Arab Spring is all about dignity and governance

The political tensions and transformations in the Mena region, which started off in Tunisia in December 2010 and quickly spread to Egypt, Syria, Bahrain, Yemen and other countries in the region and have turned into a deadly civil war in Libya.

This more aptly termed ‘Arab Firestorm' started off with protests against long-standing autocratic regimes. The protesters are demanding reform and deep transformation of both political and econ-omic governance in their countries.

In the directly affected countries and more widely across the region, weak political and economic governance reflects itself in public concerns regarding issue of dignity (Karama) in the treatment of citizens, social justice, fairness, accountability and access to public services. Dissatisfaction with governance in many Arab states is fuelled by a sense that all too often natural resources and national assets — including state-owned enterprises — have been captured by special interests and that state control of the media has stifled the ‘voices' of citizens and society.

Political and economic repression has, not surprisingly, led to widespread calls for the restoration of Karama. Although it is difficult to predict the outcome of the current turmoil — the ‘Arab Spring' or the ‘Arab Firestorm' — it has highlighted some pressing demographic, political, governance and socioeconomic vulnerabilities and challenges which, if properly addressed, should lead to major corporate governance reform in the region.

It is striking that many countries in the Mena region undergoing transformational scenarios were ranked as top reformers (for the past five years) in the World Bank's Doing Business reports. This suggests that introducing Doing Business related policy reforms may be ineffective if there is no ‘trickle down' and inclusiveness and if public engagement and buy in is not there at the time of designing these reforms.

Systematically, the popular uprisings have pointed the finger of blame at government, at weak and poor governance, at the absence of accountability and the implementation of biased policies serving special interest groups, personal interests of leaders, political clientielism and not serving the public at large.

The persistence of widespread and deep-rooted misgovernance can be destructive and lead to "failed states" where corruption becomes rife and the State and its agencies are "captured", and while natural resources may be plentiful, growth and development are dismal. At the core of the "Arab Firestorm" lies the issue of ‘governance' and its many dimensions, including the governance of state-owned enterprises and government-related enterprises (GREs).

Governments of the region have reacted to the Arab uprisings by way of enhancing subsidies and increasing public sector employment. However, fundamental structural reforms — not macro-economic policy measures — are required to address the chronically high youth unemployment rate and provide economic security.

Education

Public sector employment constitutes a short-term palliative to the regional employment challenge, but will not raise productivity growth. Indeed by increasing the size of government and offering attractive public sector jobs the policy actions are likely to crowd out the only promising engine of growth: private sector investment and employment.

A more basic problem is that ill-designed education systems have delivered generations of unemployable youth without market-oriented skills and aptitudes. Educational reform is required to produce a labour force capable of supporting the Arab economies to respond to 21st century globalisation challenges characterised by greater competition among economies, increased access to technology and enhanced labour mobility.

The transformation of Arab economies and societies will require resolute and visionary leadership with the political courage and will to establish new governance frameworks to promote fairness, accountability, transparency and responsibility.

The writer is Executive Director, Hawkamah Institute for Corporate Governance.