Abstract

The economics of “Arab transitions” focused on short-term consequences of the uprisings and governments have often been tempted by quick fixes offering more jobs in the public sector, sticking to in-efficient fuel subsidies and cutting capital spending to curb budget deficits. No noticeable progress has been made in dealing with the key economic factors that ignited Arab uprisings. New economic dynamics conducive to shared and inclusive economic prosperity requires the dismantling of the “authoritarian rentier model” that prevailed over decades. The latter has been built on a resilient network of alliances entrenched in the business sector, within state institutions such as security sector and bureaucracy, in the media and the judiciary. Domestic resilience to change, regional conservative forces as well as international skepticism towards the “rise of Islamists” have not been supportive to set off and sustain new economic dynamics in Arab transitions. The cost of inaction may be huge if transitions slide into violence and extremism that spillover the region and last for decades.

Lahcen Achy, Senior Associate Carnegie Middle East Center.