1 Class Structure and Social Change in the Arab World Samih K. Farsoun The study of the class structure and dynamics of the Arab world is very diffi- cult, given the diversity of the region, and given the spotty and uneven charac- ter of relevant data. Difficult as it is to draw a picture of the contemporary class structure and dynamics of the Arab world, it seems an almost impossible task to attempt a projection a decade into the future. Perhaps the best approach is to sketch out a synoptic view of major developments of social structure and state, then attempt to draw out in terms of these changes the derivative class forma- tions and class dynamics. This in turn will enable us to make some commentary on the potential political directions internal to major Arab countries and in the region as a whole.1 Political Economy of the Arab World The Arab world—divided into relatively distinct regions, the Mashriq and the Maghrib—has experienced three broad phases in its modern political economy. In the Mashriq, the first phase was characterized by an integrated precapitalist economy under the Ottomans.2 The second was a period of European coloniza- tion which resulted in political, economic, and social fragmentation of the area. The third has been the post-World War II period of politically independent and Balkanized nation-states. Despite a period of radical political and economic nationalism during the 1960s, the Arab world in the 1970s and 1980s experi- enced accelerating integration into a new Western division of labor. This new division of labor is characterized by an international circulation of capital and labor. The oil-rich Mashriq countries export money capital along with oil and import labor power and vast varieties of commodities and consumer goods.3 While exporting money capital to the West, the oil-rich nations import labor power from the oil-poor Arab countries, thus integrating the Mashriq as a region into the new international division of labor. On the other hand, the Maghrib exports labor power to Europe and imports tourists/consumers from the north. The oil-poor Arab countries have become the Reprinted from Hi sham Sharabi, ed., The Next Arab Decade (Boulder: Westview Press, 1988), pp. 221-38. Reprinted by permission. Samih K. Farsoun is a professor of sociol- ogy at American University in Washington, D.C. 11 12 Samih K. Farsoun locus for the reproduction of major supplies of labor power for European and oil-rich Arab states. In this sense these Arab countries have emerged as labor reserves for the labor-hungry nations of Europe and the oil-rich states.4 Labor- exporting Arab countries import monetary remittances from expatriate labor.5 The size of worker remittances as a percentage of total exports reached 28 per- cent for Egypt, 43 percent for Morocco, 198 percent for Jordan, and 5,897 per- cent for Yemen.6 The process of accelerated integration into the new international division of labor has had its consequences for both the individual Arab countries and the region as a whole. The Arab Mashriq is undergoing its own division of labor in response to regional dynamics and the more powerful dynamics of its linkage to Western capital. Elements of Arab Mashriq regional integration are the already- noted movement of labor and commodities accompanied by the equally massive counterflow of monetary capital. In addition to remittances from individuals, the capital counterflow includes bilateral state-to-state aid, joint Arab institu- tional aid, joint Arab investment capital, and direct private investment. The flow of such massive amounts of capital has energized the economic expansion of oil-poor Arab countries. The whole Mashriq has become one "oil economy," as Roger Owen argues,7 while the Maghrib remains divided and unintegrated eco- nomically. Paradoxically, increasing Mashriq regional integration has been taking place simultaneously with the process of greater consolidation of individual Arab countries' national economies, yet this seemingly contradictory development is in large part due to the fact that the processes working for the greater integra- tion of the Arab Mashriq are weak by comparison to those integrating each of the Arab countries, individually, into the international division of labor. Accompanying the region's accelerated integration into the world economy, a decline in subsistence production and other transformations have taken place.8 Accordingly, massive occupational shifts from agricultural to industrial and ser- vice activities have occurred.9 The agricultural sector in the various Arab nations has been undergoing increasing transformation, which is leading to class changes in the rural areas. This is not only forcing people off the land, but is also creating new rural social relations. There is, thus, a massive exodus of surplus agricultural labor, in particular poor, unskilled, and young fanners or peasants, to the urban conglomerations and to the oil-rich states. Two specific aspects of these developments are noteworthy: one is the marginalization of Arab women from production in those areas where commercial agriculture has taken root, and the second is the proletarianization of the young male migrant. One other derivative feature is of long-term consquence. Infitah (economic liberalization) policies of oil-poor nations have led to a process of economic denationalization and the increasing reprivatization of the economy, which allows the growth of new entrepreneurs and a new bourgeoisie in both rural and urban areas. Class Structure and Social Change in the Arab World 13 However, the significance of the policies of infitah and reprivatizafion have dif- fered in different Arab states. For example, these two policies were instituted earliest (in the early 4970s) and most extensively by Anwar al-Sadat in Egypt. In Sudan, North Yemen, Syria, and Iran, they were introduced later, in lesser scope and differently. Algeria, since Boumedienne, has become the latest of the radical nationalist states to quietly undertake a version of such policies. While Sadat announced the introduction of these policies with much political fanfare coupled with an exaggerated promise of well-being for all Egyptians, the lead- ers of the latter states introduced "liberalization" quietly, usually under an ide- ological rubric of reform. Of course, in the oil-rich countries, accelerated inte- gration into the world economy produced a quantum leap of commercialization and the final destruction of the subsistence economy. In the oil-poor Arab countries, and also Iraq, the previously radical nation- alist regimes of the 1960s instituted extensive land reform which broke up the vast holdings of the feudal landlords and distributed some of the confiscated land to peasants and other small farmers. Their agrarian policy over the years created a new kulak class of landowners. This class, with the help of the state, increasingly rationalized its agricultural production and introduced scientific farming and rural wage labor in place of tenancy, sharecropping, and other pre- capitalist forms of relations of production. These developments stimulated fur- ther the rural-to-urban exodus. In oil-rich countries (but to a lesser extent in Libya than in the rest), .settlement of nomads with the help of enormous state subsidies is also creating a rural landowning bourgeoisie which in Saudi Arabia is using expatriate wage labor. Commercialization of agriculture in the Arab world has come to mean increasing dependency on state economic policy regarding infrastructure, financing, pricing, price supports, subsidies, and import policies concerning farm equipment, fertilizers, pesticides, warehousing, transport, and marketing. Thus, through the infitah policies of the 1970s, well-connected agrarian capital- ists have increasingly gained the advantage over others in a process which has begun a more intensive concentration and capitalization of the countryside and a deeper structural change there. While this analytical description is general, research is needed to delineate and analyze country-specific transformations. Arab industrial growth is very uneven10 and generally has a weak financial base, except of course in oil-related industries in oil-rich states. Arab state industrialization is highly differentiated in both the depth and the level of indus- trial and technical development.11 There seems to be a dual tendency of indus- trial centralization and concentration in oil-producing states and some decen- tralization and deconcentration in the labor-exporting oil-poor nations. Of course, Iraq and Algeria share aspects of both oil-poor and oil-rich states. Import substitution, textiles, and some high-technology and heavy industries are char- acteristic of the oil-poor states. The older industries, such as textile and steel (in 14 Samih K. Farsoun Egypt, for example), are stagnating. The new high-tech industries have not taken solid root, and the transition from old, declining industries to new ones is not taking place rapidly or smoothly. It is problematic socially, politically, and economically. In general, Arab industry has a weak competitive position both in the region and internationally (except, of course, for the extractive oil industry—but not for petrochemicals). This weakness, as well as the particular structure of the regional and individual state industries, is directly related to Arab state policy in regard to finance, subsidy, import regulation, and marketing. The status of the public, mixed, and private industrial sectors in individual Arab states needs detailed study. The Arab industrial bourgeoisies are weak, much too small and insecure to make a significant impact in the present Arab political economy. The local bourgeoisies cannot compete with Western capital and must either com- plement Western or state capital or enter into weak areas of business. While studies on and plans for pan-Arab economic—including industrial—develop- ment abound, few concrete results have materialized. Industrial development, largely capital-intensive, has not absorbed very large numbers of the workers who have been displaced from the rural areas.