Lecture by Dr. Mohammad Sabah AlSalem AlSabah's given at the Nelson Mandela Lecture Hall
May 24, 2005 - Oxford
Ladies and Gentlemen,
Being here at this place brings back very pleasant memories. Almost twenty years ago to this date, I was marching through Memorial Hall to receive my doctorate in economics at Harvard University. A huge banner was hanging at the end of the hall. It read "Behold Harvard scholars, you are about to change the world". I was a little bit perplexed! Memorial Hall used to be a church, and I was wondering what and which "world" they have in mind? A professor emeritus noticed my perplexity and said: don’t worry son, as far as Harvard is concerned the world is Oxford and Cambridge.
Thank you for your warm welcome. I am especially honored to be here with you at the center of the world. And, yes, it feels great to be at the center of learning, of intellect, of tolerance. And I’m extremely grateful to have this opportunity to share with you, and more importantly, to learn from you how to make the dialogue of civilizations more effective.
I would like to start my remarks by pointing out the most obvious about our part of the world today. Your perception of our region may be one of hope or despair, but this perception, of course, would be based on currently popular conceptions of the region.
Many look at what is taking place in the streets of Beirut, at the polling stations in Iraq, Palestine, and Saudi Arabia, the constitutional reforms in Egypt, and the historic parliamentary debate over universal suffrage in Kuwait and talk of an Arab spring. Democratic changes are sweeping our part of the world, some argued. Yet there are others who insist that such far—reaching transformations are not likely to take place in the Arab world, offering many reasons for drawing a pessimistic picture for the future of the region.
We hear a great deal about the many deficits from which the Arab world suffers: The democracy deficit, the education and knowledge deficit, and the women’s empowerment deficit. These are remarks made by Arabs themselves in the 2003 United Nations Arab Human Development Report.
While the democratic wind is blowing across the globe, the Arab world seems to be stuck in multiple deficits. This makes people wonder whether there is something intrinsic about the Arabs that can explain this predicament: for example, their lack of progress and their lack of democratic forms of governance. In other words: is there an Arab exception?
Sadly, many analysts have resorted to naive answers putting the blame entirely on culture and Islam. This can be seen by the emergence of islamophobes who are busy unleashing their bigotry and stereotyping across the West. They use the horrors of Islamic extremism as a pretext to attack all of Islam and the civilization it has fostered. Their simple message is that Islam is incompatible with civility, modernity, and human rights.
Some have blamed those shortcomings on historical legacies of all stripes.
Some have put the blame on the reluctance of our people to stand up for themselves and push for their rights,
Today, I am not here to assign blame or justify the persistence of the current conditions. I hope that my presence here with you today will allow us to grapple with those important questions in an open and frank dialogue, befitting of an academic setting in a prestigious institution like yours. I have to admit before you that whenever I am in an academic setting I catch myself speaking as the Professor of Economics at Kuwait University that I was before joining the government. Therefore, in this academic spirit, I speak to you today openly about the challenges and obstacles confronting development in the Arab world. So allow me to share my side of the story with you.
While discussing many of the Western perspectives on Arab political ineptitude and developmental standstill, we cannot but recognize two of the most recurring fallacies in these arguments.
The first fallacy stems from the thought that religion is to be blamed for stagnation in the Arab world. As I have mentioned before, many analysts have taken the stance that Islam has hindered the progress of development and modernity in the Middle East. This assertion is simply naive and untrue. Underdevelopment and backwardness have no culture or religion. Instead, we must depart from these deceptive prejudices and generalizations and take on objective analytical means to better understand the dynamics of development and underdevelopment in the Muslim world. Once again, I repeat: underdevelopment is a condition and not a state of mind.
The second fallacy is that Arab culture is closed and hostile to diversity. It is regrettable that whoever makes this statement has clearly neglected to look at Gulf countries that are becoming a hub for diversity and international business. I find it even more disheartening when I hear people attributing stagnation to our values and religion.
Whenever I read reports coming from Western research centers and think-tanks about what exactly Arab countries need to do before they can finally enter the "Free World", it becomes frustratingly clear that those reports were written in the spirit of the “clash of civilizations” or, in other words, the national security interests of the West.
Let me assure you that as long as we keep looking at the Middle East as a threat, exclusively as a threat, and not as a region, a set of economies, and a product of a long and rich history, we will play no role in improving people’s lives in this part of the world.
We need to transcend those simplistic views about the Arab World and the Arab individual.
The first challenge is to recognize that the current stagnation we observe in Arab societies is not rooted in religion, culture or a state of mind. We must recognize that neither modernity nor its cultural dimension known as globalization are Western inventions. These are historical processes that manifest themselves differently in different parts of the world. Ideas take different shapes and forms whenever they are grafted in a new cultural setting.
Many observers speak of globalization as if it is an exclusively Western phenomenon, but as many academics know, the main indicators and measures of globalization such as the movement of people, money, and ideas have been very much alive in our part of the world for a long, long time. On the movement of people, one has to only look at the Hajj in Saudi Arabia, where a few million Muslims gather annually.
Or one can just go to Kuwait City and look at the faces and listen to the many languages or simply taste the diverse cuisines on the street to realize that we are not strangers to globalization. Despite these pressures we’ve been able to maintain our social structures and keep our identity intact. This can only be done by the accumulation of values that emphasize tolerance and peaceful coexistence. At the heart of these values are our Islamic morals and principles.
In fact, I can argue that economic conditions in our societies, underscored by unemployment and frequent turbulences in many cases, could have led to more dangerous situations if it weren’t for Arab and Islamic values. Any society in the world exhibiting such poor economic indicators, more often than not suffers from homelessness, street violence, gangs, rape, random killing, kidnappings, etc. Fortunately, apart from states of war and conflict between states, none of this exists in the Arab world; not even in the most desperate and poor Arab societies. The main reason for the relative absence of these social deformations is that Islam and Arab culture have worked as a glue to keep these social structures together that otherwise could have been undermined completely under different cultural formations.
So, if religious beliefs and social values are not the cause for the lack of economic and political development, then what is?
Let me here invoke the dismal science, and claim with certainty that economics is at the heart of the current problems and challenges. The adoption of centralized economic systems in many of the countries of the region over the past decades has generated a great deal of constraints on both Arab societies and governments.
There are three main realities we face as we look at the economies of this region: `
First, unemployment remains at disturbing rates. According to the World Bank, unemployment in the Arab world was estimated at 15 percent in 2004. The same report shows that the region employs 104 million workers, according to estimates from the year 2000. By year 2020 the region needs to generate 100 million new jobs in order to keep up with projected growth rates of the labor force. In my country alone, we expect 17,000 of our youth entering the workforce this year, while the oil sector, the largest civilian employer in the country, provides only 500 to 1,000 new jobs annually.
The second reality we observe, one that is related to the situation I described in Kuwait, is that the public sector will no longer be able to provide the employment needed to overcome this population challenge. The hands of governments are tied up by their commitment to deliver to their own people, and therefore, mass public employment is no longer a viable option.
Thirdly, and most importantly, there is no clear alternative to private investments and more open economies to avoid the perils of the unemployment crisis. The private sector presents both the solution and the opportunity for a more prosperous Arab world, and economic reform is the path through which this long—awaited prosperity could be attained. We could argue about the pace, the sequence and the prerequisites of reform, but at the end of the day this will not change the fact that the status—quo is unbearable as it is, and that the private sector is the only promising road to prosperity. It’s a long, arduous road, certainly a bumpy road, but it is the only road.
Let us all agree that the implosion of the Soviet regime, and the persisting constraints that former centralized economies continue to face to this day- including those in the Arab world- are not the result of their religious and cultural values. On the contrary, the fundamental cause of their crisis can be found in the economic doctrine they have followed. A doctrine that inhibits freedom and liberty, a doctrine that stifles private initiatives and innovations, In short a doctrine wholly based on economic totalitarianism.
To be sure, 600 years ago Ibn Khaldun had warned us about the dangers of government domination and hegemony over the economy. In his masterpiece al-Muguddimah, he described how the dynamic interaction of the principle players of society had a direct impact over the entertemporal growth of the economy. He showed us that as the society moves, away from free market economy, it risks the dangers of economic dislocation, stagnation, and ultimately social demise.
Ibn Khaldun’s analysis about the free market system was published some 400 years before Adam Smith’s Wealth of Nations. It’s quite conceivable that Adam Smith, while he —was a student at Oxford, came across the great work of Ibn Khaldun. As the Oxford historian Arnold Toynbee said "..[Ibn Khaldun] has conceived and formulated a philosophy of history which is undoubtedly the greatest work of its kind that has yet been created by any mind in any time or p1ace".
The interdependence between economic reform and political reform makes democracy part of the solution, and not the whole solution. We look at the risks and pains associated with political reform as a reason for caution and not one for inaction. As we continue to advance reforms on the political front, we must bear in mind that the sustainability of those reforms cannot be secured without economic decentralization and glopenness. The pace and sequencing of economic and political reforms is, therefore, a critical issue that must not be lost in the waves of our enthusiasm and optimism. If the issue at stake is just [elections and parties, then democratization would have been completed a long time ago. The lessons of social and political upheavals associated with the transition to democracy are numerous from the Latin American cases as well as the recent case in Eastern Europe. Any of you who read the classic works of Schmitter and O’Donnell on Latin America would appreciate this point.
In advancing reform, we are not merely creating institutions; we are reformulating a historic relationship {between people and their governments. Reformulation of this relationship involves not just political liberalization, but first a reconfiguration of the economic equation—and here at this point is when economic reforms come to play. This also requires delicate management of the process of transition. As long as governments continue to hold close to them the sources of production, society will never be empowered in any meaningful way.
Therefore, before we talk about mechanisms of accountability we must begin by addressing the issue of societal autonomy from the state, and this autonomy will never be possible as long as the state remains the dominant player in the economy.
In his powerful book The Road to Serfdom, the Nobel laureate Friedrich von Hayek reminded us that the institutional changes that accompanied the implementation of a paternalistic state with its socialist policies potentially carried within them the seeds of political tyranny and servitude. In other words, if democracy and accountability are the sine qua non of good governance, economic liberalization, embodied in the institution of free markets, is what gives meaning to it all.
And as we continue to advance change on the economic front, simultaneously with political change, we come to appreciate the value of educational reform, without which no reform strategy, whether political or economic, can succeed. Ending the knowledge deficit to which the UN Arab Human Development Report pointed is an important part of the journey towards liberalization of all its forms. The shift from public to private and the movement toward economic diversification demand the support of quality human capital. And our wealth of human capital will never be sufficient without the enhancement of our educational systems in order to support emerging sectors in the private sphere. Those sectors demand new skills and new individual capabilities that require substantial innovations and additions to the process of education. With those changes enacted a lot of untapped wealth in our society will finally be brought to light.
Women’s empowerment is another issue that must be addressed seriously and openly. Thank God that we don't have in our culture the "original sin" complex, nor do we apply the inquisitors' techniques described in "Malleus Maleficarum" on our women. Nonetheless, the women empowerment deficit in the Arab world is regrettably the deepest deficit of them all. We have witnessed in Kuwait a heated and sometimes acrimonious debate over the issue of universal suffrage. I am proud that last week in Kuwait, through a civil political discourse culminating in a monumental vote, our parliament finally closed this empowerment gap by recognizing Kuwaiti women’s full political rights. Any observer of the Kuwaiti parliament and press will see how serious the people of Kuwait took this matter.
This issue is important to us, both as a basic pillar for healthy development, and as a value in and of itself. We cannot speak of balanced development when half of the country’s human resources are helping drive business, industry and diplomacy but are unable to participate in advancing the wheels of democratic progress.
As I mentioned at the beginning of my talk, I am not here to assign blame; I am here to address the issue of comprehensive development in the Arab world in an open and frank manner. I hope I was able to do justice to this promise. And after sharing my side of the story, I would like to hear your own thoughts and I therefore welcome your questions and comments.
Before that, let me end with a final observation. Right answers can only be spurred by right questions. I think I am not alone in saying that we have exhausted all the wrong questions in trying to understand the prerequisites of development in the Arab World, Looking at the real facts not the fallacies is the first step towards posing the right questions. As the Cambridge economist John Maynard Keynes said, the challenge lies not in accepting new ideas but in getting rid of the old ones.