The economy of the Arab world is a sick cousin to the world’s major markets. And it’s getting sicker by the minute.
“In the West,” former Wall Street Journal and current Boston Globe correspondent Glain observes, “it is naturally assumed that a shrinking economy leads to rising crime.” Yet, he continues, Western analysts seem not to extend the same logic to the Arab world, where “jaundiced economies” are the fruit of corruption, stagnation, astonishingly inequitable wealth distribution, and the systemic failure of Arab nations to develop sustainable markets or trade alliances. (Whereas a century ago Egypt, for one, enjoyed international commerce equaling half of its GDP, Glain writes that today “trade among any of the Arab states is negligible.”) Despite oil wealth, which rests in the control of a handful of families, real per-capita growth in the Arab world averaged less than 1 percent annually; the middle class has been shrinking, the intelligentsia fleeing, and the 22 nations of the Arab world have seen a radical fall in standards of living; as the economist Hernando de Soto has observed, those nations lack the institutions to make capital liquid and available to local investors, crushing job creation. Add to all that a rapidly exploding population and the attendant growing number of the young, idle, and disaffected, and you have the perfect recipe for instability—and for fundamentalism, and for terrorism. And what has the West been doing in response? Led by the US, writes Glain, it has been cosseting corrupt dynasties, backing Israel at the expense of other nations in the region, alienated potential friends—and, of course, launching invasions. In the last regard especially, the US has been of no help; writes Glain, for all its faults, Saddam Hussein’s government was “not only a dictatorship; it was the country’s largest employer and consumer”—a role the occupier has yet to step into, which may have something to do with Iraqi anger today.
A sharp look at the Arab world’s wallet, offering mostly bad news—and little room for hope.