Middle East leaders under pressure

The republic states have been most affected by this year’s Arab uprisings, but the region’s monarchies are not immune, leading governments to promise political reform and increased spending. Published in MEED Yearbook 2012

What a difference a year makes. At the start of 2011, no one was predicting the civil uprisings that were about to envelop the region. The so-called Arab Spring began with a small protest in central Tunisia in mid-December 2010, but there was no expectation that it was the start of a regime-changing era.

Now, with four dictators gone and others under severe pressure, there can be few, if any, leaders who feel confident that the demands for more accountability, transparency and democracy will not catch up with them too. Whether and how they resist that pressure could define the political landscape of the region for years to come.

To date, most have reacted by promising some political reforms and increasing spending, but the repression of free speech has never been far from the surface either. It is not clear whether the measures taken so far will prove to be adequate in the long run, even in the Gulf, which, with the exception of Bahrain, has been relatively quiet for much of the year.

“The whole Gulf has more or less weathered the storm, obviously in Bahrain with great brutality,” says Kristian Coates Ulrichsen, a research fellow at the UK’s London School of Economics. “It’s hard to see it working out in the long term, but in the short term it’s been very successful in blunting the appetite for change.”

Landmark elections

In two of the countries where leaders have been deposed, voters have been going to the polls in what are the region’s most meaningful elections in decades. In October, Tunisians elected a constituent assembly to draw up a new constitution and appoint an interim government. A general election will follow in 2012. Egyptians took the initial steps in their transition to an elected civilian government on 28 November, with the first round of voting in parliamentary elections. That process is due to continue until mid-March.

The evidence from both countries suggests that Islamists will make up the largest blocs in future governments. In Tunisia, the Ennahda party, led by Rachid Ghannouchi, secured 40 per cent of the vote, while in Egypt the Muslim Brotherhood’s Freedom & Justice Party and the more hard-line Nour party of Salafi Islamists between them captured more than 60 per cent, according to early results. The situation in Libya remains more opaque, but it would not be a surprise if there was a similar outcome there.

Countries that have avoided a revolution could well move in the same direction. In Morocco, for instance, parliamentary elections on 25 November saw the Islamist Justice and Development Party winning 107 of the 395 seats and so became the largest party.

The emergence of Islamist-led governments will be watched closely around the region and beyond, although the public pronouncements of party leaders in Tunisia, Morocco and Egypt suggest they will steer a moderate course once in government. Turkey, rather than Iran or Saudi Arabia, appears to be the political model they are looking to emulate.

In other countries, meanwhile, the fight between protesters and the authorities goes on. In Syria and Yemen, the conflict is at its most heated and diplomatic efforts to bring peace have had only a limited effect at best.

In Syria, an Arab League peace plan in early November was quickly accepted by Damascus, but just as quickly forgotten as troops fired at protesters in Homs and other cities. The Arab League responded by suspending Syria on 12 November and imposing sanctions on 3 December, including travel bans on key officials. President Bashar al-Assad, however, seems determined to hang on at any cost.

President Ali Abdullah Saleh of Yemen has repeatedly promised to step aside before reneging on his promises. He finally appeared to accept the inevitable on 23 November when he agreed to hand power to Vice-President Abdrabbu Mansour al-Hadi. Since then, opposition figure Mohammed Basindwa has been given the task of forming a national reconciliation government ahead of elections in February. However, doubts persist that Saleh has fully removed himself from the power structure and fighting has continued between rival groups.

Polarised debate

Bahrain also continues to see low-level violence and protests. Most independent observers remain pessimistic about the prospects for the country, given the polarised nature of the debate there. The publication of the report by the Independent Commission of Enquiry in late November provided clear evidence of systematic torture and abuse by the authorities and refuted government allegations of Iranian involvement in the protests. However, no one has yet paid a price for this. Sheikh Khalifa bin Abdullah was removed as head of the National Security Agency, but just as swiftly appointed secretary-general of the Supreme Defence Council. In private, even senior government figures admit the country is not about to become a model democracy.

A decisive victory by protesters in any of these countries could prompt more demonstrations in other states around the region. To date, it has been the republics that have seen most of protests, but the region’s monarchies could also find themselves under more pressure.

The kings of Jordan and Morocco have made public concessions to the Arab Spring, but the reforms they have offered have done little to address the fundamental problems of unemployment, corruption and a lack of accountability in society.

The Gulf states have the luxury of high oil revenues, which makes it easier to find ways to placate their populations. Nonetheless, there have been regular demonstrations in the Eastern Province of Saudi Arabia this year and in Kuwait a group protesting against corruption briefly occupied parliament on 16 November. In the latter, Prime Minister Sheikh Nasser al-Mohammad al-Sabah resigned before the month was out, replaced by Sheikh Jaber Mubarak al-Sabah. On 6 December, the emir dissolved parliament, paving the way for fresh elections.

Clamping down

Almost no corner of the Gulf has been left completely untouched by demands for change. In Oman and the UAE too, authorities have clamped down on opponents.

“Conditions and circumstances change and the institutions that deliver services to people have to adapt to those changes,” says Christian Koch, director at the Geneva-based Gulf Research Centre. “In the UAE, the pressure for such change is not particularly great, so authorities have more time to adjust. There’s no immediate pressure for reform, but there will be pressure to reform institutions.”

The regime that looks the most secure is Qatar’s, ruling over a small local population with massive wealth and none of the sectarian problems of neighbouring Bahrain. Yet even Doha has been showing signs of nervousness, giving salary raises of up to 60 per cent to public sector employees and announcing plans to run an election in the second half of 2013 for the advisory Shura Council.

“The only guarantee for the stability of Arab States, in the short and long terms, lies in the adoption of continuous reforms to meet the aspirations of their peoples,” said Sheikh Hamad bin Khalifa al-Thani, emir of Qatar, while opening the latest session of the council on 1 November. “No country can isolate itself from the current political movement.”

As well as the political changes, the Arab Spring will have important economic consequences for the region in the year ahead, not least because investors will remain nervous.

The transition economies of North Africa began to show signs of recovery in the latter half of the year, according to the Washington-headquartered World Bank. If they adhere to the usual pattern of countries moving to democracy, they can expect economic growth rates to rebound within one or two years, although investment levels tend to take at least five years to recover.

For the region as a whole, economic growth in the coming year is likely to be slower. The World Bank is predicting that gross domestic product (GDP) across the region will grow by 3.8 per cent in 2012, led by the oil-exporting countries. This marks a fall from the 4.1 per cent growth in 2011.

The fact that the economy of the region grew by as much as it did in 2011 is largely down to a mix of high oil prices and high levels of government spending in an effort to ward off unrest. As long as oil prices stay high, this is a viable policy, but any sign of oil prices slipping and it could cause problems. However, the desire to keep protesters off the streets is likely to override any concerns about budget deficits.

“The risks are global credit markets freezing up or oil prices falling,” says Liz Martins, a Dubai-based senior economist at the UK’s HSBC Group. “I think governments will continue spending even as oil prices fall, but it might have an impact on the private sector.”

The economic picture is compounded by the problems in Europe and, to a lesser extent, the US. Europe’s downturn is having a direct impact on those countries closely tied to the EU, most of which are in North Africa. The greatest risk for the Gulf countries is that the downturn will prove contagious and spread to their key markets in Asia. If Europe’s sovereign debt crisis leads to a global credit crunch it will cause problems for Dubai in particular, which has large amounts of debt to refinance.

Nuclear plans

Alongside the seismic events of the Arab Spring, two other longer-running issues are likely to remain close to the surface in the year ahead: Iran’s nuclear programme and the Israel-Palestine conflict.

A report from the UN’s nuclear watchdog, the International Atomic Energy Agency, in early November painted an uncompromising picture of what Iran might be up to. According to the report, “Iran has carried out activities relevant to the development of a nuclear explosive device … [and] some activities may still be ongoing.”

Condemnation swiftly followed from around the world, followed by further sanctions from the US and the EU. However, both Russia and China are likely to block further sanctions at the UN Security Council level. The rising tension was highlighted by a mob storming the British embassy in Tehran on 29 November. The UK responded by pulling its diplomatic staff out of the country and expelling all Iranian diplomats in London. The situation is such that military strikes on Iran’s nuclear facilities cannot be ruled out in the year ahead, either by the US or Israel.

It is the US, meanwhile, that has promised to veto any Palestinian effort to gain UN membership. The successful bid to gain recognition at Unesco, the UN’s cultural and education arm, in October provided a rare moment of diplomatic triumph for President Mahmoud Abbas, but at this stage there is no sign that it will be followed by any further breakthroughs. For all the changes in the region this year, some things look like they will remain wearily familiar in 2012.