by Lin Noueihed
Unemployment also varied sharply within each country, reflecting geographical divides in several states that saw revolts in 2011. In Tunisia, towns and cities on the eastern seaboard enjoyed higher incomes, lower unemployment and better infrastructure than the deprived central, southern and western areas that were such fertile ground for protests in both 2008 and 2011. Nationally, average unemployment was 14.8 per cent in 2010 but in southern towns like Redeyef, Metlaoui and Moulares it was often above 25 per cent, even by official figures, which means the real total was likely to be higher still. Some have put it above 50 per cent in the most deprived areas.34
Jobless figures in the smaller Gulf monarchies are heavily skewed by the fact that there is theoretically zero unemployment among expatriates, who are not officially allowed to live in the country without full-time employment contracts, nor remain beyond retirement age unless they own property. Among Gulf nationals, however, unemployment is still a reality. The official unemployment rate in 2009 was 13 per cent among Emiratis35 and 4 per cent among Qataris,36 but this does not take into account the relatively high number of people who choose not to work and are therefore not counted as unemployed. A reliance on the public sector is even more marked here than anywhere else in the Arab world. In 2010, 46 per cent of UAE nationals were employed by federal government institutions, 39 per cent in local government, and 6 per cent in institutions that spanned the two. Only 7 per cent of the country's private-sector workers were UAE nationals.37
The problem is even graver in Saudi Arabia. Although around 716,000 new jobs were created in 2009, unemployment among Saudi nationals rose from 9.8 per cent to 10.5 per cent, and some 39 per cent of 20–24-year-olds were without work. Some 92 per cent of the Saudi workforce was employed in the public sector, despite the government's efforts to cajole private-sector companies into hiring Saudis.38
Unemployment was also exacerbated by intense demographic pressures from the so-called ‘youth bulge’ – a swelling cohort of 20- and 30-somethings with little prospect of finding a job. In proportionate terms this demographic problem is most extreme in Yemen, which had a mean average age of 21 in 2010, making it the youngest Arab country. Yemen's population explosion has exacerbated various other political, social and economic calamities that are described later in this book. The single biggest growth in youth numbers was in Egypt, whose overall population increased by 23 per cent in the first decade of the 2000s to reach 78 million in 2010, by far the largest in the Arab world. Just under a third of those are aged between 15 and 30, and their numbers grew by 1.8 million in the second half of the 2000s.39
Near the other end of the demographic spectrum is Tunisia. Within a few years of gaining independence from France in 1956, late President Habib Bourguiba had banned polygamy, promoted contraceptives and legalized abortion. Tunisia's average annual population growth was less than 1 per cent in the 2000s, compared to 2 per cent in Egypt or 2.3 per cent in Saudi Arabia. But Tunisia's problem is one that afflicts so many others in the region, namely a surplus of university graduates with skills mismatched to the job market and with unrealistically high career expectations. Sharp growth in higher education in the late 1990s and early 2000s was partly a result of higher education being prioritized by government. Parents believe that respectable jobs require university degrees, and therefore push their children to enter university, funding their higher education at the expense of other spending. But the outcome is often a surplus of graduates with worthless degrees from poor-quality universities and skills that are not suited to real-world, private-sector jobs. An emphasis on learning by rote has also tended to discourage independent inquiry and initiative.
Of the 2.4 million unemployed people in Egypt in 2009, over a third had university level education or better, and in the capital, Cairo, the figure was 54 per cent.40 An additional 7.2 million people are forecast to enter the job market between 2008 and 2020, and to create jobs for them would require annual GDP growth of at least 7 per cent a year, even before taking into account all the existing jobseekers on the market.41 Every year, the Tunisian economy creates around half as many jobs as there are new graduates entering the labour market. The result is that Tunisian chambermaids and restaurant waiters are often graduates with fluency in two or three languages, frustrated with the lot that life has offered them.
Crisis? What Crisis?
There is little to distinguish the origins of the 2008 protests from those of the 2011 revolutions. Both began for essentially the same reasons in the same region of Tunisia, a deprived and little-known area but in many ways a microcosm of the economic malaise that affected so much of the Arab world. Where those protests faded away in 2008, they snowballed in 2011.
Was it the global financial crisis and the recession in Europe – the main trading partner for all North African countries – that made the difference? The answer is yes and no. There was no dramatic stock-market crash or sovereign debt crisis on the eve of 2011, but nor were most countries immune from the crippling economic problems that were striking fear into the hearts of governments and consumers on the northern side of the Mediterranean.
Several Arab bourses had crashed in 2008, notably Saudi Arabia's Tadawul, by far the region's largest stock market by capitalization, whose main index shed more than half of its value that year, as did the Cairo stock exchange. It was a similar story in Dubai, Abu Dhabi and Doha, as big institutional investors who had adventurously entered these high-risk, high-profit markets during the boom times quickly sold off their holdings.
Individual local investors were the biggest losers. On Riyadh's bourse, retail investors accounted for the vast majority of share trades. In Egypt, where middle-class interest in the stock market had perked up in recent years, a fifty-six-year-old man was found hanging at his home in October 2008 after losing most of his savings in the crash.42
Yet many Arab stock exchanges were too small, illiquid or disconnected from global financial markets to be seriously affected by the credit crunch or to make any widespread impact on a meaningful proportion of the population. After years of planning, the Syrian government had finally re-established the Damascus Securities Exchange (DSE) in early 2009. It rode out the global downturn and subsequently became one of the best-performing stock markets in the world, its overall index rising by more than 70 per cent in 2010, testament to its latent wealth and the lack of other investment outlets in the country.43
Tunisia's tiny stock exchange, with just 55 listed companies, saw strong gains in 2009 and 2010, while a renewed upswing in sentiment in the Gulf meant Riyadh's main index rose by 27 per cent in 2009 and 8 per cent in 2010.44 And the country that arguably emerged strongest from the credit crisis and global downturn was Libya, whose uprising was bloodier than any. This was as much by accident as by design – the country had no housing credit bubbles and no financial system sophisticated or interconnected enough to be directly affected by international markets.
Nonetheless, the 2008 slowdown in the Gulf certainly sent ripples throughout the Arab world. Job losses began to gather pace, especially after the property and construction crash in Dubai and decelerating growth elsewhere. Many companies imposed hiring freezes at best, and at worst went bust as the juggernaut of real estate speculation shuddered to a halt. The outcome was fewer job opportunities for workers from oil-poor countries, and less money sent back home to support families. Remittances to Egypt dropped by a fifth in the first half of 2009 and by 6 per cent in the second half.45
Many projects set to be funded by Gulf investors were cancelled or shelved. SAMA Dubai, which had promised to create 350,000 jobs for its Mediterranean Gate project in Tunis, essentially ceased to exist after a corruption probe in Dubai saw some of its management arrested. The land it was meant to build on around the Lac du Sud, close to central Tunis, still sat empty in late 2011. Overall foreign direct investment (FDI) into Tunisia in 2010 was 45 per cent lower than in 2008, in Egypt it was 33 per cent lower, and in Morocco it was 48 per cent down. But there was an even big
ger collapse in the Gulf states themselves, where FDI into the UAE was more than three times lower than in 2008. In Bahrain, it was ten times lower.46
The tourist industry stopped growing in the region's most popular destinations, but did not collapse. Tunisia and Egypt benefited from their status as low-cost package destinations that appealed to cash-strapped European holidaymakers.47 And tourism in Syria – a growing source of jobs and foreign currency earnings – was booming. Arrivals rose by 46 per cent year-on-year in the first eight months of 2010 and the economy as a whole grew at 5 per cent in the year before the revolt against Assad, with inward FDI remaining steady.48
Housing markets collapsed in overheated cities like Dubai, Abu Dhabi and Doha, where years of speculation and lax regulation finally came home to roost, but there was no real property crash in most other Arab cities, which were facing a genuine shortage in low and mid-range housing. Nor was there any other economic emergency, like a sudden currency depreciation or sovereign debt crisis of the type that prompted riots on the streets of Athens several times in 2011.
The global financial crisis and the ensuing downturn was not the direct trigger for the 2011 revolts, and indeed barely affected countries like Syria and Libya: the most vulnerable countries, in general, were those with close financial and business ties to the global economy but whose governments were not able to cushion the shock using energy revenues. And what evidence we do have about changes in sentiment between 2008 and 2010 suggest that living standards were being eroded. A rare poll in Tunisia, for example, found that while 56 per cent of respondents felt the overall economy was improving in 2009 and 2010, public satisfaction with schools, roads, transport and housing was decidedly lower than it had been in 2008.49
More broadly, the events of 2011 took place against a backdrop of deep global economic uncertainty that has historically tended to be fertile ground for political change. Extreme spikes and troughs in the price of oil, which plays such a central role in the region, carried crucial implications for rulers and ruled in both resource-rich and resource-poor countries. This is not to say that all citizens of oil-rich countries were kept happy by the benefits that their rulers provided, while those in oil-poor countries had their patience drained by stagnant or deteriorating qualities of life. The reality is clearly more complex, and a better way to characterize the economic roots of the 2011 uprisings might be to see them as a series of divides.
Most evidence, both empirical and anecdotal, suggests that the rich-poor divide was widening in most Arab countries. Those closest to the poverty line were the worst-hit by rising food and fuel prices that meant basic essentials still ate up most of their incomes. At the other end of the spectrum, financial and political elites in places like Syria, Tunisia, Libya and Egypt were gathering ever-larger concentrations of wealth and power in their hands as the chief beneficiaries of privatization and economic liberalization programmes.
An extreme rich-poor divide is also obvious in the tiny Gulf monarchies like Qatar and the UAE, neither of which saw any real instability in 2011. But the beneficiaries in that divide were nationals of those countries, enjoying advantages and privileges denied to the foreign workers who made up the bulk of the overall population. As the final section of this book outlines in more detail, nationals in these countries are essentially an elite stratum in a many-layered system that has, in general, helped to neutralize the threat of revolt and enhanced a sense of national cohesion and identity.
Geographical divides were equally striking. Stark variations in incomes and unemployment rates between coastal and central Tunisia help explain why the protest movement began in deprived areas before anywhere else. The perception in north-eastern Libya that Tripoli had neglected them for decades was a serious cause of discontent. It was no coincidence that this region fell first from Gaddafi's grip. In Syria, impoverished families in rural eastern and southern areas lived a very different life from the urban elite in Damascus who spent their weekends partying or shopping in Lebanon.
There was also a crucial gap between expectations and reality, one closely linked with a sense of injustice. In Bahrain, where the ruling family is Sunni, the majority Shi'ite population felt economically as well as politically disenfranchised, believing that access to government jobs or housing was deliberately more restricted for them than for their Sunni compatriots. Tens of thousands of new graduates in Tunisia and Egypt expected to find jobs commensurate with their skills. They were disappointed to find no employment, or that their qualifications were ill-suited to whatever work was available.
But none of these divides are unique to the Middle East and North Africa. In fact they are often more pronounced in the developed world. Income distribution in the United States, for instance, is far more unequal than in most Arab states, and regional variations in unemployment and income are just as bleak in many Western European countries as they are on the other side of the Mediterranean. Youth unemployment in Spain was 40 per cent in 2010, higher than Tunisia, Syria or Egypt, and new graduates were faced with very similar mismatches between expectations and reality.
Nor were state finances on the verge of crisis. Net government debt was 17 per cent of GDP in Syria or 40 per cent in Tunisia in 2010, compared to 142 per cent in Greece or 101 per cent in Italy.50 Stock market crashes in developed economies were far deeper and more damaging than they were in the Arab world. Bank bail-outs in Britain or the United States could be seen as a sophisticated technique of crony capitalism little different in essence from what authoritarian rulers had applied in Syria or Tunisia.
Perhaps the key difference in the Arab world was the combination of economic hopelessness with political powerlessness. Angry, poor and disenfranchised people in Greece, Spain or Britain had outlets to express their displeasure with policy-makers. They could read and write criticism of their governments, they could watch TV shows and enjoy cartoons that openly mocked their political leaders, they could stage peaceful protests without being shot, and they could ultimately voice their disapproval at the ballot box. They had a belief, whether real or imaginary, that they could influence the course of events.
The absence of this belief in most of the Arab world fuelled a frustration that, as the next chapter explains, was being shared and spread through new forms of media and communication that had already undergone their own revolution in the preceding decade.
CHAPTER 3
The Media Revolution
If you want to free a society just give them internet access because … the young crowds are all going to go out and hear and see the unbiased media, see the truth about other nations and their own nations and they're going to be able to communicate and collaborate together … Definitely, this is the internet revolution. I'll call it Revolution 2.0.
– Egyptian activist Wael Ghonim, February 20111
In a Damascus courthouse in May 2002, Riad al-Turk, then 71, was being tried on charges of inciting an armed insurrection and undermining the constitution by taking part in the political salons that had sprung up after Bashar al-Assad inherited Syria from his father.2 Assad had promised reforms when he took office in 2000. Hopes were high for the new president, a seemingly affable eye doctor who had only been fast-tracked for leadership after his older brother, the heir apparent, was killed in a car crash. Assad had freed political prisoners, encouraged free speech and condemned corruption.
Intellectuals, many of them graduates of the Syrian prison system, began to cautiously criticize the lack of political freedoms and the dominance of the Ba'ath Party since 1963, while Turk, head of a banned faction of the Communist Party, condemned the hereditary turn the Syrian republic had taken. A respected cartoonist, Ali Ferzat, who would have his hands crushed by regime thugs in 2011, opened a daring new magazine called al-Domari, or the lamplighter, which flew off the shelves in its first week. Soviet-style housing blocks still loomed over the grey streets of Damascus and an army of spies still occupied street corners, taxis and hotel lobbies, but the erstwhile capital of Islam
's Ummayad Empire was buzzing. And this new vigour had a name: the Damascus Spring.
It was not to last. While an asymmetric economic reform programme picked up speed over the ensuing decade, Assad shut down the political salons, tried their hosts in security courts and sent them to jail, or in some cases back to jail. The experiment with political liberalization was over.
Barred from entering the courthouse on that spring morning in 2002, a crowd of several dozen had gathered outside. Most were friends and fellow dissidents, lawyers and human rights activists. Among them were some Western diplomats and a few reporters.
One man walked past a journalist, whipped a pamphlet from its hiding place inside his jacket, stuffed it in the journalist's hand, and kept walking.3 The leaflet criticized the Assad regime, and would probably have got the man arrested not just for its content, but also for his distributing publications without a licence in a country where the state virtually monopolized the media. Only a few pamphlets could be printed at any one time and they could only be distributed to Syrians who were brave or informed enough to show up in person at the courthouse, watched closely by the secret and not-so-secret police. Internet and mobile phone services had only arrived in Syria in 2000, and glacially slow dial-up connections initially had to go through the Syrian Computer Society, headed by Assad himself before he became president. Hotmail and Yahoo! were banned. Widespread restrictions meant few people used e-mail, so Syrian authorities could monitor users easily. Some critics had been arrested for forwarding jokes about the president, reinforcing suspicions that the internet, like the phones, were under surveillance.
