World Leadership Forum 2004 September 23, 2004 Arab Economic Development and Democracy What is the correlation between democracy and economic development? How will the changing role of women affect social and economic development globally, and in the Arab world in particular? Introduction: John Donvan, Correspondent and Guest Anchor, ABC News Moderator: Hutham S. Olayan, President and Chief Executive Officer, Olayan America Panelists: Isobel Coleman, Senior Fellow, U.S. Foreign Policy, Council on Foreign Relations Shibley Telhami, Anwar Sadat Professor for Peace and Development, Department of Government and Politics, University of Maryland Ambassador Edward S. Walker, President and COO, Middle East Institute Transcript: John Donvan: Our next panel conversation could end up focusing almost exclusively on Iraq but it does not really need to. We re going to be discussing democracy and development in the Arab world, and one more time I ll share an anecdote from a recent trip I made to Iraq. I was traveling through the south between Baghdad and Basra, talking as much as I could with ordinary people through a translator about efforts being made by the Americans to sow the seeds of democracy, and I was tracking some American officials and some academics who were over there with the mission of setting up democratic institutions -- town 1
councils, women s groups, unions -- and trying to recruit Iraqis to these programs and also to educate them at the same time. They were given 90 days and $167 million to complete this process. The anecdote that I would share would be a soccer game that I visited. One of the American officials whom I was focusing on said, Take a look at this soccer field. These are people who, as she put it were thirsting for democracy. We provided them with the uniforms and with the balls -- her point being any kind of organization independent of the Baathists, not being centralized, but actually coming from the ground roots was a step forward and a lesson for the Iraqi people in organizing themselves. I went out and gathered around a group of these young men between the ages of 14 and 19, I would say, and I asked them in an entirely unscientific way, but in a way that we often use in television, just to gather around and have a conversation about democracy. I asked them, Can I have a show of hands please? Who knows what democracy is? And one guy looked at the other guy and the other guy looked at the other guy, and they just stood there and shrugged. They had no idea what we were talking about. And then one man stepped out from the back of the crowd, pushed his way forward, and kind of looked at everyone a little bit shyly and he said, Democracy means that we tell the government what to do, they don t tell us what to do. It s an anecdote where I found there were grounds for despair because most everyone didn t have a clue -- and then there was that one guy, that spark of light. The question is, can democracy take root in the Arab world? Does it depend on development or does development depend on democracy? Our panel is going to be led by Hutham Olayan, President and Chief Executive officer of Olayan American Corporation. Hutham, welcome. Hutham S. Olayan: I m delighted this afternoon to lead the discussion. Our topic is a very big and complicated one. Our topic is economic development and democracy in the Arab world. Thankfully, we have three experts to help us navigate through this complicated path. Ambassador Edward Walker, President and CEO of the Middle East Institute in Washington, Dr. Shibley Telhami, the Anwar Sadat Professor for Peace and Development at the University of Maryland, and Dr. Isobel Coleman, Fellow at the Council on Foreign Relations and Director of the Women and U.S. Foreign Policy Program. Before we begin, I wish to make a very brief observation to help frame the discussion. Like it or not, the Arab world finds itself once again at the global center stage. There s a lot at stake here and I think we all sense a tremendous global yearning about the region. If we can solve the Middle East, we can solve any problem in the world. The contrasts in the Arab world seem more starkly drawn than any other part of the world. Take, for instance, the gulf between the haves and the have-nots, the young and the old, the traditional and the modern, the peaceful and the violent, the male and the female. The region has lagged behind much of the rest of the world. Experts, both inside and outside, 2
talk not only about budget deficits, but they talk about knowledge deficits, technology deficits, empowerment and diplomacy and freedom. However, I believe it would be wrong to conclude that the Arab world is either standing still or moving backwards. I think this is an illusion -- two steps forward, one step backward doesn t match anyone s step forward. Nor should we lose sight of the fact that many areas of the Arab world are vibrant and interesting. While developing nations are getting old and grey, the Arab population is among the world s youngest and fastest growing. This poses an immense challenge, but also a great opportunity. Moreover, some Arab economies are absolutely booming thanks to the oil revenues, but also thanks to the aggressive open and liberalizing economic agendas some of them have pursued. And finally, the winds of reform are flying all the way from Morocco to the Gulf. The question in everybody s mind is, would this be a pleasant breeze or would it be a violent sandstorm? I will leave that question for our panelists to think about as they give us their thoughts. We will start with Ned Walker, who will give us the view from Washington, followed by Shibley who will give us the view from the Arab world. And finally, we will turn to Isobel Coleman for the real crux of the issue -- the role of women and democracy in development. Each of our panelists will speak for ten minutes and then we will invite questions from the floor. I give you first, Ambassador Walker. Ambassador Edward S. Walker: Thank you very much. I appreciate this opportunity to come together on what is a very complex situation and subject which cannot be dealt with in ten minutes, so I will rely on someone to tell me when the time is up so we don t use all of my time. I think that the first thing to remember is that this promotion of democracy and development is not a new thing in the United States. This has been a policy that has lasted through a number of administrations, successfully in some cases, not so successfully in others. What is new about this administration and the approach it is taking is really its emphasis on the Middle East and the promotion of democracy in the Middle East. When I was assistant secretary in the previous administration, we had to scramble to find any money whatsoever to have programs to support civil society, build up democracy and so on. Most of the effort was being placed in Africa and Latin America and other areas, with some justification because they were riper if you will, and the problems in the Middle East are so much more complex than in some of these other areas. But what this administration has done, first of all, is to put a major rhetorical emphasis on democracy promotion and the use of democracy to achieve U.S. objectives in the region and broader region. There area a couple of theories behind this. I m not necessarily convinced of the theories, but certainly one of them that is often talked about is the fact that democracies don t support terrorism and democracies don t make war on one another. I think if you take the overall record that s probably demonstrable, but I don t know whether that would be demonstrable in the future. It s still remains to be seen. 3
The second theory really has been that we have an objective of supporting democracy because of our own culture, our own beliefs, and our belief structure. And I think there s a lot to that, that we do believe democracy is an answer for many of the other things that create problems in the Middle East, particularly in the area of development and so on. So I think there is justification for taking this view. The question is how you do it. And it seems to me that the administration has outlined two approaches to the development of democracy in the region. The first is imposition of democracy, and that s what we ve seen in Iraq, that s what we ve seen in Afghanistan. There are certainly some in the administration who are looking ahead and are beginning to say we ve done it in Iraq, we ve done it in Afghanistan, maybe we ought to think about Iran next, and then where does Syria fit in? There are others that say wait a minute we haven t finished the job in Iraq or in Afghanistan. Let s digest what we ve already got on our table before we go any further. But the debate is out there and it ll be answered after this election. If the administration is reelected, and if Kerry wins and he going to have has to deal with some of these problems as well. So it s going to be an issue before us for some time. The other trend line that the administration has put out is fundamentally that we can encourage democracy. And this is the soft side or the soft power approach. Now encouraging democracy, first of all, is the rhetorical encouragement -- the speeches the president gives and so on, but it s also money and programs that can encourage the development of civil society -- the kinds of basic structure that you need in order to have a successful democracy. Now, unfortunately, this part of the equation is really very poorly funded and not very heavily supported. You have the Middle East Partnership Initiative that was announced with a fair amount of fanfare, but it is $120 million. A hundred twenty million dollars divided by 22 Arab countries, and I think that they throw in a few non-arab countries as well, doesn t go very far, particularly if you start comparing it with the about $25 billion that we have put into Egypt for economic and democratic development and so on, and look where Egypt is after all these years of support. We cannot say that a $120 million is going to do anything. I m not suggesting for a minute that it s not a good idea, because it is, and there are some good programs that are coming out of it, but it s not nearly enough, and it s not going to help a great deal, and it requires one essential ingredient to be successful. It has to be done in partnership with the countries involved and it has to have the leadership of the countries involved. That remains to be seen whether that can be done. The second problem with the program -- which deals with the economy and then deals with the democratization and with education -- is that they tend to be broad programs covering the whole region. Most countries in the Middle East are very different from one another. They have different problems and we have to take account of those different problems. We have a massive problem in Iraq. We re devoting $200 billion to it so far and we re still counting. That is the essence of the democracy program which isn t terribly successful at this point. I think we have to refine our efforts throughout the rest of the region, put a lot more resources into it. And not think it terms of pressure. 4
It s an excellent time for the United States to take this initiative and to be out in front because the countries themselves in the region are feeling their own internal pressure. They don t need us to tell them that they need to have reform or that they need to have distribution of power in the country. They have the pressure from unemployment, 20 to 25 percent. They ve got to deal with that, otherwise they face explosion. They ve got the pressure of fundamentalism -- fundamentalism which has taken a radical form which is leading to terrorism and which can destabilize governments unless they do something to satisfy the needs of their people. They have dissatisfaction in the region with the status quo. They have the information revolution, which is opening up all of the questions, our own media, their media so that people can see what s happening in the rest of the world, you can t hide any more. So I think that what we have now is an incredible opportunity of regimes throughout that part of the world that are ready to reform, that are ready to change and you re seeing evidence of it. Four years ago I would never have believed they d have an election, a real election, in Saudi Arabia. We re about to see that take place. Amazing things have taken place throughout the Gulf and in some other countries in the region, including North Africa. We can help. We can make enormous contributions to this, but they have to take the lead. I would say that it is time for us to sit down with countries involved to come up with a strategic plan or a feasibility study for each of these countries, in partnership with them, and find ways that we in the international community can be supportive and we can help them do what they want to do. One of the most productive programs that I see in the Partnership Initiative is a program in Jordan for education -- special schools to try to develop new courses and new kinds of education in Jordan. This was an initiative from the Jordanian government first, two years before it ever came to us in the partnership initiative. It was an initiative that was done with the World Economic Forum and with a number of companies and so on. Then they came and they got some money out of the Partnership Initiative. But, it was not our initiative and I think that s the key and the important component of any effective approach. We need to put more resources into the Partnership Initiative. What is supposed to be the leading edge of our program has less people employed than my own organization, and believe me, I don t have very many people employed in my organization, so I hope that the new administration will take seriously its rhetoric on both sides. This is a bilateral, not a partisan issue. I think both parties support this. Both presidential candidates support it. We have an opportunity. I hope we can make use of it. Hutham S. Olayan: Thank you, Ambassador. And now, Shibley. Shibley Telhami: Thanks very much. It s an honor to be here. I speak as a political scientist and I certainly don t represent the view from any part of the world, but you will see if anything, my 5
biases as a political scientist if there are some economists who are here in this place. Now what I d like to do is make a few points, each of which would require a lot of elaboration but I ll put them here for just to make the case and hopefully we ll follow up on some of them in the discussion. First, I think in our thinking about democracy and political reform in the Middle East, we must decouple that issue from the issue of fighting terrorism. It has to be a different story; most certainly the Middle East needs political and economic reforms. It is desperately needed in that part of the world, and it should be an end in itself to pursue that, both by parties in the region and by the international community, but not because of this assumption that we have that somehow that is the way to fight terrorism. In the long term that may be, but in the short term in fact, we have to understand that that is not the way things have fallen in the Middle East. We ve had dictatorships where there was very little terrorism, we ve had democracies when there s very little terrorism, we ve had the opposite of both, and, in fact, any transitions to democracy which inevitably take a long time from authoritarianism to democracy in all cases that transition is destabilizing. That transition is more difficult. Witness what we see now in Iraq. We don t know what the outcome will be. We all hope that there will be a good outcome, but in the meanwhile, no doubt that there is more terrorism in Iraq. No doubt that there will be more instability in the foreseeable future. And so we have to be willing to pay that price if that is a priority issue. Therefore I suggest that we decouple the two issues. Second, we can t think of democracy and non-democracy as if they re just a black and white issue. There are grades. There are differences between democracies, and differences between countries where democracy doesn t exist in the same way that we know it. There s a big difference between what you see in Egypt, which is an authoritarian non-democratic state, and the Taliban regime in Afghanistan. There is a big difference between Morocco, another authoritarian regime, and Saddam s Iraq. And we have to keep in mind that the question is not about how do we get democracy in the same way we want it, but how do we progressively move toward political liberalization and empowerment of the individual. Third, we must differentiate between the goal of attaining international human rights and the goal of changing political systems. Those two are obviously related in some ways. Democracy is about, in a way, a human right -- the empowerment of the individual. But it is so much more difficult to attain and we don t know how to do it. I think it is very hard for us to do it, and it s very hard for countries to know how to do it. We political scientists have studied this for a long time. We have no consensus on it and witness in our own backyard a place like Haiti, which is important to us and which we put a lot of resources in -- how difficult it has been to attain. Whereas, on human rights, there are some global standards that we must insist on and they must be applied elsewhere and they have to be part of our agenda separate from our agenda. It s not that we should give up on democracy. We should not tie them together as if you don t get one, you don t have human rights. We must differentiate those areas. 6
Fourth, I think if you look at the meaning of what we at least intend by democracy, we clearly mean individual rights -- the power of the individual -- individual empowerment, liberty, and I think when you look at the historical trends it is impossible to divorce that from economic rights and economic reform. In fact, I think you can make a very strong argument of historical perspective that the emergence of democracy in the West, after years of the Dark Ages was in part at least, a function of industrialization which, meant the empowerment of the individual. And you see where women increasingly attain more and more rights, even in villages and traditional places it comes with the economic empowerment of women. And clearly, economic reform is an essential component for sustained political reform. You can have episodes of political reform without economic reform. Clearly they go hand in hand. In order to have good economic reform you have to have a legal system that would give people in business to have faith in the system to be able to pursue it. But I think it is very important for us to understand that it s a sustained effort that requires a focus in large part on economic reform. Fifth, I think the role of outside powers is often overstated. I think democracies are not imposed from without. Outside powers can help when there is demand for help -- when there is a readiness to accept that help. In fact, more often than not, we see outside powers doing more damage than help. Let me give you an example, I think in this particular case I have no doubt that in our American debate when we say we want democracy, we mean it. But in reality, that is not our national security priority. Our national security priority for now is to fight the war against Al-Qaida. And if there is a trade off, as is often the case, it is almost the case that we will choose the former over the latter -- that we will choose that which assists us in the war on terrorism over that which will help us push for democracy. Witness what we see in Pakistan, which is a very important ally. General Musharraf has been a courageous leader in supporting the war on terrorism, but the bottom line is we are not going to insist on his empowering the majority, which for now, is on the other side of the war on terrorism and as a consequence what you see is the exact opposite of what we intend. And you can replicate that picture all over the Middle East. In fact let me give you the numbers. I ve done a survey in 6 Arab countries recently. And when you ask them about Iraq, which we thought that would be the model of inspiration for the region, Do you believe Iraqis are better off today than they were before the war? the vast majority in the Arab world believe that Iraqis are worse off. They re frightened by the Iraqi model not inspired by it, at least in the short term. But when you ask them about their own countries, Do you believe that there is more democracy in the Arab world today than there was before the war? the vast majority say there is less democracy, not more democracy. That s astounding given the fact that we know there wasn t much democracy before the war. The reason for it is very clear. The public in the region has gone against the foreign policies of these governments, particularly in the Iraq war, in supporting the Iraq war. And these governments, in choosing to work with the United States of America had to go against the public. They became increasingly insecure and therefore they cracked down in the meanwhile, much more than before. And so the outcome was not what we had intended, it was exactly the opposite way they intended. 7
My sixth point is on the trade off that we always have between working with governments or working with civil society, the people. Clearly the American foreign policy has for a long time has been focused on working with governments. That s been the case. In part because we thought that authoritarian regimes can overcome their public opinion. Today there is obviously a need to focus on approaching the public and gaining the public. For one thing, we re trying to empower the public. How can you go for reform when a) your allies on the war on terrorism include the very agencies you want to weaken -- the army, the governments, and b) public opinion is against you. At the very least, people you want in power are rooting against you. How can that be possibly successful? Final point. I think that there is no way we can push forward with reform unless it is a partnership. We can t set ourselves against the government and the people. Certainly not both and succeed. You have to find ways to bridge. And that means you have to create mutual incentives. The region has its own incentive to want to liberalize both economically and politically, and we ve got to build on those commonalities to move forward because it cannot be done by the outside world against the wishes of the locals in the region. Hutham S. Olayan: Thank you, Shibley. Isobel Coleman: As Hutham said, I m going to get to the crux of the matter which is the role of women in democracy, and Shibley has already touched on the rich debate over economic development first over democracy first. This is a debate that s gone on for a long time. One thing I think there is a consensus about is that the participation of women is critical to democracy. Now there are certainly examples of early democracies where large portions of the population were disenfranchised. Our own history certainly includes that. Great Britain, where you had early democracies where only five percent of the population actually participated, but over time our theories and our thinking on democracy have evolved, thankfully, and now it is generally accepted that women should be part of that. Talking about the debate between democracy first and economic development first, there is thinking that has been triggered mostly by the East Asian Tiger experience that led many to believe that really, you should have economic development first. But there s new research that s come out that looks at the progress of democracies and economic growth and authoritarian countries and the democracies win out. And they have actually had stronger economic development over the past 30 years, and most importantly, stronger indicators on social development, which I think are very important. One thing that we do know is that women are very, very important for economic development. That is absolutely clear. There is very compelling data on the role that 8
women play in economic development, arguably, educating girls is one of the most powerful tools for economic development that we know of today. When you educate a girl you improve not only her own prospects but those of her family, her community; you reduce incidents of infant mortality, improve child nutrition and then dramatically accelerate and sustain that momentum over the next generation. It s a very powerful tool for development. That s just one example. The good news is that I think in the Middle East today there is a growing awareness of the importance for women for economic development, for political development, and a growing consensus that they need to be part of that reform process. Both of my panelists have already mentioned the role that women are playing in the reform initiatives across the region, and I think that we have that momentum right now with very rapidly rising literacy rates of women across the region and a growing awareness of the importance of women to economic change. I think we have the makings of a sea change on the role of women in the region. I m going to suggest a five point plan to encourage that sea change. The first is education. While the Middle East has made significant progress in terms of girls education in closing the gender gaps and literacy, the sad fact is that only 51 percent of women in the region are literate today. And there s still clearly a lot of room for improvement. Gender gaps exist in several countries that are very large, and although they ve been closing, I think they could close much more rapidly, and we ve heard already about some innovative programs in Jordan. There are other programs going on in Egypt and all over the region, Morocco, that work and that should be supported much more fully than they are today. And the United States should be putting its efforts behind it. Now, literacy doesn t lead to democracy. I think the example of Saudi Arabia, which had two percent literacy just in the beginning of the middle of the 1960s, and in one generation has gone to almost full literacy today, about 90 percent literacy, is an example that you don t have a straight line between rising literacy rates and democracy. But it certainly is an important component that enables women and the broader citizenship to participate more fully in society as it does reform and opens up. Education also includes educating men and women about their existing legal and political rights. And many of these countries are signatories to international conventions, the U.N. Declaration on Human Rights, many different international treaties which give their citizens many full rights and yet, very few people in rural areas even know about those rights, understand what they are, and it s important that men and women have a fuller understanding. The second item would be economic empowerment, giving women more control over economic resources through micro-finance, small business development loans, creating a legal and regulatory environment that is supportive of women in the economic sphere and making sure that women have property rights. The Middle East needs to create 80 million new jobs over the next ten years -- it s a lot of jobs. And I know people are 9
concerned that increasing women s work force participation is going to add to that burden, but there s actually interesting data that shows just the opposite. Countries where women are active in the work force have lower levels of unemployment in the Middle East and I think it s a sign of more adaptive innovative and open economy where women are working. The fastest growing segment of employment in the United States over the past decade has been women who own small businesses. And that s a statistic, that when I speak in the Middle East, men s ears always pick up. They understand the connection between women and economic development and they re interested, not in secondary issues of what women wear, or whether they can drive or not drive, but how they re able to leverage the investment they have made in girl s education and how they re able to enable their wives and sisters and daughters to participate fully in the economy. The third item is supporting women leaders. I think that this is incredibly important and something that the United States can do effectively -- rolling out the red carpet for women leaders when they visit in Washington. It gives them an international platform. It gives them media exposure it gives them credibility and legitimacy back home. And that can sometimes work against women also, but I think the idea of providing women with a larger stage and showing how important it is that their work, whether it s in the educational field or in some of the social services or in the political arena that Western, United States, European countries are watching, noticing and supporting that, and giving Shirin Ebadi the Nobel Peace Prize for Iran was a very symbolic measure. Many people said well, why did she deserve the Nobel Peace Prize? Well, I think, there was an element of political statement there, and the political costs of imprisoning her and of neglecting her gender in Iran have a greatly gone up on the Iranian government. Four -- supporting local initiatives. I echo strongly what Shibley has said, and that this can t be imposed from outside and it really must be a locally driven affair. There are so many very good women leaders, NGOs, different initiatives across the region that are trying to improve the lives of women and girls, and are doing very innovative work that should be fully supported by the West. Just as an example, women are running for office all around the Middle East. In Saudi Arabia, as the upcoming election has been noted, there s a woman running for a municipal position and these people across the region should be supported to the extent that they can. Now, being embraced by the United States might be the last thing that some of these candidates want, but there are other ways to do it and the National Democratic Institute has indeed t been very good at providing women with training through local NGOs that are not seen as being embraced by the United States that give them very effective, important training. The fifth thing is working with religious leaders and scholars. I think it s incredibly important to work with the institutionalized power base, and Afghanistan has had some interesting programs over the last year that I ll mention. President Karzai has been very effective at getting the mullahs to getting the women to vote and register to vote. Now you can be cynical and say this is a get out the vote campaign on his part, but it has had a tremendous impact on educating tribal leaders and people in positions of authority about the importance of allowing women to participate in an important public event. For many women it s their first experience outside their home, but 40 percent or more of those now 10
who have registered to vote in Afghanistan are women. It s quite a profound change. And the role of the mullah is incredibly important in this process. The theocracy in Iran was very critical in introducing birth control there and in just a short amount of time, through Friday prayers, managed to lower the birth rate in Iran from one of the highest in the world to one of the lowest in the world today. And again, it s the use of religious leaders to get behind that. Supporting religious scholars who are in the West because they ve had to flee their countries because of persecution, but who are writing about Islam in a different way and reevaluating the role of women in Islam and I think supporting those who are no longer alive also. There are many religious scholars from over the centuries, in particular the nineteenth century, who have reevaluated the role of women and Islam. And these are publications that should be reprinted, circulated, and supported, and these are not expensive things to do. They fit into these lower cost initiatives that we re thinking about but could have a powerful impact on change over time. Hutham S. Olayan: Thank you very much, Isobel. # 11