Moreover, the memories of European imperialism, not to mention more recent interventions against Nasser and Saddam Hussein, color the perceptions of globalization among most of the region’s contemporary political actors, in regimes and opposition movements alike. Many view globalization’s intrusion into internal affairs as a new form of imperialism, which to some Islamist parties hearkens back to the Crusades. Thus the region has tended to be more reluctant than the rest of the developing world to accept the structural adjustment that international financial institutions and bilateral aid programs advocate.

Challenges to Globalization

Though it is facilitated by new information technologies, globalization is far from inevitable because it depends on the political acts of states, particularly the great powers. As John Gray and others have noted, the world economy today is less globalized in some dimensions, such as capital flows, than it was in 1913. But the process of globalization connotes the removal of barriers to the international movement of capital, goods, and labor. For example, the international debt crisis of the 1980s contributed to globalization by obliging debtor states to remove some of their trade barriers and capital flow controls.

In the Middle East and North Africa, these pressures recalled similar ones in the 19th century when predatory European creditors imposed reforms leading to the colonial subjugation of Egypt, Tunisia, Morocco, and the Levantine and Turkish heartlands of the Ottoman Empire, ultimately resulting in profound changes in policy as well as regime. The Middle East in the 21st century is distinctive in that globalization is again raising specters of regime change, not only for Iraq but also for many other shaky autocracies in the Arab world. Such regimes are coming under external pressure not only to change their economic policies but also to rectify their “freedom deficit” and improve their human rights record.

Yet political liberalization—cautiously attempted in the 1980s in Egypt, Jordan, Morocco, Tunisia, and more vigorously in Algeria—reversed in all of these countries by 2001. The pressure for regime change has strengthened the hand of reform opponents, sparking the rollback of gains in political and economic liberalization. Every regime except Algeria’s faced growing opposition from within, perhaps assisted in part by another feature of globalization: the rise of transnational terrorist networks. It is often argued that a need to contain the discontent caused by structural adjustment induced these regimes to “deliberalize.”

The anger against US imperialism, articulated by political Islamists, that flared across the Arab world in response to the Persian Gulf War seems nearly forgotten today. Following these military operations in 1991, Egyptian and Tunisian authorities cracked down on their Islamist oppositions. Major military operations against Iraq are likely to increase repression in the region further. Meanwhile, widespread Arab perceptions of US complicity with Israel have weakened support for regimes that are perceived to be US allies.

Within each country, tighter repression complicates any reconciliation between beleaguered reformers who may support globalization and the various opponents who reject change in the name of cultural authenticity, political Islam, or Arab nationalism. Many moderate political Islamists in fact favor market-oriented reforms and a less intrusive, more accountable state of the type suggested by the World Bank. But the dialectics of globalization hardly favor any inclusive syntheses in the tense regional climate. International intervention in Iraq and possibly elsewhere may jeopardize the slow work of Arab technocrats to engineer necessary reforms.

Regional Reform Efforts

The analyses and prescriptions of leading Arab social scientists expressed in the AHDR represent the most candid positive regional response to the economic and political challenges of globalization. As the authors clearly realize, however, the governance reforms needed to implement effective economic development are likely to endanger incumbent regimes and further exacerbate their respective oppositions. Moreover, to the extent that the United States pre-empts the gentle persuasion of multilateral institutions with direct military aggression toward “regime change,” these incumbents are likely to harden their opposition to globalization and thereby render gradual reform an impossibility.

The AHDR singles out three deficits that conventional economic growth indices and the UN Development Programme (UNDP) overlook. These include deficits in freedom, women’s empowerment, and human knowledge capabilities (at least relative to wealth). Three of the AHDR’s eight chapters focus on this third deficit and try to tackle the problem of harnessing the region’s human potential for economic growth and development. Because they view civic and political freedom as intrinsic to human development, the Arab intellectuals writing this report do not shy away from addressing the “freedom deficit” either. They argue, “Efforts to avoid the political aspects of governance when discussing the question sometimes reflect fear of expected or imagined consequences of dealing directly with the subject. However, restricting discussion of governance in this way does not serve the long-term interests of developing countries.” Constitutional democracy is viewed not only as an intrinsic good by the putative globalizers who drafted the AHDR; it is also an instrumental necessity if the region is to end stagnation and begin catching up with the rest of the world.

By focusing on the knowledge deficit, the authors of the AHDR also highlight the importance of good governance. The Arab world has consistently trailed the rest of the developing world in gross primary education enrollment ratios, despite outspending other developing countries in education until 1985. Arab spending went more to secondary and university education, where Arab states outperformed most developing countries, although not those in Asia or Latin America. Thus, the gap in educational achievement obviously stems from the fact that urban middle class rulers and administrators were looking after their own interests, not those of poor rural residents or women. Literacy rates in the region improved very slightly between 1980 and 1995 but remained far lower than the average in developing countries—over half of the region’s women were illiterate in 1995. The AHDR argues that the best way to correct such a major bias and alleviate poverty is to deepen democratic participation.

An urban class policy bias may also help explain the “mismatch” deplored in the AHDR between educational curricula and labor markets, which is caused in part by parents and teachers propelling vocational schools into a dysfunctional academic status. The combination of inadequate vocational training and the declining quality of primary schools helps explain why Arab unemployment, especially among youth, is more severe than in other parts of the world. Too many aspiring but poorly trained youth graduate from secondary schools and universities to be absorbed by local economies. As a result, labor productivity, like per capita income, has stagnated or, according to one World Bank study, actually declined. Arab workers tend to produce less for equivalent wages than workers in most other regions of the developing world, while Arab states have failed to attract foreign direct investment outside the petroleum sector.