The plight of Mohamed Bouazizi, a Tunisian fruit vendor who found that official harassment made his job impossible, may seem a mundane trigger for the historic Arab awakening. In fact, Mr Bouazizi’s self-immolation and the protests it unleashed prove that Arabs’ political and economic grievances are two sides of the same coin, and that democratisation in the Arab world must be both economic and political for either to succeed.
The Arab countries vary greatly in their politics – their degree of authoritarianism and prospects for change – and in their economic structure. But they all need reform and, with few exceptions, they all suffer a similar economic ailment.
The fundamental dysfunction of Arab countries is that of the rentier state. In oil- and gas-rich countries, natural resources return far more than it costs to extract them. Capturing and controlling this surplus – economic rent – is the chief source of enrichment, hence both the means and the end of power. Meanwhile the tragedy of resource-poor Arab countries is that they create rent artificially when nature has given them none. Monopolies, regulation and bullying all serve to limit access to productive activity, which generates fantastic rewards for a favoured few at the cost of holding back whole nations.
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