Over the last seventy-five years, the endlessly shifting coalitions on the chessboard of Arab regional politics seem to have played by the same rules of the game. Yet, as private interests have become a major source of political power, there have been major changes in the powers and purposes of the players.
Ensuring Private Interests: Promising the Future
What was the logic of the newly emerging regional dynamic? Al-Maktoum suggested an answer in describing his counterparts in government as “in the business of shaping lives, planning futures and building nations”. The neoliberal foundations of globalization were presented as a new opportunity to reframe state–society relations, bypassing both states and regimes for an entirely new notion of governance modeled on the modern multinational corporation. To again quote Al-Maktoum (a prominent advocate of this new approach): “Maybe the time has come for [the Gulf Cooperation Council or the Arab League] to be overseen by leaders, managers, businessmen, heads of industry and entrepreneurs instead of foreign ministers.” He added, “Never underestimate your role for you are in the business of shaping lives, planning futures and building nations.”
The ruling families of the Gulf were among the most eager proponents of the retreat of the state and the restructuring of regimes as they adopted the watchwords of the global private sector, positioning their countries as “flexible, adaptive, entrepreneurial, and innovative”. They characterized themselves less as stewards of states or members of political regimes than as management committees of family-owned businesses. Indeed, Crown Prince Mohammed Bin Salman of Saudi Arabia was soon dubbed the “CEO of Al-Saud Inc.,” having taken control of Aramco, the national oil company. The prince quickly became “deeply entwined with the fabric of the global financial system” as the major investor in the $100 billion Vision Fund as well as in other international government funds. These were roles the rulers embraced publicly: As Ahmed Kanna, professor of anthropology and international studies, notes in Dubai: the City as Corporation, Al-Maktoum called himself the “CEO of Dubai”.
But the Gulf rulers were hardly alone in highlighting finance, entrepreneurship, and investment. Many governments, including a number of military regimes, seized the initiative to drive economic investment that had once been left to crony capitalist allies. In 2020, Algeria’s government, for example, announced that foreign investors could take majority stakes in projects in non-strategic sectors and took additional steps to seek new financing sources, including developing the Algiers stock exchange. Many of the countries of the region managed sovereign wealth funds—of the world’s top fifty sovereign wealth funds, twelve were in the Middle East, including Egypt’s at number forty-three. These funds were invested in projects designed both to generate domestic growth and employment and to partner with international private funds that typically made investments in riskier ventures such as technology firms, entertainment companies, and real estate projects—as befits funds responsible not to citizens, but to shareholders.
Other ways to attract private investment were proliferating as well. Various kinds of exceptional jurisdictions and privatized enclaves operating under special legal regimes, profiting and protecting their investors, appeared across the region. From special economic zones, self-contained “techno-cities” and science parks, gated residential communities and offshore cruise ships, to labor compounds and private islands, such enclaves provided a regional and even global class of wealthy entrepreneurs with bespoke legal regimes. Such regimes were afforded not only tax exemptions but dispute arbitration mechanisms outside the jurisdiction of national courts, and private security in lieu of the local police.
The role of the “shareholder” was increasingly complicating and even supplanting rights-based claims on governments. This citizen-as-economicactor may have been born in the Gulf but was also transregional; wherever there was foreign investment, there were local partners, agents, and representatives looking for shares of the wealth, and governments prepared to accommodate them. When protests against a law granting amnesty to corrupt civil servants broke out in Tunisia in 2017, in what researcher and political scientist Nadia Marzouki called a “shift from transitional to transactional justice,” former President Caid Essebsi argued that it was necessary to restore the confidence required to bring back investors after the upheavals of the uprisings earlier in the decade.
For the beneficiaries of such arrangements, the rights of citizenship are superseded by the privileges conveyed by patronage and protection in private systems of governance that are often inconsistent with, even contrary to, national law. This disregard for local law permitted the growth of what might be called an archipelago of enclaves stretching across the region that knit together transnational networks of special financing, exclusive investment opportunities, commercial security firms, isolated airports, cloistered villas, and private meetings.
Although Saudi Arabia had ambitious plans for Riyadh, one of the most dramatic efforts to create a new investment-ready governmental enclave is Egypt’s new administrative capital. As part of Egypt’s Vision 2030, the new capital is being built halfway between Cairo and Suez, with all of the national ministries in a dedicated campus, twenty-one residential districts, several thousand schools, a technology and innovation park, nearly seven hundred hospitals and clinics, 1,250 mosques and churches, a ninety thousand-seat football stadium, forty thousand hotel rooms, a theme park four times the size of Disneyland, and a new international airport. The population is expected to be 6.5 million; part of the avowed purpose was to decant the overcrowded downtown of Cairo with its overburdened and decaying infrastructure.
From the vantage point of the denizens of these kinds of gated communities with private security and special economic zones with exclusive jurisdiction, the purpose of government had shifted from securing independence or safeguarding stability to ensuring the ease of doing business. In the 21st century, the purpose of government was fast becoming to facilitate the ability of captains of industry and finance to fly from enclave to enclave, making deals, securing licenses, and visiting theme parks conveniently. In this context, establishing relations with Israel was merely a smart business arrangement; the Jewish state was understood as neither a nationalist settler-colony nor a sectarian regime, but as a business-friendly enclave of technology transfer, investment financing, and technological innovation.
The appeal of this new approach to governance in the Arab World—the promise of socially tolerant, economically prosperous illiberal autocracy— was considerable, at least for those who expected to benefit. It shared the “techno-optimism” of Silicon Valley, where companies from Facebook to Amazon transformed social life by making communication and commerce easier and more convenient, all the while creating vast invisible stores of surveillance data and fast growing disparities in wealth. Still reeling from the Arab Spring, many governments were, as political scientist Jon Alterman put it, “converging on a model that combines authoritarianism with a social safety net, strict limits on religious expression, a more liberalized social space, and an invigorated private sector. It might be called the ‘GCC consensus,’ but its practice reaches from Tunisia to Jordan and beyond”.
The Politics of Private Power and Public Risk
The visionaries understood both sides of the coin they were tendering. AlMaktoum’s first rule of leadership, for example, was that “processes, laws and systems” are to “serve the people, make their lives easier and more comfortable”—hardly a clarion call for freedom or social justice, but appealing in a context of decades of frustration and disappointment—and to that end, “they can be changed at any time”. These rulers are not subject to the rule of law nor accountable to citizens; they prefer consultants to voters, marketing to campaigning, customers to citizens.
The designers, promoters, and beneficiaries of this new pattern of Arab politics were optimists. As Yousef Al-Otaiba, the United Arab Emirates’ long-serving ambassador to Washington, put it: “What I’ve watched over the last several years is a shift in mindset, a shift in attitude; younger people are tired of conflict, they’re tired of ideology. They want solutions. They want jobs. They want what every young person around the world wants. We’re trying to approach long-standing issues with a completely different lens…essentially going from analog to digital.”
The challenge to this model of governance is the question of what will happen to those in the interstices, outside the enclaves. There were millions of people in southern Tunisia, across Libya, in Yemen, Syria, Lebanon, and elsewhere across the region who were left outside, neglected by these new regimes, abandoned to fight over remnants of older political loyalties, nursing envy and grievance. Indeed, even within countries whose rulers were embracing the business-friendly future, there were those who saw themselves left behind. As historian Khaled Fahmy wrote of the Egyptian capital: “Assuming that the aim of building a new administrative capital is to alleviate the pressure from downtown Cairo where the majority of government offices are located, and assuming, for argument’s sake, that the 5 million inhabitants will actually be moved from overcrowded city, what will happen to the rest of us?”
“The rest of us” in the region have reason to worry. Companies solicitous of their shareholders, concerned for their customers, even willing to care for their employees, are not accountable to the people who don’t buy their shares, purchase their products, or produce their goods. In a world of competing business enterprises, who is responsible for the public interest?
Lebanon serves as a salutary, if disquieting, warning. After the end of the civil war, the Lebanese political elite, like many of its counterparts elsewhere in the region, used a mixture of sectarian identity politics and patronage to secure support. But the merger of business and politics was evident early in the role of Prime Minister Rafik Hariri’s construction company, Solidere, in the rebuilding of Beirut. According to the International Crisis Group, “In reality these leaders were mostly serving themselves—they have amassed considerable wealth in the post-war era. In the process, they neglected economic development and helped ruin the country’s finances.” By the opening of the third decade of the 21st century, they went on, Lebanon was “rapidly becoming a mosaic of disjointed fiefdoms in which political actors struggle, sometimes violently, to control access to basic resources and security. Extreme poverty is on the rise, threatening a humanitarian crisis and further destabilization”.
Lebanon’s humanitarian catastrophe was kept at bay by remittances sent by the millions of Lebanese living abroad—a private solution to a very public calamity. Might other private solutions to the challenge of providing public goods be found? Perhaps. We are all, as Ambassador Al-Otaiba put it, “in the very, very early stages of re-imagining what the Middle East looks like and how it operates”. However, in the absence of governments that see themselves as more than investors—responsible to citizens above shareholders, promoting constituents over customers—what is for some a tantalizing dream of opportunities may be a daunting vision of bleak prospects for those left behind.
Lisa Anderson is special lecturer and James T. Shotwell Professor of International Relations Emerita at the Columbia University School of International and Public Affairs. She served as president of the American University in Cairo for five years, from 2011-2016, after having served as the university’s provost and, earlier, as dean of the School of International and Public Affairs at Columbia.