Exactly 10 years on, how should we understand the root causes of the 2011 uprisings in the Middle East and North Africa? At the time, many commentators and policy-makers answered this question with reference to the simple mantra of ‘political and economic freedom’. While much of the world appeared to move away from authoritarian state structures through the 1990s and 2000s, the Middle East had remained largely mired in autocracy and monarchical rule – ‘the world’s most unfree region’ as the introduction to one prominent study of politics in the Arab world put it.^[2] The problem, according to these frameworks, lay in the stifling effect of authoritarianism over capitalist markets, which prevented the emergence of a vibrant private sector and held back the region’s economic potential. The popular rage expressed on the streets of the Middle East in 2011 could thus be understood as a desire for both ‘free’ political systems and ‘free’ economies.

In this vein, then-US President Obama noted in a major policy speech on the Middle East in May 2011 that the region needed ‘a model in which protectionism gives way to openness, the reins of commerce pass from the few to the many, and the economy generates jobs for the young. America’s support for democracy will therefore be based on ensuring financial stability, promoting reform, and integrating competitive markets with each other and the global economy.’ Likewise, the president of the World Bank at the time, Robert Zoellick, argued that the revolts in Tunisia occurred because of too much ‘red tape’, which prevented people from freely engaging in capitalist markets. Western policy-makers have repeated this basic argument incessantly since 2011 – autocratic states smother economic freedom, and ‘free markets’ are essential for any sustained transition away from authoritarianism. As part of this narrative, Western governments and international financial institutions (IFIs) are recast as benign and benevolent actors – ready to support the ‘transition’ to democracy and willing to provide the necessary technocratic expertise to construct open economic markets.

In what follows, it is argued that this standard framing of the Middle East’s political economy is false. It is certainly true that the region’s political structures were (and remain) highly authoritarian, but this kind of political system is directly reflective of how capitalist development occurred in the region over the last few decades. Central to this development trajectory were the far-reaching economic shifts that began in the 1980s under structural adjustment packages (SAPs) supported by the leading IFIs. Locked into these agreements, Arab governments moved through the 1990s and 2000s to reorient their economies in line with market-driven principles. The policies adopted in the region differed little from those found elsewhere around the globe – the prioritization of private sector growth, fiscal austerity, opening up to foreign capital inflows, privatization, and the deregulation of markets (including labour). There was no essential contradiction between these economic policies and political authoritarianism – indeed, the opening up of markets and the steady creep of neoliberal policies throughout the region depended precisely upon authoritarian rulers (as it still does). Crucially, this process was fully supported by Western governments, who applauded the coming to power of autocratic rulers in the region in the 1980s and continued to laud the direction of economic policy-making in the decades preceding 2011.

Postwar politics and the modern Middle East

Any analysis of the contemporary Middle East needs to begin with the region’s centrality to the world economy. Long a strategic crossroads of trade, the area took on special importance following the discovery of large supplies of hydrocarbons during the early twentieth century. Oil and gas were to become essential commodities underpinning modern industrial production and transport following World War 2 and, in this context, control and influence over the region shaped the balance of global rivalries in the postwar period. The United States, which emerged as the dominant power at this time, placed particular emphasis on building privileged relationships with countries across the region.

The 1950s and 1960s saw both a deepening of the region’s importance to the world economy and, at the same time, the coming to power of Arab nationalist movements in Egypt, Yemen, Algeria, Syria and Iraq. These new governments overthrew regimes allied to former colonial powers and attempted to pursue economic models based upon statist forms of development – emphasizing domestic control of industry, support to education and employment for university graduates, subsidies for basic consumer items such as food, and state control of land and other resources. Nonetheless, despite the frequent reference to ‘Arab socialism’ made by these new governments, their economic strategy was still very much capitalist in orientation.[3] These policies led to an improvement in living conditions for much of the region’s population, but they were also characterized by repressive forms of rule aimed at curtailing any independent political action.

Western governments – led by the United States – initially confronted these nationalist struggles through strengthening relations with three key regional allies: Saudi Arabia, Iran and Israel. In the Gulf, the Saudi monarch, King Saud, had long been reliant on US political and military support, and was all too willing to undercut Arab nationalism through the corrupting influence of oil revenues. Saudi funding of pro-Western movements in the region enabled these forces to deny any direct link to Western governments. The Saudi government was also encouraged to deploy Islam as a regional counterweight to nationalist and left-wing ideas, organizing ‘Islamic summits’ that asserted Saudi influence and challenged Egypt’s role as the leading Arab state. A vitriolic propaganda war opened up between the Saudi and Egyptian governments. This proxy conflict with Egypt took its most vivid form during the eight-year North Yemen civil war, where Saudi Arabia was the main supporter of the royalist, pro-British forces that had been overthrown in 1962, while Egypt backed the republican movements arrayed against the ousted monarchy.

In the case of Iran, the United States (and Britain’s M16) engineered a coup against the Iranian Prime Minister Mohammad Mosaddegh in 1953, bringing to power a pro-Western government that was loyal to the Iranian monarchy, headed by Mohammad Reza Shah Pahlavi. The US explicitly conceived of Iran as its principal base of control for the Gulf region, with a 1969 report by the RAND Corporation – a prominent think tank closely connected to Washington policy-makers – noting that Iran could ‘help achieve many of the goals we find desirable without the need to intervene in the region’.[4] This role was convincingly demonstrated in 1973 with the dispatch of the Iranian military to Oman to assist British troops in the repression of the Dhofar rebellion – a powerful struggle that was at the heart of left-wing movements in the Arabian Peninsula. The Iranian troops, supplied with US helicopters and other weaponry, succeeded in crushing the rebellion. US military support to Iran skyrocketed from 1973 onwards, amounting to more than $6 billion annually between 1973 and 1975. This close relationship continued up until 1979, when the Iranian revolution ousted the Pahlavi monarchy and removed Iran from the sphere of US influence in the region.

The other major pivot of US power in the broader region was the state of Israel. As a settler-colonial state, Israel had come into being in 1948 through the expulsion of around three-quarters of the original Palestinian population from their homes and lands. Inextricably tied to external support for its continued viability in a hostile environment, Israel could be counted on as a much more reliable ally than any Arab state. During the 1950s, Israel’s main external support had come from Britain and France. But the 1967 war saw the Israeli military destroy the Egyptian and Syrian air forces and occupy the West Bank, Gaza Strip, (Egyptian) Sinai Peninsula, and (Syrian) Golan Heights. Israel’s defeat of the Arab states encouraged the United States to cement itself as the country’s primary patron, supplying it annually with billions of dollars’ worth of military hardware and financial support.

Israel’s victory in 1967 signalled a decisive turning point in the evolution of Arab nationalism. While pro-Western regimes continued to be challenged from below by various radical movements, and new nationalist governments came to power in Southern Yemen (1967), Iraq (1968) and Libya (1969), Israel’s victory dealt a devastating blow to the notions of Arab unity and resistance that had been crystallized most sharply in Nasser’s Egypt. The military defeat was symbolically reinforced by Nasser’s death in 1970 and the coming to power of Anwar Sadat, who subsequently moved to reverse many of Nasser’s more radical policies. The priority given by the United States to its relationship with Israel was further highlighted in 1973, when another war broke out between Israel and a coalition of Arab states led by Egypt and Syria. Despite initial Egyptian and Syrian advances in the opening salvos of the war, US airlifts of the latest military equipment led to Israel’s eventual victory.

The emergence of authoritarian neoliberalism

Given this regional political context, the global economic downturn of the early 1970s placed severe pressure on the statist development strategies of various Arab governments. The global recession hit the non-oil exports of many Arab countries, while the cost of food and energy imports increased. Moreover, large military expenditures associated with ongoing conflicts in the region (particularly the 1967 and 1973 wars with Israel) placed considerable strain on government budgets. Following the sharp rise in US interest rates that began in 1979 – the so-called Volcker Shock – an acute debt crisis swept through key Arab states, including Egypt, Morocco, Tunisia and Jordan.

As a result of this debt crisis, many Arab governments sought financial support from IFIs, in return for signing SAPs that committed them to a reorientation of economic priorities. Morocco was the first to sign a SAP in 1983, and similar reform programmes were soon adopted in Tunisia (1986), Jordan (1989), Egypt (1991), Algeria (1994) and Yemen (1995). These SAPs sought to strengthen the private sector and achieve closer integration with the world market. The private sector would be, as the World Bank later put it, the ‘engine of strong and sustained growth’ – a necessary requirement of the ‘new global economy’ in which ‘rewards . . . go to the most hospitable environments [for capital investment]’.

From the 1980s onwards, the economic policies of Arab states followed such prescriptions, much like countries elsewhere around the world. Trapped in a cycle of debt and compelled by the conditionalities of multilateral loan packages, Arab governments embraced the standard policy priorities of market-based development: privatization and the prioritization of private sector growth, deregulation of labour and financial markets, a lowering of corporate tax rates, relaxation of barriers to trade and foreign investment, and cutbacks to public spending, including subsidies on food and energy. These new policies were widely unpopular, and their introduction was met with strikes, demonstrations and violent clashes between citizens and security forces – one survey documented 25 outbreaks of major protests between 1977 and 1992 against structural adjustment in nine countries across the region (Algeria, Lebanon, Jordan, Egypt, Morocco, Iran, Sudan, Tunisia and Turkey).[5]

In the face of this widespread opposition to economic change, Arab states took on increasingly authoritarian characteristics through the 1980s and 1990s. Indeed, several of the regimes that were overthrown in 2011 first came to power in this period and led the turn towards neoliberal development models. The 1987 coup by Ben Ali in Tunisia, for example, was followed by the country’s decisive orientation towards IFI-led structural adjustment. Likewise, Egypt’s Hosni Mubarak, who became president in 1981 following the assassination of his predecessor Anwar Sadat, consolidated a system of repressive rule that included the suspension of the constitution, imposition of an Emergency Law, restrictions on the press, detention without charge, and the introduction of military courts to try political opponents. In 1991 Mubarak agreed to an SAP with the IMF and World Bank, and then turned his security forces against the resulting labour strikes and mass demonstrations that occurred throughout the 1990s. Similarly, governments in Jordan, Morocco and Algeria became much more authoritarian in this period. Western governments and IFIs were nonetheless supportive of these governments, viewing their repressive practices as a necessary means to undercut the widespread social discontent around the new neoliberal measures.

These economic measures reversed many of the previous policies embraced by Arab nationalist governments from the 1950s to the 1970s. One indication of this is the large-scale privatization of state-owned firms during this period. According to World Bank figures, total proceeds from privatization in Egypt, Morocco, Tunisia, Algeria, Jordan, Lebanon and Yemen reached a little over $8 billion between 1988 and 1999, with more than half of this figure coming from sales in Egypt alone ($4.172 billion).[6] Over the subsequent decade, the scale of privatization expanded considerably, with privatization receipts totalling more than $27 billion between 2000 and 2008. This latter period saw many more countries in the region engage in the selling of assets, as well as a shift away from the privatization of industrial and manufacturing industries and towards the privatization of the telecommunications and financial sectors. Despite the increasing number of countries involved in privatization, Egypt continued to register both the highest number of deals and the largest value of assets sold ($15.7 billion from 1988 to 2008).

A further core priority of structural adjustment in the region was the deregulation of labour markets through reducing (or abolishing) minimum wages and severance pay, and easing laws around hiring and firing.^[7] Arab governments were urged by the World Bank and other IFIs to implement ‘more flexible hiring and dismissal procedures’ as a means of reducing ‘the dominant role of government as employer’ – in this manner, the costs of labour across the board could be reduced. In particular, those firms that were earmarked for privatization would not have to compete with better labour conditions in the public sector and would thus become more attractive to potential investors. Throughout the 2000s, Egypt, Jordan, Morocco and Tunisia all passed significant laws deregulating the labour market.

Another important focus of IFI policy in the region during this period was liberalization of the agricultural sector. Here, policies aimed to develop new agribusiness models that would link production more closely to global markets. Alongside laws that commodified land and dismantled collective ownership rights, other measures lifted price caps on agricultural inputs (such as fertilizers, pesticides and water), and sought to integrate farmers into agribusiness commodity chains. The Egyptian case has been particularly well documented. In 1992, the Mubarak government passed Law 96, which allowed landlords to sell land without informing or negotiating with tenants and lifted longstanding caps on rural rents.[8] As a consequence of this law, rents increased by 300 to 400 per cent in some areas and over a third of all tenant families in Egyptian rural areas (around 1 million households) lost their rights to land. Law 96 was enthusiastically backed by the World Bank and IMF as part of a general policy to establish private property rights in agriculture. A USAID-sponsored study applauded the Egyptian government for passing the law, which it saw as doing away with

‘more than 40 years of an imbalanced relationship between landlords and tenants’.

The logic of these and other policies was further reinforced through international trade and financial agreements signed throughout the 1990s and 2000s. Of particular significance here are the Association Agreements signed with the European Union as part of the European Mediterranean Partnership (which later became the European Neighbourhood Policy). Between 1995 and 1997, Jordan, Morocco and Tunisia signed Association Agreements with the EU, while Egypt followed them in 2004. These agreements promised financial aid and greater access to the markets of the EU – the region’s most important trading partner – in return for deepening neoliberal reform. Alongside similar bilateral treaties with the US and accession to the World Trade Organization, these international agreements constituted an important driving force behind the reduction of trade barriers and the opening of new sectors – such as finance, telecommunications, transport, and energy – to foreign ownership.

These economic agreements were also directly tied to the intensification of Western military and political intervention in the region throughout the 1990s and 2000s. Most significantly, this included the decade-long imposition of sanctions on Iraq through the 1990s, culminating in a 2003 US/British-led invasion that overthrew the Iraqi ruler, Saddam Hussein, and that led to a devastating series of social and economic crises from which the country has yet to emerge. At the same time, the United States and European Union sought to normalize Israel’s place in the region – backing the misnamed Oslo Peace Process through the 1990s and advancing a range of regional initiatives aimed at deepening Israel’s ties with Jordan, Egypt and the Gulf states. In relation to both the Iraq War and Israeli–Arab negotiations, US strategic objectives carried an explicit economic dimension (frequently overlooked) that aimed to deepen the region’s integration with global trade and financial flows – war, politics and the region’s economic transformation need to be seen as intimately connected.

Of course, not all states in the Middle East were integrated into the global economy and the Western orbit to the same degree. Throughout the 1980s and 1990s, countries such as Libya and Syria largely stood outside the US-dominated system, seeking instead to build relationships with other powers – notably the Soviet Union (up until the early 1990s), and later Russia and China. These two states were headed by tightly centralized, authoritarian regimes – that of Gaddafi in Libya and the Assad family in Syria – in which state power was based on highly patrimonial structures and, in the case of Syria, the deliberate cultivation of sectarian patterns of rule. Due to the way that state control underpinned the power of these regimes, and their relative isolation from Western markets, both Libya and Syria did not see the adoption of IFI-led structural adjustment throughout the 1980s in the same way as other Arab states. Nonetheless, in the wake of the decline of their traditional international backers in the 1990s and early 2000s, both Syria and Libya began to seek a rapprochement with the West. This move was not solely political: it also included an opening to world markets and initial steps towards economic liberalization. In the case of Libya, Gaddafi gave his strong support to the US attack on Afghanistan in 2001 and was later to participate in CIA rendition flights and torture programmes. In 2003, following the lifting of UN sanctions that had been placed on Libya in 1992, key regime figures began lobbying for economic liberalization, with Gaddafi’s son Saif el-Islam insisting that ‘everything should be privatized’ in a speech at the Libya Youth Forum in 2008.^[9] Only tentative steps in this direction were to be adopted, however, due to the highly centralized concentration of state power in the hands of the Gaddafi family. Despite this fact, the IMF was to note on 15 February 2011 – just two days prior to the beginning of an uprising that was to lead to the overthrow of the regime – that ‘An ambitious program to privatize banks and develop the nascent financial sector is under way. Banks have been partially privatized, interest rates decontrolled, and competition encouraged . . . ongoing efforts to restructure and modernize the Central Bank of Libya are under way with assistance from the Fund.’

For Syria, significant steps towards economic reform began following the accession to power of Bashar al-Assad in 2000, after the death of his father Hafez al-Assad. The younger Assad began to privatize and open up the Syrian economy to foreign direct investment, leading to private control of key industrial sectors such as metallurgy, chemicals and textiles. According to one analyst of the Syrian economy, the size of the private sector had risen to just over 60 per cent of GDP by 2007, up from 52.3 per cent in 2000.^[10] Much like other countries in the Middle East, privatization benefitted a small group of business groups that were closely linked to the Assad regime, and that were enriched through state contracts and joint projects with foreign investors. As these reforms accelerated during the period 2005–10, much of the rest of the Syrian population saw a severe worsening of their living standards.

The cases of Syria and Libya confirm that the core assumptions of market-led development had become widely accepted by state and ruling class elites throughout the region by the end of the first decade of the 2000s. Although Syria and Libya may have sometimes expressed opposition to US policy in the Middle East – an opposition that was, however, typically rhetorical rather than substantive – their ruling regimes sought entry into the world market on the basis of economic programmes that paralleled those found elsewhere in the region. Characterized by a similar intertwining of authoritarian rule and economic power, the embrace of these policies expressed an attempt to strengthen the position of those located at the centre of the political system.

Social inequality and the polarization of wealth

Throughout this period of economic transformation, large and persistent disparities opened up in the ownership and control of wealth, access to resources and markets, and the exercise of political power. Alongside consistently high unemployment, rising poverty, and substantial levels of rural dispossession, a tiny layer of the region’s population benefitted considerably from the new economic policies. Privatization and new market opportunities presented lucrative openings for well-connected business groups involved in areas such as trade, finance and real estate speculation. State elites and militaries also came to wield significant economic power, building a web of highly opaque relationships with private capital groups.^[11] These patterns of inequality were sustained through authoritarian rule and state repression. Indeed, it is impossible to separate the highly autocratic political structures of the region from the policies (and outcomes) of the market-led development models implemented from the 1980s onwards.

One important illustration of these patterns can be seen in jobs and employment statistics. Before the global economic downturn of 2008, the average official unemployment rate across Egypt, Jordan, Lebanon, Morocco, Syria and Tunisia was higher than in any other region in the world. Young people and women were most affected by unemployment – with around one-fifth of all Arab women and one-quarter of youth in the region unemployed. These figures hide large regional disparities: in the Mashreq sub-region (Egypt, Jordan, Iraq, Syria, Lebanon and the West Bank and Gaza Strip), over 45 per cent of all young females were unemployed in 2011, more than double the rate for young men. The Middle East also ranked at the bottom of the world for labour market participation rates, with less than half of the region’s population considered part of the labour force. Only about one-third of young people and 26 per cent of women were in work, or actively seeking employment. This profound marginalization of young people and women carried deep social implications in countries where elderly men monopolized political power.

The region’s labour markets were also marked by a widespread prevalence of informal and precarious work. In 2009, the United Nations Development Programme reported that the growth of informal work in Egypt, Morocco and Tunisia was among the fastest in the world (reaching between 40 and 50 per cent of all non-agricultural employment). In Egypt, three-quarters of new labour market entrants from 2000 to 2005 joined the informal sector, up from only one-fifth in the early 1970s.[12] Not only did these trends affect the character of employment, they also carried important implications for the way urban space was used, and the kinds of social and political movements that emerged in the Middle East – the residents of densely-packed informal settlements across cities such as Cairo, Casablanca, Algiers and Beirut were viewed by governments with deep mistrust and suspicion.

These highly unequal employment and labour market outcomes contributed to worsening overall poverty levels in the region. The proportion of the population without the means to acquire basic nutrition and essential non-food items (the ‘upper poverty line’) averaged close to 40 per cent across Jordan, Morocco, Syria, Tunisia, Mauritania, Lebanon, Egypt and Yemen in the decade prior to the uprisings.[13] Health and educational outcomes also reflected unequal access to state services and social support. Between 2000 and 2006, around one-fifth of all children in Egypt and Morocco exhibited stunted growth as a result of malnutrition. Across the Mashreq countries, undernourishment increased from 6.4 per cent in 1991 to 10.3 per cent in 2011. In 2010, on the eve of the uprisings, a striking 30 per cent of all adults in the region were illiterate (rising to 40 per cent for females aged 15 and above). Educational access was also marked by clear inequalities. In Egypt, for example, UNESCO noted that ‘one in five of the poorest [children] do not make it into primary school at all, while almost all rich children get through to upper secondary’.

It is essential to stress, however, that alongside this widespread deterioration of social conditions throughout the 1990s and 2000s, many of the region’s leading economies were experiencing very high growth rates and were being lauded as successful cases of economic reform, worthy of emulation by other countries in the Global South. Egypt, for example, was ranked by the World Bank as the ‘world’s top reformer’ in its 2008 Doing Business report, and continued to rate within the top 10 global reformers until the overthrow of Mubarak. Likewise, the World Bank’s 2010 Development Policy Review on Tunisia praised the country for its ‘steady structural reforms and good macroeconomic management’ that had earned Tunisia a place ‘among the leading performers in the group of emerging economies’ and led to ‘enviable achievements’ for the country’s poor. This kind of support to authoritarian governments continues to mark IFI policy in much of the Middle East today (such as the Sisi regime in Egypt) – a fact that it is crucial to remember in the light of attempts by these institutions to rewrite their historical record in the region.

The regional order and the global crisis of 2008

The economic policies imposed by IFIs on the Middle East throughout the 1990s and 2000s did not just reconfigure social structures at the national scale, they also precipitated new economic and political hierarchies at the regional level. A key feature of these emergent hierarchies was the growing weight of the six Gulf Arab states (Saudi Arabia, the United Arab Emirates (UAE), Qatar, Kuwait, Bahrain and Oman) in the regional political economy – and the linkage between capital accumulation in the Gulf and processes of class and state formation elsewhere in the area.

Taken as a whole, the Gulf Arab states are marked by features that set them apart from the rest of the region. All these states are monarchies whose rich and relatively cheap hydrocarbon resources (both oil and natural gas) made the Gulf a critical focus of Western strategy in the Middle East throughout the twentieth century. At the same time, the social structures of the Gulf monarchies differ considerably from those found elsewhere in the Middle East. Most significant is the Gulf’s reliance on a large number of temporary migrant workers, mostly drawn from South Asia and to a lesser degree neighbouring Arab countries, who now make up more than one-half of the Gulf’s total population of 56 million. When considered as a percentage of the labour force, non-nationals make up from 59 to 86 per cent of the employed population in Saudi Arabia, Oman, Bahrain and Kuwait, increasing to around 92 to 95 per cent in Qatar and the UAE. Denied labour, political and civil rights, these migrant workers have been fundamental to patterns of urban growth and capital accumulation in the Gulf; they have also underpinned the ‘vertical segmentation’ of Gulf societies, with citizens incorporated into the surveillance and control of migrant populations through the kafala system.^[14]

Over the past several decades, growing international demand for the Gulf’s hydrocarbons – underpinned by a near continuous increase in the price of oil from 2000 to mid-2014 – has massively increased wealth levels in the Gulf.^[15] This has helped nurture the development of large capitalist conglomerates in the Gulf, closely linked to ruling monarchies and the state, whose activities span sectors such as construction and real estate development, industrial processes (particularly steel, aluminium and concrete), retail (including import trade and the ownership of shopping centres and malls) and finance.

While much of the surplus capital held in the Gulf has been invested in North America and Europe, large amounts also flowed into neighbouring Arab countries throughout the 2000s.^[16] Critically, this regional expansion of Gulf capital was predicated upon the SAPs discussed above, and the subsequent liberalization and opening up to foreign direct investment flows throughout many Arab countries in the 1990s and 2000s. As a result, Gulf capital was a prime beneficiary of the neoliberal turn throughout the wider region – becoming intimately involved in the ownership and control of capital across the Middle East as a whole.

These regional hierarchies are crucial to understanding the impact of the 2008–09 global economic crisis on the Middle East. As noted, in the years preceding this crisis the region was already facing very high levels of social and economic inequality. In addition to issues of youth unemployment, social exclusion and poverty, rising costs of food and energy placed considerable pressure on the livelihoods of many families.[17] Growing import bills meant that Arab governments faced enormous difficulties in maintaining already reduced subsidy levels; simultaneously, the cost of living for poorer families also rose. This precipitated a large jump in the number of the region’s poor – one estimate from the African Development Bank calculated that a total of 1.11 million additional people had fallen below the poverty line in Egypt, Jordan, Palestine, Syria and Yemen immediately prior to the 2008 global crisis itself.

As the 2008–09 crisis unfolded, these pre-existing patterns of economic development influenced how different parts of the region experienced the global turmoil. Non-oil exporting states were hard hit by the drop in global demand for goods such as agricultural products, textiles and garments, and other manufactured items. Simultaneously, overseas remittance levels fell as the crisis enveloped agriculture, construction and low-skilled manufacturing sectors in Europe, where many Arab migrants (both documented and undocumented) were located. Finally, financial liberalization throughout the neoliberal period had exposed many countries to potential fluctuations in foreign capital inflows, notably of tourist spending and foreign direct investment.

In the Gulf, however, the crisis was experienced differently. Gulf countries were initially shaken by a short-lived drop in oil prices from July to December 2008 (and the associated fall in global demand), as well as a pull-back in foreign capital inflows that led to a collapse of the Gulf’s real estate bubbles (particularly in Dubai). But, in response, the Gulf utilized accumulated financial surpluses to support the large private and state conglomerates threatened by the crisis, launching massive programmes of spending on real estate and infrastructure projects (concentrated in Saudi Arabia and the UAE). Moreover, the Gulf monarchies were able to make use of their structural dependence on temporary migrant workers to shift the burden of the crisis onto neighbouring countries – the hiring of new workers slowed and existing workers could simply be sent home as projects were cancelled. By 2010, oil prices had begun to move upwards once more, further consolidating the Gulf’s path out of the global crisis.

Taken together, these different regional trajectories of the global crisis meant that the Gulf states were able to emerge in a regionally strengthened position in the years following 2008, whilst neighbouring Arab countries faced growing fiscal and social burdens. It was in this context that mass protests first emerged in Tunisia in December 2010, spreading rapidly throughout the entire region. The first phase of these protests in 2011 saw the overthrow of the Ben Ali regime in Tunisia and the Mubarak regime in Egypt. Governments in Syria, Bahrain, Jordan, Algeria, Oman, Morocco, Yemen and Libya were also faced with uprisings and protests expressing opposition to autocratic patterns of rule and the deteriorating socioeconomic conditions experienced by much of the population. In this sense, the uprisings targeted both the economic policies that had been so heavily promoted by Western financial institutions over the preceding decades, as well as the political structures with which they were twinned. Not all participants in the uprisings thought about the protests in this manner, of course, but the ubiquitous slogan of aish, hurriyah, ‘adalah ijtima’iyah (bread, freedom, social justice) make this fusion of the economic and political spheres quite evident.

Conclusion

Despite the aspirations of those who took part in the extraordinary struggles of 2011, the extreme polarization of wealth and power in the region has not been fundamentally altered. A recent study has shown that the Middle East is now the most unequal region in the world, with the richest 10 per cent of income earners capturing 64 per cent of total income – compared to 37 per cent in Western Europe, 47 per cent in the United States and 55 per cent in Brazil.[18] The figures are even starker for the ultra-rich population of the region: the income share of the top 1 per cent stands at about 30 per cent in the Middle East, compared to 12 per cent in Western Europe, 20 per cent in the US, 28 per cent in Brazil, 18 per cent in South Africa, 14 per cent in China and 21 per cent in India.[19] These unprecedented levels of inequality are present both at the regional level – between the wealthy countries of the Gulf and the rest of the Middle East – as well as within individual countries.

These high levels of inequality are directly attributable to the market-based development models of recent decades, which have remained essentially unchanged following the uprisings and which continue to be promoted by major IFIs. Such continuities were clearly demonstrated by the IFI-led Deauville Partnership, an initiative launched at the May 2011 G8 summit in France that promised up to $40 billion in loans and other assistance towards Arab countries ‘in transition’. The core premise of the Partnership was a redoubled effort towards market opening in five target countries – Egypt, Tunisia, Jordan, Morocco and Libya – with goals such as ‘remov[ing] existing structural impediments’, encouraging a ‘vigorous private sector’ as ‘the main engine for job creation’, and pursuing ‘regional and global economic integration [as the] key to economic development’. In this manner, and strikingly reminiscent of how the political and economic crises of the 1970s and 1980s had opened the path to structural adjustment in the region, the post-2011 crises were viewed as an opportunity to extend the policy trajectories of past regimes. As the European Investment Bank noted not long after the overthrow of Ben Ali and Mubarak, ‘moments of political change can also represent an opportunity to reinforce or improve already existing institutional frameworks’.

Backed by initiatives such as the Deauville Partnership, IFIs have moved since 2011 to expand their position in the region with the offer of new loan agreements and other forms of assistance. Long-established institutions such as the World Bank and IMF have led the way in this process, while working alongside other institutions that have only begun operating in the region during the last decade (such as the European Bank for Reconstruction and Development). The evolving discussions around post-conflict reconstruction in countries such as Syria, Yemen, Libya and Iraq are also marked by the same kind of market-driven logic, and – as history amply illustrates – the aftermath of war, conflict and crisis (including the current global pandemic) is frequently viewed as an opportunity to rework power arrangements and accelerate economic change.

A decade on, the experience of the 2011 uprisings demonstrates that it is not sufficient to focus solely on political demands (such as new elections or governmental corruption) without simultaneously tackling the social and economic power of capital (nationally, regionally and globally). There can be no fundamental break with authoritarian state structures under an economic system that continues to promote unfettered growth and so-called ‘free markets’ at the expense of social justice and equality. One of the major weaknesses of the 2011 revolts was a failure to recognize this strategic lesson. But more recent cycles of political protest – notably the 2018–21 uprisings across Lebanon, Sudan, Algeria, Morocco and Iraq – appear to have learnt from the 2011 experience, explicitly linking the challenge to autocratic political elites with the need to reverse the extreme disparities in the control and distribution of wealth. In this sense – while the aspirations of 2011 remain wholly unfulfilled – the lessons, experiences and hopes of that moment will form an indelible part of struggles to come.

Adam Hanieh is a Professor of Political Economy and Global Development at the Institute of Arab and Islamic Studies, University of Exeter.  His current research focuses on global political economy, development in the Middle East, oil and capitalism. He is the author of three books, most recently Money, Markets, and Monarchies:The Gulf Cooperation Council and Political Economy of the Contemporary Middle East (Cambridge University Press, 2018), which was awarded the 2019 International Political Economy Group (IPEG) Book Prize of the British International Studies Association.

Copy-edited by Ashely Inglis

A partnership with Rosa Luxembourg – North Africa & TNI

[1] This article draws on Hanieh, A. (2013) Lineages of Revolt: Issues of contemporary capitalism in the Middle East. Chicago: Haymarket Books.

[2] Schlumberger, O. (2007) Debating Arab Authoritarianism: Dynamics and durability in nondemocratic regimes. Palo Alto, CA: Stanford University Press. p. 5.

[3] Hanieh, A. (2021) ‘Class, nation, and socialism’, International Politics Reviews 9: 50–6-0. Available at: https://link.springer.com/article/10.1057/s41312-021-00104-2 [Accessed 26 July 2021].

[4] Cited in Stork, J. (1975) ‘US Strategy in the Gulf’, MERIP Reports 36: 19.

[5] Walton, J.K. and Seddon, D. (1994) Free Markets and Food Riots: The politics of global adjustment. Wiley-Blackwell. p. 171.

[6] See Hanieh, A. (2013) Lineages of Revolt, pp. 76–80, for further discussion of the figures in this paragraph.

[7] Ibid.

[8] See Bush, R. (ed.) (2002) Counter-Revolution in Egypt’s Countryside: Land and farmers in the era of economic reform. London: Zed Books.

[9] Prashad, V. Arab Spring, Libyan Winter. Oakland, Baltimore, Edinburgh: AK Press Publishing and Distribution. p. 111.

[10] Haddad, B. (2011) ‘The Political Economy of Syria: Realities and challenges’, Middle East Policy 18(2): 53.

[11] For Egypt’s military–economic links see Marshall, S. and Stacher, J. (2012) ‘Egypt’s generals and transnational capital’, Middle East Report 262(Spring); and Abul-Magd, Z. (2011) ‘The army and the economy in Egypt’, Jadaliyya, 23 December 2011.

[12] Wahba, J. (2010) ‘Labour markets performance and migration flows in Egypt’, in Labour Markets Performance and Migration Flows in Arab Mediterranean Countries: Determinants and Effects, European Commission Occasional Paper 60, Vol. 3. Brussels: European Commission. p. 34.

[13] Achcar, G. (2013). The People Want. London: Saqi Books. p. 31.

[14] Khalaf, A. (2014) ‘The Politics of Migration’, in A. Khalaf et al. (eds.) Transit States: Labour, migration and citizenship in the Gulf. London: Pluto Press. pp. 39–56.

[15] Hanieh, A. (2018) Money, Markets, and Monarchies: The Gulf Cooperation Council and the political economy of the contemporary Middle East. Cambridge: Cambridge University Press. p. 31.

[16] A commonly cited figure throughout the 2000s was that around 50 to 55 per cent of all Gulf Cooperation Council investments went to US markets, 20 per cent went to Europe, 10 to 15 per cent went to Asia and 10 to 15 per cent went to the Middle East and North Africa.

[17] From July 2007 to July 2009, the food consumer price index rose 53 per cent in Tunisia, 47 per cent in Egypt, 42 per cent in Syria, 22 per cent in Morocco, and 20 per cent in Jordan.

[18] Alvaredo, F., Assouad, L. and Picketty, T. (2018) ‘Measuring inequality in the Middle East 1990–2016: The world’s most unequal region?’, The Review of Income and Wealth (online). Available at: https://onlinelibrary.wiley.com/doi/full/10.1111/roiw.12385 [Accessed 26 July 2021]

[19] Ibid.

@font-face {font-family:”MS Mincho”; panose-1:2 2 6 9 4 2 5 8 3 4; mso-font-alt:”ＭＳ 明朝”; mso-font-charset:128; mso-generic-font-family:modern; mso-font-pitch:fixed; mso-font-signature:-536870145 1791491579 134217746 0 131231 0;}@font-face {font-family:”Cambria Math”; panose-1:2 4 5 3 5 4 6 3 2 4; mso-font-charset:0; mso-generic-font-family:roman; mso-font-pitch:variable; mso-font-signature:-536870145 1107305727 0 0 415 0;}@font-face {font-family:”Arial Unicode MS”; panose-1:2 11 6 4 2 2 2 2 2 4; mso-font-charset:128; mso-generic-font-family:swiss; mso-font-pitch:variable; mso-font-signature:-134238209 -371195905 63 0 4129279 0;}@font-face {font-family:Cambria; panose-1:2 4 5 3 5 4 6 3 2 4; mso-font-charset:0; mso-generic-font-family:roman; mso-font-pitch:variable; mso-font-signature:-536870145 1073743103 0 0 415 0;}@font-face {font-family:Garamond; panose-1:2 2 4 4 3 3 1 1 8 3; mso-font-charset:0; mso-generic-font-family:roman; mso-font-pitch:variable; mso-font-signature:647 0 0 0 159 0;}@font-face {font-family:”\@MS Mincho”; panose-1:2 2 6 9 4 2 5 8 3 4; mso-font-charset:128; mso-generic-font-family:modern; mso-font-pitch:fixed; mso-font-signature:-536870145 1791491579 134217746 0 131231 0;}@font-face {font-family:”\@Arial Unicode MS”; panose-1:2 11 6 4 2 2 2 2 2 4; mso-font-charset:128; mso-generic-font-family:swiss; mso-font-pitch:variable; mso-font-signature:-134238209 -371195905 63 0 4129279 0;}p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-unhide:no; mso-style-qformat:yes; mso-style-parent:””; margin:0cm; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:”Cambria”,serif; mso-fareast-font-family:”MS Mincho”; mso-bidi-font-family:Arial; mso-ansi-language:EN-GB; mso-fareast-language:JA;}p.MsoFooter, li.MsoFooter, div.MsoFooter {mso-style-unhide:no; mso-style-link:”Footer Char”; margin:0cm; margin-bottom:.0001pt; mso-pagination:widow-orphan; tab-stops:center 216.0pt right 432.0pt; font-size:10.0pt; font-family:”Times New Roman”,serif; mso-fareast-font-family:”Times New Roman”; mso-ansi-language:EN-AU; mso-fareast-language:X-NONE;}span.MsoEndnoteReference {mso-style-unhide:no; mso-style-parent:””; vertical-align:super;}p.MsoEndnoteText, li.MsoEndnoteText, div.MsoEndnoteText {mso-style-priority:99; mso-style-unhide:no; mso-style-link:”Endnote Text Char”; margin:0cm; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:”Cambria”,serif; mso-fareast-font-family:Cambria; mso-bidi-font-family:”Times New Roman”; mso-ansi-language:X-NONE; mso-fareast-language:X-NONE;}a:link, span.MsoHyperlink {mso-style-unhide:no; mso-style-parent:””; color:blue; text-decoration:underline; text-underline:single;}a:visited, span.MsoHyperlinkFollowed {mso-style-noshow:yes; mso-style-priority:99; color:#954F72; mso-themecolor:followedhyperlink; text-decoration:underline; text-underline:single;}span.EndnoteTextChar {mso-style-name:”Endnote Text Char”; mso-style-priority:99; mso-style-unhide:no; mso-style-locked:yes; mso-style-link:”Endnote Text”; font-family:”Cambria”,serif; mso-fareast-font-family:Cambria; mso-bidi-font-family:”Times New Roman”; mso-ansi-language:X-NONE; mso-fareast-language:X-NONE;}span.FooterChar {mso-style-name:”Footer Char”; mso-style-unhide:no; mso-style-locked:yes; mso-style-link:Footer; font-family:”Times New Roman”,serif; mso-ascii-font-family:”Times New Roman”; mso-fareast-font-family:”Times New Roman”; mso-hansi-font-family:”Times New Roman”; mso-bidi-font-family:”Times New Roman”; mso-ansi-language:EN-AU; mso-fareast-language:X-NONE;}.MsoChpDefault {mso-style-type:export-only; mso-default-props:yes; font-size:10.0pt; mso-ansi-font-size:10.0pt; mso-bidi-font-size:10.0pt; font-family:”Cambria”,serif; mso-ascii-font-family:Cambria; mso-fareast-font-family:”MS Mincho”; mso-hansi-font-family:Cambria; mso-bidi-font-family:Arial;}div.WordSection1 {page:WordSection1; mso-endnote-numbering-style:arabic;}

Around a year ago we were reminiscing about how a decade had passed since the mass protests in Alexandria (Egypt) in June 2010 against the police murder of a young Egyptian, Khaled Mohamed Saeed,[1] and since the start of the third Saharawi intifada in Gdeim Izik[2] (Occupied Western Sahara) in October 2010. We talked about how for us that marked the beginning of a life-changing epoch.

In the year that followed (2011) a wave of revolt spread throughout the whole Middle East and North Africa region, in what came to be called the ‘Arab Spring’.[3] These uprisings were acknowledged as world-shaking events. The Tunisian and Egyptian revolutions ignited historic upheavals in North Africa and beyond. People there celebrated the toppling of the dictators, Ben Ali and Mubarak, and looked ahead towards meaningful change in their lives. These uprisings, like most revolutionary situations, released enormous energy – a collective effervescence, an unparalleled sense of renewal and a shift in political consciousness.

The peoples of the region are all too familiar with the racist stereotype and contemptuous cliché embodied in the facile falsehood that ‘Arabs and Muslims are not fit for democracy and they are incapable of governing themselves’. The imperial and colonial dominance over the region has led to it being seen in some quarters as a homogeneous entity that can be systematically reduced through negative tropes. Seen through this distorting lens, the region evokes images of conflict and wars, ruthless dictators and passive populations, terrorism and extremism, as well as rich oil reserves and expansive deserts. This orientalist imaginary and the rigid representation of ‘the other’, as well as having the power to ‘block narratives’, are hallmarks of a political and geographic violence that is produced by imperialism.[4]

The uprisings shattered many of these stereotypes and debunked many myths. The wind of revolution that began to blow in 2011 spread from Tunisia to Egypt, Libya, Syria, Yemen, Bahrain, Jordan, Morocco and Oman. The emancipatory experience was contagious, inspiring people all over the world: activists in Madrid, London and New York, whether calling themselves the Occupy Movement or the Indignados, were all proud to ‘Walk like an Egyptian’. Although the last three to four decades have seen attempts to delegitimize meaningful and radical change through revolution, following the shortcomings and defeat of decolonization efforts in various parts of the global South, and although counter-revolutionary onslaughts will always seek to crush the will of the people – revolutions and uprisings for emancipation continue (and will continue).

For both of us, as for many activists, the pride and hope that these events generated remains deeply personal and political. Our career paths, activism and world-views were shaped by this formative political experience. We participated in conferences/round-tables celebrating and analysing these historical events, we marched with our peoples in protests, and we were involved in various solidarity initiatives. We discussed, debated and disagreed with friends and comrades. Sometimes we felt hopeful, at others sad and dispirited. Above all, we learnt a great deal: engaging with revolutionary praxis offers a unique source of knowledge.

Nevertheless, we cannot deny that what started as inspiring uprisings against authoritarianism and oppressive socio-economic conditions, demanding bread, justice and dignity, morphed into violence and chaos, profound polarizations, counter-revolution and foreign intervention. The various people’s movements in the region found themselves pitted against entrenched authoritarian and counter-revolutionary forces bent on suppressing them. All were met with resistance from the state, often in conjunction with global capital and foreign interference. The military coup in Egypt ended up restoring a much more ruthless and repressive form of dictatorship. The brutal descent into civil wars in Syria, Libya and Yemen, and the series of crackdowns in Gulf countries like Bahrain, provide examples of the cruel logic of proxy war so reminiscent of the colonial schemes with which the region and its people are all too familiar. Tunisia, which had seemed to be the exception in this gloom and doom, is now in a very fragile position. Moreover, the deep polarizations (e.g. Islamists versus secularists) imposed on the masses have distracted them from the key socio-economic issues that were at the heart of the uprisings in the first place.

Some mainstream commentators have argued that the ‘Arab Spring’ gave way to an ‘Islamist winter’ (with Islamist forces coming to power in some countries). Some progressive voices have been less pessimistic and have presented a more historically nuanced perspective, arguing that these events should be seen as part of a long-term revolutionary process, with ups and downs, periods of radicalization and periods of setback and counter-revolution. This latter view received some vindication when, eight years after the 2010/11 events, an escalation of the revolutionary process took place, in the form of a second wave of uprisings in Sudan, Algeria, Iraq and Lebanon (2018–21), alongside the return to the spotlight in 2021 of the unending and heroic struggle of the Palestinians – all of which reveals people’s determination to continue fighting for their rights and sovereignty.

All of these momentous events between 2010 and 2021 have opened new horizons for people to express their discontent and demand radical change and reforms, forcing almost every government in the region to concede on issues – both political and economic.

Why a project to commemorate this decade of struggle in the region?

When we embarked on this project our guiding compass was the important role of memory in our movements for justice and freedom, and the crucial task of maintaining an archive. Our political memory is not an automatic process, like muscle memory; rather, it is shaped by the political and economic conditions in which we exist. The nurturing of political affinity and the maintenance of radical kinship does not occur in a vacuum – it must be fed, to be kept alive. To be archived and reflected upon. Anniversaries provide one occasion for such activities, and that is what this project represents. The project includes webinars [hyperlinks] and podcasts [links], together with the articles collected here, all of which can help us to look at the concrete within what are sometimes too-abstract debates, and to engage with some less visible cases.

One of our aims in this project has been to challenge a number of misconceptions about the region, its people and their revolts and uprisings. One such misconception was the attempt by the global and mainstream media, Western governments, as well as international financial institutions, like the World Bank, to portray the uprisings as merely revolts against authoritarianism and as demanding only political freedoms and democracy of the stunted kinds that exist in Western industrial countries. This framing steers away from any class analysis and tends to dissociate the political from the economic, ignoring the fundamental socio-economic demands of bread, social justice, dignity and popular sovereignty. But the misreading – or more accurately distortion – did not stop there. The Tunisian and Egyptian uprisings were dubbed by Western mainstream commentators ‘Facebook and Twitter revolutions’, exaggerating the role of social media in fomenting them. Another dominant – but no less superficial – framing was the demographic one, which interpreted the revolts as primarily youth uprisings against the older generation – the product of a ‘youth bulge’ in the affected countries.

A decade later, mainstream interpretations commemorating the tenth anniversary of the events have gained little by way of insight. Several media reports and articles talk of failed and lost revolutions and broken promises. But the dominant tone is captured by a title of one Guardian article published in December 2020, referring to Mohamed Bouazizi, the street fruit vendor who set himself on fire, catalysing the Arab uprisings: ‘He ruined us: 10 years on, Tunisians curse man who sparked Arab Spring’. The narrative advanced is one of despair and hopelessness: the uprising was not worthwhile, better to have remained in poverty and in chains. Such an interpretation needs to be strongly challenged and deconstructed in order to offer a more nuanced and less idealist (more materialist) reading of revolution and what it entails. Various critical progressive activists and researchers have emphasized the importance of acknowledging the complexities of revolutionary dynamics and their inevitable crises, shortcomings and even failings.[5] This necessitates seeing revolutions as being imbued with counter-revolutionary tendencies and encroached upon by reactionary forces. The fact that people in the region are continuing to revolt is testimony to this complexity. Ultimately, the ideas people hold about revolutions have a critical impact on the outcomes of such events when they actually occur; hence the necessity of reflecting and learning from past revolutions.

Throughout this project we have sought to make space for critical reflection: we prioritized an inclusive approach regarding different disciplinary views and political emphases, and in the process gave a platform to younger, female and local voices from the region – the least we can do. We hope we have eschewed rigid dichotomies, as well as self-righteousness as regards possession of ‘the truth’ – a desire that stems from our rejection of sectarian and polemical styles and behaviours, which can too easily morph into personal attacks. One outcome of this collaboration has been to learn to disagree and to work respectfully in a comradely fashion, and to continue the discussion in a constructive way. Anyone who is engaged in the issues presented in this project will be all too aware of how the nefarious effects of trench positions (campism) have weakened progressive possibilities for meaningful engagement over the years. So often we have seen debates about Syria or Libya, for example, turn into deeply polarizing (and often false) binaries – alienating participants and choking off productive debates regarding revolutionary strategies and international solidarity. Ultimately, how exactly we can reconcile certain positions (e.g. anti-authoritarian versus anti-imperialist) will be put to the test in our movements, but we should never absolve ourselves of our duty to argue against selective political positions. One case of freedom should be in the service of – not expendable in pursuit of – another. This was powerfully captured during one of our webinars between our Moroccan and Saharawi participants.

Summary of the articles

The contributors to this dossier are outstanding scholars and activists from, or having their roots in, the region.[6] They were given the choice to write either in Arabic or English. All pieces are offered to our readers in both languages.

In his piece, Adam Hanieh delves into the root causes of the regional uprisings through a historical and political economy approach. By describing in detail some of the lineages of the revolt that broke out in 2011, he deconstructs the mainstream liberal framing of the region and its uprisings. He argues that we must pay attention to the region’s centrality to the world economy, and how its political structures are directly reflective of the capitalist development that has taken place in the region over the last few decades.

Ghassen Ben Khelifa takes us back to 2010–2011, when Tunisian people who desired to live in dignity rose up to claim their rights. He takes a very critical look at the initial events that constituted Tunisia’s intifada and shows how it has now been contained, if not aborted. He cogently challenges the ‘exceptionalist’ framework around the Tunisian experience by showcasing a series of counter-revolutionary imperial and neoliberal measures designed to strangle the revolution and its economic demands.

Mostafa Bassiouny and Anne Alexander argue in their piece that any attempt to understand the course of the 2011 Egyptian revolution must necessarily grapple with the role of the workers’ movement. They show how workers’ struggles were an independent factor in the revolutionary process. They also underline the importance of ‘reciprocal action’ between the economic and the political aspects of the class struggle, and how this process played a pivotal role in the revolutionary developments in Egypt.

Fourate Chahal delivers beautiful and evocative illustrations for all the articles in this dossier. She also offers us some exquisite and powerful artistic collage, capturing the beauty, creativity and the energy released by various uprisings through graffiti, art, slogans and the recapturing of public spaces by people in revolt.

In his contribution, Ali Amouzai critically reflects on the historic February 20 Movement in Morocco, which arose in 2011, and details the balance of political and social forces that preceded it. Then, he describes and analyses the reaction of the monarchy to this threat to its rule, which took the form of repression, cooptation and containment. He also shines a light on Morocco’s role as an outpost of imperialist designs in the African continent, while continuing to resist the right to self-determination of the Saharawis.

Rafeef Ziadah argues that one of the major outcomes of the uprisings has been the increased role of regional players in multiple states, working to stabilize the political system to their advantage. With a focus on Libya and Yemen, she examines the various modes of intervention applied by the United Arab Emirates and Saudi Arabia, including direct military campaigns, the use of proxies, financial aid and humanitarian packages – all working in tandem to shape a regional outcome that has buttressed the status quo against the initial hopes of change offered by the uprisings.

Yasser Munif starts his article by examining bread as a central commodity in times of war and peace, offering an overview of the agrarian reform implemented by successive regimes in Syria from 1963 to 2000. He then focuses on the weaponization of bread as an important military strategy of the Assad regime during the revolt in Syria, while giving us a glimpse of the rebels’ grassroots resistance, using the city of Manbij in northern Syria as a case study.

Muzan Al Neel’s contribution focuses on the 2018–2019 Sudanese revolution and explains why the Sudanese rose up, and what it was they wanted to overthrow when they chanted ‘Just fall’. She analyses the current moment and the role of the transitional government, and its evolution vis à vis the uprising’s objectives. She ends by exploring the ways the Sudanese uprising could and should continue to achieve its goals in the face of the counter-revolution.

Zahra Ali puts forward a feminist analysis of the Iraqi uprising of 2019. Based on her in-depth fieldwork conducted with women and youth networks and social movements in Iraq, she takes the 2019 uprising as a framework for thinking about how massive protests allow for an understanding of emancipation that broadens our feminist imagination, paying particular attention to the spaces the uprising produced.

Hamza Hamouchene adopts a Fanonian lens to analyse the 2019–2021 Algerian uprising,  and argues for the rationality of rebellion in the context of the new popular movement (Hirak) in Algeria – a movement that he argues represents a continuation of the decolonization process. He also connects the uprising in Algeria with the Black Lives Matter movement in the United States and considers what Fanon’s thought has to offer to these and other struggles for economic and political justice.

And last, but not least, Rima Majed applies a comparative approach and asks what the Iraqi and Lebanese  uprisings of 2019 have in common beyond a regional/cultural proximity. She first discusses whether these uprisings can be termed ‘revolutions’ or ‘revolutionary’ in the first place. She then focuses on the internal contradictions of these revolutions, looking at the rhetoric of corruption, national unity, technocratic politics and individualism.

Looking back – looking forward

Anniversaries have a symbolic power and can be good opportunities for taking stock of what happened, and for reflecting on the positives and negatives. They can also be dynamic moments where we think about how to move forward. Our aim is not to reminisce about the beautiful times that are long gone, or to romanticize these great historical events. Instead, in this project we hope to get closer to the spirit of the revolutions, their creative energy, as well as their contradictions and shortcomings – and their enemies.

Obviously, this project has some lacunas – things that are not addressed. This is partly due to our own limits, in terms of our labour and time, and partly due to the limits of a project whose raison d’être is bound to a certain moment in time. In truth, revolutionary processes are always unfinished. The same goes for political praxis, which includes writing about revolutions. And although we would not pretend, or seek, to be fully comprehensive when discussing such a vast region, we hope we offer here an important glimpse, in the voice and the language of its people. What we have sought to present is a progressive analysis that can contribute to deepening our knowledge about the region – with the hope that this will allow us to learn from past mistakes and continue to push for long-sought change in the prevailing oppressive political and socio-economic conditions.

Our memories of the incredible events over the last decade have been foundational. We feel privileged to have witnessed people acting with a political stamina and bravery that can only be termed ‘historic’. Our minds have been enlightened and our spirits elevated by the countless ordinary men and women who dared to say ‘the people want’ [al sha’b yourid], and who rose up in unprecedented circumstances. We inherit their legacy, and the enormous price paid to arrive at a tipping point from which neither the friends nor the enemies of revolution can return. There are few things as powerful as ordinary working class people overcoming all the odds and shaking the very foundation of the status quo.

‘The personal is political’ proclaims the feminist maxim. ‘Nothing about us goes without us’ runs the motto of the disability struggle. In the spirit of these two messages we wholeheartedly thank all of the contributors to this project, who bring their perspectives as scholars and activists in and from the region. And we pay tribute to the fallen, the injured, the political prisoners and the ones who continue to struggle. We dedicate this work to them, and to all those who have sacrificed their lives for bread, justice and dignity.

Miriyam Aouragh is a Dutch-Moroccan anthropologist. She is a Reader at the Communication and Media Research Institute, University of Westminster. She is the author of the book Palestine Online and the forthcoming Mediating the Makhzan.  Her research and writings focus on cyber warfare, grassroots digital politics and (counter-) revolutions.

Hamza Hamouchene is a London-based Algerian researcher-activist, commentator and a founding member of Algeria Solidarity Campaign (ASC), Environmental Justice North Africa (EJNA) and the North African Food Sovereignty Network (NAFSN). He is currently the North Africa Programme Coordinator at the Transnational Institute (TNI).

Copy-edited by Ashley Inglis

References

[1] The murder by Egyptian police of Khaled Mohamed Saeed, and the outrage it provoked, contributed to the growing discontent in the weeks leading up to the Egyptian Revolution of 2011.

[2] Gdeim Izik was a protest camp in Western Sahara, established on 9 October 2010 and maintained till November that year. While protests were initially peaceful, they were later marked by clashes between Saharawi civilians and Moroccan security forces. Some have referred to the protests as the Third Saharawi Intifada, following the First (1999–2004) and Second (2005). Scholar and political activist Noam Chomsky has suggested that the month-long protest encampment at Gdeim Izik constituted the start of the Arab Spring.

[3] The term Arab Spring is an allusion to the Revolutions of 1848, which are sometimes referred to as the ‘Springtime of Nations’, and to the Prague Spring in 1968 , as well as later uprisings in Central and Eastern Europe in 1989. This term was been coined, and has been promoted by, Western media and pundits, and has been criticized by some scholars as part of a US strategy of controlling the movement’s aims and goals and directing it towards Western-style liberal democracy. However, it is important to acknowledge some positive uses of the term Arab Spring, and how it makes a link with earlier historic uprisings in the region, such as the Berber Spring of 1980 in Algeria and the Damascus spring of 2000.

[4] Said, E. (1984) ‘Permission to narrate’, Journal of Palestine Studies 13(3): 27–48.

[5] Bayat, A (2017) Revolution without Revolutionaries: Making sense of the Arab Spring. Stanford: Stanford University Press. See also Traboulsi, F (2014) Revolutions without Revolutionaries. Beirut: Reyad El-Rayyes Books.

[6] We note briefly here the various ways the authors in this dossier refer to the region that is the focus of this project. Some use ‘Middle East’ or ‘Middle East and North Africa (MENA)’. Others refer to the ‘Arab region’ or ‘Arab world’, while others go for the less-used coinages ‘North Africa and West Asia (NAWA)’ or ‘West Asia and North Africa (WANA)’. Our own view is that if we are committed to advancing counter-hegemonic narratives that challenge structures of power, and to decolonizing concepts and names, it is only fitting to call into question the colonial designation ‘Middle East’ – a construct of, and designed to sit in opposition to, the West; part of the legacy of Orientalism, of creating an ‘other’. We are sympathetic to the use of ‘Arabic region’, but without its ethnic connotations. We acknowledge that this naming can arouse feelings of exclusion and oppression among some. No naming is perfect, and each has its own limits. In our view, without trying to efface the rich shared cultural and political legacies in our region, a reference rooted in a geographic identification, such as North Africa and West Asia (NAWA), is a more apt description.

This dossier of articles is published in collaboration with the Transnational Institute (TNI) and Rosa Luxemburg Foundation – North Africa.

The Fakhfakh government announced a fundraising hotline to collect donations for the national health system and revealed the reorganizing of budget spending priorities in order to reallocate an overall amount of 2,500 billion TND ($860 million) to support small and medium enterprises (SME) and companies suffering from the economic shutdown. The government also agreed to transfer 200 TND ($68) as a social safety net to the 600,000 poorest families for the month of April. So far, an additional 1.4 million Tunisians requested this aid, and the number of applications for emergency cash assistance is expected to rise. The government extended this monthly allocation to May as the targeted lockdown was extended. Other emergency policies include mortgage and loan freeze for middle-income households, a freeze of social contributions from the private sector from three to six months, and a reduction by the central bank of the interest rate by 100 basis points in order to preserve the demand side. However, these measures were generally perceived as insufficient especially with attempts of banks and companies to violate the imposed measures and the agreement with the government to maintain salary payments for workers forced into confinement. Therefore, a great discontent emerged between different classes (workers and business owners), between the private and public sector, and between different unions due to the general belief that some will pay more for the others^[2].

This feeling of injustice is not unfounded as social and fiscal injustice have persisted during decades of economic and fiscal policies guided by austerity measures imposed by international financial institutions (IFIs) and donor countries, and even more so after the 2011 revolution. As a result, workers’ rights have been undermined and their struggles criminalized^[3].

This situation is exacerbated by the government officials’ belief that guaranteeing salary payments in Tunisian Dinar, social transfers to the poorest, and doing “Whatever it takes” to preserve jobs and income for workers and households, can only be done through taxation, or new debts or by collecting donations, or through threatening the rentiers capitalist class by a hypothetical wealth tax measure.

While Tunisia is a currency issuer state and is not fiscally constrained, the Central Bank of Tunisia (CBT) could have accommodated the government’s plan to stabilize the income of the most vulnerable people without fearing inflation, especially in this context of international trade contraction, instead of allowing banks and the financial sector to take advantage of this crisis by seeking more profits, from high-interest rate lending to the state, and by investing public money in non-productive sectors.

This is a political decision that could have been made by the Chief of Government when legislative power was delegated to him at the end of March, but unfortunately such a proposal –of allowing the CBT to accommodate government deficit limited to 5% of GDP- was strangely deleted from the last version of the delegation law.

A new loan with new conditions

Regrettably, the government made another political decision to prioritize external debt servicing and to acquire even more external debt.  Indeed, on the 14th of April, Tunisia and the IMF announced an agreement for the disbursement of a new loan: The Rapid Financing Instrument (RFI) worth $745 million – the second-biggest disbursement by an African country after Côte d’Ivoire – to support “the government’s efforts to contain the pandemic.”

Taking a closer look at the letter of intent^[4] jointly signed and sent by the finance minister and the central bank governor, we find that the loan is conditional, despite the government claiming otherwise. In fact, there are immediate and future commitments that predicate the continuation of the same dependency policies that may jeopardize any attempt by Tunisia to create a more resilient and sovereign economic model.

Indeed, the immediate commitment consists of a reduction of investment in non-priority projects without any clear definition of such projects. The announced budget cuts included the canceling the procurement of cars for government officials, flours and roses for the presidential palace, but most impactful, the reduction of fuel subsidies^[5], the increase in the price of tobacco, the increase in water distribution cost, and the freezing of subsidized fuel and food vouchers for public servants. Already one day of work was cut from workers’ payroll in the private and public sector as a compulsory contribution to the government’s efforts to “collect” funds, this one-day salary cut included healthcare workers and workers in essential and strategic sectors who continued to serve during the pandemic. Farmers also contributed with 1% of their turnover on the wholesale markets, while banks, financial institutions, and large profitable corporations were left free to contribute to the donations fund voluntarily based on their goodwill.

All of these measures will have a negative impact on the income of the vast majority of the marginalized people, unemployed, low wage workers, but also the middle class, which is mostly composed of public employees, while the capitalist class continues to enjoy the special fiscal status that provides them with tax cuts, especially for companies whose activity is 100% export-oriented.

The government also committed to increasing natural gas prices after the Covid-19 crisis eases. Authorities will put a strain on its workforce by freezing promotions and limiting overtime hours in the public sector to prevent any new wage bill surge for 2020. The government is also negotiating with the Tunisian General Labor Union (UGTT) so that any planned salary increases for 2021 will not exceed the inflation rate. In addition, an audit of the public sector will be performed to reduce absenteeism and ‘ghost’ workers. This may announce hard bargaining times between the government and the national union as the weight of the crisis will mainly be borne by labor, not capital. The UGTT played a major role during the last round of IMF negotiations to push back against reforms that were mainly targeting public sector privatization, wage cuts and a reduction in the number of public sector employees working in local administrations, and strategic sectors like water, energy, transport, education, and health.

As for the limited participation of private banks and financial institutions in the national effort to support SMEs and households, and the non-compliance of some banks to the CBT’s decisions to freezing loan payments, the Ministry of Finance, Nizar Yaïche, reiterated the holy principle of CBT independence. This principle, included in the new statute of the CBT, was also imposed by the 2016 loan agreement with the IMF whose main objective was to prohibit the CBT from directly financing government deficits via treasury bond purchases and to maintain legal independence in policymaking from the central government, even though most of CBT policies are guided by the IMF staff priorities and in agreement with their recommendations.

Although central banks of advanced economies have undertaken massive if not unlimited liquidity injections, to support their economies and support workers whose livelihoods have been adversely affected, this option has been denied for Tunisia. The IMF had the Central Bank of Tunisia commit to not interfering in the foreign exchange market, or limiting foreign transfers (dividends, debt repayments), trade transactions, or entering into bilateral payment arrangements with other countries. Moreover, the IMF imposed that any loan guarantees or subsidies to companies should be borne by the government rather than the Central Bank. With these prescriptions, the IMF clearly plays the role of a self-appointed watchdog of global capitalism. What worries the IMF is the leeway that countries like Tunisia could leverage with their sovereign currency, should their central bank unleash more robust counter-inflationist policies and national rights-based economic stimulus targeting full employment and rebuilding local productive capacity. That is why policing central banks have always been central to the IMF conditionalities.

As for future commitments, the government is planning to permanently reduce subsidies for electricity and natural gas, and to make social safety nets are offered on a temporary rather than permanent basis. This is part of the general neoliberal orientation maintained by the IMF to cancel governmental subsidies as they are considered distortions to market equilibrium. These reforms may certainly apply later to the few products that are still subsidized in Tunisia, namely wheat and semolina flour, sugar, vegetal oils, milk, and tomato paste (the latter are price-settled), all of which are really important food staples for Tunisian consumers, as shown during the COVID-19 crisis. Price-subsidized basic products are a sensitive issue for most Tunisians since the monthly minimum wage for a Tunisian worker is only 403 TND ($140 per month) for 48 hours/week. For a long time, subsidizing basic commodities was a necessary strategic decision for governments to maintain social peace in an economic environment of a race to the bottom wage policies.

Last but not least, to obtain this RFI disbursement, the Tunisian government committed to starting a new IMF program (Extended Fund Facility) in the third quarter of 2020, which will also include a number of painful reforms, as Nizar Yaïche, the Finance Minister stated in his recent interview with Bloomberg News.

While this Covid-19 pandemic allowed debt servicing relief for 25 African countries, Tunisia was excluded from this debt relief program announced by the G20. On the contrary, the new IMF loan is expected to be a lever to other loans from the G7 and international financial markets. The European Commission also announced a new Macro-Financial Assistance (MFA) of €600 million that will help fill the gap of debt servicing tranches which will be due in 2020 and 2021. These MFAs, like former ones that “benefited” Tunisia, were also a European Commission tool to secure its trade-related interests.

It must be noted that the amount allocated to debt servicing in the government’s budget exceeds 11 billion TND ($3,78 billion) for 2020, which is one-quarter of the government’s budget, more than six times the budget allocated for the ministry of higher education and scientific research, 35 times the investment allocation for education, and five times the budget of the ministry of health^[6]. In 2019, more than 4,000 health workers left public health services and were not replaced.

Can Modern Monetary Theory solve Africa’s debt crisis ?

This deal with the IMF is, in reality, imposing an unwarranted burden on government spending, and as a consequence, will tighten the government’s fiscal policy space which would hinder the prioritizing of health, education, universal public services for its population. However, more deceivingly, this deal is making it less likely for Tunisia to launch any new green infrastructure and a job guarantee program^[7] that may act as a stimulus and a stabilizer of economic activity; which could, in turn, protect people’s lives and dignity, especially if the central bank continues its high-interest rate policy focus, and ignores its role in financing the budget deficit or supporting any national rights-based recovery program.

The recent decision of the G20 to relieve some financial constraints on the poorest countries that are liable to find themselves in default is only aiming to avoid an imminent ‘sovereign debt default domino effect’ without addressing the structural deficiencies of developing countries or addressing the root causes of their balance of payment (BoP) deficits^[8].  At the same time, they would approve new concessional loans to countries with fewer financial difficulties, well-controlled markets (like Tunisia), and continue making these loans conditional based upon limiting government spending and deficits, excluding the central bank as an important policy tool, and making sure there are no capital controls or constraints on trade.  This strategy maintains the dependency relationship with creditor countries who need market access in developing countries where they can sell high value-added products, and where they can buy cheap factors of production and resources at stable and affordable prices.

Is this strategy sustainable?

One might, however, wonder to what extent and under which circumstances can this strategy be sustainable. The answer may be found in the blog post[9] of the IMF managing director Kristalina Georgieva who stated “But more lending may not always be the best solution for every country. The crisis is adding to high debt burdens and many could find themselves on an unsustainable path. We, therefore, need to contemplate new approaches, working closely with other international institutions, as well as the private sector, to help countries steer through this crisis and emerge more resilient.”

In reality, “supporting the government’s efforts to contain the pandemic”, could be understood in IMF’s terms as directing the government’s efforts to secure private and multilateral debt servicing, international trade, capital transfers for international investors and opening the door to more lucrative, speculative, rentier profit-making private investments, through private-public partnerships in strategic sectors, further commodification of public goods, and greenwashing that will ultimately lead to more capital accumulation.

To make it clear, the imperialist countries controlling these multilateral institutions (like the IMF, the World Bank, the WTO, ..) are desperately trying to maintain their dominance and the privileged status of their currencies in an increasingly multi polarized world for the benefit of the financialized transnational capitalist classes.[10]

Nevertheless, one hope still persists for most Tunisians: that the revolution of dignity achieves two out of three objectives for which people died, jobs and dignity.

If there is something to learn from this pandemic, it is that today more than ever, a job guarantee program is needed: namely, a green economic program supported by the government, the central bank, and public banks, and in cooperation with the private sector (subject to workers’ rights and environmental protection), managed locally, relying on the real resources and productive capacity of the country, and addressing the real needs of its population, respectful of its climate specificities and water scarcity. Guaranteeing jobs in sustainable agriculture – aiming at ensuring food sovereignty, safe and affordable food – jobs in green infrastructure, using solar, wind and hydroelectric energy to end the fossil fuel economy, and investing in the high value-added industry, in healthcare, childcare, eldercare, education, culture, community building, R&D, and in the local pharmaceutical industry to delink the dependence on big pharma’s speculation on people’s health.

Jobs, decent wages, and bold social rights to restore economic sovereignty and a healthy environment are now necessary for Tunisia’s post-covid-19 recovery. This is the only way for the government to address the root causes of the balance of payment structural deficiencies and the only political ground for the progressive movements’ struggle to end decades of economic dependency. Recent initiatives from Tunisian women and men, engineers, unemployed, students, researchers, practitioners, textile workers, farmers, and civil society during the Covid-19 pandemic to develop solidary local, innovative and autonomous solutions to save our lives are proof that a sovereign, prosperous, and sustainable Tunisia is not an impossible reality, but is rather within reach.

^[1] By End of May the number of total cases counted to 1,084 cases, and 48 deaths, which makes Tunisia one of the few successful countries in managing the pandemic.

^[2] https://orientxxi.info/magazine/tunisie-qui-paie-le-prix-du-coronavirus,3784?fbclid=IwAR0bx85c0zHiY0Hf1NnTsw_ALPXmFnR4N1dKxHNaljiQNyN5mRyQ3Rj8Uq0

^[3] See https://rosaluxna.org/wp-content/uploads/2020/02/What-Democracy-for-Tunisian-Workers.pdf

^[4] https://www.imf.org/~/media/Files/Publications/CR/2020/English/1TUNEA2020001.ashx

^[5] While international fuel prices were collapsing, the internal market prices were very slightly declining, in reality, the consumer is paying an internal price per liter higher than the international price, which makes the consumer subsidizing the government’s loss from falling quantities and not the way around.

^[6] http://www.finances.gov.tn/sites/default/files/2020-02/Loi_finances_2020_fr.pdf

^[7] To learn more about Job Guarantee program for developing countries, African economic and monetary sovereignty, colonialism and independence see the work of Fadhel Kaboub and Ndongo Samba Sylla

http://macroncheese.com/the-spectrum-of-monetary-sovereignty-in-developing-nations-with-ndongo-samba-sylla-and-fadhel-kaboub

https://www.youtube.com/watch?v=HctT4HjgChY

https://urpe.wordpress.com/2019/02/07/fadhel-kaboub-on-monetary-sovereignty-colonialism-and-independence/

https://www.youtube.com/watch?v=xD6mUDRwZ7k

https://www.rosalux.de/en/news/id/41681/modern-monetary-theory-in-the-periphery?cHash=1400f4d40c2caba146cfcd7cd8d19bcc

^[8] Ndongo Samba Sylla explains here how Senegal and other non-monetarily sovereign African countries are trapped in a permanent external debt cycle https://www.rosalux.de/en/news/id/42302/how-foreign-debt-undermines-sovereignty?cHash=71f2e5caaec2a503268898ea98b7db2a

[9] https://blogs.imf.org/2020/04/20/a-global-crisis-like-no-other-needs-a-global-response-like-no-other/

[10] For more information on the Bretton Woods institutions’ response to covid-19 crisis, see the biannual analysis of the World Bank and IMF Spring and Annual Meetings of the Bretton Woods project : https://www.brettonwoodsproject.org/2020/04/spring-meetings-amid-covid-19/

See also the works of Radhika Desai on Geopolitical Economy, and multipolarity and her more recent commentaries on WHAT IS TO BE DONE? A MANIFESTO FOR POLITICS AMID THE PANDEMIC AND BEYOND https://canadiandimension.com/articles/view/political-hope-rises

Is indebtedness really irredeemable? And can monetary sovereignty as defined by Modern Monetary Theory (MMT) settle African states problems with their creditors? These questions, among many others, have been debated in a 4-day conference held in Tunis, under the theme “The quest for economic and monetary sovereignty in 21st century Africa”.

From November 6th to 9th, economists gathered by The Rosa Luxembourg Foundation, the Global Institute for Sustainable Prosperity (GISP) and the Politics of Money/DfG Network have examined the history of Africa’s debt and analyzed its political, economic and social implications for the continent’s 54 states.

Africa’s debt: a burden of the past

When examining sovereign debt through the lens of history, many speakers first identified the moment of independence (1950’s – 1960’s) as a turning point. African countries then moved from wealth-generating colonies to theoretically independent countries. But the yoke of political and military colonization had been replaced by the burden of an increasingly growing public debt.

The freshly independent states inherited a heavy colonial debt. This debt transfer has been described as “illegitimate” and “illegal” by several civil society movements in Africa and around the world.

Since its creation in Belgium in 1980, the Committee for the Cancellation of the Third World Debt (CADTM) has been denouncing the “collusion” between ex-colonizers and IFIs.  “The World Bank is directly involved in some colonial debts. In the years 1950’s and 1960’s, it granted loans to the colonial powers for projects allowing them to maximize their colonies exploitations”, Robin Delobel, member of CADTM-Belgium wrote earlier this year.

Also read (FR) : Franc CFA: Saga d’une monnaie (néo) coloniale 

In his article entitled “When will reparations for colonial debt be made?” the activist pointed out that “debts contracted with the World Bank by the Belgian, English and French authorities for their colonies were then transferred to the countries that gained their independence without their consent”.

There came the advent of neocolonialism.

Then came the 1970’s, a decade of massive developments plans. African governments undertook large-scale projects and borrowed heavily to finance the construction of dams, ports, hospitals, railroads and schools. It was promoted by IFIs that external finance would grant prosperity. However, by the mid 1980’s, most governments found themselves overwhelmed by debt and debt service that had to be paid in foreign currency.

Besides, not all the loans were used to build infrastructure and generate growth. Many post-colonial governments were ruled by the military and armed conflicts were recurrent in several regions of the continent. A study published by the Stockholm Peace Institute in 1971 and quoted by the monthly magazine Africa, showed that during the period between 1950 and 1969, Egypt’s major weapon imports reached 1500 million US dollars. That was more than half the total arm imports of all other African countries during the same period. Corrupt regimes and dictators have also contracted debt for their own benefit.

It was promoted by IFIs that external finance would grant prosperity. However, by the mid 1980’s, most governments found themselves overwhelmed by debt and debt service that had to be paid in foreign currency.

Faced with this risk of insolvency, and in an unprecedented neoliberal intransigence, IFIs, such as the International Monetary Fund (IMF), began to impose Structural Adjustment Plans (SAP) on their debtors. In order to benefit from IMF’s loans and finance, their teetering budgets and balance of payments, indebted governments were forced to liberalize their markets and privatize several state-owned companies. But these so-called reforms, which first meant to enforce payment, were paradoxically (enough) constraining any possible future debt settlement.

The trap of indebtedness

Tunisia is one of the countries that have been stuck in this trap. Since the 1970’s, the government has become literally obsessed with foreign direct investments. It adopted laws (in 1972, 1993 and 2016) that granted generous tax and financial incentives to foreign, yet low added-value, investments.

Tunis has thus deprived itself of a huge amount of tax revenue. “We identify these tax incentives as tax expenditures, because it is a shortfall for the state,” said Amine Bouzaiane, the Tax Justice Officer at the Tunisian NGO, Al Bawsala.

Tax incentives proved to be ineffective and costly, even by the IMF, as foreign investors would have invested even without these incentives.

“Experience shows that there is often ample room for more effective and efficient use of investment tax incentives in low-income countries. Tax incentives generally rank low in investment climate surveys in low-income countries, and there are many examples in which they are reported to be redundant—that is, investment would have been undertaken even without them”, the Washington-based institution stated in a report published in October 2015.

Another self-inflicted constraint is the money lost due to free trade agreements (FTAs) and the “so called Tunisia’s open trade policy”. “Before the first SAP in the 1980’s, tariffs duties represented 25% of Tunisia’s tax revenues, in the 2020 draft finance bill the rate is about 5%”, Bouzaiane told law students at a lecture held earlier this month in Tunis.

Read More (FR) : ALECA/Tunisie: Quel impact des prêts UE sur les négociations? (Interview)

These unfavorable terms under binding FTA’s and investment treaties have been criticized worldwide by activists and economists like Prabhat Patnaik, Professor Emeritus at the Center for economic studies and planning at Jawaharlal Nehru University, New Delhi.“If governments have a popular mandate, they should withdraw from these treaties”, he told Barr Al Aman.

Over the last decade, Tunisian authorities have been overwhelmed by new dilemmas. The government responded to the outrage over unemployment by massively hiring in the public sector, which led to an inflated wage bill. Besides, corporate tax revenues have been shrinking as companies have been less productive. The country’s phosphates revenues have also declined due to protests over employment, transparency and fair development in the mining region.

In 2010, the state budget deficit was about TND 650 million (1% of GDP). In 2018, it amounted to TND 5.2 billion (10% of GDP). To fill the gap, the State has to borrow, and loans have to be contracted in dollars and euros.

On the other hand, the budget allocated in hard currency to the repayment of the foreign debt, of the principal and interest for the first half of 2019 represented almost one-quarter of all government expenditure.

In short, if a cartoon could summarize Tunisia’s debt ordeal, it would depict the country as a helpless Sisyphus who borrows continually to pay an ever-growing debt.

MMT’s prescriptions

So how can MMT help countries like Tunisia break free from this prison? “Through monetary sovereignty”, replied Fadhel Kaboub, associate professor of economics at Denison University, Ohio, and President of the Global Institute for Sustainable Prosperity (GISP).

A monetarily sovereign government, as he told Barr Al Aman, is a government that issues its own currency, collects taxes in that same currency, only issues bonds denominated in its local currency and operates under a flexible exchange rate regime.

Except from countries using the CFA Franc, which do not have monetary sovereignty at all as they have to deposit a share of their reserves at the French Treasury, the majority of African countries meet the first and second conditions of monetary sovereignty. The problem lies with the two last requirements.

Watch (AR) : What is MMT? / السياسة النقدية: ثورة في المنوال الاقتصادي؟

Tunisia, for instance, mainly borrows in foreign currencies that help the central bank build up its reserves and get access to more favorable interest rates and lengthier maturities.

As Tunisia’s local currency, the dinar, is very weak, paying down external debt and financing imports become more expensive, and thus lead to more deficit.

Beyond issuing bonds in local currencies and operating under flexible exchange rates, Kaboub added that energy and food sovereignty are the other two essential components of MTT.

Indeed, investing in renewable energies would not only drastically reduce the very expensive oil imports, but also mitigate climate change impacts. Agriculture, when directed at self-sufficiency rather than export, would minimize the exorbitant food imports, he said.

According to Mehdi Ben Guirat, professor of economics at Laurentian University, Ontario, “such measures would limit developing economies’ exposure to exogenous shocks, which will lead to less external debt and less conditional loans”.

Ben Guirat agreed with Kaboub on the need for developing countries to solve the “survivalist issues” of food dependency and energy deficit. He also stressed the importance of “champions programs”. In these programs, as he put it, the government identifies and finances priority sectors that have spillover effect and would therefore pull up the whole economy.

“There needs to be an ideological shift in terms of how the government operates”, he said.

—

Mohamed Haddad, Hoang-Xuan An & Nada Trigui contributed to this paper.

0.9 points decrease in inflation, a decrease in budget deficit and an appreciating dinar

“An adapted monetary policy” as describes Bjorn Rother, chief of the IMF mission in Tunisia, seconding Abbassi, albeit vulnerabilities related to a growing debt and political instability.

He praised the Ministry of Finance on exceeding the goals set on the collection of unpaid receivables and emphasises the importance of a reinforcement of the protection of low-income household as a necessary parallel policy.

The chief of the IMF mission has lauded what he called a “voluntary approach” Tunisia has adopted in the implementation of the expected reforms. From his side, The Cental Banks governor, Marouan Abbassi, insisted that the policies and reforms implemented are the fruit of join work with the Brettonwoods institution, rather than a “result of pressure” as echoe a fringe of the public opinion. 

In response to a question about fuel price hike and public sector salaries, two controversial topics for the public opinion, the IMF representative confirmed that another price increase shall be expected, emphasizing the necessity of parallel protection of vulnerable households, as energy subsidies remaining a heavy expense burden. The statement comes despite a recognition in the press release, that the price increase “ weights on the fiscal and external current accounts”. 

Another fuel price increase shall be expected

On the salaries of the civil servants, the executive reminded that the Fund was against the lastest February salary increase instored in February, an outcome of the social negotiation with the labor union (UGTT) and insisted on the necessity of a deflating the bloated public sector in which “civil servants still earn more than their counterparts in similar positions in the private sector”. As voluntary departure policy has yielded modest results, he encouraged the government to do more effort on “redeployment” to fill vacant positions as a substitute to a recruitment policy.

IMF encouraged the government to do more effort on “redeployment” to fill vacant positions as a substitute to a recruitment policy

On another note, Rother highlights that the exchange rate flexibility policy and the resulting depreciation of the dinar take time to yield the positive results, but were a key driver in export increase.. The leverage of the budgetary balance dependent of export performance, the current appreciation is expected to slow the recovery.

Abbassi remains optimistic about the future. The expected entry into production of Nawara gaz field and the abundant harvest promising less need for energy and wheat import and an increase in agricultural exports.

Rother, on the other hand emphasized the necessity to accelerate the implementation of the reform, a garantee for better economic recovery and performance.