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An evasive business

Book review: Business politics in the Middle East

by Riad Al-Khouri

After decades of unbalanced economic growth amid pseudo-liberal reform, the Middle East exploded in the turmoil of the ‘Arab Spring’, and many of the business groups that anchored pre-2011 developments vanished from the political scene, or otherwise recast themselves.

Addressing this process, “Business Politics in the Middle East” looks at the role of the private sector in light of the recent regime changes, the role business plays in orienting state policies, lobbying of government by private sector interests and the mechanisms by which regimes seek to keep businesses dependent — important topics that usually do not get much attention.

The book also provides insights on some individual businesses, what their impact has been, and what their prospects are. Of particular interest is a discussion of the nexus between business and the Muslim Brotherhood, an especially timely topic in view of this summer’s developments in Egypt.

The editors, Steffen Hertog of the London School of Economics, Giacomo Luciani of the Paris School of International Affairs and Princeton University, and Marc Valeri of the University of Exeter are well known in Middle East scholarly and policy circles. Luciani is perhaps the most prominent, having worked extensively on the topic of rentierism in the Arab world with, among others, Hazem Beblawi, the current prime minister of Egypt.

The book’s starting point is that in the two decades before the ‘Arab Spring’, many Arab countries underwent a restructuring of state-society relations in which lower and middle-class interest groups retreated while big business benefited through integration into policy-making and opening of economic sectors previously dominated by the state.

The ‘Arab Spring’, which is likely to lead to a more pluralistic political order in the long term, has changed much of this, with the business segment of society that was often close to the old regimes playing a less pivotal role. However, this remains a work in progress, as the current process of change in Egypt, Tunisia, Syria, and other countries shows.

While the book was published in April of this year, it is not, strictly speaking, about the ‘Arab Spring’ — four of the book’s nine country case studies cover Gulf countries where there has been no upheaval, including Oman, Kuwait, the United Arab Emirates, and Iran, the latter of course not even being Arab. The project underlying the research started in 2007 under the heading of “The Role of the Private Sector in Promoting Economic and Political Reforms”. Many of the volume’s chapters were clearly begun pre-2011.

In some cases, prefatory remarks and new concluding paragraphs were added to update research that was mainly undertaken before the ‘Arab Spring’; and the overall effect is of writers running to catch up with current events. A two-part work might have been preferable: the first bit talking about the pre-2011 situation, followed by stand-alone country analyses of business politics in light of the ‘Arab Spring’ and what the future could bring.

However, to return to the Egyptian and other regional events of the past few months: is a third phase now beginning — perhaps a long ‘Arab Summer’ — that will see extended clashes between conservative and radical forces? If so, where does business fit in scenarios of the next stage of regional turmoil? The whole question of business politics might be submerged by the current lack of certainty; in the words of Robert Springborg, author of one of the book’s two fine essays on Egypt, “such uncertainty is certainly not advantageous to business, so for the immediate future it will be on the sidelines as the political struggle is played out by more powerful forces.”

Is this book now therefore a document of the past, and does the whole story of business and the ‘Arab Spring’ need to be rewritten in another effort? The answer is that, as it stands, Business Politics in the Middle East is a solid contribution to the literature on the political economy of the region, but nevertheless will need updating in a new edition soon.

Riad al-Khouri, a Jordanian economist who lives and works on the region, is principal of DEA Inc, Washington DC

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Riad Al-Khouri

Riad Al-Khouri is Middle East director of GeoEconomica GmbH

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