On October 11th, PITAPOLICY featured Part I of Whitney Vejvoda’s analysis on the political and economic factors that influenced the Arab Spring. In Part II of this essay, Ms. Vejvoda closely examines MENA Oil Economies & Changes in Labor Structures and addresses the question: Is the Arab Spring an Organic Political Movement in the Middle East?
MENA Oil Economies & Changes in Labor Structures
Economically, the countries of the region include oil economies that are poor in other resources, such as population (Libya). Mixed oil economies (Algeria, Egypt, and Tunisia) and non-oil economies (Morocco) also comprise the multifariousness of MENA economies. And yet, whether a large exporter of crude petroleum or not, all MENA states are affected by oil: either directly through governmental capitalization and dispersion of the resource’s wealth, or through remittances: a transfer of money by a foreign worker to his or her home country. Thus, the influences of the oil boom era within MENA are highly significant.
It was this “period of state building and economic development” in MENA that brought “changes in social structures” and created new occupations that even involved female employment (Moghadam; Decker, p 68). “During the period of rapid growth, governments instituted social security programs, protective legislation for working mothers such as maternity leave”; additionally, “graduates came to expect jobs in the growing public sector,” (Moghadam; Decker, p 68).
As a result of these policies, many MENA states “employed more than 50% of the formal labor force in the public sector,” (Moghadam; Decker, p 68). But it is documented that “oil-based growth and capital-intensive production limits the demand for labor,” (Moghadam; Decker, p 69), so an economy based solely on oil exportation is not diversified enough to support labor in all sectors – thereby limiting potential for entry of small businesses into the market and allowing for a monopolization by the government of the country’s capital source.
To make matters worse, the “oil boom era came to an end in the mid-1980s” (Moghadam; Decker, p 69). As a result, many of the MENA states experienced massive quantities of debt and were compelled to accept austerity measures and “structural adjustment” policies as condition of new loans (Moghadam; Decker, p 68). Since then, the “region experienced slow growth in subsequent decades” (Cammett, p 134).
This reality coupled with the rising population growth rates has proven devastating for the MENA region. In fact, population growth rates in MENA were until recently among highest in the world (Moghadam; Decker, p 74), second only to those in Sub-Saharan Africa, with the “most rapid growth in urbanization occur[ing] in oil exporting countries.” As citizens began infiltrating the urban areas, the density of cities began to rise, creating “severe shortages of housing and services, lack of regulation of construction and urban development” (Moghadam; Decker, p 74).
Indeed, while it would have been difficult for any country’s economy to absorb large urban populations, the condition created in MENA states has “led to unemployment, underemployment, poverty among urban populations, shortages of clean drinking water, growth of slums, polluted air, inadequate waste systems, power shortages, and noise pollution” (Moghadam; Decker, p 73-74). None of these experiences create a sense of stability or wellbeing.
What’s more compelling is that “recent economic reform efforts have failed to create jobs or to attract foreign investment to the Middle East” (Cammett, p 123). Heavy debt, over-taxation, and government corruption have prevented economic growth. Continued economic decline has perceptibly eroded public confidence in leaders and led to an increase in the potential for unrest. Moreover, the surplus of educated youths without jobs has provided fertile ground for radical fundamentalism to grow. At the same time, the reforms that would need to take place to improve economies -such as fewer government regulations and greater accountability -“could destabilize regimes by alienating special-interest constituencies,” (Cammett, p 136). Thus, economic inequality can arguably be attributed as the largest contributing factor in the revolutionary mood sweeping North Africa, and ultimately has set the stage for the mass overhauls that the world has witnessed.
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