PLURALISM AND INCLUSION IN THE POST-ARAB SPRING WORLD: FINDINGS FROM A TWO-YEAR STUDY A.KADIR YILDIRIM, EDITOR

CONTRIBUTORS

Imad Salamey, Lebanese American University Mustafa Gurbuz, Arab Center Mirjam Künkler, University of Göttingen Nathan Brown, George Washington University Mazen Hassan, Cairo University Valentine M. Moghadam, Northeastern University Karen E. Young, American Enterprise Institute M. Evren Tok, Hamad Bin Khalifa University Alanoud Al Sharekh, University of London Peter Salisbury, Arab Gulf States Institute

INTRODUCTION

The Arab Spring protests that began in late 2010 considerably raised expectations for bridging the persistent democratic gap throughout the and North Africa. However, the initial enthusiasm and limited subsequent progress gradually paved the way for an authoritarian backlash.

Meager openings in were confronted with calculating and capable regimes that adapted their rules to the changing political context. Not only did these regimes limit the avenues for a repeat of mass protests, but they also curtailed rights and liberties in many cases. Likewise, the regimes challenged demands by various social, religious, and economic groups and increased pressure on these groups to minimize dissent. As a result, several years after the end of the Arab Spring protests, most authoritarian regimes in the region have been able to maintain their hold on power. In many cases, this control has actually tightened and/or creatively adjusted to conform to new societal constraints.

A lack of pluralism and inclusion makes up a major element of the democratic gap in the Middle East and North Africa. The ethnic, religious, and socioeconomic diversity of the region necessitates inclusive and pluralistic policies to facilitate the integration of communities across the region as well as offering them a fair chance to benefit from and influence the decision-making processes.

This collection of policy briefs is based on a research project on pluralism in the Arab World titled “Building Pluralistic and Inclusive States Post-Arab Spring.” The study is generously supported by a grant from the Carnegie Corporation of New York. The primary motivation for this project lay in the fact that and socioeconomic justice were consistently among the most important demands of Arab publics during the Arab Spring protests. In what ways did the Arab Spring process reshape social, religious, political, and economic pluralism? Our research aimed to shed light on the state of pluralism in many of its forms and to document the extent to which inclusive economic, social, and religious policies were implemented.

We cast a wide net, and our study proceeded on several fronts. We recruited leading experts in the field to examine pluralism in its various forms. These scholars integrated their findings in extensive working papers and more concise policy briefs. We also organized workshops throughout the Middle East and North Africa to examine distinct country-specific issues of pluralism, and we published our findings in country reports. We further conducted a 10-country public opinion survey to analyze the dynamics of ethno-religious diversity. Lastly, we organized two conferences in Beirut and Washington, D.C., to share our findings and discuss ongoing issues of conflict and post-conflict reconstruction.

In this introduction, I summarize the major findings of our study and offer a brief summary of the 10 policy briefs. Our study shows that pockets of improvement in pluralism are, by and large, dwarfed by the continuity—if not the regression—of discrimination, suppression, and disenfranchisement. For example, mechanisms devised by regimes in Kuwait and Jordan, such as new electoral laws and restrictions on of expression, serve this purpose. Economically, existing regimes undermine ongoing reform efforts because of their vested interests in the continuation of exclusive political economic structures. Likewise, while religious parties in both Morocco and Tunisia are included in their respective political systems and took part in governance for the first time in the post-2010 period, both parties faced notable obstacles in their attempts at governance.

Ethno-religious pluralism has a mixed record. The largest ethnic minorities in the region still face considerable discrimination in their efforts to secure greater recognition. Imad Salamey’s analysis on the rise of violent communitarian conflicts underscores the need for reconceptualizing the shifting dynamics of intercommunity relations (“The Communitarian Arab State”). Drawing attention to the failure of liberal conceptions of pluralism grounded in , Salamey argues that communitocracy could offer a solution to intercommunal tensions with emphasis on communal representation of interests. Such power-sharing arrangements facilitate consensus building and increase government legitimacy.

Just as important, however, is the tendency of previously marginalized minorities to engage in exclusionary policies themselves once they gain some level of over their territories. Mustafa Gurbuz’s analysis of in and —the largest ethnic minority without a state in the region—is a case in point (“False Hopes? Prospects for Political Inclusion in Rojava and Iraqi ”). In his analysis of the Kurds’ efforts to gain greater political freedom in Iraq and Syria, Gurbuz finds that political diversity and economic prosperity suffered greatly as a result of the rampant instability since the onset of the Arab Spring protests. Likewise, re- in Rojava under YPG rule and intra-Kurdish divisions in aggravated prospects for inclusionary political systems in both regions.

In the religious sphere, countervailing trends have been underway in recent years that have yielded both inclusionary and exclusionary policies. On the one hand, greater diversity was achieved with the inclusion of women and Islamists. We are witnessing a greater willingness to include Islamist parties in the political process since 2010. In countries such as Morocco, Tunisia, and Egypt for a brief period, Islamist parties took on governmental roles for the first time. In other cases, Islamist and Salafist parties found opportunities to become part of the legal political system. Likewise, in a process that predates the Arab Spring protests, women began making inroads into the religious sphere. Mirjam Künkler finds that women religious scholars assumed positions as religious authorities at greater rates in countries across the region such as Morocco, Syria, the United Arab Emirates, Iran, and (“Women as Religious Authorities: What A Forgotten History Means for the Modern Middle East”). These roles, however, typically do not reach the level of being independent religious authorities; women scholars are recruited to respond to inquiries by women believers only. Künkler argues that in order to normalize women’s religious authority, efforts must be made to ensure that women scholars are trained in all religious matters and for all believers, just like their male counterparts.

On the other hand, religious centralization has balanced limited progress in inclusionary policies. Recently, there have been vocal calls for reform in Islam to curb extremism and promote women’s rights. While these calls certainly resonate with calls for pluralism, evidence thus far suggests that newly developing policies aim to centralize religious institutional structures as part of renewed efforts to reassert state control rather than introduce greater pluralism. Nathan Brown’s analysis of developments in Egypt and Saudi Arabia in particular shows that Egyptian President Abd al-Fattah al-Sisi and Saudi Crown Prince Mohammad bin Salman’s religious reform efforts are aimed at asserting power on overly autonomous state religious agencies (“The Rhetoric and Reality of Religious Reform in Saudi Arabia and Egypt”). The key takeaway from the Arab Spring for these regimes has been the necessity of control, exclusion, and management of the religious sector as an instrument of societal control.

Gender is an area where progress has been inconsistent at best. Mazen Hassan examines the dynamics behind the historic rise in women’s parliamentary representation in Egypt since 2015 (“Women in the Egyptian Parliament: A Different Agenda?”). quotas played a critical role in ensuring this unprecedented outcome for women (almost 15% of the Egyptian parliament is female). Looking more closely at what this representation has meant in practice for women, Hassan finds that women MPs made unique contributions to Egypt’s political debates and pursued a distinctive agenda compared to their male counterparts in terms of the issues they focused on and the arguments they used to make their case. Hassan recommends upholding and even increasing gender quotas as well as revising electoral laws to eliminate discriminatory provisions against women. Tunisia presents one of the most encouraging cases in the region as far as women’s inclusion in the social, educational, and political life is considered. Valentine Moghadam, however, goes further and asks whether such success on the part of women translates into tangible gains in the economic realm (“Gender Inequality and Economic Inclusion in Tunisia: Key Policy Issues”). Moghadam’s analysis reveals that Tunisian women face a wide range of adverse conditions in their economic participation; the extent of their economic participation is not commensurate with their level of education. High unemployment rates, low demand for female labor, a weak support system for working mothers, among other barriers, preclude women’s full social inclusion and economic empowerment. Moghadam’s policy recommendations include introducing nationwide paid maternity leave, increasing access to preschool and neighborhood childcare facilities, and greater vocational training for women.

Economic diversification and reform, especially in the Gulf, have become urgent policy imperatives in recent years. The inherent tendency of natural--based to plunge into instability has become more evident in recent years with the fluctuation in oil markets. Consequently, governments across the region have initiated economic reform programs to transform their economies toward sustainable models.

An integral component of new economic policies relates to structural reforms in taxation, subsidies, and debt issuance. The primary motivation behind such reforms is relieving the state from heavy financial burdens and shifting some of the costs to citizens and residents. Karen Young draws attention to the trade-offs that regional governments need to consider with respect to long-term economic diversification and growth goals and short-term costs in the labor market (“Confronting the Governance Crisis in the Middle East”). Likewise, Young argues that building credibility in the reform process and maintaining transparency will be the most valuable assets for Gulf countries.

One crucial area of reform embraced by regional governments is promoting entrepreneurship. Such focus on entrepreneurship aims at achieving sustainable development in the long term to avoid susceptibility to internal and external shocks. In examining the current state of entrepreneurship policies, M. Evren Tok argues that blurry ownership structures between private and public sectors, extensive state regulation of the private sector, and the sheer size of the public sector in driving overall demand complicate the success of such policies (“Can State-led Entrepreneurship lead to Sustainable Economic Diversification and Development in GCC States?”). In order to overcome such obstacles, Tok recommends developing state-led entrepreneurship programs that focus on small and medium businesses with the support of a large entrepreneurial ecosystem.

In Kuwait, the government and ruling family developed a series of policies to create a robust private sector that relies primarily on small and medium enterprises. Alanoud Al Sharekh shows that such policies largely failed due to the lack of coherence in priorities, dominance of elite-controlled monopolies, and weak culture of entrepreneurship (“The National Fund for SME Development as a Vehicle of Economic Reform in Kuwait”). In order to foster the growth of small and medium businesses, Kuwait should empower a single body that will assist entrepreneurs in dealing with the creation of new businesses and that will practice transparency and sound financial management, Al Sharekh argues.

Another dimension of the changing landscape of economic policymaking in the Middle East and North Africa region is the rise of Gulf countries as emerging donor nations in the region and beyond. While in principle the addition of new nations to share the cost of regional reconstruction and beyond is a positive development, it potentially carries implications on what such aid might entail. Peter Salisbury argues that there are notable risks associated with aid that finds its way to religious or armed groups (“Aiding and Abetting: The GCC as Quiet Giants and Emerging Players in Aid and Overseas Development Assistance”). Not only is such a transactional approach to aid detrimental to regional , but it can also undermine pluralism in aid- receiving countries. Salisbury recommends enhancing cooperation among NGOs, multilateral organizations, and countries involved in the aid process, as well as developing mechanisms to mitigate the risks and share the lessons learned as part of the aid process. Our study shows that the progress toward creating inclusive policies and a pluralistic political, social, and economic structure in the Arab world has been limited since 2010. Authoritarian Arab regimes have proven adept at creating restrictive and exclusionary policies under new sociopolitical conditions. This new restrictive environment is exacerbated by the fact that ethnic and religious tensions have increased in recent years and minorities continue to face widespread prejudice throughout the region.

Our findings also suggest that various dimensions of pluralism are intimately related to each other, and efforts to tackle one component of pluralism are more likely to find success if such efforts are combined with other components. For example, the interconnected nature of gender and economic inclusion in Tunisia, ethnic and political inclusion in Syria and Iraq, and gender and religious inclusion in Syria and Morocco carry implications for the correct policy approaches to address these issues. Such interconnectedness similarly underscores the difficult task of overcoming resistance against inclusive policies from multiple sources.

The improvement of economic conditions remains imperative. An overwhelming majority of Arab public opinion is not convinced that the economies of regional countries made much progress in creating employment, raising living standards, or reducing corruption. Moreover, these societies are imbued with a deep sense of injustice as the elite are thought to have benefited disproportionately from the Arab Spring process according to a recent survey conducted as part of this study and in a separate study undertaken by the Arab Transformations Project.1

Overall, the sense of frustration in how the Arab Spring protests have not led to meaningful reforms since 2010 leaves regimes with little to satisfy the Arab publics. The lack of economic improvement, an aggravated sense of inequality, increased ethno-religious tensions, and a more restrictive political environment in most countries indicate that the basic conditions that gave rise to the Arab Spring protests in 2010 still hold, arguably more prominently today. Although there are no indications that a new wave of protests is imminent, there is enough to suggest that the underlying conditions of frustration with the political economic trajectories in these countries may return at some point in the future, and with a more violent streak.

A.Kadir Yildirim, Ph.D. Fellow, Center for the Middle East, Rice University’s Baker Institute Principal Investigator, “Building Pluralistic and Inclusive States Post-Arab Spring”

1 See https://www.arabtrans.eu for more information about the Arab Transformation Project. ISSUE BRIEF 08.29.18 The Communitarian Arab State

Imad Salamey, Ph.D., Lebanese American University

Contemporary Arab politics have been of national priorities has increasingly overwhelmed by communitarian divisions emphasized communal inclusion and that are polarized along sectarian, ethnic, consensus building to legitimize the state. and tribal lines. The latest rise of violent Hence, the rethinking of nationhood has communitarian conflicts in the Middle East, heightened issues of national integration, such as those in Syria between Sunni and cohesion, and accommodations such as Alawi communities, raises the question of constitutional revisions, electoral systems, whether nation-states can remain viable and power sharing. in their current structures or if major Previously, traditional liberal thought changes are required. The response to this suggested that global integration and question is directly tied to post-Arab Spring economic development determine national politics in which political reforms inspired democratization. The Arab Spring, however, by liberal views appear to have failed to deconstructed these traditional assumptions produce progressive changes. The lack of about national models and their inevitable state legitimacy and appropriate power political transformations. The accelerating sharing in governance are key causes of this processes of globalization have intensified the democratic failure. interdependency of nations and communal The recent proliferation of com- groups. These processes have simultaneously munitarian politics across the Middle East deepened rifts between communities. For suggests that public mobilization and example, Shiite relationships across nation- The recent proliferation partisan interactions with the state are states boosted their relative strength against of communitarian formulated along identity-group lines. Sunni communities in Iraq, Syria, Lebanon, Dominant identity groups have formed and Yemen, allowing them to demand greater politics across the based on , such as Sunnis, Shias, and shares of state power throughout the region. Middle East suggests Christians; ethnicity, such as , Kurds, Thus, the proliferation of transnational that public mobilization and Persians; tribe, such as the Houthi and communitarian movements across the and partisan Ahmar in Yemen; and region, such as the Middle East and North Africa, such as Sunni coastal and rural populations in Tunisia. Salafist groups, the Muslim Brotherhood, interactions with The inability of post- and Velayat Al Faqih’s Shiite Faylaq al Qods, the state are nation-states to accommodate com- has prompted new requirements for state formulated along munitarian diversity in governance has legitimacy and change that are founded on identity-group lines. only deepened national legitimacy crises the two seemingly conflicting tendencies and communitarian conflicts in the region, of global integration and local communal thereby diverting reform efforts and accommodations. This brief reviews rising democratic transitions. Liberal attempts to transnational communitarianism in the Middle democratize through state reforms have to East, describes multicommunal constituency some extent been superseded by domestic states, and suggests communitarian plurality calls for nation building and reconstruction in as a possible solution to ongoing political the post-Arab Spring world. This reordering conflicts in Arab states. RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 08.29.18

Arabia’s support for the anti-Houthi Sunni THE NATION-STATE AMID RISING government in Yemen demonstrate this TRANSNATIONAL COMMUNITARIANISM growing transnational communitarianism. In the post-Arab Spring period, almost The contemporary political reality all pan-Arab nationalist republics and reveals that the national-social pacts mixed communitarian states have been that have governed multicommunitarian experiencing increased political conflict societies throughout the post-World fueled by communitarian demands and War II Arab countries are increasingly aspirations. Iraq paved the way in the challenged. Reformulations of these early 1990s, when Kurdish and Shiite pacts seem to require fundamental discontent with the Ba’ath regime led to reconstructions of state foundations. This a deep national legitimacy crisis that was has become essential as newly empowered followed by international interventions communitarian groups within national and violent confrontations. Libya, Sudan, territories seek to rebalance their powers in Yemen, Lebanon, Bahrain, and Syria have state structures, such as the drive by Shiite communities to reconstruct the state in National borders as experienced similar fates with societal fragmentation and divergence along Lebanon, Iraq, Yemen, and Bahrain. isolating mechanisms sectarian, tribal, and regional lines One challenge in reconstructing the have lost their since 2010. political order comes in the form of growing relevance because For example, Syria’s ethno-sectarian interdependence among states. This society experienced unprecedented violent political interconnectedness can complicate communitarian local affairs because local communities groups are discovering inter- and intra-community conflict over the fate and nature of political power. Sunni, can strengthen their domestic bargaining transnational cultural Alawite, Christian, Druze, Kurdish, Turkmen, power by relying on transnational alliances bonds that transcend and Assyrian groups now dispute not only and external backing from abroad. Post- Arab Spring politics appear to feature such geographic space. the national order but also Syria’s Arab, Islamic, secular, and federal characters. mutually beneficial interests between These interwoven conflicts also reflect the international communities as they formulate proximity of various international actors new regional and local power structures to the Syrian conflict such as Turkey, Iran, (Salamey and Rizk 2018). For example, Saudi Arabia, Russia, Europe, and the U.S. Turkey’s Islamist Justice and Development Thus, the archaic practice of nationalization (AKP) ruling party has played a pivotal role in that sought to suppress communal identities supporting Islamist Sunni groups throughout in favor of building a unified national identity the Arab states in an effort to create a new appears to have come to an end. and favorable regional order. Local allies, In an increasingly globalized world, such as the Ennahdha Party in Tunisia and geography is no longer a sufficient factor the Free Syrian Army in Syria, have also in determining identity. National borders utilized Turkish support to strengthen their as isolating mechanisms have lost their own bargaining power against local rivals. relevance because communitarian groups Still more challenging to communitarian are discovering transnational cultural politics is the proliferation of non-state bonds that transcend geographic space. transnational militant actors such as Sectarian and ethnic resurgences among Al-Qaeda and ISIS, as well as the large Middle Eastern groups with claims to number of foreign fighters in their ranks. former territories are becoming increasingly While using military force to defeat these important among groups such as Sunnis, groups may be difficult, including them in Shiites, Christians, Kurds, Turkmens, Houthis, nonmilitaristic political negotiations may and Amazighs, who are discovering the prove impossible. However, communitarian advantages of transnational associations power-sharing agreements appear to be (Salamey 2017). For example, Iran’s the most viable alternative to undermine support of the Shiites in Iraq and Saudi the appeal of these extremist groups. The power accommodation of communitarian

2 THE COMMUNITARIAN ARAB STATE

groups is one of the most critical factors in resisting radicalization and extremism. TOWARD A MULTICOMMUNAL When communities are included in CONSTITUENCY STATE: policymaking and the distribution of state COMMUNITOCRACY power, the attractiveness of radicalization A state that expresses power in terms can be reduced. of communitarian interests is called a It is true that power sharing may communitocracy. Communitocracies can consolidate identity politics and deepen be unitary, when a single community communitarian differences, as has been the controls state power; secular, when religion case in consociational states like Lebanon, is separated from public affairs; federal, Iraq, and Belgium. Power sharing may when communities autonomously divide also result in a fragmented polity with a power between geographic territories; weak government and eventually lead to confederal, when a weak union brings extremist politics. However, attaining peace together separate independent communities in complex contexts such as Syria may for a particular set of political and not come easily. Devising short-term and economic associations; or consociational, transitional conflict mitigation policies that when communities share a single state are embedded in power-sharing strategies political power irrespective of geographic is extremely urgent because the current allocations of groups. A communitocracy conflicts are principally driven by disputes differs from a democracy in at least two over political power. Addressing these ways. First, a communitocracy provides issues would provide important incentives for a pluralistic rather than a majoritarian for negotiating peaceful resolutions. form of democratic governance. Second, Eventual negotiations between groups in communitocracies allow for the “expression For multisectarian a conflict-free environment may favor of communal interests in a state’s policy states, removing greater integration and less fragmentation. outlooks” rather than strictly expressing For multisectarian states such as Syria and religious requirements only the interests of an individual Yemen, removing religious requirements for public positions constituency (Salamey 2017). These benefits for public positions, for instance, and are best manifested in power arrangements and adding mixed establishing mixed constituency electoral that satisfy different communal groups constituency districts and proportional representation mobilized around religious, regional, ethnic, electoral districts may prove essential for long-lasting peace. or linguistic identities. For instance, as Thus, to reach the long-term goals and proportional public offices and parliamentary seats of inclusionary states that accommodate representation may are allocated along communitarian lines, pluralistic governance, Arab states must politicians and policy leaders can advocate prove essential for engage in genuine reforms that combine for communitarian-favorable policies long-lasting peace. communitarian coexistence with shared and subsequently be rewarded by their governance. Fundamental policy reforms constituencies accordingly. that would strengthen governmental Consociationalism, federalism, response to transnational and radical confederalism, and unions are forms communitarian networks in the region are of communitocracies with democratic among the priorities. Rising transnational mechanisms embedded in them (often movements are a primary challenge to referred to as indirect ). forming an inclusive, multicommunitarian, Communitocracies have demonstrated and accommodating state. While such a exceptional capacities to manage communal state may not live up to the aspirations of differences around the world. For instance, equal citizenry regardless of communitarian India’s communitarian state structure has affiliations, it can provide a realistic ensured that its multi-ethnic and regional framework for managing and de-escalating communities share power in parliament, protracted ethnic and sectarian conflicts. with seats allocated to different provinces that are largely based on ethnic and linguistic communities. 3 RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 08.29.18

A range of power-sharing irrespective of spatial distribution, size, or models is available for countries with transnational association (Salamey 2017). multicommunitarian constituencies. Furthermore, the fact that most Arab Some communitocracies are centered on states were established within relatively a multicommunal secular state, such as small and highly contested geographic Israel, Belgium, and Switzerland. These areas with communitarian demographics arrangements require consensus among that transcend national borders is an different communitarian groups that are additional reason why a consociational geographically separated by regions or power-sharing arrangement may prove to provinces. The communitocracies produce be a better alternative to strict . decentralized federal arrangements that Lebanon and Iraq are the first countries in preserve the diversity within a single the region to have utilized consociational multicommunal political order. They also and federal arrangements. Despite some of maintain the separation of state and the shortcomings of these arrangements, religion while preserving the cultural rising tensions along communitarian lines and administrative autonomy of local suggest such arrangements would be communities (Salamey 2017). feasible governing alternatives elsewhere in When communities are geographically the region, such as in Yemen, Sudan, Libya, mixed with persisting cultural, religious, Egypt, Bahrain, and Somalia. or ethnic distinctions, consociational Consociationalism can also be power-sharing arrangements provide an instrumental in resolving the conflict in alternative option to the monolithic national Syria. Sectarian and ethnic divisions, as order, as in Lebanon and Malaysia. The key well as foreign influences, in the country One aspect of feature of a consociational system is the require a delicate distribution of political consociationalism that preservation of communal diversity through offices among Alawis, Sunnis, Christians, might be particularly a prearranged distribution of state power. and Kurds. One aspect of consociationalism Consociationalism distributes power among that might be particularly fitting for Syria is fitting for Syria is identity groups rather than geographically the establishment of bicameralism, in which the establishment of separate regions, thereby preserving the communitarian interests are expressed in bicameralism. This major features of federalism. the upper house of parliament while national ensures communitarian Consociational options are also representations are preserved in the lower power sharing but also attractive to societies with substantial house. Such a distribution not only ensures variation in the sizes of ethno-cultural communitarian power sharing but also guarantees sectarian groups. For instance, Shiite, Alawi, Druze, guarantees sectarian and regional autonomy. and regional autonomy. Turkmen, and Amazigh communities Consociationalism might also be in Arab states are small minorities. For beneficial in Yemen. A combination of tribal these communities, the demographic and sectarian communitarian power sharing composition of local populations has through a balanced arrangement is required exaggerated feelings of deprivation and for an acceptable political agreement by fear of domination by larger groups (Boie rival groups. A distribution of Houthi, Zaydi, and Rae 2015). The reduced presence of and Sunni power that accommodates both minority groups such as Christians in Iraq, northern and southern tribes provides a Syria, and Yemen has increased these fears. starting point for any political power-sharing Integrative forms of communitarianism arrangement. Such a distribution would offer a means to diffuse these kinds allocate public seats along communitarian of demographically driven tensions by lines, particularly for the highest positions. assuring representative quotas in the A communitarian electoral system would distribution of state power. Thus, the major also provide proportional representation to advantage of consociationalism lies in accommodate different groups. This would its ability to mitigate communal conflicts allow communitarian power sharing while that are territorially, demographically, and ensuring intracommunitarian competition internationally instigated. It therefore and electoral alliances, as in the case assures the preservation of communities of Lebanon. 4 THE COMMUNITARIAN ARAB STATE

The Arab world needs to reverse its perception of communitarian plurality as AUTHOR a source of weakness and division. While Imad Salamey, Ph.D., is an associate most countries in the world utilize formal professor of political science and and informal power-sharing arrangements, international affairs, associate chair of the Arab region cannot remain reluctant to the Department of Social Sciences, and consider such governing options. Thus, a director of the Institute for This issue brief is part quest for new national arrangements in the and Conflict Resolution at the Lebanese of a two-year research Arab region has emerged during the post- American University. He researches ethnic Arab Spring period. Regional stabilization and sectarian polarization and transnational project on pluralism in is contingent upon building consensus extremism in the Middle East and North the Middle East after among different communal groups. This Africa, and he holds a doctorate in political the Arab uprisings. can only be attained through a power- science from Wayne State University. The project is generously sharing arrangement that preserves the fundamental aspirations of different groups. supported by a grant Communitocracy may be a beneficial from the Carnegie governing option for the region that would Corporation of New York. maintain communal plurality in a time of increasing global integration.

REFERENCES

Boie, Waddell, and Jaquilyn Rae. 2015. The Power of Numbers: Size, Collective Action, and Ethnic Civil Conflict. New Jersey: Princeton University Press. See more issue briefs at: www.bakerinstitute.org/issue-briefs Longva, Anh Nga, and Anne Sofie Roald. 2015. Religious Minorities in the Middle This publication was written by a East: Domination, Self-Empowerment, researcher (or researchers) who Accommodation. Leiden: Brill. participated in a Baker Institute project. Wherever feasible, this research is Salamey, Imad. 2017. The Decline of Nation reviewed by outside experts before it is States After the Arab Spring: The Rise of released. However, the views expressed Communitocracy. London: Routledge. herein are those of the individual author(s), and do not necessarily Salamey, Imad, and Samuel Rizk. 2018. “Ways represent the views of Rice University’s Forward for Syria.” In Post-Conflict Baker Institute for Public Policy. Power-Sharing Agreements: Options © 2018 Rice University’s Baker Institute for Syria, edited by Imad Salamey, for Public Policy Mohammed Abu Nimer, and Elie Abouaoun. London: Palgrave Macmillan. This material may be quoted or reproduced without prior permission, provided appropriate credit is given to the author and Rice University’s Baker Institute for Public Policy.

Cover image credit: Francois Mori/AP

Cite as: Salamey, Imad. 2018. The Communitarian Arab State. Issue brief no. 08.29.18. Rice University’s Baker Institute for Public Policy, Houston, Texas.

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ISSUE BRIEF 09.05.18 False Hopes? Prospects for Political Inclusion in Rojava and Iraqi Kurdistan

Mustafa Gurbuz, Ph.D., Arab Center, Washington D.C.

Among those deeply affected by the Arab i.e., unifying Kurdish cantons in northern Spring were the Kurds—the largest ethnic Syria under a new local governing body, is minority without a state in the Middle depicted as a dream for egalitarianism and East. The put the Kurds at a liberal inclusive culture that counters the forefront in the war against the Islamic patriarchic structures in the Middle East.1 State (IS) and drastically changed the future U.S. policy toward the Kurds, however, prospects of Kurds in both Syria and Iraq. has become most puzzling since the 2017 This brief examines the challenges that defeat of IS in Syria. While the U.S.—to hinder development of a politically inclusive avoid alienating the Turks—did not object culture in —popularly to the Turkish troops’ invasion of the known as Rojava—and Iraqi Kurdistan. Kurdish canton of Afrin, the YPG began Political and economic instability in both forging closer ties to Damascus—which regions have shattered Kurdish dreams for led to complaints from some American political diversity and prosperity since the officials that the Kurdish group “has turned early days of the Arab Spring. into an insurgent organization.”2 In fact, from the beginning of the Syrian civil war, Syrian Kurds have been most careful to not THE RISING TIDE OF SYRIAN KURDS directly target the Assad regime, aside from some short-term clashes in certain places The civil war in Syria has thus far bolstered like Rojava, for two major reasons. the People’s Protection Units (YPG) and its First, given the common enemies of Political and economic political platform, the Democratic Union the Kurds and the Assad regime, Damascus instability in the region Party (PYD); these groups have received continued to pay the salaries of civil both U.S. and Russian military support. In have shattered Kurdish servants in PYD-controlled regions and order to placate Turkey—which declared the dreams for political pursued an accommodative policy.3 Rojava aforementioned groups as “terrorists” due diversity and prosperity has been immune from the regime’s air to their links to the Kurdistan Workers’ Party strikes since the beginning of the Syrian since the early days of (PKK)—American officials called U.S.-YPG civil war. In addition, Damascus enabled the Arab Spring. relations “tactical,” “transactional,” and Rojava residents to enjoy access to central short-term; likewise, they also downplayed government services such as public sector the PYD’s links to the PKK. The threat of IS salaries, schools, health care, travel on has led the American media to reimagine civilian airlines, and the issuance of identity Kurdish fighters as the United States’ “best cards, passports, and property records. allies” with a secular and egalitarian Given the Assad regime’s resilience and ; this view is often presented with high likelihood of staying in power for the a juxtaposition of a “malevolent IS” and foreseeable future, Syrian Kurds will keep “freedom fighter women.” The Rojava project, RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 09.05.18

this strategy of realpolitik. In the words of out that Arab representation has increased PYD’s former co-chair Saleh Muslim, “The over time.9 At the leadership level, however, PYD is part of the Syrian revolution, but it is Kurds dominate the SDF ranks and pursue not prepared to be used as its soldiers.”4 an agenda of indoctrination. For example, Second, Syrian Kurds pragmatically used in a recent graduation ceremony of 140 PKK leader Abdullah Ocalan’s writings as Arab fighters joining SDF following a 45-day an asset to gain international recognition, training program, pro-PKK slogans such as blurring the line between separatism and “No Life without Our Leader!” were chanted local governance. While denying their as a pledge of allegiance.10 organizational links with the PKK, YPG Ethnic tensions mattered less when declared Ocalan as the group’s visionary there was a strong coalition between the leader. Ocalan’s idiosyncratic theories on Kurds and the Arabs against IS; some Arab Given the Assad “democratic confederalism,” “autonomy,” tribes sought revenge against IS, while and the “dangers” of the nation-state others have long been allied with the Assad regime’s resilience support Kurdish demands for autonomy regime. The post-IS era, however, has and high likelihood of in Syria while claiming that Kurds do not unleashed ethnic competition over limited staying in power for to pose a real threat to the Assad regime, local . the foreseeable future, as they do not seek independence. For One factor that drives tensions is the Ocalan, Kurds should not aim to establish an oil fields. Kurdish cantons include key oil Syrian Kurds will keep a independent nation-state structure because fields in southern Hasaka. The al-Shaddadi strategy of realpolitik. the modern nation-state is intrinsically oil fields, for example, are located in a top-down project that is based on predominantly Arab lands and are deemed homogenization and assimilation—what especially valuable for Rojava’s economic Kurds have suffered most in recent history.5 future. Before the Syrian civil war, Hasaka Ocalan argues that enforces “the and Raqqa provided almost two-thirds of centralization of the state” and fascism is Syria’s total oil extraction—251,000 out of the “purest form” of nation-states.6 Thus, 387,000 barrels per day.11 Syrian Kurds have tried hard to balance Oil revenue is already significant for ideology and political opportunity—and to Rojava’s and will be a major present their socialist worldview with an source of revenue if Kurds can initiate emphasis on democratic ideals that target a transactions with Damascus via the Western audience for support. original pipeline. Negotiations with the regime, however, may not ease Kurdish- Arab tensions as some of the local Arab THREATS TO POLITICAL INCLUSION tribes have long supported Damascus. In IN ROJAVA fact, during the 2004 Kurdish uprising in Qamishli, the Assad regime offered armed Despite the aforementioned factors in favor support to Arab tribes in Jazira—namely of what Syrian Kurds call “the Rojava project,” Adwan, Jabbour, Ougaidat, and Tay—to quell major challenges feed ethnic tensions between the riots.12 Despite the somewhat cordial the Kurds and the Arabs and, therefore, relations between Damascus and the Kurds threaten stability in northern Syria. during the civil war, the Assad regime aimed Being heavily Kurdish, the U.S.-backed to continue close relations with these Arab (SDF) currently tribes. When Kurds began offering higher have sway over 27% of Syrian territory in salaries to Arab locals after the SDF captured the north.7 In the Kurdish cantons of the lucrative oil fields, the regime did not eastern Euphrates, Kurds constitute only a hesitate to conduct air bombings of Hasaka slim majority of 55% and in some places in August 2016 to defend its public image as such as southern Hasakah, Kurds rule the arbiter of Kurds and Arabs.13 over the Arab-majority towns.8 The SDF’s In addition to oil, fertile agricultural land ethnic composition has long been a point of in the Jazira and Hasaka region may cause discussion in Washington, D.C.; U.S. officials mayhem if Kurdish authorities choose to have provided conflicting numbers, pointing redistribute land to attract thousands of 2 FALSE HOPES? PROSPECTS FOR POLITICAL INCLUSION IN ROJAVA AND IRAQI KURDISTAN

landless peasants. Before the civil war, the the ideology is particularly attractive to region produced 43% of Syria’s grains and Kurdish youths due to its Kurdish nationalist 80% of its cotton.14 Although the region is flavor, which does not resonate with considered Syria’s food basket, the Assad Arabs.17 Moreover, the Arab tribes’ fear regime did not invest in it when farmers of Kurdish irredentism will be reinforced faced severe water shortages in the past two as long as the SDF structure facilitates decades. Years of drought and increasing indoctrination of PKK ideology. The Syrian consumption of water on the Turkish side regime’s “” policies since the pressured the farmers whose traditional have changed the demographics agricultural practices such as gravity feed of the region; therefore, the Arab tribes’ systems demand extremely high water anxiety regarding the “re-Kurdification” of usage. The regime promised to develop Rojava under YPG rule is not baseless. The modernized irrigation techniques following YPG’s earlier practice of forced conscription the 2004 Kurdish revolt, but this was of Arab boys and girls (under the age of 18) never implemented. According to Fabrice is still fresh in the memories of local Arabs.18 Balanche’s research based on French Ministry of Agriculture statistics, the Hasaka province witnessed a 25% decrease in cultivated areas THE RISE AND FALL OF IRAQI between 1995 and 2008, causing a steady KURDISTAN outflow of the region’s population into urban The Arab Spring and ensuing meltdown of centers such as Aleppo and Damascus.15 The the Iraqi security architecture have led to regime’s food and fuel policies—extracting dramatic changes in the fortunes of Iraqi maximum resources while deliberately not Kurdistan, which is the most thriving region establishing industries—were consistent over of the post-Saddam era. Kurdistan was often the years, making the region subservient to praised as a virtual island of stability—a the state. Thus, access to water and resources reference to its secular character and will remain as the key flashpoint in the Kurds’ immunity to Shia-Sunni sectarian tensions.19 relations with the central government. The 2011 Sulaymaniyah protests inspired It is unclear how the local population by the Arab uprisings, however, revealed will perceive the redistribution of land under institutional fragility. To quell the protests, the YPG. The YPG believes in a communal the Kurdistan Regional Government (KRG) system of government that provides food approved a parliamentary bill that consisted and fuel security and education through of 17 points of agreement between the The Arab Spring and local councils. The communes take care of government and the opposition, including a most functions of a modern state; in many ensuing meltdown promise for structural economic reforms and ways, local autonomy in Rojava appears to of the Iraqi security to fight against cronyism and corruption.20 constitute a type of socialist revolution. Some The institutional problems, however, architecture have led local residents, however, have begun to raise have remained a major problem.21 Although to dramatic changes concerns, complaining about the decision- the KRG has introduced some measures in the fortunes of Iraqi making authority and unaccountability for accountability in the oil sector, the of YPG leaders.16 There is also criticism Kurdistan, which is the opposition has claimed such steps are of YPG’s strict budgetary control over the most thriving region of too little too late. Iraqi Kurdistan faced a communes and its practice of channeling major danger when IS directly threatened the post-Saddam era. funds and humanitarian aid in exchange to invade Erbil. The war against IS caused for the recipients’ loyalty to its authority. not only a shrinking economy but also a For dissident Kurds, such problems may domestic refugee flow: internally displaced be a failure of the YPG’s socialist ideology; people now represent one-third of however, for dissident Arabs, such conditions Kurdistan’s population of 5.2 million.22 Mass are also seen through an ethnic lens—that is, outrage about the economic downturn the failure of Kurdish rule. grew as the KRG failed to properly pay public The YPG’s ideology may on occasion employees and unconstitutionally postponed appeal to anti-establishment Arab youths presidential elections several times.23 who are alienated from their tribes; however, 3 RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 09.05.18

As the IS threat vanished, the KRG’s representative committee to pursue push for an independence referendum in negotiations with Baghdad until the Kurdish September 2017 was a major gamble. On parliamentary elections, scheduled for one hand, it could boost the ruling elite’s September 30, 2018. legitimacy and authority—and indeed, By pitting opposition-stronghold the referendum galvanized the national Sulaymaniyah against Erbil—the seat of the sentiment among Kurds in Iraq and beyond. government and home to Barzani—Baghdad On the other hand, failure could seriously will continue to benefit from the intra- undermine the KRG’s legitimacy. High Kurdish divide. Kurdistan’s multifaceted emotions turned into major frustrations and structural problems signal major future when the Iraqi military undertook operations challenges and vulnerability of the region to in the territories around , areas of outside interference. dispute between the KRG and the central government in Baghdad in the immediate aftermath of the referendum. The Kurdistan POLICY IMPLICATIONS FOR region not only lost massive oil revenues but WASHINGTON also faced an economic embargo, including In the post-Arab Spring era, Kurds have the blockade of international flights that was become a critical player for U.S. policy imposed by the central government.24 toward Syria and Iraq. In Syria, a key In Syria, a key question Specifically, after the loss of Kirkuk to question for Washington is how to maintain for Washington is how Baghdad, the KRG’s oil production fell from political inclusion under the SDF structure. 550,000 to 250,000 barrels per day.25 The to maintain political In immediate danger is the Kurdish-Arab dire outcomes have led the ruling parties inclusion under the SDF alliance in the absence of a front line against to accuse each other of treason, while IS. In Iraq, the United States should also structure. In Iraq, the opposition parties forcefully demanded the focus on political inclusion and therefore U.S. should focus on resignation of the government. In a historic help Kurds to achieve structural reforms in decision and with deep embarrassment, political inclusion and political accountability, economic resilience, Masoud Barzani left the presidential office in therefore help Kurds and transparency in the oil sector. The lack November 2017. to achieve reforms in of U.S. support on these issues will imperil In December 2017, protests, thousands stability in the region. political accountability, strong, once again rocked Sulaymaniyah Ensuring political inclusion will be a economic resilience, and Halabja. In clashes with security forces, daunting task for the U.S. officials in Rojava, five protesters lost their lives and a hundred and transparency in especially due to Turkey’s open war against were wounded. Given that protesters set fire the oil sector. the Syrian Kurds. Washington took a positive to the offices of the ruling parties, namely step in supporting Arab local representation Barzani’s Kurdistan Democratic Party (KDP) by helping to establish a new , and the late Iraqi President Talabani’s the Future Syria Party, to shape Raqqa’s Patriotic Union of Kurdistan (PUK), Kurdish future with its inclusive motto, “Democratic, authorities justified their harsh measures Pluralistic, Decentralized Syria.”27 Turkish on security grounds. The crackdown on the officials, however, were quick to express opposition media was particularly violent, their cynicism—they perceived it as yet with hundreds arrested.26 another PKK-led organization with a new The Sulaymaniyah protests revealed a brand name.28 Once the Islamic State’s deep split in Iraqi Kurdistan following the capital, Raqqa is now under SDF rule, but independence referendum. The Kurdish how Kurdish leaders will guarantee political opposition parties, specifically the Gorran inclusion where Arabs constitute majority Movement and the Kurdistan Islamic Group is a mystery. The assassination of Omar (Komal), have withdrawn their ministers Alloush, a key figure for reconciliation from the government. The opposition between Kurds and Arab tribes who served accused the KDP and PUK of failing the as a member of the Raqqa Civilian Council, nation before and after the independence is a recent example of targeted killings that referendum, demanding dissolution of the seek to exploit ethnic tensions.29 current cabinet and formation of a national 4 FALSE HOPES? PROSPECTS FOR POLITICAL INCLUSION IN ROJAVA AND IRAQI KURDISTAN

Moreover, it behooves the Trump 8. Fabrice Balanche, Sectarianism in administration to pursue long-term Syria’s Civil War: A Geopolitical Study, The policy goals in Iraqi Kurdistan with an Washington Institute, 2018, p. 51. understanding that current instability in 9. Daniel Wilkofsky and Khalid Fatah, Iraqi Kurdistan is deeply related to the “Northern Syria’s Anti-Islamic State Coalition institutional problems of political inclusion. has an Arab Problem,” War on the Rocks, After the referendum fallout, Kurdish Sept. 18, 2017, https://warontherocks. prospects for democracy have become com/2017/09/northern-syrias-anti-islamic- even more fragile due to Baghdad’s state-coalition-has-an-arab-problem/. “divide-and-rule” strategy toward the 10. For video footage of the ceremony, Kurds. Ad hoc deals by different Shia militia see https://twitter.com/NSO_SY/ leaders reaching out to various Kurdish status/975042465576210432, accessed actors with different forces August 27, 2018. invite further instability. Washington 11. David Butter, “Syria’s Economy: can helpfully remind the Iraqi central Picking up the Pieces,” Chatham House government that settlement on the Research Paper, June 23, 2015, pp. 15-16. disputed territories and other key issues 12. Balanche, Sectarianism in Syria’s Civil with Kurds cannot be peacefully resolved War, 89. without ensuring stability in Kurdistan. 13. Aron Lund, “Bombers over Hasakah: Assad Clashes with the Kurds,” Diwan, Carnegie Middle East Center, Aug. 22, 2016, ENDNOTES http://carnegie-mec.org/diwan/64375. 1. See, for example, Wes Enzinna, “A 14. “Syria: Crop Progress Report,” U.S. Dream of Secular Utopia in ISIS’ Backyard,” Department of Agriculture Office of Global The New York Times Magazine, Nov. 24, 2015, Analysis, Jan. 24, 2009, https://ipad.fas.usda. https://www.nytimes.com/2015/11/29/ gov/pdfs/Syria/Syria_January2009_Monthly_ magazine/a-dream-of-utopia-in-hell.html. Report.pdf. 2. “YPG is Becoming an ‘Insurgent Group’ 15. Balanche, Sectarianism in Syria’s Civil in Syria: U.S. Senator Rubio,” Ahval News, War, 126. July 27, 2018, https://ahvalnews.com/pyd- 16. Dan Wilkofsky, “The Commune ypg/ypg-becoming-insurgent-group-syria- System: A Look at Local PYD Governance in us-senator-rubio. Northeastern Syria,” SyriaSource, Atlantic 3. Ghadi Sary, Kurdish Self-Governance Council, March 12, 2018, http://www. in Syria: Survival and Ambition, Chatham atlanticcouncil.org/blogs/syriasource/the- House Research Paper, Sept. 15, 2016, p. 14. commune-system-a-look-at-local-pyd- 4. Cengiz Gunes and Robert Lowe, “The governance-in-northeastern-syria. Impact of the Syrian War on Kurdish Politics 17. Rod Nordland, “Syrian Kurds: Across the Middle East,” Chatham House U.S. Allies, but Followers of Leader Research Paper, July 23, 2015, p. 5. Jailed as Terrorist,” The New York Times, 5. Abdullah Ocalan, Demokratik Uygarlık March 10, 2018, https://www.nytimes. Manifestosu: Ortadoğu’da Uygarlık Krizi ve com/2018/03/10/world/middleeast/syria- Demokratik Uygarlık Çözümü, Mezopotamya kurds-turkey-rojava-abdullah-ocalan.htm Yayınları, 2010, p. 195. l?rref=collection%2Fsectioncollection%2F 6. Abdullah Ocalan, Democratic middleeast&action=click&contentCollection Confederalism, Transmedia Publishing, 2011, =middleeast®ion=stream&module=stre pp. 24-28. am_unit&version=latest&contentPl. 7. Josie Ensor, “U.S.-Backed Syrian Kurds 18. Abdullah Al-Jabassini, “Civil Meet with Regime for First Time in Hope of Resistance to Military Conscription in Kurdish Protecting Territory,” The Telegraph, July Areas of Northern Syria: The Untold Story,” 27, 2018, https://www.telegraph.co.uk/ Journal of Peacebuilding and Development news/2018/07/27/us-backed-syrian-kurds- 12, no. 3 (Nov. 27, 2017): 104-110. meet-regime-first-time-hope-preserve/. 5 RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 09.05.18

19. See, for example, Thomas L. 29. Wladimir Van Wilgenburg, “Omar Friedman’s columns on Iraqi politics, Alloush—Murdered for Building a Shared including “The Kurdish Secret,” The Future for Syria’s Arabs and Kurds?” The New York Times, Sept. 2, 2007, https:// Defense Post, March 17, 2018, https:// www.nytimes.com/2007/09/02/ thedefensepost.com/2018/03/17/omar- This issue brief is part opinion/02friedmancolumn.html. alloush-murder-turkey-syria-arabs-kurds/. of a two-year research 20. “Iraq’s Kurdistan Parliament project on pluralism in Introduces Changes,” E-Kurd, February 25, 2011, https://ekurd.net/mismas/articles/ AUTHOR the Middle East after misc2011/2/state4721.htm. the Arab uprisings. Mustafa Gurbuz, Ph.D., is a nonresident 21. For a detailed account of institutional fellow at the Arab Center in Washington, The project is generously problems, see Kawa Hassan, “Kurdistan’s D.C., and an adjunct faculty member of the supported by a grant Politicized Society Confronts a Sultanistic Arab World Studies program at American System,” Carnegie Middle East Center paper, from the Carnegie University. He is the author of Rival Kurdish August 2015. Corporation of New York. Movements in Turkey: Transforming Ethnic 22. “Official: IDPs Make Up 35% of Conflict (Amsterdam University Press, 2016). Population,” Rudaw, Oct. 20, 2015, http://www.rudaw.net/english/ kurdistan/201020153. 23. Kamal Chomani, “To Prevent Violence, Kurdish Government Must Address Demands of Protesters,” The Tahrir Institute for Middle East Policy, January 5, 2018, https://timep.org/commentary/analysis/ See more issue briefs at: to-prevent-violence-kurdish-government- www.bakerinstitute.org/issue-briefs must-address-demands-of-protesters/. This publication was written by a 24. Joost Hiltermann and Maria researcher (or researchers) who Fantappie, “Twilight of The Kurds,” Foreign participated in a Baker Institute project. Policy, Jan. 16, 2018, https://foreignpolicy. Wherever feasible, this research is com/2018/01/16/twilight-of-the-kurds- reviewed by outside experts before it is released. However, the views expressed iraq-syria-kurdistan/. herein are those of the individual 25. “KRG to Make More Salary author(s), and do not necessarily Cuts in 2018 after Losing Kirkuk Oil,” represent the views of Rice University’s Rudaw, http://www.rudaw.net/english/ Baker Institute for Public Policy. kurdistan/121220176. 26. “Journalists Arrested to Prevent © 2018 Rice University’s Baker Institute for Public Policy Coverage of Iraqi Kurdistan Protests,” Reporters without Borders, Dec. 28, 2017, This material may be quoted or https://rsf.org/en/news/journalists- reproduced without prior permission, arrested-prevent-coverage-iraqi- provided appropriate credit is given to kurdistan-protests. the author and Rice University’s Baker Institute for Public Policy. 27. “The Future Syria Party: A New Signal for the U.S.’ Syria Strategy?” TRT World, Cover image credit: March 30, 2018, https://www.trtworld.com/ AFP/The Telegraph mea/future-syria-party-a-new-signal-for- the-us-syria-strategy--16350. Cite as: 28. Dorian Jones, “Turkey Criticizes Gurbuz, Mustafa. 2018. False Hopes? Prospects for Political Inclusion in U.S. Support of New ‘Syria’s Future’ Political Rojava and Iraqi Kurdistan. Party,” Voice of America, March 29, 2018, Issue brief no. 09.05.18. Rice https://www.voanews.com/a/turkey- University’s Baker Institute for us-tensions-over-ypg-syria-future- Public Policy, Houston, Texas. party/4322673.html.

6 ISSUE BRIEF 10.02.18 Women as Religious Authorities: What A Forgotten History Means for the Modern Middle East

Mirjam Künkler, Ph.D., University of Göttingen

Although the history of Islam includes family members of the prophet were numerous examples of women transmitting frequently consulted on questions of Islamic hadith (i.e., sayings of the prophet), writing guidance. This practice was not limited to authoritative scholarly commentaries on the prophet’s family and descendants. As the Quran and religious law, and issuing Islamic scholar Khaled Abou El Fadl notes, fatwas (rulings on questions of Islamic law), “certain families from Damascus, Cairo, and women rarely perform such actions today. Baghdad made a virtual tradition of training Most Muslim countries, including those in female transmitters and narrators, and… the Middle East, do not allow women to these female scholars regularly trained serve as judges in Islamic courts. Likewise, and certified male and female jurists and few congregations would turn to women therefore played a major contributing role for advice on matters of Islamic law, or in the preservation and transmission of invite women to lead prayer or deliver the Islamic traditions.”1 sermon (khutba). Women’s role in transmitting hadiths For decades, Sudan and Indonesia were was modeled after ‘A’ishah, the prophet’s the only countries that permitted female youngest wife, who had been such a prolific judges to render decisions on the basis of transmitter that Muhammad is said to have the Quran and hadiths (which are usually told followers they would receive “half their conceived as a male prerogative only). And religion” from a . In later centuries, too, only recently have religious seminaries in In his overview of the history of women the great scholars of Turkey, Morocco, Iran, and pre-war Syria as hadith scholars—Al-Muhaddithat—Oxford Islam learned from opened their highest degree programs to scholar Mohammad Akram Nadwi observes both male and female women, thus enabling them to develop that, “in the formative period of Islam… the expertise in Islamic law required to women scholars are not only great in teachers. Knowledge issue fatwas. number but also great in prominence [and] seekers traveled far and Given the dearth of women exercising great in their authority. Men go to them to wide, from Damascus 2 Islamic authority, one might be forgiven learn, and doing so is normal.” and Cairo to Baghdad for assuming that for most of Islamic Research by Islamic studies professors history, women were not granted the right Irene Schneider and Jonathan Berkey and Nishapur, to study to gain expertise on questions of religion indicate that Nadwi’s observation was not with female jurists. and religious law and that these realms only true for the formative period of Islam; of knowledge were the near-exclusive in later centuries, too, the great scholars of domain of men. Islam learned from both male and female Yet a look into Islamic history teachers. Knowledge seekers traveled far and suggests otherwise. In the early periods wide, from Damascus and Cairo to Baghdad of Islam, women had great prominence and Nishapur, to study with female jurists. in transmitting the hadith, and female The 12th century Sunni scholar Ibn ‘Asākir RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 10.02.18

(d. 1176) noted that he studied under 80 (school of jurisprudence). Women jurists different female scholars.3 Among the 172 can be found from Timbuktu to Cairo, from teachers of Taqi al-Din al-Subki (d. 1370), 19 Damascus to Baghdad, and from Isfahan and were women. The Shafi‘i scholar Ibn Hajar Nishapur, from the 700s to the 1500s and al-‘Asqalani (d. 1448) named 53 women across the Hanafi, Hanbali, Maliki, Shafi‘i, and with whom he studied. Al-Sakhawi (d. 1497) Shia schools of law. Nor is there evidence noted that he learned from 68 women,4 that women transmitted or taught only and Al-Suyuti (d. 1505) listed 33 women on gender-specific themes.10 The Shafi‘i among the 130 scholars on whose authority jurist Amīnā bint al-Ḥusayn al-Maḥāmilī he recited traditions.5 Even Ibn Taymīyah (d. (d. 987) was particularly expert in the law 1328), a leading Hanbali jurist known for his of inheritance.11 The Hanbali jurist Fatimah stern approach to gender relations, listed two bint ‘Abbas ibn Abi al-Fath al-Baghdadiyyah women among his teachers. al-Hanbaliyyah (d.1333) became a renowned Schneider’s account of female scholars scholar of the Quran, and her contemporary, in Nishapur, Iran, between the 11th and 13th the great Islamic scholar Ibn Taymiyah, centuries is extraordinary, as she not only acknowledged her as an equal in knowledge offers examples of women who taught in and expertise. 'A'isha bint 'Abd al-Hadi Apart from these official madrasahs (rather than in the privacy al-Ba'uniya (d.1516) excelled in Arabic leadership roles in of their homes, as was customary in Cairo, for grammar and rhetoric, Islamic law, theology, Islamic scholarship, example),6 but also detailed descriptions of and mysticism. women also often seating orders, which suggest that religious Apart from these leadership roles in scholars were not spatially segregated by Islamic scholarship, women also often played noteworthy gender but that men and women—teacher played noteworthy roles as founders and roles as founders and student—occasionally sat side by side.7 benefactors of madrasahs, with the authority and benefactors of The common conception, by contrast, is to appoint teachers and other functionaries. madrasahs, with the that if women taught at all, they did so from Even as controllers of the endowment, they behind a curtain. Schneider’s findings set could greatly influence the sphere of religious authority to appoint Nishapur apart from discussions of Cairo and teaching and learning.12 teachers and other Baghdad, where women are usually assumed functionaries. Even to have taught from behind a curtain. A “MODERN ABYSS” FOR FEMALE as controllers of the In addition to being prevalent among the group of esteemed hadith transmitters, RELIGIOUS AUTHORITIES endowment, they women also issued fatwas, legal With the rise of modernity, the profound could greatly influence recommendations based on Islamic law, a transformations in statecraft, the adoption the sphere of religious service that would be requested of only of European legal systems, the diminished the most distinguished scholars of Islamic teaching and learning. role of religious authorities across the law. As El Fadl notes, “a careful reading Muslim world, and the rise of political of biographical dictionaries reveals a large Islam, knowledge of the multifaceted number of women who are described as ways in which women were central to the jurists (faqīhāt), and who are asserted to development of the Islamic tradition, Islamic have attained a level of competence that law, and scholarship faded into distant qualified them to issue fatwas.”8 Among the memory. It is not entirely clear why modern earliest known examples is the Damascene religious authority in Islam was in most jurist Hujayma bint Ḥuyay al-Awtābiyya (d. places reshaped to include men only, or why 701), “who is said to have taught numerous it was forgotten that women, too, could men, and who enjoyed the confidence of the become muftis and that their interpretations caliph ‘Abd al-Malik b. Marwān (r. 685–705). should have authority for both female and [She] used to meet with him regularly when male believers. they would sit together in the back of the While modern educational systems that Damascus mosque.”9 focused on men’s preparations to eventually Examples abound in subsequent become breadwinners as well as the militant centuries and are not confined to a particular anti-colonial struggle that propelled men to center of learning or a particular madhab 2 WOMEN AS RELIGIOUS AUTHORITIES: WHAT A FORGOTTEN HISTORY MEANS FOR THE MODERN MIDDLE EAST

political leadership and relegated women to vaizler in at mosques administered the private sphere both played a role in this by the directorate’s foreign office.17 development, the reasons behind this trend Iran has been the most proactive in are multifaceted and vary across the Muslim training women as religious authorities. world. Still, the schism between the period Since the 1990s, hundreds of religious spanning the seventh and 16th centuries on seminaries have been set up across one hand, and the 17th to 20th centuries on the country to train women in Islamic the other is extraordinary. In a sense, one sciences. An estimated 40,000 female can speak of a “modern abyss” for female students presently study in Iran’s religious authorities; women Islamic scholars, theological seminaries.18 Similar to the muftis, and judges are the great exception. Moroccan program, they are not trained Even public opinion surveys indicate that to become scholars of Islamic law most believers today, irrespective of gender, (which might prompt them to generate do not wish to follow women religious leaders re-interpretations), but rather to give and do not trust a woman’s interpretation lessons at mosques and schools, respond of the Quran, even if she has proven to be to female believers’ queries, and to lead equally qualified.13 pilgrimages to Mecca and other holy sites. In most of these recent initiatives, women are trained to respond to the inquiries NEW INITIATIVES: WOMEN ADVISING of female believers only, not as authorities for WOMEN the umma, as such. The Turkish and pre-war Even public opinion Syria programs train women to issue fatwas. Fortunately, several recent developments surveys indicate that But they do so only with regard to women’s indicate that the tables may be turning most believers today, issues and in response to women’s questions. once again. This is, remarkably, despite the fact that all irrespective of gender, In 2006, the Moroccan government four Sunni schools as well as the Twelver do not wish to follow began to train female religious counselors Shia school of jurisprudence recognize women religious leaders (so-called murshidat) to be assigned to women’s eligibility to serve as muftis not only mosques around the country and tasked and do not trust a regarding issues of particular relevance or with responding to religious inquiries.14 The woman’s interpretation interest to women, but on any issue on which main role of the counselors is to provide a believer might seek advice.19 of the Quran, even if legal guidance to women so that female Ahmed al-Haddad, the Grand Mufti of she has proven to be believers are not compelled to consult men Dubai and head of the Islamic Affairs and on health and women-specific issues. The equally qualified. Charitable Activities Department, in 2009 program has since grown and become very issued this important reminder: “In many popular, with hundreds of women being Muslim countries, women are already trained as murshidat each year. involved with the issuing of fatwas, or legal In Syria, prior to the civil war, female rulings, but frequently these are confined to graduates of some Islamic law colleges were ‘female issues.’ However, a woman who is being trained to become assistant muftis able learned and trained in issuing fatwas is not to offer gender-specific advice to women. limited in her role to issuing fatwas that relate Since 2005, the Turkish Directorate to women only, but rather she is qualified to of Religious Affairs (i.e., the Diyanet) has issue on matters of worship, jurisprudence, appointed female assistant muftis who may morality, and behavior.” Al-Haddad went issue fatwas on women’s issues.15 And since on to say that Islamic tradition was “rich in 2006, it has certified hundreds of women examples of highly learned women acting as as “bayan vaizler”—Diyanet personnel who muftis and issuing decrees on all matters,” give lessons at mosques three times a week and added that “women, too, can order acts and may lead pilgrimages to Mecca.16 More of virtue and ban acts of vice just like a man recently, the Diyanet has also begun to send can…which is what female contemporaries of female vaizler abroad to mosques in Europe the Prophet have done as well as the women and Asia that are funded by the Turkish who came after them.”20 government. Currently, there are 13 female 3 RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 10.02.18

In this regard, al-Haddad is entirely right. to change as well among educators, students, It is time for women to reclaim their historical and the general public. Religious leaders role and for believers to remember that for are only leaders if they have a following, as centuries, Islamic authority was less gender women muftis have repeatedly demonstrated. exclusive than the modern era. An important mechanism for changing perceptions is memory-making. Memories can be reactivated by: LOOKING AHEAD • sponsoring programs in popular culture Training more women in the interpretation that revive the tradition of women jurists of Islamic sources does not mean that such in Islam, such as visual culture projects interpretations will overnight become more like cartoons, videos, and films about inclusive or more gender sensitive. But such women, which some NGOs in Iran educating young women about female role have produced to this effect; models in the Islamic tradition such as the • generating exhibitions, children’s women teachers of Ibn Taymiyah or the books, games, and toys that elevate the Damascene jurist al-Awṭābiyya, whom memory of outstanding women jurists the caliph consulted on legal and political and hadith transmitters; and questions while sitting with her in the back of • supporting local research on examples of the mosque, is incredibly important. Seeing women religious leaders. a woman in a leadership position can have a transformative effect on an individual’s It is time for women to aspirations and open up new horizons and ENDNOTES reclaim their historical career goals previously not considered. Many role and for believers Muslims are familiar with the pivotal role 1. Khaled Abou El-Fadl, "Legal and to remember that played by Aisha and Fatimah, but these were Jurisprudential Literature: 9th to 15th women in the prophet’s family, which made Century," in Encyclopedia of Women & for centuries, Islamic their trajectory beyond reach. In a way, their Islamic Cultures, Suad Joseph, general editor authority was less towering image is part of the problem, as (Brill Online, 2012). gender exclusive than it elevates the example of female religious 2. Mohammad Akram Nadwi, the modern era. authority to unreachable heights. Instead, the Al-Muhaddithat: The Women Scholars image of women’s religious authority needs in Islam (Oxford/London: Interface to be “normalized” once again. Publications, 2007). Generations of women from the seventh 3. Nadwi, Al-Muhaddithat. to 18th centuries sought Islamic knowledge 4. See Renate Jacobi, “Der Gelehrte and became qualified as jurists, hadith und die Dichterin. Eine Seelenfreundschaft transmitters, and scholars of Islam to im mamlukischen Ägypten,” in Studien whom male students would travel across zur Semitistik und Arabistik. Festschrift für the Muslim world. The historical evidence Hartmut Bobzin, Otto Jastrow, Shabo Talay, discussed above clearly illustrates that the and Herta Hafenrichter, eds. (Wiesbaden: women of the prophet’s family were not Otto Harrassowitz, 2008), 183-203; unique in taking on religious leadership and Renate Jacobi “Gelehrte Frauen im roles. Many women across time emulated islamischen Spätmittelalter,” in Nonne, their model and contributed to a strong Königin, Kurtisane: Wissen, Bildung und tradition of female Islamic authority, which Gelehrsamkeit von Frauen in der frühen is probably stronger comparatively than in Neuzeit, Michaela Hohkamp and Gabriele the other Abrahamic . Jancke, eds. (Königstein: Ulrike Helmer A change in perception is needed to Verlag, 2004), 225-246. re-normalize women’s religious authority. 5. See Jonathan Berkey, “Women and If women are to be trained as religious Islamic Education in the Mamluk Period,” in authorities on all matters and for all believers Women in Middle Eastern History, Nikkie (not only women), then attitudes toward Keddie and Beth Baron, eds. (New Haven: Yale women in religious leadership positions need University Press, 1991) 143–57, 151. 4 WOMEN AS RELIGIOUS AUTHORITIES: WHAT A FORGOTTEN HISTORY MEANS FOR THE MODERN MIDDLE EAST

6. On women in religious education 13. For example, a recent survey during the Mamluk period (1250-1517), conducted by the Baker Institute in the see Jonathan Berkey, The Transmission of Middle East sheds light on this issue. Survey Knowledge in Medieval Cairo, A Social History available at: https://www.bakerinstitute.org/ of Islamic Education, (Princeton: Princeton carnegie-project. University Press, 1992), 170f. Berkey writes 14. See Souad Eddouada, “Cinquante that women were not in a position to become morchidates par an,” (unpublished teachers in madrasahs during the Mamluk manuscript, n.d.); Souad Eddouada and time, but often taught men and women Renata Pepicelli, “Maroc: vers un ‘féminisme outside the formal madrasah system. islamique d’État,’” Critique Internationale 7. See Irene Schneider, “Gelehrte 46, Jan-March (2010): 87-100; and Margret Frauen des 5./11. bis 7./13.Jh.s nach Rausch, “Women Mosque Preachers and dem biographischen Werk des Dahabi Spiritual Guides: Publicizing and Negotiating (st. 748/1347),” in und Arts Women’s Religious Authority in Morocco,” in in the Islamic World. Proceedings of the Women, Leadership and Mosques: Changes 18th Congress of L’Union Européenne in Contemporary Islamic Authority, Masooda des Arabisants et Islamisants held at the Bano and Hilary Kalmbach, eds. (Brill A change in Katholieke Universiteit Leuven (Sept. 3-9, Publishers, 2011). 1996), U. Vermeulen and D. de Smet, eds. 15. Overall, the Diyanet employs 81 muftis perception is needed (Leuven: Peeters Publishers, 1998), 107- across the major cities of Turkey. Since muftis to re-normalize 121. The biographies of women discussed in Turkey often function as regional managers women’s religious here amount to 2 percent of all biographies who oversee Diyanet projects, personnel, authority. If women al-Dhahabi reviewed, most of which were disputes, etc. in their assigned provinces, of male contemporaries of the Prophet. most legal inquiries from believers are in fact are to be trained as None of the 20 women surveyed by answered by the assistant muftis. I thank religious authorities Schneider served in official offices, such as James Gibbon for pointing out this division of on all matters and for administrators or judges. labor to me. On the political (in)significance all believers (not only 8. See Abou El Fadl, “Legal and of fatwas in Turkey’s entirely secular legal Jurisprudential Literature.” system, see Samil Öcal, “From ‘the Fetwa’ to women), then attitudes 9. Ibid. ‘Religious Questions’: Main Characteristics of toward women in 10. Nadwi, Al-Muhaddithat; Abou El Fetwas of the Diyanet,’” The Muslim World religious leadership Fadl, “Legal and Jurisprudential Literature”; XCVIII, April/July(2008): 324-234. positions need to Schneider, “Gelehrte Frauen.” 16. See, for example, Mona Hassan, change as well among 11. Nadwi, Al-Muhaddithat, 112. “Women at the Intersection of Turkish Politics, 12. On women who functioned as Religion, and Education: The Unexpected educators, students, nazirat (female controllers), see C. F. Petry, Path to Becoming a State-Sponsored Female and the general public. “A Paradox of Patronage during the Later Preacher,” Comparative Islamic Studies, 5, no. Mamluk Period,” The Muslim World LXXIII, 1 (2009): 111–130. no. 3-4 (1983). See also Jonathan Berkey, 17. Ulrike Hummel, “Female Imams in “Women and Islamic Education in the Mamluk Germany. The Call of the Muezzin Women,” Period,” in Women in Middle Eastern History, Qantara.de, November 7, 2008, http:// Nikkie Keddie and Beth Baron, eds. (New en.qantara.de/wcsite.php?wc_c=8123, Haven: Yale University Press, 1991), 143–57, accessed April 13, 2011. In total, the state of 144. Gawhar Shad Bigum (d. 1457), the female Turkey, through DITIB, employs 800 imams ruler of Herat, ordered the construction of the in Germany. Friday Mosque and the madrasah of Herat. 18. Mirjam Künkler, “The In Savafid, Iran Shah Bigi Bigum, the favorite Bureaucratization of Religious Education in wife of Safavid Shah Isma'il I (r. 1502-1524), as the Islamic Republic of Iran,” in Regulating well as her daughter Mahin Banu (1519-1562), Religion in Asia: Norms, Modes, and set up endowments for religious schools in Challenges, Arif A. Jamal, Jaclyn L. Neo, and Shirvan, Tabriz, Qazvin, Ray, and Isfahan. Daniel Goh, eds. (Cambridge: Cambridge University Press, 2018).

5 RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 10.02.18

19. Karen Bauer, “Debates on Women’s Status as Judges and Witnesses in Post- Formative Islamic Law,” Journal of the American Oriental Society 130, no. 1 (2010): 8. 20. See “The first female Mufti in the Arab world,” Siasat Daily, November 4, 2009, http://www.siasat.com/english/ news/first-female-mufti-arab-world; “A giant leap forward for Muslim women,” New Statesman, November 11, 2009, http://www.newstatesman.com/blogs/ the-god-blog/2009/11/female-muftis- women-islam; “Female Muftis Aren’t Making Headlines. What a Surprise,” Patheos, November 23, 2009, http://www.patheos. com/blogs/mmw/2009/11/female-muftis- aren%e2%80%99t-making-headlines- what-a-surprise; “Women muftis by end of 2010,” The National, November 3, 2009, http://www.thenational.ae/news/uae- news/women-muftis-by-end-of-2010; and “Mufti of Dubai: Women can issue fatwa,” UPI, March 6, 2009, https://www.upi.com/ Top_News/2009/03/06/Mufti-of-Dubai- Women-can-issue-fatwa/17091236381103/.

See more issue briefs at: www.bakerinstitute.org/issue-briefs AUTHOR

This publication was written by a Mirjam Künkler, Ph.D., is a professor at researcher (or researchers) who the Institute for Advanced Study in the participated in a Baker Institute project. Humanities and Social Sciences at the Wherever feasible, this research is University of Göttingen. Her work focuses reviewed by outside experts before it is on Iranian and Indonesian politics, and she released. However, the views expressed herein are those of the individual has published research on comparative author(s), and do not necessarily relations between religion and state in represent the views of Rice University’s the two countries, questions of law and Baker Institute for Public Policy. constitutionalism, religious education, and Islamic authority. © 2018 Rice University’s Baker Institute for Public Policy

This material may be quoted or reproduced without prior permission, provided appropriate credit is given to the author and Rice University’s Baker Institute for Public Policy.

Cite as: Künkler, Mirjam. 2018. Women as Religious Authorities: What A Forgotten History Means for the Modern Middle East. Issue brief no. 10.02.18. Rice University’s Baker Institute for Public Policy, Houston, Texas.

6 ISSUE BRIEF 08.27.18 The Rhetoric and Reality of Religious Reform in Egypt and Saudi Arabia

Nathan Brown, Ph.D., George Washington University; Carnegie Endowment for International Peace

Two Arab leaders recently garnered Religious approaches in the two countries favorable international attention for calling are often understood at the level of their religious establishments to account. dominant ideas. Egypt’s official religious Beginning in 2015, and repeatedly since then, leadership presents itself as the bastion of Egyptian President Abd al-Fattah al-Sisi a 1,000-year-old heritage but also one that has directed the country’s religious leaders seeks to cultivate a center path, holding to “renew religious discourse” to prevent fast to that heritage while interpreting it religion from being used as a tool of violence in a way that is appropriate for modern or to stall social reform.1 And Saudi Crown conditions. Since its founding, Saudi Prince Mohammad bin Salman has curbed the Arabia was built on rendering canonical influence of the religious police and obtained the teachings of Muhammad ibn ’Abd endorsements from the country’s senior al-Wahhab, the 18th century scholar whose religious scholars to allow women to drive.2 name has been linked—despite the wishes of These demands for change can appeal many followers—to the Wahhabi approach. to international audiences seeking allies to Insistent on strict fidelity to religious texts contain “violent extremism” or advance and fearful of the introduction of perceived women’s rights. In that sense, they accretions or corruptions like mysticism or communicate commitment to religious Shiism, Wahhabi followers evince a particular visions that seem more inclusive to global reluctance to accommodate differences even observers—more tolerant of doctrinal from their own understanding of Islamic Understanding the differences, more open to women having a teachings, much less non-Islamic doctrines. politics of the religious public role, and less insistent on adhering But a closer examination of the two to specific religious interpretations. But societies reveals that much more than “reform” necessitates what is actually unfolding domestically may the content of teachings, the reasoning of taking a much more be something quite different: centralizing fatwas and the rhetoric of sermons is at institutional than regimes and authoritarian rulers appear to stake. Though the religious establishments doctrinal view of be seeking control of religious sectors that in Egypt and Saudi Arabia are constructed have become too autonomous. It is not so in different ways, new leaders in both religion in Egypt and much the doctrines themselves that interest countries are trying to assert much more Saudi Arabia. these regimes and rulers as it is the ability to political control over them. To the extent control a critical part of the state apparatus that they succeed, Saudi Arabia and Egypt that has a far-reaching impact on society. will resemble each other far more. Understanding the politics of the Thus, international endorsements of the religious “reform” necessitates taking a pleasing religious claims made by these much more institutional than doctrinal rulers constitute support for regimentation view of religion in Egypt and Saudi Arabia. and just as much as reform. RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 08.27.18

institutions operate within such structures, DIVERGENT PASTS they have actually shown some malleability Both the Egyptian and Saudi Arabian states in how they function. Scholars trained have vast religious apparatuses, but they in both traditions have adjusted to the are structured very differently. The religious bureaucratic and institutional structures establishment in Egypt is dominated that have been established, though they by al-Azhar, a huge complex of schools, often have sought to maximize their own research institutes, and a university that was autonomy within the states that encompass brought under closer regime control in the their authority and activity. second half of the 20th century (though it In Egypt and Saudi Arabia, three has sometimes battled for autonomy). Other historical forces operated in very different religious structures include, most notably, the ways to produce the current structures. First, Ministry of Religious Affairs, which oversees Egypt was nominally part of the Ottoman mosques and religious endowments, and Empire and was deeply influenced by the a state Mufti. But other state functions— Ottoman bureaucratization of Islam as well as Ottoman institutional changes (especially These differences are policing, adjudication, and education—are not managed by religious officials. the commitment to comprehensive legal a product of divergent In contrast, Saudi Arabia has a “religious codes and judicial reform). Many of the state-building histories police” (formally named the Committee for key structures of the Egyptian state were in the countries, which the Promotion of Virtue and the Prevention either inherited from the or deeply affected by Ottoman models. The have led not only to of Vice) and courts whose judges are trained primarily in Islamic sharia law and retain Saudi state, by contrast, was largely built distinctive institutional general jurisdiction. The country also has a on a bureaucratic basis very distinct from patterns but also to Ministry of Islamic Affairs, which historically the Ottoman path. While some regions very different ways has been a more powerful body than its had been under Ottoman rule, when Saudi national institutions were built beginning in in which religious Egyptian counterpart; the influence of the religious establishment on the content of the fourth decade of the 20th century, they structures and social educational material is far greater. were constructed less on those foundations constituencies have These differences are a product of and more by creating a religious state within been folded into divergent state-building histories in the the broader state, staffed by those with training in Wahhabi Islam and dominated by modern states. countries, which have led not only to distinctive institutional patterns but also those from favored sectors of Saudi society. to very different ways in which religious Second, imperialism had very structures and social constituencies have different effects in the two locations. In been folded into modern states. The most Egypt, imperialism led to a set of religious distinctive element of the Saudi state, institutions that, while part of the state, were the body often termed the “religious separate from other governance structures. police,” for example, is a very modern Efforts by Egypt’s own leaders (before but and bureaucratized form of the classical especially after the British occupation) led muhtasib, an office that actually existed to a state religious apparatus that allowed in Egypt in earlier centuries and was very religious institutions to operate in specific much consistent with the Azhari approach. fields (personal status law, education, Similarly, while Saudi resistance to mosque administration, etc.) in ways that codification of law is sometimes described kept them separate and, to a lesser extent, in doctrinal terms, it seems to stem much autonomous from other parts of the state more from the judiciary’s suspicion that apparatus. Thus, from the late 19th century being forced to rely on written codes onward, a distinct set of schools, law courts, rather than directly consulting Islamic and other structures that could be identifiably jurisprudence will transfer authority from labelled as “religious” were established. the judiciary to the ruler. In contrast, Saudi Arabia developed Neither Egyptian nor Wahhabi dominant institutions in the same areas—law and doctrines say much about the bureaucratic education most especially—that did not structure of a modern state; while religious feature such a strong separation between 2 THE RHETORIC AND REALITY OF RELIGIOUS REFORM IN EGYPT AND SAUDI ARABIA

the religious and non-religious parts of the toward some groups while marginalizing Saudi state. When such separation eventually others. The public could certainly voice emerged, the motivation for the split was criticism and opposition in Saudi Arabia, but obscured; the subsequent structures were such actions occurred—mostly informally— ultimately designed more to anticipate within state structures. Only toward the end domestic opposition and co-opt it than to of the 20th century did distinct political and The historical forces escape the influence of foreign occupiers, as social movements arise, and even then the that created distinct was the case in Egypt. To be sure, European extent to which they represented not just powers played a role in shaping some of trends but actual organized movements evolutions in the the country’s borders and in leading the continued to be obscured by the informal nations may be losing country’s leadership to ignore and even nature of Saudi politics. some of their strength, silence individuals and organizations that By the 21st century, Egypt was marked as both countries are cause international complications. However, by a bifurcation between hierarchical official imperialism played a far less prominent structures and unofficial movements. In now led by regimes that role in shaping the contours and purview of Saudi Arabia, by contrast, the religious are centralized, security religious institutions. establishment had a far less clear chain of conscious, and focused Finally, Egypt and Saudi Arabia command, and the division of responsibility on controlling all parts constructed their modern states in distinctive was informal and in constant flux. In of the state apparatus. and different ways that accentuate the addition, Saudi religious institutions were not differences wrought by Ottoman and segregated from others; courts, schools, and imperial influences. The Egyptian state was police agencies tended to avoid establishing built gradually in a manner that tended to a distinct religious sphere. maintain older religious institutions and fold them unambiguously into the state, placing them under the direct oversight of SIMILAR FUTURES senior regime officials. Schools, personal Many of the differences between the two status courts, al-Azhar, and religious countries are now eroding, however, as a endowments were all brought under clearer result of the triumph of state state rule, governed by specific laws and and their attempts to subordinate their regulations, and placed under the authority religious constituencies. The historical forces of senior executive branch officials. From that created distinct evolutions in the nations the mid-20th century onward, presidential may be losing some of their strength, as both authoritarianism deeply reshaped the state, countries are now led by regimes that are bringing all state bodies under stronger centralized, security conscious, and focused The lesson both central control and allowing senior officials on controlling all parts of the state apparatus. regimes took away to deploy their power to secure ideological, Even the differences between their respective from the Arab policy, or other ends. It is no accident that regimes have diminished: Egypt is a republic when religious members of Egyptian society upheavals seems to and Saudi Arabia is a monarchy, but leaders mobilized, they found they had to do so have not been the of both exhibit a similar determination outside the state. to manage autonomous state structures, necessity of pluralism, Saudi Arabia might similarly be viewed scatter potential opposition movements or but instead the need for as authoritarian in its development, but block them from organizing, and prevent the state evolved into a far less coherent more regimentation, parts of the state apparatus from protecting entity, shaped from the mid-1940s on—and hierarchy, control, opposition voices. especially since the mid-1970s—by the Most significantly, the segmented Saudi and exclusion. existence of oil revenues. With a strong fiscal state, with its ability to use an enormous base that eliminated the need for difficult fiscal base to be many things to many economic decisions; ruling family members people, is being reshaped to become more sprinkled throughout the state, society, and hierarchical, responsive to regime commands, economy; and a privileged and somewhat and compliant with policy directions sketched autonomous religious sphere, Saudi state from the country’s top rulers. In that respect, formation allowed for fiefdoms within the Saudi Arabia is finally returning to the more state and enabled an inclusionary approach common trajectory of modern state-building 3 RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 08.27.18

in the region, one very clearly followed understanding and promotion of Islam uses by Egypt for two centuries. This is most some gentle words but packs a powerful evident in the legal field. The Saudi king has punch: the primacy of the presidency and the traditionally issued a stream of rules and enforcement of its view of national security regulations that help shape the Saudi legal are being forcefully asserted. Mohammad bin This issue brief is part system. But the issuance of such declarations Salman’s moves have a similar message in of a two-year research has been occurring more frequently; thus, Saudi Arabia: the religious establishment has the king’s directives are beginning to to follow the line established by the country’s project on pluralism in dominate most legal areas. Islamic sharia law top leaders. Those who do so loyally will be the Middle East after has not been abandoned, but the way courts rewarded; independent voices will be policed the Arab uprisings. apply it has been brought under greater and even silenced. The project is generously official oversight and standardization. Second, In both Egypt and Saudi Arabia, the a limited kind of codification is taking place. current rulers seem to view autonomous supported by a grant Full codification (taqnin) might no longer be religious institutions and religious publics as from the Carnegie spoken of, but tadwin, a process in which bodies to manage and control. The lesson Corporation of New York. decisions are written down for guidance both regimes took away from the Arab so that judges tend to operate a bit more upheavals seems to have not been the within known and predictable interpretations, necessity of pluralism, but instead the need is well underway. The judiciary is being for more regimentation, hierarchy, control, expanded beyond its traditional Najdi base, and exclusion. The results will garner them with universities built all over the country, some favorable international attention, discussions on admitting law school (rather and sometimes for good reason. But for than just sharia) graduates into the judiciary those inside the religious structures in both (provided they receive additional training in countries, what is happening is not more See more issue briefs at: www.bakerinstitute.org/issue-briefs sharia), and a clear trend toward appointing inclusive but less. loyalist judges to leading positions and This publication was written by a shutting down dissident voices. Deprived researcher (or researchers) who of its power to arrest in 2016, the “religious ENDNOTES participated in a Baker Institute project. police” was transformed into an institution Wherever feasible, this research is 1. See, for example, AlHayah TV Network, that now has the same authority as private reviewed by outside experts before it is YouTube video, 5:47, January 1, 2015, https:// citizens in Egypt to impose sanctions: just released. However, the views expressed www.youtube.com/watch?v=4vgOS3_ettQ. as Egyptian citizens lost the right to resort herein are those of the individual 2. See, for example: http://bit. author(s), and do not necessarily to courts directly in cases involving public ly/2OMWqYy. represent the views of Rice University’s normality, the official Saudi religious force Baker Institute for Public Policy. is now required to submit complaints to

© 2018 Rice University’s Baker Institute the police and the Public Prosecution Office, AUTHOR for Public Policy which decide whether and how to proceed. Nathan Brown, Ph.D., is a professor of This material may be quoted or political science and international affairs reproduced without prior permission, IMPLICATIONS at George Washington University and a provided appropriate credit is given to nonresident senior fellow at the Carnegie the author and Rice University’s Baker In Egypt and Saudi Arabia, regimes are Endowment for International Peace. His Institute for Public Policy. striving hard to ensure that states are more research specializes in comparative politics responsive to the rulers’ needs and direction. Cover image credit: of the Middle East, democratization and The trend has been underway for more than Mohammed Samaha/MENA via AP constitutionalism, rule of law in the Arab half a century in Egypt but has taken on world, Islam and politics, and judicial politics. Cite as: renewed vigor since 2013. In the wake of the Brown, Nathan. 2018. The Rhetoric 2011 revolution, al-Azhar managed to assert and Reality of Religious Reform in a great deal of autonomy and even increase Egypt and Saudi Arabia. Issue brief its influence over parts of the religious no. 08.27.18. Rice University’s Baker Institute for Public Policy, apparatus (such as the state Mufti) that had Houston, Texas. escaped its control. President al-Sisi’s current efforts to shape the religious establishment’s 4 ISSUE BRIEF 09.02.18 Women in the Egyptian Parliament: A Different Agenda?

Mazen Hassan, Ph.D., Cairo University

How much of a difference does it make to find it quite difficult to obtain parliamentary increase women’s political representation seats in both majoritarian and proportional beyond their traditional levels? How representation systems.2 Second, female significant is the role of quotas in facilitating legislators have an impact on parliamentary this change? In this brief, I offer a summary debates. A pronounced focus on issues such of recent research conducted on these as education, health care, and inequality— questions in the context of Egypt. topics termed “soft issues”—is one such Although Egypt had been a regional example.3 Lastly, female parliamentarians pioneer in women’s parliamentary dedicate their efforts to feminist issues such representation in the 1950s, it has since as women’s political rights and maternity lagged behind, with an average female benefits. Women parliamentarians who representation of between 2% and 3%. The serve in environments where they were exceptions were the 1979, 1984, and 2010 traditionally underrepresented tend to live parliaments, which each introduced female up to society’s expectations of them as quotas and yielded female representation “representatives of women” and therefore of 8%, 7.8%, and 12%, respectively.1 It champion feminist issues.4 was only in 2015 that women achieved a historic increase in legislative representation, securing 14.9% of seats in parliament THE STATUS OF EGYPTIAN WOMEN’S (Figure 1). A total of 75 women were elected SOCIOPOLITICAL PARTICIPATION to Egypt’s House of Representatives (out of a Egypt’s 2014 constitution granted women possible 568 seats), a change mostly driven significant gains in terms of gender equality. by gender quotas. An additional 14 women Their legislative representation increased were appointed by the president, bringing sevenfold, and their participation in the the total of women MPs to 89 in the current cabinet increased threefold compared Egyptian parliament. A content analysis of to the pre-2014 period (Figure 1). From key parliamentary sessions in 2015 and 2016 14.9% a socioeconomic perspective, however, reveals that this political experiment has had there is still much room for improvement. In 2015, women achieved a significant implications. Women’s participation in the workforce, for historic increase in legislative example, remains low, ranging between representation, securing WOMEN’S REPRESENTATION ON A 20% and 25% compared to a global average 14.9% of seats in parliament. GLOBAL SCALE of 52%. Only 14% of women ages 15 to 59 are employed or self-employed, compared Previous research on the effects of greater to 83% of men.5 women’s political representation around the In terms of education, around 21% of world has yielded several significant findings. women between the ages of 15 and 59 have First, quotas matter in increasing women’s never attended school, compared to 8% of representation. Without quotas, women still men in that age range. Egypt ranks 136th out RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 09.02.18

FIGURE 1 — WOMEN’S REPRESENTATION IN EGYPTIAN PARLIAMENTS (1957-2015)

80 75.0

70 64.0 60

50

40 35.0 36.0

30

20 18.0 14.9 12.0 12.0

Number/Percentage of Women MPs of Women Number/Percentage 11.0 8.0 10.0 9.0 9.0 8.0 8.0 7.8 10 6.0 3.2 3.0 3.9 2.0 0.6 0.8 2.2 2.0 2.3 1.8 2.5 1.8 1.8 0 1957 1964 1969 1971 1976 1979 1984 1987 1990 1995 2000 2005 2010 2012 2015

Number Percentage

SOURCE Members’ Register, Egyptian Parliament (various editions)

of 145 countries in gender equality according both women- and non-women-specific to the World Economic Forum’s Global issues, and to address political, economic, Gender Gap Report 2015.6 These statistics and social issues) and saliency (i.e., topics indicate that there is significant room for that mattered to MPs and also attracted improvement in Egyptian women’s inclusion media attention at the time). The topics in society if women’s issues and rights are included an economic issue (the 2016- to be emphasized in public debates, with 2017 budget bill), a women-specific issue parliamentary debates at the forefront. (toughening sentences against individuals performing female genital mutilation—FGM), and a political oversight issue (questioning DEMOGRAPHIC BACKGROUND OF the minister of supplies on the wheat sales Female MPs were EGYPTIAN FEMALE MPs and storage system). These three topics were discussed over 21 parliamentary almost as equally A comparison of the backgrounds of female sessions. A total of 147 MPs spoke on all and male MPs showed that female MPs active as male MPs three topics, of which 19 were female.8 are younger on average, have a slightly when speaking in Data indicate that female MPs were better educational background, and are less parliament. almost equally as active as male MPs in partisan than their male counterparts.7 A proportion to their total number in parliament statistical analysis (t-test) revealed that the when speaking on these topics (they made gender quota was found to be a statistically up 14.9% of all MPs and 13% of the speakers significant driver behind women’s increased on the three topics). Of the three topics representation in the 2015 election. examined, female MPs were most active on the topic directly addressing women’s issues WHAT ISSUES DO FEMALE EGYPTIAN (FGM), making up 20% of the MPs who spoke MPs FOCUS ON? on the issue. Second in line was the budget bill (12.8%), followed by the wheat sales and A content analysis was performed on the storage regime topic (10.2%). official transcripts of three topics discussed With regard to budget discussions, by the 2015 parliament. The topics were although only 10 out of the 78 female MPs selected to ensure diversity (i.e., to include participated in these deliberations, some 2 WOMEN IN THE EGYPTIAN PARLIAMENT: A DIFFERENT AGENDA?

interesting observations can be made. The mothers), women spoke significantly more topics female MPs focused on the most than men, yet they were significantly less were health care (28.6% of all paragraphs likely to criticize the government than men. attributed to female MPs on the subject It is also quite intriguing to see that none addressed health care issues), followed by education (16.1%), and welfare and the deficit, which drew equal attention (12.5% TABLE 1 — BACKGROUNDS OF FEMALE AND MALE MPs ELECTED TO each). Male MPs on the other hand focused more on government criticisms (26.3% THE 2015 EGYPTIAN PARLIAMENT of the paragraphs attributed to male MPs on the topic), the deficit (14.6%), and Male MPs Female MPs subsidies (10.9%). It is quite interesting to see that female MPs devoted significant Average age (years) 51.0 45.7 attention to the deficit, with a focus on the fear of burdening the younger generations. High school or lower 20.8 17.3 This focus seems to fit the picture painted University degree 73.1 73.3 by previous studies that female MPs are Education (%) likely to extend their role as mothers to a Master’s degree 1.4 2.7 similar role for the broader population. A statistical comparison of the number of Ph.D. 4.7 6.7 interventions made by female and male MPs on each budget sub-topic reveals that MPs elected via lists in each category (%) 13.0 74.7 women made different contributions than Independents in each category (%) 57.0 77.3 men on three topics: health care, women’s issues, and government oversight. On both health care and women’s issues (e.g., SOURCE Members’ Register, Egyptian Parliament (various editions); 2015 House of Representatives providing more financial support to single Election Report, National Election Commission

FIGURE 2 — INTERVENTIONS ON WHEAT SALES AND STORAGE, BY GENDER (%)

Rhetorical 0.4 8.0

Farmer’s status 3.1 19.6

Regional issues 1.8 7.6

Specific cases of 3.1 13.8 mismanagement

Use of figures 1.3 7.6

Suggestions 0.4 10.7

Technical issues 0.9 10.2

Direct accusation 1.3 10.2

0 5 10 15 20 25

Female Male

SOURCE Author’s analysis

3 RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 09.02.18

of the male MPs spoke on women’s issues partial support for critical mass theory, in during budget discussions. that women’s representation beyond a On the bill related to FGM sentencing, certain threshold gives women in parliament male and female MPs used interventions9 greater and impetus to act to declare their opposition to the practice together and stand up for women’s rights. (21.6% of all paragraphs), call for tougher To sustain these changes, upholding—or Women spoke more sentences against practitioners (15.7%), possibly increasing—the female legislative or use feminist arguments to debate quota would be a step in the right direction. on health care and against FGM (13.7%). Around 25% of all Moreover, some aspects of election laws women’s issues. When paragraphs were attributed to female MPs make it more difficult for women to arguing against FGM, (who represent 15% of all of parliamentary campaign and could benefit from reform, female MPs were three members) whereas the rest were attributed especially regarding elections in which to male MPs. Female MPs primarily voiced numerous majoritarian seats are contested. times more likely to disapproval of FGM (23% of all paragraphs Examples include excessive—and sometimes use feminist arguments attributed to female MPs) and used feminist difficult to monitor—campaign spending, than religious or arguments against the bill (also 23%).10 geographically large majoritarian districts, scientific ones. Two interesting results stand out. No and women’s underrepresentation in bodies single female MP endorsed FGM. Second, that supervise elections. Additionally, if when arguing against FGM, female MPs more women are appointed to key executive were almost three times more likely to positions, their presence in public and use feminist arguments than religious political life could become a “new normal.” or scientific ones (a difference significant While Egypt did make some recent progress at the 90% confidence level), indicating in this area by appointing women to key that women chose to deal with the topic cabinet positions, applying such a strategy primarily from a feminist perspective. to other levels of the would Finally, when discussing the topic of make a difference. wheat sales and storage, empirical analyses revealed no statistically significant difference in perspectives between male and female ENDNOTES MPs. One way to interpret this result is to 1. The 2010 parliament, however, lasted deduce that female MPs addressed non- Upholding the female for only two months and was dissolved after women’s issues in the same way as men. legislative quota the 2011 uprising. Female representatives were equally capable 2. P. Norris, Electoral Engineering: would be a step in of addressing even “dry” or “hard” bread- Voting Rules and Political Behavior (New the right direction. and-butter topics with the same depth and York: Cambridge University Press, 2004); level of sophistication as male MPs. and Mona Lena Krook, Quotas for Women in Politics: Gender and Candidate Selection LOOKING AHEAD Reform Worldwide (New York: Oxford University Press, 2009). More than 150 years ago, philosopher 3. S. Franceschet and J.M. Piscopo, John Stuart Mill described losing the “Gender Quotas and Women’s Substantive representation of women and their talents Representation: Lessons from Argentina,” in society as an exercise of non-utilitarian Politics & Gender 4 (2008): 393–425; and irrationality.11 Beyond arguments that J.A. McDonald and E.E. O’Brien, “Quasi- favor greater representation of women Experimental Design, Constituency, and in the political arena on the grounds of Advancing Women’s Interests: Reexamining fairness and symbolism, the evidence above the Influence of Gender on Substantive confirms that women’s representation is Representation,” Political Research substantively important as well. Women Quarterly 64 (2011): 472–86. make unique contributions to politics and 4. R. Heath, L. Schwindt-Bayer, and advance a distinctive agenda. The empirical M.M. Taylor-Robinson, “Women on the evidence presented in this brief also offers Sidelines: The Rationality of Isolating Tokens,” 4 WOMEN IN THE EGYPTIAN PARLIAMENT: A DIFFERENT AGENDA?

American Journal of Political Science 49 (2005): 420–36; and W. Smooth, “Standing AUTHOR for Women? Which Women? The Substantive Mazen Hassan, Ph.D., is an associate professor Representation of Women’s Interests and of comparative politics at Cairo University, the Research Imperative of Intersectionality,” Egypt. Since May 2018, he has been the Politics & Gender 7 (2011): 436–41. deputy director of the university’s Centre for 5. Egypt Health Issues Survey 2015 (Cairo, Political Research & Studies and Intercultural Egypt: Ministry of Health and Population; and Dialogue. His specialization includes electoral This issue brief is part Rockville, Maryland: ICF International, 2015). and party systems, institutional design of a two-year research 6. See World Economic Forum, Global in new democracies, public opinion, and project on pluralism in Gender Gap Report 2015, http://reports. experimental political science. weforum.org/global-gender-gap- the Middle East after report-2015/. Accessed on December the Arab uprisings. 15, 2017. The project is generously 7. In this analysis, only elected female supported by a grant MPs were considered. from the Carnegie 8. The unit studied for the content analysis was the paragraph. In total, the Corporation of New York. parliamentary scripts of the three topics included 516 paragraphs. 9. Other tools include: motion of asking a minister, request to deliver an urgent speech, and request to form a fact- finding mission. All these tools, however, are less powerful than questioning a minister, which is the only measure that can lead to a no-confidence vote. 10. For example, one female MP said that See more issue briefs at: FGM represents “violence against women www.bakerinstitute.org/issue-briefs because it capitulates part of her body” This publication was written by a [Plenary Session no. 95 (August 31, 2016), researcher (or researchers) who 12], whereas another stated that “it is mere participated in a Baker Institute project. violence against women” [Plenary Session Wherever feasible, this research is no. 95 (August 31, 2016), 14]. Interestingly, a reviewed by outside experts before it is third female MP—who is a professor of creed released. However, the views expressed herein are those of the individual and philosophy at Al-Azhar University—also author(s), and do not necessarily used feminist remarks in calling for male MPs represent the views of Rice University’s to “respect women and stop constraining, Baker Institute for Public Policy. intimidating, or hurting us” [Plenary Session no. 95 (August 31, 2016), 23-24]. © 2018 Rice University’s Baker Institute for Public Policy 11. John Stuart Mill, The Subjection of Women, ed. Susan Orkin (Cambridge: Hackett, This material may be quoted or 1869; 1988). reproduced without prior permission, provided appropriate credit is given to the author and Rice University’s Baker Institute for Public Policy.

Cite as: Hassan, Mazen. 2018. Women in the Egyptian Parliament: A Different Agenda? Issue brief no. 09.02.18. Rice University’s Baker Institute for Public Policy, Houston, Texas.

5

ISSUE BRIEF 09.03.18 Gender Inequality and Economic Inclusion in Tunisia: Key Policy Issues

Valentine M. Moghadam, Ph.D., Northeastern University; Rice University’s Baker Institute

Tunisia’s indicators on female labor force the favorable legal environment, Tunisian participation, educational attainment, women lack full social inclusion and economic professional activity, and political empowerment. These are key issues participation are quite impressive compared that require attention from researchers, to other countries in the Middle East and policymakers, and women’s rights advocates. North Africa region (MENA) (Table 1). In This brief provides a comprehensive 2015, women accounted for 40% of tertiary picture of Tunisian women’s employment education enrollment, 42% of university patterns and problems, along with some professors, and 31% of parliamentary seats. policy recommendations. Women’s Indicators on school enrollment, fertility economic exclusion has implications for rates, and women in the judiciary are also national development, the tax base, poverty noteworthy, as are three sociopolitical alleviation, household well-being, and developments. First, since 1956, Tunisia has women’s full civic inclusion (Chamlou and had a fairly liberal family law that banned Karshenas 2017; Moghadam 2018; World Bank polygamy and allowed women the right to 2011). Whereas women’s rights organizations divorce—the effects of “state .” and policy agencies in Tunisia are aware of Second, the women’s movement—as the problems of poverty, unemployment, and defined by the influence and visibility of violence,1 more attention should be directed— Whereas women’s women’s rights organizations that effect especially by researchers and policymakers— rights organizations legal and policy changes—is quite strong in to the causes of low rates of female labor Tunisia (it should be noted that force participation (FLFP) and strategies to and policy agencies in in general is quite robust in the country). enhance both the quantity and quality of Tunisia are aware of the Third, Tunisia embarked on a democratic women’s employment. problems of poverty, transition (albeit a bumpy one) in 2011 that unemployment, has won accolades internationally. and violence, more The very positive gender indicators FEATURES OF THE FEMALE LABOR listed in Table 1, however, provide only a FORCE attention should partial picture. Tunisia’s women suffer from be directed to the According to data from the International an untoward economic situation and low Labor Organization, most of Tunisia’s causes of low rates demand for their labor; low labor force female labor force works in the of female labor force participation and very high unemployment manufacturing industry (43%) followed by rates; social and regional inequalities; participation. the professional, scientific, technical/public inadequate support systems for working administration, social security, and mothers; persistent domestic violence; and health and social work fields (19.4%). The prevailing conservative attitudes, values, remainder work in the agriculture, forestry, and norms toward women’s rights. Without and fishery sectors (12.3%). changes in these areas, and notwithstanding RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 09.03.18

TABLE 1 — WOMEN’S SOCIAL INDICATORS AT THE START OF THE ARAB SPRING (2010-11)

Algeria Morocco Egypt Tunisia Percent of women in the paid 17% 28% 19% 25% labor force

Women’s tertiary education 34% 12% 14% 40%

Women’s average age at first 29 26 23 27 marriage (years)

Total fertility rate 2.4 2.4 2.9 1.9

Percent of women in parliament 11% 8% 2-3% 23-28% (1995-2010) (after 2002 quota) Percent of women teaching at 38% 17% N/A 42% universities 24% 0.46% 28% Percent of women in the judiciary 37%* (first appointed (first appointed (first appointed in 1965) in 2003)** in 1967) Liberal since 1956; Family law Minor reform in 2005 Major reform in 2004 Patriarchal; khul’a amended in 1998 Fragmented, subject State of women’s movement In abeyance Visible, well organized Visible, well organized to state repression

NOTES *The percentage of Algerian female judges increased to more than one-third after the Bouteflika government appointed 121 women as judges in the summer of 2010 (Sonneveld and Lindbekk 2017). **In 2010, just 42 out of 9,000 Egyptian judges were women. Egypt appointed its first female judge, Tahani al-Gebali, in 2003. Judge al-Gebali was dismissed during a conflict between the Morsi government and the judiciary at the start of 2013. See http://www.npr.org/templates/ story/story.php?storyId=125501126. SOURCES World Economic Forum, Global Gender Gap Report; Sonneveld and Lindbekk (2017)

Only 7.7% of women work in wholesale in many Arab countries, the labor force and retail trade. In terms of occupational employment of married women is weak for distribution, 24% of the female labor all but a small stratum of professional women force works in professional fields; 20% who build decades-long careers. Many hold clerical, service, and sales positions; working women drop out of the labor force and 51% hold blue-collar occupations. when they marry or have children. According to Ben Salem (2010, 501), women At the same time, Tunisia’s female made up 39% of the staff in the civil unemployment rate (24% in 2012) is service. Within the health field, women very high compared to other countries made up 42% of physicians, 72% of around the globe. Despite women’s pharmacists, and 57% of dental surgeons. significant educational attainment levels, These figures illustrate the extent to which unemployment is nearly twice as high public and private services depend on among women than men, illustrating the women. great difficulties women face in trying to Despite the high rates of women in establish their place in the economy. Well- both professional and manufacturing fields, qualified, university-educated women have Tunisia’s FLFP rate is very low by international the highest unemployment rate of any standards. At 27.2% in 2012, it is about half group in the population—47.4%, compared the rate of that in Organisation for Economic to 20.6% among similarly qualified men Co-operation and Development (OECD) in 2012 (République Tunisienne 2012, countries (République Tunisienne 2012). Tableau 37, 35). Young people aged 15-29 Although more women work in Tunisia than constituted 72% of the total number of 2 GENDER INEQUALITY AND ECONOMIC INCLUSION IN TUNISIA: KEY POLICY ISSUES

unemployed.2 University-educated women female unemployment rates are found in have experienced a sharp decline in the the country’s interior, reaching 40% to 46% probability of government employment in Kebili, Gafsa, and Tataouine (République in recent years; it dropped by nearly half Tunisienne 2014, 16). These rates are between 2005 and 2013 for both never- often two to three times higher than the married and ever-married women (Assaad unemployment rates for men. Tunisia’s et al. 2016, 12). Large numbers of young interior regions lack the infrastructure, women who wish to enter the labor market transportation, and information networks out of economic need—especially girls from that the northeast and coastal areas enjoy. working-class households with no more Health care is also lacking in low-income than a secondary education—or to pursue a areas such as Jendouba, Le Kef, Kasserine, professional career find that lack of demand and Gafsa. In those areas, according to Elrahi blocks their entry into the workforce. (2015), about 60% of women suffer from Despite women’s Women’s employment rates and the health problems, and just 10% have access overall economy in Tunisia took two hits to health care. Youth illiteracy and dropout significant educational in recent years. First, the Great Recession rates are also significant in these areas; 40% attainment levels, of 2008 led to plant closures in the ready- of women in these regions are illiterate. unemployment is nearly made garment manufacturing sector. Given As in other MENA countries, women in twice as high among the large proportion of women working in Tunisia who have obtained a university women than men, manufacturing, the combined shock of the education are more likely to be in the recession and plant closures likely had a workforce—and continue working long- illustrating the great substantial impact on women in the labor term—than women with only a secondary difficulties women force and contributed to both unemployment education or less. This situation may stem face in trying to 3 and the “discouraged worker” effect, from the more conservative social norms establish their place although detailed data on this issue is not among the less-educated population, the available. Still, one can conjecture that the lack of skills and job training for women, in the economy. subsequent export and investment declines or the absence of decent jobs—with resulted in job losses for working class good wages, benefits, and protections women.4 Second, in the wake of the 2011 against sexual harassment—for women revolution and the onset of terrorist attacks, from lower-income households. Gender investments sharply declined in almost all inequality in the labor market (especially sectors; foreign direct investment (FDI) flows in the private sector), high rates of female decreased by 29% in 2011, and 182 foreign unemployment, and stratification within firms—including companies based in Italy, the female population contribute to broad France, and Germany—closed their doors, social inequality, exclusion, and other leading to the loss of 10,930 jobs (Ayadi and disadvantages. Mattoussi 2014, 6). The decline in FDI was also severe in the tourism sector. Tunisia is heavily reliant on travel and tourism, which WORK-FAMILY RECONCILIATION AND accounted for 11.5% of jobs and 12.6% of SUPPORT FOR WORKING MOTHERS GDP in 2015 despite the contraction of the Ben Salem (2010, 501) references studies overall economy since 2011 (World Travel and showing that many employed women in Tourism Council, 2016). the MENA find it difficult to balance work and family. Tunisia’s Labor Code mandates SOCIAL AND REGIONAL INEQUALITIES different accommodations for women working in the public and private sectors. Government data show that the highest In the public sector, social security benefits rates of economic activity in Tunisia—that are provided, and women are entitled is, above 30%—are concentrated in coastal to two months of paid maternity leave and relatively affluent areas such as Tunis, (Ben Salem 2010, 502) as well as on-site Ariana, Ben Arous, Manouba, Nabeul, child care facilities at workplaces with Zaghouan, Sousse, and Monastir. The highest more than 50 employees. There are also 3 RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 09.03.18

special provisions for mothers of toddlers head of the household, must provide for his or handicapped children. Private sector wife and children within his means and their employers, however, are not required to status within the components of alimony. provide paid maternity leave, although the The wife must contribute to family expenses law stipulates that new mothers must be if she has assets.” Moreover, inheritance granted an unpaid leave of 30 days as well distribution continues to follow sharia law: as daily breaks to breastfeed during working women inherit half of what their brothers hours for a year after the birth of their child. receive. Among other consequences, In principle, private-sector employers are unequal inheritance has implications for required to provide child care facilities if the ability of women to establish their own they have 50 or more employees (Ben Salem businesses (Moghadam 2006). 2010, 502; Bernard-Maugiron 2015, 7), but Sociocultural prescriptions about gender small enterprises are exempt from these roles have changed less than the secular requirements. In addition, the mandatory nature of the state might suggest. According requirements in the code only apply to civil to the sixth wave (2010-14) of the World servants (Bernard-Maugiron 2015, 8), which Values Survey, 71% of respondents agreed may explain why 86% of workers in health that “when jobs are scarce, men should Another deficit for and public administration are covered, as have more right to a job than women” (see working mothers, these are public sector jobs that provide full Table 2). The gender breakdown suggests social security benefits. It is encouraging that more men (82%) than women (58%) certainly those from that in 2014, the majority of Tunisian women agreed with this statement; among women working-class or low- working in the manufacturing sector were respondents, less than half of those with full- income households, enrolled in the social security program time jobs (48.7%) agreed, while more than is the absence of a (République Tunisienne 2014, 26). As noted 30% disagreed. Other surveys have found nationwide network of above, however, many firms in the private that attitudes about women in the workforce sector do not offer paid maternity leave. are more liberal in Tunisia than elsewhere in quality and affordable By international standards, Tunisia’s the MENA region, especially when compared child care facilities. paid maternity leave is among the least to attitudes and values in Egypt (see Moaddel generous, and the onus is on the employer et al. 2013); however, conservative attitudes to finance it. This extra “tax” on the private may shift as a result of changing political and sector is a disincentive for employers and economic conditions. In general, the Tunisian may be an institutional impediment to public’s responses show very low confidence women’s labor force entry and attachment. in government institutions—much lower Another deficit for working mothers, than in Morocco or Turkey. And according to certainly those from working-class or recent Arab Barometer findings, Tunisians low-income households, is the absence have become dissatisfied with democracy of a nationwide network of quality and and perceive economic difficulties as the affordable child care facilities. Children most serious problem facing the country usually begin school at age six. Without the (Robbins 2016). means to hire a nanny, or in the absence of a relative who can care for their infants and 5 young children, new mothers drop out of the THE VIOLENCE AGAINST WOMEN LAW labor force or decline to enter at all. Violence against women is both an obstacle

to women’s economic participation and a GAPS IN FAMILY LAWS, SOCIAL clear manifestation of gender inequality. NORMS, AND VALUES The problem of violence against women has been long recognized by women’s rights Tunisia’s Code of Personal Status (or family organizations. In 1993, for example, the law) has been viewed as quite liberal Tunisian Association of Democratic Women since its introduction in 1956. Nonetheless, (ATFD) established a centre d’écoute, or men are the household heads in Tunisia; hotline, for female victims of domestic according to the code, “the husband, as violence and sexual harassment. After a 4 GENDER INEQUALITY AND ECONOMIC INCLUSION IN TUNISIA: KEY POLICY ISSUES

TABLE 2 — WORLD VALUES SURVEY, TUNISIA (6TH WAVE)

Percent of total population in agreement Statement (Percent of women in agreement)

“If a woman earns more than her husband, it is almost certain to cause problems.” 43% (35%)

“Having a job is the best way for a woman to be an independent person.” 50% (62.7%)

“If a mother works for pay, her children will suffer.” 78% (69%)

“On the whole, men make better political leaders than women.” 71% (60%)

“On the whole, men make better business executives than women.” 61% (46%)

“Being a housewife is just as fulfilling as working for pay.” 80% (76%)

“A university education is more important for a boy than a girl.” 25% (17%)

SOURCE World Values Survey, http://www.worldvaluessurvey.org/WVSOnline.jsp

commission was formed to find strategies large number of conjugal violence cases to tackle violence, an international seminar in their regions. Workers from the Bizerte convened in Tunis on November 11-13, 1993. branch stated that victims do not always This resulted in the report Les Violences follow through on their complaints or à l’égard des femmes. An amendment to requests for legal services: “We have to call Article 218 of the Penal Code introduced them, and all are in need of financial help. punishments for perpetrators of family We try to provide them with help through violence. The National Office for Family and microcredit grants.” One representative Population followed by offering medical care said a man had killed his wife for refusing to female victims of family violence, though to wear the niqab veil (also known as a Tunisia’s family the initiative’s implementation was stymied khimar in Tunisia). There were also cases due to low reporting of incidents, inadequate of sexual violence among the wives of planning office found police training, and lack of public awareness Salafists. The branch in Ben Arous, home that about 47% of of the law and available services. to several manufacturing plants, reported women aged 18–64 Tunisia’s family planning office found providing services to 74 women between had experienced some that about 47% of women aged 18–64 had December 2013 and January 2014. The form of violence, experienced some form of violence, typically women, who were largely illiterate or only domestic. While that statistic was alarming, had a primary education, had lost jobs typically domestic. it was the rape of a woman named Meriem following factory closures. Ben Mohamed in September 2012 by two In general, women who experience policemen—who defended their actions domestic or community violence may be by stating that she had been behaving unwilling or unable to leave their homes, or immodestly with her boyfriend—that may be prevented from joining, remaining, galvanized Tunisia’s feminist population. or advancing in the labor force. The ATFD organized a national workshop in September 2014 and launched the “Action Plan 2015–17 on Violence Against Women.” GOVERNMENT AND NGO RESPONSES During the workshop, activists from In 2016, the Tunisian government reached branches in Tunis, Ben Arous, Bizerte, Sfax, an agreement with the International Sousse, and Kairouan reported that their Monetary Fund (IMF) for a $2.8 billion bailout small staffs were unable to cope with the 5 RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 09.03.18

to support the country’s economic and and influential trade union, human rights political transition and help fund its new groups, professional associations, and the 2016-2020 development plan (République Observatory of Social, Political, and Economic Tunisienne 2016). In its note to the IMF, the Rights, Tunisia’s women’s rights organizations Tunisian government proposed focusing have been able to make their voices heard policy interventions on four leading in the new, more pluralistic political arena economic sectors: the knowledge economy, since the Arab Spring. While the gains have health and , tourism, and been impressive, gaps and deficits remain, agriculture. One goal of the plan is to especially in the area of women’s economic significantly increase women’s share of empowerment. Most Tunisian women, except the labor force to 35%. Another goal is for highly educated professional women, Working in concert to expand the social services sector. This remain economically inactive, with educated with the country’s would entail raising kindergarten enrollment young women hardest hit by unemployment. from 35% in 2015 to 53% by 2020, and Working conditions in the private sector could large and influential investing in child protection services, sports, also be improved to accommodate working trade union, human programs and home care support. The mothers. Since 2014, problems within the rights groups, government has proposed regrouping the Nidaa Tounès party and the government have professional existing 289 microcredit associations into led to resignations, cabinet reshuffles, and associations, and 24 institutes (one per region) to be governed stalemates, which have ultimately resulted by a new microfinance strategy (IMF 2016, in a stalled policy agenda. As feminist trade the Observatory of 23). If successful, the plan should better unionist Samia Letaief stated, “The democratic Social, Political, and serve women’s entrepreneurship, especially transition has succeeded, more or less, Economic Rights, in the country’s interior, where—as noted on the political front but not in terms of Tunisia’s women’s above—FLFP is very low and unemployment governance and development” (“La transition rates are very high. Building a nationwide démocratique a réussi sur le plan politique rights organizations social care infrastructure would provide et plus au moins sur le plan démocratique have been able to employment opportunities for women, mais pas sur le plan gouvernance et make their voices enable mothers to enter and remain in the développement”) (personal communication, heard in the new, workforce, and possibly help reduce the high 2017). Attention should now be directed level of female unemployment in Tunisia. to women’s economic participation and more pluralistic In 2017, government responses to empowerment. political arena since the women’s movement resulted in three First, the government’s plan to increase the Arab Spring. important milestones. First, the government FLFP and women’s share of the total labor repealed a 1973 directive forbidding Muslim force would succeed through the construction Tunisian women from marrying non-Muslim of preschool facilities and neighborhood child men. Second, the parliament introduced care centers nationwide, along with vocational the country’s most stringent anti-domestic training for women to staff those facilities. violence law yet. And third, President Beji The employment-generation possibilities, Caid Essebi indicated support for repealing for women and men alike, are obvious. As or revising the unequal inheritance law. the tax base grows, the government could Progress on these fronts could provide even mandate statutory paid maternity leave across more Tunisian women with social inclusion, the private sector, which could be financed dignity, and economic and physical security. through general revenue or some combination of government, employer, and employee contributions. Paid maternity leave should be RECOMMENDATIONS FOR REFORM presented as a responsibility of government and employers and as a right of working Tunisian women have benefited from decades mothers. The construction of preschool of state feminism, an institutionalized feminist facilities would contribute to stronger FLFP movement, and a democratic transition that and labor force attachment among married has enabled more initiatives for recognition, women, and to quality socialization among representation, and inclusion of women. children. Child care facilities could begin in Working in concert with the country’s large the poorest regions—Sidi Bouzid, Kairouan, 6 GENDER INEQUALITY AND ECONOMIC INCLUSION IN TUNISIA: KEY POLICY ISSUES

and Kasserine, located in the central-west 2. “Tunisia: High rate of unemployment region of the country—which experience among youth and women,” Tunis Times, very low female labor force participation and May 25, 2014. high unemployment rates. Monitoring and 3. “Discouraged workers” are those who enforcement of the new Violence Against drop out of the labor force following periods Women law should also be strengthened in of unemployment and inability to find these areas to eliminate domestic violence, suitable jobs. community intimidation, and workplace 4. Mechanical and electronics sexual harassment. manufacturing and automotive component The high unemployment of new entrants, production have been the most dynamic especially of educated young women, is export sectors in Tunisia since the 1990s, another policy area in need of urgent surpassing the previously dominant textiles attention. As there is some disagreement and garments sector. Exports of textiles among experts regarding solutions to the and garments declined from 42% of all education-labor market mismatch, it would merchandise exports in 2004 to 27% in be useful to conduct surveys with students 2008. In contrast, exports of electronics and professors (and not just employers) to and chemicals increased to 30% (Ayadi determine how and why graduates—even and Mattoussi, 2014, Appendix Table A3, young women with degrees in science, 15). Together with food production, these technology, engineering, and math—find it so are the pillars of productive capacity in difficult to secure gainful employment. With manufacturing. The textiles and garments regard to women with a secondary education sector is relatively labor intensive and or less who are out of the workforce, the remains heavily feminized (Jaud and Freund focus should be on examining school 2015, Figure B1.1.1, 2). curricula and textbooks to determine if they 5. This section draws from Arfaoui and perpetuate traditional gender roles and Moghadam (2016). stereotypes, which would further compound this problem. Tunisia’s difficult economic conditions REFERENCES and a proposed finance bill to introduce Arfaoui, Khedija and Valentine M. Moghadam. austerity measures generated unrest and 2016. “Violence against Women and protests in January 2018. Thus, fast action Tunisian Feminism: Advocacy, Policy, is needed to demonstrate a commitment to and Politics in an Arab Context.” Current socioeconomic inclusion and empowerment. Sociology 64 (4): 637-653. Focusing greater attention on the country’s Assaad, Ragui, Rana Hendy, Moundir Lassassi, women and their children is the right place and Chaimaa Yassine. 2016. “Where has to start. all the education gone? Analyzing trends in labor force participation in MENA.” ENDNOTES Paper prepared for the 22nd annual conference of the Economic Research 1. The two longstanding and active Forum, Cairo, Egypt, March 2016. women’s rights organizations are the Tunisian Ayadi, Mohamed and Wided Mattoussi. 2014. Association of Democratic Women (ATFD) and “Scoping of the Tunisian Economy.” Association of Tunisian Women for Research UNU-WIDER Working Paper 2014/074, and Development (AFTURD), which have Helsinki, Finland, April 2014. conducted research and advocacy since Ben Salem, Lilia. 2010. “Tunisia.” In Women’s 1989. The government-funded women’s Rights in the Middle East and North policy agency Centre for Research, Studies, Africa: Progress amid Resistance, edited Documentation, and Information on Women by Sanja Kelly and Julie Breslin, 487- (CREDIF) works with AFTURD and ATFD 516. Lanham and New York: Rowman & members, Tunisian women researchers, Littlefield Publishers and Freedom House. UN agencies, and international donors to research various aspects of women’s lives. 7 RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 09.03.18

Bernard-Maugiron, Nathalie. 2015. Shahra Razavi and Shireen Hassim, “Supporting women as economic actors 87-108. Basingstoke: Palgrave. in the Middle East and North Africa République Tunisienne. 2016. “Synthèse du region.” Draft report of Experts Meeting, Plan du Développement 2016-2020.” Paris, Programme MENA-OCDE Pour Tunis: Ministère du Développement l’Investissement, July 1, 2015. et de la Coopération internationale, This issue brief is part Boughzala, Mongi. 2013. “Youth March 23, 2016. Unemployment and Economic Transition ———. 2014. Recensement en Chiffres/ of a two-year research in Tunisia.” Global Economy and Statistique Tunisienne. Available at project on pluralism in Development Working Papers no. 57, http://census.ins.tn/fr/recensement. the Middle East after Brookings Institution, Washington, D.C., ———. 2012. Enquête nationale sur la the Arab uprisings. January 2013. population et l’emploi 2012. Tunis: The project is generously Chamlou, Nadereh and Massoud Karshenas, Statistiques Tunisie. eds. 2016. Women, Work and Welfare supported by a grant Robbins, Michael. 2016. “Tunisia Five Years in the Middle East and North Africa: after the Revolution: Findings from the from the Carnegie The Role of Socio-Demographics, Arab Barometer.” Arab Barometer, May Corporation of New York. Entrepreneurship, and Public Policies. 15, 2016. http://www.arabbarometer. London: Imperial College Press. org/wp-content/uploads/Tunisia_Public_ Elrahi, Nay. 2015. “Rural women in Tunisia: Opinion_Survey_2016_Democracy.pdf. ‘We have been silent for too long.’” Nadia Sonneveld, Nadia and Monica Lindbekk, The Guardian, March 30, 2015. eds. 2017. Women Judges in the Muslim https://www.theguardian.com/ World: A Comparative Study of Discourse global-development/2015/mar/30/ and Practice. Leiden: Brill. rural-women-rights-tunisia-world- World Bank. 2011. World Development Report social-forum. 2012: Gender Equality and Development. Jaud, Mélise and Caroline Freund. 2015. See more issue briefs at: Washington, D.C.: The World Bank. “Champions Wanted: Promoting Exports www.bakerinstitute.org/issue-briefs World Travel and Tourism Council. 2016. in the Middle East and North Africa.” Travel & Tourism Economic Impact This publication was written by a Washington, D.C.: The World Bank 2016: Tunisia. London: World Travel and researcher (or researchers) who Group: Directions in Development. participated in a Baker Institute project. Tourism Council. Moaddel, Mansoor et al. The Birthplace of the Wherever feasible, this research is World Values Survey. n.d. http://www. reviewed by outside experts before it is Arab Spring: Values and Perceptions of worldvaluessurvey.org/WVSOnline.jsp. released. However, the views expressed Tunisians and a Comparative Assessment herein are those of the individual of Egyptian, Iraqi, Lebanese, Pakistani, author(s), and do not necessarily Saudi, Tunisia, and Turkish Publics: A represent the views of Rice University’s AUTHOR Baker Institute for Public Policy. Report. Middle Eastern Values Study, Michigan Population Studies Center and Valentine M. Moghadam, Ph.D., is director © 2018 Rice University’s Baker Institute Department of Sociology, University of of the International Affairs Program and for Public Policy Maryland. Retrieved from http://mevs. professor of sociology at Northeastern org/files/tmp/Tunisia_FinalReport.pdf. University and a nonresident fellow in the This material may be quoted or Baker Institute Women’s Rights in the Middle reproduced without prior permission, Moghadam, Valentine M. 2018. “After provided appropriate credit is given to the Arab Spring: Towards Women’s East Program. She was previously director of the author and Rice University’s Baker Economic Citizenship.” In The Middle the Women’s Studies Program and professor Institute for Public Policy. East in Transition: The Centrality of of sociology at Purdue University. Her Citizenship, edited by Nils A. Butenschøn current research is on democratization after Cite as: the Arab Spring. Moghadam, Valentine M. 2018. and Roel Meijer, 316-342. Cheltenham, Gender Inequality and Economic UK: Edward Elgar. Inclusion in Tunisia: Key Policy ———. 2006. “Maternalist Policies vs. Economic Issues. Issue brief no. 09.03.18. Citizenship? Gendered Social Policy in Rice University’s Baker Institute for Public Policy, Houston, Texas. Iran.” In Gender and Social Policy in a Global Context: Uncovering the Gendered Structure of “the Social,” edited by 8 ISSUE BRIEF 09.06.18 Confronting the Governance Crisis in the Middle East and North Africa: Toward Establishing Inclusive and Pluralistic States Post-Arab Spring

Karen E. Young, Ph.D., American Enterprise Institute

states (and across the Middle East and North EXPERIMENTS IN FISCAL Africa region) an opportunity to promote GOVERNANCE: THE ECONOMIC their own versions of nationalist growth REFORM AGENDA IN THE GCC agendas without external pressure on their methods of governance. The decline in oil prices in late 2014 In effect, what we have witnessed precipitated a torrent of fiscal policy changes since late 2014 is a new period of policy across the Gulf Arab states. These reforms experimentation in which the ends of a covered sensitive issues such as labor market diversified economy less reliant on oil reform; financial sector liberalization; the exports justifies the means of achieving a introduction of consumption and land taxes; radical break in a system of social welfare, and removal or reduction of subsidies on changing employment preferences and electricity, water, and fuel. As a result, it is practices, and establishing a new role for the reasonable to expect some reconfigurations state in prescribing an agenda for growth. of state-society relations in the Gulf states. The state remains central to the conception Yet there are few signs of public unrest or and execution of economic development, protest, even with higher costs of living and while Gulf citizens and residents are What we have limited availability of public-sector jobs. expected to either seize the opportunity, This muted reaction is a puzzle, at least witnessed since late leave, or be left behind. This brief sets out as a short-term observation. But the shifts 2014 is a new period of some of the major structural reforms to under way are structural, and society—both taxes, subsidies, and debt issuance in the policy experimentation citizens and foreign residents—will likely take GCC that are shifting financial burdens from in which the ends of some time to fully absorb the impact. the state to its citizens and residents. a diversified economy At the same time, a number of global and regional political currents have less reliant on oil strengthened authoritarian governance STRUCTURAL BARRIERS TO REFORM exports justifies and diminished incentives for risk-taking AND ECONOMIC GROWTH the means. in civil society. The outbreak of conflict related to the Arab Spring uprisings The grievances that motivated many of the in Syria, Libya, Yemen, and Egypt has Arab Spring uprisings were economic in demonstrated the high risk of revolution nature: lack of social and economic mobility, and change in government. Shifts in corruption, and exclusion from opportunity. American and European politics since 2016 New research by scholars at the World have also reinforced negative perceptions Bank on the sources of the grievances, the of democracy and given rulers in the Gulf demographic profile of protestors, and the RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 09.06.18

FIGURE 1 — FOREIGN COMMERCIAL OWNERSHIP REFORMS IN THE GCC

Country Foreign Commercial Ownership

Bahrain • 100% foreign ownership possible in most sectors, excluding oil exploration, real estate, and military equipment production

Kuwait • 100% foreign ownership possible through a foreign-owned branch*

• Foreign ownership in Omani companies permitted up to 70%, with further exemptions under certain conditions • New foreign capital investment law (currently in the final drafting stage) will allow 100% foreign ownership and Oman remove minimum capital requirement to provide foreign investors with an open market in Oman. • “Negative list” will be prepared to safeguard certain areas the government may wish to restrict from foreign investment in order to protect national security or interests • Up to 49% foreign ownership; 100% in some sectors Qatar • Legislation proposed in 2018 permits 100% foreign ownership in all sectors, with a Qatari services agent (yet to be enacted)

• 100% foreign ownership in certain industries; excluded sectors include oil exploration, real estate, and military equipment Saudi Arabia • Foreign license renewals extended from one year to up to 5 years (2018) • Qualified companies may own up to 49% of listed securities as of January 2018

• Up to 49% foreign ownership in restricted industries, with 100% foreign ownership to be allowed by the end of 2018; UAE up to 100% foreign ownership currently allowed in free sectors

NOTE *Kuwait figures retrieved from 2015 Investment Climate Statement — Kuwait, U.S. Department of State SOURCES 2017 EU-GCC Investment Report; 2016 EY Global Tax Alert Library; Emirates News Agency

puzzle of mobilization1 reveals how little has of living, including school fees.5 Other changed in terms of the structural barriers to states like Bahrain, the UAE, and Qatar have inclusion that persist across the Gulf and the created more liberal policies to welcome wider MENA region.2 foreign investors as long-term residents Employment opportunities and lack of and to facilitate the retention of existing affordable housing remain key problems,3 expatriates as a labor resource. especially for the current generation of young, As governments in the region media-savvy Arabs. The fiscal reform agenda compete by offering stimulus packages has only heightened anxieties around public and enticements to make their business sector employment, while the cost of living environments more welcoming to foreign New research by the has risen throughout the Gulf Arab states due investors,6 they are weakening one of the World Bank reveals that to the imposition of new taxes and fees as key wealth redistribution tools utilized over little has changed in well as reduced energy and water subsidies. the past 40 years: the commercial agency terms of the structural In this period of policy experimentation, structures that required investors to partner barriers to inclusion we also find variation across the Gulf states in with local citizens in order to establish the implementation of reforms (particularly franchises and foreign-owned firms.7 that persist across regarding the value added tax, which only the Gulf and the wider the United Arab Emirates [UAE] and Saudi MENA region. Arabia have instituted thus far), and also in JOBS CRISIS: PROTECTING AND the perception of the value of foreigners as CREATING JOBS FOR NATIONALS workers and members of society. Whereas foreigners are less welcome All of the Gulf states aim to increase in Saudi Arabia, we see an acceleration national employment in the private sector, in protection schemes for national but the policy prescriptions for how to employment. Saudization, or the create job opportunities have varied reservation of certain jobs and sectors for significantly. Saudi Arabia and Oman have Saudi nationals, is part of the government’s seen an exodus of expatriate workers4 effort to reduce the public wage bill and because of rising visa fees and higher costs transform its private sector. In January 2 CONFRONTING THE GOVERNANCE CRISIS IN THE MIDDLE EAST AND NORTH AFRICA

2018, the government announced that it 340 billion riyals (about US$90.66 billion) in would expand its growing list of Saudi- investment spending is planned for 2018. only jobs to include sellers of watches, For good measure, the government eyewear, medical equipment and devices, has delayed its commitment to a balanced electrical and electronic appliances, auto budget until 2023. But spending its way out parts, building materials, carpets, cars and of the current slump includes inherent risks. motorcycles, home and office furniture, One key factor driving consumer children’s clothing and men’s accessories, sentiment, especially within the private sector, home kitchenware, and confectioneries.8 is the expatriate population—the unwitting The experimental nature of Saudization victim of Saudi Arabia’s reforms. For those raises questions about why certain sectors who stay, the rise in the cost of living has are targeted, and how smaller businesses been substantial. And for those who leave, will be able to assume the higher wage their absence is compounding weak economic costs of hiring nationals. In theory, the activity. And many are leaving. policy should create opportunities for all Expatriates, who make up one-third of Saudis, but its potential to increase jobs the population in Saudi Arabia, are facing for Saudi women is especially promising. price increases without the cushion of the Yet few expect that Saudi citizens will be Citizen’s Accounts16—a program that offers eager to take low-wage and menial jobs,9 direct cash transfers to low- or middle- The kingdom has particularly in construction. income households—or the reinstatement introduced a range of In addition to Saudization, the kingdom of public sector allowances17 (issued by has introduced a range of reforms10 decree for 2018 only). And foreign workers reforms to rationalize to rationalize fuel and electricity costs, are subject to a range of additional fees18 for fuel and electricity established a new value-added tax, and dependents19 as well as other levies20 that costs, established a new targeted cash support to lower income citizens do not have to pay. value-added tax, and families through the Citizen’s Accounts The rationale for the increased fees and targeted cash support Program. All of these measures have taxes is to create an alternate stream of disrupted the economy, leaving families to government revenue to offset losses in oil to lower income families try to establish a new monthly baseline for revenue that have been compounding since through the Citizen’s expenses. Energy prices have increased two- late 2014. Even though Saudi Arabia’s 2018 Accounts Program. 21 to three-fold in Saudi Arabia, and there was budget is its largest ever, it still features These measures have an 80 percent11 increase in gasoline prices some cost-savings measures. Examples at the end of 2017.12 Consumer sentiment include price rationalization in the energy left families trying to among Saudis and foreigners alike is sector; attempts to cut the public wage establish a new monthly apprehensive. Just as the image of a Saudi bill; new taxes on tobacco and sugary baseline for expenses. woman soldier is testing the limits of popular drinks; plans to introduce road tolls; the culture, there is an unsettled sense of “What implementation of a VAT on Jan. 1, 2018; next?” in consumer confidence.13 new efforts to retroactively collect zakat The Reuters Ipsos consumer sentiment (Islamic tax) from financial institutions;22 index from late 2017 for Saudi Arabia showed and a push to seize assets from public consistent negative expectations about jobs, officials and members of the ruling family investment, and growth.14 Indexes by IHS as well as large business conglomerates Markit and Emirates NBD indicate a sharp through an anti-corruption campaign.23 drop in the Purchasing Managers’ Index, The UAE has also struggled to create declining from 57.3 in December 2017 to jobs for citizens in the private sector, but 53.0 in January 2018, the lowest reading in its approach to expatriate workers has the survey’s history.15 been very different from the Saudi “tax and This malaise is all the more troubling levy” policy. Efforts to extend long-term as it has been accompanied by the largest residency,24 introduce new protections for fiscal outlays in recent Saudi history. The investor’s rights, and even allow home- Saudi budget expanded for 2018; combined based businesses are designed to boost a with additional investment spending from private sector heavily reliant on foreigners the Public Investment Fund, approximately as business owners and innovators. 3 RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 09.06.18

Within the UAE, there is also competition for foreign expertise and investment. FINDING REVENUE: EXPERIMENTAL Abu Dhabi recently created a stimulus FISCAL POLICY 25 package for investment within the emirate Fiscal policy experimentation has required to rival the vibrant private sector in Dubai. innovation to create new sources of Likewise, Bahrain has moved to allow revenue as well as the issuance of debt. 26 long-term foreign residency, end its After decades of fiscal surplus and a very kafala system of requiring workers to have low debt-to-GDP ratio, Gulf states now find an employer sponsor their visa permits themselves heavily indebted, not just to their by allowing self-sponsorship (especially local banking sectors but to international for lower wage workers), and introduce a banks and bondholders. number of reduced subsidies and increased Moreover, the ability to access debt fees for citizens. capital markets has created some competition among governments. Saudi Arabia and Qatar had dueling debt issuances in March 2018,27 with each attempting to one-up the other in the amount they could borrow. FIGURE 2 — TIMELINE OF ECONOMIC REFORMS IN BAHRAIN Meanwhile, for weaker economies like Bahrain and Oman, efforts to issue bonds and borrow from international banks have been 2014 Oil Price Collapse complicated by assurances of support from regional backers. For instance, questions October 2015 Meat subsidy cut: Beef and chicken prices double about financial support it received from Saudi Arabia affected Bahrain’s ability to issue a November 2015 Plan to cut utility subsidies for expats and big businesses bond in March 2018. The conventional bond announced issue was canceled at the last minute,28 Meat subsidy cash compensation initiative launched, while a sukuk issue went to market. with back-dated effect This policy experimentation, coupled with very public efforts to raise capital, January 2016 Gas prices increase by 56.3% has somewhat lifted the veil of secrecy that has shrouded the fiscal affairs of Gulf February 2016 Increased fees for utility administration, sand mining, governments. International bond issuances hotel services, and municipalities enacted require some transparency; a bond Alcohol and tobacco taxes increase: Alcohol taxed at prospectus should declare existing debt, 225% (from 125%), tobacco at 200% (from 100%) possible avenues of growth, and government liabilities in spending. This information is March 2016 Housing utilities subsidy cut approved public, which raises the possibility that citizens might access greater details about December 2017 New sin taxes go into effect: 100% price increase government expenditures and weigh that for tobacco and energy drinks; 50% price increase for information against their own perceptions of soft drinks service delivery and benefits.

January 2018 Gas subsidies lifted; prices increase 12-25% (on hold, as of Jan. 23) SENSITIVE BENEFITS: SCALING BACK New 5% VAT delayed to mid-2018 THE WELFARE STATE

February 2018 Cap removed on Bahrainis’ health insurance The wave of economic liberalization continues VAT delayed to year-end to spread across the region, opening paths to greater ownership stakes for foreign investors; allowing longer term residency SOURCE Author’s elaboration; Arab Gulf States Institute in Washington. permits untethered to employers; breaking down state subsidies on energy, fuel, and

4 CONFRONTING THE GOVERNANCE CRISIS IN THE MIDDLE EAST AND NORTH AFRICA

water; trimming public sector wage bills; and introducing consumption and “sin” taxes.29 FIGURE 3 — GCC SOVEREIGN USD DEBT ISSUANCE (2012-2016) Still, some social benefits30 deemed too 60 sensitive to withhold remain. Housing is perhaps the most sensitive 50 of these social benefits and remains one of the key levers of domestic policy for Gulf monarchies. In the Gulf states, a number of 40 factors have escalated the housing shortage and made housing less accessible for citizens, 30 such as rapid population growth, a rising USD Bn cost of living, and lifestyle expectations in a 20 culture of wealth. In addition, an entrenched system of elite land ownership and state- 10 led megaproject development has excluded average citizens from accessing finance and 0 mortgage markets. 2012 2013 2014 2015 2016 2017 2018 Increasing economic mobility, pathways to home ownership, and a sense of social mobility cannot be sustained without Kuwait Qatar Saudi Arabia Bahrain UAE Oman 31 reforms to subsidies and cash transfers Share of all EM USD sovereign debt issuance (rhs) that address underlying inequalities.32 These include access to opportunity, increased land SOURCE Dealogic, Goldman Sachs Global Investment Research availability, access to financing, discouraging monopolies and state-linked corrupt firms, and protection of property owners’ rights. Home ownership embodies the tension estimated that based on the age distribution of inclusion and mobility, the underlying in Gulf states, with a median age of 29, grievances that have motivated unrest across young people considering marriage and the MENA region. And across the Arabian families would trigger a housing shortage of Peninsula, from Kuwait33 to Oman, this 1 million units by 2018. tension has been simmering for years. But more important than the large Increasing economic According to Reuters and property youth population in the Gulf is the problem mobility, pathways to consultant firm Jones Lang LaSalle, the cost of how and where young people are of a roughly 2,600-square-foot home in a working, and how they are included in home ownership, and a major Saudi city is $186,000 to $226,000. plans for job growth and productivity. sense of social mobility This is 10 times the annual salary of a low- Unfortunately, they have been excluded cannot be sustained income family in the Gulf states. For example, from economic opportunities, with high without reforms to Saudis who receive the Citizen’s Accounts rates of unemployment blocking them from stipend make about $2,660 per month, which attaining financial independence.37 The subsidies and cash is the average monthly salary in the kingdom. Strategy& report states that in 2012, the transfers that address The Citizen’s Accounts Program is average residential home in Kuwait was underlying inequalities. mandated annually; thus, neither the next priced at 30 times the average gross income year's allocation nor who may qualify for the for a person between the ages of 25 and 29. benefit is clear.34 In January, King Salman bin In comparison, the average home price was Abdulaziz granted additional stipends of $260 11 times the average young adult’s salary per month for all public sector employees for in Norway, and six times more than such 2018 to offset cost of living increases.35 workers’ earnings in the United States. A 2014 study by Strategy& identified a demographic-driven surge in housing demand in the GCC states.36 The report

5 RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 09.06.18

3. As a policy recommendation for working IMPLICATIONS with citizen groups, worker organizations Economic inclusion in the Gulf states (where they are permitted, as in Bahrain), is a public policy priority. In housing and industry associations, Gulf states and employment opportunities, Gulf should keep in mind that there is power governments are now forced to become in transparency. The recent release of more innovative in their policy choices by budgets by Gulf governments (Saudi either mandating hiring of nationals or finding Arabia and the UAE in particular) can ways to incentivize foreigners to grow new encourage some dialogue and shared businesses. How society will respond is still a planning between the private sector and very open question. the state. Organizing business interests For now, Gulf citizens and expatriates could be a lasting result of the current have embraced change (or left the region). reform environment. For those who stay, there will begin a new conversation about belonging and ENDNOTES contributing to society in meaningful, financially productive ways. These are 1. The puzzle being that such widespread discussions that governments can dictate or political mobilization has overturned choose to facilitate. The variation in approach governments, but has not yet compelled across the Gulf could also be substantial. governments to change their policies to This brief offers three policy address economic mobility barriers, boost job recommendations: creation, and combat corruption. 1. Gulf governments must carefully balance 2. Elena Ianchovichina, Eruptions of short-term labor market challenges, Popular Anger: The Economics of the Arab especially among their young adult Spring and Its Aftermath, MENA Development populations, with a long-term need for Report (Washington, D.C.: The World Bank), diversification and growth. Implementing doi:10.1596/978-1-4648-1152-4. immigration policy that welcomes 3. Karen Young, “A Home of One’s Own: foreigners with skills that can be Subsidized Housing as a Key Lever of Gulf transferred and taught, as well as resources Domestic Policy,” Market Watch (blog), that can be used to grow new businesses The Arab Gulf States Institute in Washington on the ground (rather than just in portfolio (AGSIW), June 15, 2018, http://bit. investments) will be essential. Low-wage ly/2wuyhyu. foreign workers can be useful, too, but 4. Karen Young, “Saudi Economic Reform should be granted some flexibility to move Update: Saudization and Expat Exodus,” between employers (which would generate Market Watch (blog), AGSIW, February 28, savings for companies, since they would 2018, http://bit.ly/2MG7byz. pay less in recruitment fees and sponsoring 5. Karen Young, “The Cost of Private workers in holding patterns when business Education,” Market Watch (blog), AGSIW, is slow) and build skills that are transferable October 3, 2017, http://bit.ly/2PYJ2Bs. and can boost productivity. Workers who 6. Bernd Debusmann Jr., “Revealed: What stay and are able to choose their employers Abu Dhabi’s $13.6bn Stimulus Really Means and compete for higher wages will over for the Capital,” Arabian Business, June 10, time build more competitive sectors that 2018, http://bit.ly/2PpklwN. can also attract nationals. 7. “Bahrain approves new law to allow 100% foreign ownership,” Arabian Business, 2. Most importantly, reforms need staying July 19, 2016, http://bit.ly/2PkPUYH. power, and governments need to build 8. “Labor Ministry Designates 12 Job credibility in their reform agendas. Types as Saudi-only,” Arab News, January 30, Backtracking and reinstating benefits will 2018, http://bit.ly/2LINyka. only make the transition to reduced energy, 9. Margherita Stancati and Donna water, and fuel subsidies more difficult for Abdulaziz, “Saudi Arabia’s Economic Revamp citizens to bear. 6 Means More Jobs for Saudis—If Only They CONFRONTING THE GOVERNANCE CRISIS IN THE MIDDLE EAST AND NORTH AFRICA

Wanted Them,” Wall Street Journal, June 19, 23. Karen Young, “Corruption Purge 2018, https://on.wsj.com/2MIGyco. Overshadows Stalled Reality of Saudi 10. “Saudi Reforms,” Gulf Economic Economy,” Lawfare, November 16, 2017, Barometer, AGSIW, retrieved July 10, 2018, http://bit.ly/2LJuxOz. http://bit.ly/2LP0aX6. 24. “New visa rules in UAE: All you need 11. Wael Mahdi and Vivian Nereim, “Saudi to know,” Khaleej Times, June 20, 2018, Arabia Plans to Raise Gas Prices by 80% in http://bit.ly/2MEK5bM.. January,” Bloomberg, December 25. “Abu Dhabi Stimulus Plan,” Gulf 11, 2017, https://bloom.bg/2C53c9T. Economic Barometer, AGSIW, retrieved July 12. “Saudi Arabia hikes fuel price,” 10, 2018, http://bit.ly/2MGYtAe. Saudi Gazette, January 1, 2018, http://bit. 26. Amany Zaher, “Bahrain Looks To ly/2LK7NOu. Issue 10-Year Residence Permit for Foreign 13. There is some cognitive dissonance Investors,” Forbes Middle East, May 31, 2018, and apprehension in Saudi society as changes http://bit.ly/2CgwJOb. occur with little public awareness campaigns. 27. Karen Young, “Trade Wars and The economic effect is that people are less Bond-Offs: Side Effects of Tariffs and Tactical likely to make significant life decisions Borrowing Hit the Gulf,” Market Watch (blog), or even major purchases because of the AGSIW, April 11, 2018, http://bit.ly/2MHKlq8. possibility that major regulatory or labor 28. Archana Narayanan, “Bahrain Wakes market reform may affect their livelihoods. Up to Bond Reality as Secondary Market Hit,” 14. “Primary Consumer Sentiment Index,” Bloomberg, March 28, 2018, https://bloom. Thompson Reuters/Ipsos, October 2017, bg/2wuCDpk. http://bit.ly/2NEuHbT. 29. “Fiscal Policy Measures: Tax,” Gulf 15. “Saudi Arabia Purchasing Managers’ Economic Barometer, AGSIW, retrieved July Index,” Emirates NBD, February 5, 2018, 10, 2018, http://bit.ly/2ou1vch. http://bit.ly/2PkQupl. 30. International Monetary Fund, Gulf 16. “Saudi Arabia makes 2 billion riyal Cooperation Council: How Can Growth- payment in citizens account program,” Friendlier Expenditure-Based Fiscal Reuters, December 21, 2017, https://reut. Adjustment be Achieved in the GCC? rs/2LHTrOs. (Washington, D.C.: International Monetary 17. “Saudi Arabia restores perks to state Fund, 2017), http://bit.ly/2oqKIXH. employees, boosting markets,” Reuters, April 31. Elena Ianchovichina and Harun Onder, 22, 2017, https://reut.rs/2C5sq87. “Dutch disease: An economic illness easy to 18. Sara Khoja and Ahmed Almazed, catch, difficult to cure,” Future Development “KSA: New Fees Applicable for Foreign (blog), Brookings Institution, October 31, 2017, Employees and Dependents,” Insight and https://brook.gs/2NE74Aa. Knowledge (blog), Clyde & Co., January 10, 32. Melani Cammett and Ishac Diwan, 2018, http://bit.ly/2orHGCJ. “The Roll-Back of the State and the Rise 19. Aarti Nagraj, “Saudi’s expat of Crony Capitalism,” in The Middle East dependent fee: Everything you need to Economies in Times of Transition, eds. know,” Gulf Business, July 6, 2017, http://bit. I. Diwan and A. Galal (London: Palgrave ly/2PWdEnd. Macmillan, 2016). 20. Chang Lin Zhu, “Expats leaving 33. Sharifa Alshalfan, The right to Saudi must pay new ‘family tax’ up front,” housing in Kuwait: An urban injustice in International Adviser, July 5, 2017, http://bit. a socially just system (London: Kuwait ly/2MIGRUA. Programme on Development, Governance 21. “2018 Saudi Arabia Fiscal Budget,” and Globalisation in the Gulf States, London Jadwa, retrieved July 10, 2018, http://bit. School of Economics and Political Science, ly/2PTMLA3. 2013), http://bit.ly/2wxHeqK. 34. “How 22. Marwa Rashad, Tom Arnold, and will Saudi Arabia distribute its financial Saeed Azhar, “Jump in Islamic tax liabilities support to its citizens?” Al Arabiya English, worries Saudi banks,” Reuters, February 22, December 22, 2016, http://bit.ly/2N3oLfi. 2018, https://reut.rs/2C3hJTG. 7 RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 09.06.18

35. “Saudi royal handouts to cost about APPENDIX $13 billion: Minister,” Reuters, January 7, 2018, https://reut.rs/2wwXcS7. For an overview of subsidy and tax 36. “Beyond affordability: Public housing implementation reforms in the GCC, and community development in the GCC,” please see https://bit.ly/2NcklDW. Strategy&, October 21, 2014. https://pwc. This issue brief is part to/2PpGQSu. of a two-year research 37. Rethinking Arab Employment: A project on pluralism in Systemic Approach for Resource-Endowed the Middle East after Economies (Geneva, Switzerland: World Economic Forum, 2014), http://bit. the Arab uprisings. ly/2BZOJMt. The project is generously supported by a grant AUTHOR from the Carnegie Corporation of New York. Karen E. Young, Ph.D., is a resident scholar at the American Enterprise Institute. She teaches courses in on politics and economics of the Middle East at George Washington University and at the Johns Hopkins University School of Advanced International Studies. Her research focuses See more issue briefs at: on the political economy of the Gulf states www.bakerinstitute.org/issue-briefs and emerging markets.

This publication was written by a researcher (or researchers) who participated in a Baker Institute project. Wherever feasible, this research is reviewed by outside experts before it is released. However, the views expressed herein are those of the individual author(s), and do not necessarily represent the views of Rice University’s Baker Institute for Public Policy.

© 2018 Rice University’s Baker Institute for Public Policy

This material may be quoted or reproduced without prior permission, provided appropriate credit is given to the author and Rice University’s Baker Institute for Public Policy.

Cover image credit: Fahad Shadeed/Reuters

Cite as: Young, Karen. 2018. Confronting the Governance Crisis in the Middle East and North Africa: Toward Establishing Inclusive and Pluralistic States Post- Arab Spring. Issue brief no. 09.06.18. Rice University’s Baker Institute for Public Policy, Houston, Texas.

8 CONFRONTING THE GOVERNANCE CRISIS IN THE MIDDLE EAST AND NORTH AFRICA — APPENDIX 1

Appendix 1

SUBSIDY REFORM AND TAX IMPLEMENTATION

Country VAT Excise Taxes Other reforms

• Subsidies lifted on petrol (2018): Petrol prices increased by 12-25% (plan currently on hold) • Increase in fees for the Electricity and Water Authority, sand mining, and hotel services, as well as cost recovery on municipalities, and 3-5% (plans “Sin tax” on tobacco, new fees on sand extractions (2016) for mid-2018, Bahrain energy, and soft drinks • Lifting of housing utilities subsidies approved (2016) delayed from (2017) • New fees on alcohol and tobacco (2016) January 2018) • Meat subsidy cash compensation initiative launched; the amount of the subsidy determined by Ministry of Social Development, based on residents’ eligibility (2015) • Meat subsidies lifted; beef & chicken prices doubled (2015)

• 10% business tax on companies’ annual profits and on profits Legislation proposed to greater than 50,000 Kuwaiti dinars (US$64,500) by other entities enact excise taxes on (2016) Kuwait 5% (2018/19) tobacco, energy, and • Work-permit fee raised from KWD 2 (US$6.60) to KWD 50 (US$165), soft drinks (2017) while renewal fees increased from KWD 2 (US$6.60) to KWD 10 (US$33) (2016)

• Price cap for M91-grade fuel lifted (2017); low-income Omanis earning less than OMR 600 (US$1,557) per month to receive a subsidized rate of 180 baisa (US$0.47) per liter on the first 200 liters of petrol purchased via a cash transfer payout to fuel subsidy cards issued by the National Subsidy System • Introduction of 3% income tax for certain small taxpayers (2017) Plans to introduce Oman 5% (2019) • Training tax and municipal tax on rents enacted (2016) excise taxes (2017) • Fees for outbound travelers approved (2016) • Fuel subsidies cut by OMR 500 million (US$1.3 million); electricity subsidies cut by OMR 108 million (US$280 million); food subsidies cut by OMR 3 million (US$7.79 million); and water subsidies increased by 3% • Increase in civil aviation fees and other fees (2015)

• Introduction of pricing mechanism to regularly revise fuel prices (2016); prices increased by 10 QAR per liter in 2017 and by 5 QAR per Introduction of liter in 2018 “sin tax” on tobacco, • Gasoline price increase by 30%, fines for wasting water are doubled, Qatar 5% (delayed) energy, and soft drinks and the costs of postal services increase (2016) delayed (2017) • State-owned enterprises instructed to reduce programming and lay off expats (2016) • Water and electricity tariffs increase (2016)

1 RICE UNIVERSITY'S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 09.06.18

Country VAT Excise Taxes Other reforms

• Saudi economic cities to charge 1% sales fee, plus transaction fee, and mortgage registration fee (February 2018) • Allocation of monthly stipends to public and military employees to offset the VAT and increase in energy prices (January 2018) • The Citizen’s Accounts Programme is established for low- to mid- income families. Eligibility determined after online registration with Ministry of Labor and Social Development (2017) • US$19 billion stimulus package introduced (December 2017) • Introduction of expat levy on private sector companies that employ foreign labor as part of Saudi’s nationalization drive (December 2018) “Sin tax” on tobacco, • Plan to phase out fuel subsidies announced Saudi Arabia 5% (2018) energy, and soft drinks (2017–delayed). (2017) • Introduction of white land taxes (March 2017). • Expats required to pay “family tax” up front when leaving Saudi Arabia (2017). • Monthly employment tax on foreign laborers and dependents (2017) • Aramco’s tax rate is reduced from 85% to 50% to attract investors for its planned IPO (2017) • Corporate tax rate set at 20%; Zakat tax rate of 2.5%; National Gas Investment Tax set at 30% (based on initial rate of return), with a progressive increase up to 85%. Income from oil and hydrocarbons production taxed at 50-85%, effective January 2017 • Private health care and education exempted from the VAT (2017)

• Monthly revision of fuel prices enacted since 2015. Latest increase: December 2017 (excluding January 2018, when prices increased by 5% rise due to the VAT) • VAT revenue distribution plan introduced in seven emirates (2018) • Abu Dhabi water and electricity tariffs raised; minimal increase for citizens, higher rate for expatriates (2017) • Introduction of a 3% municipal fee on expat property rental in Abu Dhabi (2016) “Sin tax” on tobacco, • Airport departure fee enacted in Dubai, Sharjah, and Abu UAE 5% (2018) energy, and soft drinks Dhabi (2016) (2017) • Increase in government fees for intellectual property rights registrations, including trademarks, patents, copyrights, and designs (2015) • Fees on alcohol and tobacco launched (2015) • Fuel subsidies cut (2015) • Schools, medicine and medical equipment, and 20 FZs exempted from the VAT. The VAT is made refundable for tourists visiting from outside GCC (2017).

SOURCE Author’s elaboration

The issue brief “Confronting the Governance Crisis in the Middle East and North Africa: Toward Establishing Inclusive and Pluralistic States Post-Arab Spring” written by Karen Young, is part of a two-year research project on pluralism in the Middle East after the Arab uprisings. The project is generously supported by a grant from the Carnegie Corporation of New York.

For the full brief, please visit https://bit.ly/2x5D0a7.

2 ISSUE BRIEF 08.30.18 Can State-led Entrepreneurship lead to Sustainable Economic Diversification and Development in GCC States?

M. Evren Tok, Ph.D., Hamad Bin Khalifa University

Gulf Cooperation Council (GCC) states are state-led enterprises and the development of currently seeking alternative trajectories of small- and medium-sized enterprises (SMEs). economic development that can maintain It is especially fundamental to set in place the political status quo but simultaneously appropriate and robust legal, financial, and enhance their global economic competitive- regulatory frameworks to allow this process ness. Yet GCC economies have reported a to produce the benefits expected. sharp slowdown since 2016. Their average growth rate fell from 3.1% in 2015 to 2.2% in 2016 and 2.1% in 2017 (World Bank 2017a). THE PRIVATE SECTOR AND STATE-LED This trend suggests that, despite cuts in ENTREPRENEURSHIP IN THE GCC public sector spending and other austerity Within the GCC member states, the line measures, GCC economies remain heavily between the public and private sectors is influenced by oil price trends. blurry, in part due to overlapping ownership Despite a modest recovery in 2017, structures that involve public sector officials especially in the United Arab Emirates (UAE), and members of ruling families supposedly Kuwait, and Qatar, but less so in Oman acting “in a private capacity.” Likewise, a and Bahrain,1 GCC countries are still paying sizable portion of private-sector demand the price of economic overdependence on is driven by the state, and by the public Policies supporting hydrocarbons, with all the long-term risks sector more generally; hence, when there that this set of policy choices implies. GCC sustainable growth are state-driven austerity cutbacks (as in states have, however, engaged heavily in aim to deliver Saudi Arabia since 2014), the private sector diversification efforts, albeit with differing also contracts. Thus, while the private sector concurrent and levels of success. plays a critical role in the Gulf, it is heavily long-term positive By promoting entrepreneurship and regulated by the state. raising homegrown entrepreneurs, policies impacts on human Nevertheless, more recently a “new” supporting sustainable growth aim to development, has emerged in the Gulf deliver concurrent and long-term positive sustainable prosperity, “in which the state has been an activist impacts on human development, sustainable and ambitious actor keen to engage and development prosperity, and development of the public economically with the outside world. of the public and and private sectors to ensure that GCC […] Most of these states set strategic economies can weather external and internal private sectors. goals and visions rather than seek to economic shocks. Despite divergent views centrally plan or manage the economy; in academic literature, there is a strong link favor tertiary economic sectors and late- between entrepreneurship and economic late-development concepts above heavy development (Toma et al. 2014). The various industrialization; and set in place the stakeholders involved must find the right mechanisms for investment attraction balance between the traditional role of RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 08.30.18

and export-led economic growth, rather employment (Nasr & Pearce 2012). Despite than pursue import-substitution policies” a growing policy focus on SMEs in GCC (Gray 2011, 32). This trend in the Gulf is in countries, Saudi Arabia and Qatar being the line with contemporary economic policies most important cases, government policies pursued in the African continent: green still primarily cater to large companies. industrialization, trade facilitation, internal Therefore, entrepreneurs who may benefit resource mobilization, and investment from policies that facilitate SME creation facilitation. may face difficulties expanding and State-led Contemporary Gulf state capitalism scaling up their ventures. Entrepreneurs entrepreneurship, is nevertheless made possible by the fact contend with capacity issues and a lack of therefore, historically that major private firms are state-initiated business training and acumen, as well as created a comfort enterprises (e.g., in the UAE and Qatar), challenges in marketing their products and meaning that the private sector’s relative finding partners to expand their activities. zone for the private autonomy is limited, economically and Additionally, the lack of robust legal and sector, particularly in politically. State-led entrepreneurship, regulatory frameworks, the need to revise strategic sectors. therefore, historically created a comfort bankruptcy laws (which began in the UAE zone for the private sector, particularly and later in Saudi Arabia) to reduce the cost in strategic sectors. This certainly serves of taking risks, and a need to level a playing political goals but also guarantees state field that is presently stacked in favor of support to private-sector development, large enterprises by reserving a proportion ensuring that needed policies and of state contracts for SMEs are among other capacities are provided by the state: “Public issues new entrepreneurs face in the Gulf. leaders (representing governmental bodies) State-led entrepreneurship refers including the elected representatives, to the active role of a developmental professional and private sector work state (Abdullah and Muhammad cohesively and on several interrelated 2008) in supporting entrepreneurship principles to form an ecosystem for creation, especially but not only through entrepreneurship growth” (Khan 2013, 30). policymaking. Policy gaps in other sectors This is the case in Saudi Arabia, where such as regional markets, land ownership, Improving the the government has actively assisted property registrations, and construction ecosystem for private-sector actors with financing and permitting also constitute supplementary other support services (Khan 2013). The difficulties for entrepreneurs (Momani entrepreneurs is government has already established 2017). Improving the ecosystem for necessary because financial institutions and mechanisms entrepreneurs is necessary because homegrown dedicated to entrepreneurs, providing them homegrown entrepreneurship is critical entrepreneurship with financial research and consultancy in GCC states; it carries major implications is critical in GCC services. Governmental initiatives include for human and social development and for research institutions supporting the policy sustainable prosperity through employment states; it carries major domain, such as the King Abdulaziz City for creation and inclusive economic growth. implications for human Science and Technology (KACST) and the In states like Qatar and the UAE, where and social development King Abdullah University of Science and expatriates form the bulk of the population, and for sustainable Technology (KAUST). Although the Saudi homegrown entrepreneurship cannot Arabian government is currently focusing be limited to nationals. However, such prosperity through on SME creation, state-owned companies efforts focus on residents more generally, employment creation are still important in Saudi Arabia, and their emphasizing that solutions and choices and inclusive ongoing privatization strategy entails tough must be local while giving priority to economic growth. political choices (Onour 2012). national needs and preferences. Overall in the Arab world, large enterprises (100 or more employees) account for 10-20% on average of all firms and provide 60-80% of private-sector

2 CAN STATE-LED ENTREPRENEURSHIP LEAD TO SUSTAINABLE ECONOMIC DIVERSIFICATION AND DEVELOPMENT IN GCC STATES?

The following are policy recommendations CONCLUSIONS AND POLICY to facilitate a path forward in Gulf regimes’ RECOMMENDATIONS: LIMITS AND efforts to navigate their sometimes CHALLENGES divergent economic and political constraints: Proactive government efforts to sustain • Governments need to develop and encourage entrepreneurship in the GCC policies to ensure that the state-led currently focus on economic diversification entrepreneurship model remains and joint initiatives between the public relevant in a changing economic context and private sectors in the Gulf region. and encourages innovation. State- This creates a peculiar entrepreneurship led entrepreneurship is rooted in the ecosystem in GCC countries. Public and mechanisms and history of Gulf states. private-sector stakeholders work together Adapting this model to the contemporary to develop entrepreneurship as a key and changing needs of the region is tool and strategy to diversify economies imperative in order to sustain stability away from an overreliance on extractive within a framework of reform. resources and instead transform them • Meaningful and sizable economic Public and private- toward knowledge-driven economies. change in the Gulf will be driven on While state-led entrepreneurship policies the backs of SMEs, especially green sector stakeholders have worked to achieve many positive and social enterprises and startups, work together outcomes, they have also revealed some as it has elsewhere in the world. The to develop major shortcomings. The principal limitation recent emphasis on SME development entrepreneurship of this strategy is that because the state via new policies and measures is a as a key tool and remains the core actor in all entrepreneurship step in the right direction, but this has strategies, such policies also happen to to be complemented by building the strategy to diversify ensure regime security. This perpetrates the required capacities for entrepreneurs, economies away from current political status quo and prevents especially but not only through ad hoc an overreliance on the possibility of a genuine political change entrepreneurship education curricula. toward democratization in these countries. extractive resources • Of particular policy significance is In some cases, there is stark contrast and instead transform the intersection of the state-led between the discourse used by public them toward entrepreneurship model and the focus on officials in the international arena and the SMEs. These enterprises need a larger and knowledge-driven actions undertaken at home. This particularly more complex entrepreneurial ecosystem has been the case in Saudi Arabia, where economies. in order to develop. These two policy initial measures to cut back waste and areas are complementary and can drive inefficiencies have been reversed by the state. economic transformation, yield sizable Although the reality is far from ideal social effects, and improve employment, and the challenges to achieving economic which remains a critical problem in Gulf goals are still sizable, GCC states have to aim countries. For this to happen, SMEs must at a balance between sustainable economic be encouraged and supported, notably by diversification through entrepreneurship reserving specific domains or contracts development (especially innovative and to such enterprises. green entrepreneurship) and political stability. Despite the limitations of rentier • Gulf countries should develop mechanisms political systems, a rapid and radical political to share their experiences and successful change would be negative and possibly policy implementations (e.g., bankruptcy dramatic in the Gulf region. Hence, the laws). Such sharing could facilitate political milieu and the business environment adoption of best practices in the MENA have to engage in a gradual process of region, ultimately leading to improved mutual transformation. Real change may be economic performance. slow and thus frustrating at the societal level, yet a gradual approach could at least ensure better and longer term results. 3 RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 08.30.18

Khan, M.R. 2013. “Mapping entrepreneurship ENDNOTE ecosystem in Saudi Arabia,” World Journal 1. Babu Das Augustine, “GCC economies of Entrepreneurship, Management, and expected to post modest recovery in Sustainable Development 9 (1): 28-54. 2017,” Gulf News, February 5, 2017, https:// Magrin, G. 2013. Voyage en Afrique rentière. gulfnews.com/business/economy/gcc- Une lecture géographique des trajectoires economies-expected-to-post-modest- de développement. Paris: Publications de recovery-in-2017-1.1973397. la Sorbonne. Momani, B. 2017. Entrepreneurship: An REFERENCES Engine for Job Creation and Inclusive Growth in the Arab World. Doha: Abdullah, S. and A. Muhammad. 2008. “The Brookings Institution. development of entrepreneurship Nasr, S. and D. Pearce. 2012. SMEs for job in Malaysia: State-led initiatives.” creation in the Arab worled: SMEs access Asian Journal of Technology Innovation, to financial services. Washington, D.C.: 16 (1): 101-116. World Bank. D’Alessandro, C. 2016. Economic Onour, Ibrahim. 2012. “Implementing Diversification in Africa: What Can Gulf Privatization Strategy of Saudi Arabia: States Learn from African Countries? Issues and Challenges.” SSRN Electronic Ontario: University of Ottawa, Centre on Journal, DOI: 10.2139/ssrn.2189804. Governance Research Paper Series, 2. Qatar Development Bank. 2016. 2016 Global Ennis, C.A. 2015. “Between Trend and Entrepreneurship Monitor Qatar Report. Necessity: Top-Down Entrepreneurship Doha: Qatar Development Bank. Promotion in Oman and Qatar.” The Muslim World 105 (January): 116-138. Toma, S.G., A.M. Grigore, and P. Marinescu. 2014. “Economic Development and General Secretariat for Development Planning. Entrepreneurship.” Procedia Economics 2008. Qatar National Vision 2030. Doha: and Finance 8: 436-443. General Secretariat for Development Planning. Tok, E., L. Alkhater., and L.A. Pal. 2016. “Policy-Making in a Transformative State: Gray, M. 2011. “A Theory of ‘Late Rentierism’ The Case of Qatar.” In Policy-Making in a in the Arab States of the Gulf.” Doha: Transformative State: The Case of Qatar, Georgetown University School of Foreign edited by E. Tok, L. Alkhater, and L.A. Pal, Service in Qatar, Occasional Paper No. 1-36. London: Palgrave. 7 of the Center for International and Regional Studies. Van Eeghen, M., I.S. Gill, I.V. Izvorski, and D. De Rosa. 2014. Diversified development. Hammouda, H.B., S.N. Karingi, et al. 2006. Making the most of Natural Resources in “Diversification: Towards a new paradigm Eurasia. Washington, D.C.: World Bank. for Africa’s development.” Addis Ababa: UNECA, African Trade Policy Centre Work World Bank. 2016. MENA Economic Monitor. in Progress, No. 35. Washington, D.C.: World Bank. Havro, G. and J. Santiso. 2008. OECD World Bank. 2017a. GCC: Economic Outlook Policy Brief No. 37-To Benefit from 2017. Washington, D.C.: World Bank. Plenty: Lessons from Chile and Norway. World Bank. 2017b. Doing Business Report Paris: Organisation for Economic 2017. Washington, D.C.: World Bank. Co-operation and Development, World Economic Forum. 2016. The Global Revenue Watch Institute. Competitiveness Report 2016-2017. Geneva: World Economic Forum.

4 CAN STATE-LED ENTREPRENEURSHIP LEAD TO SUSTAINABLE ECONOMIC DIVERSIFICATION AND DEVELOPMENT IN GCC STATES?

ACKNOWLEDGEMENT

This publication was made possible in part by NPRP grant #10-1203-160007 from the Qatar National Research Fund (a member of Qatar Foundation). The findings expressed herein are those This issue brief is part of the author. of a two-year research project on pluralism in AUTHOR the Middle East after

M. Evren Tok, Ph.D., is an associate the Arab uprisings. professor in the College of Islamic Studies The project is generously at Hamad Bin Khalifa University. He is also supported by a grant assistant dean of Innovation and Community from the Carnegie Advancement, program coordinator for the Corporation of New York. Master of Islam and Global Affairs Program, and lead project investigator for “Localizing Entrepreneurship Education in Qatar,” a three-year research project funded by the National Research Priority Program at the Qatar National Research Fund.

See more issue briefs at: www.bakerinstitute.org/issue-briefs

This publication was written by a researcher (or researchers) who participated in a Baker Institute project. Wherever feasible, this research is reviewed by outside experts before it is released. However, the views expressed herein are those of the individual author(s), and do not necessarily represent the views of Rice University’s Baker Institute for Public Policy.

© 2018 Rice University’s Baker Institute for Public Policy

This material may be quoted or reproduced without prior permission, provided appropriate credit is given to the author and Rice University’s Baker Institute for Public Policy.

Cite as: Tok, M. Evren. 2018. Can State-led Entrepreneurship lead to Sustainable Economic Diversification and Development in GCC States? Issue brief no. 08.30.18. Rice University’s Baker Institute for Public Policy, Houston, Texas.

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ISSUE BRIEF 08.31.18 The National Fund for SME Development as a Vehicle of Economic Reform in Kuwait

Alanoud Al Sharekh, Ph.D., University of London

Kuwait’s economy has been stagnant over a prosperous private sector; this plan the past decade due to a combination also showed that “SME development of political instability, fluctuating oil [was] implicitly a major concern for the prices, and endemic corruption. To development of the country’s economy.”3 combat this situation, the parliament, Unfortunately, the plan failed to significantly ruling elites, and mercantile class have affect SME growth, though the need for attempted to develop a robust business change and greater economic opportunities sector through fundamental policy shifts became more urgent after the 2012 protests away from monopolies and toward the and youth violence in Kuwait.4 creation of small- and medium-sized In 2013, the National Fund for enterprises (SMEs). However, the three SME Development was launched as an groups disagree on how to accomplish independent public corporation with 2 their goals and frequently work at cross- billion Kuwaiti dinars (US$7 billion) in purposes. Kuwait’s economic problems capital and an execution partnership with are exacerbated by increases in public the World Bank.5 spending—which crowd out the private The National Fund for SMEs has four sector and have ensured a continuing components, according to Abdulaziz al reliance on the state as the employer of Loghani, the organization’s first vice first resort—as well as interwoven and chairman and executive director: The creation of redundant institutional responsibilities, the 1. Government assistance through start-up small- and medium- 1 newspaper alRai has written. capital and restructured regulations. sized enterprises (SMEs) Efforts to focus on SME growth date to in Kuwait is seen as at least 2010, when the Supreme Council for 2. Educational interventions designed to help Planning and Development presented the students “embrace an entrepreneurial a way to create an government’s goals in the Strategic Vision of mindset through extracurricular and independent private 6 Kuwait 2035. This plan encouraged private curricular activities.” sector by allowing sector success independent of government 3. A venture-friendly legal framework smaller players into oil rents,2 and diversified private sector that seeks to remove impediments to wealth away from the nontradables fueling SME growth.7 the market. asset inflation. The creation of SMEs was 4. An attitude shift toward an understanding seen as a way to create an independent that “a merchant in our day and age also private sector by allowing smaller players tackles problems in the community and into the market. makes people’s lives more efficient.” In a separate initiative introduced in The Fund sought to spur public 2010, the National Assembly approved a awareness and embrace of the concept midterm development plan intended to of entrepreneurship.8 improve government efforts to promote RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 08.31.18

This national strategy identified areas Assembly committee that aimed to improve of initial government interest for SME business conditions conducive to SME investment and key performance indicators development and entrepreneurial growth to monitor and evaluate business growth.9 in Kuwait. Applicants were required to be over 21 years of age and employed by Kuwaiti- owned SMEs “directly contributing to the IMPLEMENTATION ISSUES development and diversification of the Despite efforts to boost their growth, SMEs national economy […] and creating job account for only 3% of Kuwait’s GDP and opportunities for Kuwaiti nationals.”10 The employ 23% of the workforce.19 A 2017 subsequent three-year wait for a loan from World Bank report ranked Kuwait 102nd the fund highlighted the ongoing legislative globally for ease of doing business (the and executive stalemate rooted in the lowest in the GCC), down from 98th in conflicting political and reform agendas 3% 2016, and 173rd (down from 149th in 2016) of the mercantile and ruling elites and for ease of starting a business.20 Starting parliament factions. Despite efforts to boost a business in Kuwait takes approximately The first annual report for the National their growth, SMEs account 12 separate procedures and 62 days, costs Fund for SME Development concluded that for only 3% of Kuwait’s 2.8% of income per capita, and requires a lack of technical and financial support GDP and employ 23% a mandatory paid-in minimum capital of and mentorship were the main obstacles to of the workforce. 10.2% of income per capita. success.11 The organization could not provide In a 2014 World Bank survey, 502 such support due to its hasty launch and Kuwait-based SMEs cited business the conflicting agendas of decision-makers. licensing and permit requirements as the Structural issues such as delays in guiding main hindrance to growth while “labor SME-related matters through the Ministry regulations, regulatory uncertainty, and of Commerce and Industry also presented administrative corruption” were among the problems. A general atmosphere of public other major obstacles. Twenty-four percent mistrust in the organization exacerbated the of respondents felt that the lack of an situation,12 which the treasurer of Kuwait’s “adequately” educated workforce with the Economic Society Muhannad al Sanea13 and required skill set and training was another Al Loghani14 himself observed. barrier to growth.21 As a result, the original board To address some of these issues, the was replaced in 2016 and a slew of government formed a Business Reform new entrepreneurship development Committee in 2015 to improve and facilitate programs were implemented with General business conditions in Kuwait; 11 public Electric and other partners.15 However, entities participated. The committee political conflicts underlying the board successfully ushered in some improvements appointments emerged as Kuwait’s and new legislation. One particular area of governing bodies disagreed on the best success involved funding for new projects. ways to utilize the program to include According to the National Fund’s 2015- the least privileged Kuwaitis. This conflict 2016 annual report,22 only 59 projects had represented what the deputy minister received funding since 2013; by comparison, for youth affairs described as a lack of the 2016-2017 annual report shows that “coordination, unification, combination an additional 245 programs have been of efforts, or accountability.”16 Young approved, bringing the total to 304.23 MPs seeking to explain why the National However, there are greater structural Fund for SME Development had failed to impediments to SME growth that may not yield significant financial support for SMEs be resolved by a committee memorandum uncovered major difficulties in securing or new legislation alone. In 2016, Kuwait administrative support17 from government issued an economic reform bill that focused bodies18; attempts were made to tackle on increasing the number of privately owned these problems through a National businesses and public-private partnerships 2 THE NATIONAL FUND FOR SME DEVELOPMENT AS A VEHICLE OF ECONOMIC REFORM IN KUWAIT

as the best ways to deal with a growing next two decades,28 there clearly needs budget deficit and falling oil prices. Out of to be a major shift in Kuwait’s private six goals listed,24 the bill identified three sector away from monopolies controlled key changes to improve Kuwait’s economy: by elites and toward greater competition. privatization of government services to The creation of independent wealth in a further partnerships with the private sector, largely state-controlled system requires a robust anti-monopoly legislation to allow fundamental shift in fiscal policy.29 competition, and the creation of a business- There is also a wider issue that friendly environment. However, the economic underpins Kuwait’s economic stagnation. bill was frozen less than a year after its Despite enormous wealth in the GCC introduction due to disagreements between private sector that surpasses $2 trillion, it political factions; as a result, the minister of is predominantly concentrated in a small finance was asked to review the bill.25 group of powerful family businesses.30 As a The fate of the National Fund for SME result, the reforms in Kuwait directly conflict Development is similarly tied to shifting with elite family interests. Political power economic visions for Kuwait. So far, the in Kuwait, as in the rest of the GCC, is “a Fund has been overhauled twice and balancing act of keeping citizens acquiescent its governing body is to be completely while catering to the economic demands of restructured as ordered by Kuwait’s Cabinet powerful families whose continued support in May 2018. The fate of the National Fund is critical to regime survival.31 for SME Development is similarly tied to Familial relationships continue to shifting economic visions for Kuwait. So underpin sensitive political positions. For far, the Fund has been overhauled twice example, National Assembly Speaker and its governing body is to be completely Marzouq al Ghanim’s father has headed While the initiatives restructured as ordered by Kuwait’s Cabinet the country’s Chamber of Commerce described here offered 26 in May 2018. While the National Fund for the past 20 years, and this is not an plans and executable and other initiatives described here offered isolated case. The situation suggests plans and executable frameworks designed that maintaining a familial and economic frameworks [to improve to inject new life into Kuwait’s economy, advantage takes priority over reforms with Kuwait’s economy], it is clear that at present no single body or real impact. Reform efforts usually turn it is clear that no political or economic group involved has into “politically backed glamour projects single body or political the ability to effectively implement them. and cosmetic initiatives that are passed In order to surmount the conflicts between off as sweeping changes.”32 For instance, or economic group political agendas and economic interests, when the current minister of commerce involved has the the Fund must have much more autonomy. and industry decided to replace the National ability to effectively Unfortunately, it seems that it has become Fund for SME Development board in 2016, implement them. further entwined with government he installed what one observer described figureheads through the latest reshuffling as “members of one social gathering of the board. (diwaniya)”33 without using a transparent hiring process. It is clear that when the government is POLICY IMPLICATIONS involved with entrepreneurial organizations and the attempted growth of SMEs, there is The World Bank has partnered with the a lack of consensus regarding funding and National Fund for SME Development during operations. There are also the persistent three of the initial implementation phases. problems of weak educational systems It has also collaborated on five main issue that fail to adequately equip students with areas. The most challenging of these the skills needed to thrive in a modern areas has been “developing a culture of labor market and an overreliance on entrepreneurship” in Kuwait.27 In order to government jobs. Such issues cannot be meet the goal of establishing a private sector remedied by Kuwait’s many start-up and that “[plays] a leading role in creating jobs entrepreneurial development programs.34 for the next generation of Kuwaitis” in the 3 RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 08.31.18

In sum, to implement meaningful reforms 3. Ernest Koch, Challenges to SME and the creation of a climate hospitable to Development in Kuwait, UNDP Kuwait, SME growth, Kuwait must institute policy November 2011, https://info.undp.org/ changes that address the legislative and docs/pdc/Documents/KWT/SME%20 educational impediments to growth. Challenges%20Final%20Report%20 The National Fund for SME Development KUWAIT%20Nov%2011.pdf. aims to help create productive jobs for 4.Alanoud Al Sharekh, “Unprecedented Kuwaiti professionals, increase private Protest in Kuwait,” IISS Voices, October participation in the economy, and diversify 25, 2012, http://www.iiss.org/en/iiss%20 sources of economic growth. To reach these voices/blogsections/2012-6d11/october- goals, the country must move away from 2012-9f2f/protest-in-kuwait-e38c. an oil-centered, nepotistic environment and 5. Building Kuwait’s Future, One Small There needs to be a toward a profitable economic environment Enterprise at a Time, World Bank, March 1, driven by real market conditions. The 2016, http://www.worldbank.org/en/news/ major shift in Kuwait’s lessons learned from creating SMEs in feature/2016/03/01/building-kuwait- private sector away Kuwait must be applied by a single, cohesive future-one-small-enterprise-at-a-time. from monopolies body capable of practicing transparent 6. Sushmitha Pidatala,“Backstage controlled by elites decision-making, financial management, with the Kuwait National Fund for SME and toward greater and regulation. This must be coupled with Development,” Arabnet, May 5, 2015, methods to ensure that an inclusive and http://news.arabnet.me/backstage-with- competition. The creative pool of applicants can access the-kuwait-national-fund-for-sme- creation of independent funding and are empowered to overturn development/. wealth in a largely the status quo and enable true economic 7. World Bank, Doing Business state-controlled system diversification. Such a scenario will only 2017: Equal Opportunity for All Kuwait become feasible if the country overhauls its Report, Washington, D.C., http://www. requires a fundamental education system to better align job skills doingbusiness.org/reports/global-reports/~/ shift in fiscal policy. with the needs of a modern labor market, media/WBG/DoingBusiness/documents/ and removes the structural obstacles to profiles/country/KWT.pdf. market entry for young entrepreneurs. 8. Pidatala,“Backstage with the Kuwait.” Kuwait is capable of producing successful 9. National Fund for SME Development, SMEs. For instance, Boutiqaat,35 an online Annual Report for the Financial Year retailer run by a young Kuwaiti company, 2014/2015, Kuwait, https://bit.ly/2N02SNV. claims to be the largest site for cosmetics, 10. Annual Report for the Financial Year skin care products, and perfumes in the 2014/2015. Middle East.36 11. Annual Report for the Financial Year 2014/2015. 12. “Khaleeji citizens accept fees and ENDNOTES taxes while Kuwaitis refuses them,” alQabas, 1. “Recommendations to Dissolve the April 5, 2017, https://alqabas.com/378966/. Ministries of Youth Affairs, Public Affairs and 13. Interview with Muhannad al Sanae at Transportation,” alRai, March 25, 2017, Al-Reyada Investment Offices, May 4, 2017. http://www.alraimedia.com/ar/article/ 14. Interview with Abdulaziz al Loghani, omma/2017/03/25/754485/nr/kuwait. National Fund for SME Development 2. Khalid al Khater, “The Challenges headquarters, April 13, 2017. of the Oil Prices Collapse and Economic 15. Mena Herald, “Kuwait National Diversification in the GCC Countries,” Fund Supports SMEs to Develop the Digital Cooperation Council for the Arab States of Industrial Ecosystem with GE’s Predix the Gulf: Socio-Economic Challenges, Arab Platform,” January 24, 2018, https://www. Center for Research and Policy Studies, 2016, menaherald.com/en/economy/energy/ 464-534. kuwait-national-fund-supports-smes- develop-digital-industrial-ecosystem- ge’s-predix.

4 THE NATIONAL FUND FOR SME DEVELOPMENT AS A VEHICLE OF ECONOMIC REFORM IN KUWAIT

16. Comments made at a National 34. “Workers paid to do nothing; a ghost Assembly town hall meeting on May 2, 2017. army that haunts gulf rulers,” Bloomberg, 17. Interview with Noha al Mansour at June 20, 2018, https://www.bloomberg. Al-Reyada Investment Offices, May 4, 2017. com/news/articles/2018-06-20/workers- 18. Eid alRashidi, “The performance paid-to-do-nothing-a-ghost-army-that- of the National Fund for SME Development haunts-gulf-rulers. disappoints entrepreneurs,” alQabas, June 4, 35. May Farhan, “Boutiqaat: Creating a This issue brief is part 2017, http://alqabas.com/402907/. Social Commerce Market in the Gulf,” Arab 19. Building Kuwait’s Future, One Small Gulf States Institute in Washington Blog, of a two-year research Enterprise at a Time, World Bank, March 1, February 5, 2018, http://www.agsiw.org/ project on pluralism in 2016, http://www.worldbank.org/en/news/ boutiqaat-creating-social-commerce- the Middle East after feature/2016/03/01/building-kuwait- market-gulf/. the Arab uprisings. future-one-small-enterprise-at-a-time. 36. “About Us,” Boutiqaat, http://www. The project is generously 20. World Bank, Doing Business 2017. boutiqaat.com/about-us. 21. Building Kuwait’s Future, 2016. supported by a grant 22. National Fund for SME Development, from the Carnegie AUTHOR Annual Report for the Financial Year 2015/ Corporation of New York. 2016, Kuwait, https://bit.ly/2oibMs3. Alanoud Al Sharekh, Ph.D., is a research 23. National Fund for SME Development, associate at the London Middle East Institute Annual Report 2016/2017, Kuwait, https://bit. at the University of London. Her research ly/2wla5P6. focuses on sociopolitical, cultural, and 24. The 2016 economic reform security issues in the Arabian Gulf. She document can be viewed here (Arabic text): received her Ph.D. from the University http://alqabas.com/3416/. of London. 25. “Kuwait’s Economic Reform Bill Frozen,” The New Khaleeji, April 2, 2017, http://www.thenewkhalij.org/node/63782. See more issue briefs at: 26. “Al Rodan Chairman of National www.bakerinstitute.org/issue-briefs

Fund for SMEs,” al Qabas, May 19, 2018, This publication was written by a https://alqabas.com/538095/. researcher (or researchers) who 27. Building Kuwait’s Future, 2016. participated in a Baker Institute project. 28. Building Kuwait’s Future, 2016. Wherever feasible, this research is 29. Interview with Abdulaziz al Loghani, reviewed by outside experts before it is released. However, the views expressed April 13, 2017. herein are those of the individual 30. Rola Dashti, “The Private Sector author(s), and do not necessarily and Social Divide in the GCC,” Private Sector represent the views of Rice University’s Development in the Gulf States, Oxford Baker Institute for Public Policy. Gulf and Arabian Peninsula Studies Forum, Summer 2017, 20. © 2018 Rice University’s Baker Institute for Public Policy 31. Mark Neal, “Private Sector Development in the Gulf States; Overview,” This material may be quoted or Private Sector Development in the Gulf reproduced without prior permission, States, Oxford Gulf and Arabian Peninsula provided appropriate credit is given to Studies Forum, Summer 2017, 4. the author and Rice University’s Baker Institute for Public Policy. 32. Neal, “Private Sector Development,” 5. 33. Comment made during interviews Cite as: for this study by an NGO member who Al Sharekh, Alanoud. 2018. The wishes to remain anonymous. National Fund for SME Development as a Vehicle of Economic Reform in Kuwait. Issue brief no. 08.31.18. Rice University’s Baker Institute for Public Policy, Houston, Texas.

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ISSUE BRIEF 08.28.18 Aiding and Abetting: The GCC as Quiet Giants and Emerging Players in Aid and Overseas Development Assistance

Peter Salisbury, Chatham House; Arab Gulf States Institute

common language of aid and development INTRODUCTION is being employed, the objectives of the In the years since World War II, a small Gulf states are likely to be substantially club of donor nations has been seen—and different from the stated objectives of has regarded itself—as the most important officials in London or Washington DC, or player in humanitarian aid and development at the United Nations or World Bank. From assistance. These states have also been another perspective, the objectives of the seen as leaders in broader initiatives aimed Gulf states should be seen as little different at growing and diversifying the economies from those of the U.K. and U.S., which often of less developed countries. Now, a series deploy aid as a tool of foreign policy. This of interconnected trends are bringing a new brief provides an overview of the evolution group of donors from the Gulf Cooperation of aid and development resources by the Council (GCC) to prominence alongside GCC states over the past several decades the member states of the Organisation for and discusses the political context for their Economic Co-operation and Development emergence as donor nations. It also offers The emergence some broad observations on the risks (OECD), an association of wealthy countries of the GCC states in that describes itself as the “venue and voice” associated with an OECD withdrawal from for cutting-edge debates around aid and the Middle East and North Africa in favor of humanitarian aid has development. the Gulf states in the coming years. been welcomed by their The emergence of the GCC states, international partners, especially Qatar, Saudi Arabia, and THE GULF STATES AS EMERGING who hope that the the United Arab Emirates (UAE), in DONOR NATIONS Gulf states can help humanitarian aid has been welcomed by take on the burden their international partners, who hope A series of crises from Syria to Myanmar and that the Gulf states can help take on the beyond has put an almost unprecedented of reconstruction in burden of reconstruction in the Middle East strain on multilateral aid and development the Middle East and and North Africa. This enthusiasm should agencies like the UN and World Bank. At North Africa. be tempered by a clear understanding of the same time, budget deficits and growing the political drivers behind the GCC states’ nationalism have reduced many traditional interest in providing assistance. The donor nations’ spending abroad, and many approaches of Qatar, Saudi Arabia, and nations are now focused on spending that the UAE in particular should be seen in the benefits donors directly. For example, the context of long-term thinking and regional U.K. has become increasingly explicit in competition. Despite the fact that the saying that spending through its Department RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 08.28.18

for International Development must help foreign assistance from the Gulf states must bolster trade as well as improve lives also include a frank discussion of funding abroad. At the same time, several of the Gulf for religious and armed groups seen as states—namely Qatar, Saudi Arabia, and the detrimental to Western national security and UAE—have emerged as major donor nations foreign interests. in aid and development. Their increased visibility has coincided with foreign policies that are, to varying degrees, more visible RISKS OF GCC STATES IN FOREIGN AID and aggressive. A veteran aid worker who has been With their rapid development over employed by Western agencies, the UN, and the past several decades and lengthy a major Gulf state’s main aid organization experience working in underdeveloped describes Kuwait, Saudi Arabia, and the and fragile contexts, the GCC states should UAE in particular as “quiet giants” in Budget deficits and have a considerable store of institutional humanitarian aid and development.4 Kuwait growing nationalism knowledge with respect to development. has been described as an “inveterate” If broader transactional arguments for have reduced many donor,5 while Saudi Arabia has claimed foreign aid are to be believed, such as the traditional donor to have given away more than 4% of its U.K.’s Overseas Development Institute’s nations’ spending annual GDP as ODA in the past.6 The UAE and statement that “the national interest is Qatar have also become huge donors and abroad. now a guiding principle behind U.K. aid sponsors of economic development projects spending,”1 the GCC states should also have over the past two decades. been able to earn considerable soft power However, the countries mentioned abroad. But several open questions remain above have not been particularly transparent as to 1) whether the GCC states have about how their spending has been learned from experiences overseas and at deployed, and concerns have been raised home; 2) whether development assistance about the intermingling of aid and funding and other forms of foreign assistance for political and militant groups, such as have translated into either international those in Afghanistan and the Balkans. Since power or influence; 3) what strategic 9/11 however, the Gulf states have been agenda overseas development assistance under pressure to regulate their charitable (ODA) and other forms of assistance serve sectors and state-run projects abroad. for each of the GCC states beyond broad European officials still worry that Saudi conceptions of soft power; and 4) whether Arabia in particular counts funding for Western allies and partners conceive of aid Concerns have been proselytization of conservative Salafist Islam in the same way as the Gulf states. as “aid.”7 A Western official interviewed by raised about the In particular, it is unclear whether the author meanwhile worried that a new intermingling of aid and ODA, humanitarian aid, and other forms “hard transactionalism” was emerging in of financial assistance are seen as tools funding for political and Gulf aid, as the UAE and Saudi Arabia have for achieving long-term policy goals militant groups, such become more aggressive in their foreign as part of a “whole of government”2 as those in Afghanistan policy stances, have written off past failed approach to fragile contexts that involves attempts at generating soft power through and the Balkans. a more holistic approach to international ODA, and as competition with Qatar, Turkey, relations, or as short-term plays aimed and Iran has intensified. It can be argued at achieving limited goals that are often that this transactionalism already existed political in nature. This is a particularly among Western donors who saw aid as a pertinent question in the context of the way of combating extremism and pressuring current era of the “chaos state,”3 in which recipient countries into changing policies many states have fragmented internally they did not agree with. to the extent that they no longer exist In Yemen, for example, Saudi Arabia as unified entities in reality and require has crowded out other donors in its highly sophisticated, multipronged policy contributions to UN programming while responses. From a Western policymaking forcing UN aid agencies to work with the perspective, meanwhile, any discussion of 2 THE GCC AS QUIET GIANTS AND EMERGING PLAYERS IN AID AND OVERSEAS DEVELOPMENT ASSISTANCE

King Salman Humanitarian Aid and Relief leadership of President Donald Trump, the Center.8 Saudi Arabia has also threatened U.S. has become increasingly transparent to suspend all funding to the UN in response in its desire to link aid to political support to its placement on the UN’s list of state and its willingness to use the withdrawal of and nonstate actors who violate the rules of funding as a punitive measure. For example, war on protecting children.9 Saudi Arabia’s the U.S. cut funding for the UN Relief and Yemen Comprehensive Humanitarian Works Agency for Palestinian Refugees Operations plan has been described by (UNRWA) by half in response to Palestinian leading relief agencies as an attempt at criticisms of its decision to move its Israeli justifying a planned assault on a major embassy from Tel Aviv to Jerusalem.11 The Yemeni port, Hodeidah, which they fear U.K., meanwhile, has developed a clear could deepen what is already the world’s focus on prioritizing commercial ties to worst humanitarian crisis.10 The plan was foreign partners over humanitarian issues. jokingly described by a senior Western The Gulf states’ visibility in humanitarian official to the author as the “invade- aid could still come as a major benefit to Hodeidah humanitarian plan.” the Gulf countries if they are willing to engage with and learn from professional humanitarian organizations with deep CONCLUSIONS institutional experience, like the UN The Gulf states will Development Program or the U.K.’s The Gulf states of 2018 have extensive Department for International Development. use their increasing experience as donors and developers. They However, if the Gulf states continue on their weight in humanitarian are also experienced in using foreign aid as current course, the reputations of all states a tool of soft power in both relatively stable aid to achieve their involved could be damaged and mistrust in contexts and in fragile state contexts such political aims and quell humanitarian action could grow. as Afghanistan, Somalia, and Yemen. The criticisms over their GCC states are likely to become increasingly conduct in places influential donors very soon and will have POLICY RECOMMENDATIONS growing influence over how funds are like Yemen. dispersed in complex political environments • Develop and enhance the cooperation and like Yemen’s. Multilateral organizations collaboration between NGOs, multilateral like the UN and World Bank are already organizations (e.g., the World Bank and looking to the GCC states as important UN), and different countries, including the donor nations with a mix of expectation and Gulf states, to provide a comprehensive trepidation, particularly when reflecting on overview of programming and impact and their experiences in Yemen and other Middle share best practices and concerns. Eastern countries affected by conflict. • Consider mechanisms to limit the risk However, it remains unclear how of politicizing aid delivered by the UN reliable the GCC countries will be for major and ensure the political independence multilateral organizations. The reliability of of UN bodies (e.g., the Human Rights Saudi Arabia is especially questionable for Council), including through the creation these major organizations as well as for the of emergency funds to cover gaps when countries it has funded. What is clear is that program support is withdrawn. the Gulf states—Saudi Arabia and the UAE in particular—will use their increasing weight • Encourage the Gulf states to create in humanitarian aid to achieve their political internal, cross-government dialogues aims and quell criticisms over their conduct on lessons learned at home and abroad in places like Yemen. that could help improve domestic and Unfortunately, not only is this international policies on governance and transactional approach to humanitarian growth while sharing any past lessons and developmental aid unlikely to receive learned by OECD players. criticism, it may well become the norm for Western powers like the U.S. Under the 3 RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // ISSUE BRIEF // 08.28.18

10. “Yemen: Saudi ‘aid’ plan is war tactic,” ENDNOTES International Rescue Committee, February 1. Paddy Carter, Five ways to deliver UK 22, 2018, https://www.rescue.org/press- aid in the national economic interest (London: release/yemen-saudi-aid-plan-war-tactic. Overseas Development Institute, 2016), 11. “US cuts UNRWA funding by more This issue brief is part https://www.odi.org/sites/odi.org.uk/files/ than half,” Al Jazeera, January 17, 2018, of a two-year research resource-documents/10897.pdf. https://www.aljazeera.com/news/2018/01/ project on pluralism in 2. See Stewart Patrick and Kaysie Brown, cuts-unrwa-funding-180116193513823.html. the Middle East after Greater Than the Sum of Its Parts? Assessing “Whole of Government” Approaches to Fragile AUTHOR the Arab uprisings. States (Washington, DC: Center for Global The project is generously Development, 2007), https://www.cgdev. Peter Salisbury is a senior consulting fellow supported by a grant org/doc/weakstates/Fragile_States.pdf. at the Chatham House Middle East and North from the Carnegie 3. See Peter Salisbury, “Yemen: Africa Programme, and a non-resident Corporation of New York. National Chaos, Local Order” (London: fellow at the Arab Gulf States Institute in Chatham House, December 2017), Washington. Previously a journalist and https://www.chathamhouse.org/sites/files/ analyst writing on political economy issues chathamhouse/publications/research/2017- in the Middle East and North Africa, Salisbury 12-20-yemen-national-chaos-local-order- holds a master’s degree in international salisbury2.pdf. politics from the School of Oriental and 4. Author interview via Skype, African Studies at the University of London, November 2017. and a master’s degree in English and See more issue briefs at: 5. Hessah Alojayan, “Kuwait’s Economic Scottish literature from the University www.bakerinstitute.org/issue-briefs ‘Toolkit’: Foreign Aid & the Kuwait Investment of Edinburgh. Authority,” Middle East Centre (blog), The This publication was written by a London School of Economics and Political researcher (or researchers) who Science, November 13, 2015, http://blogs. participated in a Baker Institute project. lse.ac.uk/mec/2015/11/13/kuwaits- Wherever feasible, this research is reviewed by outside experts before it is economic-toolkit-foreign-aid-the-kuwait- released. However, the views expressed investment-authority/. herein are those of the individual 6. Literature produced by the Saudi author(s), and do not necessarily American Public Relations Affairs Committee represent the views of Rice University’s cites a figure of 3.7% of GDP between Baker Institute for Public Policy. 1975 and 2016. See: “Saudi Foreign Aid,” © 2018 Rice University’s Baker Institute Saudi American Public Relations Affairs for Public Policy Committee, 2016, https://www.saprac. org/uploads/2/4/0/6/24062436/_saudi_ This material may be quoted or foreign_aid.pdf. reproduced without prior permission, 7. Author interviews, March-April 2017. provided appropriate credit is given to the author and Rice University’s Baker 8. Samuel Oakford, “Saudi Arabia is Institute for Public Policy. Thwarting the Distribution of Emergency UN Aid in Yemen,” VICE News, June 26, 2015, Cover image credit: https://news.vice.com/article/exclusive- Ahmad al-Basha/AFP/Getty Images saudi-arabia-is-thwarting-the-

Cite as: distribution-of-emergency-un-aid-in- Salisbury, Peter. 2018. Aiding and yemen; author interviews 2015-present. Abetting: The GCC as Quiet Giants 9. Colum Lynch, “Confidential UN Report and Emerging Players in Aid and Accuses Saudi Coalition of Killing Hundreds of Overseas Development Assistance. Yemeni Kids,” Foreign Policy, August 16, 2017. Issue brief no. 08.28.18. Rice University’s Baker Institute for Public Policy, Houston, Texas.

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