By BENJIE OLIVEROS
The peoples’ uprisings in Egypt, Jordan, Tunisia, Yemen, Bahrain, Libya, and the brewing unrest in Saudi Arabia have been in the headlines lately. Sadly, nothing much is being written about the reasons behind the uprisings except that people are rising up against their long-time rulers because of the worsening unemployment and poverty in these countries. And because these rulers have responded with violence and repression, the uprisings have likewise intensified.
It is true that in most of these countries, those in power have been imposing their autocratic rule on its citizens for a long time: Jordan, Bahrain and Saudi Arabia are ruled by their respective kings; Egypt’s Hosni Mubarak had been Egypt’s president for 29 years until he was ousted recently; Tunisia’s Zine Ben Ali was in power for 24 years before being ousted on January 14 this year. President Ali Abdullah Saleh has ruled Yemen for 32 years.
Libya’s Moammar Qaddafi wrested power in 1969, but not being said much in the news is the fact that since 2003, Libya had been ruled by two prime ministers: Shukri Mohammed Ghanem from June 2003 to March 2006, then Baghdadi Ali al-Mahmudi from March 2006 up to the present. While it could be argued that Qaddafi still exerts considerable influence, he is no longer the head of state and has, thus, lost much of his power and authority,
The US has reportedly been observing the turn of events closely and in the case of Libya, has been gearing to act decisively as the self-proclaimed policeman of democracy in the world. What is not being said is the fact that the US exerts considerable influence on, and has been supporting and propping up these autocratic governments, with the exception of Libya.
Gone are the days when Egypt, Jordan, and Saudi Arabia have been at odds with the US over its policy regarding Israel and the Middle East. Egypt, and Saudi Arabia have become the closest allies of the US in the Middle East. Egypt gets considerable support from the US. Israel and Egypt combined receive one-third of all US aid: military and economic. Jordan signed a non-belligerency agreement with Israel in 1994. Before that, it has signed a bilateral free trade agreement with the US in 2001, being the first Arab country to do so. And the US has been providing $6 billion in development assistance to Jordan since 1952. The US is the leading arms supplier to Saudi Arabia. In 2002, Saudi Arabia became the second largest trading partner of the US in the Middle East.
The US has a history of working with and providing USAID assistance to Yemen even when it was still divided into the Yemen Arab Republic and the People’s Democratic Republic of Yemen. But the US later included the latter in its list of countries supporting terrorism and broke relations with it. During the border conflict between the two in 1979, the US supported the Yemen Arab Republic under President Ali Abdullah Saleh by cooperating with Saudi Arabia in supplying it with F-5 aircraft, tanks, vehicles and training. Saleh visited the US in 1990 and since then, the US has been providing Yemen, which was then united into one state, with development assistance which, in 1990 amounted to $42 million and by 2010 $48 million. Other US support to Yemen included assistance to agriculture, health , water, education and US government scholarships. While US assistance dipped temporarily after it was displeased with Yemen’s position on the Iraqi invasion of Kuwait, aid increased again since 2003. The US also actively supported the 1993 parliamentary elections and the 2006 presidential and local elections.
The US has developed a closer “strategic partnership” with Bahrain since 1991. The US provided defense, technical and military assistance to Bahrain’s armed forces during the Gulf War. In return, Bahrain provided basing and logistical support to US military incursions into Iraq. Bahrain also helped enforce the embargo on oil exports from Iraq ,its pilots participated in air strikes against Iraq during the Gulf War, and it has sent troops during the US occupation of Iraq in 2003.
Tunisia’s Zine Ben Ali was trained in military schools in the US specifically, the Senior Intelligence School (Maryland, USA) and the School for Anti-Aircraft Field Artillery (Texas, USA). Since March 26, 1957, Tunisia has been receiving economic and technical assistance from the US. The US and Tunisia have established a Joint Military Commission and have been regularly conducting joint military exercises. Tunisia hosts a regional office of the Middle East Partnership Initiative, which is being run by the US.
Since Qaddafi took power and nationalized the country’s oil industry, Libya had been at odds with the US. The US even sponsored several assassination attempts against Qaddafi, with one attempt claiming the life of his infant daughter and injured his wife and seven other children. However, Libya has granted a lot of concessions to the US since 2003, in an effort to prevent the US from attacking it and to push the UN to lift its sanctions and embargo on Libya. Libya’s adherence to IMF-WB impositions led to the lifting of the sanctions and the normalization of US-Libya relations. However, the US would not rest until Qaddafi has been totally removed from Libya and his influence in the government and the region has been effectively curtailed.
It is also true that these countries have been grappling with worsening unemployment and poverty problems. In Yemen, 40 percent of the population live on less than $2 a day, and a third of the population experience chronic hunger. In Tunisia, the official unemployment rate is 14 percent but analysts believe it is much higher. In fact, the protests were triggered after Mohammed Bouazizi, an unemployed man, poured gasoline on himself and lit a match in front of the town hall in the central Tunisian town of Sidi Bouzid. In Egypt, 40 percent of the population live on less than $2 a day and food prices soared by 17 percent. Egypt’s youth unemployment rate is at 25 percent. Jordan’s official unemployment figure is at 14 percent and the official poverty figure is at 15 percent. Unemployment in Saudi Arabia is around 10.9 percent. Bahrain claims that it has reduced unemployment in the country from 16 percent in 2002 to 3.7 percent in 2010 through its Unemployment Insurance System.
In Libya, from 1.4 percent in 1995, the unemployment rate soared to 15 percent in 2005 and 20.7 percent in 2009. The single biggest cause of unemployment in Libya is the privatization of state enterprises in 2003, which was a demand of the IMF-WB.
This is again what is not being said in news reports about the uprisings. All of these countries have been implementing the IMF-WB imposed Structural Adjustment Program. Tunisia, Morocco, Jordan, Egypt were even touted as IMF success stories in the 1990s.
Tunisia passed a privatization law in 1989, privatized banks and insurance companies in August 1994 and by November 1994 created the Tunis Stock Exchange. Egypt, together with Colombia, was declared as the World Bank’s “top global reformer” in 2010 praising its performance during the previous four years. Egypt implemented aggressively the structural adjustment program beginning in March 1990. Import restrictions were removed and tariff reductions of up to 100 percent were implemented. By 1992, the IMF-WB instructed Egypt to remove its subsidies on basic food stuffs such as sugar and flour. The World Bank was so pleased with Egypt that it established an office in Cairo.
In compliance with the IMF-WB prescriptions, Jordan removed most fuel and agricultural subsidies, passed legislation targeting corruption, and begun tax reform. It liberalized trade by joining the World Trade Organization (WTO) in 2000, signing an Association Agreement with the European Union (EU) in 2001, and signing the first bilateral free trade agreement (FTA) between the U.S. and an Arab country. Under the terms of the U.S.-Jordan FTA, which was signed in 2001, the United States and Jordan agreed to reduce tariffs toward completely eliminating import duties on nearly all products by 2010. In 1996, Jordan signed an “open skies” agreement with the US.
Yemen signed an agreement with the IMF-WB to implement a structural adjustment program right after the north-south unification in 1990. As part of the agreement, Yemen agreed to remove all subsidies, reduce the budget deficit, and float its currency. And of course, it agreed to liberalize trade and investments and deregulate the economy. When the government rescinded its agreement with Hunt Oil, which had been exploring and producing oil in Marib, a central Yemeni province, for 20 years, the company sued it before the Paris-based International Chamber of Commerce in 2005. Hunt Oil was able to continue operations in Marib, which currently produces 120,000 barrels of oil per day.
Saudi Arabia has been the most resistant to IMF-WB impositions although it has applied membership with the World Trade Organization. As a precondition to the approval of its membership, the U.S. State Department is requiring the Saudi government to initiate “substantial reforms,” such as removing its tariffs on imports, opening up financial services (insurance and banking) to foreign investors, allowing competition in telecommunications and other services, and better protection of intellectual property rights.
Bahrain has been diversifying its economy from its dependence on oil exports along the lines of IMF-WB prescriptions, although it is not dependent on IMF-WB financing because it is able to use its income from oil exports. Bahrain awarded oil exploration rights to Malaysia’s Petronas and Chevron Texaco of the US. It has liberalized the banking and insurance sectors. Bahrain hosts over 370 offshore banking units and representative offices, as well as 65 American firms. It dismantled the state-owned Batelco and granted 63 telecommunications licenses. Bahrain has also been privatizing the power and water industries. It signed a bilateral free trade agreement with the US in 2006.
Libya has been implmenting the IMF-WB structural adjustment program since 2003, albeit slowly. The following is a description by the 2011 Index on Economic Freedom – being published by the conservative think tank Heritage Foundation – of the “reforms” being implemented by Libya –
“Libya’s weighted average tariff rate was 0 percent in 2006. In 2005, the Libyan Customs Administration cancelled duties on more than 3,500 product categories; however, a flat 4 percent ‘service fee’ is levied on most imported products. Additional consumption and production taxes, import bans and restrictions, other import fees, non-transparent and discretionary regulation, aging infrastructure, state trade in petroleum products, subsidies, and customs corruption also add to the cost of trade.”
Thus, unemployment and poverty in these countries worsened in the context of an economic program patterned after the structural adjustment program of the IMF-WB and the liberalized and deregulated regimen of globalization.
The wiiw published a study by Doris A. Oberdabernig, University of Innsbruck, with the title “The Effects of Structural Adjustment Programs on Poverty and Income Distribution,” in March 2010. The study included Egypt, Jordan, Tunisia, Yemen, Bahrain, Libya, and Saudi Arabia, among 202 other countries, which included the Philippines. The conclusion was, to quote:
“This paper gives evidence that IMF programs tend to harm countries in terms of poverty levels and income distribution. Rich people seem to profit from the participation in IMF programs, poor people seem to lose, falling even deeper into poverty. One of the arguments of the IMF is that, although there might be a negative impact on poverty levels in the short run, the situation tends to improve in the long run. It does not disclose however, how long IMF programs need to show positive outcomes.”
Coupled with the debilitating crisis and spike in prices of basic goods and services, it is no wonder that uprisings are spreading like wild fire in North Africa and the Middle East. The only question is, where will it spread next?