Egyptians shop at a vegetable market in Cairo February 6, 2011. (photo by REUTERS/Amr Abdallah Dalsh)

Islamist Programs Provide Little Regarding Economic Alternatives

Author: alhayat Posted April 11, 2012

The available literature on the Arab Islamic parties (the Justice and Freedom Party in Egypt, the Islamic Action Front, the Muslim Brotherhood in Jordan, Ennahda in Tunisia and the Justice and Development Party in Morocco) allows us to draw conclusions on their stances regarding five essential issues: the role of the state and its views of the private sector, the fight against poverty and unemployment, the rule of law and anti-corruption, the deficit, the general budget, foreign relations and its perception of international institutions.

SummaryPrint Ibrahim Saif, resident scholar at the Carnegie Middle East Center, gives readers a peek at an upcoming report on the economic programs of Islamic parties in Arab Spring countries. He writes that, contrary to expectations, they profess to make no attacks on the crucial tourist sector, while offering few concrete steps for structural reform.
Author Ibrahim Saif Posted April 11, 2012
TranslatorSami-Joe Abboud

According to a study conducted by this author and Muhammad Abu Rumman from the University of Jordan, to be published shortly by the Carnegie Endowment for Peace, the four parties have detailed economic programs on these five axes.

The philosophy of those programs does not run contra to present norms — it conveys an economic policy which believes in free markets and private property. Thus, it does not offer any "revolutionary" alternatives that aim to change the prevailing economic system or the existing structures. The Islamists rather seek better management. The programs of those parties include incentive policies, employment policies and good governance. They focus on the unhealthy relationships between certain top businessmen and government, pointing out that this dynamic contributed to the marginalization of social groups, the spread of corruption and the absence of a productive culture.

However, in their programs there is an exaggeration of estimated growth rates, job opportunities and size of investments, as well as a clear absence of priorities, financing tools and limits to the role of the state. In many cases, they offer general suggestions and solutions. However, they lack answers about which issues represent priorities, how to bring about the desired transformation and how to change the existing structures so that qualitative economic change can be achieved over the next four or five years.

The four parties agree on the need to respect private property rights as well as on the role of the private sector. However, they have not set clear limits on the role to be required of this sector or of the state.

There is talk about many employment and investment initiatives that should be undertaken by the public sector, but these will come against the barrier of a balance deficit and high debt. Structural weakness plague certain state institutions, and there have been no indications of a desired magnitude of public-sector intervention in relation to the size of the GDP of these countries.

The programs of the parties reveal differences in the nature of their economic discourse. Whereas the Egyptian, Tunisian and Moroccan discourse refer to detailed accounts of the economic problem, the Muslim Brotherhood in Jordan has not dug into the details of the solutions it is proposing to deal with the issues there. During the recent electoral campaign, the Egyptian Brothers developed positions on economic issues, although their counterparts in Tunisia and Morocco offered more details.

As far as the tax system is concerned, there is consensus in Tunisia, Morocco and Egypt on the principle of progressive taxation. On the other hand, the Moroccan Justice and Development Party has not thus far adopted a clear approach to taxation. It has suggested exempting commodity goods from taxes while introducing taxes on luxury goods and high-income categories. Morocco distinguishes between imposing a progressive tax on individuals and reducing it for institutions so that their competitiveness can be preserved.

Regarding the banking system in Tunisia and Morocco, there is a clear possibility of coexistence between the conventional banking system and the Islamic system. In Egypt and Jordan, the parties’ position on this eventuality is not yet clear despite the fact that the current banking system makes room for this. For its part, Tunisia does not hide its desire to expand the work that is done based on Islamic law. Moreover, the parties do not take a tough stance on tourism. In fact, party officials do not see any harm in encouraging tourism, which provides an important source of income source to many of their constituencies.

The Islamic movements have no taken positions opposing international institutions like the World Bank or the International Monetary Fund, among others. The dispute is about the policies they are proposing, and the ways in which they will formulate policies and programs that address the existing imbalances in their countries. They will be forced to balance between the vision of these institutions and the internal conditions of their respective states.

Those movements are not ashamed of using certain international competitiveness indicators such as the index of the World Economic Forum. They will endeavour to improve their condition based on this index — Morocco is a perfect example of this.

Moreover, some parties further plan to employ financing instruments which will involve the participation of the private sector. One such example is a modern project-finance model called Build-operate-transfer (BOT).

The winning Islamic parties will have to form alliances with other parties, which means that the programs they propose will not be fully implemented. They will be forced to agree and comply with the suggestions of the other parties that make up these alliances. This would ease the pressure on the Islamic parties in terms of achieving the desired objectives.

It is clear that the Islamic parties of the four countries are well aware of the nature of the economic challenges they face. They know full well the importance economic achievements play in their ability to maintain their links with their constituencies. However, it is not clear how productivity and competitiveness will be enhanced in these countries, an act which would imply reducing the role of the public sector and launching private initiatives and investments at a time when the nature of the relationship that will prevail between the economic actors and the Islamic governments is still unclear.

Given the time frame of the rule (four years), it is not expected that many electoral promises will go fulfilled. This makes the economic dimension — which sparked many of the Arab revolutions — essential to the confidence that voters will give to the Islamic parties in the future.

Perhaps the most important achievement that Islamists in power can make is establishing new principles based on integrity and social justice, knowing that the desired changes mentioned in their electoral programs need a longer time frame than their mandate will allow.

Read More: http://www.al-monitor.com/pulse/business/2012/04/no-economic-alternatives-provide.html

Published London, Pan Arab Established 1946
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