NDN policy analyst Bradley Bosserman: An economic growth strategy for a new Middle East

{mosads}The recent political turmoil in Egypt is leading to widespread pessimism about the country’s future. Putting all the focus on the political process, however, makes the mistake of viewing elections and legislatures as the most important part of a renewed Middle East. While those institutions are important, it is impossible to imagine a path forward for the Arab Spring that does not also involve a strategy for real economic growth. 

Many Egyptians envy Tunisia’s relatively peaceful democratic transition, in many ways a best-case scenario. Yet, the new government in Tunis is still struggling under the crushing weight of 18 percent unemployment — 35 percent for those with degrees. The fundamental instability stemming from weak economic growth can put a ceiling on progress and should be a wake-up call for U.S. policymakers.

These forces threaten to undermine the long-term success of democratic transition, and underscore two important realities. First, economic support, reform and growth are essential to solidifying the gains made across the Middle East in recent months. Second, if the United States chooses not to forge strong relationships with countries in transition, other nations with competing interests will.

The Senate wisely included funding for the Middle East and North Africa Incentive Fund (MENA-IF) — one of President Obama’s signature responses to the Arab Spring — in the recent Foreign Operations bill. Its fate is still uncertain, however, as Republicans in the House scrapped the initiative in their version of the legislation. The 300 million people in the Middle East and North Africa, more than 40 percent of whom are under the age of 25, are seeking new relationships with their governments and with the West. If the United States chooses not to seize this opportunity, the window of engagement will be closed to us for a generation or more. Any real, forward-looking strategy for the region has to include the following four elements:

Expanding and modernizing our support mechanisms. MENA-IF should be funded by Congress and fully utilized. Sen. John Kerry (D-Mass.) has described this program as a “no-brainer” that gives the U.S. State Department “the flexibility to deal with unforeseen contingencies … [and helps to] empower moderates and reformers.” The strength of this fund is its regional, rather than national, focus, and its ability to shift money from failing programs to those that are succeeding. The dynamic transitions in this region do not always accede to the exact schedule of the annual appropriations calendar, and we should not surrender some of our most potent tools simply to avoid disturbing the bureaucratic apple cart.

Supporting civil society and entrepreneurism with exchanges and business delegations. The U.S. government, nonprofit community and private sector need to help develop a healthy business culture by sponsoring more business-to-business exchanges and mixed entrepreneurial delegations and by incorporating market skills into existing civil society programs. Many business and political leaders in these countries are struggling to choose between betting on a successful transition that would enable long-term investments in their societies and simply extracting the spoils of conflict for short-term gain. Many of these people have learned over decades that they can gain success for themselves and their families from nepotism and cronyism rather than from innovation, civil engagement and investment. Changing those attitudes is vitally important.

Resisting calls to abandon the process and walk away from our huge investment of blood and treasure. Officials who return from the region often report that local leaders are looking for signs of real commitment and the security of knowing they will not be abandoned if they are no longer a political priority. While it is tempting to question support for a country that elects a parliament at odds with some liberal norms, it’s crucial to understand that transitions are long-term projects. If the United States does not help guide these governments through the rocky stages of development, other countries like China or Iran will be more than happy to fill the void, pulling these nations in directions at odds with U.S. interests.

Expanding regional and international trade. Currently, oil and gas account for more than 90 percent of U.S. imports from the region, and U.S. investment has been largely confined to the energy sector. Growing that economic relationship will be essential for addressing the fact that an entire generation of Arab leaders and citizens has yet to realize the gains of globalization. Liberalizing markets and increasing trade is a powerful tool for growth and development. The existing trade and investment framework agreements in the region should be utilized to provide technical assistance for transition countries to enact customs reform, harmonize internal and regional regulatory structures and provide a platform for trade discussions.

Aid and elections are not enough. We must act now to support a robust program of engagement that increases trade, builds the central pillars of civil society, gives our experts the tools they need to support moderates and express a real commitment to partnership. 

We should vocally advocate for American values, but also demonstrate patience with these young democracies and be prepared for their governments to reflect their diverse societies and cultures. If we desire to see the Arab Spring lead to long-term democratization and liberalization, we must fully commit to implementing the economic policies that will make that possible.

Bosserman is a policy analyst at NDN, formerly the New Democrat Network, and the New Policy Institute, where he directs the MENA Initiative.