How the economic policies of a corrupt elite caused the Arab Spring

Living standards in the region must rise if the political momentum is to be kept up.

Six months ago a Tunisian street seller started what is now known as the "Arab Spring" by setting himself on fire. However, although the immediate motivation behind his gesture was anger at the confiscation of his market stall, the economic causes of recent events in the Middle East have still received relatively little attention. However, many analysts believe that economic stagnation has been an important driving force behind the demands for political change, and that political and economic reform has to take place simultaneously.

One expert who has extensively studied the interaction between development and politics in the Middle East is Dr Ali Kadri, the former Head of the Economic Analysis Section of the United Nations regional office in Beirut. Dr Kadri sees recent events in the Middle East as the culmination of decades of under development, and in some cases de-development, fuelled by failed economic policies and broken institutions. He points out that between 1971 to 2000 overall economic growth in the Arab world was negative, with the real GDP per capita of Gulf Countries contracting by 2.8% annually.

At the same time inequality has increased, further squeezing the incomes of middle-class and working families. Although most Middle Eastern countries attempt to hide the extent of these problems by refusing to carry out the necessary surveys, unofficial reports suggest that the region is more unequal than even Africa or Latin America. According to the University of Texas Inequality Project, Qatar, Oman and Egypt had Gini coefficients of 55, 52 and 50 respectively in 2002, one of the highest levels in the world.

Kadri believes that these problems have been compounded through patronage. Lacking democratic legitimacy, "regimes in the region have used public sector employment to generate consent via clientelism... shifting the accent away from development". Although he believes that a degree of government ownership may be necessary in the short-run, many of the state-run firms that dominate most Middle Eastern economies are focused on creating make-work jobs rather than productive goods.

These views are increasingly recognised by other organisations. In the case of Egypt, a US State Department document three years ago noted "the military's strong influence in Egypt's economy" and that "military-owned companies, often run by retired generals, are particularly active in the water, olive oil, cement, construction, hotel and gasoline industries". Similarly, a study by the World Bank of the Egyptian financial system found that because a significant portion of bank credit went to state companies, "family owned firms and small and medium enterprises rely heavily on the informal market".

These policies have resulted in high rates of unemployment and under-employment, especially among the young. According to the International Labour Office, less than half those of working age in the Middle East are actually in employment, with youth unemployment over four times the adult rate. Even in oil-rich Saudi Arabia, 30.2% of those between the ages of 20 and 24 are unemployed. Kadri believes that "those protesting want a dignified living and good schools for their children".

Kadri believes that corruption, and regional conflict, which many analysts believe are consequences of dictatorships, have made it hard for firms to think beyond the short-term. Kadri notes that the dearth of domestic investment opportunities has meant that much of the wealth generated by rising commodity prices over the last decade has gone abroad. He also suggests that the growing gap between savings and investment rates has been instrumental in producing financial bubbles, such as the speculative frenzy surrounding property and office construction in Dubai, which came to a dramatic end three years ago.

Kadri is relatively optimistic about the future of the region, suggesting that the collapse of autocrats, like Ben Ali in Tunisia, will allow the population, rather than the elites, to determine the course of development for the first time. His conclusions are supported by World Bank research which found that the existence of an independent civil society was the most important factor in determining whether countries in Central and Eastern Europe were able to make a quick and successful economic transition after the fall of the Berlin Wall.

However, although the long-term prospects of those in countries currently making the transition to democracy may be positive, this is of little comfort where the regime is willing to brutally crush dissent, as in Syria. Even in Egypt, there are signs that Mubarak's machine is silently reconstituting itself, although its creator is now in jail. Although the G-8 has announced $40bn in economic support, much of this will come from Gulf Countries who have little interest in economic and political change. This prompts the question of what else western countries can do to make sure the political momentum generated by the "Arab Spring" continues and is able to result in rising living standards for all those in the region.

Matthew Partridge is a freelance journalist and a PhD student at the London School of Economics.

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The New Statesman 2016 local and devolved elections liveblog

Results and analysis from elections across the United Kingdom. 

Welcome to the New Statesman's elections liveblog. Results will be coming in from the devolved legislatures in Scotland and Wales, local elections in England, and the mayoral contests in London, Salford, Bristol and Liverpool. Hit refresh for updates!

23:07: Those numbers from Sunderland, where Labour have held in St Anne's ward. Labour down 15 points on 2012, when these seats were last fought, Tories down 3. It's Ukip who are making the headway (they didn't stand last time and expect them do post performances like this throughout the United Kingdom tonight and as results roll in over the weekend). 

23:04: Back to Wales - YouGov's poll "looks about right" according to my Plaid Cymru source. What does that mean? Labour could go it alone and do deals on a vote-by-vote basis - they govern alone now with just 30 seats. If the poll is even a little out - let's say either Labour or the Liberal Democrats get one more seat - they might do a deal if they can get a majority with the Welsh Liberal Democrats. 

23:01: Pallion Ward in Sunderland is the first to declare, and it's a Labour hold! More on percentages as I get them. 

22:58: Why isn't it an exit poll, I hear you ask? Well, an exit poll measures swing - not vote share, but the change from one election to the next. People are asked how they've voted as they leave polling stations. This is then projected to form a national picture. Tonight's two polls are just regular polls taken on the day of the election. 

22:57: The Sun's poll - again, not an exit poll, I'm not kidding around here - of Scotland has the SNP winning by a landslide. (I know, I'm as shocked as all of you) But more importantly, it shows the Conservatives beating Labour into second place. The Tories believe they may hold onto Ettrick as well. 

22:55: What news from Scotland? Labour looks to have been wiped out in Glasgow. Liberal Democrats think they might hold at least one of Orkney or Shetland, while the seats in Edinburgh are anyone's game. 

22:52: Hearing that turnout is low in Waltham Forest, Lewisham, Hackney and my birthplace of Tower Hamlets (the borough's best export unless you count Dizzie Rascal, Tinchy Stryder or Harry Redknapp, that's me). Bad news for Labour unless turnout is similarly low in the Tory-friendly outer boroughs. 

22:47: YouGov have done a poll (note: not an exit poll, it should not be taken as seriously as an exit poll and if you call it an exit poll I swear to god I will find you and kill you) of the Welsh Assembly. Scores on the door:

Labour 27

Plaid Cymru 12 

Conservatives 11

Ukip 8

Liberal Democrat 2

There are 60 seats in the Assembly, so you need 30 seats for a majority of one. 

22:40: In case you're wondering, how would closing a seven point deficit to say, six, compare to previous Labour oppositions, I've done some number-crunching. In 1984, Neil Kinnock's Labour turned a Tory lead of 15 per cent at the general election to a Conservative lead of just one per cent. In 1988, one of 12 per cent went down to one per cent. (He did, of course, go on to lose in both the 1987 and 1992 elections). In 1993, John Smith's Labour party turned a deficit of eight points at the general to a Labour lead of eight points in the local elections. William Hague turned a Labour lead of 13 points to one of just six in 1998, while Iain Duncan Smith got a Tory lead of just one point - from a Labour lead of nine. In 2006, new Tory leader David Cameron turned a 3 point Labour lead to a 13 point Tory one. Ed Miliband - remember him? - got from a Tory lead of seven points to a two point Labour one. 

22:35: John McDonnell is setting out what would be a good night as far as the party leadership is concerned - any improvement on the 2015 defeat, when the party trailed by close to seven points. Corbyn's critics say he needs to make around 400 gains.

I've written about what would be good at length before, but here's an extract:

"Instead of worrying overmuch about numbers, worry about places. Although winning seats and taking control of councils is not a guarantee of winning control of the parliamentary seat – look at Harlow, Nuneaton, and Ipswich, all of which have Labour representation at a local level but send a Conservative MP to Westminster – good performances, both in terms of increasing votes and seats, are a positive sign. So look at how Labour does in its own marginals and in places that are Conservative at a Westminster level, rather than worrying about an exact figure either way."

22:31: Oh god, the BBC's election night music is starting. Getting trauma flashbacks to the general election. 

22:22: A few of you have been in touch about our exit poll. Most of you have been wondering about that one vote for George Galloway but the rest are wondering what happens - under the rules of the London mayoral race (and indeed the contests in Salford, Bristol and Liverpool), 2 votes would not be enough for Sadiq. (He needs 2.5). However, all the other candidates are tied - which makes it through to the second round. What happens then is the second preferences are used as a tie-break. Of the tied candidates, Sian Berry has the most second preferences so she goes through to face Sadiq Khan in the final round. Final round is as follows:

Sadiq Khan: 3

Sian Berry: 2

3 votes is above the quota so he is duly elected. An early omen? 

22:19: Burnham latest. A spokesperson for Andy Burnham says:

"Approaches have been made to Andy Burnham to give consideration to this role. It is early days and no decision as been taken. Whatever the decision, he will continue to serve the leader of the party and stay in the shadow cabinet."

22:17: Anyway, exit poll of the office. We've got:

Sadiq Khan: 2

George Galloway: 1

Caroline Pidgeon: 1

Sian Berry: 1

22:15: Update on Andy Burnham. He has been asked to consider running. More as we get it. 

22:13: People are asking if there's an exit poll tonight. Afraid not (you can't really do an exit poll in elections without national swing). But there is a YouGov poll from Wales and I am conducting an exit poll of the four remaining members of staff in the NS building. 

22:11: It's true! Andy Burnham is considering running for Greater Manchester mayor. Right, that's it, I'm quitting the liveblog. Nothing I say tonight can top that. 

22:09: Rumours that professional Scouser Andy Burnham is considering a bid for Greater Manchester mayor according to Sky News. Not sure if this is a) a typo for Merseyside or b) a rumour or c) honestly I don't know. More as I find out. 

22:06: Conservatives are feeling good about Trafford, one of the few councils they run in the North West.

22:03: Polls have closed. Turnout looks to be low in London. What that means is anyone's guess to be honest. There isn't really a particular benefit to Labour if turnout is high although that is a well-worn myth. In the capital in particular, turnout isn't quite as simple a zero-sum game as all that. Labour are buoyant, but so are the Tories. In Scotland, well, the only questions are whether or not the SNP will win every single first past the post seat or just the overwhelming majority. Both Labour and Tory sources are downplaying their chances of prevailing in the battle for second place at Holyrood, so make of that what you will. And in Wales, Labour look certain to lose seats but remain in power in some kind of coalition deal. 

22:00: Good evening. I'm your host, Stephen Bush, and I'll be with you throughout the night as results come in from throughout the country. The TV screens are on, I've just eaten, and now it's time to get cracking. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.