If We Don’t Compare MENA Countries’ Fiscal Fragility, Then How Will Gather Lessons Learned?

PITAPOLICY Points

PITAPOLICY Points

Breaking bread, hence sharing a meal with anyone, symbolizes the conscious and informal way of engaging in respectful conversation.  Moreover, if one can “break bread” with another, they have taken the first step towards engagement, and building more concretely upon that diplomacy.  Pita bread operates as the common denominator that links the various cultures in that region–from Morocco to Pakistan–in reflecting upon dynamics and anticipating trends in the region. ~ PITAPOLICY, LLC

Greetings Pitaconsumers!

This week includes a montage of political economy issues that PITAPOLICY observed for the Middle East & North Africa region because of the International Monetary Fund’s and the World Bank’s conference.  Overall, MENA GDP growth barely reaches 3% for the third year in a row, according to the World Bank’s Economic Outlook reports.  In addition, some MENA countries’ economic reforms are overshadowed by political developments.  Cases , like Tunisia and Iran, illustrate this below following the MENA Economic Outlook findings and comments.

The most pressing issue is: “Fragility in Middle Income Countries: New Ideas for Unique Challenges”, which includes many MENA countries facing debates on fiscal austerity while balancing social responsibility.  Countries representing these key challenges, Libya, Tunisia, Lebanon, Jordan, and Palestine participated in these discussions taking place in Lima, Peru from October 6th-10th.  While country ministers highlighted the budgetary challenges in the political and economic spheres, community service organization leaders relayed the social and economic factors resulting from growing refugee influx brought about by Assad regime’s human rights abuses in Syria.

Fragility Discussion Participants Weigh In with respect to Palestine, Jordan, Libya and Tunisia

Achieving development goals in middle-income countries requires spending.  Not surprisingly, Jordan’s Minister of Planning and International Cooperation pinpointed a key theme shared by many MENA countries–not just middle-income ones — questioning financial austerity measures when trying to address key challenges, like the influx of Syrian refugees.  He pushed back by saying, “do not penalize us for being a middle income country- we’re losing development gains because we are doing the right thing by refugees,” as he explained that the MENA region has dealt with waves of Palestinian, Iraqi and Syrian refugees displaced by occupation, ISIL, and chemical weapons attacks.

Alaa Tartir, Palestine

  • : I’m aware of donors don’t want to intervene in politics, but the politics of donors do have consequences

Minister of Planning and International Cooperation, Imad Fakhoury, Jordan:

  • measure for refugees are too little too late, has 20% of its population as refugees. The European Union should have taken in 10 million refugees.
  • It’s the time, window of opportunity for int. community to rethink sense of urgency & scale needed to deal w the Syrian crisis
  • In we have 700K people knocking on clinic doors, double shift in hospitals & schools, a nightmare each day in urgency

Ayat Mneina,

  • Libya is a unique case, its an upper middle income country however it suffers from weak institutions

Wala Kasmi, Civil Society Organization Representative, Tunisia

  • We can’t compare ‘s situation to & just because the democratic transition is going well there.

Ms. Kasmi resented being compared to Egypt and Libya, Arab countries that also underwent drastic government changes since 2011.  However, we beg to disagree, and offer this suggestion: Fine, but what about contrasting to identify lessons learned.  Firstly: Why not at least identify the similarities since each of these countries’ parliaments are stuck in debate regarding economic reform and combating corruption.  Secondly, Egypt, like Tunisia, has faced political assassinations in the wake of controversial laws or executive actions being debated, if not implemented.  For example in Egypt, Prosecutor General Hisham Barakat, who oversaw the cases against thousands of Muslim Brotherhood affiliates, was assassinated in late June this year after President Sissi and the judiciary took heavyhanded measures without due process.

“The judiciary is restricted by laws, and swift justice is also restricted by laws. We will not wait for that,” el-Sissi said.

Corruption Reform Bill

Similarly –and more on point with fiscal fragility discussed above — legal debates introducing heavy-handed action by Presidential heads have also faced violent repercussions in Tunisia.  Tunisia’s parliament muddles through legislation to fix its economic woes.

In September 2015, Tunisia’s leading party, Nidaa Tounes, introduced Corruption Law that would exonerate business leaders who worked with ousted Tunisian President Ben Ali.  If they reveal their stolen wealth to a parliamentary committee, they they avoid prosecution for corruption charges.  Tunisia’s current president, Beji Caid Essebsi, argues that the Tunisian Treasury would recoup 5 billion dollars, a crucial measure to boost Tunisia’s struggling economy.

This project will hurt transitional justice and the political transition.~Khaled Krichi, a member of a truth and dignity commission set up in 2013

Controversy has built because Tunisia’s Labor Union, and other parties, have disputed President Essebsi’s argument because 1) he is a former official of the Ben Ali regime, and is not impartial, and 2) such measures would disrupt the transitional justice process since Ben Ali’s ouster, and backtrack political gains for Tunisians.  As such, political assassinations remain a concern.  Perhaps controversial legislation debates act as cover for violent reprisals — we hope not.  But Tunisian lawmaker, Ridha Charfeddine of the Nidaa Tounes party, escaped an attempt at his life on October 8th, 2015.

Social Safety Nets

On the subject of social responsibility, Iran offers an example that relies on a singular authority — the Supreme Leader, Ayatollah Khamenei —  access the finances.  Although Iran was not vocal in the MENA forum discussions, like its neighbors, social safety net programs continue to comprise a cornerstone of its economic programs.  Yet, one in particular, “Setad Ejraiye Farmane Hazrate Emam” – Headquarters for Executing the Order of the Imam — targets Iran’s poor…but Setad’s source of funding raises questions about redistribution policies as the Irani government began to seize property since 1979.  Reuters investigates here:

The organization’s total worth is difficult to pinpoint because of the secrecy of its accounts. But Setad’s holdings of real estate, corporate stakes and other assets total about $95 billion, Reuters has calculated. That estimate is based on an analysis of statements by Setad officials, data from the Tehran Stock Exchange and company websites, and information from the U.S. Treasury Department.~Reuters

 


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