Rich Arabs, poor Arabs and the ever-widening gap
There’s money and opportunity even in poor Arab countries, but corruption has led to an uneven economic reality
Rich Arabs live in first world countries and pay their employees - whether citizens or foreigners - wages which are not even suitable for third world countries. They are happy with that but employees are angry. Unless rulers act and spend more time with their people who live in the third world countries, then something significant will happen in each Arab country where the balance of social justice is dysfunctional. It would thus be simply a matter of time before we witness an Arab Spring of our own.
It’s true that life as Arabs of first world countries is more fun as they enjoy luxuries and engage in interesting discussions on the best restaurants in Europe, the recent fashion trends, the best resorts and the best schools and universities. But these Arabs are also the quickest to run when the situation gets tough. The issue is not one of patriotism, it is instead linked to their ability to leave and relax away from home. They observe what’s going on from a secure place. Meanwhile, the ruler finds himself alone with his police and army. He finds himself forced to listen to angry people. It is thus better to listen to them during prosperous times and not during tough ones.
The numbers speak for themselves and the gap is widening in most Arab countries - except in small oil-rich Gulf countries which must not be the standard when discussing development challenges in Arab countries. These challenges now hamper Saudi Arabia though it’s an oil-rich country. However, these challenges are more difficult in other countries like Egypt, Iraq and Yemen. What’s good is that leadership in the kingdom has the courage - and sometimes more than some writers and intellectuals - to admit the truth.
There’s money and opportunity even in poor Arab countries but bad administrations, monopolies, discrimination and corruption created an unusual economic situationJamal Kashoggi
Last Tuesday, Prince Muqrin bin Abdulaziz, second-in-line to Saudi throne and who’s well-known for his interest in research, did not hesitate to attend the event announcing the results of a study carried out by the King Khalid Foundation. The study kkf.sa.org revealed that most Saudis live within the “adequacy line.” The study defined the “adequacy line” as the “amount of income that allows families to live a decent life without needing additional aid.” It specified it at 8,926 riyals of monthly income. It’s a shocking number as, according to several studies, the average wage in the kingdom decreases or increases a bit. This means that all Saudi developmental plans failed to achieve their aims despite the massive expenditure. Prince Muqrin did not reject the study and he was not annoyed by it though he knows that there might come a day when it’s his responsibility alone to reform this situation and that unless reforms begin now, the burden will be heavier in later years. He therefore called for implementing the recommendations provided at the end of the study. The recommendations are within the sphere of economic reforms and address quickly strengthening the spirit of social solidarity. He spoke harshly about the private sector which is the first beneficiary of Saudi prosperity but he specifically described banks as a “saw which chews when it goes in and chews when it goes out.”
Dealing with the problem
Any bank may whisper and say: the solution to poverty is not the banks’ responsibility but the government’s. But no bank would say this aloud as it knows that Saudi banks don’t pay taxes. Not only that, but unlike the world’s banks, Saudi banks have the luxury of recycling one of the biggest oil windfalls in the world while in smaller countries like Kuwait, double the number of Saudi banks are allowed to operate. Considering this special treatment, it’s prince Muqrin’s right to reprimand Saudi banks for not cooperating with the government in bearing the social burden. After all, the government has provided banks with this exceptional privilege. Do we need some of Abu Dhar al-Ghifari’s, an early convert to Islam, socialism to achieve the quick distribution of wealth while we build a proper economy biased on the industrious, the Arabs of the third world countries and while we build an economy that generates a new productive middle class? The answer is certainly yes, or the situation will get worse.
There’s money and opportunity even in poor Arab countries but bad administrations, monopolies, discrimination and corruption created an unusual economic situation. Macroeconomics achieve a high growth rate in some cases. But the truth is, this growth rate only represents the growth rate of Arabs of first world countries and citizens only benefit a little from this growth rate. For example, the minimum wage in Egypt, which the previous government considered as the most important of its achievements and which some say was the reason behind its ouster, is no more than $174 a month. This is the salary of millions of Egyptians. Meanwhile, the Egyptian elite live as per the standards of first world countries and if any government hints that it wants real economic reform in which the rich pay taxes and increase the wages of their employees, they’d say: “By doing that, you’d be killing the spirit of making initiatives. You’d force me to shut down my factory and leave to where I can be appreciated for my efforts.” Don’t ever believe an Egyptian or Saudi businessman when they say that, because if there was a country where they can make as much as they’re making here, they would have left a long time ago.
This article was first published in al-Hayat on April 12, 2014.
Jamal Khashoggi is a Saudi journalist, columnist, author, and general manager of the upcoming Al Arab News Channel. He previously served as a media aide to Prince Turki al Faisal while he was Saudi Arabia's ambassador to the United States. Khashoggi has written for various daily and weekly Arab newspapers, including Asharq al-Awsat, al-Majalla and al-Hayat, and was editor-in-chief of the Saudi-based al-Watan. He was a foreign correspondent in Afghanistan, Algeria, Kuwait, Sudan, and other Middle Eastern countries. He is also a political commentator for Saudi-based and international news channels.
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