World Economic Forum to tackle economic failure in Middle East

Two years after the exhilarating surge of hope after the revolutions of the Arab Spring, much of the Arab world is bogged down in political miasma and economic failure. This daunting atmosphere is the backdrop to the Middle East World Economic Forum gathering at the weekend in Jordan.

The conference programme is designed to combine the economic urgency of the moment, with an overview of the political hotspots. The World Economic Forum will run sessions on youth unemployment, transparency, income disparity, food security, private sector development, and infrastructure. Any one of these issues may seem obvious, but when combined into one government plan they add up to many of the core issues that are stopping the economies of the region taking off.

The lingering political instability in various countries after their political epiphanies will be covered in a variety of meetings, as well as special sessions on the troubled states of Libya, Iraq, and Syria. Delegates from equally troubled Egypt and Yemen may be happy that the spotlight will not fall on their own countries’ inadequacies.

Discussions will concentrate on promoting sustainable social safety mechanism, equality of opportunity and strengthening civil society. The pressure of regional transformation amidst violent tensions, compounded by sluggish growth and slow economies often cause these vital underlying imperatives for business and social development to be overlooked or completely ignored.

Political Islam

Two important sessions will look at the new Islamicisation of Arab politics. One will tackle the vital question of where political Islam works with good political governance; and another will look at how to prevent interfaith and sectarian relations from deteriorating, which will look specifically at Shiite Sunni relations, and the status of religious minorities, while also covering the vital issues of how to combine a secular (religiously neutral) constitution with political parties that come from Islam.

The combination of great political dislocation and uncertainty, with the serous economic instability means that very few of the new Arab governments are able meet their people’s hopes. There needs to be serious debate on how the new governments in North Africa can respond to public expectations, and a new effort to build regional or international mechanisms to try to help shore up the prosperity of the economies facing resource scarcity and rapid population growth, as the same time as the turmoil of the revolutions sweeps over the region.

The obvious sectarian splits in Syria are frightening the whole of the Arab world. The five or six-way clashes between radical Islamists, Shiites and Kurds, government forces and Free Syrian Army units illustrate a country disintegrating into warring factions that are struggling to control small patches of land and from which they will seek political advantage.

Oil fields

Perhaps the most bizarre such alliance is between the Islamist extremists of Jabhat Al Nusra whom the government hates, but with whom Al Assad’s generals have been forced to find do a deal since Jabhat Al Nusra now controls the oil fields and they need a profit share on the oil sales to find their military activity (against the government, and other rebel factions).

There is a live worry in most Arab states that the fighting in Syria will spread. It has already started to go into Lebanon and Iraq, and the Turks have worked very hard to keep it out of their southern borders. There will be deep interest from all participants on how they see Syria playing out over the next few months, with a sharp split between countries like the UAE which are very wary of getting involved in the deepening confusion although with a strong desire to support humanitarian aid, and others like Qatar and Saudi Arabia who are already involved in actively backing the opposition forces.

No one will be more involved in this debate than the host of this year’s World Economic Forum, King Abdullah of Jordan, whose small country is already housing over 500,000 refugees from the fighting, which is increasing every day as Al Assad’s forces conduct savage sweeps through the plains of Syria’s south just over the border from Jordan, in order to strengthen his geographical position ahead of any peace talks which might materialise over the summer.

Top impediment

Corruption is another of the evergreen topics that the World Economic Forum lies to look at. It has been repeatedly identified as the top impediment to conducting business in 22 out of 144 economies, many of which are in the Middle East.

The perception of a high level of corruption has caused great dissatisfaction in the Arab world and the people have repeatedly said that they want their new governments to behave differently to the old governments and their famously corrupt business partners. The fear is that this may not be happening so many will be watching to see how the new governments of the Arab world are implementing the process that they have made to their electorates, but may be willing to keep.

Part of the debate at the World Economic Forum will be to see what businesses can do to work with government and build robust anti-corruption regimes that will stand the test of time, and encourage a transparent environment that supports growth, competition, and stability.

All these issues are very desirable, and some of this programme may sound far too optimistic and naïve. But if everyone is cynical, and everyone thinks these things are too difficult to tackle, who will ever build the impetus for a better economic environment. This is why the World Economic Forum meeting should be useful, and we wait to see what results emerge from it.