Feature

The Arab World and Its Discontents

The bitter harvest that came from having too much money. 

By From the May 2011 issue

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A long time ago (when those of us in our sixties were young and the Great Extinction of newspapers and magazines was still somewhere off in the future), I wrote a letter to Bill Kroger, then the chief of correspondents of Business Week. In it I suggested that he make me his man in Beirut -- opening a bureau in that exotic city and putting me in charge.

Kroger turned me down -- citing my inexperience. If he wanted to open a bureau in Beirut, he said, he would look for someone who was worldly and sophisticated, and well versed in economics, finance, and oil.

Britain's Economist once had a Beirut bureau chief who fit this description. His name was Kim Philby -- a daring, dashing, and brilliant man. Unfortunately for the Economist (and still more for the British secret service), he disappeared one night -- picked up by a Russian trawler in Beirut harbor and whisked off to spend the rest of his life as one of the heroes of the Soviet Union.

For better or worse, I was no Philby. At the age of 27, I had never set foot outside of North America. I spoke no Arabic. And I had only been "stringing," or freelancing, for Business Week for a couple of years. My full-time job was with the St. Louis Globe-Democrat.

Kroger said one thing that gave me a flicker of hope. He admitted the magazine should have a full-time staffer in the Middle East. As I had argued in my letter, how could Business Week call itself one of the world's leading business magazines and not have a bureau somewhere in the Middle East -- given the billions upon billions of "petro-dollars" that were pouring into the region as a result of the Arab oil embargo and the sudden quadrupling of oil prices in 1973 and 1974?

All of that was money taken from the pockets of consumers in the United States and other advanced countries. As a result of this sudden loss of purchasing power, the developed world fell into a deep recession. People stopped buying cars and the housing market cratered. Business Week and other big New York-based publications shared in the all-pervasive misery. They stopped hiring and they weren't opening new offices -- in the Middle East or anywhere else.

As I pondered the situation, I had a sudden inspiration: I would get a jump on everyone else and send myself to Beirut. There was nothing to stop me from going on my own.

So I phoned Kroger with a new plan. This time I asked for nothing more than the opportunity to act as the magazine's "stringer" in Beirut, just as I was already doing in St. Louis. That meant working on piecework basis, paid so much per column inch -- with no salary or benefits to offset the substantially higher cost of living in Beirut, a watering hole for the super rich. This put all the risk on my shoulders. How could Kroger refuse such an offer? He couldn't (knowing I could make the same offer to competing publications). And he didn't.

On this basis, my wife and I quit our jobs in St. Louis, sold almost everything we owned, and prepared to move half way around the world. At a going-away party, a friend gave our four-year-old daughter a T-shirt emblazoned with the words "Beirut or Bust."

WE ARRIVED IN BEIRUT just 10 days before the city erupted in violence. The trouble began on April 13, 1975, a day that lives in infamy for all Lebanese, solemnly commemorated every spring as the saddest day in their collective history.

On that day Christian gunmen stopped a bus filled with Palestinian workers and opened fire -- slaughtering all on the bus. This was the start of the Lebanese Civil War -- a prolonged and messy conflict involving Maronite Christians, Sunni Muslims, Shiite Muslims, Druze, and Palestinian refugees from Israel and Jordan who lived under United Nations supervision in large camps on the outskirts of the city.

Did the sudden enrichment of the oil-producing states have anything to do with the swirling storm of violence in Lebanon? As a matter of fact, it did. To show their devotion to the Palestinian cause, the Saudis and others sent money to the PLO (then encamped in Lebanon) to buy weapons to use against Israel. However, as the Lebanese Christians saw it, the growing cache of weapons held by the Palestinians could equally well be used against them. The Christians -- or heavily armed elements among the Christians -- became obsessed with the fear that the Palestinians would tilt the balance of power within Lebanon decisively in favor of the Muslims. This is what led them to take the first step in precipitating a war that left more than 40,000 dead and 100,000 wounded in its first three years.

There was intermittent heavy fighting in and around Beirut in the spring of 1975, followed by a lull in hostilities during the summer, and renewed, and far worse, violence in the fall, when the fighting was more like Stalingrad than Belfast -- with pitched battles to control key buildings and a daily death toll that sometimes exceeded 100.

If only briefly, Beirut became the center of world attention and -- from my narrow perspective as neophyte foreign correspondent -- this counted as a lucky break. From the start, I had a big and continuing story to write about as I made the rounds of banks, businesses, and embassies in Beirut. In working for a business magazine, I did not have to untangle the causes of the war or dive into the labyrinth of Lebanese politics. For me, the story was much simpler: Would Beirut survive as a regional center, and, if not, what would replace it?

I watched the recent television scenes of fleeing expatriates gathered at airports in Cairo and Tripoli with a sense of déjà vu. In late October 1975, we were part of a general evacuation of expatriates from Beirut. Various embassies around the city activated phone chains and pooled their minivans and buses into a ragtag convoy, which stopped to collect people from hotels and other gathering points and took them out to the airport. The most striking figure in our van was a majestic-looking Maronite priest, a black-bearded bear of man. He was dressed in a white cassock with a red sash, with a pearl-handled revolver tucked into the sash. Three Japanese businessmen sat in the back of the bus, with our daughter's wicker doll basket lying sideways across their legs.

By this time, I had accepted a full-time position with Mideast Markets, a fortnightly publication aimed at filling the gap that I had brought to Kroger's attention: the absence of serious, ongoing reporting on the changing business scene in the Middle East, with particular emphasis on Saudi Arabia, Iran, and the other oil-rich states.

AFTER A BRIEF stay in Athens, I relocated to Bahrain -- in part because of its location between the two great oil giants and in part because it had a more relaxed and open atmosphere than most other places in the Gulf. Bahrain was a jumping-off point. Over the next three years, I traveled constantly -- reporting on events in more than 20 countries, including all but two of those (Libya and Morocco) that have figured in the recent news because of riots, demonstrations, and acts of violence.

When I left Bahrain and returned to the United States at the end of 1978, the shah's government in Iran was teetering on the verge of collapse and Ayatollah Khomeini was getting ready to return to Iran and unleash his fury on the country's secular leaders -- and anyone else who did not accept his contempt for Western ways or accept his desire to reintroduce a fierce and belligerent strain of Islam that harked back to a time more than a thousand years ago when it was a religion of conquest. My last trip to Iran was to cover a high-level nuclear energy conference in Persepolis as riots were occurring in other parts of the country. It seemed exceedingly strange to me that the leading Western governments (the U.S., Germany, and France) would be happy to hand over nuclear technology to such an unstable place.

Thus, my time in the Middle East spanned a pair of mighty conflicts: the Lebanese Civil War on one side and the Iranian Revolution on the other.

The Lebanese Civil War was by far the bloodier of two conflicts. But unlike the Iranian Revolution, it did not fundamentally alter the course of human history. The Iranian Revolution sent an immediate and unmistakable chill -- or thrill, depending upon your point of view -- across the entire Muslim world.

John Rice, an English friend who stayed on in Bahrain long after I left, tells a story that describes the baleful impact on his office at Bahrain's oil refinery. He had five young Bahraini women working for him in early 1979 -- all bright and cheerful and the closest of friends. One day four of them showed up for work covered head to toe in black abayas. The next day the fifth woman -- who continued to dress in Western fashion -- came to him in tears, saying that the other women were accusing her of being a "slut" and a "whore." Soon she too took to wearing traditional attire.

In revisiting Bahrain three years ago (one of several visits I've made to the region in recent years), I looked up an old friend by the name of Ahmed. He and his wife, an American woman who had worked in the Peace Corps in Afghanistan, used to joke, and speak openly, of her difficulties in trying to adjust to life within Ahmed's extended family -- to life, that was, under the heavy and overbearing thumb of Ahmed's mother.

Unlike most Arab and Persian men, who cannot abide the thought of having a dog around the house, Ahmed was a real dog lover. When he and his wife were away on trips, my wife and I were happy to have Henna, their Golden Retriever, stay at our house.

I was disappointed to find that Ahmed, long divorced, had turned bitter and resentful. Over lunch, he railed against both the Bahraini and U.S. governments -- calling his own government corrupt and autocratic and blaming the U.S. for supporting it.

Though I don't know for sure, I feel certain that Ahmed was one of those calling for the downfall of the Al Khalifa monarchy in the recent mass demonstrations at the Pearl Roundabout in Bahrain. But here's the thing: No one in his right mind could call Ahmed "oppressed." As part of a very prosperous merchant family, he grew up wanting for nothing. And if Bahrain was so autocratic, why was Ahmed so relaxed about venting his feelings against it in a public place where anyone could overhear his words?

THIS RAISES THE QUESTION: Why has all of this rage spilled out onto the so-called Arab street, and not just in poor countries like Egypt, where there is acute poverty and where people wake up wondering where the next meal is coming from, but even in places like Bahrain, which ranks among the top 20 richest countries in the world with a GDP per capita of $40,000?

A good deal of the outrage and frustration, I think, is really a case of self-loathing. It is the dissatisfaction of someone who strikes it rich in the lottery...and proceeds to make a shambles of his entire life. The Middle East has oceans of oil -- and the price of this vital resource continues to rise -- yet the region continues to fall further and further behind the rest of the world, looking both West and East. The Indians and Chinese are surging forward. The Arabs and Iranians are not.

If he wanted to sound a feel-good note, President Obama must surely have failed when he went to Cairo and spoke about the many achievements of the Arab people in the distant past -- the invention of algebra and all that. Why give an Arab audience another reminder of how the region and its people have regressed compared with the rest of the world and even their own forbears?

The great historian and Middle East expert Bernard Lewis quotes a telling statistic: "According to a World Bank estimate, the total exports of the Arab world other than fossil fuels amount to less than those of Finland, a country of 5 million inhabitants."

The poorer Arabs -- Yemenis, Egyptians, and others -- hoped that they would benefit as the whole region was lifted through the widely expected miracle of investing oil money into the creation of a much more dynamic region. It didn't happen -- in part because the "gift of oil" was a poisoned chalice.

In the normal course of events, if the people in a country or region hope to prosper and make money, they have to do it the old-fashioned way: they have to earn it through increasing productivity and ingenuity used in satisfying the needs of others. That did not happen with the oil-rich countries of the Middle East. Their prosperity was (and is) an accident. And there really is such a thing as having a lot of people with too much money.

Economists call it the "Resource Curse." There is a large body of economic literature on the subject. The basic idea is commonsensical: If people are suddenly rich because of skyrocketing oil prices or some other anomaly of that kind, it produces "income effect" (i.e., they work less); and it eliminates the pressure to produce useful exports to pay for imports. Bubbles then develop as people bid up the price of real estate and other assets of a purely speculative nature. In the case of real estate, this has the perverse and harmful effect of making it harder for young couples to afford housing.

With my own eyes, I saw the inevitability of prodigious waste in places where money was no object. I was guilty myself. During summers in Bahrain, I kept two industrial-grade air-conditioners going at full blast. It might be 115º Fahrenheit outside but I was sleeping under heavy blankets in my bedroom. My wife and I liked it that way, and why not, thanks to the fact that I paid nothing for electricity (due to a combination of government and company subsidies).

This is the old story of easy-come, easy-go. It happens to nations as well as individuals.

BUT THE RESOURCE curse cannot be blamed for all the region's problems. And despite the protestations of my friend Ahmed and others like him -- complaints that have been amplified by a liberal press that has embraced democracy as the quick answer to all the region's ills -- neither can the rulers.

This is how Thomas Friedman of the New York Times began a recent column:

With Libya, Yemen, Bahrain, and Syria now all embroiled in rebellions, it is not an exaggeration to suggest that the authoritarian lid that has smothered freedom in the Arab world for centuries may be coming off all 350 million Arab peoples at once. Personally, I think that is exactly what is going to happen over time.

This is an extraordinary statement, to say the least, from a man who has spent considerable time in the Middle East and won a Pulitzer Prize for his reporting there. Does Friedman really think that the Arabs will be able to toss off what he calls a centuries-old "authoritarian lid" as easily as a fast-rising genie popping the top out of a manhole?

A little later in the same column, Friedman writes:

Democracy requires 3 things: citizens -- that is, people who see themselves as part of an undifferentiated national community where anyone can be ruler or ruled. It requires self-determination -- that is, voting. And it requires what Michael Mandelbaum, author of "Democracy's Good Name," calls "liberty."

No, that is not all it takes. Having swept to power in a great victory in the German elections of 1932, Adolf Hitler might almost qualify as a democrat under Friedman's definition. But to have a functioning democracy fundamentally requires tolerance -- a willingness to respect (and protect) the rights of others with whom you disagree. More than that, it requires the rule of law -- which means rules that are known in advance and treat all people the same. It also means that the power of government itself is strictly defined and limited.

In a real (or emerging) democracy, you would not expect to find women treated as chattel or masses of guest workers from poorer East Asian countries treated as little more than slaves.

But that is the reality in the Gulf and in much of today's Middle East. So, too, is the glorification of violence against Jews, Christians, and other minorities.

Let us hope that greater political and economic freedom will emerge from the current turmoil. But whatever we have seen in the recent upheavals, it is not yet time to call it an "Arab spring," similar to the "Prague spring" of 1968. Nor is there any surety that we are witnessing a Great Awakening that will liberate the Arabs and other Muslims from the demons inside their own heads. 

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About the Author
Andrew B. Wilson, a frequent contributor to The American Spectator and a former foreign correspondent, writes from St. Louis.