Revisiting Marshall: Private Sector Development in the Middle East

Report

Revisiting Marshall: Private Sector Development in the Middle East

When the Arab Spring began in late 2010 in Tunisia, and then quickly spread to Egypt, Yemen, Libya and Syria, it was hailed as a historic moment of transformation for the Middle East region. The transition from authoritarianism to new more representative government that had occurred in Europe, Latin America and parts of Asia since the 1980s was finally coming to the Middle East. Around the world, people were moved by scenes of once-cowed citizens seeking a greater role in public life. Debates about the causes for this largely unanticipated uprising centered around economic factors, such as food prices or joblessness; more intangible issues of dignity and identity; and, more fundamentally, failures of governance and leadership.

The rapid fall of dictators in Tunisia, Egypt, Libya and Yemen created enormous challenges and governance gaps. It was not easy to determine or build societal consensus to rebuild political legitimacy and set up processes for political transitions. The international community focused largely on supporting those political processes that would provide peaceful transfers of power. Later, the central role of economics emerged, not necessarily as a causal factor for the revolt, but as an essential part of new governments’ responses to the demands for change.

The larger purpose of this project is to examine how the Arab transitions are affecting prospects for regional peace and stability. It poses the question of what factors would create conditions for genuine and lasting transformation of the region into more stable and open states and societies. It explores whether the Marshall Plan that was so instrumental in Europe’s recovery after World War II provides a useful set of ideas for US and other international engagement in this period of change in the Middle East. The study uses the Marshall Plan literally—how it worked to stimulate economic recovery and promote regional economic integration—but also figuratively. Many Arab policy analysts pay lip service to the Marshall Plan idea, less for its specific operational components and more for the concept of transformation of state-society relations through economic reforms that empower citizens and promote prosperity. Many commentators assume that such change would occur mainly through a dramatic infusion of financial capital from outside the affected states; an interesting twist is that Arab discourse assumes the financing would come from wealthy Arab states rather than western donors. Such a shift away from western aid dependence would be a real sign of regional transformation, with both positive and negative implications.

As this project evolved, many of the early judgments about the Arab Spring were superseded by dramatic setbacks and erupting violence in the region. The number of states still embarked on peaceful paths to change is now fewer than was the case in 2011. Nonetheless, this report provides analysis on the evolving environment for lasting change in the political culture of the region, and pays close attention to economic policymaking and action as essential tools for the transitions. It also provides some reflections on how the changes to date—albeit uneven and susceptible to reversals—are contributing to regional security.

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