The post-war rule of autocratic, secular strongmen backed by
their military and secret police is coming to an end. Last year saw the fall of regimes in Egypt,
Tunisia, Libya
and Yemen. There is open revolt in Syria. Demonstrations continue in Bahrain,
even after earlier demonstrations were suppressed by Saudi Arabian troops. The kings of Morocco
and Jordan have
made concessions towards democracy. A
democratic election that went against the ayatollah-supported regime in Iran
was disqualified and leaders were arrested; despite this, anti-government
demonstrations continue. Then there is
the special case of the overthrow of Hussein in Iraq.
The immediate issue is the lack of economic growth and
development, the inability to provide jobs for its young population. The demographic clock is ticking. Within a generation or two, the Middle
East will have a smaller, older population, with the possibility
of far fewer resources to support it.
THE ROLE OF DEMOGRAPHICS
The most surprising fact about the Middle East
is the low birthrate in the populous countries of Egypt,
Iran and Turkey
(also Tunisia
and Algeria). The Arab world, Turkey
and Iran are
facing a demographic decline. The region
is far along one of the fastest declines in birthrates in history. From 1950 to 2010, it went from some of the
highest birthrates in the world to some of the lowest. Birthrates in Iran,
Turkey, Algeria
and Tunisia are
below replacement. Egypt’s
birthrate is rapidly approaching replacement.
One-third of the current population in Arab countries is
between 15 and 29 years old. We are looking
at the last Arab and Iranian “baby boomer” generation. The population profile of these countries will
go from a young to a rapidly aging population distribution over the next 30-50
years. The tragedy is that this could
happen without rapid economic development.
The presidents of Turkey
and Iran have
talked about their countries’ low birthrates.
They are fully aware of the social stresses and political consequences. In Turkey,
the higher birth rate among the minority Kurds than among Turks is shifting the
demographic balance. Kurdish demands for
more autonomy, or even a separate state, will become harder to resist,
especially now that there is forming a de
facto Kurdish state in neighboring Iraq.
EGYPT
Egypt’s
population 35 years ago was around 40 million; today it is 82 million. Economic development has not kept up and the
recent political turmoil has had a negative impact of the Egyptian economy. Egypt
is experiencing serious environmental degradation, according to a World Bank
study. Part of the problem is that poor
agricultural practices are creating soil erosion and the spread of deserts. Even current levels of food production may
not be sustainable without drastic changes in agricultural practices, which
would have destabilizing political consequences.
The pictures of Egyptian protesters are somewhat
misleading. The protesters appeared to
be overwhelming young, reflecting the population in the Middle East
and North Africa.
But Egypt
also has a large rural population and high rates of illiteracy, especially
among females. The quality of education
is poor and, as in most less-developed countries, there are very high rates of
unemployment among the young.
The tech-savvy, often bilingual young people who appeared on
U.S. news
channels are a very small percent of Egyptian society. Egypt
has about 500,000 Internet connections in a country of 82 million people. The democratic coalition did very poorly in
the first round of elections. The
Islamic parties drew their strength from the rural and urban poor.
Egypt’s
economic situation is becoming critical.
Despite a large rural population, Egypt
cannot feed its population. Egypt
is the world’s largest importer of wheat.
It runs a large trade deficit, which has been covered by tourism (Egypt’s
largest source of foreign capital), remittances from Egyptians working outside
the country, the Suez Canal and foreign aid. Tourism has
temporarily ceased and Egyptians working in neighboring Libya
have come home. Foreign reserves are
decreasing rapidly, partly because of capital flight.
In addition, political turmoil in Egypt has apparently revived Israeli plans to build a high-speed railroad to carry containers from its port on the Red Sea to a Mediterranean port. Some cargo ships then be able to bypass the Suez Canal and transport time between Asia and Europe will be reduced.
IRAN
Iran’s
ability to deal with its economic problems is more difficult today than in 1979
when the Islamic Revolution began. In
1979, Iran’s
population was 37 million; it is now 75 million. Iran,
like other Muslim countries, is going through a “demographic transition” from
high birthrates and high population growth to low birthrates and an aging
population at a time when the country is experiencing severe economic stress
and probably declining economic output.
Iran’s
birthrate is very low. Even if it
doesn’t continue to decline, sometime after 2050 there will be more Iranians
aged 55-75 than 20-40. Iran’s
age distribution will look like Europe but probably
without the economic resources to support an aging population.
The Iranian economy may be on borrowed time. Oil production is declining although oil
revenues would be up, because of high world prices, if it were not for the economic
sanctions. Reflecting the lack of
internal economic development, Iran
is a large importer of refined oil products.
The price of gasoline is heavily subsidized with the revenue from
selling crude oil. Iran
may not be a net oil exporter in about 15 years without massive new investment
in its oil infrastructure. But decreasing
the massive subsidies for gasoline and other basic products runs the political
risk of decreasing support for the Islamic rulers.
Iranian efforts to build nuclear weapons have taken a heavy
economic toll. American and European
boycotts and sanctions have damaged the Iranian economy. Oil revenue has been cut in half, from $100
billion a year to $50 billion a year.
There are shortages of virtually all products. Inflation rates are very high. Despite the “charm offensive” of Iran’s
new president, it is unlikely that Iran
will abandon its program of producing nuclear weapons. The leaders of the powerful Revolutionary
Guard, which manages the weapons program, have publicly told the new president
that they will not support any suspension or abandonment of building nuclear
weapons.
In addition, Iran
is threatened by climate change and environmental challenges. The immediate problem is water. According to the former Iranian agricultural
minister (an adviser to the new president), groundwater is decreasing and all
bodies of natural water are drying up.
Deserts in Iran
are spreading. He fears that large parts
of Iran will be
uninhabitable in 30 years.
GENERAL COMMENTS
With the exception of Turkey,
Muslim countries in the Middle East have failed to
compete in the global economy. They have
not attracted foreign capital investment, except in the areas of oil and
tourism.
Arab countries and Iran
do not produce goods and services they can sell in global markets. Even with proximity to Europe,
literacy and low wages, they cannot compete with East Asia. All of the countries have an undereducated
young population with very high unemployment rates (an estimated 30% in Egypt). Many educated Arabs look for opportunities
elsewhere. Except for oil, the Arab
countries and Iran
have total exports that are less than those of Israel. A rough equivalent would be if New
Jersey, with less than 3% of the U.S.
population, exported more goods and services to the rest of the world than the
other 49 states combined.
Even the oil-rich countries have not fared well over the
last 40 years. The “oil curse” was discussed
in an earlier post. Much of the oil
revenue has been spent fighting wars, on high military and “internal security”
spending, supporting a small political and economic elite and, in Dubai,
insanely expensive building (see Mission Impossible III) that has bankrupted the country.
Given the future demographics, it may be too late. Egypt,
like other countries, had 60 years of military and autocratic rule. Its rulers failed to provide universal,
quality education, and economic growth and development. It has enriched a small,
politically-connected elite and a privileged military. We are looking at the political consequences
of this failure. But providing economic
growth and development, or world-class secular education, may not be too high
on the agenda of new governments.
It is wide open what will come next. It may not be democracy in some countries. Recent actions by the military in Egypt
indicate that they are not ready to tolerate an open, democratic society. The military has used violence against
demonstrations of Coptic Christians and raided the offices of foreign NGOs
promoting democracy. The democratic
coalition fared poorly in the recent election, with Islamic parties receiving
about two-thirds of the vote.
IN THE LONG RUN
However, I am “cautiously optimistic” about the long
run. For decades, I’ve heard how there
would never be democracy in “Confucian” cultures in East Asia or in “caudillo”
cultures in Latin America. Who would
have thought that democratic governments would be the norm in central Europe? Multi-party democracy has returned to Indonesia
(another Muslim country with a low birthrate) with the end of the Sukarno
regime. Besides South
Africa, at least five other African
countries have held multi-party elections in the last few years. Even the oppressive military regime of Burma
(Myanmar)
appears ready to tolerate at least some democracy.
Arab countries are riven by ethnic, clan and sectarian
conflicts. Traditional society is still
strong. Whether power can be shared and
conflicts compromised through elections remains to be seen. For Islamic parties, there is the negative
example of Iran. Not only has the regime turned most of its
young people against it, but also against religious participation. There is some polling evidence that Iran
(or at least Tehran) has the lowest
religious attendance in the Middle East.
There will still be brutal regimes in the world. But opposition to such regimes will be fed
by, among other factors, their inability to provide economic growth, good mass
education, jobs (outside of those for people with political influence) and
economic opportunity to their young populations. Once again, a “baby boomer” generation is
driving political change.