A CDGE, Great Decisions and IT Collaboration

Latest Post from C.O.W. ’11 Grad Adel El Adawy on his Excellent Blog

Adel El Adawy, who graduated from The College of Wooster (German and Communication Studies) in 2011 Started a blog this past year.  I highly recommend that you bookmark it and check back to read the frequent updates, including the most recent.  About this internet venture, Adel writes:

Welcome to Egyptian Student Abroad,

This website brings the voices of young Egyptians together. Egypt has witnessed dramatic events in the past few months, that have impacted the political landscape. We see political parties being formed, more political awareness, and foremost greater political participation. At this pivotal moment in our nations history, we need to remember that there will be many more obstacles ahead of us.

Nelson Mandela once said: “After climbing a great hill, one only finds that there are many more hills to climb.” The uprising of January 25 is just the start of the ongoing revolution in Egypt. What we do now, is what will change Egypt and transform it into a liberal democracy.

There are many issues, debates, and events unfolding while we speak. This website seeks to provide a fresh perspective from young Egyptian students studying around the world. Young Egyptians are the hope of the future. Again, as Nelson Mandela once said: “Sometimes it falls upon a generation to be great. You can be that great generation.” What the youth of Egypt are doing is remarkable, but trust me the road is still long.

Adel El-Adawy
September 20, 2011

Jared Cohen’s GDWC 2012 Lecture: “Digital Diplomacy and 21st Century Statecraft”

 

 

Will an elected Muslim Brotherhood Party Result in a Fundamentalist Islamic State?

Many people fret about what would happen in Egypt if the Muslim Brotherhood grew in its power. According to the Chicago Tribune “with more than 43 percent of the seats in parliament, the Brotherhood is the biggest of the parties that emerged from Egypt’s most democratic elections in six decades.. Local media reports have named Khairat Shater, the deputy head of the Brotherhood, as a possible candidate for prime minister.”

As one of the founding civil society organizations responsible for a “fundamentalist Islam”, we have become used to reading about their complex history that suggests that they would institute an Islamic state. What are the images that come to mind when one thinks of an Islamic state? I would submit, that in the West, when we think of an Islamic state, we imagine an Iran-like-Theocracy or the Taliban in Afghanistan. In reality, the situation is a bit more complex and according to Tariq Ramadan it is changing.

First, there are many examples of Islamic states (see below) that are not theocracies and do a decent job at democracy and maintaining the rule of law.Furthermore, Grand Mufti Gomaa of Egypt has suggested that “a civil state means a modern nationalist state that is compatible with Islamic provisions.”

Do nations that adopt state religions protect civil and human rights and religious freedoms?

According to Gomma quoted in Egypt Independent “Egypt’s religious traditions are historically linked to Islamic concepts that are based on tolerance and respect for religious differences. Egypt’s Islamic identity does not clash with its civil system, which defends citizens’ rights regardless of their faith. The mufti said the rights of Egypt’s Coptic Christians will be protected and that religious diversity should be respected.”

Second, many members of the Muslim Brotherhood and people that belong to Islamist parties in other countries are changing their rhetoric from “Islamist” to “civil”. For a neat discussion of this trend see Tariq Ramadan’s oped.

Finally, its important to remember as Dr Ramadan has pointed out that the notion of an Islamist state, as espoused by the Brotherhood was in part a response to western domination. “The state, defined as ‘Islamic’ was..the only structure that could ensure the political independence, religious identity (as opposed to secularisation, implicitly directed against Islam) and cultural specificity of the emerging Arab state entities. It was an ideological response which must be assessed in the light of the prevailing issues of the day.”

What intrigues me is how the language and rhetoric of the former Islamists is changing to be inclusive but at the same time attempts to maintain its identity separate from the west. This is as it should be.

Blogging Heads Conversation on China and Syria

In another timely BloggingHeads installment between Robert Wright (author of The Evolution of God) and Lora Saalman (an analyst based in China) Saalman links China’s veto of the anti-Assad UN resolution to the Libyan intervention and China’s own disputed territories.

Arab Spring in Algeria

The Arab Spring uprising is one that has impacted many countries in the Middle East and Northern Africa with large Arab populations. The unrest has forced many countries to change the ways in which they do economic planning. It has put pressure on governments to increase economic opportunities. Ways in which governments do this is through providing more jobs or by increasing wages paid to the workers. To really understand the impact of the Arab Spring movement we must first understand what the movement is.

The Arab Spring movement is one that was motivated by issues such as unfair government policies, human rights violations, and economic decline. Specifically in the country of Algeria, the uprising came as a result of a lack of decent housing for its citizens. During these initial protests 59 people were reported as injured by police brutality. Despite these initial protests, Algeria had been able to remain somewhat under the radar during the recent years of Arab Spring protests. This is surprising considering Algeria has a rich history of political protests, which end in violence for both sides. The Algerian’s knowledge of what can happen during these political upheavals is a major reason that the country has stayed out of the spotlight.

The Algerian population was primarily seeking better food prices. In response to these demands the government implemented short-term reforms that lowered the cost of certain foods such as milk, cooking oil, and sugar. The subsidies on these goods were matched by increased wages in the public sector as well as a decrease in imports. Another major factor in the unrest in Algeria is the unemployment, especially of the youth. The youth unemployment is at 45% and will most likely rise as approximately 300,000 youth enter the work force each year.

The economic impact of the Arab Spring uprising in Algeria is seen in the lowering of taxes and increased wages in the public sector. The impact of these government decisions will most likely be seen in the consumption portion of the market and will provide households with increased purchasing power in the market. Firms will receive a benefit from these decisions as well. Firms will be able to sell more goods and therefore profits will rise within this area. As households are assumed to be the entity in charge of firms, the general population will yield both a direct benefit and an indirect benefit from these changes. Unemployment rate may also be impact positively. As firms benefit they may choose to expand and hire more workers. This will decrease the unemployment rate and help the overall economy. Rising costs of oil will also help the overall economy of Algeria, as it is one of its major exports.

Source: Algeria at the Crossroads, Between Continuity and Change
Andrea Dessi

Blogging Heads TV

Recently Blogging Heads TV featured a discussion between Shadi Hamid and Gregory Gause on whether the Arab Spring has been good for America and how Syria differs from Iraq.

Arab Spring Effect on Algeria

While other northern African countries are struggling because of Arab Spring, Algeria has been holding its own.  This may be because of their revolts in 1988 that led to their “Dark Decade” from 1991-2001.  These 1988 revolts led to a new constitution for Algeria, but their 1991 elections were invalidated by the Algerian army.  This unfortunately led to a civil wear that resulted in over 150,000 casualties.   This time in Algerian history is said to be why Algeria has not been hit as badly as neighboring countries by the Arab Spring.  These past years have left a big enough mark on the Algerian people that they are now thinking twice when it comes to revolting.

Because Algerians are conservative about revolting against their government, their revolts are not as threatening as surrounding countries.  These weaker riots are much easier to control.  Algeria controls these riots by using the wealth they have gotten from their oil industry.  This money is then used for increases in employees’ salaries and food subsidies.  Not only is the Algerian government trying to control the angry Algerians rioting in the street, but they are also  trying to give a boost to their economy.  Consequently, Algeria’s market is then benefitted by this increase in cash flow in the country.  More money in their economy will increase their cash flow.  It is hoped that, this will increase their economy.  This will be a great advantage to Algeria compared to neighboring countries if they can give a lift to their economy because they are already one of the least phased of countries effected by the Arab Spring.

Algeria also gave handouts to young people who are currently unemployed.  These handouts are not only passed out to help maintain their riots, but also they are intended to help these young unemployed citizens manage without a job.  Algeria will able to give such subsidies and handouts for a little while because of their large amount of foreign currency reserves of over $100 billion.  The more money in consumers hands, the more they will be willing to purchase goods.  They do face long-term trouble when it comes to one of their biggest economic markets, gas.

Their gas production has recently hit a quiescent period.  It is reported that it will soon start to decrease, consequently hurting its economy.  The Arab Spring is not helping them out in this manner because of the troubles and riots their neighboring countries are having.  This leads to a decrease in communication with them because these countries are to busy being involved with their domestic problems, and this will lead to a decrease in trading.

While it is unfortunate the Algeria had to experience the “Dark Decade” throughout the 1990’s, they are fortunate that they did go through that because the Arab Spring has shown less effect on them than on other countries.  They can also thank their money reserves.  This money has been used to settle the small amount of rioters that they do have.  The more subtle effect this money has on Algeria is that it can be used to increase spending in Algeria.  Little businesses can benefit from this money given out to potential consumers.  While Algeria’s economy is doing adequate now in the short run, the long run is the main concern for Algeria.  Their natural gas industry is planning on declining.  This is where the Arab Spring will have the most impact on Algeria’s government.  The corruption going on in surrounding countries is hurting their long term economic future, but their short term future is safe with help from their money reserves.

Economic Indicators for the Arab Spring

Steve Hagen

Arab Spring Economic Content

                The Arab Spring is an uprising of demonstrations and protests in Tunisia, Algeria, Egypt, Yemen, Bahrain, Libya, and Syria, as well as a few other countries in the area that began late 2010.  This uprising has caused a lot of damage to many of these countries politically and economically.  I will examine the economic content involved in a few of these countries, particularly Egypt, Libya, and Syria throughout the uprising, and observe economic indicators to see how much of an impact the Arab Spring has had on these countries.

                While many lives have been lost during the violent Arab Spring, there have also been many economic losses as well.  Since the beginning of the demonstrations and protests, there have been over $51 billion in total costs for Egypt, Libya, and Syria (“Arab Spring Losses”).  Of this debt, approximately $18 billion were costs to GDP and around $33 were costs to public finance in these countries.  However, these numbers only illustrate part of the economic problems in Egypt, Libya, and Syria.  To truly understand the crisis in these Arab countries we must observe the following four economic indicators: unemployment rate, real personal income, retail sales, and industrial production.

                CIA – The World Factbook estimates the unemployment rate in Egypt to currently be 12.2%.  This is up approximately 3.2% from the estimated 9% unemployment rate just a year ago.  This shows the devastating effect that the Arab Spring has had on Egypt’s unemployment rate.  The same source also estimates the unemployment rate in Syria to be about 8.1%.  This is not a very big difference from the 8.3% unemployment rate in Syria from a year ago, so the Arab Spring has not had much of an impact on unemployment rate in Syria.  Compared to the previous two countries, Libya has a very high unemployment rate.  It is estimated to be about 30% (“Libya — Revolution and Aftermath”).  This high unemployment rate is clearly related to the economic problems that the Arab Spring has caused.

                While real personal income data may be tough to find for these countries, GDP per capita according to CIA – The World Factbook gives a good estimation of a person’s income per year.  In Egypt, it is estimated that the GDP per capita is $6,500 for 2011.  This is the same as the GDP per capita in Egypt for 2010.  Given a 13.3% inflation rate in Egypt in 2011 (CIA – The World Factbook), the fact that the GDP per capita stayed the same for this two year span shows that the Arab Spring hurt personal income in Egypt.  In Libya, the GDP per capita dropped from $14,100 in 2010 to $0 in 2011.  Due to the political effects of Muammar Gaddafi, his radical ideas and actions had a direct correlation with the GDP per capita in Libya.  In Syria, the GDP per capita decreased from $5,200 in 2010 to $5,100 in 2011.  Similar to Egypt, a 7% inflation rate makes this decrease seem much more severe. 

                The Arab Spring has hurt Egypt in terms of retail sales.  In the first two months of 2011, approximately $1 billion were lost in retail sales due to the Arab Spring (“Egypt Retail Report Q4 2011”).  BBC News suggests that Libya similarly had major losses in retail sales in 2011 due to the demonstrations and violence brought by the Arab Spring, majorly because of decreases in tourism (Smale).  BBC News also suggests that Syria had losses in retail sales.  This was in large part because of losses in tourism due to the protests going on in Syria.  This also hurt tourism in neighboring countries such as Lebanon (“Syrian Protests”).  

                Finally, the Arab Spring has had dramatic effects on industrial production in these three countries.  The industrial production growth rate is 5.7% in Egypt (CIA – The World Factbook).  This is relatively high compared to many other countries throughout the world.  Due to the Arab Spring, Syria has a low level of industrial productivity (state.gov).  Similar to Syria, Libya is also experiencing troubles with industrial growth due to the uprising of the Arab Spring.  These repressed results show a direct relationship between the Arab Spring and a decrease in industrial production in Syria and Libya.

                In conclusion, the Arab Spring has had many harsh effects and few positive effects on the nations involved in this uprising.  By use of the four provided economic indicators, we can reasonably justify the struggles in these countries, especially Egypt, Libya, and Syria. 

 

Bibliography

“Arab Spring Losses.” Zawya. Accessed February 16, 2012. Last modified October 16, 2011. http://www.zawya.com/story.cfm/sidZAWYA20111016064955/Arab_Spring_losses. Central Intelligence Agency. The World

                Factbook. Accessed February 16, 2012. Last modified December 30, 2011. https://www.cia.gov/index.html.

“Egypt Retail Report Q4 2011.” ResearchAndMarkets. Accessed February 16, 2012. Last modified October 2011. http://www.researchandmarkets.com/research/44e074/egypt_retail_repor.

“Libya — Revolution and Aftermath.” The New York Times. Accessed February 16, 2012. Last modified February 9, 2012. http://topics.nytimes.com/top/news/international/countriesandterritories/libya/index.html.

Smale, Will. “Arab Nations Aim to Win Back Tourists.” BBC News. Accessed February 16, 2012. Last modified November 9, 2011. http://www.bbc.co.uk/news/business-15651730.

“Syrian Protests Hit Lebanon Tourism.” BBC News. Accessed February 16, 2012. Last modified October 2, 2011. http://www.bbc.co.uk/news/15145225.

U.S. Department of State. Accessed February 16, 2012. Last modified February 2012. http://www.state.gov/.

Economic Indicators

Zach Jergan

Arab Spring Economic Indicator

Macro

2/17/12

Economic Indicators Arab Spring

                I want to start off by thoroughly describing what the Arab Spring is.  The Arab Spring is a revolutionary movement that spread like wildfire throughout the Arab world.  To date there have been some form of revolution in 17 different Arab countries.  The impact left by the Arab Spring has not only changed political outlooks but economic ones as well.  The things that I am going to look over are how some economic indicators were affected in the region by looking at three different countries in particular: Tunisia, Bahrain, and Yemen.  These economic indicators should give a good feel of what the outlook is like on the entire region and how damaging it has been.

Let’s go through these alphabetically, starting with Bahrain.  According to a table found on zawya.com the cost to GDP in billions of U.S. dollars was $0.39(“Arab Spring losses” October 16, 2011).  The costs to personal finance were $0.69.  This all accumulated to a total loss of 1.09 billion U.S. dollars.  On top of the decline of GDP and personal finance, the last collected unemployment rate I could find on The World Factbook was 15% in 2005.  This number might not seem extreme; however looking deeper into the numbers it said that 44% of the workers in Bahrain are non-national workers.  This is a very large number and can be attributing to the high unemployment rate.  Looking at industrial production it is important to see what industries are prominent in Bahrain.  The leading industries are petroleum processing and refining, aluminum smelting, Islamic and offshore banking, and ship repairing.  The most recent statistics about industrial production were from 2010 and Bahrain has a growth of 1.5%.  This is misleading because the Arab Spring happened in December of that year.  Bahrain’s Retail Report forecasts that the country’s retail sales will grow from an expected $2.18 billion in 2011 to $2.90 billion by 2015(“Bahrain Retail Report Q2 2011″ April 15, 2011).  This is all based on the assumption that the political situation remains stable.  Looking at the GDP per capita of Bahrain and seeing that during the Arab Spring it has only dropped from $27,500 to $27,300 in 2011(“World Factbook, Bahrain” February 8, 2012).  This is a strong sign that although the Arab Spring may have hurt the personal income a little it did not affect it significantly.

The second country I chose to look at was Tunisia.  Tunisia has had no real growth rate from 2010 to 2011(“World Factbook, Tunisia” February 8, 2012).  Tunisia’s GDP per capita in 2011 was $9,500 and ranked 112th in the world.  The GDP seems to have been affected by the Arab Offspring because its GDP dropped $100.  This directly affected the real personal income of the people of Tunisia because they had less money to spend.  Another economic indicator that I looked at was unemployment.  Tunisia’s unemployment rate rose 3% from 2010 to 2011(“World Factbook, Tunisia” February 8, 2012).  This number seems to have a direct correlation with the Arab Spring and has pushed Tunisia to 151st in the world in unemployment. Another statistic that Tunisia was ranked 151st in was industrial production growth rate.  This rate came in at 0%.  This might not seem alarming but it means that there was no growth at all in the industrial sector, which is not good for a struggling country like Tunisia.  Another economic factor I found was that Tunisia had a -8.5% budget deficit of GDP in 2011(“World Factbook, Tunisia” February 8, 2012).  This is just another illustration of the Arab Spring and how it is affecting the economic sector of Tunisia. A leading world producer of phosphates, Tunisia’s annual production of phosphates reached a new high in 2008. Shopping malls and local supermarkets only account for 20% of the country’s retail trade, which remains dominated by the local corner shop. (“Industry & Retail Tunisia 2010″)

The final country that I am looking at is Yemen.  In 2011 the GDP per capita in 2011 was only $2,500.  This ranked Yemen 177th in the world.  The GDP per capita dropped nearly 7.5% from 2010(“World Factbook, Yemen” February 8, 2012).  This is a significant drop from one year to another and the reasoning may have been due to the Arab Spring.  The drop in GDP per capita would have definitely affected the real personal income in Yemen because there was less money to be used.  Another economic indicator that I looked at was economic growth rate.  The growth for 2011 in Yemen was -2.5%.  This is another factor suggesting the impact of the Arab Spring hurt the economic sector severely.  On a positive note the industrial production rate in Yemen went up 9% in 2010, which put them 13th in the world.  However, the Arab Spring took place in December and effects of it were probably not felt in the industrial sector until the following year.  Although Yemen suffered some losses in 2011, it is expected that the country will recover relatively and forecast real GDP growth of 2.4% in 2012 (“Oman and Yemen Business Forecast Report Q4 2011″ September 23, 2011).  This is all dependent on the stability of the government that has been stirred up by the Arab Spring.

After gathering all of this information I can firmly say that Arab Spring has definitely affected the political and economic structures in all of the countries involved.  The demonstrations affected the political sector, which then had a negative effect on the economic sector.  All of the information provided shows the negative outcomes, at least economically, of the Arab Spring.

References

Central Intelligence Agency, “The World Factbook, Yemen.” Last modified February 8, 2012. Accessed February 16, 2012. https://www.cia.gov/library/publications/the-world-factbook/geos/ym.html.

Central Intelligence Agency, “The World Factbook, Bahrain.” Last modified February 8, 2012. Accessed February 16, 2012. https://www.cia.gov/library/publications/the-world-factbook/geos/ba.html.

Central Intelligence Agency, “The World Factbook, Tunisia.” Last modified February 8, 2012. Accessed February 16, 2012. https://www.cia.gov/library/publications/the-world-factbook/geos/ba.html.

Market Research, “Bahrain Retail Report Q2 2011.” Last modified April 15, 2011. Accessed February 16, 2012. http://www.marketresearch.com/Business-Monitor-International-v304/Bahrain-Retail-Q2-6275196/.

Market Research, “Oman and Yemen Business Forecast Report Q4 2011.” Last modified September 23, 2011. Accessed February 16, 2012. http://www.marketresearch.com/Business-Monitor-International-v304/Oman-Yemen-Business-Forecast-Q4-6611166/.

Zawya, “Arab Spring losses.” Last modified October 16, 2011. Accessed February 16, 2012. http://www.zawya.com/story.cfm/sidZAWYA20111016064955/Arab_Spring_losses.

Oxford Business Group, “Industry & Retail Tunisia 2010.” Accessed February 16, 2012. http://www.oxfordbusinessgroup.com/product/industry-retail-12.

The Effect of Arab Spring on Yemen

The demonstrations and protests materializing in the Arab World are occurring in an attempt to draw attention to the repression felt by citizens of these countries.  Yemen is no exception.  Yemen’s protests, commencing in January 2011, called for the resignation of President Ali Abdullah Saleh after 33 years of authoritarian rule.  Although the resistance is intended to ignite a social revolution, the consequences of these movements have larger implications for Yemen’s economy and the macroeconomy as a whole.

Yemen is one of the poorest countries in the Arab World and is heavily dependent on oil resources for revenue.  According to the Central Intelligence Agency’s World Factbook, “petroleum accounts for roughly 25% of GDP and 70% of government revenue.”  However, Yemen faces diminishing resources, largely responsible for the country’s further decline.  Although the government has taken steps to bolster non-oil sectors of the economy along with foreign investment, they must still battle longterm challenges such as dwindling water resources and a high population growth rate in addition to Arab Spring.

The political turmoil caused by Arab Spring has exacerbated rising unemployment.  The most recent estimate of the unemployment rate reached 35%.  This in turn results in a loss of income and therefore a decline in standards of living.  This is accurately reflected in GDP per capita, estimated at $2,500 in 2011.  The population below the poverty line was also listed at 45.2%.  This is no surprise as political turmoil often demands that attention be focused elsewhere, rather than on the current state of the economy.

Rising unemployment also has the property of a domino effect.  Those people facing unemployment will have less demand for goods and services, thus affecting the employees in the sector that provides those goods and services.  A decrease in demand means that the marginal product of labor decreases.  A chain reaction ensures, causing more workers to be laid off.  In addition, the decrease in wages implies a decreasing money multiplier.  If people do not have money to save and invest, the banks cannot create more money by distributing loans.

Yemen, already a suffering country, is experiencing a loss of national output as well.  If people are spending their time protesting rather than working, resources are being wasted, which also decreases GDP.  The government must also focus on welfare spending despite foreign aid they receive for development projects and humanitarian needs, which increases deficits.  An increase in government spending results in a decline of national savings, raising the interest rate and discouraging investment.  In addition, government spending is heightened even more as the government attempts to stifle more protests and uprisings.  The corrupt government, heightened by Arab Spring, extends into the judicial system as well.  This insinuates that contracts are not enforced and private property rights are not respected.  This limits economic security and freedom, and discourages foreign investment.

Yemen has also experienced surging inflation rates since Arab Spring, ranking as one of the highest rates in the world, now at 20%.  This is a significant increase from the 2010 inflation rate of 11.2%.  This inflation occurs as the government issues large quantities of money to pay for expenditures.  With this, seigniorage occurs, which can be thought of as a tax.  Inflation tax hurts those who hold the money because old money in the hands of the public becomes less valuable.  The difference between the value of money and what it costs to print the money is seigniorage and goes to the issuer of the money.  In countries experiencing hyperinflation, this is often the government’s primary source of revenue.

Further, the Fisher effect explicates a one-to-one relation between the inflation rate and nominal interest rate (the rate the bank pays).  Thus, when inflation is high, nominal interest rates are high as well.  This lowers the demand for real money balances, the quantity of money in terms of the quantity of goods and services it can buy.  In other words, it measures the purchasing power of the stock of money.  If demand decreases, there is a decreased desire among the population to hold assets in the form of cash or bank deposits because of it’s decrease in value.  This is true for Yemen, as it experiences high inflation.

Arab Spring has negatively affected Yemen’s already poor economy.  The adverse effects are intertwined, leading the country farther into poverty.  These multiplier effects not only travel through Yemen’s economy, but through the macroeconomy as a whole.  The World Bank experienced interrupted projects during the political crisis in 2011 is just one example.  Thus, Arab Spring is not only a crisis for the Arab World, but the world in its entirety.