• The vulnerability of Arab economies -   Anouar Boukhars

• Needed: a new vision of inter-state cooperation -   Soli Ozel

• Managing challenges -   Abdel Monem Said Aly

Education and the pursuit of justice
 Rime Allaf

There is no shortage of thorny problems needing solutions in the Middle East but few get the attention they deserve. The Arab-Israeli conflict understandably grabs most headlines, even though the attention is usually slanted and the reports are designed to generate sympathy for one side, Israel. When the interest deigns digging deeper into the condition of some of the victims, it is usually just another way to condescendingly blame the latter for bringing this unto themselves and for preferring to hate their enemy over loving their children. Sometimes reports go as far as decrying the state of, say, human rights in the Arab world. This allows for a necessary reprimand of Arab regimes in general, but also provides another rationale for why Arabs should really concentrate on their own development and leave Israel in peace, letting bygones be bygones.

It would be foolish to claim that the Arab-Israel conflict does not, directly or indirectly, influence decisions that ultimately affect the wellbeing of people. Until it is resolved in a just and comprehensive manner, life cannot improve for the people involved in it, and no amount of spin is going to change the fact that this is the most basic of existential issues.

Rime Allaf is an associate fellow at London's Chatham House.

The perfect financial storm now descending on the Middle East threatens to derail the economic ambitions of the oil rich Gulf states and wipe out the modest economic growth and progress witnessed in the non-oil producing areas of the region. Perhaps even more troubling, the crisis has exposed the vulnerability and inadequacy of the institutional foundations of Middle Eastern economies and raised serious questions about the economic judgment of the region's authoritarian leaders and their ability to weather the current financial tsunami.

To be sure, the Gulf states have an advantage over other Middle Eastern countries thanks to their huge budget surplus, funds which can act as a cushion against heightened global volatility and further drops in oil prices. Nevertheless, the substantial losses incurred by Gulf stock markets and their sovereign wealth funds have dampened the exuberance in the region and reignited anxiety and fear about a replay of the tragic mistakes of the 1970s and '80s when oil producers squandered their wealth on grandiose luxuries, unproductive projects and useless military hardware.

When the oil boom turned into bust in the 1990s, a plethora of domestic problems finally boiled over, igniting the simmering discontent of bursting populations with the cronyism and incompetence of their leaders. This political and social discontent did not turn into a revolution like the one that swept the Shah of Iran in 1979 but it did contribute nevertheless to a troubling rise in political radicalism.

With the oil boom of the new millennium, however, the oil producers displayed a modest amount of economic sense. Billions of dollars were directed toward shoring up their ailing infrastructure and building economic cities and knowledge-based industries. The goal was, and still is, to diversify their economies, increase regional growth and generate employment opportunities for their restless and youthful populations. In some areas, these investments have paid off. Foreign investment, trade and gross domestic product have all increased quite substantially.

But the new economic policies were not all efficiency-driven. Economic development and growth is still foreign manned. Worse, the expansion of the economy has not significantly dented unemployment among nationals. This inability to absorb masses of unemployed youths productively is due in part to shortages of skilled labor. But the larger problem is that much of the newly acquired wealth was invested in non-productive industries and generated by "commodity and asset market booms". Investments in energy-intensive products and automated factories are important but do little to create new jobs. The same thing happened regionally. Gulf investments poured in but were not spent where most needed. Much of the money went into real estate, non-productive commercial trade and other non-tradable sectors. These investments do not bring any new technology or help raise the capital of knowledge and capital of the people's of the region. Furthermore, they are subject to the vagaries of the international environment.

The non-oil producers of the region will probably suffer the most from this current financial turmoil. Like the Gulf states, they've witnessed respectable economic growth but have failed to effectively shift their economies toward allocative and productive efficiency. From Morocco to Egypt, non-oil producers did not take full advantage of the oil-fuelled economic boom of the last eight years nor did they smartly channel the significant flow of remittances and at times direct Gulf aid into productive activity. Today, these countries still have the world's lowest employment rates. A deep and prolonged international recession threatens to badly hit their main job creation industry (tourism) and squeeze out funding for projects that are vital to sustaining economic growth and containing mounting unemployment.

The net result is that Arab middle classes and many ordinary people will be choked further. Already the region suffers from an enormous disparity of wealth between the obscenely rich and the rest. This wealth chasm is widening within and between oil and non-oil producers with serious repercussions for social peace and order. Even before the financial crisis unfolded, all Middle Eastern countries suffered from mounting inflation pressures and a dramatic increase in food prices, caused in part by the reliance of the region on food imports and the failure of Arab countries with arable land to develop it and grow their own food. Those countries with huge budget surpluses can still afford to buy their way out of trouble by significantly raising the wages of public sector employees and increasing subsidies for food staple products. The non-oil producers have to grapple with public protests and occasional rioting. But throughout the region, public resentment is widespread. The fact that the middle and lower classes feel the pinch of rampaging inflation at a time of massive oil revenues only exacerbates feelings of anger at their governments' failure to spread the wealth.

The current financial crisis has demonstrated that the fundamentals of Middle Eastern economies, including wealthy ones, are not strong. Most countries are still held back by the same structural problems and underlying labor market troubles. Despite years of economic growth and efforts to diversify their economies and reform their educational systems, Middle Eastern nations are still weighted down by problems in economic governance and political inertia. This crisis might serve as another wake up call for the region to revise its investment strategies and channel its resources into regional and intra-regional productive projects and industries that better utilize regional skills, create jobs and yield long term political and economic benefits.- Published 23/10/2008 © bitterlemons-international.org

Dr. Anouar Boukhars is assistant professor of political science and international studies at McDaniel College. He is also a visiting fellow at the Brookings Doha Center.

The next decade will undoubtedly be a hectic one in the region. One does not have to be a genius to divine as much. The American-led war against Iraq both brought to an end a particular strategic balance that existed in the region since the modern Middle East was shaped and destroyed the social basis of political power in Iraq--with serious spillover effects elsewhere.

In addition, the failure of that American enterprise, or at least the failure of its originally declared aims, combined with the unwise disinterest of the Bush administration in the moribund Middle East peace process, created a vacuum. As in all such cases, this vacuum is being filled by diverse regional actors. Note, for example, Turkey's initiatives on the Israel-Palestine and Israel-Syria fronts and the activism of Qatar during the recent debacle in Lebanon. One prediction about the coming decade as a result of this condition is that regional actors will play a more active and decisive role in resolving their own political and strategic problems.

Even in its failure, though, the war in Iraq changed, indeed transformed, the political and strategic landscape of the region. With the fall of the Baath regime in Iraq the majority Shi'ites came to rule this critical Arab country. Shi'ites elsewhere began to ask more aggressively for their citizenship rights; Hizballah in Lebanon, with the support of Syria and Iran, challenged both the domestic political structure of Lebanon and the military might of Israel. At the broadest level, this suggests that one of the greatest challenges to Middle Eastern regimes concerns how they deal with their religious, ethnic or sectarian minorities and whether they can actually create a national identity built on equal citizenship rights.

In recent years, non-state actors and transnational movements gained strength and challenged established regimes through either terrorism or mass action. In the next decade, no matter who comes to power anywhere, I expect the states of the region to gain the upper hand and reinstitute the supremacy of the state system over non-state actors. However, the regimes themselves--especially in Egypt and arguably in Syria--might find themselves under increased pressure unless they manage to implement long delayed reforms.

The Palestinian-Israeli conflict is no longer the central political or strategic issue, yet it still has the potential to block all other openings. It has this power because of the moral weight it carries in the region's imagination and the de-legitimizing role that its irresolution plays. Even if the Syrians were to sign a peace treaty with Israel that leaves Hamas without its main sponsor, the matter would not go away and the "single state" option, however unacceptable it may be to Israelis, would gain traction.

In general, it may become increasingly urgent for Israel to change its conception of security and decide to be a player of the region rather than being just from the region. As I will argue below, non-military threats to security and stability in the region will need to be dealt with through cooperative endeavors. Otherwise natural, demographic and political problems will all combine to undermine the regional system and the regimes therein.

It is by now common wisdom that Iran became the unintended main beneficiary in strategic terms of the American war against Saddam Hussein's regime, gaining much advantage in the Gulf region and acquiring a presence in the eastern Mediterranean. Iran's strategic rise has also been compounded by the significant influence it wields in Iraq until that country settles down. To deal with this double jeopardy, the countries of the region will need to devise ways of containing and balancing Iran. Arguably, this cannot be done without the diplomatic and military weight of the United States. If Tehran overplays its hand, the likelihood of a confrontation will increase.

In one fashion or another, the United States will withdraw the majority of its troops from Iraq. But it will continue to have a presence in the Gulf and probably in Iraq as well. Subtle efforts on the part of Washington to open paths of dialogue and cooperation between Turkey and the Kurdistan Regional Government can also be seen as an attempt to fortify the circle around Iran. To the extent that this complements Turkey's desire to open up space for economic integration with its neighbors and, more importantly, so long as this rapprochement, combined with Turkey's domestic reforms, marginalizes or eliminates PKK terrorism, the zone of stability in the region will be expanded.

This is important because the American decision to withdraw is a risky one. It could indeed leave a void in an Iraq where political equilibrium has not yet been reached and thereby unleash full-scale civil war. The Iraqi state is not yet strong enough to provide security and order. Violent instability in Iraq will have repercussions throughout the region. In a worst-case scenario, should Iraq disintegrate all states in the region would face similar pressures. This is one of the reasons why the dynamics of the region itself will not favor or allow such an eventuality. But whether the region mounts a collective response to the challenge remains to be seen.

In today's Middle East, it is almost impossible to attain strategic goals without taking into account the interests and relative power of diverse players. This obliges the United States to seek cooperation with regional actors and prioritize diplomacy and negotiation over military might to pursue its goals. There are strong grounds to assess that the next administration, because of either ideational commitment or lack of resources, will pursue such a policy.

Finally, in order to stave off the challenges of the next decade the region will have to generate a new vision of cooperation. Water and land scarcity, the pressure of bulging populations, the discontent of citizenry that is denied participation in politics--will all put pressure on the old order. One must bear in mind that most populations nowadays live in urban areas. The temptation to opt for terrorism in order to overcome frustration will grow every year that essential problems of livelihood, decent environment and self-esteem are not addressed.- Published 23/10/2008 © bitterlemons-international.org

Soli Ozel is professor of international relations at Istanbul Bilgi University and columnist for the daily Haberturk.

Composing a long list of challenges for the Middle East is not a difficult task. All international and regional organizations, governments and civil society NGOs have their own lists. The millennium preparations inspired long checklists of challenges to mankind, including the peoples of the region. Indeed, for most of the last three decades since the mid-1970s the challenges to the region have been portrayed in terms of deep and protracted historical conflicts, great power penetrations, lack of democratization, serious underdevelopment, population, energy, water and poverty inequalities and backwardness in general. Taken together, these still constitute the Middle East agenda for research, discussion and debate.

Ideas on how to deal with these issues have ranged from conservative to liberal and between optimism and pessimism. Many of these ideas have turned into policies that helped address these challenges with modest rates of success. During the 1990s, a regional attempt to deal with them through the multilateral negotiations for Middle East peace took place over a number of years, as the issues of arms control and regional security, water scarcity, refugee problems, environment and economic cooperation were discussed and negotiated.

With the onset of the twenty-first century, the Middle East agenda that was developed throughout the 1990s has been further enhanced and complicated by the powers of globalization and the technological revolution. The categories of poverty and inequality in the Middle East were expanded to include the digital divide, the intermingling of peoples and cultures and the movements of populations across continents. In the region itself the Palestinian intifada, the stagnation of the Arab-Israel peace process, the rise of terrorism and fundamentalism and the disintegration of states such as Iraq, Sudan, Somalia and Lebanon have created unprecedented challenges. The events of September 11, 2024 and the subsequent American invasion of Afghanistan and Iraq have turned the region upside-down, raising issues alikes the clash of civilizations, "Arab exceptionalism" and the crisis of democracy.

This in a way generates the first item in a new set of challenges that face the Middle East and that emphasize not only the management of regional issues but also their status in a much more globalized world. Globalization is not only increasing trends of trade, investment and the movement of peoples; it is also producing a much more complicated process of interactions that change societies and eventually states. Ironically, as states are weakened by globalization they are now much more necessary to protect the process from its vulnerabilities, most notably terrorism and the clash of cultures. In fact, since the events of 9/11, which affected the West as much as the Middle East, a fortress mentality has begun to affect the policies of states: walls are erected instead of open borders, bigotry prevails over tolerance and human freedoms yield to intrusions on human privacy.

The management of these regional and global challenges is becoming more difficult by the day due to the weakness of states and the scarcity of suitable policy instruments at their disposable. Regional organizations like the Arab League or the Gulf Cooperation Council are prisoners in their limited Arab reach and poverty of funding and resources and are ossified in their imagination and vision. Attempts to create a pan-regional organization, from the Middle East Supply Center of World War II to the multilateral negations during the 1990s, were quickly aborted for a variety of reasons, most notably the continuance and resilience of the Arab-Israel conflict.

These past failures of regional management render the current challenge that much more serious. The experience of other regions in the world, from Europe to Asia to South America, bears witness that it is not the recognition of the issues but the capacity to manage them successfully that constitutes the real challenge.

Here three conditions have to be satisfied. The first is the strength of states and their ability to make decisions, including hard ones, and to implement them. The second is the ability of the regional states to reach a concert of powers that is not only capable of formulating an agenda for progress but also has the will to implement it. The third is the ability of the concert of powers to resolve the major geopolitical issues of the region and mobilize resources to face other shared regional challenges.

Unfortunately, none of these conditions is anywhere near being satisfied in the Middle East, hence the management of challenges will remain a hope rather than a policy. The major powers in the region are involved, each in its own way, in heavy internal challenges that involve serious domestic divisions. Thus, in addition to the current weakness of states in the Middle East, its major challenge in the foreseeable future will be how to manage the chaos and the fallout from failing states, rather than the management of major regional and global challenges.- Published 23/10/2008 © bitterlemons-international.org

Abdel Monem Said Aly is director of Al Ahram Center for Political & Strategic Studies in Cairo.