Rebuilding Arab Solidarity

Patrick Seale writes: A well-funded Middle East development bank will be able to prevent the ongoing revolutions from collapsing into violence

Beginning in the first quarter of the last century, Arab leaders used to proclaim their attachment to Arab nationalism and to the pursuit of Arab independence as the basis of their legitimacy. Some leaders went further still, professing a belief in Arab unity — without, however, being ready to put on one side, even for a moment, the rivalries, disputes and mutual denunciations which have long characterised the actual exercise of Arab politics. Such slogans have since been largely discredited.

Today, the nationalist rallying cries of an earlier generation have been replaced by something more modest — namely ‘Arab solidarity’. One might be tempted to call it the poor relation of Arab nationalism. It should not, however, be dismissed as an empty slogan if ‘Arab solidarity’ means helping each other, standing together in the face of external threats, and recognising, by word and deed, that the Arabs have certain common interests which need to be defended for the benefit of all.

In practical terms — and especially at times of crisis like the present — it must surely mean that rich Arab nations must assume responsibility for coming to the aid of the poorer ones.

One Arab leader who has grasped the urgent need for common Arab action is Shaikh Hamad Bin Jasem Al Thani, Prime Minister and Foreign Minister of Qatar. In a speech last month at the Oxford Centre for Islamic Studies, he called for the establishment of a Middle East Development Bank — in other words, a major new institution to channel aid to Arab countries in danger of economic collapse. Qatar, he said, was seeking the support of Saudi Arabia, Kuwait and the UAE for the project.

“Through this bank,” he said, “local resources and capabilities can be mobilised and foreign expertise can be solicited.” He made particular mention of unemployment of youth which most observers have recognised as a major motor of the revolutionary wave across the Arab world and a problem which must be addressed with speed and large-scale resources if the Arab Spring does not turn into in a winter of disillusionment and misery.

The richer Arab states have already made substantial gestures. To mention a few examples, last March the Gulf Cooperation Council (GCC) announced measures to provide Oman and Bahrain with $10billion(Dh36.7billion) each to upgrade infrastructure and housing over 10 years. Saudi Arabia agreed to lend Egypt $4billion in emergency funding in the form of soft loans, deposits and grants. The Arab Fund for Economic and Social Development, headed by Abdul Latif Al Hamad, agreed to grant Yemen $329million to finance road building, a gas power plant and the restoration of Sana’a’s grand mosque — but no doubt this will have to wait for calmer times. The Kuwait Fund for Arab Economic Development signed an agreement to provide a $50million grant to East Sudan to finance health and educational projects. The UAE has pledged to invest more than $1.5 billion to improve electricity supply and other utilities in Sharjah and Ras Al Khaimah.

These pledges of aid, and others like them, are admirable. But requirements are very great. To be effective, reconstruction and development need to be planned and coordinated on a regional basis. An Arab institution on the model suggested by the Qatari prime minister would be well-placed to collect and administer funds and distribute them where they are most needed, with full transparency and on the basis of expert technical advice.

The Arab revolutionaries in Egypt and Tunisia, Yemen, Libya, Syria and elsewhere want political freedoms and relief from the heavy hand of brutal security services. But they also want, and deserve, a better economic future for themselves and their children. If these material demands are not met, no Arab state, however rich, will be able to escape the inevitable turbulence.

When Soviet rule collapsed after the fall of the Berlin Wall, the European Bank of Reconstruction and Development was set up in 1991 to help the transition to prosperity and democracy of the former communist states. The EBRD has been a considerable success, funding a great many projects in eastern and central Europe, and in Russia itself.

The European Commission in Brussels has suggested modifying the mandate of the EBRD to allow it to help countries like Tunisia and Egypt. No doubt the EBRD has the right experience to do so, but fiscal constraints in Europe make it most unlikely that it will be able to provide aid to the Arab world on the scale required.

When leaders of the Group of Eight economic powers, led by the US, met at Deauville in France last May, they pledged $20billion in international loans to Egypt and Tunisia. These were not grants but loans. They would need to be repaid in due course. In the meantime, they would only add to the debt burden of these countries, putting further pressure on budgets already strained to breaking point.

Moreover, Western aid comes with strings attached. An explicit condition is that Egypt and Tunisia continue their transition to ‘democratic and tolerant societies.’ In other words, in exchange for Western aid they would be expected to adopt Western-style democracy in one form or another.

The truth is that Arabs must look after themselves and not attempt to shuffle off the task to the non-Arab world — whether to the US, Europe or even China. The US, virtually bankrupted by its wars in Iraq and Afghanistan, has few resources to spare. China’s attention remains focussed on its own huge development problems. Its main external interest lies in snapping up raw materials wherever it can find them to feed its voracious industries. Europe, in turn, has its own priorities.

Eastern European states do not want to see resources, from which they continue to benefit, diverted to North Africa. As for Western European states, such as France, Italy and Germany, their special concern is to avoid importing radical Islamist ideas into their own societies and being swamped by mass illegal immigration — such as the Italian island of Lampedusa has recently experienced. Any aid they provide to the Arab world will inevitably be guided by self-interest.

In an article in the Financial Times on May 26 2011, Professor Joseph Stiglitz of Columbia University — recipient of the 2001 Nobel Memorial Prize in economics — argued that Western aid was necessary to prevent the Arab revolutions stalling or going into reverse. The priorities, he listed, were job creation, debt relief and access to Western markets.

His analysis is no doubt correct. But a well-funded Middle East Development Bank, such as proposed by the Qatari prime minister, would be by far the better instrument to prevent the Arab Spring from collapsing into violence and despair.

-This commentary was published in The Gulf News on 17/06/2011
-Patrick Seale is a commentator and author of several books on Middle East affairs