The Modern Middle East (88 page)

7.
Interventionism and heavy regulation of the economy can make a state appear socialist. Nazih Ayubi discusses at great length the question of whether the Middle Eastern state is socialist or what he calls “populist-corporatist,” arguing that despite the adoption of socialist slogans and even certain organizational structures, what predominates in the Middle East is not socialism but
etatism.
See Nazih N. Ayubi,
Overstating the Arab State: Politics and Society in the Middle East
(London: I. B. Tauris, 1999), pp. 196–203.

8.
Monte Palmer,
Political Development: Dilemmas and Challenges
(Itasca, IL: F. E. Peacock, 1997), p. 30.

9.
Cited in Richards and Waterbury,
Political Economy,
p. 180.

10.
John Waterbury,
The Egypt of Nasser and Sadat: The Political Economy of Two Regimes
(Princeton, NJ: Princeton University Press, 1983), p. 160.

11.
Richards and Waterbury,
Political Economy,
p. 184.

12.
Volker Perthes,
The Political Economy of Syria under Asad
(London: I. B. Tauris, 1997), p. 141.

13.
Data collected from the Syrian Central Bureau of Statistics,
Statistical Abstract
2008, “Distribution of Employees (15 Years and Over) by the Employment Status (the Main Job), Sector and Sex, 2007,”
www.cbssyr.org/yearbook/2008/Data-Chapter3/TAB-5-3-2008.htm
.

14.
John Ruedy,
Modern Algeria: The Origins and Development of a Nation
(Bloomington: Indiana University Press, 1992), p. 216.

15.
Richards and Waterbury,
Political Economy,
p. 187.

16.
Ibid., p. 188.

17.
Ibid., p. 195.

18.
Hooshang Amirahmadi,
Revolution and Economic Transition: The Iranian Experience
(Albany: SUNY Press, 1990), p. 189.

19.
Anne Marie Baylouny, “Militarizing Welfare: Neoliberalism and Jordanian Policy,”
Middle East Journal
62 (Spring 2008): 287.

20.
Central Intelligence Agency,
CIA World Factbook,
2009,
https://www.cia.gov/library/publications/the-world-factbook/
.

21.
Ibid.

22.
“Cleanup” efforts have been largely unsuccessful. See Kate Gillespie and Gwenn Okruhlik, “Cleaning Up Corruption in the Middle East,”
Middle East Journal
42 (Winter 1988): 59–82.

23.
Owen and Pamuk,
History of Middle East Economies,
pp. 141–44; Andre Croppenstadt, “Measuring Technical Efficiency of Wheat Farmers in Egypt,” ESA Working Paper, No. 05–06, Food and Agriculture Organization of the United Nations, July 2005, p. 1.

24.
Richards and Waterbury,
Political Economy,
p. 153.

25.
Ibid., p. 206.

26.
Ruedy,
Modern Algeria,
p. 220.

27.
World Bank, “Foundations of Future Growth and Job Creation,” in
Unlocking the Employment Potential in the Middle East and North Africa: Toward a New Social Contract
(Washington, DC: World Bank, 2004), p. 171.

28.
Richards and Waterbury,
Political Economy,
p. 216.

29.
Perthes,
Political Economy of Syria,
p. 204.

30.
Richards and Waterbury,
Political Economy,
pp. 233–37.

31.
World Bank,
World Development Indicators,
2003 (Washington, DC: World Bank, 2003), pp. 258–60.

32.
Iliya Harik, “Privatization: The Issues, the Prospects, and the Fears,” in
Privatization and Liberalization in the Middle East,
ed. Iliya Harik and Denis Sullivan (Bloomington: Indiana University Press, 1992), pp. 18–19.

33.
John Page and Linda Van Gelder, “Missing Links: Institutional Capability, Policy Reform, and Growth in the Middle East and North Africa,” in
The State and Global Change: The Political Economy of Transition in the Middle East and North Africa,
ed. Hassan Hakimian and Ziba Moshaver (London: Curzon, 2001), p. 46.

34.
Ibid., p. 28.

35.
Put differently, rentierism is the product of “unearned income not generated by the productive operation of the national economy.” Khaldoun Hasan Al-Naqeeb,
Society and State in the Gulf and Arab Peninsula: A Different Perspective,
trans. L. M. Kenny (London: Routledge, 1990), pp. 78–79. Todaro offers a more precise definition of economic rent: “the payment to a factor of production (i.e., resources or inputs such as land, labor, or capital) required to produce a good or a service over and above its highest opportunity cost.” Todaro,
Economic Development,
p. 716.

36.
Laurie Brand, “Economic and Political Liberalization in a Rentier Economy: The Case of the Hashemite Kingdom of Jordan,” in Harik and Sullivan,
Privatization and Liberalization,
p. 168.

37.
Peter Evans,
Embedded Autonomy: States and Industrial Transformation
(Princeton, NJ: Princeton University Press, 1995), p. 23. Nevertheless, especially in relation to the Middle East, a rentier state is generally seen as one that “depends on external sources for a large portion of its revenues. These revenues from abroad are called rent. Rent is not the only income, but it certainly predominates. In the past, rentier states have been based on international trade in gold or bat guano. Today, the term refers most often to the oil states whose income is derived from the international sale of petroleum.” Gwenn Okruhlik, “Rentier Wealth, Unruly Law, and the Rise of Opposition: The Political Economy of Oil States,”
Comparative Politics
31 (April 1999): 295.

38.
Timothy J. Piro,
The Political Economy of Market Reform in Jordan
(Lanham, MD: Rowman and Littlefield, 1998), p. 11.

39.
Brand, “Economic and Political Liberalization,” p. 168.

40.
Gregory S. Mahler,
Politics and Government in Israel
(Lanham, MD: Rowman and Littlefield, 2004), p. 105. For more on Israel’s “imported money,” see Asher Arian,
Politics in Israel: The Second Republic,
2nd ed. (Washington, DC: CQ Press, 2005), pp. 71–72.

41.
Brand, “Economic and Political Liberalization,” p. 168.

42.
Ibid., p. 169.

43.
Kiren Chaudhry rejects the argument that the state deliberately seeks to foster clientelism and patronage, instead maintaining that social outcomes can be best explained by examining “the interaction of laissez-faire distributive imperatives
undertaken for growth alone,
the lack of economic information, and the preexisting composition of the bureaucracy” (emphasis added). Kiren Aziz Chaudhry,
The Price of Wealth: Economies and Institutions in the Middle East
(Ithaca, NY: Cornell University Press, 1997), p. 191. Nevertheless, the outcome, namely the acquiescence of important economically active sectors of the population to state authoritarianism, remains the same.

44.
There is a rich body of literature on rentierism in the Middle East. A sample of this literature includes Rex Brynen, “Economic Crisis and Post-rentier Democratization in the Arab World: The Case of Jordan,”
Canadian Journal of Political Science
25 (March 1992): 69–97; Barnett Rubin, “Political Elites in Afghanistan: Rentier State Building, Rentier State Wrecking,”
International Journal of Middle East Studies
24 (February 1992): 77–99; Hootan Shambayati, “The Rentier State, Interest Groups, and the Paradox of Autonomy: State and Business in Turkey and Iran,”
Comparative Politics
26 (April 1994): 307–31; and Eva Bellin, “The Politics of Profit in Tunisia: Utility of the Rentier Paradigm?,”
World Development
22, no. 3 (1994): 427–36.

45.
There are, needless to say, differences in the context of rentierism that need to be taken into account. Okruhlik, for example, maintains that in Saudi Arabia “rent did not buy the support or loyalty of different social groups even
during the boom,” as the uneven distribution of its proceeds led to resentment and opposition. Okruhlik, “Rentier Wealth,” p. 297.

46.
In addition to chapter 8 in this volume, see Daniel Brumberg, “Authoritarian Legacies and Reform Strategies in the Arab World,” in
Political Liberalization and Democratization in the Arab World,
vol. 1,
Theoretical Perspectives,
ed. Rex Brynen, Bahgat Korany, and Paul Noble (Boulder, CO: Lynne Rienner, 1995), p. 233.

47.
Although almost the rule, rent seeking in the Middle East has been a highly risky endeavor, especially lately, as the amount of revenues accrued from it—namely from oil, labor, and tourism—has been volatile and unpredictable.

48.
Brumberg, “Authoritarian Legacies,” p. 239.

49.
For essays on the different liberalization experiences in the Middle East in the 1980s, see Harik and Sullivan,
Privatization and Liberalization.
See also Henri Barkey, ed.,
The Politics of Economic Reform in the Middle East
(New York: St. Martin’s Press, 1992).

50.
As Okruhlik puts it, Middle Eastern states have opted for “system maintenance in the guise of liberalization from above . . . [hoping to] coopt wider circles of the political public and direct political and religious organizations into acceptable and controllable channels.” Okruhlik, “Rentier Wealth,” p. 305.

51.
David Waldner,
State Building and Late Development
(Ithaca: Cornell University Press, 1999), pp. 198–99.

52.
Ibid., pp. 49–51.

53.
Robert Looney, “Reforming the Rentier State: The Imperative for Change in the Gulf,” in
Critical Issues Facing the Middle East: Security, Politics, and Economics,
ed. James A. Russell (New York: Macmillan, 2006), p. 43.

54.
The linkages between declines in economic rents and political instability are not as direct as they may appear on the surface. Even in times of economic difficulty, in many instances the state is still seen as an important source of patronage and protection under adverse circumstances, and as the only ally that can turn the economy around and once again funnel capital into private hands.

55.
Richard Auty, “The Political State and the Management of Mineral Rents in Capital-Surplus Economies,”
Resources Policy
27 (2001): 79.

56.
See, for example, Amirahmadi,
Revolution and Economic Transition;
Chaudhry,
Price of Wealth;
Manochehr Dorraj, “State, Petroleum, and Democratization in the Middle East and North Africa,” in
The Changing Political Economy of the Third World,
ed. Manochehr Dorraj (Boulder, CO: Lynne Rienner, 1995), pp. 119–43; Ellis Jay Goldberg, ed.,
The Social History of Labor in the Middle East
(Boulder, CO: Westview Press, 1996); Harik and Sullivan,
Privatization and Liberalization;
Homa Katouzian,
The Political Economy of Modern Iran,
1926–1979 (New York: NYU Press, 1981); Piro,
Political Economy;
and Richards and Waterbury,
Political Economy.

57.
Edmund Burke, ed.,
Struggle and Survival in the Modern Middle East
(Berkeley: University of California Press, 1993).

58.
On informal networks, see Guilain Denoeux,
Urban Unrest in the Middle East: A Comparative Study of Informal Networks in Egypt, Iran, and Lebanon
(Albany: SUNY Press, 1993). Sanchez, Palmiero, and Ferrero do discuss a “quasi-formal” sector, although they apply the concept to “those earning a high income either because of advanced skills, or because of high capital intensity or because of oligarchical market environment”; they describe the sector as including “self-employed professionals like doctors, lawyers, etc.; small engineering units and manufacturing activities with significant amounts of skills and investment; self-employed construction workers including plumbers and electricians and the like; and commercial activities with a substantial capital input.” Carlos Sanchez, Horacio Palmiero, and Fernando Ferrero, “The Informal and Quasi-Formal Sectors in Cordoba,” in
The Urban Informal Sector in Developing Countries: Employment, Poverty and Environment,
ed. S. V. Sethuraman (Geneva: International Labour Office, 1981), pp. 144–45.

59.
John Waterbury,
Exposed to Innumerable Delusions: Public Enterprise and State Power in Egypt, India, Mexico, and Turkey
(New York: Cambridge University Press, 1993), p. 1.

60.
Monte Palmer, Ali Leila, and El Sayed Yassin,
The Egyptian Bureaucracy
(Cairo: American University of Cairo Press, 1988).

61.
Piro,
Political Economy,
pp. 96–97.

62.
Richards and Waterbury quote an Egyptian study that found four different subsectors within Egypt’s informal sector: (1) small-scale manufacturing and handicraft work; (2) itinerant and jobbing artisanry (masons, carpenters, tailors); (3) personal services (servants, porters, watchmen); and (4) petty services and retailing activities (car washers, street hawkers and vendors, garbage collectors). According to the broader classification used here, subsectors 1 and 2 are stationary, while 3 and 4 are mobile members of the informal sector. Richards and Waterbury,
Political Economy,
p. 139.

63.
Richard Adams, “Bureaucrats, Peasants and the Dominant Coalition: An Egyptian Case Study,”
Journal of Development Studies
2, no. 2 (1986): 236–54.

64.
Alan Richards, “Economic Imperatives and Political Systems,”
Middle East Journal
47, no. 2 (1993): 219–20.