Book

Mullahs, Merchants, and Militants: The Economic Collapse of the Arab World

by Stephen Glain

A thousand years ago, a vast Arab empire stretched from the Asian steppe across the Mediterranean to Spain, pioneering new technologies, sciences, art and culture. Arab traders and Arab currencies dominated the global economy in ways Western multinationals and the dollar do today. A thousand years later, Arab states are in decay. Official corruption and ineptitude have eroded state authority and created a vacuum that militant Islam has rushed to fill. Glain takes us on a journey through the heart of what were once the great Islamic caliphates, the countries now known as Lebanon, Syria, Jordan, Israel/Palestine, Iraq and Egypt, to illustrate how a once prosperous and enlightened civilization finds itself at a crossroads between a Dark Age and a New Dawn.

In a fascinating study filled with memorable first hand accounts of individual hopes, despair, and struggles for a better life, Stephen Glain tackles one of the questions most often posed to Middle Eastern experts: "What went wrong -- why is the region so stuck behind the times?" The answers he comes up with will surprise many, especially those unfamiliar with the everyday struggles and challenges faced by the region's beleaguered and declining entrepreneurial class.

In contrast with many contemporary observers, Glain is able to draw on the past to provide added relevance for many of his observations. He is particularly struck by the fact that around the tenth century, the Middle East, together with China, was the most economically advanced region of The World. Yet today, as documented by the authoritative UN Human Development Report, one in five Arabs lives on less than $2 a day.

Over the past 20 years, growth in income per capita increased at an annual rate of 0.5% was lower than anywhere else in The World except sub-Saharan Africa. Around 12 million people or 15% of the labor force are already unemployed. Based on current trends, the number could rise to 25 million by 2010. Surveys find that with severely limited prospects more than half the youth in the region would like to relocate to Europe or America.

A wide range of explanations abound for the economic slowdown in the Middle East -- its neo-colonial heritage, structural economic imbalances, the so-called "curse" of natural-resource abundance, deficient political systems, conditions of war and conflict and even culture and religion. While Glain is obviously aware of these theories, he doesn't dwell excessively on them. Instead, he appears to have approached his writing with few pre-conceived ideas concerning the region's demise.

One senses he is an adept interviewer and patient listener - one who easily gains the confidence of normally cautious, guarded businessmen. His skills come together on one level to produce a refreshingly new perspective concerning the day-to-day struggles of entrepreneurs in Lebanon, Syria, Jordan, Palestine, Iraq and Egypt. On a higher level the commonality of experiences allow him to advance several fresh insights as to what needs to be done to reverse the region's decline.

Glain's interviewees provide consistently sad accounts of intelligence, competence, and honest hard work thwarted at every step of the way by useless, arbitrary bureaucratic hindrances, incompetent government officials and corruption. To cross one hurdle is only to come up against another. While the details vary a bit from country to country, the over-riding theme is one of breakdowns in governance at nearly all levels. With governance in disarray, economic reforms, if present at all, are incapable of directing resources toward productive uses.

While Glain finds a little truth in each of the explanations noted above for the region's demise, he is particularly stuck by the fact that even the enlightened leaders in the region have little use for or interest in economics or the economy. Perhaps as a result, most of the Arab world has largely opted out of the global economy. With global competitive checks absent and little in the way of domestic reforms or effective reformers, the region's economic fate was set.

Reaching the end of the book this reviewer sadly found little basis for optimism. The Bush administration's efforts to mold the Middle East into a centerpiece of democracy will fail, Glain argues, unless it first rehabilitates the Arab world's once mighty middle class - not a small task given the circumstances. Short of that, there is little the United States or its European partners can do to rebuild the region. Yet in looking for possible indigenous-based virtuous circles of reform, growth and middle class development, one sees the same old gloomy vicious circles of failed governance, economic stagnation and middle class flight.

Mullahs, Merchants and Militants represents a major contribution to our knowledge of the inner economic workings of the harried Arab business class. It is a serious, objective study that should be on the shelf of anyone concerned with the fate of this vitally important region.

Robert Looney, Professor, Naval Postgraduate School
(published in the Middle East Journal, Winter 2005)