Globalization and The Arab World
Alazar Kebede
Today’s economic realities reflects that China, after all, is one of the major actors of contemporary globalization, while the Middle East has been described as its orphan. But just as loudly, this form of characterization speaks to these regions’ aspirations and futures. Here are some of the numbers. Over the past 20 years, average annual GDP growth in East Asia has been over 6%, while that of the Middle East and North Africa has been 2.3%.
China attracts the lion’s share of global foreign direct investment (FDI) flowing to developing countries. The Middle East and North Africa account for less than 1%. China’s exports of manufactured goods are composed of about 15% high-technology products. For the Middle East, the corresponding figure is 0.6%. Lest we forget, for at least 500 years the Arab world was the locomotive of globalization. Philosophy, mathematics, science, resplendent art and architecture and truly global trade were among the benefits this Arab civilization bequeathed the world.
Why then does the Arab world wallow today in stagnant irrelevance? We might note a few related paradoxes that could help to answer this question. Fareed Zakaria in his book entitled “The Future of Freedom”. stated that during the last 50 years, predominantly Hindu India was a poor economic performer as well. Yet, Hindus are now among the most successful global entrepreneurs, not least in one of its most competitive environments, Silicon Valley.
According to Fareed Zakaria, North Korea and South Korea are both products of exactly the same Confucianist culture as is China. And 40 years ago, both North and South Korea were among the world’s poorest countries. Today, the South is rich and one of the world’s most dynamic societies. The North is an unmitigated disaster. Similarly, Thailand and Myanmar (Burma) are neighbors, both Buddhist cultures with a quite similar heritage.
But 40 years ago, Myanmar was significantly richer than Thailand. At some point, Myanmar decided to shut itself off from the world. Thailand, on the other hand, has been one of the world’s most open societies. True, Thailand does face some substantial economic challenges, but the difference between the two countries at the beginning of the 21st century is enormous. The important difference in all these cases, it seems, is not defined by the culture which is Islamic, Confucianist, Christian or whatever it might be. Rather, it is between those societies that are open, tolerant, pluralistic and driven by intellectual curiosity and those that are the opposite.
History teaches this lesson quite forcefully. Spain, for example, was a great nation for several centuries. During that time, many of its cities, notably Cordoba, were true crossroads of Christian, Islamic and Jewish cultures. In the 15th century, however, the Catholic regime became intolerant and dogmatic. It expelled the Jews and the Muslims. And Spain entered a period of five centuries of decline. It only began to recover from this detour after the death of dictator Francisco Franco in 1975 when, symbolically, it started on a journey of rejoining Europe.
Similarly, when Taiwan was a repressive militarist dictatorship, about eight out of every ten Taiwanese who went to study in the United States failed to return. Following the democratization and general opening that occurred, members of the “Taiwanese Diaspora” returned in droves. They were instrumental in making the island one of the world’s most advanced entrepreneurial hubs of information technology.
The situation in the Middle East is totally different. Fareed Zakaria noted that more than anything else, one statistic illustrates not only that the cultural environment is stagnant but indeed that it has seriously deteriorated. In the 1950s and 1960s, Egypt was a regional, indeed global, hub of cultural dynamism and academic thought. Egypt’s decline into atrophy has been one of the saddest spectacles of the global intellectual scene of the last four decades. An official data of the Cultural Ministry of Egypt revealed the following statistic. Whereas in the 1960s Egypt published an average of 3000 books per year, in the 1990s the number fell to about 300.
The key, then, to the difference between China and the Arab world is not in their cultures. It is in their willingness to embrace certain parts of other cultures. In short their willingness to accept the need to question and to learn from others. Adoption of a liberal point of view is the main thing that would place Egypt, Syria and Iraq back at the center of the global economy that they once dominated.
According to Fareed Zakaria globalization has caught the Arab world at a bad demographic moment. Its societies are going through a massive youth bulge. More than half of the Arab world is under the age of 25. 75% of the Saudi Arabian population is fully under the age of 30. A bulge of restless young men in any country is bad news. Almost all crime in every society is committed by men between the ages of 15 and 25.
Lock up all young men, one social scientist pointed out, and violent crime will drop by more than 95%. That is why the socialization of young men in schools, colleges and camps has been one of the chief challenges for civilized societies. When accompanied by even smaller economic and social change, a youth bulge produces a new politics of protest. In the past, societies in these circumstances have fallen prey to a search for revolutionary solutions.
France went through a youth bulge just before the French Revolution in 1789 and so did Iran before its revolution in 1979. Even the United States had a youth bulge that peaked in 1968 when the country’s strongest social protests since the Great Depression. In the case of the Arab world, this upheaval has taken the form of a religious resurgence.
The most crucial question here is this. What can be done to resolve all these tensions? There is a dominant business class in the Middle East, but it owes its position to oil or to connections to the ruling families. Its wealth is that of feudalism, not capitalism, and its political effects remain feudal as well. A genuinely entrepreneurial business class would be the single most important force for change in the Middle East which is pulling along all others in its wake.
If culture matters, this is one place it would help. Arab culture for thousands of years has been full of traders, merchants and businessmen. The bazaar is probably the oldest institution in the Middle East. And Islam was historically highly receptive to business. Prophet Mohammed (p.b.a.h) himself was a businessman. Ultimately, the battle for reform is one Middle Easterners will have to fight which is why there needs to be some group within these societies that advocates and benefits from economic and political reform.
Tigist Abebe
Name: Tigist Abebe
Education: BSC in Medical Laboratory
Company name: Tenadam Manufacturing PLC
Title: CEO
Founded in: 2022
What it do: Bamboo Fashion Accessories and Craft
Hq: Addis Abeba
Number of Employees: 35
Startup capital: 1,000,000 birr
Current Capital: 1,500,000 birr
Reason for starting the Business: To meet the increasing demand in both domestic and international markets
Biggest perk of ownership: Impact as a social enterprise
Biggest strength: Consistent, good networking skill
Biggest challenge: Breaking the comfort zone, tools and space limitations
Plan: To create bamboo craft village
First career: Flight attendant
Most interested in meeting: Prime Minister Abiy Ahmed
Most admired person: Anyone who thinks outside of the box
Stress reducer: Prayer and sleeping
Favorite past time: None
Favorite book: Ye Habesha Jebdu and rich dad poor dad
Favorite destination: Japan
Favorite automobile: All electric cars
Water security
Catarina de Albuquerque is Chief Executive Officer, Sanitation and Water for All. She joined Sanitation and Water for All in 2014 and has since increased political will in favor of water, sanitation and hygiene, and positioned SWA as a vital contributor to the achievement of Sustainable Development Goal 6. She was previously the first UN Special Rapporteur on the human right to safe drinking water and sanitation.
In July 2018, following a wide-ranging governance review, SWA created the position of Chief Executive Officer and de Albuquerque was chosen for the position in a competitive process. Through her strategic leadership as CEO, she is an influential and powerful advocate for SWA and the human rights to water and sanitation. She leads the SWA secretariat and provides strategic leadership compatible with its vision and high-level objectives, including all operational, executive and fundraising activities.
In 2008, de Albuquerque was appointed by the Human Rights Council to become the first UN Special Rapporteur on the human right to safe drinking water and sanitation. In 2010, she played a pivotal role in the recognition of water and sanitation as human rights by the UN General Assembly. Her work helped ensure that the rights to water and sanitation were incorporated into the language of the Sustainable Development Goals. Capital caught up with her to talk about water security and sustainable sanitation in Africa. Excerpts;
Capital: How much investment is required annually to achieve water security and sustainable sanitation in Africa by 2030?
Catarina de Albuquerque: According to the Africa Water Investment Programme (AIP) an additional $30 billion is required annually by 2030 in order to close the water investment gap in Africa. Currently, only $10-$19 billion is invested. Tripling the current rate of investment may seem like a challenge, but it’s less than two per cent of the continent’s current GDP. It’s also far less than the estimated $170 billion lost annually from water scarcity, poor sanitation and disease in sub-Saharan Africa alone.
This is not a plea for charity, this is a wake-up call.
Existing plans show that mobilizing these funds is achievable, with domestic resource mobilisation accounting for $17.5 billion and savings and efficiencies from enhanced sector governance contributing $11.5 billion. This represents an empowering opportunity for national governments, as they can raise $29 billion independently as long as they have access to affordable capital.
To find concrete solutions to the financing gap, the Sanitation and Water for All partnership, UNICEF and AMCOW organized the Africa Finance Ministers’ Meeting on 31 October. There we focused on the fact that expanding water and sanitation services by strengthening the systems that deliver them is the bedrock of economic growth and sustainable development.
As SWA’s Global Leadership Council Member Joyce Banda pointed out during the Finance Ministers’ Meeting: We want to counteract the prevailing narrative of Africa as a problematic continent in constant need of hand-outs. This narrative does not reflect the reality of a continent rich in human, mineral and green energy resources, ready to work, ready to deliver universal access to water and sanitation.
Additionally, while many African countries may not achieve all the Sustainable Development Goals, their rate of progress in expanding access to water and sanitation is often much higher than in those countries that started with better access to these essential services. It is not helpful for countries to measure themselves against countries that are already far ahead, but measuring the rate of progress towards the Sustainable Development Goals gives another, more positive picture of the countries of Africa, and this is something to be proud of.
Capital: What is the projected population growth of Africa by 2030, and how will it impact the demand for food and water?
Catarina de Albuquerque: According to the African Development Bank, the African population is forecast to rise to at least 2.4 billion by 2050 and will continue to grow to 4.2 billion – four times its current size in the next 100 years. The AIP estimates the continent will need to produce at least 50% more food and at least ten times more water for energy production to enable growth and development.
Capital: How much money are African countries currently losing each year due to insufficient investment in water and the impacts of climate change?
Catarina de Albuquerque: According to the AIP, water security is central to Africa’s future growth and sustainable development, but countries are currently losing up to $200 billion per year due to insufficient investment and inefficiencies. Africa is the region most affected by climate shocks, which are primarily felt through water. Over 130 climate change related disasters were recorded on the continent in 2020-2021. By 2050, climate impacts, largely driven by water-related hazards, could cost African nations $50 billion annually.
Historically, the GDP of low-income economies with improved access to water and sanitation services grew much faster (3.7% annually), compared with those without (0.1%).
Capital: What is the economic cost of water scarcity, contaminated water, and poor sanitation in Sub-Saharan Africa?
Catarina de Albuquerque: Each year, sub-Saharan Africa loses an estimated $170 billion – 5% of its GDP – from water scarcity, poor sanitation and disease.
Capital: What are the benefits of improved sanitation, particularly for girls, women, children, and the elderly?
Catarina de Albuquerque: Across sub-Saharan Africa, women and girls collectively spend around 16 million hours per day fetching water, time that could otherwise be spent on education or paid work. This is crucial when we consider that an additional year of education for girls in Africa leads to a 14% increase in future income, compared to an 11% increase for boys.
As the UN points out, the hours that women and girls spend collecting water are a “colossal” waste of time.
For years, we’ve talked about the costs to women and girls if we don’t solve water, sanitation and hygiene issues. But what of the costs to our communities if we fail to act?
Women’s empowerment, gender equality, and sustainability strategies go hand-in-hand.
Stigma and social exclusion around periods lead many girls to drop out of school. Without proper sanitation, one in three adolescent girls misses school each month due to lack of privacy and access to water to wash their hands after changing sanitary towels.
Simply ensuring that schools have safe water, toilets and soap for hand washing, increases the likelihood that girls will attend while on their periods.
Additionally, my colleague Catherine Russel at UNICEF (who co-hosted this meeting with us) reminds us that universal access to safe water and sanitation is critical to achieving the sustainable development goals, and to ensuring the wellbeing and healthy development of children. Africa has the youngest population in the world, and its future hinges on its children. Investing in water and sanitation can prevent 1000 child deaths a day.
Capital: What is the return on investment for climate-resilient water and sanitation projects in Africa?
Catarina de Albuquerque: Every $1 invested in climate-resilient water and sanitation returns at least $7.
Capital: What are the potential economic costs of climate impacts, specifically water-related hazards, in African nations by 2050?
Catarina de Albuquerque: By mid-century, climate impacts largely driven by water-related hazards, including drought, flooding, and water-borne diseases could cost African nations $50 billion annually. Unpredictable floods and droughts aggravate displacement, migration, and food insecurity; they inflict costly damage to infrastructure, devastate livelihoods, and biodiversity.
Capital: How do global pandemics highlight the importance of access to safe water and handwashing facilities?
Catarina de Albuquerque: One of the most important lessons we learned from the COVID-19 pandemic is that we are only as healthy as the most vulnerable members of our societies, and today, huge sections of the global population are still being left behind in their access to water, sanitation and hygiene.
Before the pandemic hit, 40 percent of the world’s population already lacked access to basic hand-washing facilities at home, and children at almost half of the world’s schools did not have water and soap. While many governments have increased the provision of public hand-washing stations during the pandemic, the economic fallout of COVID-19 has only exacerbated what was already an urgent need in homes, schools, and healthcare facilities all over the world.
Tackling infections and epidemics is a critical benefit from investment in water, sanitation and hygiene, with continued importance across the continent. Ensuring everyone has somewhere to wash their hands with soap and water will generate $45 billion/year globally and reduce the spread of infections in a COVID-19-like epidemic by up to 20%.
Capital: How can investments in universal access to water and sanitation have a catalytic impact on other sectors and public health?
Catarina de Albuquerque: Water and sanitation cut social costs and healthcare burdens: Adequate water and sanitation can lead to lower social costs associated with disease outbreaks and environmental degradation, freeing up resources for other critical investments. Tackling diarrhoea worldwide can generate $86 billion per year in increased productivity and reduced health costs. This is crucial when considering that 45% of global deaths due to diarrhoea, equivalent to 700,000 people, occur in sub-Saharan Africa.
A decrease in the number of days of diarrhea increases school and work attendance by 3 billion days each year, potentially unlocking $420 billion in productive value. Adequate and sufficient water, sanitation and hygiene also has the potential to reduce open defecation. Around 28% of Africa’s population practise open defecation with faecal exposure accounting for 10–15% of all deaths in children under five.
