Prof. Ishac Diwan: The immobilism of the past is gone

01/08/2011

Interview with Right to Nonviolence

August 2011

Q. Will you first comment generally on the ME revolutions underway? Any particular impressions or associations with previous historical transitions/moments?

My sense is that the specificities or the ME region make this a case apart. There can be interesting comparisons with the fall of the Berlin wall, the fall of the generals in Latin America, or the removal of Suharto or Marcos. But the ME has to contend with its own historical moment, which includes the evolution of political Islam, external influences connected with oil and Israel, and its multi-ethnic diversity. It looks to me that we are facing a long period of adjustment, perhaps a decade, whose outcomes are highly uncertain.

Q. Although there is a strong narrative based on fear of radicalization as an argument for the status quo the predominantly nonviolent revolutions are widely analyzed as driven by democratic and economic aspirations rather than by religious arguments or ideals. Would you agree? As an economist, how do you view the economic causes in particular?

The revolutionary equation is complex. In Egypt and Tunisia, it is as if the middle class, especially the educated youth, have now rejected the authoritarian bargain which “protected “ them against political Islam at the cost of a repressive state with no liberties, and afloat in corruption and lack of broadly available opportunities for the youth. Why the shift? Perhaps they sense that political Islam has entered a more moderate phase that can be accommodated in more open system? The hope is that unlike Iran in the early 1980s, there can be a constructive dialogue leading to the establishment creation of a state that can accommodate both liberals and conservatives.

Q. You have in fact argued that the revolutions underway are an understandable demand for better governance on the part of countries more of less categorized as ‘later-stage state dominance’ according to a socio-political typology. Is a framework such as this also useful in determining the role of international agencies and other governments in facilitating change in specific countries?

If the political situation stabilizes, there will be a challenging economic reform agenda ahead. The hope is that the new and broader social coalition that will hold power will be able to deal with some fundamental weaknesses left behind by the autocrats. These concern first the productive base of the economy, which needs to be opened up beyond elite capital so that opportunities are more widely available to all in society, corruption and monopolies are kept in check, and the financial sector is democratized. And second, there should be a revival and improvement in quality of public services (health, education, social protection, and infrastructure) that will require an overhaul of civil service pay – perhaps financed by a reduction of the large subsidies received in the past by the middle class to keep them quiet. These reforms will require first and foremost political support at home, in the form of broad coalitions delivering then in ways that spread the benefits widely. Financing from abroad would be helpful, once these conditions are in place, to smooth the costs of the reforms over time. But it is important for the reforms to be home-grown and domestically supported politically.

Q. Should good governance be considered a basic human right?  How does it differ from democracy, or the rule of law?

Good governance is a right, but rights have to be fought for!  There is a need now to advocate for the kind of political settlements that can provide for good governance and human rights. This supposes that each country can be governed by a coalition of forces that can ensure stability and security, and that is interested and able to deliver these rights, including to minorities. The challenge today in each country is to build such coalitions, and this will require dialogue rather than repression and denial.

Q. You have worked in a number of countries during periods of extraordinary global change that until now seemed to highlight that Arabs were ‘missing their appointment with destiny’ as framed by the late Samir Kassir. As an economist, do you see the planes for optimism in the current situation given the economic, demographic, social, and political realities at play?

I am an eternal optimistic and see many opportunities in the current situation. At least, the immobilism of the past is gone, and the search for better outcomes is ongoing. But there are also lots of risks to be wary of – fragmentation into smaller ethnic countries, or “Lebanonization” of Iraq and Syria, or of going the extremist way religiously and militarily (à la Iran, Pakistan). Turkey does provide a more positive model, and this is very helpful, although it has its specificities and cannot just be imitated.

Q. You have recently participated in a number of regional meetings on the economics of the revolution, what they are, what they need to be, etc. Do you as a result have a clearer idea of a useful economic agenda? For the region? For individual countries?

I think that the new ruling coalitions will have to tackle the economic challenges head on when they take over, and manage to bring new life to the economy, or the new regimes to get consolidated. It would be a mistake to consider, instead, that the early coalitions will be too weak to implement change. The challenge is to form early on political coalitions that have the muscle to be ambitious. This realization has to be home grown, and should influence the willingness of the revolutionary and Islamic forces to seek a quick historical settlement of their differences, which are especially large on the social rather than economic side of things.

Q. There is a certain irony in Egypt’s rejection of major support from the IMF and acceptance of ‘gifts’ of $500 million each from Qatar and Saudi Arabia, until now staunch counter-revolutionists.  Do you see viable opportunities for innovation, experimentation, and self-determination in economic policy-making in the case of Egypt?

I hope that Saudi conditionality is really less intrusive than the IMF’s. From an internal political perspective, the less foreign interferences the better at this junction – foreign support tends to encourage chicken games, when the situation calls for a quick basic agreement over some basic principles. But external financing will be no doubt help a lot. The best would be a situation where internal priorities are decided first, and a portfolio of external loans is assembled in ways that support the national project and without undue influence by any one external actor. This is not impossible but requires determination.

Q. Given the rather dismal historical record related to economic sanctions, is there any forward thinking in policy circles applicable to countries in the ME for revolutions under way where regimes entrench, such as in Syria, Libya, Bahrain?

Are sanctions useful for the cases of Syria, Bahrain, or Libya? This is a difficult question. Internal solutions are by far preferable. The revolutionaries have to feel that they can do it on their own, if they decide to rebel. Otherwise, we will get unbalanced coalitions that depend on external support for survival, which is dangerous given that no support comes for free. But once a rebellion has started, and massacres are ongoing, it is difficult, morally, not to support short term solutions that can bring relief. But attention must be also kept on the longer term future – it is no good to replace one dictatorship by another that will oppress a segment of society, be it the minorities in Syria, or particular tribes in Libya or Yemen.

Q. After a stellar career at the World Bank you are returning to research and teaching at Harvard. What are your best lessons learned from outside the ivory tower?

I have always been torn between the desire for action and results, and the desire to take time to read and think about how best to act.  The world is changing fast and in uncertain ways, especially in the ME. Thus my desire to move (back) to the ‘ivory tower’ at this point in time, but while also trying to stay close to the action, at least when it comes to the Middle East and Africa.

Q. Recently a young activist affirmed in less than flattering terms that the widespread feeling amongst the youth is that the ‘older’ academic/intellectual generation is utterly disconnected from the reality on the ground in the region and therefore not well suited to make decisions, manage transitions, or even give advice. Why should they listen and any ideas on bridging that gap?

Has the old generation failed? I do not think so. Nobody should be disqualified. So far, the people of the Middle East have had a difficult time figuring out the outline of a state that can serve its population best. There were waves of ideologies, from communism to Arab Nationalism and to political Islam, and large interests at play, related to oil and Israel’s interests. It is not possible to go back to the 1970s, or to the 1920s. It is going to take everyone, young and old, to make sure that the next solution is the right one.   The accumulated experience should be a big asset, on which we need to have a return.

Interview with RN Director Trudi Hodges, August 2011

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