MENA Revolutions: The Historical Failure of Neo-liberalism

MENA Revolutions: The Historical Failure of Neo-liberalism 

Some analysts, the self-acclaimed capitalist democracy advocates, have opined that what is needed in the revolting societies of MENA is democratic elections and smooth liberal economic system. The big imperialist governments and their multinational backers are already strategizing on huge profits to be extracted from these economies. Whether these will be achieved is a living question. But, it needs to be stressed that if it happens, it will only bring closer bigger and sharper class conflict that will escalate in these countries sooner than later. The imperialism’s double deals in these revolutions will be explores subsequently in this treatise, but let us look at the economic outlooks of these revolting countries and see if they confirm the prognosis of the capitalist democracy advocates.

To start with, the mass movements on the streets of Tunisia to Egypt, Libya, Syria, Yemen, Bahrain, Saudi Arabia, etc, have clear message of the failure of capitalism, especially in its neo-liberal form. Thousands of protesters in Tunis to Cairo, Benghazi, Damascus, Sana’a, etc. continue to echo the demands for jobs, wage increase, cut in food prices, etc. This knocks the first blow against the advocates of mere political reform. Secondly, while the revolutions might have taken political form in its first phase, the movements are developing into clear-cut political-economic struggles with thousands pouring out demands on immediate economic improvement, retrieval of all stolen wealth for social and economic improvement of the people, among other socio-economic demands. This, in some instances, has led to demand for the removal of subsequent ruling caste that has taken over from the ousted rulers a la Tunisia and Egypt.

More importantly, it should be underlined that while the political structures in these countries are truly rotten and require not just reform but total dismantling, it is a fact that these degenerate ruling classes actually represent an economic system that loots the resources of the society and handover the mainstays of the economy to the big sharks of capitalism both nationally and internationally. No ruling class stays in power, especially autocratically, without having economic privilege and interests it is defending. Conversely, no ruling class that maintains economic justice and equal distribution of wealth, will fear or repress mass protest, or maintain a repressive and spying state, or even wage an open war against the people. Therefore, that these societies are ruled over by strong/repressive states only underlines the desperate attempts of the ruling classes to hold on to the economic system that insure their privileges and wealth. That imperialism and global capitalism tolerated and supported these corrupt and repressive regimes economically and politically shows that, as against the idea that capitalism is synonymous with democracy, capitalism gain much from undemocratic but pro-capitalist regime. This is because capitalist policies, especially in this neo-liberal age, are unpopular, therefore a form of autocratic regime or undemocratic system is needed to force down the poisonous pills on people.

It is no accident that capitalist classes use to façade of democracy to enforce economic coups on people by using capitalist technocrats in governments, to enforce neo-liberal policies, even when general populace are against these policies. This is not to even mention various coups engineered and supported by imperialist governments globally enforce capitalism a la Allende in Chile[1]. This is no past for capitalism. In the wake of global economic recession, and faced with mass rejection of capitalist rule, a form of civilian coups was carried out in some European countries: Italy, Spain, Greece, etc. It is no accident that the western capitalist governments are supporting Egypt’s military junta and its repressive measures. The fact that hundreds of pro-Morsi supporters were murdered by the regime or that human rights are being daily trampled upon did not matter to these imperialist government. Indeed, they hope the regime will be able to restore some stability that can lead to continuation of neo-liberal regime in Egypt, nay MENA. As one capitalist spokesperson said recently that a strong government is needed in Egypt to restore stability i.e. profits. Therefore, the democracy of capitalism is a democracy of profits, not of human rights or empowerment of the people. Indeed, capitalism was caught unaware and threatened by the revolts in Maghreb. It is suffice to ask the capitalist democracy advocates what the semi-revolts that occurred in democratic and semi-democratic societies in recent times such as the class war in Wisconsin, US, and growing mass movement in Britain, Spain, Greece and France, should be termed; democratic movements? Indeed, under the guidance of European and US imperialisms, such states as Tunisia and Egypt have been holding ‘elections’ to re-elect the reigning but ruining ruling caste, in order to sustain the pro-imperialism corrupt states while getting the credential of ‘democracy’ to gain full imperialist recognition.

a.       Tunisia: Neo-liberalism failed

In Tunisia, while capitalism and its town criers are quick to refer to economic growth and wonders of the ousted Ben Ali regime, the economic foundation is indeed rotten. For instance, while the IMF has lauded Tunisia’s economic reforms as a model, more than 14 percent of the working population is officially unemployed. Of the official 3.6 million working population, over 50 percent of the employment in the country is in informal sector. This is despite the fact that manufacturing sector purportedly increase by 5 percent to 18 percent since 1970s to 2007. From this labour distribution it is glaring that majority of the working population are in the informal sector where they earn token that could hardly be called income, making them little different from the unemployed. This also applies to the agricultural sector where majority of the so-called 800, 000 engaged are poor peasants who subsist between poverty and misery. It should be further recalled that the MENA revolts started with the self-immolation of a 26-year-old street trader, a breadwinner for a family, whose wares were destroyed by a policewoman. Thus shows where the so-called growth of the economy is – at least not with the poor. To show the poor conditions of living of working people, workers embarked, in late 2011, on mass street demonstrations to demand improvement in their poor wages (less than $50 a month). The implication of all this is that various governments, especially in the third world official data are mostly exaggerated statistics or more or less half-truth. In fact, the same IMF that praised Ben Ali’s regime to high heavens reported that just 10 percent of the topmost Tunisians on the social ladder control 32 percent of total national income, while the lowest 10 percent get only 2.3 percent. What this translates to is that the $27.7 billion of the annual GDP of $86.6 billion is going to just 10 percent of the nation’s population. On the other hands, the working poor who are in the majority will always bear the burden of the $10 billion foreign debt of the government and the big business through diversion of public resources to debt servicing and repayment, and its attendant results. This is clearly reflected in the fact that foreign companies (271 in 2006 alone) took advantage of the brutal exploitation of the working class, as labour cost “is relatively low” according to IMF.

But, are these the products of neo-liberal capitalism: the facts speak for themselves. In the 1970s, the GDP per capita increased rapidly by 380 percent. This was when government invested state resources in social and public infrastructures coupled with government control of a major section of the economy including industries, run albeit on a bureaucratic, undemocratic top-down basis. The implication was that the economy was run to benefit a greater proportion of the population as lesser parts of the economy is in the hands of the private sector. This compelled government to tailor economic and industrial policies toward provision of secure employment, better wages, improved social services like education, health, water, roads, etc. rather than tailoring it to service of few capitalists. This meant that any gain in the GDP would surely reflect much more in the lives of the majority than in the bank accounts of the handful capitalist class. Thus, this period witnessed reduced wealth disparity. Even when multinational corporations were part of the development policies like constructions, banking and even parts of industry while the ruling caste live on huge privileges, there is still a substantial improvement in the living conditions of the people.

On the other hand, aside the fact that GDP growth rate has reduced steadily – since the adoption of neo-liberal ideology – to about 7 percent by average in 2007, most of the growth has been in the service sector (about 63 percent) like stock and financial markets, tourism, telecommunications, etc. which generates huge profits for the few but contribute less to employment, industrial development, advancement and better living conditions for the majority. Furthermore, majority of the growth is going to a thinner section of the population. This has reflected in declining human development indices. Poverty level (using $2.7 baseline) is around 25.2 percent while the country ranked 94 in the 2011 Human Development Report. It should be noted that this era is characterized by neo-liberal policies, which has seen labour pay reduced, social services commercialized, and more money and power handed over to the big business with about 160 state-owned enterprises privatized since 1987.

With these situations, it only needs a very repressive regime and treacherous labour movement leadership to avoid uprising. This explains why the ousted Ben Ali regime had to queue behind US and French imperialisms and held on to the strand of anti-terrorism to prop itself up as an acceptable state in the international cycle of imperialism, while also using divide-and-rule cum infiltration to weaken the working class power, as witnessed in the buy over of labour unions’ leaders and espionage activities in trade union and militant mass platforms. But, like a bottled up steam, the bigger the force that is suppressing the discontent, the bigger will be the bang when the content is to escape. That this bang has not led to ouster of capitalism and enthronement of democratic, revolutionary socialism, coupled with the increasing opportunity for imperialism to manipulate the revolutionary upsurge is a reflection of the absence of a working class alternative platform. But, the revolution is still unraveling, with working class forcing out one concession after the other from the ruling class. It will get to a point in which imperialism and its stooge will not be able to grant any more concession as the interests of imperialism will run contrary to that of the working people. In fact, it will attempt and indeed is already attempting to roll back the little gains of the revolution. At this point, the working people will realize that the revolution is incomplete, and unless they overthrow the capital system, they cannot move forward.

About $12 billion in credit grants was extended to Tunisia and Egypt by Gulf States with the nod of big imperialist countries of G8. This was to further root the economy under the capitalist soil and tie the country to the apron string of imperialism. It is also meant to prop up the pro-imperialist, capitalist ruling elites in these countries with the aim of making it survive mass anger and derail the growing revolutionary movement. This is similar to the experience of the independent republics of the former Soviet Union in the 1990s where the so-called ‘democratic’ revolutions that brought these countries under the control of imperialist economic doctrines meant neo-liberalism being unleashed on these countries leading to total breakdown of human development indices[2]. Yet, these countries supposedly, had democratic revolutions. Also, the experience of Philippines in 1986 and 1990s, where mass revolutionary movement that ousted Ferdinand Marcos was hijacked by the pro-big business political class to unleash neo-liberal on the country’s folks, is a warning example to working people. In Latin America, specifically in Peru, radical consciousness brought Alberto Fujimori to power in 1990s running on anti-imperialist, populist programmes. However, he was imprisoned by neo-liberal dragons such that all unknown neo-liberal attacked were launched by the regime against the people. Thus, radical/populist movement is not enough; without fundamental break with global capitalism, and enthronement of genuine socialist system, these revolting societies may find themselves back in the fold of neo-liberal imperialism on a more ruthless level.

b.      Egypt: From Nasser to Mubarak

Going over to Egypt, the pro-capitalist pundits have tried to portray the revolutionary movement has a response to the sit-tight rule of Hosni Mubarak and his cohort. While sit-tight rule itself is enough source of mass anger in a country with notoriety for high-level state repression and spying on perceived opponents; however, the movement has a very deep root in the socio-economic foundation of the society, which has meant poor living conditions for the working class, and lack of hope for the youth. This economic foundation itself is engendered further by the neo-liberal phase of capitalism. The best of the bourgeois commentators have linked corruption of the Mubarak regime, which has made nonsense of public service, as a major source of anger in the Egyptian society. This tended to imply that without corruption (if that is at all possible under capitalism), the society will operate properly based on neo-liberal capitalism. Indeed, the pervasive corruption that has eaten deep into the fabrics of the society, ably catalyzed by the top echelon of the regime, which has led to failing public services for years, played active role in rousing mass angst. However, it needs to be stressed that all these are features of the neo-liberal capitalism unleashed on the country in the past two to three decades ago.

Neo-liberalism mean that the economy be opened up fully to the capitalist class, both local and foreign, to amass as much profits as possible. The state tailored economic and monetary policies and politics toward total protection of the profits for the capitalist big business and multinational corporations in the hope that wealth will trickle down from the capitalist profits to the masses through increased investment and spending that will lead to more employment, increased labour values, etc. On the contrary, more profits for the capitalists has meant investment in short-term, non-productive businesses which yields less production and jobs, and concentrates more wealth in the hands of the capitalist class. This is coming as governments, – especially third world countries government – fearful of capital flight, appeased capitalist class with more concessions at the expense of the working people. The history of capitalism dictates that the third world local elites are latecomers to the orbit of capitalist exploitation, therefore the political elites, who were imperialist vassals during the colonial periods (the degree of their compromise depending balance of forces between the working people and the capitalist class) and post-colonial eras, also served as the local economic elite. Thus, the state and the business are completely intertwined with individuals playing roles in both, leading to either direct control of the economy by the same elements in political power or by using their political power to tailor the state economic policies toward enhancement of their economic interests or embark on direct looting of public resources for personal use. Under imperialist neo-liberalism, this process is driven more ruthlessly as multinational corporations care much less about corruption or equality, but rather continued and improved profit making. Thus, the corruption being referred to as the basis of the revolt in Egypt is nothing but a reflection of the political economy of the neo-liberal capitalism in a neo-colonial world.

On the other hand, the Keynesian, state capitalist and welfare states of the late 1950s to late 1970s, the economic foundation of corruption are masked and indeed to some extent reduced. The neo-liberal phase of capitalism, with its poisonous pills of privatization, wage freeze, commercialization, trade liberalization, etc. has laid bare this brazen corruptive nature of capitalism especially in the third world countries, as state resources and economies are officially handed over to the capitalist class.

These analyses are clearly manifested in Egypt especially since Hosni Mubarak took over from Anwar Sadat. In the 1950s through 1970s, the regime of Gamal Abdel Nasser, introduced what can be termed a state capitalism where a section of the economy including the very important Suez Canal were nationalized, albeit under military repressive and undemocratic regime, providing a basis for state control of wealth and provision of basic social infrastructures and services such as employment, education, health, etc. During this period, there was state control of foreign trade, progressive tax was introduced and properties of 600 wealthiest families seized. State investment increased from 10 percent in 1952 to 20 percent in 1962. The Aswam dam, which was completed in 1968, tripled electricity generation. Consequently, public elementary and secondary education was made free with higher education following suit leading to growth in student enrollment by 8 percent a year between 1952 and 1970 with all the graduates and school leavers guaranteed secure jobs. Indeed, the state employment increased from 350, 000 in 1952 to 1.2 million in 1970.²⁴

This is against the current horrible situation in which up to 60 percent of educated youths are unemployed! Although, a portion of the state wealth was creamed off by the military ruling elite through increased privileges and perks while mismanagement and waste, associated with bureaucratic management of state economy, which laid the basis for the limits of the gains of the partial state control, it need to be stressed that the economy improved far more rapidly than under the colonial regime. Furthermore, the capitalist class (especially the foreign business) was allowed to play active roles in the economy while the working class was prevented from playing roles in the direct management and control of the state economy; all of which further undermined progress the partially state controlled economy was making in favour of the majority.

However, since the introduction of neo-liberal economic doctrine; slowly in the 1980s and rabidly since 1990s, the gains of the past have been eroded away. According to UNCTAD report, the percentage of manufacturing sector in the economy reduced from 18 percent in 1974 to 15 percent in 2006[3]. This is in spite of the fact that population has increased by more than 60 percent. In 2003, customs and tariffs were drastically reduced to give the multinational corporations free access to the country. The labour cost has been greatly slashed in favour of big business; with workers in such sensitive sub-sector as Medicare collect a gross wage of 700 Egyptian pounds (around $80) a month, from which about $35 is paid as taxes and electricity bill. Yet, the same government slashed corporate tax by 100 percent to 20 percent while outsourcing companies (for multinational corporations) are allowed free reign as a result of flexible labour policies that allow for grim exploitation of the working class. The economy, aside being in the hands of handful foreign corporations and local big businesses like Orascom and Raya, is under fully corrupt hands of the ruling caste comprising army generals and government bureaucrats. These government officials own substantial part of the economy by using looted fund to acquire stakes in the industries. For instance, US military grant to Egypt is being siphoned by the military generals who own stakes in military industries that manufacture consumer goods. Also, Mubarak family alone is reported to be worth more than $20 billion²⁴. This is aside billions of dollars in liquid and investment assets owned by generals, who were the mainstay of the Mubarak regime. Yet, “health and education spending accounted for only 5.7% of GDP between 1990 and 2008, for example. By contrast, estimates of the size of the military economy range from 5% to 40% of GDP, though no accurate figures are available due to the exemptions from oversight the military enjoys.”[4]

The level of inequality in the Egypt is so much such that the poorest 10 percent of the population only take 3.9 percent of the national income while the richest 10 percent control over 30 percent. Thus, the GDP per capita of $ 6, 200 only mask the huge inequality in the society. There is such cordial and friendly economic and political relation between Egypt capitalist class and the western imperialism such that US and European officials and business leaders always make dates with the Mubarak regime regularly. As a result of these neo-liberal policies that has ensured huge profit for the few, over 40 percent of the population is said to be officially living below $2 a day ($730 a year) while over 20 percent of the 26.1 million workforce is officially unemployed. Meanwhile, consumer price inflation rose from 9.5 percent to 11.4 percent between 2007 and 2010. This got to the peak of 18.3 percent in 2008. This means that the income of workers have effective reduced in social value. This is coupled with privatization and commercialization of public enterprises and social services that has meant more money of the poor and working people going to paying for services hitherto subsidized by the state.

The last decade of Mubarak rule saw rise in poverty (on $2/day) rise from 39 percent to 43 percent[5], while incidence of extreme poverty rose from 16.7 percent (10.6 million) in 1999 to 19.6 percent (13.7 million) in 2005. About 27 percent of the Egyptian youths are unemployed while youth unemployment constitutes over 60 percent of the unemployed population. Majority of those employed are on precarious and low wage jobs. For instance, over 45 percent of the working population are in the informal sector[6] while, as a result of neo-liberal policies that have seen rise of private businesses, more and more layers of workers are employed on short-term and insecure jobs. Note that these data in themselves only mask the real poverty and inequality state of the Egyptian society. For example, with an average of about $90 as wages, the working people (32.6 percent of the national population) are only earning about $28.2 billion of the $500.9 billion national GDP (5.62 percent)! All of this is happening in spite of the fact that GDP growth averaged 6.0 percent between 2007 and 2010. Contrarily, the big multinational corporations and local big business are earning billions of dollars as profits as the handful 20 big companies in Egypt are worth $100 billion while in 2009, a year of global capitalist economic recession, the richest African was an Egyptian, the owner of Orascom.

The general summary of these analyses is that the working masses in Egypt have been living in increasing penury for the past over two decades as a result of neo-liberal capitalism unleashed on the country. Despite billions of dollars that is accruing to the country yearly, the public and social infrastructures are in their decrepit state such that government itself, out of public outcry promised to use $3 billion paid as royalty by Etisalat, a telecomm company, in 2010 to develop the failing infrastructures, but annually the government earn over $5 billion from Suez Canal alone. All this, coupled with the repressive apparatus of the state, which had been ruling on Emergency Rule for up to three decades, ably supported by US and European imperialisms, has built up the anger of the working and poor masses for years. Since 2001, the Egyptian masses have been trying to raise up their heads against the dictatorship, improve their conditions and rebuild the society. Indeed, the 2011 revolt was prepared as far back as 2006, when millions of working and young people rallied round textile workers in Mahalla, who were fighting for better working conditions. Also,  as a response to the global food crisis which hit Egypt badly in 2007/2008, there were workers’ protests against the regime, while in 2009, the masses also protested against the rigged elections which virtually made the ruling NDP (now dissolved) the sole party in the country while thousands of opposition, mostly from the Muslim Brotherhood were in jails.

Therefore, it only took the tinderbox of Tunisian revolt to remind the Egyptian working and poor masses of the historical challenge before them to change their conditions. The absence of working class political platform or a genuine workers’ movement is a major bane of the revolutionary waves. But the masses are learning fast through every protest, that they need to go beyond mere protests and uprising, they need a vanguard revolutionary mass-based democratic party to have a successful revolution that will end the nightmares of capitalism and imperialism. These are the lessons that have not been learnt since the days of even Abdel Nasser. The latest development in which working class has started asserting themselves through organized movements demanding increased wages, better working conditions, removal of corrupt managements and democratic rights including the right to form independent trade unions, is a pointer in this revolutionary re-assertion. The masses seem to be bending backward after a major leap to learn and rediscover themselves and their ultimate aim. From removal of the ‘all powerful’ Mubarak, the working masses are now demanding the basic daily demands. In general, the working masses and youth in Egypt are still on the move, now gradual, now rapid; now small, then big movements – the class struggle in a transitory state with only the course of objective situations and the subjective factors of leadership and party being major determinants. On the other hands, imperialist capitalism is trying to reassert itself with the propping up of the new ruling elite in the country.

c.       Libya: Neo-liberalism broke Qaddafi

In Libya, events have been more complicated as a result of fake credential of the roguish Muammar Gaddafi regime coupled with the rabid interests of the imperialist nations to hijack the movement for their interests (which will be explored later in this work). The absence of a clear working class revolutionary programmes and platform to defeat Gaddafi both militarily and politically, Gaddafi only aided this complication. Just like Zimbabwe which had strong anti-imperialist struggles for independence (with huge anti-imperialist sentiments flowing amongst the populace), the open warfare, anti-imperialist slogans and imperialism’s involvement, coupled with lack of clear-cut revolutionary platform of the working people, has made the situation confusing for the working and young people in not only Libya, but also throughout the world. The imperialist nations under the banner of NATO mobilized their forces to Libya to uproot the Gaddafi regime, not on the ground of humanitarian protection but for the protection of imperialist capitalist interests. Consequently, various forces, including foreign and religious fighters were mobilized to defeat Qaddafi. The aftermath has been sectarian divisions that are threatening the very existence of the country.

While the role of imperialism in Libya has been instrumental to the limitations of the Libyan revolution; unfortunately, a section of anti-imperialist cum leftwing pundits have been echoing the fact that imperialism’s intervention is aimed at controlling Libyan oil without mentioning the fact that the Gaddafi regime itself has been handing over Libyan oil wealth and indeed the economy to the global capitalism since early 2000. Since 2001, over 100 state-owned enterprises have been sold, after Gaddafi regime reconciled itself with imperialism. (Note that its anti-US stance was not a reflection of genuine revolutionary ideas; on the contrary, it was an attempt to protect the regime’s interests in the oil wealth). Furthermore, more than 50 percent of the Libyan oil is under private investment with the economy further handed over to the big business. Even, the state oil company is managed and run by such multinationals like ENI, AGIP, etc. In 2004, Shell got a $200 million gas contract from Libya as part of the "deals in the desert" by western powers while another $900 million oil deal was signed with BP in 2007 by Gaddafi regime. In fact, 29 out of the 100 privatized state-owned companies were fully (i.e. 100 percent) privatized.

The Gaddafi government had tried to retrench workers, but it was careful or fearful of the possible outcome. However, it has tried to reduce the labour share of national wealth while selling the idea of workers becoming entrepreneurs – another euphemism for rationalization of workforce and a reflection of the falling productivity of the economy –; privatization of the wealth and further financialization of the economy. Gaddafi himself was quoted in 2006 of wanting to redistribute oil wealth to the citizens, which according to him is meant to take more than a million citizens out of poverty. In a population of more than 6 million, it means a sixth is officially recognized as being poor by the regime. This definitely is just a part of those living at the fringe of penury and not their total number. As a result of the growing pauperization, xenophobia grew against the foreigners, ably aided by the Gaddafi regime itself through his alliance with European countries' racist immigration policy. Yet, this is a country that was once known for full employment, improved living standard and high level of education and healthcare. Currently, the country only produces 25 percent of its needed food, which by 2007/2008, due to hike in food prices globally, meant serious erosion of the real incomes of the working people, as inflation rate rose to 10.4 percent in 2008, as against 6.5 percent a year earlier. This is made worse by the fact that public sector wages remained the same since 1981, while inflation had increased safe for the period of 2000-2005. Many workers, as a result of rise in cost of living and fixed wages, coupled with growing liberalization of the economy for private businesses, maintain more than one job, to meet their needs.[7] “Mean wages were $9.51 per man-hour in 2009 (amounts to a compensation of $1598 for 21 working days of 8 hours)”[8].

Counterpoising these facts to the Libya of the early 1970s to early ‘80s will show the real impact of the change in economic gear. For instance, through the 1970s to early 1980s, GDP per capita grew between 676 percent and 480 percent respectively. This was a period when the state was actively involved in the provision of massive infrastructures and rebuilding of the colonial economy. Of course, the period also coincided with the era of huge oil exploitation; therefore, the increased GDP per capita may be a product of increased oil income while a relatively smaller population may also contribute to the higher GDP per capita growth. These are true, but it should be understood that the level of inequality in the country was relatively very small during the period in review, with a far smaller number of the rich. Furthermore, the effects of imperialist capitalist exploitation was seriously limited as the Gaddafi regime, claiming to be part of the non-aligned movement, leaned more on the East than West (or at worst try to play in between the two), making foreign exploitation seriously limited, unlike in Nigeria where from the start, the oil was in the hands of the colonialist foreign corporations. This translated to more money being available to the populace through increased social infrastructural and industrial developments. Thus, this period witnessed significant investment in education, healthcare, industries, etc. by the state. There was also virtual state control of foreign trade and banking.

It was in the late 1980s, when the corrupt, kleptomaniac tendency of the Gaddafi regime started impacting negatively on the Libyan economy coupled with the fall in oil prices in international market and historical shortcomings of bureaucratic /undemocratic control of the state economy (i.e. without full democratic participation of the working class organized independently as a class), that the GDP per capita growth fell to 42 percent. Even at this, the economy was faring much better when compared to other oil producing third world countries, which are clearly neo-colonial. As a product of the acceptance of neo-liberal doctrine, today the GDP growth has fallen to 3.2 percent since late 1990s; not because the society has reached the peak of its development, but because the contradiction between the capitalist neoliberal interests adopted by the Gaddafi regime and the welfare interest of the working people cannot be reconciled.

Of course, the country recorded one of the highest per capita income, but just like elsewhere the inequality is high. Share of the manufacturing sector in the GDP – which accounted for about 3 percent of the economy – reduced by one percent between 1970 and 2007. Youth unemployment in 2010 is estimated to be around 28 percent while percentage of youth in national unemployment was around 48 percent.[9] According to International Crisis Group, there is over 540, 000 housing deficit in a country sitting on huge petro-dollar. While human development indices have increased over years (e.g. life expectancy, literacy rate, etc.), the fact is that these are product of the state investment since the 1970s, which, while gradually being eroded in the late 1990s as a result of falling investment and kleptomaniac character of the regime, could not be wiped out. This means that those who were educated in the 1970s when state invested heavily in the society will ensure that their children will also be educated. This implies there is natural tendency of availability of social services to expand even when state investment is dwindling and more people are finding it hardly to access these services.

Moreover, based on growing economic exclusion (such as rising unemployment and cost of living), many people would believe with better education, they can get more sustainable means of livelihood. This is also applicable to not only Libya and MENA countries, but indeed, third world economies. However, contradiction will set in from this scenario. While, on the basis of neo-liberalization of the economy, the job market continue to shrink, cost of living rises and state investments in social services and social security dwindle, more people find it difficult not only to attain higher education due to cost of access, but the value of higher education itself will fall in the labour market. This will lead to more youths, with higher education being unable to get employment or proper employment, while those who have will not be able to reconcile their cost of education (both in financial and time cost) with their wages. Furthermore, this will further strain the income of adults and parents. This will lead to greater desperation among the population. This reflects the growing ‘informalization’ of economies of not just MENA but the third world economies, and even advanced economies. This also applies to other indices like health indices.

Furthermore, any growth in the economy today will be shared unequally between the growing capitalist class (comprising the foreigners and the local elite, including the corrupt, kleptomaniac members of the Gaddafi regime) and the working population, with the balance conveniently favouring the former. For instance, as a result of the current revolutionary upsurge, the western governments have been compelled to freeze over $2 billion of assets linked to the Gaddafi family while another over $35 billion of assets of the country’s Sovereign Wealth Fund, the part of the Libyan wealth made available to international capitalism to make huge profits, have also been frozen. While the country huge oil wealth, over $35 billion was invested in foreign businesses, workers had to struggle on two or more jobs to survive. With this huge wealth, the western imperialist governments cannot consider any other plan than removal of Gaddafi in order to have full access to this wealth. In fact, the removal of embargoes after September 11, 2011 terror attack in US, on Libya has more to do with interests of imperialism in Libya oil and huge petro-dollar, than stopping weapon of mass destruction, or getting compensation for victim of Qaddafi’s terroristic activities, as the huge Libyan petro-dollar in western businesses has shown. Indeed, several western oil companies such as US’s Conoco-Phillips, Italy’s Eni, among others have accessed new and juicy oil fields in Libya since 2004.[10] Furthermore, Qaddafi family’s stolen wealth are mostly spent and invested in western economies.[11] Moreover, many western multinationals were reported to have helped Qaddafi family loot Libya’s oil wealth.[12] It is worth mentioning that the little improvements in the public and social infrastructures in the country, being enjoyed today are product of past investments.

It should however be underlined that the state investment in the public infrastructures and industry is not an endorsement of the character of the Gaddafi regime, which claimed to be a form of socialist, but in the real sense is a corrupt, undemocratic, nepotistic, semi-fascist (relying on a section of the populace, mostly on ethnic basis, as a reserved army to whip others into line), semi-Bonapartist (leaning on antagonistic social classes at various points in history in order to justify its existence) and ideologically clueless regime as reflected in its Third Way Doctrine. The open contradiction between the operation of the regime and the vague ideological compass of Gaddafi (as contained in the Green Book) clearly underlines this characterization. The popular waves of mass movements against colonialism and for self-rule in the 1950s through late 1970s, which moved leftward, threw up elements like Gaddafi, who though lack a coherent and consistent understanding and plans of the society, rode to power on the back of the popular anger against feudalist regimes and their colonialist base. The subsequent bankruptcy of the regime, its massive ‘klepto-cracy’, support for other monstrous regimes across Africa and other Middle Eastern countries, its autocratic and undemocratic rule for over 40 years, its final bow before imperialism and subsequent state terror against revolting citizens only reflect the historical trend of degeneration of the regime. That the original revolutionary movement started from the oil rich eastern regional towns of Benghazi and Ras Naf, further underlines the economic undertone of the now-derailed revolutionary struggle in the country - reflecting the degree of economic marginalization of the population even in oil producing areas.

d.      The Rest of MENA

Elsewhere, the protests and revolutionary contagions ably inspired by the movements in Tunisia and Egypt have been responses to destructive economic policies and looting of the state economies by the ruling classes with active support of imperialism, but made more rabid by long undemocratic rules. For instance, the Saudi monarchy that has been propped up by US imperialism, having being gates keeper (just like the Mubarak regime) for imperialism in the Middle East, has been living off on oil wealth of the country. In 1996 alone, the Saudi monarchy spent $2 billion for its ostentatious lifestyles out of the state budget of $40 billion[13]. It is a known fact that the royal sheiks are full of expensive lifestyles underlined by wild acquisition of juices properties and assets in Europe, US, Asia and the Middle east. These sheiks are major investors in the European economies including in the real estate sector and sports. In spite of the huge oil wealth and petro-dollar, the incidence of poverty in Saudi Arabia is still as high as 15 percent in 2009, while over 25 percent of youths are jobless. Yet, the government spent about 9.5 percent of its GDP on defence in 2009! Also, in Oman where 20 percent of youths are jobless and over 15 percent official poverty incidence, close to 11 percent of its GDP is spent on defence in 2009.[14] Even poor Egypt which spent less than 5 percent of budget on education and health, committed over 7 percent of budget to defence in 2010. Indeed, most of the defence spending is spent in western countries, where these regimes procure arms and ammunitions. For the majority, the situation can only get worse. Between 2006 and 2010, inflation rose by 5.3 percent in Saudi Arabia, 5.4 in Kuwait, 5.7 in Oman, 6.7 in Qatar, 7.5 in Syria and 10.5 in Yemen[15], with cost of food consuming large part of the working class income.

Therefore, the current waves of protests reflect this economic lootocracy exceptionally supported economically, politically and militarily by US and European imperialisms. The attempt by these regimes such as Saudi, Oman, Qatar and Kuwait to buy off the protests with monetary dole out to the citizens is a reflection of the economic disequilibrium in these countries. It is going to be ridiculous and an outright misrepresentation to argue that these revolutionary movements are mere opposition to autocratic nature of the regimes in question, overlooking the economic underbelly, ably signified by the neo-liberal phase of global capitalism. This misrepresentation is meant to veil the capitalist crimes in these societies and the continuation of the neo-liberal capital system, under pseudo-democratic ruling class. More importantly, it is meant as an excuse to sustain neo-liberal capitalism in other third world countries, where neo-liberal capitalism has meant erosion of the living conditions of people. For instance, it is argued that since these revolutions happened or are happening in autocratic and undemocratic societies, it cannot spread to other ‘democratic’ societies. This is meant to hypnotize the working and young people into accepting the continuity of neo-liberalism. However, events in the recent have refuted this thinking as movements have been developing in other third world countries, though on a limited basis compared to movements in the MENA. In the absence of genuine platform to lead such movements, the movement may be defeated, hijacked and misdirected to safeguard capitalism and imperialism, which in the final analysis may lead to society being thrown several steps backward; the prospect of which is facing the MENA countries where revolutionary movements are happening.

The challenges are enormous today with the growing bankruptcy of the workers’ movement leaderships and their acquiescence to neo-liberalism. This is why the political economic analysis of the MENA revolution is importance. We have been able to highlight the role of neo-liberalism in the worsening economic situation of the working and toiling people of MENA region, which fuelled the revolts and revolutions. While the limitation of state controlled of economy under bureaucratic and repressive state apparatus is highlighted; we have been able to show through specific case examples and general analyses that, whatever shortcoming and limitations that these economies may have, have actually been compounded by neo-liberal capitalism. Globally, we have shown that in order to move society forward, working and poor people must consciously reject neo-liberal capitalism in their movement and learn why the state run economies could not survive the onslaught of capital. This is vital in order to build a genuine socialist society where people’s happiness will form the basis of production, distribution and governance. With the huge resources and technical advances today, democratic planning of economy by the majority can leap humanity forward several folds, while poverty and want can be wiped out of the face of the earth. It is important to further state that the political economic analyses given so far again underline the revolutionary elements in the movements in these aforesaid MENA countries which will propel the movements in these countries forward, but what is clearly lacking are revolutionary platform, programmes and leadership.

---

[1] Read John Perkin’s “Confessions of an Economic Hit Man” for better understanding of how global capital undermined democracy in various countries to ensure better profit making for multinational corporations.

[2] Bello, Walden, The Arab Revolutions and the Democratic Imaginations, Foreign Policy in Focus, March 16, 2011, www.fpif.org

[3] Quoted from MENA: Oil, Revolution and a Path to Stability, Revenue Watch Institute, April, 2011

[4]

[5] Rashid Khalidi, Preliminary Historical Observations on the Arab Revolutions of 2011, www.jadaliyya.com, March 21 2011, retrieved, May 2013.

[6] Arab Human Development Report, 2009, UNDP.

[7] Popular Protest In North Africa And The Middle East (V): Making Sense Of Libya, International Crisis Group (ICG), 6 June 2011, retrieved June, 2013

[8] Economy of Libya, www.wikipedia.org, updated 22 August 2013, retrieved November 2013

[9] Ibid.

[10] Economy of Libya, www.wikipedia.org, updated 22 August 2013, retrieved November 2013

[11] Popular Protest In North Africa And The Middle East (V): Making Sense Of Libya, International Crisis Group (ICG), 6 June 2011, retrieved June, 2013

[12] Shady Dealings Helped Qaddafi Build Fortune and Regime, New York Times, March 24, 2011

[13] US Cables Detail Saudi Royal Family’s Lavish Lifestyles, World News Daily, February 28, 2011, article originally from Reuters. Retrieved June 2013 from www.informationclearinghouse.info

[14]  a. Quoted from Adeel Malik and Bassem Awadallah, The Economics of the Arab Spring, CSAE    Working Paper WPS/2011/23, December, 2011

     b.  Arab Human Development Report, 2009, UNDP.

[15] IMF 2011 World Economic Outlook Database, www.imf.org/external/pubs/ft/weo/2011