverty: while some citizens get rich, many others become poorer. Subsistence farmers and shepherds have been given a cold shoulder since about 1950, because high-volume cash crops use tractors and other equipment, as well as water and fertilizer. They look down at the fellaheen. But now, with sustained high oil prices, the small farmers' time has come - to stage a return.

The crisis of energy costs has arrived a bit early for some, but we are not under any illusions or delusions. I worked in areas of the world too poor and remote to be plugged into the power/petrol 'socket.' I know people can live without burning any hydrocarbons, but it does require some new appropriate technology – like animals.

The unrest of the Arab Spring was inevitable. So too the wars in Syria and Libya. But are not the people being caught in a downward spiral? In Libya, some of the towns have gone for four months with no electricity, cell phones, water or fuel or food. Yemen is collapsing, whole sections breaking off. Trouble in Egypt and Tunisia. Algeria just can't start building enough housing, because so many are on the take.

Jobs. Jobs. Jobs. Not nearly enough. The present power-possessors have neither the will or the imagination to create millions of new jobs. It can be done. Many of us in the USA remember President Johnson's CETA program. Many, many important issues and imperatives were accomplished using CETA workers. But that takes money, and even the government of the USA, does not have enough. It is forced to raise its debt ceiling. Or the whole thing crashes and seizes up with smoke rising up all over the place.

Egypt -

On Friday the 8th, we see a huge demonstration in Cairo at Tahrir Square. Over 250,000 were present, as the side streets to the square were full of protesters.

The unrest has been bubbling for some time. Few politicians and police have been called to account. The army has been quietly managing the reform process from behind the scenes. Marshall Tantawi is playing the Sphinx. The army has set up basic guidelines – and the bulk of the new politicos have been preparing party platforms. But for those who perished or were grievously wounded in Egypt's February revolution, friends and family of the dead demand justice.

Most Egyptians (and Tunisians) are suffering higher food and fuel prices. Many have lost jobs. Industry is still limited by government management. Tourism has yet to regain pre-2011 levels. New housing has failed to appear. The world downturn is as much responsible as are local conditions – the unrest. Greed and corruption are active forces.

Libya -

The pace of the war quickened. Qaddafi has his hands on war material but his forces cannot respond everywhere. In fact, even sections of Tripoli are off limits to army soldiers and intel police: no go areas, lethal.

Last month, another front in the war opened, in the Nafusah Mountains in Libya's northwest. At the time of this writing, Libyan democratic fighters, advancing from the southwest, are some than 52 km/30 miles from Tripoli. Qaddafi cannot drive the rebels out, and we expect a great exploitation of this advance, both by Libyan democratic forces (armed to the teeth with tanks and rockets) and by NATO jets. Can they work together?

Sudan -

On Saturday the 9^th we see the birth of South Sudan. The South is all celebration, but it is the north which we need watch. Will black Africans be molested in Northern Sudan? Does the Sudanese army have orders to shoot civilians? Are there Northern forces fighting still in Southern Sudan?

The same banal miss-use of military forces against black African civilians is apparent today in south Kordofan, where some 2,000 Nuba have been killed just in the past two months. Experts say they are fighting over oil, as in Abiyeh. But there really is not much oil down there. Why fight? Abiyeh should be shared.

The army offers the best deal, even for women. Half of Southern Sudan's budget goes to the army. “We need an intelligent army” which “does not involve itself in politics” said one returning intellectual. So many accomplished people have returned to the South, we literally have a new kind of nation. It is outward looking, ebullient, ready to absorb investment financing without the corruption. Too many good people in Sudan for corruption to flourish. Having been fighting for two decades, there is a strong ethnic, partIslamic, part Christian, part Pagan, and part secular educated scientists.

The Yaman -

Yemen is breaking apart, though the government does control the key installations in Aden, Al Hudaydah and Sana'a. The tribes have all flexed their muscles, setting up checkpoints along the roads. One pays them to gain entry. I believe we do see a curious balance-of-tribal power which will protect Yemen's assets even as it people and government collapse. These are the poorest of the Arabs. Yet Yemen is a complex country – some 16-20 tribes and sectarian and labor organs all jostling for influence and a cut of the government's budget. People are fighting for jobs, or in the hope of getting a job.

Saudi Arabia -

Educated Saudi women tried a demonstration last month at the wheel of vehicles, and some were later arrested and put in prison. There just were not enough women with vehicles to pull off any mass protest. But the police were quickly overwhelmed, and could only stop a fraction.

What about unrest in Saudi Arabia's eastern provinces? Jobs have long been available to Shi'a in the oil extraction infrastructure. The Shi'a are former maritime owners and operators, with some Persians who settled in centuries past.

The cities to watch are Al Hofuf, Al Mubarazz, Al Khobar and Ad Damman.  

Saudi Arabia exhibited the will to flex its muscle when it intervened in the unrest in Manama, Bahrain.

Saudi Arabia has suffered two recent loses. First, the Saudis failed to sway the OPEC to raise its output, so to lower world oil prices. That led to some fisticuffs in Vienna in early June. And the Arab allies (SA, UAE, Qatar, Oman, Bahrain), all sheykhdoms, failed to persuade Iran and Venezuela and Ecuador, to reduce oil prices, thereby screwing hundreds of million people all over the globe.

The refusal of the price (for oil) to decline like they did in 2008-09, combines with other negative factors to create a negative vortex (like a water going down a drain or toilet). That decline is both decremental and free fall. There are countervaling factors and forces, but these are best found in your own locale, your own surround, the sensorium.

Readers interested in the decline of the USA might like to read http://speculumusa.blogspot.com. We remain indifferent. The same concern we have regarding poverty in Arabia we can easily find in our view of the USA, or Europe. I don't like to say it - we are not alarmists - but, in case you have not noticed, civilization is falling apart.

Seen in a larger context, there appears to be all the ingredients for growth, but after several trillions of dollars have been lost, the recession became a depression. Debt alone precludes much government efforts to stimulate new job growth. So there is not the feed money to start new businesses. The slow erosion of the dollar makes most everyone poorer. Housing prices remain low, with millions in hock. But the cliff-edge, the drop point, is cheap oil from the Middle East. It seems we are losing that, and that is serious.

The decline is a decline of the over-elaborate overly-expansive 'American-style' or 'Euro-style' economy, based on the burning of cheap Mid East oil. When gasoline becomes too expensive to burn, the connections tying community to community snap, one by one. When times get bad, one can make a new home close by.

In times past, the peoples of the Muslim world knew how to build their own houses, but this knowledge is dying out in many regions. Meanwhile, population rise is unrelenting, the demand for housing quickly outstripping supply.

Immense sums have been given over to developers and contractors to construct mid and lower income housing, but in most of those cases, the contractors added a few touches and doubled the rent, appealing to the newly prosperous, the middle class. But that's over. The middle classes have dwindled, if we use money as the criterion. 


Secular educated people, many of them social scientists, are leading these revolutions. One might call these new governments 'smart' in that, in the case of Egypt, Tunisia, and even in Algeria,  one sees no one leader but instead committees with local competence on the ground, in the streets. We do think the Muslim Brotherhood will assist in  neutralizing the Salafi hotheads. The Arab people have grown enough through war to not admit such narrow clerical actors as the Salafis. Some want to kill innocents, even Muslims.

-John Paul Maynard