Saturday, 9 February 2013


Is democracy, not as a theoretical model but as practiced in Norway for example, the same as neoliberalism, or is neoliberalism a catalyst to diluting democracy and paving the road to socioeconomic authoritarianism? While democracy is based on a broad social contract that takes into account the interests of the general population on a social justice criteria, neoliberalism is a political economic doctrine whose purpose is to justify the accumulation of wealth by a small percentage in society who operate under a regime of free flow of capital across national borders and enjoy the protection and fiscal support of the state to the detriment of the majority.

Why has the West endeavored to identify democracy with neo-liberalism from the Reagan administration to the present? Is it because of the Cold War until 1990 and 'war on terror' since 1990 intended to engender sociopolitical conformity behind the neoliberal regime? Why has there been an effort under globalization in the last three decades to foster the doctrine of neoliberalism that has devastated the middle class and workers in most countries, including the Western World, but very little resistance to an ideology that is diluting democracy and creating quasi-authoritarian conditions?

Why is the West so anxious to impose neoliberalism in Muslim countries, preferring Islamist regimes - Egypt and Tunisia for example- operating under neoliberalism than secular nationalist regimes? And why have Islamist regimes in Egypt and Tunisia embraced neo-liberalism, modeling themselves after Turkey, Indonesia, and Malaysia, instead of a nationalist economic regime like Iran? Not that Iranian nationalist theocratic-style regime is a model to be emulated because it is a panacea for the majority of the people, but why do national capitalists in Arab countries and a segment of their Islamist political representatives opt for global economic integration under neoliberalism? Does this suggest that the national capitalists are realistic in their assessment of the changing political winds moving toward Islamist direction, and it serves their interests just as good because an Islamist regime can engender sociopolitical conformity to promote capitalism more readily than a secular regime?

While it is true that nationalist authoritarian regimes operated in Tunisia, Algeria, Libya and Egypt, it is also true that what replaced those regimes are not much better in terms of commitment to human rights and social justice, largely because of the commitment to a neoliberal direction. Libya where NATO intervened with massive bombings to impose regime change has now adopted policies favoring foreign investment, privatization of public enterprises, foreign ownership of oil that is the base of the economy, special economic zones for multinational corporations to operate under special incentives and protection, and a crackdown of those opposed to such neoliberal policies intended to reduce the national economy into a dependency of the West. The result has been resurgence of resistance as much in Libya as in neighboring countries pursuing the same path, in short, the continuation of Arab Spring.

Why does sociopolitical unrest persist in Egypt, if Arab Spring managed to remove former dictator Mubarak from power in February 2011? Why is there unrest if the popular Muslim Brotherhood's Freedom and Justice Party took power? Were the goals of Arab Spring rebels simply to replace a dictator with a duly-elected president, or to change economic and social policy that would begin to address issues of widespread poverty and inequality? Did Egypt replace crony capitalism under Mubarak with neo-liberalism backed by the US, EU, International Monetary Fund, and World Bank?

Does an Islamist regime represent systemic change in Egypt and Tunisia, or is it used as a veneer to hide neo-liberal policies that were responsible for the structural problems that led to Arab Spring? After all, from the 1980s until Arab Spring, privatization and reductions in trade barriers resulted in even greater wealth concentration in a small politically connected group within Egypt and Tunisia and in foreign corporations that invest through native (comprador) capitalists. This led to sharp rise in inequality and growing poverty in Egypt and Tunisia and was the root cause of Arab Spring.

Throughout 2011 when Arab Spring rebellions where unfolding across North Africa and the Middle East, I argued in several blog articles that the US, Europe, the International Monetary Fund (IMF), World Bank, OECD, multinational corporations, and the large domestic businessmen wanted to make sure that Muslim countries remain well integrated into the global political economy and accommodating toward the Western (NATO) military zone. I noted that it made no sense merely to remove one authoritarian regime that caters to a small domestic elite and a handful of foreign interests and replacing such a regime with another that will continue to cater to a small elite under neo-liberal policies.

Two years after Arab Spring, we have seen that indeed the old regimes are gone, but the new regimes have pursued global economic integration under neo-liberal policies as the IMF, US, and EU demanded during the uprisings in 2011. The result has been sociopolitical turmoil in Egypt and Tunisia, not so much because the new Islamist regimes in those countries have violated civil rights, manipulated the judicial system, suppressed social forces demanding social justice, but because the new regimes are modeled after the Turkish, Malaysian and Indonesian political-economic models where Islamic governments pursue neo-liberalism and global integration, to the detriment of social justice. Trade union and human rights activists played a key role in Arab Spring uprisings, especially in Egypt and Tunisia. However, trade union and human rights continue to be violated under Islamist regimes that see trade union and human rights activists as a threat rather than the basis for society rooted in social justice.

Neo-liberalism under Islamist regimes operating in Turkey, Indonesia and Malaysia are the models that the US, EU, and IMF want for the entire Muslim world, and this has been confirmed by what has been taking place across North Africa in the last two years. Neo-liebralism under globalization is subtle form of infringement on Muslim sovereignty. One would naturally assume that Islamist regime entails economic nationalism, social justice rooted in the religion's doctrines, and above all, solidarity with Muslim countries instead of globalization. In reality, Egypt and Tunisia have not followed such paths and the result in late 2012 and early 2013 has been increased social unrest and demand for a true democratic regime that enjoys national sovereignty and promotes social justice.

The only hope to strengthen national sovereignty and lessen external dependence for the Arabs is to revisit some 21st version of Nasser's dream of promoting social justice at home, an integrated Arab world and regional solidarity at all levels possible as a means of increasing leverage around the world. Given that Arab princes and millionaires are putting their money in global financial markets, expensive real estate in the West, and other businesses around the world, given that the Arabs are pitifully divided, regional economic integration is unlikely. Now under Islamist regimes in Egypt and Tunisia, we have a new economic elite committed to neo-liberalism, while it is using Islamist government as a tool to suppress the aspirations of the middle class and workers for greater political, economic, and social justice. This is what the political opposition in Tunisia and Egypt is claiming, and it is what protesters have been saying in Tunis and Cairo.

The neo-liberal push across the Muslim World and using Turkey (both a NATO member and a candidate for EU membership) as the model for the rest of Islamic nations clashed with the realities of Arab societies that have a huge number of poor people and a rapidly growing population. One would think that after the economic, social and political disasters of Iraq and Afghanistan in the first decade of the 21st century, the US and EU would have learned that trying to superimpose Western institutions rooted  in social injustice does not work because the people on the receiving end will undermine and eventually topple them. Of course, the West does not see it this way because if Turkey is enjoying economic growth under an Islamist regime pursuing neo-liberalism and global integration, why not the rest of the Muslim countries.

In the first term of the Reagan administration, Turkey accepted the US neo-liberal course that the IMF and World Bank were advocating. Turkey’s economic growth in the last decade has average about 5%, in comparison with just a bit over 4% from 1980 to 2000. This astonishing growth has taken place partly because of a burgeoning trade deficit, unemployment rising from from around 8% in the early 1980s to above 11% in 2012, and an overvalued currency amid low wealth creation for the vast majority of the population.
Tragically, Turkey like Egypt and Tunisia has a youthful population, an estimated 50% under the age of 30, that is facing unemployment problems comparable to those of southern Europe currently under IMF-EU austerity measures. Moreover, while the official poverty line for Turkey is comparable to that of Greece, just as in the case of Greece the unofficial rate is roughly half of the population. Inequality statistics for Turkey that the West has as a model for the rest of the Arab countries are comparable to Egypt and Tunisia. Although looking solely at Turkey's phenomenal vertical growth through gross GDP statistics in the last ten years, one would be convinced to advocate the same model for other countries. However, has any of that phenomenal growth 'trickled down' to create a strong and broad middle class, a working class with improved living standards and a farming sector with higher living standards? Is Turkey the next China, or the next Greece, once the bubble bursts?

Under neo-liberalism, Turkey's labor movement has weakened, just as it has in Tunisia and Egypt and recently weakening in Southern Europe operating under austerity that is a front for imposing neo-liberal policies. The United Nations’ (UN) International Labor Organisation (ILO) lists Turkey as one of the least respectful nation for labor rights, classifying it in the same category as Djibouti and Ethiopia, a country currently ranking 122 out of 134 on the World Economic Forum’s Gender Gap Index owing to its unequal treatment of women.

A free-market Islamist neo-liberal, Khairat el-Shater, a multimillionaire businessman, was the financier behind the Muslim Brotherhood in which he served as deputy chair. Backing him is another neo-liberal businessman
 and el-Shater's partner Hassan Malek, advocating free market principles become the ruling party's sole economic ideology without any room for dissent. When the Arab Spring rebels at Tahrir Square cried out for sweeping reforms, they could not have foreseen that one financial elite would be replaced with another. However, the US worked behind the scenes all along during the uprising to make certain that Egypt follow neo-liberal principles under political Islam, something along the lines of Turkey's Islamist political regime fostering free market principles with emphasis on import-substitution in order to improve the balance of trade. Did Egypt and Tunisia remove the structural causes of the rebellion, causes that included crony capitalism, vast network of public-private sector corruption, gross social and gender inequality, external dependence, and lack of hope for the future?

That Egypt under the new regime is following old policies should not come as a surprise, given that Mubarak took power in the same year as Reagan and received a massive aid package in order to pursue diplomatic, defense and economic policies that were in accord with US interests. Most of the aid went for military purposes, allowing Egypt to purchase hardware from US defense companies in  order to keep a strong military needed to keep the regime in power from internal dissent. US, EU, IMF, and World Bank aid and loans were linked to following neo-liberal policies that are continuing today based on an agreement that the Mursi government signed with the IMF in November 2012. One month later Morsi raised indirect taxes that burden the masses and cut subsidies, reduced trade barriers and invited foreign investment; policies that had been the cause of Arab Spring and nearly identical to those the IMF and EU have imposed on Southern Europe as a condition to receive new loans to service the existing debt.

Neo-liberalism increases the socioeconomic gap and reduces national sovereignty and the role of the state in the economy, but it strengthens the national and foreign capitalists who want privatization of public enterprises, weak labor unions, and low-cost assets, especially wages. The defense of the Egyptian regime has been the same as that of Tunisia, namely, the people elected the government, therefore, they must obey it and resolve any issues through the ballot box, not protests, demonstrations, or uprisings that destabilize the regime. When Morsi realized the level of popular resistance, he tried securing extra-judicial powers, a political maneuver to take the focus away from his neo-liberal direction. The Muslim Brotherhood’s neoliberalism must come as a surprise to many people around the world, as much as it did when Morsi announced that he supported regime change in Syria, thus siding with neo-liberal Turkey that is in the front line of the US-EU war against Assad's nationalist regime.

Islamists are the political instrument to preserve the neo-liberal order that has been in place under various phases for the past three to four decades.The ruling Ennahda has moved toward a neoliberal direction, exposing itself as prone to authoritarianism following the assassination of Chokri Belaid. Mr. Belaid on 6 February 2013. A progressive secular politician and human rights activist, Belaid was an Ennahda outspoken critic who demanded investigation into government-backed gang violence against reformists who supported workers and pluralism.

The Ennahda won the elections with 41% of the vote under Prime Minister Hamadi Jebali who has been eager to embrace neoliberalism - attract foreign investment, rather than launching on the massive public works initiative that would lower unemployment and poverty levels. Moreover, the government has been privatizing state-owned enterprises, while gutting public institutions and subsidies for fuel and food as part of its effort to implement neoliberalism Turkish-style, all in line with IMF policy advice. Secular political parties in Tunisia advocate a more nationalist and quasi-socialist route, that runs diametrically opposite neoliberalism whose goal is to destroy any vestiges of statism in Tunisia as indeed throughout the world. The Tunisian government is on record stating that its brand of political Islam is neither the Saudi nor the Taliban model, but the Turkish, Indonesia and Malaysian where economic 'modernity' (neoliberal orientation) coexists under an Islamic regime. 

Until 14 January 2010, when Tunisia's pro-West dictator Bin Ali fled the country, the media had never raised issues of human rights abuses and repressive nature of the regime in Tunisia. On the contrary, the US, EU, IMF, and World Bank held Tunisia as a model of success. The reason for defining Tunisia a success was because the brutal and corrupt dictator followed a neoliberal orientation, which was an underlying cause for Arab Spring. The irony is that the current Tunisian Islamist regime is following a similar orientation, currently confronting massive grassroots opposition just as did Bin Ali.

CONCLUSIONS: Syria, Iran and Beyond

Syria is the current target of the West and neoliberals willing to collaborate with Islamists, including unsavory groups with a record of 'terrorist activities'. That Turkey is the base of military operations to bring down the regime in Syria was bad enough in terms of destablizing the region, but now Israel has been brought into the picture as well. Just as the West was on the same side with Islamist extremists, including al-Qaeda, across North Africa, especially in Libya, it is now on the same side with them in Syria. 

Beyond Syria is Iran, which is Islamist, but nationalist and not integrated with the West as the US and EU demand. The process of bringing down nationalist regimes helps the Wetsern defense industry for the immediate term, and the multinationals for the longer term, thus it is a gamble worth taking to destabilize the entire Middle East. The obvious question is why doesn't the US and its NATO partners go after Saudi Arabia and the Gulf states in the same manner they went after Libya and now Syria? Ther answer is that Saudi Arabia and the Guld states are a major strategic partner - Saudi is a base of CIA drone-war operations. Moreover, the Saudis and Gulf states have massive investments in the US and Europe, thus it is not in the interest of the West to destabilize them, but protect them from advocates of pluralistic reform.  

One could argue that there are obvious contradictions between Islamism and neoliberalism, given the 'war on terror' that has targeted fanatic Muslims for the past two decades or so. One could also argue that political Islamism (national Islamism and pan-Islamism) is at least on the surface a reaction against Western ideologies and institutions, so how there be Islamist regimes not just in Turkey, but across the post-Arab Spring world that have embraced neoliberalism, a doctrine devastating much of Southern and Eastern Europe operating under austerity policies? Besides having collaborated with Islamist elements in the past to fight Communism, and secular nationalists during the Arab Spring uprisings, Western neoliberals, especially the WASHINGTON CONSENSUS, has worked to foster neoliberalism in Indonesia, Turkey, Malaysia and now across the North African continent, all in the name of 'freedom and democracy'. The ultimate goal here is to make sure that statist or quasi-statist (economic nationalist) policies are avoided at all costs because they reduce substantially the role of foreign capital.

The unholy alliance between political Islam and neoliberalism makes sense because Islamism placates the masses because the regime clings to a religious foundation that is the institutional base of  society, while using religious conformity to impose conformity to economic policy, as well as foreign and defense policies that would have to mirror the nature of economic integration with the West. Will this work and pacify the people who demand jobs, better living standards, greater social justice and civil rights, greater national sovereignty and lesser external dependence? My view is that there is no risk here because political Islam advocating neoliberalism and global integration is open to authoritarian methods to engender conformity. Therefore, the cycle of protests and social violence will continue across the Muslim countries

Because the Middle East and Africa are the great frontiers for massive foreign investment in the 21st century when China will be a major global player. Neoliberalism best serves foreign investors for now, and under Islamist regimes that can push through such policies and global integration. Grassroots movements against neoliberalism are global and will continue to grow, no matter the massive propaganda through the media and other insitutional means as well as distraction tactics that the neoliberalism advocates attempt.  

Capitalism in its current phase with so much capital concentrated in so few hands cannot possibly sustain itself as contradictions arise in the age of mass communications and increasingly higher educational levels. Denying social justice to people whether in Islamic countries, in the Hindu and Buddhist East, or in the Christian West will always meet with resistance, the levels which we cannot predict. Therefore, it is premature to argue that the overthrow of capitalism is imminent because neoliberalism is destroying democratic societies rooted in social justice

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