Understanding the success of the Gulf States due to some application of free market principles in relation of moving of capital and investment, I was wondering why this area of the World hasn’t been as receptive to the wave of free market ideology the way the rest of the world has been for the last 30 years, and how it took the invasion of Iraq and the direct attempt by the US to implement it to try and get it to take root (Which it hasn’t)
Is it because of cultural and society that it hasn’t been successful yet? Or is it due to the perception of US hegemony which makes it look unattractive, or something else?
The “free market model” is disastrous in most of the world. It only looks good if you are in one of the countries doing the exploiting, not if you are one of the exploited.
Americans have a hard time understanding that slaughtering people and devastating their homeland so you can exploit them does not make you popular with them.
Which country in particular are you referring to? I can’t think of a single “free market” country in the Middle East, but of course I’m not entirely up to date on these things.
In general, there aren’t as many free markets as people claim. Like communism, it’s mostly a label used to legitimize whatever corrupt kangaroo government gets set up after a regime change somewhere.
After WW2 middle east countries generally tried Arab socialism such as Baathism or Nasserism. This was accompanied by political repression and the only effective oppositions were religous based since that was too ingrained in the population to be stamped out. Thus in most middle east countries there are secular socialists and religious fundamentalism. Both of these ideologies are anti-free market.
The only middle east countries that are really free market are Quatar and the UAE. Both their economies are doing very well.
Qatar is not a free market country. The few hundred thousand “citizens” are all wealthy, receiving a monthly share of the nationalized oil revenues, paid utilities, and free housing. They then truck in 3 million or so Pakistanis, Filipinos, etc, to do their dirty work for them and to treat like peasants. Furthermore, they are ruled by a hereditary monarchy with no independent legislature.
I’m not an expert, but I think UAE is similar. These countries are well off because they have a single abundant and valuable resource they can export. When the oil runs out, free market or not, they’re going back to being dirt poor pearl divers, camel herders and fishermen.
I think the OP is asking why free market thinking has not been more successfully accepted in the Gulf States. I don’t think he’s stating that they implemented free market policies and asking why they aren’t working.
He’s saying, if I can paraphrase: They dabbled in free market thinking a bit in setting policies, but didn’t go very far. Why not?
Free market does not mean democratic or that it treats foreigners like “citizens”. Quatar has the rule of law and respects private property. It has very low levels of corruption, low taxes, and a business friendly regulatory environment. Here is the Heritage foundation’s profile of Quatar’s economy.
The same is mostly true of UAE.
Oil wealth does not translate into a growing economy for most countries. Oil rich countries tend to grow slower than other countries because of higher levels of corruption.
That’s silly. There have been plenty of secular gov’ts in the Middle East. None have been particularly more open to captialism then the others.
I think the reason is pretty clearly oil wealth. It’s pretty hard to have a free market economy when 55% of your GDP is based on exploiting a single, localized, natural resource.
Not every country, but most of them do (or did, Egypt and Syria both peaked in the 90’s, a fact probably not coincidentally related to the fact that they’re both currently suffering revolutions).
Other then that, I think Jordan, Lebanon, Yemen and Morocco and Tunisia are the only countries where petro-chemicals don’t make up (or didn’t make up until recently) a major chunk of the economy. Morocco and Tunisia have fairily liberal economies, Yemen doesn’t really have a functioning state, Lebanon was a client state of Syria. Jordan is the only real outlier.
!!! It is as if St. Thomas Aquinas’ condemnation of usury, defined as charging any interest at all on a loan, were still accepted throughout Christendom.
Egypt has modern, western style banks (or did, not sure what the situation is now, post-Arab Spring). If it’s difficult finding mortgages, I suspect it has more to do with the fact that no one wants to loan money in a country where half the population makes under 3$ a day then any religious prohibition.
I don’t see how Islamic Banking could be done in a way which doesn’t conflict with the main tenets of free market capitalism, in fact, I’m pretty sure they conjured up financial instruments to do that.