Sunday, February 6, 2011

Does Economics Explain The Current Arab Uprising?

Some days ago I posted on the political economic roots of the Egyptian uprising, and I think that michael perelman is correct in putting all that in a broader framework of international political economic domination by the US. However, the degree of importance of economic factors in the broader uprising in many Arab countries now seems to me to be not as strong as one might think.

I do see two clear areas where one can see economic factors. The first has to do with oil. No Arab country that is a major oil exporter (or earns the vast majority of its export earnings from oil) is seeing an uprising, or even any noticeable hints of one, unless one counts the continuing rumblings and instability in Iraq, and Algeria is a borderline case as a somewhat significant oil exporter that has had riots. Oil prices have risen, and it would appear that most of the leaders of the countries exporting lots of oil have been clever enough to sufficiently distribute the rising earnings from this so as to tamp down any incipient unhappiness about dictatorship or monarchy or excessive friendliness with the US.

The other obvious shock has been the spike in food prices, with the massive drought due to an unprecedented heat wave in Russia, Ukraine, and Kazakhstan last summer playing the leading role in this, with something on the order of a 10% decline in world wheat production resulting. Egypt is the world's largest importer of wheat, and pretty much all the other Arab countries with demonstrations or riots are also importers of food to some extent, and almost all of wheat in particular. So, there we have a neat story. Those with rising foreign earnings from oil exports have not had political upheavals (except maybe Algeria), while those more strongly dependent on food imports and thus suffering shocks that especially impact the poorer parts of their populations have almost all had uprisings.

Beyond those two fairly clear cut matters, all else is very murky. This can be seen by considering the two reasonably large, non-oil exporting and mostly Sunni Arab, states that have not had actual demonstrations or riots, although both have had rumors and threats of same: Morocco and Syria.

It is hard to find much in common between them. Both have lower per capita GDPs than either Tunisia or Egypt, the countries with the most serious riots and demonstrations. Both have greater inequality as measured by official Gini coefficients than Egypt (who has the lowest Gini of any Arab nation), although Morocco has slightly greater inequality than Tunisia (Gini of 40.9 with Tunisia at 40.0, while Syria is at 37.0 and Egypt at 34.0). However, Morocco has had a higher growth rate than either Tunisia or Egypt, while Syria has had a lower one than either of those countries.

Furthermore, Morocco and Syria are probably at opposite ends in terms of foreign policy and internal politics. Like Jordan, Morocco is a near-absolute monarchy, whose king is a descendant of the Prophet Muhammed and which has very friendly relations with the US, and less hostile relations with Israel than many Arab states, although has not had a peace treaty like Egypt or Jordan. Ba'athist Syria is Arab nationalist socialist (indeed was unified officially with Egypt a half centry ago in the failed United Arab Republic), and very anti-US and anti-Israel, while being friendly with Iran.

Some attribute the lack of uprisings in Syria, although there have been rumblings put down by security forces, to the population favoring the foreign policy of the regime. Could be. In the case of Morocco, the current king is relatively young and still relatively new in office, and viewed as a reformer compared to his autocratic and long-serving father. Again, there have been rumblings, but nothing too noticeable. It may be that the Moroccan population is cutting a relatively popular new and young king some slack.

Other Arab states that have had demonstrations or riots have had more dramatic political problems or issues, although there is no pattern, beyond the intense cases of Tunisia and Egypt. So, Yemen is the poorest by far, with serious demonstrations; Jordan has a 70% Palestinian population possibly unhappy over policy with Israel and a weak economy; Algeria has had long conflicts with Islamists and a past of a military resisting the results of an election; Lebanon it is a matter of Sunnis rising up to protest the coming to power of Shi'i Hezbollah, and Iraq is just an ongoing mess from the overthrow of Sunni rule by the US invasion (and it is an oil exporter anyway, so not properly in these groups). However, aside from the much greater poverty of Yemen, most of these countries are not all that different in the major economic variables than the two without demonstrations: Morocco and Syria. So it is probably these other political factors that are the source of the greater calm in those two compared to the others.


Jacob A. Geller said...

Sudan is an Arab oil-producing country with oil-related conflict, and Iraq certainly counts as well. I think you've also missed the importance of youth unemployment, underemployment, and overqualification. Big problem across the whole region.

Jacob A. Geller said...

Oh, and Yemen too. Yemen has oil, albeit dwindling supplies, and it's positively rife with conflict.

Barkley Rosser said...


Yes, those countries do produce oil, but they are not significant oil exporters. However, I should have mentioned Sudan and Mauretania, although their populations are heavily non-Arab and they are much poorer, kind of in different situations. Both have very serious problems, but somewhat different from the other Arab countries.

I agree that the youth unemployment problem is a big issue. I actually looked at unemployment rates, but did not see youth ones. All of the countries with riots, but also the ones without, have pretty high unemployment rates, although Syria's is a bit lower than the others. But I think that they all have high youth unemployment rates, so that is not what explains why some did not have riots, even if it is an important factor in the countries that have had riots, certainly has been a major complaint in both Tunisia and Egypt.