World Bank Study: Middle-Class Frustration Fueled the Arab Spring; Economic Indicators Failed to Predict Arab Uprisings

Judging by economic data alone, the revolutions of the 2011 Arab Spring should have never happened. A long-time reliance on economic indicators as a barometer of progress in Middle Eastern and North African countries masked the level of frustration and dissatisfaction in the region ahead of the ‘Arab Spring.’ Indeed, the numbers from the decades before had told a glowing story: the region had been making steady progress toward eliminating extreme poverty, boosting shared prosperity, increasing school enrollment, and reducing hunger, child and maternal mortality. Reforms were underway and economic growth was moderate.

 

And then, in late 2010 and early 2011, millions of people poured onto the streets of major cities in the Middle East and North Africa (MENA), calling for change, and the Arab street began to tell a story that standard quantitative indicators had not foreseen.

 

Now, a new study focusing on economic inequality, subjective wellbeing, and social turmoil in MENA helps provide a possible answer to this ‘Arab inequality puzzle’ and, specifically, to two questions: what drove people to the streets and why did the numbers miss this?

The report attempts to resolve the apparent paradox presented by mass demonstrations in the face of improving economic conditions. In examining the causes of the Arab Spring, the report identifies sources of frustration that persist today, and run the risk of being aggravated by the current economic slowdown.

 

The report finds that the Arab Spring revolutions were triggered by growing and broadly shared dissatisfaction with the quality of life. Ordinary people were frustrated by their deteriorating standards of living, reflected in a shortage of quality jobs in the formal sector, poor quality public services, and the lack of government accountability. The old social contract of redistribution without voice had stopped working. In the Arab world, the middle class wanted a say and more opportunities. The system of general subsidies could not compensate for these problems. Indeed, subsidies mattered less for the well-being of the middle 40 percent of society than they did for the bottom 40 percent.

 

“On the eve of the Arab Spring, the Arab world was an unhappy place for a variety of reasons,” said Shanta Devarajan, World Bank Chief Economist of the Middle East and North Africa Region. “The old social contract of redistribution with limited voice had stopped working, especially for the middle class, prior to 2011. People wanted a say and real opportunities for economic advancement.”

 

According to the report, many countries in the region seemed primed to fall into disarray following the Arab Spring uprisings. Unless there are global efforts to end regional conflicts and help countries renew the social contract, a vicious circle of instability exacerbated by economic weakness could be the long term future for the MENA region.

 

 “The situation has continued to deteriorate in the region as many of the factors that made people unhappy before the Arab Spring are still present today,” said Elena Ianchovichina, World Bank MENA Lead Economist and principal author of the report. “Though grievances alone do not lead to civil wars, grievance-motivated uprisings can grow into civil wars in societies polarized along ethnic or sectarian lines. High male youth unemployment rates and the abundance of natural resources increase the risk of conflict.”

 

Rather than inequality, the study finds that ethnic or sectarian inter-group inequality may have played a role in the increased incidence of conflict in the MENA region. The researchers of this study conclude that although grievances alone do not cause civil wars, they can motivate people to start fighting, especially if ethnic and sectarian grievances are used to garner public support.

 

Where societies are polarized along ethnic or sectarian lines, the combination of unemployed young men and natural resources also increases the risk of conflict. It was in this context that after the Arab Spring, many countries in the region seemed primed to fall into disarray.

 

The report also provides an economic outlook for the Middle East and North Africa, predicting that regional gross domestic product (GDP) growth will average 2.8 percent for 2015. Continued low oil prices, civil wars and conflicts, and a likely global economic slowdown mean that prospects for faster growth are slim.  Civil wars have severely harmed the economies of Iraq, Libya, Syria, and Yemen, and have had adverse spillover effects on the economies of Lebanon and Jordan.  MENA’s oil-importing countries have not grown rapidly in the wake of low oil prices because they have been hurt, to varying extents, by terrorist attacks, spillovers from neighboring wars, slow growth in the Euro zone, and political uncertainty.

 

The full report can be found at:

http://documents.worldbank.org/curated/en/2015/10/25119063/inequality-uprisings-conflict-arab-world

The World Bank Group recently launched a new Middle East and North Africa strategy focused on addressing the causes of conflict to promote peace and stability. One of the primary goals of the new strategy is to rebuild the relationship between citizens and governments through improved service delivery and increased transparency and accountability. Information about the World Bank Group’s MENA Strategy can be found at:

http://www.worldbank.org/en/region/mena/overview#2