Casting Light on the Arab Spring A Survey of Influential Economic Factors in the Arab Spring Countries

Ugurhan Berkok, Royal Military College of Canada and Queen’s University Christopher E. Penney, Royal Military College of Canada Nicholas Andexer, Royal Military College of Canada Mohammed Douch, Royal Military College of Canada Adugna Olani, Queen’s University Abdelkerim Ousman, Royal Military College of Canada Prepared By: Department of Economics, Queen’s University 94 University Avenue, Kingston, ON, Canada K7L 3N6 Contract Project Manager: Ugurhan Berkok, 613 533 2291 ext 32291 PWGSC Contract Number: RMCC Serial #2009-0302-SLA CSA: Tania Yazbeck, DRDC CORA Defence Economics Team, 613-995-2445 The scientific or technical validity of this Contract Report is entirely the responsibility of the Contractor and the contents do not necessarily have the approval or endorsement of the Department of National Defence of Canada.

Contract Report DRDC-RDDC-2015-C111 January 2015

© Her Majesty the Queen in Right of Canada, as represented by the Minister of National Defence, 2015

© Sa Majesté la Reine (en droit du Canada), telle que représentée par le ministre de la Défense nationale, 2015

JOHN DEUTSCH INSTITUTE FOR THE STUDY OF ECONOMIC POLICY

Casting Light on the Arab Spring A Survey of Influential Economic Factors in the Arab Spring Countries

Prepared By: Ugurhan Berkok, Royal Military College of Canada and Queen’s University

Editor, Author of Iraq, Jordan and Tunisia Chapters

Christopher E. Penney, Royal Military College of Canada Editor, Author of Kuwait and Yemen Chapters

Nicholas Andexer, Royal Military College of Canada

Author of Bahrain Chapter

Mohammed Douch, Royal Military College of Canada Author of Morocco Chapter

Adugna Olani, Queen’s University

Author of Algeria, Egypt and Sudan Chapters

Abdelkerim Ousman, Royal Military College of Canada Author of Libya and Syria Chapters

Department of Economics – Queen’s University

94 University Avenue – Kingston, ON, Canada – K7L 3N6

The scientific or technical validity of this Contract Report is entirely the responsibility of the Contractor and the contents do not necessarily have the approval or endorsement of the Department of National Defence of Canada.

PWGSC Contract Number: RMCC Serial #2009-0302-SLA

Contract Scientific Authority: Tania Yazbeck, DRDC CORA Defence Economics Team, 613-995-2445

January 22, 2015

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© Her Majesty the Queen in Right of Canada, as represented by the Minister of National Defence, 2015 © Sa Majesté la Reine (en droit du Canada), telle que représentée par le ministre de la Défense nationale, 2015

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Contents Introduction .................................................................................................................................................. 5

Summary and Conclusions ............................................................................................................................ 9

Middle Eastern Countries ........................................................................................................................... 21

Bahrain .................................................................................................................................................... 21

Iraq .......................................................................................................................................................... 38

Jordan ...................................................................................................................................................... 51

Kuwait ..................................................................................................................................................... 68

Syria ......................................................................................................................................................... 81

Yemen ..................................................................................................................................................... 96

North African Countries ............................................................................................................................ 111

Algeria ................................................................................................................................................... 111

Egypt ..................................................................................................................................................... 127

Libya ...................................................................................................................................................... 143

Morocco ................................................................................................................................................ 160

Sudan .................................................................................................................................................... 173

Tunisia ................................................................................................................................................... 185

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Introduction

Mohamed Bouazizi’s self-immolation in December 17th of 2010 in Tunisia marked the beginning of a far-reaching movement in the Arab World, a region where the vast majority of countries lacked democratic freedom and universal human rights.1 Prior to this, Iraq was the only country to have relatively free and fair elections, and this was under the auspices of American and British soldiers following the deposing of Saddam Hussein. Immediately following the revolt in Tunisia, unrest spread to Egypt, Libya, Syria and Yemen.2 Four years on, however, only Tunisia has progressed towards a true democracy while Egypt has since returned to autocratic governance and Libya and especially Syria are afflicted by violent civil wars. With the exception of Iraq and Tunisia, the Arab Spring uprisings have not yet yielded a transition towards ‘minimalist democracy’3 as enjoyed by many developing countries such Indonesia and the Philippines in Asia, Ghana in Africa and several in Latin America. This concept of ‘minimalist democracy’ can simply be described as governance characterized by competitive elections and little more; a fully-fledged democracy would have significant additional institutional strength that would weigh against tyranny.4 Perhaps the most striking contrast observed amongst Arab Spring countries would be Libya and Tunisia; though neighbours, the former has historically had very low institutional quality while the latter had strong institutions. It is perhaps not surprising then to witness a successful transition underway in Tunisia while Libya continues to experience difficulties.

This study concentrates on twelve Arab countries5 in the Middle East and North Africa. None of these countries had, prior to the Arab Spring, implemented a fully inclusive democracy, partly due to their colonial history, partly due to the manner in which they earned their freedom from colonialist powers, and largely due to the winds of history and technology that did not create adequate conditions for democracies to emerge.

One can observe, from Chart 1 below, the drastic changes that have occurred since 1990 following the end the Cold War. The number of autocracies worldwide fell from about eighty to twenty within a span of twenty-five years. Since the transition to democracy requires more than competitive elections, only half of these sixty or so countries have transitioned to a mixed spectrum of functioning democracies, many still remaining as anocracies – as is the case with many Arab regimes.

1 The Economist’s Democracy Index 2010 ranked Lebanon - the highest ranking Arab country - at 86th out of 167 countries. 2 In April 2011, the Gulf Cooperation Council brokered a deal to transfer the presidency from the 33-year autocratic president Ali Abdullah Saleh to his vice-president Abdrabbuh Mansour Hadi who subsequently won the February 2012 election to become the president. With Insurgencies and economic woes continuing, and no democratic elections yet held, the Yemeni democracy still lies in a distant future. 3 Bidner et al. (2014). 4 Ibid. 5 Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Libya, Morocco, Sudan, Syria, Tunisia, and Yemen while leaving out Oman and, most importantly, Saudi Arabia.

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Chart 1: Global Governance Trends, 1800-20126

This research examines the characteristics and economic and political aspects of twelve Arab Spring-affected countries, paying careful attention to common and country-specific factors. Each chapter includes three main information sections: first, a section with a set of descriptive indicators offering a snapshot of the country in question; second, a section entitled Critical Economic Indicators (CEIs) that covers a decade leading up to the unrest and/or uprisings; and, third, a section allocated to country-specific indicators. Core to each country analysis is the selection of CEIs, which may be interpreted as barometer readings ahead of potential civil unrest. The selection of the CEIs used within this report has been guided by observations made on each of the countries’ Arab Spring experiences as well as those from other popular uprisings elsewhere in the world, including recent events in Turkey, Ukraine, and Hong Kong. The robust participation of educated and socially-connected youth against various perceived governance problems, often with demands for greater personal and democratic freedoms, is a commonly observed

6 Systemic Peace (2014).

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factor in virtually all unrests examined in this study. Therefore, the three groups of CEIs are particularly representative of youth activism by taking into account the demographic, economic and technological dimensions of youth malcontent. The demographic dimension is captured by the youth bulge and youth unemployment. The academic literature distinguishes popular uprisings from armed conflicts and this Report concentrates on the former. The economic dimension of CEIs includes the Gini coefficient, the Undernourishment Index and the Consumer Price Index. Finally, the technological dimension, aiming to capture the educated youth phenomenon observed prominently in popular uprisings, includes the Emigration Rate of Tertiary Educated and the Internet Users. The third main section in each chapter attempts to capture factors that are specific to the country being studied. Beyond the indicators covered in the first two main sections, each country will normally exhibit historical, geographic, economic or political specificities which may underline or complement the other critical factors in generating civil unrest . Examples of country-specific factors include the ethnic and religious divides present in Iraq and Syria, the role of the Kings in Jordan and Morocco, and the variety of institutional backgrounds and natural resource endowments of each of the countries. We must note that the fundamental objective of the Report is to list and discuss the significance of each of the CEIs. For instance, an increasing use of internet and the social media, especially after 2000, may have been a decisive factor in breaching repression against their autocracies. The Arab youth that led the uprisings in these countries have been exposed to world media. This is in sharp contrast to North Korea, an absolute autocracy, where the youth are completely insulated from the outside world.7 The study also provides an overview of non-economic factors in each of these countries, including the armed forces personnel and the annual military expenditure of these countries. We observe that relative to their GDP, military expenditure in these countries tends to be rather high. The objective of this study is not to develop policy prescriptions but to examine the factors associated with the origin and continuation of civil unrest. Yet, in the aftermath of the Arab Spring, some suggestions can be considered.8 If Egypt, the largest and arguably the most influential Arab country, had progressed as Tunisia has, there could have been a viable and very strong example to other affected countries. The current economic upheaval due to the volatility in oil prices may not retrigger grievances anywhere in the Arab world because oil production costs are low in the oil producing countries whereas low prices benefit importers. As for American and European foreign policy9 and the intervention in Iraq and Syria against ISIL, a successful short-term success may be simple stabilization rather than actual progress towards democracy in the region.10 7 BBC (2014). 8 Diamond (2010). 9 The Economist (2014). 10 Sarsar (2006).

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References BBC (2014). “Educating North Korea”. BBC Panorama. Published 2/8/2014, www.bbc.co.uk/programmes/b03txq49. Accessed 12/1/2014. Bidner, C., P. Francois and F. Trebbi (2014). “A Theory of Minimalist Democracy”. NBER Working Paper 20552. http://www.nber.org/papers/w20552. Diamond, L. (2010). “Why are there no Arab democracies?”. Journal of Democracy 21(1). 92-104. Sarsar, S. (2006). “Quantifying Arab Democracy”. Middle East Quarterly 13(3), 21-28. Center for Systemic Peace (2014). Polity IV Dataset. http://www.systemicpeace.org/inscrdata.html. Accessed 11/1/2014.

The Economist (2014). “The lesson of Algeria”. Published 4/16/2014. http://www.economist.com/node/21600984/print. Accessed 12/1/2014.

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Summary and Conclusions

1. Similarities and dissimilarities

This study led to the identification of strong similarities and sharp divergences amongst the twelve Arab Spring countries covered in this Report. However, there are a small number of fundamental commonalities within the group of countries that experienced uprisings. Moreover, in those countries where unrest evolved into uprisings, we detected a conflation of factors that boosted the likelihood that the masses, fed up and wanting to see the ruling regime deposed, descended on the streets for mass revolts.

A short list of fundamental commonalities has been observed. First, nearly all twelve countries developed autocratic and corrupt regimes upon independence.11 Second, periodic unrests have been occurring in most countries in recent decades. While these were often motivated by deep and longstanding grievances - consider the divide between North and South Yemen - more immediately pressing concerns such as food availability and changes in cost of living seem to have spurred popular dissent.. Third, political Islam, while suppressed in most countries, has always played a significant role and has recently been represented by political movements and parties.

Observed divergences are equally important. First, two of the more stable countries in the last four tumultuous years were the kingdoms of Jordan and Morocco.12 The two Kingdoms didn’t experience uprisings as severe as elsewhere. Their young, modernizer kings, though ruling somewhat autocratically, may have realized the inevitability of political and economic liberation and proceeded to initiate reforms in advance of unrest. In fact, both seem to be moving towards parliamentary monarchies. Second, some post-independence presidents such as Bourguiba in Tunisia, and Ben Bella and Boumedienne in Algeria had gained legitimacy in their countries’ struggles for independence while kings and other presidents were simply negotiated to power by colonialist powers. Third, they differ significantly in terms of natural resource and water endowments. Fourth, some countries have experienced Islamic sectarian divides, such as Bahrain, Yemen, Iraq and Syria. South Yemen stands out as the only country where a radical Marxist rule was established shortly after independence and lasted from 1969 till the unification of North and South Yemen in 1990. Other relatively radical countries, such as Algeria, Egypt, Iraq and Syria, were ruled by either the military or by single party systems, with the military figuring prominently in their respective power structures. Fifth, upon the commencement of the Arab Spring, countries with a weak fabric of civil society failed to cope in the aftermath while, starting with Tunisia, countries with more developed social and political traditions have fared relatively well.

There exist differences perhaps of a second order. From one end of the Arab world to the other, former British and French colonies differed in terms of the social and political structures left behind. Further,

11 Egypt is an exception as, upon independence in 1922, it developed a parliamentary monarchy which lasted until a military takeover in 1952. Kuwait can also be considered an exception, as it had long been considered the most open and democratically inclusive country in the Arab world. 12 And Oman but it is not in the current sample. Saudi Arabia was not an Arab Spring country.

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proximity to the Israeli-Palestinian conflict necessarily affects the country’s foreign relations as well as domestic politics.

2. Countries where uprisings took place

Countries where unrest ultimately led to regime changes exhibited further common threads.

First, autocratic presidents tended to have been in power for a very long period of time without free and fair elections. In fact, all four countries (Egypt, Libya, Tunisia and Yemen) where regime change took place, at least initially, had long-time autocratic rulers. Iraq remains outside the group because regime change was imposed externally. One might suggest a similar interpretation for Libya but the initial uprising had already snowballed into a civil war by the time external intervention began.

A second common thread, as expected, is the high level of corruption exhibited by these regimes. Corruption manifested in different manners, such as embezzlement, regulatory favouritism and subsidies in the form of favourable access to various inputs such as credit, land and natural resources.

Third, in the years leading to the uprisings, these countries tended to have rapidly growing economies. However, the global financial crisis resulted in negative shocks, and economic growth in these countries slowed down or ground to a halt.

Fourth, their demographic data shows that they were populated with various ethnic and religious groups and, especially in some countries such as Iraq and Syria, frictions amongst these groups played a significant role in igniting the conflicts.

Fifth, literacy rates were not low. This could partially explain the success in the effectiveness of coordinating demonstrations through the use of social media.

Sixth, each of these countries had young populations and high rates of youth unemployment. In all four countries, the youth bulge seems to have just peaked.

3. Conflation of grievances and uprising facilitators

The mass uprisings - particularly in Egypt, Tunisia and Yemen - and the civil wars in Libya and Syria resulted from the conflation of a variety of factors. Current studies discuss not only the various factors that facilitated the uprisings but also the conflations that triggered the changes of regime. While no single study can conclusively demonstrate what factors could have been the triggers, there were two categories of factors, those that were conducive to a build-up of grievances and those that facilitated the mass uprisings.

We cited the grievance-enhancing factors above within different categorizations. All twelve countries experienced various forms and levels of autocracy as well as high levels of corruption. Moreover, most

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Arab Spring countries’ populations exhibited relatively high levels of education that prompted comparisons to other, more democratic countries, as well as increasing the understanding of the causes of the perceived malaise in their own countries. This has also likely facilitated the emergence of protest leaders.

Civil uprisings can be a powerful tool, and have resulted in the removal of many regimes throughout history. The Arab Spring protests, once triggered by underlying factors, exhibited various multipliers that may have invigorated the nascent movements.

First, modern communication means such as mobile phones and social media may have skirted the attempts of ruling regimes to undermine crowd coordination. This was partly due to the diversity of digital media channels, so that any attempt to suppress one would be overcome by protesters using other channels. For instance, recent empirical evidence on Egypt’s uprisings shows that “activity on Twitter predict[ed] protests in Tahrir Square, suggesting that social media has helped coordinate street mobilizations.”13

Second, components of overall malcontent tend to be complementary, thus generating some type of “scope multiplier”. High literacy rates and cyber-activism widely observed in the past decade or so seems to have served to enhance this multiplier. This concept can be explained as follows - the greater the scope of the opposition, and the more popular support the opposition was receiving, the greater the overall effectiveness would be. The scope was narrower in Algeria and Syria yet wider in in Egypt and Tunisia. Libya and Yemen remain mixed cases, the former with a wide range of factions in opposition and the latter with sectarian and tribal factions.

Third, the presence of civil society institutions serve to narrow the gap between the military and the civilians in such a way that may help portray the military as not being squarely in the pocket of the corrupt autocracy. In fact, both in Egypt and Tunisia, the military demonstrated their independence of the parties and presidents in power. Yet in other countries, the autocrats’ lack of trust in the military and their own citizens led them to avail themselves of the services of private military companies.14

Fourth, it is certainly true that a window of opportunity15 is critical: it may appear somewhat serendipitously16 and has to be seized by the opposition, as a minor unrest can develop into a full-blown uprising. The window of opportunity was missed in Egypt by the Muslim Brotherhood that didn’t quite play by the rules of democracy; the Islamists in Tunisia, probably due to their shared history of opposition, boosted the potential for a successful democracy in the country through their cooperation with other democratic forces.

Fifth, the geographical "neighbourhood" matters. While interference by the UAE and Saudi Arabia suppressed the opposition in Bahrain, the Syrian uprising spiralled out of control mostly due to the chaos and the malcontent of Sunnis in Iraq. Turkey’s indifference towards controlling its borders against 13 Acemoglu et al. (2014). 14 This was observed in Bahrain, United Arab Emirates and Libya. 15 Aidt and Leon (2014). 16 Recall Bouazizi's self-immolation.

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jihadist infiltrations into Syria and its reluctance in supporting moderate forces were also major factors in this regard.

Finally, once a given unrest evolves into a full uprising, concessions by autocrats seem to have only emboldened the masses. Yet, trickling concessions towards democracy by the rulers of Jordan and Morocco helped avoid uprisings despite the presence of unrest on numerous occasions. Regardless of their true intentions, the two kings steered their respective countries away from uprising and violence. Thus, the slippery slope argument is path dependent, i.e., concessions by rulers may generate diametrically opposite effects vis-à-vis the momentum of uprisings.

4. Country-Specific Factors

The overall Arab Spring phenomenon cannot be analyzed without a proper understanding of the elements of the countries’ specific histories, geo-political and economic conditions. Predictions regarding their future paths also critically depend on such an understanding. For example, the differences between Morsi of Egypt and Ghannouchi of Tunisia explain a great deal of the current divergences in the aftermath of their Arab Spring uprisings. This section therefore summarizes the relevant country-specific features of each of the twelve surveyed countries.

I. Middle-Eastern Countries

Bahrain

Bahrain is a home to the US Fifth Fleet, a relationship established in 1995 to ensure that vital oil shipping lanes remain open while acting as a deterrent against Iran's regional ambitions. Bahrain suffers from a cultural divide that is relatively common in the Arab world: like Iran to the north, Bahrain's citizens are mostly Shiite; however, its government is mostly Sunni, much like Saudi Arabia and the UAE. A vast majority of Shiite protesters are calling for democratic reforms and equal rights under the law, and some others are calling for the dissolution of the monarchy.17 Additionally, many Shiite also claim that they face discrimination when trying to attain government employment.18

Further, the regime and the opposition each suffer from a lack of internal cohesion. Within the regime, a reformist crown prince wagered his political future on reaching out to a pragmatic segment of the (mostly Shiite) opposition, angering some of the more hard-line regime elements. The opposition, Al-Wifaq, for its part, by agreeing to engage in informal, semi-secret talks with the crown prince risked alienating its popular base. Finally, the non-Arab Ajam ethnic group who represent around 10 per cent of Bahraini Shiites, continue to feel deeply threatened as a community.19

17 Postel (2013). 18 Newmann (2013). 19 International Crisis Group (2011).

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Iraq

The American-British military intervention of 2003 hasn’t changed the sectarian and ethnic divides in Iraq. The British-French partition of Middle East in the aftermath of World War I left the region with all the potential frictions and conflicts by splicing ethnic and sectarian groups into different countries. The Baath party regimes in Iraq and Syria over the past 50 years or so brutally suppressed, respectively, their Shia and Sunni “minorities”, about 60% and 70% of their respective populations. Therefore, any future success of democracy critically depends on the reconciliation of minority Sunnis and majority Shiites, with Kurds as the added dimension. Ironically, Kurds are identified more by their ethnicity than their adherence to religion.

Since the 2003 invasion that toppled the Saddam Hussein’s Ba’athist regime, the Iraqi Kurdistan has been relatively peaceful and prosperous, largely free of sectarian conflict. Meanwhile, other regions of the country experienced various levels of violence, first rising till the 2007-2008 Sunni Awakening but then recently catching fire with the emergence of Sunni extremist ISIS invading western Iraq and terrorizing all non-Sunni populations.

A critical economic factor in Iraq is oil. Whereas Sunni regions have no oil, Kurdish and Shiite regions do. In fact, the main friction point between Iraqi Kurdistan autonomous region and Baghdad is the disagreement about oil revenues generated in the Kurdish region. A potential future break-up of Iraq could see an independent Kurdistan with the power of oil revenues. This might draw into the frame Turkey that is opposed to Kurdish independence for fear that it might tempt Turkish Kurdistan to follow suit.

Jordan

With little energy and water resources, the Jordanian economy is vulnerable and domestic stability could be endangered due to variations in energy prices. Energy imports satisfy more than 90% of Jordan's energy demand while accounting for more than 40% of the country's budget. Whereas Jordan imports Saudi oil through the TransArabian pipeline, it imports gas through the Arab Gas Pipeline (AGP) from Egypt. Jordan’s gas imports suffered dramatically in 2011 and 2012 as a result of unrest in the Sinai Peninsula and in Syria.

Two fronts hold promise, however. First, very significant shale gas resources have been discovered and Jordan has reached an agreement with Enefit, an Estonian company, and its partners to build a 540MW shale-fuelled power station.20 Second, a proposed pipeline from the Iraqi oil city of Basra to the Jordanian port city of Aqaba would bring Iraqi oil and gas to Jordan. This pipeline, by diversifying Iraqi export opportunities, is a mutually beneficial project.

Hydrocarbon exploration near Jordan's eastern border with Iraq and in the areas around the Dead Sea could lead to additional discoveries, but in the short term Jordan will continue to rely on energy imports 20 The Economist (2014) and EIA (2014), http://www.eia.gov/countries/country-data.cfm?fips=jo.

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and a nascent renewable energy sector to meet domestic energy demand. Jordan's government plans to boost electricity generation capacity from renewable sources to 1.8 gigawatts by 2020, up from just 18 megawatts at present.21

Kuwait

Kuwait’s domestic stability continues to depend upon the status of its hundreds of thousands of non-citizen residents. While recently there have been efforts to pass legislation that would grant citizenship to some 4000 residents.22 Many more remain without status, and precious little has been done to resolve the underlying problems. A recent move to offer citizenship of the small African island nation of Comoros to Kuwait’s stateless has been generally panned by critics; while obtaining this citizenship would mean access to health and other government services, it would also open residents to potential deportation if any crimes are committed.23

A further cause for concern is the question of whether government revenues can continue to support the cradle-to-grave welfare system currently present in the country, along with a variety of other generous benefits available to its citizens. For example, energy prices are offered to citizens at less than 5 percent of actual cost. Recently, government officials have warned that such practices can no longer be supported, and a new four-year programme outlines a variety of measures including the imposition of a taxation system to improve government revenues. Currently, 94 percent of government revenue originates from oil income, and the country has posted budget surpluses in each of the last 13 years, not surprisingly coinciding with the rise in the price of crude oil. While until recently the short and medium term public financial situation has appeared relatively optimistic, the recent volatility in the price of crude oil has created some uncertainty in this regard. Imposing economic diversification measures now, it is hoped, can help curtail potential budget shortfalls in the future.24Whether any serious efforts will be undertaken with a view towards diversifying the domestic economy away from the production and refinement of fossil fuels remains to be seen, however, as the country lags behind even Qatar and the UAE in this regard.25

Syria

The Syrian society is divided vertically by cleavages along religious and ethnic lines, as well as horizontally along socioeconomic and class lines. "Minority groups tend to segregate themselves in their

21 EIA (2014). 22 Amnesty International (2014). 23 Al-Jazeera America (2014). 24 Daily News Egypt (2012). 25 Gulf News (2012).

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own neighbourhoods and villages. Traditionally, Syrian society has been divided between landlords and tenants, between urban dwellers and rural peasants, and between a Sunni elite and minority groups."26

Still others made "their fortunes in industry and trade in the late nineteenth century. Another component of the ruling class was the ulama (or alim). This group consisted of religious scholars, Islamic judges (qadis), interpreters of law (muftis), and other persons concerned with the exposition of Sunni Islam."27 The land reform legislation of 1963 led to "the nationalization of larger financial, commercial, and industrial establishments virtually eliminated the economic and political power base of the old elite."28 This land reform was an opportunity for the emergence of a new elite comprised of military and civilian leaders who consolidated their position "by cultivating the support of peasants and the proletariat, who benefited from the new economic order. The regime's socialism eroded the position of the bazaar merchants while its secularism removed power from the ulama."29 What remains today is the Ba’ath party and its affiliated institutions.

Yemen

The balance of power in North Yemen has been shifting since Huthis(also known as their alternative organizational names Zaydi Shia or Ansar Allah)30 emerged around the 1994 civil war, against the government domestic and international policies, in the governorate of Saada“on the border of Saudi Arabia, and expanding southward to the gates of the capital, Sanaa.”31Between 2004 and 2010, the Huthis, with no clear political agenda and as both politically and militarily underdogs, confined their fight against the government to the Saada region.

The 2011 uprising against former President Ali Abdullah Saleh changed the country’s political dynamics, progressively propelling the Huthis onto the national stage that had been occupied by a political duopoly. In early 2014, the Huthis won a series of battles, consolidating their control over the governorate of Saada and starting to move onto Sanaa. Currently, tensions are very high between Huthis (close to Iranian Shi’ism) and their various opponents, including the Ahmar family and their affiliated tribes, General Mohsen and his military allies, Salafi fighters, and the Sunni Islamist party Islah (close to Muslim Brotherhood).

The Huthis have moved to the political centre as they gained momentum and now their platform advocates “popular positions, including a federal state based on democratic principles, political pluralism, religious freedom and balance of powers… The result is a shifting coalition of competing streams – religious, tribal and even leftist – cooperating under an anti-establishment umbrella, the

26 Thomas Collelo (1987). 27 Ibid. 28 Ibid. 29 Ibid. 30 More than a third of the Yemeni population are the Shias and Huthis have become their legitimate political representative. The rest of the population are Sunnis. 31 International Crisis Group (2014).

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overall character of which has yet to be hashed out.”32Whether the Huthi movement will transform from an armed militia into a legitimate political party still remains uncertain.

II. North African Countries

Algeria

Algeria may be an "Egypt in waiting", though it has two key differences: it has significant hydrocarbon resources and Egypt has significant geopolitical importance33. Similarities abound because Egypt was and, after the Morsi period, again is a military-dominated autocracy with a state-dominated economy, high corruption, youth bulge and unemployment, and wider economic difficulties. The 2011-2012 Food Riots were symptoms of these underlying latent problems behind a facade of stability since the end of Civil War in 2002. Three quarters of the population is under the age of 30, and 20 percent of them are unemployed.34

With the rigid economic structure and a non-diversified economy, Algeria cannot be expected to easily resolve the problems it faced during the 2011-2012 Food Riots.35 Moreover, the corruption level has always exceeded that of neighbouring Tunisia and Morocco; the youth unemployment has remained high; and, recently, price level increases have outpace GDP. These factors are all expected to contribute to the persistence of the current economic malaise. It would be unreasonable to rule out further protests against the Algerian autocracy.

Egypt

Arguably the most fundamental stressor in and around Egypt is the management of water resources. Egypt relies for 97 percent of its water from the Nile. Neighbouring countries also make use of the Nile for water resources, though to nowhere near the same extent. Egypt does not enjoy rainfall like the Nile's upstream riparian nations such as Burundi, Eritrea, Ethiopia, Kenya, Rwanda, Sudan, South Sudan, Tanzania, Uganda and the Democratic Republic of Congo. These countries have a combined population of 450 million people. This regional population is expected to double in the next twenty five years, thus generating a very high demand for water and stressing the environmental carrying capacity, with demands deriving from industry, agriculture and domestic use.36

Water sharing agreements in the region originate in the early 20th century. The Nile Water Agreement in 1929 endowed Egypt with a right to veto any upstream Nile water project. In 1959, Egypt and Sudan signed another Nile Water Agreement that gave Egypt three quarters or 55 billion cubic metres of the Nile's water flow of 84 billion cubic metres. In 1997, countries initiated the Nile River Cooperative Framework which resulted in the Entebbe Agreement in 2011, signed by Ethiopia, Rwanda, Uganda, 32 Ibid. 33 Egypt also produces some natural gas. 34 Euro News (2011). 35 World Bank (2014). 36 Di Nunzio (2013).

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Kenya, Tanzania and Burundi. South Sudan and Democratic Republic of Congo pledged to sign it in the future. Egypt and Sudan refused to sign the agreement alleging that it impinges in their pre-existing rights.37

The provisions of the 1929 Agreement and Ethiopia’s $4.2 billion mega-dam project expected to be completed by 2017 generated a collision course between the two countries, risking an armed conflict. In January 2014, Egypt requested Ethiopia to suspend the mega-dam project. Upon rejection of the request, a temporary halt to the project was proposed so that its effects downstream could be determined. “Otherwise, it has vowed to protect its ‘historical rights’ to the Nile at ‘any cost.”38

The second, but not necessarily less important stressor is Egypt’s role in Middle Eastern politics. Egypt is allied with Saudi Arabia, the United Arab Emirates and Kuwait against the Muslim Brotherhood and other political Islamic movements. For instance, these four countries “are discussing the creation of a military pact to take on Islamic militants, with the possibility of a joint force to intervene around the Middle East.”39 The alliance is also meant to counterbalance Iran. In terms of these geo-strategic considerations, Egypt is a critical actor due to its (and its military’s) size, its control of the Nile and the geo-strategic importance of the Suez Canal.

Libya

While some Libyans value their tribal identity, many openly dismiss it as a relic of the past; there are others who do not even know their tribal origin amongst some 300 tribes. Ironically, the majority of tribes are not identified to a territory but "are simply networks of people who live far from each other and barely (if at all) know the identity of their tribal leaders."40 For four decades, the Qaddafi regime has prevented the formation of a real civil society."41 The country has lacked political parties and civil society organizations, which is why many Libyans have resorted to tribal affiliations. "For many Libyans, tribal affiliation had become a central theme in their everyday lives. It was the only way to get jobs, justice or financial support from the state (…) Tribal loyalty strengthened the maintenance of Qaddafi’s power."42

During his 42-year reign, Qaddafi "pursued a policy of ‘statelessness’ – rejecting parliamentary democracy and the formation of political parties – thus preventing the development of effective governing institutions."43 Qaddafi’s revolution, by exercising total control over the country, prohibited the creation of any institution that could potentially challenge his authority.44 The civil war of today is not so surprising in a country with neither any inherited governance structures nor civil society organizations. 37 Di Nunzio (2013). 38 Hussein (2014). 39 Hendawi (2014). 40 Cherstish (2011). 41 Ibid. 42 Sangha (2014). 43 Ibid. 44 Schewan (2014).

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Morocco

Morocco was not immune to the 2011 Arab revolution. On 20 February 2011, thousands of Moroccans joined nationwide protests calling for political reforms and eradication of corruption. Differently from most other Arab Spring countries, the monarch responded to these protests with a new constitution seen at the time as a new step towards democracy.

The young King, Mohammed VI, who inherited the Moroccan throne in 1999, retains much of the executive power, but Parliament is democratically elected and the head of government is chosen from the winning party. These reforms, portrayed by officials as an example of “Moroccan exceptionalism” and a model for other countries in the region, did neither lead to a genuine democracy nor to real progress on issues such as justice or corruption. The Moroccan economy is relatively diverse. Key sectors include agriculture, tourism, mining, and remittances from the Moroccan diaspora. According to the International Monetary Fund (IMF), the economy is growing at a reasonable and stable speed in the low single digits.45 Unemployment slightly increased to 9.3 percent in 2014. The fiscal deficit slightly decreased to an estimated 4.9 percent of GDP in 2014, mostly reflecting a reduction in subsidies and lower oil prices. Although Morocco shares some similar problems with other Arab Spring-affected countries, the Moroccan monarchy managed to stay in power with minimal reforms. To perpetuate this seemingly stable situation for the country, Moroccan authorities need to continue along the path of economic and social development, address human rights issues and democratize Morocco’s institutions.

Sudan

The management of water resources in Sudan is a serious national concern. It benefits from the Nile and the Nile Basin but does not receive rainfall like in Nile upstream riparian nations such as Burundi, Eritrea, Ethiopia, Kenya, Rwanda, South Sudan, Tanzania, Uganda and the Democratic Republic of Congo. The Nile Water Agreement in 1929 endowed Egypt with a right to veto any upstream Nile water project and their 1959 Nile Water Agreement allocated 55 billion cubic metres of the Nile's water flow of 84 billion to Egypt. In 1997, the riparian countries initiated the Nile River Cooperative Framework which resulted in the Entebbe Agreement in 2011, signed by Ethiopia, Rwanda, Uganda, Kenya, Tanzania and Burundi. South Sudan and Democratic Republic of Congo pledged to sign it in the future, while Egypt and Sudan refused to sign, alleging that it impinges in their pre-existing rights.46 Water may well be a source of future conflict in the region.

45 See: http://www.imf.org/external/np/pp/eng/2014/100914.pdf. 46 Di Nunzio (2013).

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In Darfur and the North the water problem is critical, except in the Nile Basin, along the Atbara River and smaller rivers between the two. Sudan has massive underground water reserves (aquifers) that are large sources of freshwater in the country; however, no integrated coordination and management of these flows and stocks exists. Furthermore, water waste arising from inefficient irrigation and destructive rain-fed farming methods aggravate the water problems. The country is, on average, water rich, but exhibits poor management and maintenance of the resource. Further serious challenges for Sudan are its long-term relationships with South Sudan and Chad. A long civil war ended with the independence of the South in 2011. In parallel, and since 2003 the lingering Darfur conflict has intensified and transformed into a proxy war between Sudan and Chad; while Sudan supported the Chadian armed opposition, the Chadian government provided arms, money and combatants to Darfuri rebels. When this proxy war ended in 2008, the internal Darfur conflict continued with a varying intensity and spread to the region of South Kurdufan, which is contiguous to Darfur and South Sudan. The South Kurdufan conflict is the remnant of North/South conflict and has been kindled by the nascent South Sudanese government as a pressure against the North that remains intransigent on the issue of Abeyi, a contested territory between the North and the South containing large hydrocarbon reserves. The mostly urban phenomenon of the Arab Spring also had a brief echo in Sudan but was limited to Khartoum, the capital of Sudan. Currently, both Sudans continue to suffer from internal conflicts. While the conflict in South Sudan remains strictly tribal, the Sudanese conflicts revolve around tribal, modem political and confessional lines.

Tunisia

Pre-Arab Spring Tunisia was uniquely characterized by three phenomena. First, tertiary-educated youth faced high unemployment. Second, Tunisia differed from all other Arab countries through its exceptionally high incidence of civil society organizations. And third, the rampant corruption was personalized in the president, his family and his entourage.

Unemployment amongst recent university degree holders was rather high, increasing from 34 percent in 2005 to 56 percent in 2011.47 Tunisia “attempted various reforms aiming to promote employability or self-employment among university graduates.”48 Whereas Tunisia compared favourably to its neighbours in terms of general youth unemployment, the unemployment problem specifically affected university graduates.

47 Premand et al. (2012). 48 Premand et al. (2012).

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Also, Tunisian citizens had a significant tendency to set up civil society organizations.49 As mentioned in the Introduction, this bodes rather well for building a strong institutional democracy. Tunisia’s strong civil society was also instrumental in the overthrow of Ben Ali.

Finally, but perhaps most influential in bringing down Ben Ali was the corruption empire the president built around his family and friends. The post-uprising Confiscation Commission50 discovered 220 very successful firms belonging to Ben Ali and family.51 Their success was due to presidential decrees over 17 years, decrees that captured state’s industrial policy and regulation for the benefit of the 220 firms by creating a protected environment for them. The president issued 25 decrees, authorized requirements in 45 different sectors and restricted foreign direct investment (FDI) in 28 sectors. This resulted in over one fifth of all private sector profits accruing to connected firms. At its peak, this conglomerate appropriated a fifth of the realized profits in the Tunisian economy. This “… corruption was widely known and was a source of palpable frustration for the Tunisian public, as evidenced by the targeted and systematic looting of Ben Ali family holdings after the 2011 uprising.”52

References

Acemoglu, D., T.A. Hassan & A. Tahoun (2014), “The Power of the Street: Evidence from Egypt’s Arab Spring”, NBER Working Paper 20665, http://www.nber.org/papers/w20665.

Aidt, T.S. & G. Leon (2014), “The Democratic Window of Opportunity:Evidence from Riots in Sub-Saharan Africa”, CESIFO Working Paper No. 4884, http://www.cesifo-group.de/, http://www.repec.org/, http://www.ssrn.com/ .

Country-specific references are available in the respective sections.

49 The period 1988-1989 that followed Ben Ali’s rise to power witnessed an incredible rise in the number of Civil Society organizations, a jump from 2,527 in 1,987 to 6,024 in 1989. 50 La Commission Nationale de Gestion d'Avoirs et des Fonds objets de Confiscation ou de Récupération en faveur de l'Etat, http://www.finances.gov.tn/index.php?option=com_content&view=article&id=201:gestion-des-biens-confisques&catid=28&Itemid=577&lang=fr. 51 Riskers et al. (2014). 52 Ibid.

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Middle Eastern Countries

Bahrain

1. Introduction The small island nation of Bahrain is a constitutional monarchy, with King Hamad bin Isa al Khalifa as head of state since 1999. The first oil well in the Middle East was drilled in Bahrain in 1933, setting the country on the path towards becoming the first oil-driven economy in the Arab world. Not unlike other oil-rich Arab countries, proceeds from petrol sales have given Bahrain a high per capita income and a high level of human development53. Recently, steps have been taken to diversify the economy in order to be less dependent on oil revenues due to dwindling proven reserves54. Bahrain is the financial center of the Persian Gulf and ranks highly in international ease of business measures55. Despite the small and rapidly depleting proven oil reserves - now standing at only the 63rd largest reserves in the world56 - Bahrain’s economy remains heavily dependent on hydrocarbons for GDP and government revenue.57 This is largely due to the island’s substantial refining capacity which is used to refine imported oil.58

Bahrain has had a tumultuous history since obtaining independence from Britain in 1971, most of which has resulted from sectarian tension.59 The ruling al Khalifa family, whose roots are traced back to the Arabian Peninsula, is Sunni while the majority of the island’s native inhabitants are Shiite, with historic ties to Iran.60 This tension came to a head in the mid-1990s with a series of violent protests and arsons against Sunni-owned businesses. This unrest was ultimately put to rest via a military crackdown.61

2. Overview

The Bahraini Arab Spring began on Feb 14, 2011, with protestors gathering in various locations across the island nation for a “Day of Rage” inspired by events in Tunisia and Egypt. The protesters converged at Pearl Roundabout in Manama, the capital city of Bahrain. On Feb 17 security forces were called in to attempt to disperse the crowds; this resulted in four deaths and hundreds of injuries. After the United States urged the Bahraini government to show restraint and moderation when dealing with the protesters, the security forces were withdrawn and protesters returned to Pearl Roundabout, a roundabout in the financial district of Manama. The largest protest occurred on February 21 when over

53 Basedau and Lacher (2006). 54 Kingdom of Bahrain (2013). 55 Ibid. 56 United States Energy Information Administration (2013). 57 Kingdom of Bahrain (2013). 58 United States Energy Information Administration (2013). 59 International Crisis Group (2005). 60 Katzman (2014). 61 Darwish (1999).

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100,000 people marched in Manama. On the same day and also in Manama, tens of thousands of pro-government protesters also gathered.62

The government, with full support from the King, offered the protesters the opportunity to conduct a formal dialogue and pardoned 308 people including the exiled leader of a Shiite political party and ousted two unpopular cabinet ministers. On March 13, Crown Prince Salman announced his “Seven Principles” reform plan which laid out, among other things, plans to strengthen Bahrain’s democratic institutions while establishing more equitable electoral practices and an end to gerrymandering in this young constitutional monarchy. The more moderate Shiite parties supported the “Seven Principles” but hard-line organizations rejected any plan short of the abolition of the monarchy.63

After Shiite groups refused to accept the Seven Principles, the Bahraini Arab Spring descended further into violence, with clashes between Sunni and Shiite groups becoming more widespread. Protesters began constructing barricades throughout Manama’s financial district and on March 14 the Bahraini government asked for help from the Gulf Cooperation Council (GCC). Led by 1,200 and 600-strong Saudi Arabian and UAE contingents, the GCC secured economically and strategically vital points through the Bahraini archipelago. It is possible that the members of the Saudi contingent had received military training from the British.64 This freed up Bahrain’s security forces that promptly cleared Pearl Roundabout with force. Protests in the capital ceased completely as a large scale crackdown occurred throughout the country.

A series of “national dialogues” on political and economic reform began on July 2, 2011. Initially these dialogues were successful and led to the implementation of constitutional amendments which limited the power of the king and gave more power to democratically elected councils. Despite this, protests recommenced, prompting a second, less successful national dialogue which by 2014 remained in gridlock.65

3. Discussion of Critical Economic Indicators

This section introduces a set of indicators for Bahrain. In addition, to provide further background for countries that have experienced vigorous opposition movements - with many swelling to full-scale uprisings - a smaller set of indicators are used to measure the population's attitude towards their respective country's governance. Although no causality conclusions are implied, the Critical Economic Indicators (CEIs) may serve as barometer readings ahead of potential civil unrest. Three groups of factors are covered within this section. The first concerns general summary statistics and important contextual economic facts on the country in question. The second group covers selected political factors such as the total number of personnel in the country’s military and the Polity government legitimacy measure. The third group consists of the selected political and socioeconomic factors which we argue played a role in the development of the unrest for the country. Both country-

62 Katzman (2014). 63 Katzman (2014). 64 Kirkup (2011) 65 Katzman (2014).

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specific factors and factors that are common to other Arab Spring-affected nations are discussed within this group. The selection of CEIs is guided by the observations made during the Arab Spring uprisings as well as similar popular uprisings elsewhere in the world, in particular recent experiences in Turkey, Ukraine, and Hong Kong. The robust participation of educated and connected youth against various perceived governance problems and with democratic demands has been a commonly observed factor in virtually all unrests. Therefore the three groups of CEIs are representative of youth activism by taking into account the demographic, economic and technological dimensions of youth malcontent. The demographic dimension as captured by the youth bulge and youth unemployment has been extensively studied.66 The literature distinguishes popular uprisings from armed conflicts and this Report concentrates on the former. The economic dimension of CEIs includes the GINI coefficient, the Undernourishment Index and the Consumer Price Index. Moreover, the first block of numbers in Table 1 includes, as general indicators, the population and GDP figures. Finally, the technological dimension aims to capture the educated youth phenomenon observed prominently in popular uprisings and includes the Emigration Rate of Tertiary Educated Persons and Internet Users per 100 People.

Indicator67 Value General Population GDP Per Capita

1.3 Million (2013) USD $24,613 (2009, current USD)

Political Armed Forces Personnel Contiguity to Instability Government Legitimacy (Polity IV) Ruler Longevity

19500 (2013) Saudi Arabia, Iran -8 (Autocracy) (2013) 2002 to present (Al Khalifa): ruling family in power since 1783

Economic (CEIs) Corruption Perceptions Index (rank and index)68 Youth Bulge69 Youth Unemployment GINI coefficient

57/177 and 4.8 (2013) 35% (2010) 27.5% (2012) N/A

66 Cabras (2010), Lin (2012), Schomaker (2013), and Urdal (2013). 67 Unless otherwise indicated, data obtained from the World Bank’s WDI dataset (2014). 68 "The "Polity Score" captures the regime authority spectrum on a 21-point scale ranging from -10 (hereditary monarchy) to +10 (consolidated democracy). The Polity scores can also be converted into regime categories in a suggested three part categorization of "autocracies" (-10 to -6), "anocracies" (-5 to +5), and "democracies" (+6 to +10).” ).(…) The Polity scheme consists of six component measures that record key qualities of executive recruitment, constraints on executive authority and political competition.” Systemic Peace (2010). 69 For the purposes of this review, the Youth Bulge refers to the percent of the population under the age of 24. Data obtained from CIA Factbook (2014).

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Inflation Emigration Rate of Tertiary Educated Internet Users70 3.2% (2013)

5.1% (2000) 90% (2013)

Key Indicator for Bahrain Proven Petroleum Reserves (Billions Barrels and Rank)

.1246 and 62 (2014)

Table 1: A selection of indicators on Bahrain

i. Political Indicators

This section will briefly review the four political indicators introduced above in Table 1.

Armed Forces and Contiguity to Instability

In 2011 Bahrain had a total of 19,50071 armed forces personnel which accounts for 2.6% of the total labour force. Bahrain is also home to the U.S. Navy’s fifth fleet. Bahrain’s army has been a source of tension as Shiites are notably shut out from jobs in the military and security force, now representing only between 2 and 5 percent of security forces.72 This is largely due to perceived concerns over Shiite loyalty as some Sunni government officials think that the members of the island's Shiite majority belong to groups that seek to undermine the establishment. Since the mid-1990s the Bahraini government has started to recruit Sunnis, predominantly from Pakistan to serve in their security forces.73 This policy has led to much anger and frustration amongst the Kingdom’s Shiites who claim this is done to sway the demographic balance of the island in favor of Sunnis.74 During the early stages of Bahrain’s Arab Spring protests the Bahraini government hired an estimated 2500 Pakistani ex-military servicemen to bolster their National Guard and Riot Police forces.75

70 “Internet Users” is a proxy for use of social media tools. 71 World Bank WDI. 72 Neumann (2013). 73 Katzman (2014). 74 Neumann (2013). 75 Mashall (2011).

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Chart 1: Bahrain armed forces personnel, 2002 to 201376

Bahrain’s two largest neighbors, Iran and Saudi Arabia, are regional political rivals. Bahrain has been a battle ground of sorts between these states. In 1981 and 1996 the Bahraini government claims it foiled Iranian backed Shiite coups.77 The Saudis, meanwhile, have maintained a significant political and economic presence in Bahrain, notably by funding a causeway between the two countries. Further, Saudi troops were called upon to aid the Bahraini government during the Arab Spring crackdown.

Government Legitimacy (Polity IV) and Ruler Longevity

Bahrain is a constitutional monarchy with an elected parliament and an appointed upper house (Shura council) with veto power. Despite the democratically elected parliament power is still concentrated in the hands of the royal family (Polity IV country report). Shiite claim widespread gerrymandering is done to prevent the majority Shiite from acquiring a majority in parliament78. This is reflected in Bahrain’s polity score of -8 which makes Bahrain an autocracy79. The Al Khalifa family has ruled Bahrain since 1783 and the current king, Hamad bin Isa Al Khalifa, rose to the throne in 2002.

ii. Common CEIs

This section covers all relevant CEIs displayed in Table 1.

Corruption Perceptions Index

76 World Bank (2014). 77 BBC (2014), “Bahrain Profile”. 78 Freedom House (2012), “Countries at a Crossroads: Bahrain”. 79 Polity IV. Center for Systemic Peace, Coups d'Etat, 1946-2013, event list includes successful, attempted, plotted, and alleged coup events reported in Keesings Record of World Events (Keesings Online) and other sources; successful coups are cross-referenced to the Polity IV data series to distinguish "adverse regime changes" from "autocratic coups"; also listed in the codebook are cases of leadership change that are not considered coups (e.g., assassinations, ouster by foreign forces, victory by rebel forces).

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Bahrain‘s Corruption Perception Index rank has been steadily declining since the early 2000s. This corresponds with worsening levels of perceived corruption. The CPI has also been steadily falling from 27 out of 133 countries in 2003 to 57 out of 177 countries in 2013. Bahrain’s CPI rank is similar to other Persian Gulf petro states such as Saudi Arabia and Kuwait but it ranks significantly lower than Qatar and the United Arab Emirates. Sectarian tension between the Shiite and the Sunni, the denomination of the royal family, maybe be driving the declining CPI. Many Sunni believe that they are shut out from many positions in the government and military.80 Shiites seeking government housing also have to wait longer on average than Sunnis.81

Chart 2: Corruption Perceptions Index for Bahrain, 2003 to 2013

Year Rank 2003 27/133 2004 34/146 2005 36/159 2006 36/163 2007 46/180 2008 43180 2009 46180 2010 48/178 2011 46/183 2012 53/176 2013 57/177

Table 2: Corruption Perceptions Rank

80 International Crisis Group (2005). 81 Neuman (2013).

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Youth Bulge and Youth Unemployment

Chart 3 displays the proportion of the population of Bahrain belonging to the 0 to 24 age group, and includes projections out to 2020 based on a medium fertility scenario. The portion of the population under the age of 24 has been steadily declining since 1980 and is projected to stabilize around 35%. Bahrain’s population under 24 is similar to that of other small gulf petro states such as Kuwait and is significantly lower than other countries that experienced civil disturbances during the Arab Spring such as Egypt (54%) in 2013.

Chart 3: Youth Bulge for Bahrain, 1980-2010 and projections to 202082

At the onset of the protests in 2011, Bahrain’s youth employment rate (chart 5 below) was 26.6%. While statistics on this issue are not available, it is believed that youth unemployment is even higher still for the Shiite population.83 The unemployment rate is highest amongst people with only secondary education and lowest for people with only primary level education.

82 UN Dept. of Economic and Social Affairs (2012). 83 Roudi (2011).

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Chart 4: Bahrain Unemployment by Education level, 2002 to 201084

Chart 5: Unemployment, youth total for Bahrain, 2002 to 201285

Foreign workers have historically dominated the Kingdom’s private sector due to a number of reasons. First, public sector employment is more sought after than private sector employment by Bahrainis.86 This is due to better working conditions in the public sector with higher wages, better working conditions and better overall benefits.87 On average, the wages earned in the private sector are much lower than those offered by the public sector and the Bahrainis typically don't have the proper skills and

84 World Bank (2014). 85 World Bank (2014). 86 Louer (2008). 87 Hertog (2012a).

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training to successfully pursue the higher-earning private sector jobs.88 One source of this is insufficient secondary schooling which leaves students unprepared for tertiary education.89 Unemployment amongst secondary school graduates is the highest amongst all levels of education.90 The private sector jobs are typically low-paying because they are highly dependent on large amounts of low-skill or unskilled labour.91 Secondly, until 2009 the Bahraini visa system was dependent on employers sponsoring foreign workers. As a result, foreign workers were tied to their sponsors and unable to seek outside employment opportunities.92

Large-scale reformations of the Bahraini labour market were set in motion beginning in 1995.93 These reforms focused on increasing Bahraini penetration into private sector as well as raising private sector wages. By regional standards, the reform has been largely successful as the policy has drastically increased native labour force participation in the private sector.94 Despite these improvements, the private sector is still dominated by foreign workers, mostly from Southeast Asia,95 and youth unemployment sits at a region-high 26%.96 Historically, Bahrain has used the public sector to provide employment for the native Bahrainis. This policy, however, has proven to be unsustainable in the face of declining oil revenues (Chart 6) and a rapidly growing population.97 Bahrain’s proven oil reserves have been declining for decades and are predicted to be no longer economically viable in 10 to 15 years.98

88 Forstenlechner and Rutledge (2010). 89 Ibid. 90 Roudi (2011). 91 Kingdom of Bahrain (2013). 92 The Economist (2010). 93 Hertog (2012b). 94 Ibid. 95 International Labour Organization (2010). 96 Hertog (2012b). 97 Ibid. 98 Specifically, the cost of continuing to extract crude oil would outweigh the potential benefits (The Telegraph, 2011).

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Chart 6: Bahrain Proven Petroleum Reserves, 1980-2010

Charts 7 and 8: Population pyramids for Bahrain (left) and Canada (right), 201099

Bahrain’s population pyramid’s skewed shape towards working age males demonstrates the predominance of (largely male) migrant workers in the economy.

Economic difficulty indicators: Undernourishment and CPI100

99 UN Dept. of Economic and Social Affairs (2012). Horizontal axis represents thousands of persons for Bahrain and millions of persons for Canada; vertical axis represents 5-year age groups. 100 No GINI coefficients were available for this Report.

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Economic difficulty indicators are meant to convey the economic stress endured by residents. The three indicators chosen to form this group connect the income distribution in a given country with economic growth and the nature of proper food intake. Note GINI is not available for this country, and so the focus will be on the remaining two.

Undernourishment has not been a significant problem in Bahrain, with estimates of 5 percent or lower over recent decades indicating that no measurable amount has been obtained in the World Bank data.

Chart 9: Consumer Price Index for Bahrain, 2000 to 2013101

The Consumer Price Index (CPI) has been relatively stable between 200 and 2013. The inflation rate has never risen over 5% although Bahrain has experienced bouts of deflation, most recently in 2011.

Educated Malcontent and Technological Adaptation

101 World Bank (2014).

This section investigates two CEIs: the emigration rate of tertiary educated persons and the adoption of social media, as proxied by ‘internet users per 100 population’. The first provides a measure of labour market tightness and can serve as an indication of discontent with the conditions in the country. The second CEI concerns the prevalence of social media and interconnectedness among the tech-savvy youth of Arab countries.

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Chart 10: Emigration Rate of Tertiary Educated from Bahrain (1990, 2000)102

The emigration rate of the tertiary educated has increased between 1990 and 2000. Bahrain has relatively low emigration rates for people with tertiary education given the high unemployment rate for people with this level of education.

Chart 11: Bahrain internet users per 100 people, 2002 to 2013103

Bahrain’s internet usage has increased steadily since 1995 and in 2013 had 90 users per 100 people. Social media was widely used by protesters to organize anti-government rallies. Social media may also have been used by the government and pro-government loyalists to track down and arrest dissidents.104

iii. Country-Specific CEIs

The country is a home to the US Fifth Fleet, a relationship established in 1995 to ensure that vital oil shipping lanes remain open while acting as a deterrent against Iran's regional ambitions. Bahrain is in

102 World Bank (2014). 103 World Bank (2014). 104 Dixon (2014).

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the center of a major cultural divide in the Arab world. Like Iran to its north, Bahrain's citizens are mostly Shia. But Bahrain's government is mostly Sunni, much like Saudi Arabia and the UAE. A vast majority of Shiite protesters are calling for democratic reforms and equal rights under the law, and some others are calling for the dissolution of the monarchy.105

In addition, the regime and the opposition each suffers from a lack of internal cohesion. Within the regime, a reformist crown prince wagered his political future on reaching out to a pragmatic segment of the (mostly Shiite) opposition, angering more hard-line regime elements. The opposition, Al-Wifaq, for its part, by agreeing to engage in informal, semi-secret talks with the crown prince risked alienating its popular base.106 The Ajam, the non-Arabs,107 who represent around 10 per cent of Bahraini Shiites, have felt deeply threatened as a community.108 Bahrain enjoyed freedom to form political parties earlier than any other country in the GCC up until the Bahraini parliament was dissolved in 1976. After decades of clandestine operations the civil society parties in Bahrain could finally be elected.109 The Article 27 of the 2002 constitution guarantees the "freedom to form associations and unions on national principles". Based on that article the Bahraini parliament today includes 14 blocs or associations although they are not recognized as parties. These include both Shia and Sunni Islamic parties, communists, liberals, Arab nationalists and blocs that are backed by Bahraini businessmen.

4. Current and Future Challenges

While the domestic unrest has deescalated, the Bahraini Arab Spring is far from resolved with violent protests still occurring as of 2014.110 The Bahraini government continues to claim that Iran is training rebels in a bid to overthrow the Sunni monarchy and since the end of the round of protests there have been a series of successful and foiled bombings. Especially troubling is that in one case, a car bomb exploded outside a Sunni mosque111, indicating a distinctly sectarian tone to the violence. Many of the country’s political and economic challenges have not been tackled and the country remains in political gridlock with the ruling royal family receiving military support from Saudi Arabia and the United Arab Emirates112. Britain will also be increasing its military presence in the Persian Gulf by expanding a military base in Bahrain to allow a permanent military presence113, a decision which was met with protests114. Britain and the United States have sold weapons to the Bahraini government during the

105 Postel (2013). 106 International Crisis Group (2011). 107 Mostly Persians and Lurs who, originating from southwestern Iran, have some links to Kurds. 108 International Crisis Group (2011), p.6. 109 Al-Qassemi (2011). 110 BBC (2013). 111 El Dahan (2013). 112 Katzman (2014). 113 Reuters(2014) 114 Spencer (2014)

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protests and crackdown115. Parliamentary elections took place in November 2014 but the Shiite opposition boycotted the election and the largest opposition party was banned from taking part in the election. This development doesn’t augur well for the political stability of Bahrain in the short-term.

References

Al Jazeera (2011). “Bahrain court suspends opposition party.” http://www.aljazeera.com/news/middleeast/2014/10/bahrain-court-suspends-opposition-party-2014102895829270131.html. Accessed 11/2/2014

Al-Qassemi, S.S. (2011), “The Civil Society Movement in the Arab Gulf States”, The World Post, March 25th. http://www.huffingtonpost.com/sultan-sooud-alqassemi/units-of-the-civil-societ_b_720583.html .

BBC (2014). Bahrain Profile. British Broadcasting Corporation. http://www.bbc.com/news/world-middle-east-14541322. Accessed 11/2/2014

BBC (2013). “Bahrain protest over Grand Prix.”s British Broadcasting Corporation. http://www.bbc.com/news/world-middle-east-22237478

Basedau, Matthias and Lacher, Wolfram (2006). “A Paradox of Plenty Rent Distribution and Political Stability in Oil States.” GIGA Research Program, 21

Cabras, A. (2010). "The implications of the youth bulge in Middle East and North African populations". NATO Parliamentary Assembly Report. 138 GSM 10 E rev 3. http://www.nato-pa.int. Accessed 11/1/2014.

CIA World Factbook (2014). Country Backgrounds. http://www.cia.gov. Accessed 11/1/2014.

Darwish, Adel (1999). “Rebellion in Bahrain.” Middle East Review of International Affairs. 3(1), 84-87

Dixon, Suzie (2014). ”Facebook ‘used to hunt down Bahrain dissidents’.” http://www.telegraph.co.uk/expat/expatnews/8681230/Facebook-used-to-hunt-down-Bahrain-dissidents.html, The Telegraph. Accessed 11/1/2014

El Dahan, Maha (2013). “Car bomb explodes outside mosque in Bahrain.” Reuters. Published 7/18/2013. http://www.reuters.com/article/2013/07/18/us-bahrain-car-bomb-idUSBRE96H06V20130718. Accessed 12/1/2014.

Forstenlechner, Ingo and Rutledge, Emilie (2010). “Unemployment in the Gulf: Time to Update the ‘Social Contract’.” Middle East Policy 17(2), 38-51

115 Norton-Taylor (2012)

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Hertog, Steffen (2012b). A comparative assessment of labor market nationalization policies in the GCC. LSE Research Online, 2012

Hertog, Steffen (2012a). National employment, migration and education in the GCC. The Gulf Region: economic development and diversification, Gerlach Press

International Crisis Group (2011), “Popular Protests in North Africa and the Middle East (VIII): Bahrain’s Rocky Road to Reform” Middle East and North Africa Report No.111, 28 July, http://www.crisisgroup.org/~/media/Files/Middle%20East%20North%20Africa/Iran%20Gulf/Bahrain/111-%20Popular%20Protest%20in%20North%20Africa%20and%20the%20Middle%20East%20VII%20-%20%20Bahrains%20Rocky%20Road%20to%20Reform.

International Crisis Group (2005). Bahrain’s Sectarian Channeling. Crisis Group Middle East Report,

International Labour Organization (2010). Kingdom of Bahrain: Decent Work Country Programme 2010-2013. http://www.ilo.org/public/english/bureau/program/dwcp/download/bahrain.pdf

Katzman, Kenneth (2014). Bahrain; Reform, Security, and U.S. Policy. Congressional Research Services

Kingdom of Bahrain (2013). Kingdom of Bahrain Economic Yearbook 2013. http://www.bahrainedb.com/en/EDBDocuments/Bahrain-Economic-Yearbook.pdf. Accessed 6/23/2014

Kirkup, James (2014). Saudi troops sent to crush Bahrain protests ‘had British training’. http://www.telegraph.co.uk/news/worldnews/middleeast/saudiarabia/8536037/Saudi-troops-sent-to-crush-Bahrain-protests-had-British-training.html. The Telegraph. Accessed 11/1/2014

Louer, Laurence (2008). The political Impact of Labor Migration in Bahrain.City and Society, 20(1) 32-53

Mashall, Mujib (2011). Pakistan troops aid Bahrain crackdown. Al Jazeera, http://www.aljazeera.com/indepth/features/2011/07/2011725145048574888.html. Accessed 7/22/2014

Neumann, Ronald E. (2013). Bahrain; A very complicated Little Island. Middle East Policy Council, 20(4)

Norton-Taylor, Richard (2012). Bahrain Receives military equipment from UK despite violent crackdown. http://www.theguardian.com/world/2012/feb/14/bahrain-military-equipment-uk. The Guardian. Accessed 1/18/15

Postel, T. (2013). “Here’s one Way to Stop the Brutal Repression in Bahrain”. The Atlantic . Published 3/13/2013. http://www.theatlantic.com/international/archive/2013/03/heres-one-way-to-stop-the-brutal-repression-in-bahrain/273983/?single_page=true. Accessed 12/1/2014.

Reuters (2014). “UK says sings deal to expand naval presence in Bahrain”. Published 12/5/2014. http://www.reuters.com/article/2014/12/05/britain-bahrain-idUSL6N0TP3W220141205. Accessed 1/18/2015.

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Richter, Frederik (2011). “Protesters, police clash in Bahrain on “Day of Rage”. Reuters. http://www.reuters.com/article/2011/02/14/us-bahrain-protests-idUSTRE71D3P420110214. Accessed 11/1/2014 Roudi, Farzeneh (2011). ”Youth Population and Employment in the Middle East and North Africa: Opportunity or Challenge?” United Nations Expert Group Meeting on Adolescents, Youth and Development

Schomaker, R. (2013). “Youth bulges, poor institutional quality and missing migration opportunities - triggers of and potential counter-measures for terrorism in MENA.” Topics in Middle Eastern and African Economies 15(1), 116-140

Spencer, Richard (2014) Protests erupt over British decision to open military base in Bahrain. http://www.telegraph.co.uk/news/worldnews/middleeast/bahrain/11278281/Protests-erupt-over-British-decision-to-open-military-base-in-Bahrain.html. The Telegraph. Accessed 1/18/2015

Systemic Peace (2010). Polity IV Country Report – Bahrain. http://www.systemicpeace.org/polity/. Accessed 11/1/2014.

The Economist (2010). “Bahrain’s Labour Market: Bridging the Gulf.” Published 1/14/2010. http://www.economist.com/node/15275715. Accessed 12/1/2014.

The Telegraph (2011). Bahrain: oil and gas facts. http://www.telegraph.co.uk/finance/globalbusiness/8385822/Bahrain-oil-and-gas-facts.html. Accessed 6/22/2014.

Transparency International (2014). Corruption Perceptions Index. http://www.transparency.org. Accessed 11/1/2014.

UN Dept. Of Economic and Social Affairs (2012). “World Population Prospects: The 2012 Revision”. http://esa.un.org/unpd/wpp/unpp/panel_indicators.htm. Accessed 11/1/2014.

United States Energy Information Administration (2013). Overview data for Bahrain. http://www.eia.gov/countries/country-data.cfm?fips=ba. Accessed 10/31/2014

United States Department of State: Bureau of Democracy (2011). “International Religious Freedom Report for 2011: Bahrain.” http://bahrain.usembassy.gov/policy/religious-freedom-report.html. Accessed 6/6/2014

Urdal, H. (2013). A clash of generations? Youth bulges and political violence. UN Dept. of Economic and Social Affairs, Population Division, Expert Paper No. 2012/1

Wright, Steven (2010). “Fixing the Kingdom: Political Evolution and Socio-Economic Challenges in Bahrain.” Center for International and Regional Studies.

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World Bank - World Development Indicators (2014). http://data.worldbank.org/data-catalog/world-development-indicators. Accessed 12/1/2014.

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Iraq

1. Introduction

Iraq is a multi-ethnic and multi-religious mosaic, though not a very harmonious one. The country was born out of the Treaty of Sèvres in 1920 signed under the auspices of the League of Nations and its borders and demographic demarcations have remained the same since. The country was ruled by monarchy from 1921 until 1958, when a military coup overthrew the ruling family. After a tumultuous period of overt and covert coups, mostly under the Ba’ath Party, Saddam Hussein assumed absolute power by 1979 and ruled until his overthrow in 2003.

Iraq's population demography varies significantly by region. Western Iraq is predominantly inhabited by Sunni Arabs; the north east, meanwhile, consists mainly of ethnic Kurds of various religions. The demographic majority of the country consists of Shia Arabs who dominate the east, central and south east of the country. This mosaic includes many other smaller groupings. Since the 2003 invasion that toppled the Saddam Hussein’s Ba’athist regime, the Iraqi Kurdistan has been relatively peaceful and prosperous, largely free of sectarian conflict. Meanwhile, other regions of the country experienced various levels of violence. Kurds are identified more by their ethnicity than their adherence to religion.

The absolute Ba’ath Party rule, especially from 1979 till 2003, was marked with anti-Shia bias that translated into ethnic cleansing in the Southern parts of the country. Similarly, Kurdistan suffered Arab colonization attempts with repeated waves of repression, including the use of chemical weapons on Kurdish villages in 1988.

2. Overview of Recent Events

What differentiates Iraq from other Arab countries is that the instability caused by sectarian violence followed the 2003 invasion. After a period of relative stability upon an American brokered 2007 peace with Sunni populations116, instability has recently resumed with a vengeance. Iraq’s sectarian divides prove to be the underlying reason why the country fell into chaos in the aftermath of 2003 during the period of American occupation as well as the current threat posed by ISIS (Islamic State in Iraq and Syria). The Syrian civil war has quickly spilled over into Iraq because the Sunni regions in the west of the country that had opposed Shia-dominated governments in Baghdad constituted a fertile ground for ISIS. Moreover, Sunni and Ba’athist military personnel from the dismantled pre-2003 army supported the ISIS expansion into Iraq.

The 2007-2013 period exhibited improving security and strong economic activity, especially in Iraqi Kurdistan117. The GDP grew 10.16%, 1.38%, 6.61%, 5.81, 5.86%, 8.58% and 10.29% over the period. The two-way interaction between security and economic activity yielded a boom in energy, construction and

116 “The Sunni awakening” of 2007 (Berman et al. [2013]) 117 The Economist (2014a), CIA Factbook (2014).

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retail sectors with little to show for agriculture. Industry, services and agriculture accounted, respectively, for 64.6%, 32.1% and 3.3% of GDP in 2013. In terms of composition, oil extraction only recently recovered its 2003 pre-occupation level and yields 55% of GDP, 90% of government revenues and 80% of foreign exchange earnings (CIA Factbook (2014)). This level of dependence on oil would be potentially detrimental to the Iraqi economy if oil prices declined in the long term. The service industries include community, social and personal services at 13% of GDP), finance, insurance and real estate services at 9% of GDP and the wholesale and retail trade, and restaurants and hotels at 7% of GDP. In industry, manufacturing, construction water and electricity production and distribution account for 8% of GDP (Trading Economics (2014)).

Iraq's multitude of ethnic, religious and sectarian divides also reflect some economic divides. For example, the autonomous Iraqi Kurdistan Region (IKR), with its vast oil reserves in and around Kirkuk, only second to the southern fields around Basra, has been an oasis of peace and better governance relative to the rest of the country since Saddam’s fall in 2003. During this period, some economic overreach by the Kurdistan Regional Government (KRG) regarding the oil industry generated frictions with Baghdad.

Rampant corruption118, outdated infrastructure, insufficient essential services, skilled labor shortages, and antiquated commercial laws continue to stifle investment and constrain the growth of private, non-oil sectors. Iraq has been considering a package of laws to establish a modern legal framework for the oil sector and a mechanism to equitably divide oil revenues within the nation, although these reforms are still under contentious and sporadic negotiations. Under the Iraqi Constitution, some administrative mandates over investment are either shared by the federal government and the regions or are devolved entirely to the regions. For example, investment in the IKR operates within the framework of the Kurdistan Region Investment Law (Law 4 of 2006) and the Kurdistan Board of Investment, which is designed to provide incentives to help economic development in areas under the authority of the KRG.

Inflation in Iraq has remained under control since 2006 as security improved. However, Iraqi leaders remain hard pressed to translate macroeconomic gains into an improved standard of living for the Iraqi populace. Unemployment remains a problem throughout the country despite a bloated public sector.

3. Discussion of Critical Economic Indicators (CEIs)

This section introduces a set of indicators for Iraq. In addition, to provide further background for countries that have experienced vigorous opposition movements - with many swelling to full-scale uprisings - a smaller set of indicators are used to measure the population's attitude towards their respective country's governance. Although no causality conclusions are implied, the Critical Economic Indicators (CEIs) may serve as barometer readings ahead of potential civil unrest. Three groups of factors are covered within this section. The first concerns general summary statistics and important contextual economic facts on the country in question. The second group covers selected political factors such as the total number of personnel in the country’s military and the Polity government legitimacy measure. The third group consists of the selected political and socioeconomic

118 See Iraq’s performance in the Corruption Perceptions Index below.

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factors which we argue played a role in the development of the unrest for the country. Both country-specific factors and factors that are common to other Arab Spring-affected nations are discussed within this group. The selection of CEIs is guided by the observations made during the Arab Spring uprisings as well as similar popular uprisings elsewhere in the world, in particular recent experiences in Turkey, Ukraine, and Hong Kong. The robust participation of educated and connected youth against various perceived governance problems and with democratic demands has been a commonly observed factor in virtually all unrests. Therefore the three groups of CEIs are representative of youth activism by taking into account the demographic, economic and technological dimensions of youth malcontent. The demographic dimension as captured by the youth bulge and youth unemployment has been extensively studied.119 The literature distinguishes popular uprisings from armed conflicts and this Report concentrates on the former. The economic dimension of CEIs includes the GINI coefficient, 120 the Undernourishment Index and the Consumer Price Index. Moreover, the first block of numbers in Table 1 includes, as general indicators, the population and GDP figures. Finally, the technological dimension aims to capture the educated youth phenomenon observed prominently in popular uprisings and includes the Emigration Rate of Tertiary Educated Persons and Internet Users per 100 People.

Indicator121 Value General Population 33.42M (2013) GDP Per Capita 6,670 (2013, current USD) Political Armed Forces Personnel 802,400 (2012) Contiguity to Instability Syria Government Legitimacy (Polity IV)122 3 (Open anocracy) Ruler Longevity 2006-2014 (Maliki)123 Economic (CEIs) Corruption Perceptions Index (rank and index)

171/177 and 16/100 (2013)

Youth Bulge124 56.3% (2013) 119 Cabras (2010), Lin (2012), Schomaker (2013), and Urdal (2013). 120 Data on Iraqi GINI coefficient is only available for two years, 2007 and 2012. 121 Unless otherwise indicated, data obtained from the World Bank’s WDI dataset (2014). 122 "The "Polity Score" captures the regime authority spectrum on a 21-point scale ranging from -10 (hereditary monarchy) to +10 (consolidated democracy). The Polity scores can also be converted into regime categories in a suggested three part categorization of "autocracies" (-10 to -6), "anocracies" (-5 to +5), and "democracies" (+6 to +10).” ).(…) The Polity scheme consists of six component measures that record key qualities of executive recruitment, constraints on executive authority and political competition.” Systemic Peace (2010). 123 Saddam Hussein ruled Iraq 1979-2003. 124 For the purposes of this review, the Youth Bulge refers to the percent of the population under the age of 24. Data obtained from CIA Factbook (2014).

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Youth Unemployment 32% (2013) GINI coefficient 30.9 (2007), 29.5 (2012) Undernourishment Index 26% (2009-2012) Consumer Price Index 1.9% (2013) Emigration Rate of Tertiary Educated 7.4% (1990), 10.9% (2000) Internet Users 9.2% (2013)

Table 1: A selection of indicators on Iraq

i. Political Indicators This section very briefly overviews the four political factors introduced above in Table 1.

Armed Forces Personnel The post-Saddam Iraqi Armed Forces, with Ba’athist elements purged, went from a low of under 200,000 in 2004 to a high of over 800,000 by 2010.125 Numerically strong but rife with sectarianism, the Iraqi Army was being rebuilt, especially with Shia Arab bias, since 2004. The tradition of military coups is real with a total of 26 (actual, attempted and alleged)126 since the 1958 coup d’état that deposed King Faisal II and brought the Arab Ba’ath Party to power. The 1958 coup marked the transition from one anocracy - in the guise of parliamentary monarchy - to another that evolved towards autocracy under Saddam Hussein.

Contiguity to Instability Instability around Iraq has originated from four sources. The first is the continuing Palestine-Israel conflict, though neither of these countries borders Iraq. The second source is Kurdistan, which generated ethnic unrest from Iraqi Kurds in response to repression but also due to the recent civil war in Turkish Kurdistan, which often spilled over into Iraq. The third, which culminated during the 1980-1988 Iran-Iraq or Gulf War, was partially caused by historic border disputes but rooted in Shia Arabs’ affinity with Shia Iran. The fourth and most recent originated from the current Syrian civil war which subsequently spilled into the traditional Sunni-Shia enmity in Iraq when Iraq’s Ba’athist Sunni Arab soldiers started defecting to ISIS in 2013. This would subsequently spread into Iraq's western provinces, eventually threatening Iraqi government positions as far away as the outskirts of Baghdad.

Government Legitimacy (Polity IV) and Ruler Longevity

125 World Bank - World Development Indicators (2014). 126 Polity IV Center for Systemic Peace, Coups d'Etat, 1946-2013, event list includes successful, attempted, plotted, and alleged coup events reported in Keesings Record of World Events (Keesings Online) and other sources; successful coups are cross-referenced to the Polity IV data series to distinguish "adverse regime changes" from "autocratic coups"; also listed in the codebook are cases of leadership change that are not considered coups (e.g., assassinations, ouster by foreign forces, victory by rebel forces).

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Government legitimacy scores have always been low in Iraq, ever since the establishment of the Hashemite kingdom in 1921 by the victorious Britain upon breakup of Ottoman Empire. The subsequent Ba’athist anocracies and Saddam autocracy have never yielded to democracy and hence political legitimacy. The current Polity Score of Iraq’s open anocracy is a 3 out of a maximum of 10. Open anocracies with regular ruler rotation of leader or party tend to be more legitimate than others and Iraq’s transition certainly resulted in an increase of its Polity Score from Saddam autocracy that lasted 34 years to a Shia anocracy after the 2003 invasion.

ii. Common CEIs

This section covers all CEIs introduced in Table 1. With the exception of the GINI coefficient we present short time-series data on the performance of Iraq in these dimensions.

Corruption Perceptions Index

Two complementary measures of corruption are provided. First, in Chart 1, the Corruption Perceptions Index for Iraq is provided. This Index varies from 0 to 100 (worst to best).

Chart 1: Corruption Perceptions Index for Iraq, 2003 to 2013127

Perhaps a better reflection of the endemic corruption in Iraq is its rank over countries assessed by Transparency International. Iraq’s low Corruption Perceptions Rank early on over the interval 2003-2006 in Table 2 below gets worse over 2007-2013. Both measures (Rank and Index) exhibit this deterioration. Two country-specific factors may be exacerbating the effect expressed by the low index and rank values. First, the prevailing sectarianism with Shias dominating the government may be producing unaddressed grievances deriving from corruption, particularly amongst the Sunni population, though not likely amongst the relatively autonomous Kurds. Second, given that no major oil fields are

127 Transparency International (2014).

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situated in Sunni regions, Shias and Kurds are in a much more powerful economic position than Sunnis, yet another factor reinforcing Sunni grievances.

Year Rank 2003 113/133 2004 129/146 2005 137/159 2006 160/163 2007 178/180 2008 178/180 2009 176/180 2010 175/178 2011 175/183 2012 169/176 2013 171/177

Table 2: Corruption Perceptions Rank128

Youth Bulge and Youth Unemployment

Chart 2: Youth Bulge for Iraq, 1980-2010 and projections to 2020129

Chart 2 above shows that Iraq is passing through a significant youth bulge due to the fact that the 0-14 year age group is still increasing at a substantial rate and will only start tapering off in a decade or so and, moreover, the 15-24 year group is expected to experience growth as well. As observed in Chart 3 below, the consistently high level of unemployment upwards of 30% experienced by this large group, it is hard to ignore the possibility that they are “… much more prone to social unrest and/or acting

128 Transparency International (2014). 129 UN Dept. of Economic and Social Affairs (2012).

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belligerent towards their neighbors than those societies without these demographic stressors.”130 A word of caution is in order on this age group’s unemployment. Chart 3 shows unemployment for the age group 15-24 and assumes that children from the age group 0-14 do not work. Since family businesses employ children, the figure may be an overstatement in terms of the percentage. However, what matters politically, i.e. for Arab Spring uprisings and discontent would be the 15-24 age group.

Chart 3: Unemployment, youth total for Iraq, 2002 to 2013131

Charts 4 and 5 below contrast the Iraqi and Canadian population pyramids. Every slice represents a 5 year age interval, and it is easy to see the bottom-heavy age distribution in Iraq. This bulge is projected to disappear between 2050 and 2100, with the pyramid converging to what Canada’s looks like today.

130 Schomaker (2013). 131 World Bank (2014).

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Charts 4 and 5: Population pyramids for Iraq (left) and Canada (right), 2010132

Economic difficulty indicators: GINI, Undernourishment and CPI

Economic difficulty indicators are meant to convey the economic stress endured by residents. The three indicators chosen to form this group connect the income distribution in a given country with economic growth and the nature of proper food intake.

Given reasonable economic growth in Iraq over the 2007-2013 period, the GINI coefficient and the CPI would signal whether economic growth has translated into reducing economic stress.

The first CEI in this group is the GINI coefficient.133 Since it is not available as a time-series, we provide the two data points available: 30.9 in 2007 and 29.5 in 2012. We observe a slight improvement along with robust economic growth over the same period.

The second CEI is the Undernourishment Index. It is available for the whole sample period and, despite the availability of resources, it signals that Iraqis compare unfavourably to neighbouring Iran or fellow Arabs in Morocco.134

132 UN Dept. of Economic and Social Affairs (2012). Horizontal axis represents millions of persons; vertical axis represents 5-year age groups. 133 United Nations Development Programme (2014). 134 To contextualize by comparison, the Index has similar values for Burkina Faso and Kenya but only 5 for Iran and Morocco over 2009-2012.

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Chart 7: Prevalence of undernourishment for Iraq, 2002 to 2013135

The third CEI is the Consumer Price Index as given in Chart 8 below. Since corruption is high and per capita GDP growth, on average, is expected to be unequal, the latter is not expected to reflect economic stress whereas price increases will tend to reflect this more accurately. The 2009-2013 period exhibits the following reasonably low inflation rates of 6.9%, 2.9%, 5.8%, 6.1% and 1.9%, while per capita GDP growth rates were 3.2%, 4.1%, 6.9%, 6.4% and 1.3% over the same period.

Chart 8: Consumer Price Index for Iraq, 2002 to 2013136

Taken together, these three indices provide an indication as to whether economic conditions for certain sections of society are improving.

135 World Bank (2014). 136 World Bank (2014).

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Educated Malcontent and Technological Adaptation

Both these measures run into data problems. First, in the absence of a more general data set, we combine WDI data with the Emigration to OECD from OECD statistics collected from Iraqi emigrants in OECD countries: 28.6% of emigrants are tertiary-educated,137 a significantly higher percentage than those enrolled in tertiary education in Iraq which suggests an educated and potentially malcontent strata of Iraqi youth.

Chart 9: Emigration Rate of Tertiary Educated from Iraq (1990, 2000, 2008)138

Second, in the absence of figures on youths with access to social media, we use the percentage of internet users as a proxy for the pervasiveness of social media. Chart 10 shows very mediocre pervasiveness of internet usage, with only significant increases happening since 2009.

137 OECD (2008). 138 World Bank (2014).

This section investigates two CEIs: the emigration rate of tertiary educated persons and the adoption of social media, as proxied by ‘internet users per 100 population’. The first provides a measure of labour market tightness and can serve as an indication of discontent with the conditions in the country. The second CEI concerns the prevalence of social media and interconnectedness among the tech-savvy youth of Arab countries.

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Chart 10: Internet Users per 100 People for Iraq, 2002 to 2013139

iii. Country-Specific CEIs American-British invasion of 2003 hasn’t changed the sectarian and ethnic divides in Iraq. The British-French partition of Middle East in the aftermath of World War I left the region with all the potential frictions and conflicts by splicing ethnic and sectarian groups into different countries. The Ba’ath party regimes in Iraq and Syria over the past 50 years or so brutally suppressed, respectively, their Shia and Sunni “minorities”, about 60% and 70% of their respective populations. Therefore, any future success of democracy critically depends on the reconciliation of minority Sunnis and majority Shiites, with Kurds as the added dimension. Ironically, Kurds are identified more by their ethnicity than their adherence to religion.

Since the 2003 invasion that toppled the Saddam Hussein’s Ba’athist regime, the Iraqi Kurdistan has been relatively peaceful and prosperous, largely free of sectarian conflict. Meanwhile, other regions of the country experienced various levels of violence, first rising till the 2007-2008 Sunni Awakening but then recently catching fire with the emergence of Sunni extremist ISIS invading western Iraq and terrorizing all non-Sunni populations.

A critical economic factor in Iraq is oil. Whereas Sunni regions have no oil, Kurdish and Shiite regions do. In fact, the main friction point between Iraqi Kurdistan autonomous region and Baghdad is the disagreement about oil revenues generated in the Kurdish region. A potential future break-up of Iraq could see an independent Kurdistan with the power of oil revenues. This might draw into the frame Turkey that is opposed to Kurdish independence for fear that it might tempt Turkish Kurdistan to follow suit.

4. Current and Future Challenges

139 World Bank (2014).

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Iraq is an outlier amongst the Arab Spring countries in that no popular uprising had taken place and autocracy’s overthrow came with the 2003 invasion. Despite hopes of an Iraqi democracy that would reconcile and balance ethnic and religious divides, what was subsequently established turned out to be an anocracy, having replaced a Sunni Arab autocracy with a Shia anocracy. Since the current situation is fluid and a large multi-country intervention140 is under way, it is difficult to predict the direction of governance in the country. This is especially true given that Kurds may have gained significantly by vigorously fighting ISIS belligerence, and hence are developing legitimacy towards more power within the Iraqi federation or even towards independence.141

Two factors are likely to endanger Iraqi development. First, the Iraqi economy’s growth over the period 2009-2013 was driven by increases in oil production and exports. The oil’s share in GDP reached 50% in 2012. This is expected to come to a grounding halt with the current fall in world oil prices. Second, it is well established that well-functioning institutions can bolster economic development. However, “lack of robust institutions in Iraq with rising oil revenues will continue to provide poor quality policies and implementation. There is no international evidence to suggest that the new democracy in Iraq will, in itself, naturally lead to economic growth and prosperity; this can only be achieved through human development, which is an important element for sound institutions.”142

References

Al-Basri, K.F. and M. Al-Sebahi (2013). “The Political Economy of Iraq: Will Oil Burn Out Democracy?”. Analysis 198, Italian Institute for International Political Studies (ISPI). http://www.ispionline.it/sites/default/files/pubblicazioni/analysis_198_2013_0.pdf Berman, E., J. Felter, J.N. Shapiro and E. Troland (2013). “Modest, Secure and Informed: Successful Development in Conflict Zones”. WP 18674. http://www.nber.org/papers/w18674 Cabras, A. (2010). "The implications of the youth bulge in Middle East and North African populations". NATO Parliamentary Assembly Report. 138 GSM 10 E rev 3. http://www.nato-pa.int. Accessed 11/1/2014.

Center for Systemic Peace (2014). Polity IV Dataset. http://www.systemicpeace.org/inscrdata.html. Accessed 11/1/2014.

CIA World Factbook (2014). Country Backgrounds. http://www.cia.gov. Accessed 11/1/2014.

Lin, J.Y. (2102). “Youth Bulge: A Demographic Dividend or a Demographic Bomb in Developing Countries?” Let's Talk Development. http://blogs.worldbank.org/developmenttalk Marshall, M.G. and B.R. Cole (2014). “Conflict, Governance, and State Fragility”. Center for Systemic Peace. www.systemicpeace.org

140 On the basis of the 2005 UN Resolution on the Responsibility to Protect. 141 Saunders (2014). 142 Al-Basri & Al-Sebahi (2013).

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OECD (2008). “A Profile of Immigrant Populations in the 21st Century: Data from OECD Countries “. Ch.9. www.oecd.org/els/mig/40647145.xls. Accessed 12/1/2014.

Saunders, Doug (2014). “Do we really want to birth an independent Kurdistan?” Globe & Mail. Published 10/11/2014. http://www.theglobeandmail.com/globe-debate/do-we-really-want-to-birth-a-kurdistan/article21037549/. Accessed 12/1/2014. Schomaker, R. (2013). "Youth bulges, poor institutional quality and missing migration opportunities - triggers of and potential counter-measures for terrorism in MENA". Topics in Middle Eastern and African Economies 15(1), 116-140.

Systemic Peace (2010). Polity IV Country Report – Iraq. http://www.systemicpeace.org/polity/. Accessed 11/1/2014.

The Economist (2014). “Profits in a time of war – Death, chaos, destruction. They’re not as bad for companies as you might think”. Published 9/20/2014. http://www.economist.com/news/business/21618815-death-chaos-destruction-theyre-not-bad-companies-you-might-think-profits-time. Accessed 12/1/2014. Trading Economics (2014), http://www.tradingeconomics.com/iraq/gdp-growth-annual Transparency International (2014). Corruption Perceptions Index. http://www.transparency.org. Accessed 11/1/2014.

United Nations Development Programme (2014). Human Development Reports. http://hdr.undp.org/en/content/income-gini-coefficient. Accessed 12/1/2014.

Urdal, H. (2013), “A clash of generations? Youth bulges and political violence”, UN Dept. of Economic and Social Affairs, Population Division, Expert Paper No. 2012/1 World Bank - World Development Indicators (2014). http://data.worldbank.org/data-catalog/world-development-indicators. Accessed 12/1/2014.

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Jordan

1. Introduction

When the Ottoman Empire disintegrated at the end of World War I, the occupying powers Britain and France redrew the borders in the Middle East based on the blueprints of the Sykes-Picot agreement. The British Protectorate of Transjordan was thus created in 1922. The British mandate from the League of Nations became official in 1923. Britain allocated Transjordan to the Hashemite Emir Abdullah I. “The Jordanian state was built on an alliance between the Hashemite royal family of western Arabia and native pastoralists and farmers. These segments of Jordan’s population are referred to as Bedouin, tribal, or East Banker Jordanians—as distinct from Jordanians of Palestinian origin from west of the Jordan River.”143 The early years of Transjordan were marked by Wahhabi incursion from the south and local rebellions elsewhere on the way to consolidation of the power of Emir Abdullah with British military support. Britain granted full autonomy to Transjordan 1928. Almost half of the population of Transjordan at the time consisted of the mostly nomadic Bedouins, who would constitute the power base of the King until recently when this social construct has experienced stress with more Palestinian immigration and economic change due to liberalization and globalization.

In the aftermath of World War II, Britain announced that it would grant full independence to Transjordan. The British mandate was thus terminated in 1946 and the country declared itself the Hashemite Kingdom of Transjordan under King Abdullah. Transjordan opposed the partition of Palestine to give way to the State of Israel, and participated in the war against Israel. Transjordan gained control of the West Bank according to the 1949 Armistice Agreement and annexed it in 1950 despite opposition by other Arab states. King Abdullah was assassinated by a Palestinian blaming him of collusion with Israel in the carving-up of Palestine. After an unstable year, his son Hussein became King in 1953 for a reign that lasted until his death in 1999. The 1950s and early 1960s marked Jordan's experiment with liberalism. Jordan ended its special defense treaty relationship with the United Kingdom in 1957 and, in February 1958, while Syria and Egypt merged into the United Arab Republic, Jordan joined Iraq in the Arab Federation of Iraq and Jordan, also known as the Arab Union, though it would dissolve only months after its inception.

The 1965 border agreement with Saudi Arabia yielded expanded access to the Gulf of Aqaba while protecting economic opportunities for the Bedouins. Upon signing a defense agreement with Egypt, Jordan participated in the 1967 War against Israel and lost East Jerusalem and the West Bank to Israel. A consequence of the loss of territories was an influx of Palestinian refugees into Jordan with the long-term effect of changing the balance of forces in Jordan between the Bedouins and the Palestinians in the latter’s favour. Jordan was pushed to the brink of war with Syria supporting the more militant factions of Palestinians in Jordan but the Black September victory over the militants saw the Palestinian Liberation Organization (PLO) headquarters and other militants’ expulsion from Jordan in 1970. In 1974, Jordan

143 Istani (2013).

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recognized the PLO as the sole legitimate representative of the Palestinian people. However, in 1986, it severed political links with the PLO and, in 1988, renounced all claims to the West Bank.

Alongside the influx of West Bankers or Palestinians, the 1980s witnessed the slow erosion of Jordanian stability with student protests against some economic demands as well as political freedoms. In 1989, there were riots in protest of price increases and elections took place with independent candidates as political parties had been since 1963. The elections marked a period of political liberalization, with thirty political parties and a functioning parliament. After the First Gulf War, Jordan signed the Israel-Jordan Peace Treaty in 1994, ending the state of war against Israel since its foundation in 1948.

The food price riots of 1996 and the 1997 parliamentary elections boycotted by several parties preceded King Hussein’s death in 1999 and his son’s accession to the throne as King Abdullah II. By the late 1990s, Jordan's unemployment rate was almost 25%, while nearly 50% of the employed were on the government payroll.

“Although half of Jordan’s population is of Palestinian descent, East Bankers have historically dominated the state and security forces. In contrast to the largely rural East Bankers, Palestinians tended to settle in cities, particularly Amman and Irbid, and a largely Palestinian urban middle class emerged, distinct from the East Banker political elite. Despite limited resources, the monarchy secured East Banker loyalty by providing them with public sector jobs and allowing them to dominate the armed forces. These expenses were underwritten through foreign aid assistance from powers invested in the monarchy’s survival for strategic reasons, including Britain, the United States, and fellow Arab monarchies.”144 Clearly, the changing balance of economic power in Jordan has necessitated reforms, both economic and political. The old system of patronage for East Bankers in their alliance with Hashemite royalty was under threat from economic pressures that culminated with the economic crisis of 1989 based on the lack of resources, namely water and fuel, which strained the Jordanian economy’s macroeconomic balances.

2. Overview of Recent Events

King Abdullah II, upon accession to throne, initiated liberalization policies that helped create one of the freest economies in the Middle East. Moreover, by 2001, Jordan linked its electricity grid to those of Syria and Egypt, agreed with Israel to pump water from Red Sea to the Dead Sea, and engaged with Syria in the Wahdah Dam along the Yarmouk River. However, Jordan remains vulnerable to world energy prices as it depends heavily on gas and oil imports until such time as its shale deposits can be exploited.

On the political front, without existential domestic threats, Jordan has had to maintain a delicate balance with its neighbours. While continuing to recognize the PLO as the legitimate representative of Palestinian people, difficulties arose on Israel’s actions in Occupied Territories, Hamas activities and attempts on Americans and Israelis on Jordanian territory.

144 Istani (2013).

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The slow pace of political reforms frustrated many and even the King. Whereas the monarchy has remained strong, the turnover of prime ministers145 is relatively high as perhaps a method of appeasing the dissatisfied. The first parliamentary elections under King Abdullah II were held in June 2003 when independent candidates loyal to the king won two-thirds of the seats, within a few years, three prime ministers rotated. The first local elections under the new King were held in July 2007 when the Islamist Action Front, the main opposition party, withdrew after accusing the government of vote-rigging. The parliamentary elections of November 2007 strengthened the position of tribal leaders and other pro-government candidates whereas support for the opposition Islamic Action Front declined. In November 2009, the King dissolved parliament and appointed yet a new prime minister hoping progress in political reforms and a new electoral law was introduced May 2010. The parliamentary elections of November 2010 were boycotted by the opposition Islamic Action Front and riots broke out after it was announced that pro-government candidates had won a sweeping victory. Political turmoil continued with a succession of prime ministers till 2012 when new elections were scheduled for 2013. In that period, increasing food prices and the slashing of fuel subsidies, though subsequently reversed, led to riots.

Domestic reforms included tax reform aiming at expanding the tax base, gradually withdrawing subsidies, introducing new property regulations, liberalizing trade, setting up free market zones, privatizing state enterprises, promoting mining and industrial exports, supporting a knowledge economy capable of exports146 and investing in tourism alongside initiating international projects with neighbours. However, economic liberalization strained the traditional social contract by weakening the public sector patronage networks for East Bankers while facilitating the economic ascendance of West Bankers or Palestinian Jordanians. Therefore, while Jordan is affected by the economic burden of influx of refugees from neighbouring countries147 and by Islamic fundamentalism, the potential East Banker unrest is more fundamental as it threatens the monarchy’s traditional power base. This unrest attracted Herak youth movement148, tribal elders and professionals employed by the state, including those from security forces. Although motivated by the changing balance of economic power, these groups’ demands evolved toward access to state and accountability. If these last two demands were to be supported by Palestinians as well, the slow but steady progress towards liberalization could be derailed and a serious stability threat may emerge: “Many of the anti-government demonstrations were led by youth, representing a broad spectrum from conservative East Bank tribes to the urban Palestinian-Jordanian elite, and the normally politically apathetic youth population seemed engaged in unprecedented ways.”149 Though the King remains sufficiently powerful, the delicate domestic balance requires that the mostly East Banker political elite must be convinced that political liberalization will not erode their status while the economic elites consisting of mostly West Bankers or Palestinians must find the progress in political liberalization acceptable.150

145 In the first thirteen years of his reign, King Abdullah appointed nine prime ministers. 146 World Bank (2013). 147 Now exceeding 10% of the population and costing more than 3% of GDP. Despite these figures the negative economic impact seems to be modest. (World Bank (2013)) 148 Greenfield (2013). 149 Greenfield (2013). 150 Istani (2013).

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3. Discussion of Critical Economic Indicators (CEIs)

This section introduces a set of indicators for Jordan. In addition, to provide further background for countries that have experienced vigorous opposition movements - with many swelling to full-scale uprisings - a smaller set of indicators are used to measure the population's attitude towards their respective country's governance. Although no causality conclusions are implied, the Critical Economic Indicators (CEIs) may serve as barometer readings ahead of potential civil unrest. Three groups of factors are covered within this section. The first concerns general summary statistics and important contextual economic facts on the country in question. The second group covers selected political factors such as the total number of personnel in the country’s military and the Polity government legitimacy measure. The third group consists of the selected political and socioeconomic factors which we argue played a role in the development of the unrest for the country. Both country-specific factors and factors that are common to other Arab Spring-affected nations are discussed within this group. The selection of CEIs is guided by the observations made during the Arab Spring uprisings as well as similar popular uprisings elsewhere in the world, in particular recent experiences in Turkey, Ukraine, and Hong Kong. The robust participation of educated and connected youth against various perceived governance problems and with democratic demands has been a commonly observed factor in virtually all unrests. Therefore the three groups of CEIs are representative of youth activism by taking into account the demographic, economic and technological dimensions of youth malcontent. The demographic dimension as captured by the youth bulge and youth unemployment has been extensively studied.151 The literature distinguishes popular uprisings from armed conflicts and this Report concentrates on the former. The economic dimension of CEIs includes the GINI coefficient, the Undernourishment Index and the Consumer Price Index. Moreover, the first block of numbers in Table 1 includes, as general indicators, the population and GDP figures. Finally, the technological dimension aims to capture the educated youth phenomenon observed prominently in popular uprisings and includes the Emigration Rate of Tertiary Educated Persons and Internet Users per 100 People.

Indicator152 Value General Population 6.46M (2013) GDP Per Capita 5,214 (2013, current USD) Political Armed Forces Personnel 115,500 (2012) Contiguity to Instability Egypt, Iraq, Palestine, Syria

151 Cabras (2010), Lin (2012), Schomaker (2013), and Urdal (2013). 152 Unless otherwise indicated, data obtained from the World Bank’s WDI dataset (2014).

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Government Legitimacy (Polity IV) 153 - 3 (Closed anocracy) Ruler Longevity 1999- (King Abdullah II)154 Economic (CEIs) Corruption Perceptions Index (rank and index)

66/175 and 45/100 (2013)

Youth Bulge155 56.2% (2014)156 Youth Unemployment 29.3% (2012) GINI coefficient 32.6 (2008), 33.7 (2010) Undernourishment Index 5% (2009-2012) Consumer Price Index 5.9% (2013) Emigration Rate of Tertiary Educated 7.4% (2000), 5.8% (2005) Internet Users 7.1% (2013)

Table 1: A selection of indicators on Jordan

i. Political Indicators

This section very briefly reviews the four political factors introduced above in Table 1.

Armed Forces Personnel The Jordanian Armed Forces (JAF) had 110,500 regulars over 2009-2011 but went up to 115,500 in 2012.157 It made the transition from a conscript to a professional force after the 1994 Peace Treaty with Israel. It participated in NATO-led mission in Afghanistan in the aftermath of which a further modernization, namely the development of the Non-Commissioned Officer (NCO) corps started in cooperation with U.S. Army. Numerically strong, JAF has transformed itself towards a modern army tasked to protect borders and participate in international missions rather than one specifically developed for domestic missions as is still the case in many neighbouring countries.158 The history of Jordan is marked with a single coup d’état and just an attempted one at that. Unsatisfied with the coalition government in April 1957 in terms of both its domestic and international policies, King Hussein dismissed the government. But, within a few days, a conspiracy to overthrow him was thwarted by the King himself upon receiving intelligence. This attempted coup was a turning point in civil-military

153 "The "Polity Score" captures the regime authority spectrum on a 21-point scale ranging from -10 (hereditary monarchy) to +10 (consolidated democracy). The Polity scores can also be converted into regime categories in a suggested three part categorization of "autocracies" (-10 to -6), "anocracies" (-5 to +5), and "democracies" (+6 to +10).” ).(…) The Polity scheme consists of six component measures that record key qualities of executive recruitment, constraints on executive authority and political competition.” Systemic Peace (2010). 154 King Hussein, father of Abdullah II, ruled Jordan 1953-1999. 155 For the purposes of this review, the Youth Bulge refers to the percent of the population under the age of 24. Data obtained from CIA Factbook (2014). 156 More precisely, 35.8% in 0-14 and 20.4% in 15-24 age groups (CIA, 2014). 157 World Bank (2014). 158 Rank & Saba (2014).

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relations as the King ruled the country autocratically with the support of the military till the 1989 elections.159 The liberalization that ensued was taken up by King Abdullah II. Contiguity to Instability The current instability around Jordan originates from three sources. The first is the continuing Palestine-Israel conflict that has affected Jordan with refugee flows in the past and, nowadays, continues to affect directly through its West Bankers connected to Palestine. Jordan is forced to walk a delicate line: While at peace with Israel, it still recognizes PLO as the legitimate representative of Palestinians but, also, is inevitably bound by economic ties to Egypt, Iraq and Saudi Arabia. The second is the civil war in Syria. By October 2014 the number registered Syrian refugees in Jordan had exceeded 600,000160, close to 10% of the Jordanian population. This influx has influenced Jordan in two ways. On the upside, tourism is rerouted from Syria to Jordan, partially compensating Jordan’s large expenditures on energy purchases from abroad. However, the large number of refugees not only strains government services but also applies pressure on informal labour markets as Syrians are easily adaptable to local working conditions. Moreover, the closure of some transit trade routes through Syria negatively affects Jordanian exports. It must be noted that the two economies had not been well integrated so that the Syrian civil war does not in itself reduce Jordanian exports.161 The third is the continuing overall instability in Iraq. Although the number of Iraqi refugees is very low at 23,290162, probably due to the desert terrain separating the two countries, the economic effects are mixed but substantial. Jordan has benefited, in the post-Saddam period, “from serving as a “gateway” to Iraq for governments, aid workers, contractors, and businesspeople; its real estate and banking sectors are booming, and it stands to reap more benefits from increased trade and transport should the situation in Iraq improve.”163 Whereas Jordan lost “the sizable oil subsidies and customary shipments”164 it had received from Iraq under Saddam, mutual economic necessities have force the two countries to resume the Basra-Aqaba oil pipeline project, which is now expected to become operational in 2018. This would diversify Iraq’s export routes and Jordan’s energy sources as well as benefiting from royalties from Iraq’s oil exports through the Gulf of Aqaba. Government Legitimacy (Polity IV) and Ruler Longevity Unlike under modern and legitimate monarchies, Jordanian Hashemite monarchy’s power base is repeatedly legitimized by infrequent elections that, based on gerrymandered electoral regions, yield pro-monarchy compositions in the lower house whereas the upper house is fully appointed by the King. Typical of Jordan, it is not elections that lead to government changes but, rather, the King dismissing a

159 Cavendish (2007). 160 UN High Commission for Refugees, http://data.unhcr.org/syrianrefugees/country.php?id=107. However, the total number of refugees from Syria reaches 1,410,520 as December 2014 according to UNHCR. 161 World Bank (2013). 162 UNHCR, http://www.unhcr.org/pages/49e486566.html. 163 Lasensky (2006). 164 Lasensky (2006).

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prime minister and appointing a new one in response to unrest. The low Polity IV index of -3, indicating a closed anocracy, is a reflection of this governance in Jordan.165 Under the current governance, the parliament does not initiate legislation but, rather, serves as one of the checks on government initiated legislation. Parliamentary composition does not yield uniform representation because the electoral system, with clear gerrymandering and “malapportionment of the electoral districts” allocates a disproportionate number of seats to “rural areas dominated by East Bank origin citizens supportive of the monarchy over more oppositional, urban areas inhabited largely by Palestinian origin citizens.”166 Reforms that preceded the 2013 elections redressed little towards proper representation. Moreover, seat quotas are allocated to political party representation, independents and various other groups of corporatist nature167 so that a pro-monarchy majority is perennially assured. Independents derive from East Banker tribes and clans that normally affiliate closely with the monarchy. The 2006 electoral victory of Hamas in Palestine and its potential repercussions in Jordan, the monarchy stalled democratic progress to restrict the electoral advance of the Islamic Action Front (IAF), the Jordanian franchise of the Muslim Brotherhood. Especially after the turbulence in Egypt ensuing the temporary access to power by the Muslim Brotherhood , one does not expect any resumption of democratization. Both the 2007 municipal elections and the 2013 parliamentary elections perpetuated the pro-monarchy bias in the system while moderating IAF access to power although a mainstream Islamic party fared well.168 As the Polity IV Country Report 2010 shows, Jordanian governance seems to have been stalled in its current structure, with a monarch ruling since 1999 and expected to rule in the foreseeable future.

ii. Common CEIs

This section covers all CEIs introduced in Table 1. With the exception of the GINI coefficient we present short time-series data on the performance of Jordan in these dimensions.

Corruption Perceptions Index169

Two complementary measures of corruption are provided. First, in Chart 1, the Corruption Perceptions Index for Jordan is provided. Recalling that this index varies from 0 to 100 (worst to best), Jordan ranks at a medium level around 5 over the 2001 to 2013 period.

165 Systemic Peace (2010). 166 Carter Center (2013). 167 These groups include women, Christians, and Chechens/Circassians. 168 Polity IV Country Report: Jordan – Systemic Peace (2010), Carter Center (2013). 169 Transparency International (2014).

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Chart 1: Corruption Perceptions Index for Jordan, 2003 to 2013170

The corruption discourse in Jordan is uncommon in that, since 2009, it has gained prominence yet takes on different meanings. First, many in opposition ranks see corruption phenomena beyond the nepotism in familial or tribal connections that have always facilitated entry to universities and access to public sector employment or the granting of public funds and other public benefits to politicians’ constituents, relatives and acquaintances. Second, privatizations provide the most fertile ground as well as undermining the monarchy’s core support through the rise of West Bankers’ fortunes. Thus, whereas the first favours the East Bankers, the second facilitates West Bankers’ rise. “Though public employment still protects the regime’s East Bank social base, Jordan’s decade-long privatization campaign has so far divested many billions of dollars in state assets and enterprises across sectors as diverse as transportation, telecommunications, and mining. The new spirit of popular inquiry incited by the Arab Spring has produced greater awareness that procedures governing the tendering of bids and awarding of contracts were not transparent, and that numerous officials and businessmen profited due to ill-structured deals or deliberate undervaluation.”171

Year Rank 2001 37/91 2002 40/102 2003 43/133 2004 37/146 2005 37/159 2006 40/163 2007 53/180

170 Transparency International (2014). 171 Schenker (2013).

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2008 47/180 2009 49/180 2010 50/178 2011 56/183 2012 58/176 2013 66/175

Table 2 : Corruption Perceptions Rank172

Chart 1 and Table 2 indicate a slow but steady rise in corruption. Whereas further economic liberalization may favour West Bankers and induce unrest amongst East Bankers, it may also be conducive to competition and, hence, an erosion of corruption when markets open up and develop. In the meantime, however, corruption may trigger common ground between those East and West Bankers concerned with corruption, a phenomenon detrimental to monarchy.173

Youth bulge and youth unemployment

The youth bulge and youth unemployment, when combined, may be perceived as a toxic combination. Though it may be overly simplistic, this observation is consistent with serious hypotheses as follows. “The corresponding youth bulge theory predicts that societies characterized by a youth bulge while simultaneously facing limited resources and, in particular, a lack of prestigious positions for "surplus“ youngsters – i.e. the third, fourth, fifth etc. born children – are much more prone to social unrest and/or acting belligerent towards their neighbors than those societies without these demographic stressors.”174

Chart 2 below shows that Jordan is passing through the bulge due to the fact that the 0-14 year age group is still increasing at an increasing rate and will only start tapering off in a decade or so and, moreover, they are bulging the 15-24 year group. The Jordanian population pyramid compared to those of some other countries, e.g. Iraq, is significantly more mature or, in other words, the bulge has moved upwards in the pyramid. Below, in Charts 3 and 4, a comparison of the population pyramids of Jordan and Canada reveals the differences. As Chart 2 suggests, the subsidence of the youth bulge should take another generation. This means Jordan may be facing a transitional employment problem which can yield political consequences.

172 Transparency International (2014). 173 Schenker (2013). 174 Ibid.

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Chart 2: Youth Bulge for Jordan, 1980-2010 and projections to 2020175

Charts 3 and 4: Population pyramids for Jordan (left) and Canada (right), 2010176

The Jordanian employment scene seems segmented. The public sector employing East Bankers and the private sector the West Bankers, clearly competition and mobility are hampered due to this rather idiosyncratic nature of the Jordanian society. Therefore, if liberalization continues, there might be relatively more opposition voices appearing from amongst the East Banker youth than from West Banker youth because the traditional employment destination for East Bankers will be expected to shrink. And if they cannot make the transition towards competing in private markets, East Banker youth

175 UN Dept. of Economic and Social Affairs (2012). 176 UN Dept. of Economic and Social Affairs (2012). Horizontal axis represents thousands of persons for Jordan and millions of persons for Canada; vertical axis represents 5-year age groups.

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may be facing employment problems. Of course, politically, this is simply a scenario for the erosion of monarchy’s power base.

This prediction can be strengthened with further labour market information from the public and private sector markets as well as backgrounds of those unemployed youth and their current educational engagements leading to future employment. Chart 5 below provides the aggregate youth unemployment, a figure hardly different from comparable countries but, in the case of Jordan, the aggregate is hiding the youth labour market dichotomy arising from Jordan’s two sub-populations, the East and the West Bankers. Youth bulge and segmented youth unemployment may generate frictions while liberalization and youth bulge subsidence continue over the next generation.

Chart 5: Unemployment, youth total for Jordan, 2002 to 2013177

Economic difficulty indicators: GINI, Undernourishment and CPI

Economic difficulty indicators are meant to convey the economic stress endured by residents. The three indicators chosen to form this group connect the income distribution in a given country with economic growth and the nature of proper food intake.

Given moderate but consistently positive economic growth in Jordan over the 2009-2013 period, respectively 5.5%, 2.3%, 2.6%, 2.7% and 2%,178 the GINI coefficient and the CPI would signal whether economic growth translates into reducing economic stress.

The first CEI in this group is the GINI coefficient.179 Since it is not available as time-series, we provide the four data points available below in Chart 6. We observe improvement, i.e. evening out of income distribution, despite modest economic growth over the same period.

177 World Bank (2014). 178 World Bank (2014). 179 United Nations Development Programme (2014).

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Chart 6: GINI coefficient for Jordan (2003, 2006, 2008, 2010)180

The second CEI is the Undernourishment Index. For Jordan, it is available for the whole sample period and compares favourably to Iraq but it is level with neighbouring Arab countries.181

The Undernourishment Index represents the percent of the population below minimum level of dietary energy consumption (also referred to as prevalence of undernourishment). Jordan has been rated at or below 5% over at least the past decade, indicating that this is only a relatively minor problem in the country.

The third CEI is the Consumer Price Index as given in Chart 7 below. Since both corruption and per capita GDP growth are moderate on average, this latter is not expected to signal economic stress whereas, if they are present, price increases will tend to reflect the stress more accurately. The 2009-2013 period exhibits the following reasonably low inflation rates of 6.9%, 2.9%, 5.8%, 6.1% and 1.9%, while per capita GDP growth rates were moderate but consistently positive, respectively, -0.7%, 5%, 4.4%, 4.8% and 5.5% over the same period. Given that -0.7 reflects the effect of the 2008 Financial Crisis gone global, Jordanian inflation went fairly stable around 5% over the period 2010 to 2013.

180 United Nations Development Programme (2014). 181 To contextualize by comparison, the Index has identical values of 5% for Argentina, Iran, Morocco and Uruguay over 2009-2012.

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Chart 7: Consumer Price Index for Jordan, 2002 to 2013182

Taken together, these three indices provide an indication as to whether economic conditions for certain sections of society are improving. The observed reality in Jordan is one where standards of living don’t appear to have deteriorated over the 2009-2013 period despite intercommunal frictions.

Educated Malcontent and Technological Adaptation

Both these measures run into data problems. First, in the absence of a more general data set, we use the Emigration to OECD from OECD statistics collected from Jordanian emigrants in OECD countries: 41.5% of emigrants are tertiary-educated183, a significantly higher percentage than those enrolled in tertiary education elsewhere, which suggests an educated and potentially malcontent strata of Jordanian youth. However, Chart 8 seems to suggest that the emigration rates of tertiary-educated seem to suggest that their emigration has slowed down considerably.

182 World Bank (2014). 183 A Profile of Immigrant Populations in the 21st Century: Data from OECD Countries - OECD (2008), ch.9, www.oecd.org/els/mig/40647145.xls.

This section investigates two CEIs: the emigration rate of tertiary educated persons and the adoption of social media, as proxied by ‘internet users per 100 population’. The first provides a measure of labour market tightness and can serve as an indication of discontent with the conditions in the country. The second CEI concerns the prevalence of social media and interconnectedness among the tech-savvy youth of Arab countries.

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Chart 8: Emigration Rate of Tertiary Educated from Jordan (1990, 2000, 2008)184

Second, in the absence of figures on youths with access to social media, we use the percentage of internet users as a proxy for the pervasiveness of social media. Chart 8 below shows that internet use has been increasing rapidly for the past decade or so in Jordan.

In the recent Arab Spring uprisings, the pervasiveness of social media as a coordination device and method of conveying grievances device was observed. This last section combines the emigration of tertiary-educated and the internet usage rates to estimate the youth discontentment. Of course, the youth unemployment index could be combined with these two variables to have a more complete understanding of youth involvement in unrests.

Chart 9: Internet Users per 100 People for Jordan, 2002 to 2013185

184 World Bank (2014).

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Jordan did not experience an uprising per se, especially one where youth played a major role. Whereas youth unemployment should worry Jordanian policy-makers, the low emigration rate suggests that the Jordanian youth are not leaving the country.

iii. Country-Specific CEIs

Lack of natural resources and energy

With little energy and water resources, Jordanian economy is vulnerable and domestic stability could be endangered responding to variations in energy prices. Energy imports satisfy than 90% of Jordan's energy demand and they account for more than 40% of the country's budget. Whereas Jordan imports Saudi oil through TransArabian pipeline, it imports gas through the Arab Gas Pipeline (AGP) from Egypt. Jordan’s gas imports suffered dramatically in 2011 and 2012 as a result of unrest in the Sinai Peninsula and in Syria.

Two directions hold promise. First, oil shale resources have been found very significant and Jordan reached an agreement with Enefit, an Estonian company, and its partners to build a 540MW shale-fuelled power station.186 Second, a proposed pipeline from Iraqi oil city of Basra to the Jordanian port city of Aqaba would bring Iraqi oil as well as gas to Jordan. This pipeline, by diversifying Iraqi export opportunities, is a mutually beneficial project.

Hydrocarbon exploration near Jordan's eastern border with Iraq and in the areas around the Dead Sea could lead to additional discoveries, but in the short term Jordan will continue to rely on energy imports and a nascent renewable energy sector to meet domestic energy demand. Jordan's government plans to boost electricity generation capacity from renewable sources to 1.8 gigawatts by 2020, up from just 18 megawatts at present.187

4. Current and Future Challenges

Jordan exhibits similarities with Morocco. Both are less than absolutist monarchies with young and relatively legitimate kings who both acceded to the throne in 1999 and may be leading their countries down a slow path to democracy. The dynamics of Jordan, significantly different than Morocco’s, revolves around the dynamics of its East and West Banker sub-populations and, of late, by a large number of refugees from Syria. Despite a rather homogeneous ethnic distribution with Arabs constituting about 98% of the population,188 the historical and cultural differences between East Bankers (mostly Bedouins) and West Bankers (Palestinians) are substantial, generating frictions over the recent

185 World Bank (2014). 186 The Economist (2014) and EIA (2014). 187 EIA (2014). 188 With Circassians and Armenians with 1% each.

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process of liberalization and the resulting shifts in economic and political power bases towards West Bankers benefiting from the expansion of market forces.

The recent discovery of oil shale, provided it is successfully developed, may alleviate energy-deprived Jordan’s macroeconomic and budgetary problems. Moreover, the Basra-Aqaba pipeline, if built, may provide further relief, not only by diversifying energy sources but also providing further opportunities by offering Iraq export diversification.

References

Assaad, R. and D. Levison (2013), “Employment for Youth – A Growing Challenge for the Global Economy”, http://www.post2015hlp.org/wp-content/uploads/2013/06/Assaad-Levison-Global-Youth-Employment-Challenge-Edited-June-5.pdf

Cabras, A. (2010). "The implications of the youth bulge in Middle East and North African populations". NATO Parliamentary Assembly Report. 138 GSM 10 E rev 3. http://www.nato-pa.int. Accessed 11/1/2014.

Cavendish, R. (2007), “A Failed Coup in Jordan”, History Today 57(4), http://www.historytoday.com/richard-cavendish/failed-coup-jordan. Accessed 12/1/2014.

Carter Center (2013), “Study Mission Report for Jordan’s 2013 Parliamentary Elections”, http://www.cartercenter.org/resources/pdfs/news/peace_publications/election_reports/jordan-2013-study-mission-eng.pdf

CIA World Factbook (2014). Country Backgrounds. http://www.cia.gov. Accessed 11/1/2014.

EIA - U.S. Energy Information Administration (2014), “Jordan: Country Analysis Brief”, Independent Statistics & Analysis, http://www.eia.gov/countries/country-data.cfm?fips=JO&trk=m

Greenfield, D. (2013), “Jordan’s Youth: Avenues for Activism”, Atlantic Council, Rafik Hariri Center for The Middle East, http://www.atlanticcouncil.org/publications/issue-briefs/jordan-s-youth-avenues-for-activism

Itani, F. (2013), “Stability through Change: Toward a New Political Economy in Jordan”, Atlantic Council, Rafik Hariri Center for The Middle East, http://www.atlanticcouncil.org/publications/issue-briefs/stability-through-change-toward-a-new-political-economy-in-jordan

Lasensky, S. (2006), “Jordan and Iraq: Between Cooperation and Crisis”, Special Report, United States Institute of Peace, http://www.usip.org/sites/default/files/JordanandIraq_SR%20178_Lasensky.pdf.

Marshall, M.G. and B.R. Cole (2014), “Conflict, Governance, and State Fragility”, Center for Systemic Peace, www.systemicpeace.org

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Oxford Business Group (2013), “Jordan: High hopes for oil shale potential”, http://www.oxfordbusinessgroup.com/news/jordan-high-hopes-oil-shale-potential. Accessed 11/1/2014.

Rank, J. and B. Saba (2014), “Building Partnership Capacity 101 - The New Jordan Armed Forces Noncommissioned Officer Corps”, Military Review, September-October, pp. 24-35

Schenker, D. (2013), “Will Jordan Be the First Arab Monarchy to Fall?”, The Atlantic, January 2013

Systemic Peace (2010). Polity IV Country Report – Jordan. http://www.systemicpeace.org/polity/. Accessed 11/1/2014.

The Economist (2014). “Oil shale – Flaming rocks”. Published 6/28/2014.

Transparency International (2014). Corruption Perceptions Index. http://www.transparency.org. Accessed 11/1/2014.

United Nations Development Programme (2014). Human Development Reports. http://hdr.undp.org/en/content/income-gini-coefficient. Accessed 12/1/2014.

World Bank (2013), “Maintaining Stability and Fostering Shared Prosperity amid Regional Turmoil”, Jordan Economic Monitor, Poverty Reduction and Economic Management Unit, http://www.worldbank.org/content/dam/Worldbank/document/MNA/Jordan_EM_Spring_2013.pdf

World Bank - World Development Indicators (2014). http://data.worldbank.org/data-catalog/world-development-indicators. Accessed 12/1/2014.

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Kuwait

1. Introduction

From several different perspectives, Kuwait does not fit the mould set by other Arab Spring-affected nations. The country is among the richest in the world in per-capita income, with a GDP per capita of $56,366 as of 2012.189 It is one of the world’s largest exporters of oil and has ample reserves. Unemployment is also relatively low, with guaranteed-job programs and other generous redistributions of state income. While Kuwait does have a ruling family, it also has an elected parliament that has moderate power and is able to question ministers and make recommendations on many policy issues.190 Prior to the Arab Spring, Kuwait was widely considered the most democratic of all Arab countries. Perhaps most significantly, the country is considered a major ally of the United States; the 2003 American invasion of Iraq was largely staged from Kuwait.

2. Overview of Recent Events

Despite being a beacon of prosperity in an otherwise troubled region, the country experienced significant unrest not unlike many of its neighbours. The protest movement's beginnings included the country’s "stateless" residents, also known as the Bedouin, demanding the right to obtain citizenship. These were precipitated by a generous and hefty grant from the government – 1,000 dinars,191 and free food for a year – that only citizens were eligible to receive. Ironically, while this grant was officially meant to commemorate the anniversary of the liberation from Iraqi forces in 1991, it was given during the opening stages of the Arab Spring, and may have been a gesture to avoid the unrest other countries were currently experiencing.192

By March 2011, new protests, driven by a variety of issues from government corruption to the desire for electoral reform, intensified and culminated with the dissolution of parliament in December of 2011. This resulted in an election that was won by a coalition of opposition groups, though this victory would be short-lived as Kuwait’s constitutional court ruled that the original dissolution was unconstitutional, resulting in the previous parliament being reinstated. The protest movement persisted, however, and a second dissolution of parliament set the stage for new elections. Kuwait’s Emir issued significant changes to the electoral system, in particular the reduction in the number of votes from four to one.193 This move was considered detrimental to the opposition parties who responded by urging their supporters to abstain from voting altogether in the coming election. As a result, this election would see an electoral turnout as low as 28%, the lowest in Kuwait’s history. Pro-government candidates went on to win a majority of the seats in the election.194

189 World Bank (2014). 190 Kinninmont (2012). 191 Roughly equivalent to 4,000 USD at the time. 192 Kamel (2013). 193 BBC (2013). 194 Black (2012). The official turnout rate was reported to be 43%.

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The protest movement lost momentum in 2013, though the discontent that caused the uprisings in the first place had not been resolved. Opposition groups have reportedly attempted to reconcile their demands through negotiations as a means to present a united front to the current government. In April of 2014, these groups issued a document relating their consolidated demands. These specifically include the introduction of a full parliamentary system, an independent judiciary, and changes to the criminal code. The power of the ruling family would also be drastically reduced under the proposed demands.195

3. Discussion of Critical Economic Indicators

This section introduces a set of indicators for Kuwait. In addition, to provide further background for countries that have experienced vigorous opposition movements - with many swelling to full-scale uprisings - a smaller set of indicators are used to measure the population's attitude towards their respective country's governance. Although no causality conclusions are implied, the Critical Economic Indicators (CEIs) may serve as barometer readings ahead of potential civil unrest. Three groups of factors are covered within this section. The first concerns general summary statistics and important contextual economic facts on the country in question. The second group covers selected political factors such as the total number of personnel in the country’s military and the Polity government legitimacy measure. The third group consists of the selected political and socioeconomic factors which we argue played a role in the development of the unrest for the country. Both country-specific factors and factors that are common to other Arab Spring-affected nations are discussed within this group. The selection of CEIs is guided by the observations made during the Arab Spring uprisings as well as similar popular uprisings elsewhere in the world, in particular recent experiences in Turkey, Ukraine, and Hong Kong. The robust participation of educated and connected youth against various perceived governance problems and with democratic demands has been a commonly observed factor in virtually all unrests. Therefore the three groups of CEIs are representative of youth activism by taking into account the demographic, economic and technological dimensions of youth malcontent. The demographic dimension as captured by the youth bulge and youth unemployment has been extensively studied.196 The literature distinguishes popular uprisings from armed conflicts and this Report concentrates on the former. The economic dimension of CEIs includes the GINI coefficient, the Undernourishment Index and the Consumer Price Index. Moreover, the first block of numbers in Table 1 includes, as general indicators, the population and GDP figures. Finally, the technological dimension aims to capture the educated youth phenomenon observed prominently in popular uprisings and includes the Emigration Rate of Tertiary Educated Persons and Internet Users per 100 People.

195 The Economist (2014). 196 Cabras (2010), Lin (2012), Schomaker (2013), and Urdal (2013).

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Indicator197 Value General Population GDP Per Capita

3.37M (2013) 56,366 (2012, current USD)

Political Armed Forces Personnel Contiguity to Instability Government Legitimacy (Polity IV)198 Ruler Longevity

22,600 (2012) Iraq, Saudi Arabia -7 (Autocracy) 2006 to present (Al-Sabah); ruling family in power since 1938

Economic (CEIs) Corruption Perceptions Index (rank and index) Youth Bulge199 Youth Unemployment GINI coefficient Undernourishment Index Inflation Emigration Rate of Tertiary Educated Internet Users

69/177 and 43/100 40.7% 11.3% (2005) 30 (Global Peace Initiative estimate) 5% 2.62% (2013) 6.23% (1990), 7.09% (2000) 20% (2013)

Key Indicator for Kuwait Net Migration (estimates)

200,174 (1998-2002) 448,950 (2003-2007) 300,000 (2008-2012)

Table 1: A selection of indicators on Kuwait

i. Political Indicators

This section very briefly reviews the four political factors introduced above in Table 1.

Armed Forces Personnel and Contiguity to Instability

At 22,600, the armed forces of Kuwait represent about 1.4% of the country's work force. Kuwait resides in a particularly dangerous and unstable region of the world, bordering both Saudi Arabia and Iraq, and has been involved in several international military interventions in the past 25 years, including being invaded by Saddam Hussein's Ba'athist Iraq in 1990. While Kuwait is economically powerful, it has only a fraction of the population of either Iraq or Saudi Arabia, and is therefore careful not to antagonize its

197 Unless otherwise indicated, data obtained from the World Bank’s WDI dataset (2014). 198 "The "Polity Score" captures the regime authority spectrum on a 21-point scale ranging from -10 (hereditary monarchy) to +10 (consolidated democracy). The Polity scores can also be converted into regime categories in a suggested three part categorization of "autocracies" (-10 to -6), "anocracies" (-5 to +5), and "democracies" (+6 to +10).” ).(…) The Polity scheme consists of six component measures that record key qualities of executive recruitment, constraints on executive authority and political competition.” Systemic Peace (2010). 199 For the purposes of this review, the Youth Bulge refers to the percent of the population under the age of 24. Data obtained from CIA Factbook (2014).

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more powerful neighbours, pursuing instead diplomacy and good relations as a means to ensure its own stability.200 In 2012, Kuwait even reopened relations with long-time rival Iraq, albeit now under a different, non-Ba'athist regime.

Kuwait has the financial means to field and maintain a relatively large army. The domestic economic situation and tranquil population render this largely unnecessary, however; Kuwait’s regime is not one that owes its legitimacy to military strength and the ability to repress public dissent. There is therefore little need for Kuwait to maintain a large standing army as a domestic deterrent force, as may be the case for other North African and Middle Eastern nations.

Government Legitimacy (Polity IV) and Ruler Longevity

The government legitimacy indicator value of -7 reflects the nature of the longstanding monarchic rule in Kuwait. The country does have a consultative parliament, and the citizenry have largely advocated in favour of greater democratic freedoms. However, the Emir still wields the vast majority of power, as evidenced by the dissolution of parliament in the wake of the election of many opposition representatives. In addition, the Emir sanctioned the amendment of the constitution to change the rules of voting, decreasing the number of votes per citizen from four to one,201 thus stacking the deck against the election of opposition members of parliament.

ii. Common CEIs

This section covers all relevant CEIs displayed in Table 1.

Corruption Perceptions Index

The above chart displays a relatively stable trend in corruption perception from 2003 to 2013. Compared to the Western world, Kuwait fares rather poorly, and has most recently ranked 69th out of 177 surveyed countries. However, the country rates very well compared to its regional counterparts. In terms of freedom of the press, Kuwait ranks far above Iran, Iraq and Saudi Arabia.202 Further, Kuwait rates relatively well in terms of civil liberties and political freedoms, though the latter index has worsened in recent years due to the aforementioned electoral reforms and parliamentary dissolution imposed by the Emir.203

200 Al-Sharekh (2012). 201 BBC (2013). 202 World Press Freedom Index – Reporters Without Borders (2014). 203 Freedom House (2013).

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Chart 1: Corruption Perceptions Index for Kuwait, 2003 to 2013204

Year Rank 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

35/133 44/146 45/159 46/163 60/180 65/180 66/180 54/178 54/183 66/176 69/177

Table 2: Corruption Perceptions Rank205

Youth Bulge and Youth Unemployment

Chart 2 below displays the evolution of the proportion of the population of Kuwait belonging to the 0 to 24 age group, and includes projections out to 2020. Hovering around 40%, this measure is significantly lower than those of other Arab Spring nations; Iraq, for example, has a youth bulge in the region of 60%. This proportion is expected to remain stable for the most part, according to projections based on a medium fertility scenario.206

204 Transparency International (2014). 205 Transparency International (2014). 206 UN Dept. of Economic and Social Affairs (2012).

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Chart 2: Youth Bulge for Kuwait, 1980-2010 and projections to 2020207

Charts 3 and 4: Population pyramids for Kuwait (left) and Canada (right), 2010208

Comparing Charts 3 and 4, it is apparent that the youth bulge in Kuwait, while larger than that of Canada, is not especially exaggerated. The majority of the population falls within the 20 to 45 age range, with a peculiar imbalance on the male side.

Chart 5 illustrates the progression of youth unemployment for the period leading up to and including the Arab Spring movement in Kuwait. Again, the contrast between Kuwait and other Arab Spring nations is quite evident: youth unemployment is both stable and low, owing to the country’s strong resource-based economy. Unlike other oil-based economies such as those of Oman and Bahrain, Kuwait has a 207 Ibid. 208 UN Dept. of Economic and Social Affairs (2012). Horizontal axis represents thousands of persons for Kuwait and millions of persons for Canada; vertical axis represents 5-year age groups.

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much more effective government and there exists a fair amount of economic opportunity for young, educated workers. Note that the rate of youth unemployment in Kuwait, which hovers in the 8-9% range, is substantially lower than even Canada’s let alone its neighbours.209

Chart 5: Unemployment, youth total for Kuwait, 2002 to 2013210

Economic difficulty indicators: GINI, Undernourishment and CPI

Economic difficulty indicators are meant to convey the economic stress endured by residents. The three indicators chosen to form this group connect the income distribution in a given country with economic growth and the nature of proper food intake.

The first economic difficulty indicator is the GINI coefficient, a measure of income inequality within the country. At 30, this indicates a rather equitable distribution of income within Kuwait, and rates similarly to developed Western nations, even ranking better than Canada’s inequality coefficient.211

Perhaps unsurprisingly, undernourishment does not appear to be an acute problem in Kuwait, with an estimated rate of no higher than 5 percent over the last decade.

The Consumer Price Index (CPI) for Kuwait shows an annual inflation rate of 2.6 percent leading into 2013, and has remained relatively stable over the past 5 years.

209 Which has historically hovered around 12 percent (Statistics Canada CANSIM table 109-5324). 210 World Bank (2014). 211 Rated 32.1 in 2005 according to the CIA World Factbook (2014).

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Chart 6: Consumer Price Index for Kuwait, 2002 to 2013212

Educated Malcontent and Technological Adaptation

Chart 7: Emigration Rate of Tertiary Educated from Kuwait (1990, 2000)213

212 World Bank (2014). 213 World Bank (2014).

This section investigates two CEIs: the emigration rate of tertiary educated persons and the adoption of social media, as proxied by ‘internet users per 100 population’. The first provides a measure of labour market tightness and can serve as an indication of discontent with the conditions in the country. The second CEI concerns the prevalence of social media and interconnectedness among the tech-savvy youth of Arab countries.

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Owing to encouraging domestic labour market conditions, as evidenced by low youth unemployment numbers as expressed previously, Kuwait has a relatively low emigration rate for its tertiary-educated population.

Chart 8: Internet Users per 100 People for Kuwait, 2002 to 2013214

To serve as a proxy for interconnectedness and social media use among the country’s populace, often cited as a key factor in the Arab Spring uprisings, we use a data series showing the percentage of the population with regular internet access.

Reviewing Chart 8, it is quite clear that among other Middle Eastern and North African nations, Kuwait is quite advanced in this regard. This rapid adoption of the internet can likely be attributed to the domestic economy and the disposable income available to residents.

iii. Country-Specific CEIs

Net Migration

The narrative that the above figures draw attention to is how Kuwait’s Arab Spring experience is strikingly different from that of others; while many observers have described these movements as being driven by the youth, in particular students and the educated unemployed, the same cannot be said here. In Kuwait, perhaps the most important drivers of the protests, particularly in the early going, were the stateless residents and non-citizens.

Between the years 2002 and 2011, the population increased from approximately 2.05 million to over 3.1 million, for an increase in population north of 50 percent over the ten-year span. Given the relatively modest natural population growth rate, it follows that this rapid growth is attributable to immigration.

214 World Bank (2014).

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Chart 9: Net Migration for Kuwait (5-Year Estimates), 1997 to 2012215

Chart 9 shows the 5-year net migration totals for Kuwait. In the period ending 1997, net migration totalled approximately 125,000; this figure would balloon to almost 450,000 for the period ending 2007. As citizenship is difficult to attain in Kuwait, a substantial portion of these migrants would go on to swell the ranks of the country’s non-citizens, who were ineligible to either vote or receive a variety of government benefits. By 2011, 2.0 million of the country’s 3.1 total population were either stateless or non-citizen, and thus more likely to align themselves with the protest movement.216

Civil Society

Kuwait was traumatized by the invasion of 1990. It has yet to overcome the fear that Iraq will yet again want to show that Kuwait is the 19th province rather than an independent neighbouring state -- and Kuwait will want guarantees that such a breach of sovereignty will not be repeated. Iraq is continuing to pay off its war reparations to Kuwait. Baghdad has already paid about $30 billion to date and still owes more than $20 billion. The money is deducted from Iraq's main income, oil revenues.217

One distinctly GCC (Gulf Cooperation Council) social phenomenon is dewaniya (or men's reception hall) as a unique model for civil society. The whole family and/or tribe maintain dewaniya in their residence where the host can receive guests and visit with others. The Kuwaiti dewaniya acts like a local parliament with no political parties. However, independent civil society organizations have not existed until very recently. Economic organizations such as public utility associations, trade unions and several other unofficial organizations play the role of civil society organizations. They are in fact cooperative associations “which shoulder civil and economic functions unofficially… Their goals, tasks and scope of

215 World Bank (2014). 216 World Population Review (2014). 217 Karadsheh (2011).

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activity range from professional, cultural and social services to humanitarian services such as the Red Crescent Society.”218 The Kuwaiti Constitution provides (in Chapter 3 Public Rights and Duties Article 43) the right to establish associations and trade unions on national bases and by peaceful means are guaranteed in accordance with the terms and conditions stated by the law. There is no compulsory membership to these associations or trade unions.219 A further civil society institution has been the suffrage extended to women. A 1999 decree by the long-time Emir Jaber extended voting rights to women220 but the parliament didn’t pass a law till 2005. Finally, in 2009, four women were elected to parliament.

Contrary to other countries studied in this Report, Kuwaiti demographic picture does not exhibit a youth bulge. The most important drivers of the protests of 2011-2012, particularly in the early going, were the stateless residents and non-citizens.

4. Current and Future Challenges

The most important issue facing Kuwait continues to be the status of the hundreds of thousands of non-citizens. While recently, there have been efforts to pass legislation that would grant citizenship to some 4000 residents,221 many more remain without status, and precious little has been done to resolve the underlying problems. A recent move to offer citizenship of the small African island nation of Comoros to Kuwait’s stateless has been generally panned by critics; while obtaining this citizenship would mean access to health and other government services, it would also open residents to potential deportation if any crimes are committed.222

A further cause for concern is the question of whether government revenues can continue to support the cradle-to-grave welfare system currently present in the country, along with a variety of other generous benefits available to its citizens. For example, energy prices are offered to citizens at less than 5 percent of actual cost. Recently, government officials have warned that such practices can no longer be supported, and a new four-year programme outlines a variety of measures including the imposition of a taxation system to improve government revenues. Currently, 94 percent of government revenue originates from oil income, and the country has posted budget surpluses in each of the last 13 years, not surprisingly coinciding with the rise in the price of crude oil. While the short and medium term public financial situation appears relatively optimistic, imposing measures now, it is hoped, can curtail potential budget shortfalls in the future.223 Whether any serious efforts will be undertaken with a view

218 Henry (2005). 219 Ibid. 220 Ironically, Kuwaiti women had the right to vote when Kuwait became a parliamentary monarchy. The right was subsequently withdrawn, to be restored in 2005. 221 Amnesty International (2014). 222 Al-Jazeera America (2014). 223 Daily News Egypt (2012).

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towards diversifying the domestic economy away from the production and refinement of fossil fuels remains to be seen, however, as the country lags behind even Qatar and the UAE in this regard.224

References

Al-Jazeera America (2014). “Kuwait offers stateless group citizenship – from Comoros”. Published 11/10/2014. http://america.aljazeera.com/articles/2014/11/10/kuwait-statelesscitizenshipcomoros.html. Accessed 11/11/2014.

Al-Sharekh, A. (2012). Commentary featured in Financial Times. Financial Times, 4/16/2012. http://www.ft.com/intl/cms/s/0/449784ee-8304-11e1-929f-00144feab49a.html#axzz3HC1CXRQ4. Accessed 11/1/2014.

Amnesty International (2014). “Kuwait: Small step forward for Bidun rights as 4,000 ‘foreigners’ granted citizenship”. Published 3/20/2014. http://www.amnesty.org/en/news/kuwait-small-step-forward-bidun-rights-4000-foreigners-granted-citizenship-2013-03-21. Accessed 11/1/2014.

BBC (2013). "Arab uprising: Country by country - Kuwait". BBC. Published 12/16/2013. http://www.bbc.com/news/world-19401680. Accessed 11/1/2014.

Black, I. (2012). "Kuwait election turnout shrinks after opposition boycott". The Guardian. Published 12/2/2012. http://www.theguardian.com/world/2012/dec/02/kuwait-election-turnout-opposition-boycott. Accessed 11/1/2014.

Cabras, A. (2010). "The implications of the youth bulge in Middle East and North African populations". NATO Parliamentary Assembly Report. 138 GSM 10 E rev 3. http://www.nato-pa.int. Accessed 11/1/2014.

Center for Systemic Peace (2014). Polity IV Dataset. http://www.systemicpeace.org/inscrdata.html. Accessed 11/1/2014.

CIA World Factbook (2014). Country Backgrounds. http://www.cia.gov. Accessed 11/1/2014.

Daily News Egypt (2013). “Oil-rich Kuwait warns welfare state unsustainable”. Published 10/28/2013. http://www.dailynewsegypt.com/2013/10/28/oil-rich-kuwait-warns-welfare-state-unsustainable/. Accessed 11/1/2014.

Freedom House (2013). “Freedom in the World – Kuwait”. https://freedomhouse.org/report/freedom-world/2013/kuwait#.VGTyfSi3M0M. Accessed 11/1/2014.

Gulf News (2012). “Kuwait and economic diversification”. Published 6/28/2012. http://m.gulfnews.com/kuwait-and-economic-diversification-1.1041131. Accessed 11/1/2014.

224 Gulf News(2012).

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Henry, C.M. (2005). “Civil Society - Kuwait. University of Texas”. http://chenry.webhost.utexas.edu/civil/Dead%20Sea%202005/CivilSocietyAndMedia/CivilSociety/Kuwait_Country. Accessed 11/1/2014.

Kamel, S. (2013). "Kuwait's Bedoon and the Arab Spring". Middle East Flashpoint - Centre for Mediterranean, Middle East & Islamic Studies. University of Peloponnese.

Karadsheh, K. (2011). “Tensions Remain, 20 years after the Gulf War” CNN January 16. http://www.cnn.com/2011/WORLD/meast/01/16/iraq.kuwait.war.anniversary. Accessed 11/1/2014.

Kinninmont, J. (2012). "Kuwait's Parliament: An Experiment in Semi-democracy". Briefing paper, Middle CIA World Factbook (2014). “Country Comparison: Distribution of Family Income – GINI Index”. http://www.cia.gov/library/publications/the-world-factbook/rankorder/2172rank.html. Accessed 11/1/2014.

Lin, J.Y. (2012). "Youth Bulge: A Demographic Dividend or a Demographic Bomb in Developing Countries?”. World Bank blog. http://blogs.worldbank.org/developmenttalk. Accessed 11/1/2014.

Schomaker, R. (2013). "Youth bulges, poor institutional quality and missing migration opportunities - triggers of and potential counter-measures for terrorism in MENA". Topics in Middle Eastern and African Economies 15(1), 116-140.

Systemic Peace (2010). Polity IV Country Report – Kuwait. http://www.systemicpeace.org/polity/Kuwait2010.pdf. Accessed 11/1/2014.

Transparency International (2014). Corruption Perceptions Index. http://www.transparency.org. Accessed 11/1/2014.

The Economist (2014). "Kuwait's opposition - A reawakening". Published 4/17/2014. http://www.economist.com/blogs/pomegranate/2014/04/kuwaits-opposition. Accessed 11/1/2014.

UN Dept. Of Economic and Social Affairs (2012). “World Population Prospects: The 2012 Revision”. http://esa.un.org/unpd/wpp/unpp/panel_indicators.htm. Accessed 11/1/2014.

Urdal, H. (2013). "A clash of generations? Youth bulges and political violence". UN Department of Economic and Social Affairs, Population Division. Expert Paper No. 2012/1.

World Bank - World Development Indicators (2014). http://data.worldbank.org/data-catalog/world-development-indicators. Accessed 12/1/2014.

World Population Review (2014). “Kuwait Population 2014”. http://worldpopulationreview.com/countries/kuwait-population/. Accessed 11/1/2014.

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Syria

1. Introduction

In 1946, Syria became an independent state and established a parliamentary democracy. This first attempt failed because the political environment was dominated by factional, sectarian, and tribal rivalries that rendered any consensus impossible. This failure of the first multiparty system was followed by a series of military dictatorships. Then, between 1958 and 1961 the country joined Egypt under the short-lived United Arab Republic (UAR).225

Political power after independence was concentrated in the hands of a wealthy oligarchy of landlords, industrialists, merchants, and lawyers. The majority of this post-colonial oligarchy consisted of urban aristocrats of Sunni Muslim background, "who derived their influence from inherited wealth and social position, as well as from their early involvement in the Arab nationalist movement."226 These elites draw their political legitimacy not from a platform of national cohesion and reconciliation but from opposition to foreign powers including the Ottoman Empire, France and Zionism.227 The post-independence rise of radical nationalism and populism among the middle class and peasantry destabilized the semi-feudal oligarchic regime and paved the way for the 1963 Ba’athist coup, which made the military a prominent actor in the Syrian political system.228

Between 1963 and 1965, the Syrian government implemented a socialist economy. Its agrarian reform stripped large landowners of their estates and provided land to farmers, and improved conditions for farm tenants and sharecroppers. During the same period, commercial banking and insurance were nationalized and other large businesses were wholly or partially nationalized, including natural resources, electric power, and water. "In addition, the government was responsible for the bulk of investments, the flow of credit, and pricing for many commodities and services, including a substantial part of wages."229

2. Overview of Events

In May 2011, Bashar al-Assad gained a second term as president after winning a referendum. This took place after the March 2011 antigovernment protests, which began in the southern province of Dar’a following major uprisings elsewhere in the Arab world. Syrian protesters had several demands, including the repeal of the restrictive ‘Emergency Law’ allowing the detainment and arrest of civilians without charges, the legalization of political parties, and the removal of corrupt local officials. The government response fell short of these demands, and Assad would not step down. As a result, widespread armed

225 Collelo, Thomas (1987). 226 Ibid. 227 Ibid. 228 BTI (2012). 229 Collelo, Thomas (1987).

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opposition activities led to extended violent clashes between government forces and opposition elements. Since then, "demonstrations and unrest have spread to nearly every city in Syria, but the size and intensity of protests have fluctuated over time."230 These clashes have evolved into significant armed conflict between radical Islamist groups and the government. There is also a moderate armed opposition group fighting both the government and the Islamist militants.

Subsequently, international pressure on the Assad regime has intensified with the Arab League, EU, Turkey, and the United States levying economic sanctions against the regime. In response, the Syrian government offered a set of a concessions that included repealing the controversial ‘Emergency Law’ and allowing for greater democratic freedoms in the country; 231 these would , however, not be successful in stopping either the armed uprising or the economic sanctions.

3. Discussion of Critical Economic Indicators (CEIs)

This section introduces a set of indicators for Syria. In addition, to provide further background for countries that have experienced vigorous opposition movements - with many swelling to full-scale uprisings - a smaller set of indicators are used to measure the population's attitude towards their respective country's governance. Although no causality conclusions are implied, the Critical Economic Indicators (CEIs) may serve as barometer readings ahead of potential civil unrest. Three groups of factors are covered within this section. The first concerns general summary statistics and important contextual economic facts on the country in question. The second group covers selected political factors such as the total number of personnel in the country’s military and the Polity government legitimacy measure. The third group consists of the selected political and socioeconomic factors which we argue played a role in the development of the unrest for the country. Both country-specific factors and factors that are common to other Arab Spring-affected nations are discussed within this group. The selection of CEIs is guided by the observations made during the Arab Spring uprisings as well as similar popular uprisings elsewhere in the world, in particular recent experiences in Turkey, Ukraine, and Hong Kong. The robust participation of educated and connected youth against various perceived governance problems and with democratic demands has been a commonly observed factor in virtually all unrests. Therefore the three groups of CEIs are representative of youth activism by taking into account the demographic, economic and technological dimensions of youth malcontent. The demographic dimension as captured by the youth bulge and youth unemployment has been extensively studied.232 The literature distinguishes popular uprisings from armed conflicts and this Report concentrates on the former. The economic dimension of CEIs includes the GINI coefficient, the Undernourishment Index and the Consumer Price Index. Moreover, the first block of numbers in Table 1 includes, as general indicators,

230 CIA World Factbook (2014). 231 Ibid 232 Cabras (2010), Lin (2012), Schomaker (2013), and Urdal (2013).

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the population and GDP figures. Finally, the technological dimension aims to capture the educated youth phenomenon observed prominently in popular uprisings and includes the Emigration Rate of Tertiary Educated Persons and Internet Users per 100 People.

Indicator233 Value General Population GDP Per Capita

17.95M (2013) 5,100 (2011, current USD)

Political Armed Forces Personnel Contiguity to Instability Government Legitimacy (Polity IV) 234 Ruler Longevity

250,000 (2014) Iraq, Jordan -9 (Autocracy) Bashar al-Assad in power from 2000 to present

Economic (CEIs) Corruption Perceptions Index (rank and index) Youth Bulge235 Youth Unemployment GINI coefficient Undernourishment Index Inflation Emigration Rate of Tertiary Educated Internet Users

168/177 and 17/100 (2013) 53.3% (2013) 56.3% (2010) 35.78 (2004)236 6% (2012) 36.7% (2012) 7.5% (1990), 6.2% (2000)237 26.2% (2013)

Table 1: A selection of indicators on Syria

According to 2009 figures quoted by the Syrian Central Bank, before the civil war, the country’s economy was diversified in many sectors including agriculture (22 percent of the economy), industry and excavation (25 percent), retail (23 percent), and tourism (12 percent). In 2009, the revenue of the Syrian government amounted to 600 billion Syrian lira, with tax revenues making up 80 percent of the government budget. "The rest came from oil revenue, which amounted to 150 billion lira in 2010,

233 Unless otherwise indicated, data obtained from the World Bank’s WDI dataset. 234 "The "Polity Score" captures the regime authority spectrum on a 21-point scale ranging from -10 (hereditary monarchy) to +10 (consolidated democracy). The Polity scores can also be converted into regime categories in a suggested three part categorization of "autocracies" (-10 to -6), "anocracies" (-5 to +5), and "democracies" (+6 to +10).” ).(…) The Polity scheme consists of six component measures that record key qualities of executive recruitment, constraints on executive authority and political competition.” Systemic Peace (2010). 235 For the purposes of this review, the Youth Bulge refers to the percent of the population under the age of 24. Data obtained from CIA Factbook (2014). 236 UNDP (2014). 237 OECD (2008).

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according to the IMF. Despite a decrease in oil production from 431,000 barrels in 2006 to 382,000 barrels in 2009, the rise in the price of oil made up for the difference."238

i. Political Factors

This section very briefly overviews the four political factors introduced above in Table 1.

Armed Forces Personnel

As of 2014 Syria has 250,000 armed personnel. Deliberate, targeted and sustained recruitment efforts have, over time, led to the military consisting primarily of citizens of the Alawi community in Syria, though they represent only a small fraction of the population of the country. This trend has been underway for a long period of time, likely beginning in the post-war period; for example, in "1955 the chief of Syria’s intelligence bureau found that approximately sixty-five percent of the non-commissioned officers belonged to the Alawi sect. Heavy recruitment among Alawi communities after the 1963 Ba‘athist officers’ coup exacerbated this trend."239 This is an important point in the analysis of the current civil war; as the protests spiralled into armed confrontations, the majority of the army sided with the regime of Assad, who is himself a member of the Alawi sect.

Contiguity to Instability

Syria borders Iraq, Turkey, Jordan and Lebanon. Among the four countries, only Turkey and Jordan are relatively stable. Recently, there was a "spate of bombings along the Turkey-Syrian border. The city of Reyhanli on the Turkish side of the border is home to tens of thousands of both Syrian refugees and opposition fighters, all of whom entered Turkey after civil war erupted in Syria in 2011." 240 There is also a risk of the emergence of trans-border Kurdish politics as a consequence of the Syrian crisis. Iraq is also affected; prior to the uprising, Syria was not allied with the ruling Shiites of Iraq. Since the uprising, "Iraqi positions on Syria reoriented themselves along the lines of sect: Iraqi Shiites made known their sympathies to the Alawite regime in the name of stability, while Iraqi Sunnis sided with the Sunni majority in the name of democracy. Should the regime led by Bashar Assad fall… Iraqi politico-sectarian arrangements will be severely tested, if not disturbed, both for good and bad."241 The Syrian civil war has also "spilled over into Lebanon as Lebanese opponents and supporters of the Syrian government have travelled to Syria to fight and attack each other on Lebanese soil. The Syrian conflict has been described as having stoked a ‘resurgence of sectarian violence in Lebanon’."242 Currently, Lebanese Sunni Muslims are supporting the rebels in Syria, while Shiites have mostly supported Assad because the ruling Alawites' version of Islam is considered a derivative of Shi'a.

Government Legitimacy (Polity IV) and Ruler Longevity

238 Mahamid (2013). 239 Holliday (2013). 240 Carter, Poast (2014). 241 Abbas (2012). 242 Ibid.

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In November 1970, Hafiz al-Assad, a member of the socialist Ba’ath Party seized power in a bloodless coup and brought political stability. "In the 1967 Arab-Israeli War, Syria lost the Golan Heights to Israel. During the 1990s, Syria and Israel held occasional peace talks over its return. During the July-August 2006 conflict between Israel and Hizballah, Syria placed its military forces on alert but did not intervene directly on behalf of its ally Hizballah."243 The Assad family maintained total control over Syria’s politics.

ii. Common CEIs

This section covers all relevant CEIs displayed in Table 1.

Corruption Perceptions Index

Chart 1: The Corruption Perceptions Index for Syria, 2003 to 2013244

Despite an extensive social security system, Syria’s society remains characterized by widespread inequality and corruption. Political liberalization initiatives proposed in the early 2000s were quickly halted and democratization has not been on the government’s agenda since.

Year Rank 2003 2004 2005 2006 2007 2008 2009 2010 2011

66/133 71/146 70/159 93/163

138/180 147/180 126/180 127/178 129/183

243 CIA World Factbook (2014). 244 Transparency International (2014).

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2012 2013

144/176 168/177

Table 2: Corruption Perceptions Rank245

Syria’s legal system is a mix of Ottoman and French civil law with Islamic law. The constitution requires that Islamic jurisprudence be a main source of legislation. However, the judiciary is neither transparent nor independent.246 Consequently, corruption is widespread, and bribery is often necessary when dealing with bureaucracy. Syria’s Corruption Perceptions Index in 2010, prior to the uprising, was 20, ranking 127 out of 178 countries. "Bribery is used to get ahead in securing basic government services. It is used to gain a preferential treatment in the armed services. It is used to get government loans. It is used to lower import duties at customs. It is used to wave traffic violations. It is used at passport issuing offices. Indeed, one is hard pressed to think of a single place where it cannot be used."247

Youth Bulge and Youth Unemployment

Syria is witnessing a large youth bulge with 56.4% of the population aged 15-24 as of 2010. The young working-age population peaked in 2005; but these numbers are expected to rise again beginning in 2020,248 presenting challenges as well as opportunities.

Chart 2: Youth Bulge for Syria, 1980-2010 and projections to 2020249

Syria was among the Middle Eastern countries (Egypt, Sudan, Syria, Tunisia and Yemen) that sought to reduce fertility rate.250 It is reported that governments implemented different measures to reduce

245 Transparency International (2014). 246 Heritage Foundation (2014). 247 Landis (2009). 248 According to a 'medium fertility' scenario - UN Dept. of Economic and Social Affairs (2012). 249 UN Dept. of Economic and Social Affairs (2012).

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fertility including family planning, "access to reproductive health services, promoting the responsibility of men in sexual and reproductive health, raising the minimum legal age for marriage of men and women, discouraging son preference, improving female education and employment opportunities, promoting women’s empowerment and providing accessible, low cost, safe and effective contraception."251 In Syria, these government measures explain the demographic transition in the Syria population.

Charts 3 and 4: Population pyramids for Syria (left) and Canada (right), 2010252

The population pyramids above can be mostly explained by the progression of fertility rates. In Syria, fertility rates have been declining for at least the past 30 years, with 6.77 children born per woman on average in the 1980 to 1985 period declining to 3.19 children per woman in 2005 through 2010. This is expected to decline further, with only 2.1 children born per woman in 2035 to 2040.253 Therefore, in the future, Syria’s population pyramid will begin the resemble that of Canada’s and other highly developed nations.

250 Mirking (2013). 251 Ibid. 252 UN Dept. of Economic and Social Affairs (2012). Horizontal axis represents thousands of persons for Kuwait and millions of persons for Canada; vertical axis represents 5-year age groups. 253 UN Dept. of Economic and Social Affairs (2012).

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Chart 5: Unemployment, youth total for Syria, 2002 to 2012254

In Syria, the youth unemployment rate is four times higher than the rate for persons aged 30 and above. By some accounts, Syria's education system has failed to prepare students for a modern globalized economy.255 Socioeconomic status is a major variable affecting the age at which a young person joins the work force. A 2008 survey by the Syrian government found that youth from poorer families tend to enter the labour market earlier: "The average age that youth from poor families enter the labour market is 13, while those from middle class tend to start working at age 15, and those from wealthy families start at age 17. This is attributable to the fact that most youth state financial need as the primary factor behind their decision to search for work".256 The survey also reports that urban youth tend to be employed more often as part-time or seasonal workers than other working age cohorts. Rural youth, meanwhile, are even more likely to be seasonal or part-time than their urban counterparts.257

Economic difficulty indicators: GINI, Undernourishment and CPI

Economic difficulty indicators are meant to convey the economic stress endured by residents. The three indicators chosen to form this group examine both relative income (GINI) and absolute income (undernourishment) while taking into account the effect of prices. The most recent GINI coefficient for Syria is 35.78 in 2004. This reflects a significant degree of income inequality caused by a legacy of corruption and divergence between the haves and the have-nots. From the mid-1980s onwards, state elites enriched themselves through corruption while middle class public employees saw their livelihood degrade due to heightened inflation. The result of this was the emergence of a two-tiered social system. The opening up of private universities and businesses enhanced "the prospects of well-off and Westernized urban segments of the population, but the erosion

254 Transparency International (2014). 255 Amos (2010) 256 Buckner, Saba (2012). 257 Ibid.

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of public universities, the decline in public sector employment and the contraction of the party and army as channels of upward mobility cut social mobility for the have-nots. The exception may be some Alawis who will continue to enjoy privileges to the army and security services."258

In Syria, the prevalence of undernourishment was reported at or below 5% for each of the years leading up to the beginning of the present conflict, when it began to ascend rapidly. Many of the undernourished are believed to be children; in a report, Childhood Under Fire, the organization Save the Children found that many are struggling to find enough to eat.259

Chart 6: The Syrian Consumer Price Index, 2002 to 2012260

The Syrian Consumer Price Index reflects a moderate but stable inflation rate for the years 2002 through 2010; in 2011, as the uprisings and subsequent conflict began to unfold, however, inflation has increased significantly. By 2012, the CPI increased approximately 40 percent, reflecting unstable conditions present in the country.

Educated Malcontent and Technological Adaptation

This section investigates two CEIs: the emigration rate of tertiary educated persons and the adoption of social media, as proxied by ‘internet users per 100 population’. The first provides a measure of labour market tightness and can serve as an indication of discontent with the conditions in the country. The second CEI concerns the prevalence of social media and interconnectedness among the tech-savvy youth of Arab countries. 258 BTI (2012). 259 CBS News (2013). 260 Transparency International (2014).

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As of 2013, there are 1,643,747 Syrian nationals abroad, most of them having fled from the current civil war. Indeed, 1,387,806 Syrians fled the war to local neighbouring countries: Jordan (444,268), Lebanon (433,467), Turkey (313,679), Iraq (135,842), Egypt (50,498) and other North African countries (10,052). Other Syrian migrants reside in EU countries (8.0%) and in other parts of the world (7.6%).261

Chart 7: Emigration Rate of Tertiary Educated from Syria262

"In OECD countries (years around 2006), Syrian emigrants have an intermediate skilled profile: respectively 30.1%, 33.7%, and 36.1% hold a low, medium and high level of education. As to their occupational profile, Syrian emigrants tend to be employed at high occupational levels: 53.9% are employed in highly-skilled jobs – such as legislators, managers, professionals, etc."263

261 Migration Policy Centre (2013). 262 Transparency International (2014). 263 Ibid.

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Chart 8: Internet Users per 100 People for Syria, 2002 to 2013264

The Syrian regime maintains tight control over information and communication technologies. It dominates key networks via government-linked service providers and engages in extensive blocking of websites. The internet was first introduced to Syria in 2000. That year, the number of users reached only 30,000. By the end of 2010, more than one-fifth of the population was online.

In 2009, the Committee to Protect Journalists named Syria number three in a list of the ten worst countries in which to be a blogger, given the arrests, harassments and restrictions which online writers in Syria have faced.265 The government admits to censoring "pro-Israel and hyper-Islamist" Web sites, such as those run by the illegal Muslim Brotherhood, and those calling for autonomy for Syrian Kurds.266 In defence of these practices, former Minister of Technology and Communications Amr Salem has said that "Syria is currently under attack … and if somebody writes, or publishes or whatever, something that supports the attack, they will be tried."267 "It is in the context of such growing access that the internet and social media have played an important role in a civic protest movement, which began in February 2011 calling for the end of al-Assad’s rule and which by early 2012 had turned into a full-fledged armed conflict."268

iii. Country-Specific CEIs

Political Structure and the Absence of Civil Society

The Syrian society is divided vertically by cleavages along religious and ethnic lines, as well as horizontally along socioeconomic and class lines. "Minority groups tend to segregate themselves in their

264 Transparency International (2014). 265 Committee to Protect Journalists (2009). 266 Taylor (2007). 267 Ibid. 268 Freedom House (2012).

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own neighbourhoods and villages. Traditionally, Syrian society has been divided between landlords and tenants, between urban dwellers and rural peasants, and between a Sunni elite and minority groups."269

Until the revolutions of the mid-1960s, the country was politically dominated by

"a syndicate of several hundred Sunni Muslim extended families living in Damascus and Aleppo. Some of these families were of the Sharifan nobility, which claims genealogical descent from the Prophet Muhammad. Most had accumulated great wealth and wielded virtual feudal power as landlords possessing vast agricultural and real-estate holdings." 270

Still others made "their fortunes in industry and trade in the late ninteenth century. Another component of the ruling class was the ulama (sing, alim). This group consisted of religious scholars, Islamic judges (qadis), interpreters of law (muftis), and other persons concerned with the exposition of Sunni Islam."271 The land reform legislation of 1963 led to "the nationalization of larger financial, commercial, and industrial establishments virtually eliminated the economic and political power base of the old elite."272 This land reform was an opportunity for the emergence of a new elite comprised of military and civilian leaders who consolidated their position "by cultivating the support of peasants and the proletariat, who benefited from the new economic order. The regime's socialism eroded the position of the bazaar merchants while its secularism removed power from the ulama."273 What remains today is the Ba’ath party and its affiliated institutions.

4. Current and Future Challenges

Today the challenge of Syria is "the successful push of the Islamic State of Iraq and al-Sham (ISIS) into northern and western Iraq and its territorial gains in eastern Syria"274 which exceeded the expectation of the regime’s enemies. However, the Syrian regime’s army progress against ISIS and other groups in northern and western Syria makes one to think that the regime collapse is not in the near future. Despite this, the Assad regime is currently unable to retain control of large swaths of its territory - limited portions of western Syria. Security is the main problem of Syria because of these different groups trying to gain control of the country. The second most important problem is the economy. The economy was devastated particularly the agriculture and industrial sectors in the northern parts of country. The third challenge is how to create a civil society and citizenship after this prolonged factional strife. It is not only the regime that faces these challenges. The Syrian opposition is in no better position. It is divided and lacks cohesion. It does not have "a unified vision of Syria’s future and concrete and

269 Thomas Collelo (1987). 270 Ibid. 271 Ibid. 272 Ibid. 273 Ibid. 274 Liepman, Andrew M, Brian Nichiporuk, Jason Killmeyer (2014).

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detailed planning to respond to the significant challenges that will accompany a post-Assad transition."275

References

Abbas, Akeel (2012). "How does the Outcome in Syria Affect Iraq?" Bitterlemons-International. Edition 12 Volume 10 - March 21, 2012. http://www.bitterlemons-international.org/previous.php?opt=1&id=374. Accessed 11/1/2014. Amos, Deborah (2010). "Syrian Youth Unprepared for Market Driven Economy". Published 9/30/2010. http://www.npr.org/templates/story/story.php?storyId=130222200. Accessed 11/1/2014. Bricker, Noah Q. and Mark C. Foley (2013)."The Effect of Youth Demographics on Violence: The Importance of the Labor Market" IJCV : Vol. 7 (1) 2013. http://www.ijcv.org/earlyview/290.pdf. Buckner, Elizabeth and Kholoud Saba (2012). "Syria’s Next Generation: Youth Un/Employment, Education, and Exclusion" http://elizabethbuckner.files.wordpress.com/2012/01/buckner-and-saba_publish.pdf. BTI 2012 Syria Country Report (2012). http://www.btiproject.de/uploads/tx_itao_download/BTI_2012_Syria.pdf. Accessed 11/1/2014.

Cabras, A. (2010). "The implications of the youth bulge in Middle East and North African populations". NATO Parliamentary Assembly Report. 138 GSM 10 E rev 3. http://www.nato-pa.int. Accessed 11/1/2014.

Carter, David B. and Paul Poast (2014). "Why Do States Build Walls? Political Economy, Security and Border Stability". Working Paper, Princeton University. http://www.princeton.edu/~dbcarter/David_B._Carter/Research_files/stable_borders_final.pdf Accessed 12/1/2014.

CBS News (2013). "Report 2M Children in Syria Face Malnutrition Trauma" Published March 13, 2013. http://www.cbsnews.com/news/report-2m-children-in-syria-face-malnutrition-trauma/. Accessed 11/1/2014.

Center for Systemic Peace (2014). Polity IV Dataset. http://www.systemicpeace.org/inscrdata.html. Accessed 11/1/2014.

CIA World Factbook (2014). Country Backgrounds. http://www.cia.gov. Accessed 11/1/2014.

Collelo, Thomas (1987). "Syria: A Country Study". Washington: GPO for the Library of Congress, 1987.

275 United States Institute for Peace and German Institute for International and Security Affairs (2012).

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Committee to Protect Journalists (2009). "10 Worst Countries to be a Blogger". Published April 30, 2009. http://www.cpj.org/reports/2009/04/10- worst-countries-to-be-a-blogger.php. Accessed 11/1/2014.

Freedom House (2012). "Syria Freedom on the Net 2012. " https://www.freedomhouse.org/report/freedom-net/2012/syria#.VG-sWNF0zcs Accessed 11/1/2014. Heritage Foundation (2014). "Syria Economic Freedom Score". http://www.heritage.org/index/pdf/2014/countries/syria.pdf. Accessed 12/1/2014.

Holliday, Joseph (2013). "The Assad Regime From Counterinsurgency to Civil". Published March 2013. Accessed 11/1/2014. http://www.understandingwar.org/sites/default/files/TheAssadRegime-web.pdf

Landis, Joshua (2009). "The Syrian Public Sector, Corruption, Taxation and Government Services". Published August 21th, 2009. http://www.joshualandis.com/blog/the-syrian-public-sector-corruption-taxation-and-government-services-by-ehsani/ Accessed 11/1/2014. Liepman, Andrew M, Brian Nichiporuk, Jason Killmeyer (2014). "Alternative Future for Syria", Rand Corporation. http://www.rand.org/content/dam/rand/pubs/perspectives/PE100/PE129/RAND_PE129.pdf. Accessed 12/1/2014. Lin, J.Y. (2012). "Youth Bulge: A Demographic Dividend or a Demographic Bomb in Developing Countries?”.World Bank blog. http://blogs.worldbank.org/developmenttalk. Accessed 11/1/2014. Mahamid, Jamil (2013). "Syria’s frail economy, before and after the revolution" Al-Arabia Center of Studies, April 2013, http://english.alarabiya.net/en/perspective/alarabiya-studies/2013/04/01/Syria-s-frail-economy-before-and-after-the-revolution.html. Accessed 11/1/2014.

Mirking, Barry (2012). "Arab Spring: Demographics in the Country in transition" United Nations Development Programmes Regional Bureau for Arab States Arab Human Development Report Research Paper Series 201, p.15. http://www.arab-hdr.org/publications/other/ahdrps/AHDR%20ENG%20Arab%20Spring%20Mirkinv3.pdf. Migration Policy Centre (2013). "Syria The Demographic-Economic Framework of Migration The Legal Framework of Migration The Socio-Political Framework of Migration". http://www.migrationpolicycentre.eu/docs/migration_profiles/Syria.pdf. Systemic Peace (2010). Polity IV Country Report – Syria. http://www.systemicpeace.org/polity/. Accessed 11/1/2014.

Taylor, Guy (2007). "After the Damascus spring: Syrians search for freedom online," Reason Online: Free Minds and Free Market. Published February 2007. http://www.reason.com/news/show/118380.html.

Transparency International (2014). Corruption Perceptions Index. http://www.transparency.org. Accessed 11/1/2014.

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UN Dept. Of Economic and Social Affairs (2012). "World Population Prospects: The 2012 Revision". http://esa.un.org/unpd/wpp/unpp/panel_indicators.htm. Accessed 11/1/2014.

United Nations Development Programme (2014). Human Development Reports. http://hdr.undp.org/en/content/income-gini-coefficient. Accessed 12/1/2014.

United States Institute for Peace and German Institute for International and Security Affairs (2012). "The Day After. Supporting a Democratic Transition in Syria". http://www.swp-berlin.org/fileadmin/contents/products/comments/2012C28_TDA.pdf. Accessed 11/1/2014.

Urdal, H. (2013). "A clash of generations? Youth bulges and political violence". UN Department of Economic and Social Affairs, Population Division. Expert Paper No. 2012/1.

World Bank - UNDP (2014). "Economy Watch". http://www.economywatch.com/economic-statistics/country/Syria/. Accessed 12/1/2014.

World Bank - World Development Indicators (2014). http://data.worldbank.org/data-catalog/world-development-indicators. Accessed 12/1/2014.

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Yemen

1. Introduction

The Yemeni Revolution was among the earliest of all the Arab Spring conflicts, with the first protests coming about during the final stages of the Tunisian revolt that ended with the ousting of President Ben Ali, and beginning roughly at the same time as the protest movement in Egypt. As was the case with several of its contemporaries, the Yemeni chapter of the Arab Spring culminated with a change in regime—the removal of President Ali Abdullah Saleh from power. While the movement succeeded in this end, there remain many unresolved territorial, tribal and internal security issues that continue to threaten political stability in Yemen.

2. Overview

Yemen is a country with a fractured past. The unification of North and South Yemen occurred relatively recently, in 1990. South Yemen had previously been supported by members of the Warsaw Pact and followed a secular, socialist approach to governance while the North tended to receive support from disparate sources including Western powers and, at times, Saudi Arabia.276,277 The two countries had rather volatile relations, with two short-lived conflicts: the first occurring in 1972, the second in 1979. The first conflict brought about intervention by the Arab League, which resulted in a recommendation urging the unification of the two countries. The unification process called for Saleh, then president of North Yemen, to take the position of president of the new, united Yemen, while South Yemen's Ali Salim al-Beidh would take the position of vice president. The unification was tested in 1994 when the South unilaterally declared independence, setting off another conflict between the two sides, though this attempt was promptly defeated by Northern forces.278

Retaining power until 1999, and then winning a presidential election, Saleh had been in power for over two decades, and president of Yemen for 9 straight years. With constitutional amendments already enacted increasing the length of tenure for both elected members of parliament and the presidency, Saleh could remain in power until 2006, at which point he would be expected to relinquish his office.279 However, by 2010, not only had there been no transfer of power, but there was a movement afoot within the ruling party with the goal of further modifying the constitution to remove presidential term limits, thus allowing Saleh to remain in power for life like in so many of the Arab Spring countries prior to uprisings. Some have also speculated that he may otherwise have had the intention of installing his son, Ahmed Saleh, as president if he could not stay in office himself.280

276 Yodfat (1983). 277 Though, Saudi Arabia and North Yemen were also frequently at odds with one another (Katz, 2010). 278 Katz (2010). 279 Holmes (2010). 280 Ibid.

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The Yemeni chapter of the Arab Spring began in late January, 2011. The manifestations began rather modestly, with students and civilians intent on quashing the proposed constitutional amendments to eliminate presidential term limits. These soon escalated to calls for the President to step down immediately. By March 2011, the protests had become widespread and crowds grew ever larger, with violence between protestors and government forces erupting on numerous occasions. On March 18th, 45 protestors were killed by sniper fire allegedly sanctioned by Saleh.281 With the civilian death toll mounting, several organizations expressed support for the protest movement; these included: the Joint Meeting Parties (JMP)282, the opposition alliance struck in 2002, that would eventually play a major role in negotiating the removal of Saleh from power; the al-Ahmar family at the head of the Hashid tribal federation that had formerly belonged to the ruling compact with Salem family, whose support of the protests led to armed movements against loyalist forces in the country; and the South Yemen secessionists, which drove much of the protest movement in the south of the country.283 Al-Ahmar family’s defection from supporting Saleh was indeed critical. Another critical defection from the ruling compact was Ali Mohsen al-Ahmar, general and business tycoon. These defections precipitated the fall of Saleh.

Efforts were made on the part of the government to appease the protestors and opposition parties, including an agreement for president Saleh to step down by 2013 and to expressly state that power would not be transferred to his son Ahmed. Protestors and opposition parties were, however, not convinced of the sincerity of these assertions, with JMP speaker Mohammed al-Sabri reminding his constituents that Saleh had already failed to live up to his earlier promise to step down by 2006.284

Beginning in late April, attempts were made by the Gulf Co-operation Council to broker a deal in order to establish an agreement for the transfer of power. On several occasions, Saleh refused to sign the agreement, and this further incited protests. These soon escalated to street violence between the protestors and elements still loyal to Saleh. A bombing at a mosque inside the presidential palace injured Saleh and forced him to travel to Saudi Arabia for medical treatment.285 Within a few months, Saleh abandoned his previous stance and agreed to step down as president in exchange for immunity from prosecution. The agreement was signed in late November,286 and power was officially handed over to then Vice-President Abdu-Rabbo Mansour al-Hadi. Saleh formally stepped down by the 21 February 2012 presidential elections that saw Hadi win with near unanimity.287

3. Discussion of Critical Economic Indicators

281 BBC (2011). 282 JMP included the Yemeni Socialist Party (YSP), formerly governing South Yemen, three minor parties in Al-Haq, the Unionist Party, the Unionist Party, and the Popular Forces Union Party and, eventually, Al-Islah, the large Islamist party related to the Muslim Brotherhood. 283 Al-Jazeera (2011). 284 Holmes (2011), Thiel (2012). 285 BBC (2011). 286 BBC (2012). 287 Jamjoom (2012).

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This section introduces a set of indicators for Yemen. In addition, to provide further background for countries that have experienced vigorous opposition movements - with many swelling to full-scale uprisings - a smaller set of indicators are used to measure the population's attitude towards their respective country's governance. Although no causality conclusions are implied, the Critical Economic Indicators (CEIs) may serve as barometer readings ahead of potential civil unrest. Three groups of factors are covered within this section. The first concerns general summary statistics and important contextual economic facts on the country in question. The second group covers selected political factors such as the total number of personnel in the country’s military and the Polity government legitimacy measure. The third group consists of the selected political and socioeconomic factors which we argue played a role in the development of the unrest for the country. Both country-specific factors and factors that are common to other Arab Spring-affected nations are discussed within this group. The selection of CEIs is guided by the observations made during the Arab Spring uprisings as well as similar popular uprisings elsewhere in the world, in particular recent experiences in Turkey, Ukraine, and Hong Kong. The robust participation of educated and connected youth against various perceived governance problems and with democratic demands has been a commonly observed factor in virtually all unrests. Therefore the three groups of CEIs are representative of youth activism by taking into account the demographic, economic and technological dimensions of youth malcontent. The demographic dimension as captured by the youth bulge and youth unemployment has been extensively studied.288 The literature distinguishes popular uprisings from armed conflicts and this Report concentrates on the former. The economic dimension of CEIs includes the GINI coefficient, the Undernourishment Index and the Consumer Price Index. Moreover, the first block of numbers in Table 1 includes, as general indicators, the population and GDP figures. Finally, the technological dimension aims to capture the educated youth phenomenon observed prominently in popular uprisings and includes the Emigration Rate of Tertiary Educated Persons and Internet Users per 100 People.

Indicator289 Value290 General Population GDP Per Capita

23.30M (2011) 1,253 (2011, current USD)

Political Armed Forces Personnel Contiguity to Instability Government Legitimacy (Polity IV)291

137,900 (2011) Oman, Saudi Arabia -2 (Autocracy/Anocracy 1993-2011) 3 (Anocracy/Democracy 2011-2013)

288 Cabras (2010), Lin (2012), Schomaker (2013), and Urdal (2013). 289 Unless otherwise indicated, data obtained from the World Bank’s WDI dataset. 290 Since Yemen is a country that had its regime deposed as a result of the protest movement, the statistics shown here are those in the year in which this occurred.

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Ruler Longevity 1990-2011 (before Arab Spring) Economic (CEIs) Corruption Perceptions Index (rank and index) Youth Bulge292 Youth Unemployment GINI coefficient Undernourishment Index Inflation Emigration Rate of Tertiary Educated Internet Users

167/177 and 18/100 65.07% (41.95% 14 and under, 23.2% 15-24) (2010) 34.8% (2011) 35.91 (2005) 30% (2011) 16.4 (2011) 24.04% (1990), 5.97% (2000) 14.9% (2011)

Key Indicators for Yemen Water Availability293

140m3 per person per year (2012) – very low

Table 1: A selection of indicators on Yemen

i. Political Indicators

This section very briefly reviews the four political factors introduced above in Table 1.

Armed Forces Personnel and Contiguity to Instability

Yemen has maintained a total of armed forces personnel exceeding 100,00 since 1996, though the number has not changed significantly since the late 90s, even in the face of a rapidly growing population. This stagnation is likely due to decreased government profits from oil extraction, which will be discussed in further detail later in the Critical Economic Indicators section.

Yemen borders Saudi Arabia and Oman. The former has had a history of meddling in Yemeni affairs, particularly during the North/South Yemen divide, attempting to use its power to ensure favourable political outcomes from its own perspective. Oman, meanwhile, had some relatively minor disputes primarily with South Yemen but, since the unification in 1990, these had been largely settled.294 From the perspective of the Arab Spring protest movements, each of these two countries experienced rather significant unrest, but they were both smaller in scale, and in the case of Saudi Arabia, did not begin until months after those in Yemen. Based on this, there is no substantial evidence that geographic contiguity to these two countries played a role in the Yemeni revolution.

Government Legitimacy (Polity IV) and Ruler Longevity 291 “The "Polity Score" captures the regime authority spectrum on a 21-point scale ranging from -10 (hereditary monarchy) to +10 (consolidated democracy). The Polity scores can also be converted into regime categories in a suggested three part categorization of "autocracies" (-10 to -6), "anocracies" (-5 to +5), and "democracies" (+6 to +10).(…) The Polity scheme consists of six component measures that record key qualities of executive recruitment, constraints on executive authority and political competition.” Systemic Peace (2010). 292 For the purposes of this review, the Youth Bulge refers to the percent of the population under the age of 24. Data obtained from CIA Factbook (2014). 293 Data obtained from OCHA (2012). 294 Bowring (1993).

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The government of President Ali Abdullah Saleh may have been somewhat bereft of transparency and accountability, but its lengthy time in power is at least partly due to strong performances in elections. Saleh won two elections by very large margins, with 96% of the vote in 1999 and over 77% of the vote in 2006. While the opposition Joint Meeting Parties accused Saleh’s party of tampering with the vote in 2006,295 independent observers did not agree with this assertion. On the strength of these results, Saleh had held office for nearly 22 years by 2010, and a further 12 years as President of North Yemen.296 Thus a polity score of (-2) – signifying a moderate ‘Anocracy’ – was maintained until 2011, when the deposing of the long-tenured Saleh in favour of a transitional government resulted in a modest improvement from the perspective of democracy.

ii. Common CEIs

This section covers all relevant CEIs displayed in Table 1.

Corruption Perceptions Index

Yemen has historically ranked very poorly in terms of corruption perceptions, and the recent trend, even post-2011, shows no improvement in this regard. This ongoing sentiment can be traced to a variety of factors such as the political and religious divisions within the country and the strength of tribal families, notably the Ahmars and Houthis, and their ability to exert power on others, though Houthis proved more politically astute than relatively pure tribal influence than Ahmars. Further, Yemen rates very poorly in terms of freedom of the press, ranking 167th out of 180 ranked countries in 2014.297

Chart 1: Corruption Perceptions Index for Yemen, 2003 to 2013298

295 Abu-Nasr (2006). 296 Officially, the Yemen Arab Republic (YAR). 297 Reporters Without Borders (2014). 298 Transparency International (2014).

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Year Rank 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

88/133 112/146 103/159 111/163 131/180 141/180 154/180 146/178 164/183 156/176 167/177

Table 2: Corruption Perceptions Rank299

Youth Bulge and Youth Unemployment

The proportion of the population in Yemen belonging to the 0 to 24 age group is massive, accounting for upwards of 65% of the population for at least the past 30 years. While this number is expected to decline in the years ahead, the total population has already expanded tremendously as a result of births, with a crude birth rate remaining above 30 per 1000.300 This translated to a very high population growth rate of 2.72%.301 Yemen lacks the basic resources needed to support this rapidly growing population,302 which is further evidenced by the elevated undernourishment index shown in the next section.

With this glut of young labour, Yemen has an astounding youth unemployment rate close to 35 percent. This had been on the rise in the years leading up to the Arab Spring. This narrative is thus well-aligned with that of many other Arab Spring nations: Yemen presents a convincing case of a country with a large youth bulge and high youth unemployment, both contributing to a stronger protest movement.

299 Transparency International (2014). 300 World Bank WDI (2014). Yemen’s crude birth rate has been slowly declining over the past 20 years. 301 CIA World Factbook (2014). 302 IFAD (2014).

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Chart 2: Youth Bulge for Yemen, 1980-2010 and projections to 2020303

Charts 3 and 4: Population pyramids for Yemen (left) and Canada (right), 2010304

303 UN Dept. of Economic and Social Affairs (2012). 304 UN Dept. of Economic and Social Affairs (2012). Horizontal axis represents millions of persons; vertical axis represents 5-year age groups.

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Chart 5: Unemployment, youth total for Yemen, 2002 to 2013305

Economic difficulty indicators: GINI, Undernourishment and CPI

Economic difficulty indicators are meant to convey the economic stress endured by residents. The three indicators chosen to form this group examine both relative income (GINI) and absolute income (undernourishment) while taking into account the effect of prices. Economically, Yemen had been suffering significantly practically since its inception. Despite having a adequate amount of resources – oil, in particular – the government seems to have done a poor job in both creating employment and developing a more equitable distribution of income.

The GINI coefficient for Yemen has most recently (2005) been rated at 35.91, indicating only a mildly inequitable distribution of income. For comparison, this is not much more severe than the inequality in Canada, which was rated at 33.3 (2011). Perhaps the better descriptor of economic difficulty here is overall GDP Per Capita, which is a paltry $3,761 (2013).306 Therefore while income is not terribly unequal in the country, there is not much income to go around. This reality is reflected in the undernourishment index, which indicates that over 25% of the population qualifies as ‘undernourished’ and has remained above this threshold for at least the past decade.

305 World Bank (2014). 306 Valued in 2011 international dollars at purchasing power parity (PPP).

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Chart 6: Undernourishment Index for Yemen, 2002 to 2013307

Reviewing Chart 7 below, the consumer price index shows both sustained and accelerated periods of inflation. Averaging over 10 percent over the past decade, Yemen exhibits an elevated rate of increase in consumer prices, which may contribute to economic difficulty on the lower strata of society dependent on wages.

Chart 7: Consumer Price Index for Yemen, 2002 to 2013308

307 Transparency International (2014). 308 World Bank (2014).

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Educated Malcontent and Technological Adaptation

Chart 8: Emigration Rate of Tertiary Educated from Yemen (1990, 2000)309

Yemen exhibits a peculiar trend in emigration of tertiary educated residents, with a value close to 25 percent in 1990 followed by one just over 6 percent in 2000. The high value in 1990 is likely due to changes in political circumstances resulting from the unification of North and South Yemen, while directly preceding the 1994 attempted succession and subsequent military conflict.

To serve as a proxy for interconnectedness and social media use among the country’s populace, often cited as a key factor in the Arab Spring uprisings, we use a data series showing the percentage of the population with regular internet access.

Reviewing Chart 9, Yemen shows gradual growth in the adoption of the internet throughout the mid to late 2000s. By the beginning of the Arab Spring movement in Yemen in 2011, only about 15 percent of residents were users of the internet, likely skewing more towards a younger demographic. This provides evidence for the use of more traditional communication methods in the organization of the protest movement to supplement social media as a coordination mechanism.

309 World Bank (2014).

This section investigates two CEIs: the emigration rate of tertiary educated persons and the adoption of social media, as proxied by ‘internet users per 100 population’. The first provides a measure of labour market tightness and can serve as an indication of discontent with the conditions in the country. The second CEI concerns the prevalence of social media and interconnectedness among the tech-savvy youth of Arab countries.

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Chart 9: Internet Users per 100 People for Yemen, 2002 to 2013310

iii. Country-Specific CEIs

Water Availability

The ongoing depletion of the country’s water table is also a concern. On average, 140 cubic metres of water are available per person per year in Yemen, compared to an average of 1000 cubic metres in the Middle East and North Africa region, and the situation appears to be getting worse.311 This issue is compounded by the fact that 90% of the water consumed by the country goes towards agriculture; of this, a staggering 37% consists of water used in the production of ‘qat’, a mild narcotic consumed by a large proportion of the population on a regular basis.312 A continued, or worsened, lack of availability of water would have a variety of negative impacts on the population, including displacement of individuals and increased food scarcity.

4. Current and Future Challenges

Despite the Yemeni uprising resulting in the overthrow of a corrupt regime, the path towards democracy and prosperity is hardly certain. Yemen faces many challenges in the years ahead, even leaving aside the need to establish good governance.

The separatist issues dividing the north and the south of the country remain a key source of tension while the recent southern expansion of Huthis integrates the Yemeni politics. While the South Yemeni secession movement abated its calls for secession during the peak of the Arab Spring in order to focus on deposing Saleh from power, the underlying and fundamental beliefs associated with this movement

310 World Bank (2014). 311 OCHA (2012). 312 Laessing (2010).

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are unresolved, and it appears unlikely that even a fully inclusive central government would erase such sentiment.313

The Huthi tribe, meanwhile, has continued to assert itself in Yemeni politics.314 Feeling marginalized in governance negotiations in the wake of the 2011 revolution, Huthis used their military power to hold the territory in the country's northern provinces. In September 2014, the Huthi militia moved into the capital Sa'naa and bargained for a greater share of power in Yemen's governance.315 The Huthis have inched towards the political centre as they gained momentum and now their platform advocates “popular positions, including a federal state based on democratic principles, political pluralism, religious freedom and balance of powers… The result is a shifting coalition of competing streams – religious, tribal and even leftist – cooperating under an anti-establishment umbrella, the overall character of which has yet to be hashed out.”316 Whether the Huthi movement will transform from an armed militia into a political party still remains uncertain.

Complicating the economic future of Yemen is the issue of its dwindling crude oil reserves; the country reached peak oil production in 2001 and has seen declines every year since as its oil fields age and attacks on its energy infrastructure continue. By contrast, natural gas holds promise for the future, with large potential untapped reserves available in the country. However, even if new discoveries in crude oil were to occur and natural gas operations were set in motion, the economy would need to undergo significant diversification so as to create enough opportunity for its growing population and head off the curse of Dutch disease.317

Yemen also faces a continual threat from terrorist groups, al-Qaeda in the Arabian Peninsula (AQAP) in particular. During the protests, while opposition groups and al-Qaeda shared the goal of deposing the government, most opposition groups sought to distance themselves from al-Qaeda and southern separatists who, as opposed to al-Qaeda, are secular in nature. In 2013, the United States, France, Britain and Germany closed their respective embassies in anticipation of potential AQAP terrorist attacks. The United States would soon begin a prolonged campaign of drone strikes against AQAP, which are ongoing as of late 2014. Despite this, without a fully established and effective government in Sanaa to oppose them on the ground, AQAP remains a threat to domestic and regional stability.318

313 Kechichian (2014). 314 Winter (2012). 315 Ghobari (2014). 316 Ibid. 317 U.S. Energy Information Administration (2014). Note the phrase ‘Dutch disease’ refers to a situation where a currency increases in value due to energy exports, rendering other exported goods relatively more expensive to prospective buyers. 318 Lewis (2013).

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References

Abu-Nasr, D. (2006). “Yemeni Opposition Alleges Violations”. Associated Press, 9/21/2006. http://www.apnewsarchive.com/2006/Yemeni-Opposition-Alleges-Violations/. Accessed 11/1/2014.

Al-Jazeera (2011). “Who’s who in Yemen’s Opposition?”. Al-Jazeera, 2/28/2011. http://www.aljazeera.com/indepth/spotlight/yemen/2011/02/2011228141453986337.html. Accessed 11/1/2014.

BBC (2011). “Profile: Yemen’s Ali Abdullah Saleh”. BBC, 9/19/2011. http://www.bbc.co.uk/news/world-middle-east-13179385. Accessed 11/1/2014.

BBC (2012). “Yemen’s president Ali Abdullah Saleh cedes power”. BBC, 2/27/2012. http://www.bbc.com/news/world-middle-east-17177720. Accessed 11/1/2014.

Bowring, P. (1993). “Oman and Yemen: Good News from the Arabian Peninsula”. NY Times, 5/14/1993. http://nytimes.com/1993/05/14/opinion/14iht-edbo_2.html. Accessed 11/1/2014.

Cabras, A. (2010). "The implications of the youth bulge in Middle East and North African populations". NATO Parliamentary Assembly Report. 138 GSM 10 E rev 3. http://www.nato-pa.int. Accessed 11/1/2014.

Center for Systemic Peace (2014). Polity IV Dataset. http://www.systemicpeace.org/inscrdata.html. Accessed 11/1/2014.

CIA World Factbook (2014). Country Backgrounds. http://www.cia.gov. Accessed 11/1/2014.

Ghobari, M. (2014). “Houthis tighten grip on Yemen capital after swift capture, power-sharing deal”. Reuters, 9/22/2014. http://uk.reuters.com/article/2014/09/22/uk-yemen-security-idUKKCN0HH2BM20140922. Accessed 11/1/2014.

Hearst, D. (2014). “Saudi Crapshoot in Yemen”. Huffington Post, 9/28/2014. http://www.huffingtonpost.com/david-hearst/saudi-high-risk-bet-in-ye_b_5895984.html. Accessed 11/1/2014.

Holmes, O. (2011). “Why Yemenis Doubt Their President’s Offer to Step Down”. Time, 2/2/2011. http://content.time.com/time/world/article/0,8599,2045792,00.html. Accessed 11/1/2014.

International Crisis Group (ICG) (2014), “The Hutis from Saada to Sanaa”, Middle East Report No.154, http://www.crisisgroup.org/~/media/Files/Middle%20East%20North%20Africa/Iran%20Gulf/Yemen/154-the-huthis-from-saada-to-sanaa.pdf.

IFAD (2014). “Rural Poverty in Yemen”. International Fund for Agricultural Development. http://www.ruralpovertyportal.org/country/home/tags/yemen. Accessed 11/1/2014.

Jamjoom, M. (2012). “Yemen holds presidential election with one candidate”. CNN, 2/22/2012. http://www.cnn.com/2012/02/21/world/meast/yemen-elections/. Accessed 11/1/2014.

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Kassim, S. (2012). “Twitter Revolution: How the Arab Spring Was Helped By Social Media”, Policy Mic, 7/3/2012. http://mic.com/articles/10642/twitter-revolution-how-the-arab-spring-was-helped-by-social-media. Accessed 11/1/2014.

Katz, M. N. (2010). “ISS Opinion – Yemen – The Evolution of a Problem”. European Union Institute for Security Studies, February 2010. http://www.iss.europa.eu/uploads/media/Yemen_evolution_of_a_problem.pdf.

Kechichian, J. A. (2014). “Yemen in transition – and turmoil”. Al Jazeera, 2/6/2014. http://www.aljazeera.com/indepth/opinion/2014/02/yemen-transition-turmoil-2014264255740696.html. Accessed 11/1/2014.

Laessing, U. (2010). “Yemen’s water crisis eclipses al Qaeda threat”. Reuters, 2/17/2010. http://www.reuters.com/article/2010/02/17/us-yemen-water-idUSTRE61G21P20100217. Accessed 11/1/2014.

Lewis, A. (2013). “Unpacking Terrorism, Revolution and Insurgency in Yemen: Real and Imagined Threats to Regional Security”. Perspectives on Terrorism. 7 (5), October 2013.

Lin, J.Y. (2012). "Youth Bulge: A Demographic Dividend or a Demographic Bomb in Developing Countries?”.World Bank blog. http://blogs.worldbank.org/developmenttalk. Accessed 11/1/2014. OCHA (2012). “Humanitarian Bulletin – Yemen”. United Nations Office for the Coordination of Humanitarian Affaris (OCHA), 6/12/2012. http://reliefweb.int/sites/reliefweb.int/files/resources/OCHA%20Yemen%20Humanitarian%20Bulletin%20%234%20-%2012%20June%202012.pdf. Accessed 11/1/2014.

RAND (2010). “Conflict in Yemen Fueled by Tribalism, Religious Conflicts”. RAND News Release, 3/3/2010. http://www.rand.org/news/press/2010/05/03.html. Accessed 11/1/2014.

Reporters Without Borders (2014). “World Press Freedom Index 2014”. http://rsf.org/index2014/en-middle-east.php. Accessed 11/1/2014.

Schomaker, R. (2013). "Youth bulges, poor institutional quality and missing migration opportunities - triggers of and potential counter-measures for terrorism in MENA". Topics in Middle Eastern and African Economies 15(1), 116-140.

Systemic Peace (2010). Polity IV Country Report – Yemen. http://www.systemicpeace.org/polity/Yemen2010.pdf. Accessed 11/1/2014.

Thiel, T. (2012). “Yemen’s Arab Spring: From Youth Revolution to Fragile Political Transition,” LSE Ideas!, May 2012. http://www.lse.ac.uk/IDEAS/publications/reports/pdf/SR011/FINAL_LSE_IDEAS__YemensArabSpring_Thiel.pdf. Accessed 11/1/2014. Accessed 11/1/2014.

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Transparency International (2014). Corruption Perceptions Index. http://www.transparency.org. Accessed 11/1/2014.

UN Dept. Of Economic and Social Affairs (2012). “World Population Prospects: The 2012 Revision”. http://esa.un.org/unpd/wpp/unpp/panel_indicators.htm. Accessed 11/1/2014.

Urdal, H. (2013). "A clash of generations? Youth bulges and political violence". UN Department of Economic and Social Affairs, Population Division. Expert Paper No. 2012/1.

U.S. Energy Information Administration (2014). “Yemen – Analysis”. USEIA website, 9/25/2014. http://www.eia.gov/countries/cab.cfm?fips=ym. Accessed 11/1/2014.

World Bank - World Development Indicators (2014). http://data.worldbank.org/data-catalog/world-development-indicators. Accessed 12/1/2014.

Winter, L. (2012). “Yemen’s Huthi Movement in the Wake of the Arab Spring”. Combating Terrorism Center at West Point, 8/23/2012. https://www.ctc.usma.edu/posts/yemens-huthi-movement-in-the-wake-of-the-arab-spring. Accessed 11/1/2014.

Yodfat, A. Y. (1983). “The Soviet Union and the Arabian Peninsula - Soviet Policy Towards the Persian Gulf and Arabia” Routledge Library Editions: Iran. Taylor & Francis Group. ISBN 13: 978-0-415-57033-6. Published 1983.

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North African Countries

Algeria

1. Introduction

Algeria is surrounded to the east by Tunisia and Libya, both countries of the Arab Spring, to the south by sub-Saharan countries Mauritania, Mali and Niger with their various instabilities and to the west by Morocco, a relatively stable kingdom in a slow progress away from absolutism and Western Sahara where an independence movement has existed for decades. Therefore, Algeria has been exposed to a fair share of uprisings along its borders. Mauritania and Mali have all had uprisings on different scales. However, more than instabilities in the neighbourhood, Algeria was battered by the civil war that started with the December 1991 election, the cancellation of its second round and the annulment of the whole election in January 1992. The decade was marked by the struggle involving the military who took over in January 1992 and the Islamists. The bloody civil war claimed an estimated 150,000 lives. The war raged till the 1999 amnesty when most rebels laid down their arms, the civil war ended in 2000 and any remnants from radical Islamist groups were eliminated by 2002.

The French colonized Algeria in 1830, taking over from the Ottoman Empire that had conquered the region in 16th century. Algeria gained its independence from France in 1962 after the bloody independence war known as Guerre de libération nationale, which had started in 1954 and resulted in more than a million Algerian casualties. The history of modern Algeria is glorified by the war of independence but also scarred by the autocracy produced by granting nearly uninterrupted power to the Front de libération nationale (FLN) that ruled the country ever since.

Algeria is mainly inhabited by the various indigenous ethnic groups of Berbers, the majority of whom identify with the Arab culture. The Berbers are divided into many groups: Kabyle, Chaoui, Tuaregs and Shenwa.319 In addition, a significant minority group is Kouloughlis. They are descendants of the Turks who settled in the region under Ottoman rule and, today, their population is estimated as between half a million to two million. Finally, during the French colonial period, close to 10% of the population were Europeans known as Pied-Noirs, consisting of mostly French settlers but also Spaniards, Italians, Maltese and even including Jews according to some classifications. Ninety-nine percent of the population is Muslim, making Islam the dominant religion as elsewhere in the region.320

Algeria, with a per capita income of $5,361,321 is an upper middle income country. The backbone of Algeria’s economy is the export of natural gas. Despite minimal efforts made by the government to diversify the economy from petroleum-dependency, there is high youth and women unemployment in

319 Preminger (1961). 320 CIA (2013). 321 WDI (2014).

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the country.322 The inflation rate, at 4 percent, has been stable. The overall economy of Algeria stands better compared to other Maghreb region countries. The literacy rate of the overall population is over 78 percent.

2. Overview of Recent Events

A series of protests in 1988 resulted in a new constitution in 1989 and elections by 1991 in this formerly one-party state. The Islamic Salvation Front (FIS) won the first round of parliamentary elections in December 1991. However, the January 1992 second-round elections never took place; the army assumed control of the country and declared a state of emergency.323 This led to a civil war against Islamists.

In 1994, as negotiations between the government and the FIS's imprisoned leadership were being conducted, the splinter faction Armed Islamic Group (GIA) continued the violent campaign, not only against the government but also against FIS. Various other Islamists regrouped to continue the FIS tradition within the Islamic Salvation Army (AIS), also fighting against GIA. The negotiations collapsed and the 1994 and the presidential election was won by the army's candidate. The violent infighting amongst the Islamist factions GIA and AIS intensified, also with involvement by government forces, and peaked around the 1997 parliamentary elections. The newly created and pro-army National Rally for Democracy (RND) won the elections.

AIS declared a unilateral ceasefire against the government in 1997 and, in 1999, the newly elected president Abdelaziz Bouteflika introduced an amnesty to most Islamist fighters. This measure and the ensuing process towards reestablishing security would win Bouteflika two more elections, in 2004 and 2009. The GIA was decimated over the next few years, the violence subsided and the government won. The end of the Algerian Civil War of the 1990s was followed by the autocratic presidency of Abdelaziz Bouteflika. He was elected three times, the last in 2009.324 The 2010 constitutional amendment eliminated term limits and made Bouteflika re-electable indefinitely.

With seventy percent of Algeria's population under the age of thirty, combined with high levels of youth unemployment, corruption and widespread poverty, Algeria is latently dissatisfied.325 Moreover, protests continue over unemployment, lack of housing, food-price inflation, corruption, restrictions on freedom of speech, poor living conditions, and other issues such as education and health care.326

In 2011, the government introduced some political reforms in response to the Arab Spring uprisings, including lifting the 19-year-old state of emergency restrictions and increasing women's quotas for 322 IMF (2013). 323 Richards (1993). 324 The Economist Intelligence Unit (2010). 325 Belayachi (2011). 326 Belhimer, Mahmoud (17 March 2010). "Political Crises but Few Alternatives in Algeria". Arab Reform Bulletin (Carnegie Endowment for International Peace).

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elected assemblies. Parliamentary elections in May 2012 and municipal and provincial elections in November 2012 saw continued dominance by the FLN, with Islamist opposition parties performing poorly. While political protests remained subdued through 2013, small and sometimes violent socioeconomic demonstrations by disparate groups continued to be a common occurrence. In 2014, the parliament is expected to revise the constitution.327

President Abdelaziz Bouteflika won a third term in the 2009 election as an independent. The election was boycotted by some political parties and he faced opposition candidates with no political basis whatsoever.

The statist economic model adopted upon Algerian independence from France 1962 has hindered development. Formal-sector unemployment remains persistently high and housing shortages persist. While Algeria is the world’s sixth-largest exporter of natural gas and possesses the world’s 10th-largest natural gas reserves and 16th-largest oil reserves, the economy is moribund. The government began a five-year, $286 billion program to modernize infrastructure in 2010 and it appears to be trying to attract foreign and domestic private investment in order to diversify the economy.328

3. Discussion of Critical Economic Indicators (CEIs)

This section introduces a set of indicators for Algeria. In addition, to provide further background for countries that have experienced vigorous opposition movements - with many swelling to full-scale uprisings - a smaller set of indicators are used to measure the population's attitude towards their respective country's governance. Although no causality conclusions are implied, the Critical Economic Indicators (CEIs) may serve as barometer readings ahead of potential civil unrest. Three groups of factors are covered within this section. The first concerns general summary statistics and important contextual economic facts on the country in question. The second group covers selected political factors such as the total number of personnel in the country’s military and the Polity government legitimacy measure. The third group consists of the selected political and socioeconomic factors which we argue played a role in the development of the unrest for the country. Both country-specific factors and factors that are common to other Arab Spring-affected nations are discussed within this group. The selection of CEIs is guided by the observations made during the Arab Spring uprisings as well as similar popular uprisings elsewhere in the world, in particular recent experiences in Turkey, Ukraine, and Hong Kong. The robust participation of educated and connected youth against various perceived governance problems and with democratic demands has been a commonly observed factor in virtually all unrests. Therefore the three groups of CEIs are representative of youth activism by taking into account the demographic, economic and technological dimensions of youth malcontent. The demographic dimension as captured by the youth bulge and youth unemployment has been extensively studied.329 The literature distinguishes popular uprisings from armed conflicts and this Report concentrates on the former.

327 CIA (2013). 328 2014 Index of Economic Freedom, http://www.heritage.org/index/country/algeria. 329 Cabras (2010), Lin (2012), Schomaker (2013), and Urdal (2013).

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The economic dimension of CEIs includes the GINI coefficient, the Undernourishment Index and the Consumer Price Index. Moreover, the first block of numbers in Table 1 includes, as general indicators, the population and GDP figures. Finally, the technological dimension aims to capture the educated youth phenomenon observed prominently in popular uprisings and includes the Emigration Rate of Tertiary Educated Persons and Internet Users per 100 People.

Indicator330 Value

General Population GDP Per Capita

37.9M (2013 Census) $5,361 (2013, current USD)

Political Armed Forces Personnel Contiguity to Instability Government Legitimacy (Polity IV)331 Ruler Longevity

317,200 (2004-2013) Tunisia, Libya, Mali 2 (Open Anocracy)332 1999 (Abdelaziz Bouteflika)

Economic (CEIs) Corruption Perceptions Index (rank and index)

Youth Bulge333 Youth Unemployment GINI coefficient Undernourishment Index Inflation Emigration Rate of Tertiary Educated Internet Users

94/177 and 36/100 45.8% (2014) 22.4% (2011) 35.33(1995) 5% (2010-2013) 4.5% (2011) 9.5 (2000) 15.2% (2012)

Table 1: A selection of indicators on Algeria

i. Political Indicators

This section very briefly reviews the four political factors introduced above in Table 1.

330 Unless otherwise indicated, data obtained from the World Bank’s WDI dataset (2014). 331 "The "Polity Score" captures the regime authority spectrum on a 21-point scale ranging from -10 (hereditary monarchy) to +10 (consolidated democracy). The Polity scores can also be converted into regime categories in a suggested three part categorization of "autocracies" (-10 to -6), "anocracies" (-5 to +5), and "democracies" (+6 to +10).” ).(…) The Polity scheme consists of six component measures that record key qualities of executive recruitment, constraints on executive authority and political competition.” Systemic Peace (2010). 332 An open anocracy, normally with an index 0-5, is an autocracy where power. 333 For the purposes of this review, the Youth Bulge refers to the percent of the population under the age of 24. Data obtained from CIA Factbook (2014).

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Armed Forces Personnel

Armed forces personnel consist of active duty military personnel, usually including paramilitary forces if the training, organization, equipment, and control suggest they may be used to support or replace regular military forces. The size of the armed forces personnel may be an understatement of the number. According to the Global Fire Power, the number of personnel in the Algerian armed forces is higher than in the report produced by the World Bank. Furthermore, the number of reserve personnel is large, rising up to 400,000.334

The Algerian armed forces personnel and military intelligence have been playing an important role in Algerian politics since the 1962 independence, albeit from behind the scenes. Since 1998, there have been attempts to depoliticize the army. Recruitment uses draft and all Algerian men are required to do a year and a half of military service.

The Algerian army has, in the recent past, been highly active along the country’s border with northern Mali, where various insurgent movements are based. Algeria has fought only one external war since independence: the Sand War, a border conflict with Morocco in 1963. The country has also, like many Arab countries, been formally at war with Israel since 1948.

Algeria has the largest defense budget in Africa in terms of the percentage of GDP allocated to defence. CIA estimates that military expenditures accounted for 3.3% of GDP in 2006.335 Algerian arms purchases are expected to continue at a very high rate of 6.2% till 2017.336 Historically, Algeria bought weapons and military equipment from the Soviet Union. Algeria has recently been undergoing a process of military modernization, which includes the introduction of new, more modern warships, aircraft, and tanks.337 This modernization seems to aim counterterrorism and counterinsurgency capabilities.338

Contiguity to Instability

According to the Congressional Research Service (CRS), Algeria has weathered the Arab Spring since 2011 without significantly altering its political system. While economic and political grievances have driven some domestic unrest, other factors appear to have dampened enthusiasm for dramatic political change. These may include an aversion to instability stemming from Algerians’ experience with mass violence in the 1990s; the perceived complexity of the Algerian regime, in which no single figure or family is seen as all-powerful unlike in pre-Arab Spring Tunisia; a fractious opposition and civil society; and the “negative” examples of instability in transitional states elsewhere. Still, some local commentators point to “a deep social malaise” among Algerians struggling with difficult living conditions, bureaucracy, and corruption.

Perhaps the most serious external threat to Algeria was posed by the early 2012 Tuareg rebellion in the region of Azawad, northeastern Mali. Since Tuaregs are Berbers, their rebellion in Mali could have

334 Global Firepower (2014). 335 CIA (2013). 336 Defense News (2013). 337 UPI (2013). 338 Defense News (2013).

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instigated a contagious effect in Algeria. However, the co-presence of a strong Islamist movement in Azawad weakened the resolve of Tuaregs and they compromised with Mali late in 2013.

Government Legitimacy (Polity IV) and Ruler Longevity

Political liberalization, which started in the 1980s (see Chart 1 below), came to a sudden halt right after the Islamic Salvation Front (FIS) was allowed to compete the first round of the December 1991 elections and won. The crackdown on opposition started with the cancellation of the second round of elections in January 1992 (see section 2 above). Subsequently, presidential elections held in 1995339 and in 1999 did not meet the threshold of a procedural democracy. In 1999, Abdelaziz Bouteflika of the National Liberation Front (FLN) won the election. The 2004 presidential election was the cleanest in Algerian history (see Chart 1 reflecting this phenomenon) and president Bouteflika was re-elected with 83% vote. However, the military, led by the president, continues to hold hegemonic power to this day within the Algerian political system. Bouteflika was re-elected in 2009 and to a fourth term in office in April 2014. He lifted the nearly twenty-year state of emergency in 2011, partly in response to the Arab Spring. Chart 1 somewhat reflects the stability since his second term in office.

While more than thirty parties operate actively in Algeria and 27 parties vied for seats in the latest legislative elections in 2012, the populist, Islamic-based FIS continues to be banned340 and the politics remains highly factional in nature. Conflict between Islamic fundamentalists and the secular government continues to threaten the stability of the country despite the fact that President Bouteflika had negotiated an end to violence in early 2000s.

Algerians, particularly those from younger generations, appear to feel disconnected from formal politics. The 2007 legislative elections saw a dismal participation rate of 35% of eligible voters. Similarly, disillusionment with the political status quo, maintained by an aging elite that many view as exhibiting disdain toward the broader population, appears to be widespread. Recent mass protests in the resource-rich but generally quiet south of the country point to high expectations that the state-centric economy should deliver jobs and benefits, as well as the potential for state officials to overlook certain regions and constituencies.341

339 The army-supported Liamine Zeroual won and served until the 1999 election. 340 Though some Islamist parties are free to operate. 341 CRS (2011).

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Chart 1: Authority Trends, 1959-2014: Algeria342

Algeria’s factionalism (perhaps well signaled by the existence of thirty or so political parties) and opaque decision-making apparatus often seem to inhibit political and economic reforms. As the independence generation ages, the latent instability threatens with an uprising.

ii. Common CEIs

This section covers all relevant CEIs displayed in Table 1.

Corruption Perceptions Index

In Chart 2, we present the Corruption Perceptions Index plot for 2003 to 2013. As can be seen, the index decreases before 2010 when the uprisings took place and rises up afterwards. This implies that the uprisings may have, in part, been motivated by observed and perceived corruption.

342 Systemic Peace (2014).

Polity Score

C: Change in regime leadership

A: Civil uprising against government

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Chart 2: Corruption Perceptions Index for Algeria, 2003 to 2013343

In Algeria the vast majority of citizens believe that the system is fundamentally corrupt. Algerians are intensely cynical about their rulers.344 As in other oil exporting countries, the elites in oil-producing countries do not have to rely on taxation for revenue. As a result they are not held accountable. They do not have to engage with their populations. The same situation is also true for Algeria.

Year Rank

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

88 / 133 97 / 145 97 / 145 84 / 163 99 / 179 92 / 180

111 / 180 105 / 178 112 / 182 105 / 176 94 / 177

Table 2: Corruption Perceptions Rank345

343 Transparency International (2014). 344 Evans (2013). 345 Transparency International (2014).

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Youth Bulge and Youth Unemployment

Chart 3: Youth Bulge for Algeria, 1980-2010 and projections to 2020346

The youth bulge and youth unemployment, when combined, may be a toxic combination. According to Schomaker (2013), “The corresponding youth bulge theory predicts that societies characterized by a youth bulge while simultaneously facing limited resources and, in particular, a lack of prestigious positions for "surplus“ youngsters – i.e. the third, fourth, fifth etc. born children – are much more prone to social unrest and/or acting belligerent towards their neighbors than those societies without these demographic stressors.”347

Charts 4 and 5: Population pyramids for Algeria (left) and Canada (right), 2010348

346 UN Dept. of Economic and Social Affairs (2012). 347 Schomaker (2013). 348 UN Dept. of Economic and Social Affairs (2012). Horizontal axis represents millions of persons; vertical axis represents 5-year age groups.

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It is not surprising that this combination, in a developing country with state-controlled economy producing patronage rather than meritocracy, would exacerbate the instability. As can be seen in the charts below the youth bulge has been a clear phenomenon in Algeria compared to the more mature population pyramid of the neighbouring Tunisia.

The youth unemployment in Algeria is very high. The combination of youth bulge and youth unemployment has been, as in all Arab Spring countries, a relevant factor in youth unrest in Algeria.

Chart 6: Unemployment, youth total for Algeria, 2002 to 2013349

Economic difficulty indicators: GINI, Undernourishment and CPI

Economic difficulty indicators are meant to convey the economic stress endured by residents. The three indicators chosen to form this group connect the income distribution in a given country with economic growth and the nature of proper food intake.

Algerian economic growth has been consistently positive in recent years. However, the rate fell to less than 5% since 2006. For the years 2010-2013 the growth rate for Algeria was 3.6%, 2.8%, 3.3%, and 2.7%. Economic inequality indexes may help determine whether this growth, though modest, has trickled down to the poor in Algeria.

The most recent World Bank data on the GINI coefficient, an indicator of income inequality, available for Algeria was 35.30% in 1995.350 The coefficient for Canada, for example, was 33.7% in 2010.351 Therefore, if income distribution did not worsen considerably since mid-1990s352, the Algerian inequality does not seem to be overly concerning.

349 World Bank (2014). 350 Knoema (2013). 351 http://data.worldbank.org/indicator/SI.POV.GIN. 352 We have not found an up-to-date Gini figure for Algeria.

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The undernourishment index for Algeria has been consistently at 5% in recent years as reported by the World Bank. This indicates that undernourishment is not a serious concern in the country as this estimate is the lowest predicted level of prevalence.

The next CEI to consider is the consumer price index (CPI), the average price of goods and services that enter a predetermined consumer basket. With the moderate level of economic growth as discussed above, unless inflation is controlled, the economic stress of the people of Algeria would be acute. Chart 7 below shows the recent annual inflation rates in Algeria. Even though it seems to have been contained by 2013, the inflation rate in Algeria has been rising since 2005 and mostly exceeding the economic growth rates. In 2012 it reached a maximum of 9% which was lowered back to 3% in 2013.

Chart 7: Consumer Price Index for Algeria, 2002 to 2013353

In summary, the economic stress indicators show that the growth rate is not sufficiently high while the income inequality was moderate. However, since inflation exceeded economic growth, one would expect that the GINI coefficient may have risen in the intervening years, indicating a worsening of income inequality. As discussed earlier, one of the causes of the unrest in Algeria was the inflation of food prices.

Educated Malcontent and Technological Adaptation

The following table from the European University Institute’s Migration Policy Center shows the number

353 World Bank (2014).

This section investigates two CEIs: the emigration rate of tertiary educated persons and the adoption of social media, as proxied by ‘internet users per 100 population’. The first provides a measure of labour market tightness and can serve as an indication of discontent with the conditions in the country. The second CEI concerns the prevalence of social media and interconnectedness among the tech-savvy youth of Arab countries.

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of Algerian migrants residing abroad.354 A surprising 2.6% of the Algerians born in Algeria reside abroad. The profile of Algerians residing in France has substantially increased: from 1999 to 2008, those with a tertiary education rose from 15.2% to 17.3%, while those with an intermediate level went up from 28.1% to 37.2%.355

The education profile of the emigrants was: primary or below (51.9%); secondary (29.1%); tertiary (19.0%) in 2006. In general there is an increasing trend of tertiary educated emigration from Algeria mainly to European countries.

Table 3: Algerian emigration stocks by country of residence, most recent data (2012)356

Secondly, in the absence of actual figures, we use the percentage of internet users as a proxy for the pervasiveness of social media. Chart 8 shows that internet use has been increasing at a moderate rate that pales in comparison to many similar countries.

354 Neither the World Bank’s World Development Indicators nor the document A Profile of Immigrant Populations in the 21st Century: Data from OECD Countries - OECD (2008) yielded data for Algeria. 355 European Union Institute (2013). 356 European Union Institute (2013).

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Chart 8: Internet users per 100 People in Algeria, 2002 to 2013357

4. Country-specific factors

Algeria may be an "Egypt in waiting", though it has two key differences: it has significant hydrocarbon resources and Egypt has significant geopolitical importance358. Similarities abound because Egypt was and, after the Morsi period, again is a military-dominated autocracy with a state-dominated economy, high corruption, youth bulge and unemployment, and wider economic difficulties. The 2011-2012 Food Riots were symptoms of these underlying latent problems behind a facade of stability since the end of Civil War in 2002. Three quarters of the population is under the age of 30, and 20 percent of them are unemployed.359

With the rigid economic structure and a non-diversified economy, Algeria cannot be expected to easily resolve the problems it faced during the 2011-2012 Food Riots.360 Moreover, the corruption level has always exceeded that of neighbouring Tunisia and Morocco; the youth unemployment has remained high; and, recently, price level increases have outpace GDP. These factors are all expected to contribute to the persistence of the current economic malaise. It would be unreasonable to rule out further protests against the Algerian autocracy.

5. Current and Future Challenges

The CIA report361 indicates that Algeria's economy remains dominated by the state, a legacy of the country's socialist post-independence development model. In recent years the Algerian government has halted the privatization of state-owned industries and imposed restrictions on imports and foreign

357 World Bank (2014). 358 Egypt also produces some natural gas. 359 EuroNews.com (2011). 360 CIA (2013). 361 Ibid.

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involvement in its economy. Hydrocarbons have long been the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings.

Algeria has struggled to develop non-hydrocarbon industries because of this heavy regulation and because of the emphasis on state-driven growth. The government's efforts have done little to reduce high youth unemployment rates or to address housing shortages. A wave of economic protests in February and March in 2011 prompted the Algerian government to offer more than $23 billion in public grants and retroactive salary and benefit increases, moves which continue to weigh on public finances.

Long-term economic challenges include diversifying the economy away from its reliance on hydrocarbon exports, bolstering the private sector, attracting foreign investment, and providing adequate jobs for younger Algerians.362

References

Arieff, Alexis (2013). Algeria: Current Issues. Congressional Research Service. http://fas.org/sgp/crs/row/RS21532.pdf. Accessed 11/1/2014.

Belayachi, D. (2011). “Algeria protests take place amid 30,000 police deployment.” Afrik-news.com. http://www.afrik-news.com/article18940.html. Accessed 11/1/2014.

Belhimer, M. (2010), “Political Crises but Few Alternatives in Algeria”, Carnegie Endowment for International Peace, http://carnegieendowment.org/2010/03/17/political-crises-but-few-alternatives-in-algeria/b20o. Accessed 11/1/2014.

Cabras, A. (2010). "The implications of the youth bulge in Middle East and North African populations". NATO Parliamentary Assembly Report. 138 GSM 10 E rev 3. http://www.nato-pa.int. Accessed 11/1/2014.

CIA World Factbook (2014). Country Backgrounds. http://www.cia.gov. Accessed 11/1/2014.

Defense News (2013). “Algeria Tops Africa Markets; Arms Race Emerges on Continent.” http://www.defensenews.com/article/20131020/SHOWSCOUT04/310200012/Algeria-Tops-Africa-Markets-Arms-Race-Emerges-Continent. Accessed 12/1/2014.

EuroNews.com (2011). “Algerian riots over food prices and unemployment.” Published 1/7/2011. http://www.euronews.com/2011/01/07/algerian-riots-over-food-prices-and-unemployment/. Accessed 12/1/2014.

European Union Institute - Migration Policy Centre (2013). Migration Profiles – Algeria. http://www.migrationpolicycentre.eu/docs/migration_profiles/Algeria.pdf. Accessed 12/1/2014.

Evans, M. Corruption and Islamic Militancy – Algeria. London School of Economics. Published 11/20/2013. 362 CIA (2013).

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http://blogs.lse.ac.uk/africaatlse/2013/11/20/algeria-corruption-and-islamic-militancy/. Accessed 12/1/2014.

Global Firepower (2014). Country Military Strength Detail – Algeria. http://www.globalfirepower.com/country-military-strength-detail.asp?country_id=algeria. Accessed 11/1/2014.

Heritage Foundation (2013). Index of Economic Freedom - Algeria. http://www.heritage.org/index/country/algeria. Accessed 12/1/2014.

IMF (2013). Algeria: 2011 Article IV Consultation – Staff Report; Public Information Notice. Published 12/22/2011. http://www.imf.org/external/pubs/ft/scr/2012/cr1220.pdf. Accessed 12/1/2014.

Knoema (2013). African Economic Outlook. http://knoema.com/AEO2012May/african-economic-outlook-may2012?tsId=1000410. Accessed 12/1/2014.

Lin, J.Y. (2012). "Youth Bulge: A Demographic Dividend or a Demographic Bomb in Developing Countries?”.World Bank blog. http://blogs.worldbank.org/developmenttalk. Accessed 11/1/2014. Preminger, M. M. (1961). “The Sands of Tamanrasset: The story of Charles de Foucauld.” Hawthorn Books. Richards, C. (1993). “Algeria uses emergency law to fight Islamic group.” The Independent. Published 2/9/1993. http://www.independent.co.uk/news/world/algeria-uses-emergency-law-to-fight-islamic-group-1471880.html. Accessed 12/1/2014.

Schomaker, R. (2013). "Youth bulges, poor institutional quality and missing migration opportunities - triggers of and potential counter-measures for terrorism in MENA". Topics in Middle Eastern and African Economies 15(1), 116-140.

Systemic Peace (2010). Polity IV Country Report – Algeria. http://www.systemicpeace.org/polity/Algeria2010.pdf. Accessed 11/1/2014.

The Economist Intelligence Unit (2010). Democracy Index, 2010. http://graphics.eiu.com/PDF/Democracy_Index_2010_web.pdf. Accessed 12/1/2014.

Transparency International (2014). Corruption Perceptions Index. http://www.transparency.org. Accessed 11/1/2014.

UN Dept. Of Economic and Social Affairs (2012). World Population Prospects: The 2012 Revision. http://esa.un.org/unpd/wpp/unpp/panel_indicators.htm. Accessed 11/1/2014.

UPI (2013). “Algeria buying military equipment”. Published 3/11/2013. http://www.upi.com/Business_News/SecurityIndustry/2013/03/11/Algerias-military-goes-on-an-arms-spree/UPI-89581363031700/. Accessed 12/1/2014.

Urdal, H. (2013). "A clash of generations? Youth bulges and political violence". UN Department of Economic and Social Affairs, Population Division. Expert Paper No. 2012/1.

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World Bank - World Development Indicators (2014). http://data.worldbank.org/data-catalog/world-development-indicators. Accessed 12/1/2014.

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Egypt

1. Introduction

Egypt occupies a central and strategically important location in the Arab world. The great majority of Egyptian population is Arab speaking and lives along the Nile Basin. Moreover, the economically vital Suez Canal is entirely within Egypt.

Partly due to this key geopolitical location and partly to its large population, Egypt is considered a regional and middle power, with significant cultural, political, and military influence in North Africa, the Middle East and the Muslim world. Its economy is one of the largest and, especially, most diversified in the Middle East, with sectors such as tourism, agriculture, industry and services generating equal shares of the GDP. In 2011, long-term President Hosni Mubarak stepped down amid continuing mass protests as part of the Arab Spring that had started in Tunisia. Later elections saw the rise of the Muslim Brotherhood, which was ousted by the army a year later amid another wave of mass protests.363

Egypt was a province of the Ottoman Empire from 1517 till the French occupation in 1798. An Ottoman commander of Albanian descent reclaimed Egypt from the French in 1805 and the country remained semi-independent till British occupation in 1882. Although its status was fluid, between the British and Ottoman empires between 1882 and 1914, it became a British protectorate by 1914. After a brief independence struggle, Egypt gained independence in 1922 and became a parliamentary monarchy that lasted till the nationalist military officers’ takeover in 1952.364 Egypt became a republic in 1953 but, by 1954, Jamal Abdel Nasser captured the reign of power and became president in 1956. The same year the Suez Canal was nationalized and the British forces withdrew from the region.

The Egyptian Suez Canal, built in partnership with the French in 1869, had led to the European intrusion due to its economic as well as military importance.365 During Nasser’s reign, the tension with Israel heightened. After Nasser died in 1970, he was succeeded by Anwar Sadat founded the authoritarian National Democratic Party (NDP) in 1978 and introduced a token multi-party system. Sadat signed a peace treaty with Israel in 1979 as a result of which he was assassinated in 1981 by a member of the Egyptian Islamic Jihad, one of the precursors to Al Qaeda.366

Hosni Mubarak, from NDP and vice-president of Sadat, followed him as president and he reaffirmed Egypt's relationship with Israel. Mubarak's era was characterized by Islamist terrorist attacks, the single-party rule by the National Democratic Party, and extensive human rights violations. Mubarak prohibited parties from using religion as a basis for political activity in 2007, allowed the drafting of a new anti-terrorism law, authorized broad police powers of arrest and surveillance, and strengthened the

363 Cooper et al. (2007). 364 The Free Officers Movement which included Muhammad Naguib, the first leader of the military takeover, and Jamal Abdel Nasser, the military autocrat who ruled the country from 1956 till his death in 1970, had both belonged to the Muslim Brotherhood. 365 CIA (2014). 366 Vatikiotis (1991).

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presidency by assuming the power to dissolve parliament and eliminating the judicial monitoring of elections. He resigned and fled Cairo on the 11th of February 2011 as the widespread protests against him began.

2. Overview of Recent Events

The Egyptian uprising called the Egyptian Revolution of 2011 began on the 25th of January 2011 following the Tunisian Revolution. The protesters demanded the resignation of Hosni Mubarak. The revolutionary spectrum of groups included Islamic, liberal, anti-capitalist, nationalist and feminist elements. Violent clashes between security forces and protesters resulted in at least 846 deaths and over 6,000 injured.367

The protesters focused on legal and political issues, state-of-emergency laws, lack of free elections, freedom of speech, corruption, and economic issues including high unemployment, food-price inflation and low wages. The protesters’ primary demands were the end of the Mubarak regime and of the emergency law. Also included demands for freedom, justice, a responsive non-military government and a voice in managing Egypt's resources.

Hosni Mubarak and his National Democratic Party had reigned in Egypt for 30 years prior to the Tahrir Square demonstrations of 2011. His government earned support from the West and aid from the United States by its suppression of Islamic militants and thanks to a lasting peace with Israel. However, the intense opposition since his re-election in 2005 was demanding multi-candidate elections and rejecting the transfer of the presidency to his son Jamal Mubarak. The emergency law enacted in 1958 extended police powers, suspended constitutional rights, legalized censorship and abolished habeas corpus. It limited non-governmental political activity, including demonstrations, unapproved political organizations and unregistered financial donations. The Mubarak government presented the threat of terrorism as a pretext to extend the long-standing emergency law. It also claimed that opposition groups such as the Muslim Brotherhood could gain power in Egypt if the government does not forgo parliamentary elections and suppress the group through emergency law.368, 369

Prior to the 2011 revolution, Egyptian discontent was fast growing due to several reasons. Police brutality was extensively documented by many human rights organizations. Vote rigging was commonplace in all elections. Mubarak was the only sanctioned candidate and, as such, won five consecutive presidential elections. In addition, widespread corruption was exemplified by the fact that many of the political leaders and ministers owned major sectors of the economy. While ministers stashed wealth in the billions of dollars, about 40% of Egyptians lived on the equivalent of roughly $2 per day. The living conditions for the average Egyptian remained poor.

367 BBC (2011). 368 Shehata (2004). 369 Shenker (2010).

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Following the Tunisian revolution which removed Zine El Abidine Ben Ali from power in January 14th 2011, Egyptian opposition groups planned a demonstration at Tahrir Square on January 25th to protest police brutality. This was supported by many opposition parties and public figures. This was followed by unrest in other cities of Egypt. The unrest continued without interruption till Mubarak resigned on February 11th and the Supreme Council of Egyptian Armed Forces assumed power. Though subsided, protests continued during the next months.

On June 24th, Muslim Brotherhood candidate Mohamed Morsi, as the first Islamist elected head of an Arab state, was declared the winner of the presidential election by the Egyptian electoral commission. However, exactly a year later, on June 30th 2013, Morsi was removed from office by the military as millions of Egyptians had been marching on the streets demanding his ouster. Unlike the imposition of martial law which followed the 2011 resignation of Hosni Mubarak, Adly Mansour was appointed interim president in July 2013. He had been the Head of the Supreme Constitutional Court, was vested with an authority to issue constitutional declarations and, also, with the executive power. His presidency lasted till May 2014 elections when ex-Army Chief El Sisi who had, incidentally, deposed Morsi in in 2013 was elected President.

3. Discussion of Critical Economic Indicators (CEIs)

This section introduces a set of indicators for Egypt. In addition, to provide further background for countries that have experienced vigorous opposition movements - with many swelling to full-scale uprisings - a smaller set of indicators are used to measure the population's attitude towards their respective country's governance. Although no causality conclusions are implied, the Critical Economic Indicators (CEIs) may serve as barometer readings ahead of potential civil unrest. Three groups of factors are covered within this section. The first concerns general summary statistics and important contextual economic facts on the country in question. The second group covers selected political factors such as the total number of personnel in the country’s military and the Polity government legitimacy measure. The third group consists of the selected political and socioeconomic factors which we argue played a role in the development of the unrest for the country. Both country-specific factors and factors that are common to other Arab Spring-affected nations are discussed within this group. The selection of CEIs is guided by the observations made during the Arab Spring uprisings as well as similar popular uprisings elsewhere in the world, in particular recent experiences in Turkey, Ukraine, and Hong Kong. The robust participation of educated and connected youth against various perceived governance problems and with democratic demands has been a commonly observed factor in virtually all unrests. Therefore the three groups of CEIs are representative of youth activism by taking into account the demographic, economic and technological dimensions of youth malcontent.

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The demographic dimension as captured by the youth bulge and youth unemployment has been extensively studied.370 The literature distinguishes popular uprisings from armed conflicts and this Report concentrates on the former. The economic dimension of CEIs includes the GINI coefficient, the Undernourishment Index and the Consumer Price Index. Moreover, the first block of numbers in Table 1 includes, as general indicators, the population and GDP figures. Finally, the technological dimension aims to capture the educated youth phenomenon observed prominently in popular uprisings and includes the Emigration Rate of Tertiary Educated Persons and Internet Users per 100 People.

Indicator371 Value

General Population GDP Per Capita

87.5M (2014) $3,213 (2014, current USD)

Political Armed Forces Personnel372 Contiguity to Instability Government Legitimacy (Polity IV)373 Ruler Longevity

1,567,096 (2014) Israel, Sudan, Libya - 4 (Closed anocracy) 1981-2011(Hosni Mubarak)

Economic (CEIs) Corruption Perceptions Index (rank and index) Youth Bulge374 Youth Unemployment GINI coefficient 375 Undernourishment Index Inflation Emigration Rate of Tertiary Educated Internet Users

112/177 and 32/100 49.9% 35.7% (2012) 30.8% (2008) 5% 9.5% (2013) 4.7% (2000), 3.7% (2008) 49.6% (2013)

Table 1: A selection of indicators on Egypt

370 Cabras (2010), Lin (2012), Schomaker (2013), and Urdal (2013). 371 Unless otherwise indicated, data obtained from the World Bank’s WDI dataset (2014). 372 Global Firepower (2014). 373 "The "Polity Score" captures the regime authority spectrum on a 21-point scale ranging from -10 (hereditary monarchy) to +10 (consolidated democracy). The Polity scores can also be converted into regime categories in a suggested three part categorization of "autocracies" (-10 to -6), "anocracies" (-5 to +5), and "democracies" (+6 to +10).” ).(…) The Polity scheme consists of six component measures that record key qualities of executive recruitment, constraints on executive authority and political competition.” Systemic Peace (2010). 374 For the purposes of this review, the Youth Bulge refers to the percent of the population under the age of 24. Data obtained from CIA Factbook (2014). 375 CIA(2014).

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i. Political Indicators

This section very briefly reviews the four political factors introduced above in Table 1.

Armed Forces Personnel

The Egyptian Armed Forces are the largest in Africa and the Middle East, with personnel levels generally exceeding 1.5 million over the past decade. 376 The eligible population pool fit for military service is over 30 million.377 Egypt has also allocated over 1.7 percent of GDP on military expenditures in recent years.378

The Egyptian army is directly accountable to the president. Egypt remains a strong military and strategic partner and is a participant in NATO's Mediterranean Dialogue forum, especially after the military deposed President Morsi. The Egyptian military is one of the strongest in the region, at least numerically, and gives Egypt regional military supremacy, topped only by Israel but being one of the strongest in Africa. Egypt is one of the few countries in the Middle East, and the only Arab state, with a reconnaissance satellite. It has launched one in 2007 and another in 2014.

The Egyptian army was established in 1922 and is still a conscript army. The Egyptian air force is numerically strong and its pilot training is considered to be the strongest in Africa and one of the strongest in the Middle East. Although the Egyptian Navy is the smallest branch of the military, it is large by Middle Eastern standards. And the Army is very large by any standard. Since the Egyptian army has been associated with the autocratic power in the country since the military takeover by the Free Officers’ Movement in 1952, its professionalization is incomplete and its privileges are difficult to reconcile with modern democratic standards.

Contiguity to Instability

One of the fundamental sources of instability for Egypt is the Nile River, which crosses eleven countries in northeastern Africa.379 Treaties dating back to the colonial era have enabled Egypt to assume possession of natural rights to the river. These treaty rights have caused national security concerns as Ethiopia desires more broad rights with respect to the use of Nile water.

Another international dispute Egypt faces at its frontiers relates to the Hala’ib triangle, just north of the 22nd parallel at the southeastern corner of Egypt. The Hala’ib region is an area of land measuring 20,580 square kilometers (7,950 sq mi) and located on the Red Sea's African coast. Sudan claims this region but Egypt de facto administers it since the mid-1990s. The straight line border between the two countries does also lead to a second problem: Strangely, the Bir Tawil region, south of the 22nd parallel and west of the Hala’ib region, is a swath of land claimed by neither of the two countries. Egypt no longer shows its administration of the Bir Tawil trapezoid in Sudan on its maps. 376 Global Firepower (2014). 377 Global Firepower (2014). 378 CIA (2014). 379 Egypt, Tanzania, Uganda, Rwanda, Burundi, Democratic Republic of the Congo, Kenya, Ethiopia, Eritrea, Sudan and, South Sudan.

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Egypt’s northeastern border with the Gaza Strip has constantly been subject to breaches, especially since the Hamas takeover of Gaza and the Israeli embargo that followed. Moreover, worried about Islamist attacks on El Arish, a city close to the Gaza border, Egypt started building a security wall around El Arish in order to control entries and exits.380 This wall is a response to Egypt’s difficulties in monitoring the Sinai border and peninsula. Yet another territorial dispute in that region pertains to Saudi Arabian claim to Egyptian-administered islands of Tiran and Sanafir. The dispute dates back to the colonial area again.381 The islands are quite strategically situated at the entrance to the Gulf of Aqaba.

Egypt’s rather porous borders allow, worryingly, refugees to arrive from as diverse regions as the West Bank and the Gaza Strip, Sudan, Somalia, Iraq, and Syria. Moreover, Egypt is considered to be a transit point for cannabis, heroin and opium moving to Europe, Israel and North Africa from the east. It is a transit stop for Nigerian drug couriers and there are concerns that intensive money laundering takes place in Egypt due to lax enforcement of financial regulations.

Government Legitimacy (Polity IV) and Ruler Longevity

Following the Tahrir Square uprising of 2011 and the resignation of President Hosni Mubarak, executive power was assumed by the Supreme Council of the Armed Forces, which dissolved the parliament and suspended the constitution. After the interim period under the elected president Morsi and the military takeover, ex-supreme commander Abdel Fattah el-Sisi was elected as Egypt's seventh president under less than free elections. Under the new constitution, the president is limited to two four year-terms but the parliament lacks the legislative authority to balance the extensive powers of the president.382

Political parties can run candidates in elections but religious political parties are excluded, fundamentally to preclude the Muslim Brotherhood. Prior to the fall of Mubarak, emergency laws had been enforced since 1967, under which police enjoyed extensive powers, constitutional rights were suspended and heavy censorship severely restricted the freedom of expression. The laws prohibited all non-governmental political activities, street demonstrations and non-approved political organizations.383

Up until the 2011 uprising, every head of the state ruled for a long time. Jamal Abdel Nasser was the president from 1956 to 1970, followed by Anwar Sadat from 1970 to 1981. Hosni Mubarak was in power from 1981 until his fall in 2011. Mubarak won 5 consecutive elections, each one under rather restricted environments. Mohamed Morsi, from Muslim Brotherhood, was briefly president for a year from June 2012 to July 2013 when he was toppled by the army. This brief period with a freely elected president is the little blip below in Chart 1, which traces Egypt’s political maturity, or lack thereof, since the military takeover in 1952.

380 Jerusalem Post (2014). 381 CIA (2014). 382 Martini & Taylor (2011). 383 Caraley (2004).

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Chart 1: Authority Trends, 1959-2013: Egypt384

ii. Common CEIs

This section covers all relevant CEIS displayed in Table 1.

Corruption Perceptions Index

We provide two complementary measures of corruption. The corruption perception index and the ranking of Egypt compared to countries in the world. As can be seen in the chart below, Egypt has never rated above 36/100.

Year Rank 2001 2002 2003 2004 2005 2006 2007

54/91 62/102 70/133 77/146 70/159 70/163

105/179

384 Systemic Peace (2010).

Polity Score

X: Overthrow of monarchy

C: Change in ruling regime

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2008 2009 2010 2011 2012 2013

105/180 111/180 98/178

112/182 118/174 112/177

Table 2: Corruption Perceptions Rank385

Corruption has historically been, and remains, a significant issue in Egypt. Investors report bribery and extortion in their interaction with government officials. The government has aimed at containing corruption through several initiatives and efforts. The 2013 constitution included a whistle blower protection article and the establishment of the Anti-Corruption Commission. However, the political climate since the revolution in Egypt has been marred by instability, and the existing anti-corruption laws have been poorly enforced. The situation further deteriorated after Morsi was removed from power and many a one-time Mubarak supporters recovered their positions. Companies are likely to encounter corruption in meetings with public officials. Officials in various government departments are known for bribery, embezzlement and tampering with official documents. Corruption and bribery are also reportedly common when companies deal with public services, customs and taxes, public utilities and procurement.386

Chart 1: Corruption Perceptions Index for Egypt, 2001 to 2013387

Youth Bulge and Youth Unemployment

As can be seen in the chart below, the majority of the population in Egypt still consists of youth under the age of 24 but falling at a pace similar to comparable countries.

To compare the Egyptian demographics to Canada, we note that the population density per kilometer in Canada is 3 while it is 78 in Egypt. The percentage of the population under the age of 15 in Egypt is

385 Systemic Peace (2010). 386 Business Anti-Corruption Portal (2014). 387 Transparency International (2014).

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31.5% while it is 16.5% in Canada. Similarly, the percentage of the population aged 15-24 is 13.5% in Canada while the same age range constitutes 19.5% of the population in Egypt. Chart 2 below shows that Egypt is still passing through the bulge and the population pyramids in Charts 3 and 4 show the same phenomenon graphically, by comparing the Egyptian demographic distribution to that of Canada. For instance, by comparison, Iraq, a similar country, is significantly more mature demographically or, in other words, the bulge has moved upwards in the pyramid.

Chart 2: Youth Bulge for Egypt, 1980-2010 and projections to 2020388

Charts 3 and 4: Population pyramids for Egypt (left) and Canada (right), 2010389

388 UN Dept. of Economic and Social Affairs (2012). 389 UN Dept. of Economic and Social Affairs (2012). Horizontal axis represents millions of persons; vertical axis represents 5-year age groups.

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Chart 5 below provides information on aggregate youth unemployment in Egypt. The evolution of youth unemployment is hardly different from comparable countries. It is easy to see that such a trend could be disastrous unless the economy improves and unless an environment which fosters success for the youth is created. The Egyptian economy is still dominated by the rigid state sector despite the reforms that started in 2004 but slowed down subsequently.

With an annual rate of population growth of 1.7%; total fertility (children per woman) of 2.98%; and a mortality rate of under 5 per 1000 live births, youth population in Egypt would continue to rise in absolute numbers. Egypt has to facilitate youth employment attracting foreign domestic investment besides encouraging private domestic investment in order to absorb large numbers of unemployed youth.

Chart 5: Unemployment, youth total for Egypt, 2002 to 2013390

Economic difficulty indicators: GINI, Undernourishment and CPI

Economic difficulty indicators are meant to convey the economic stress endured by residents. The three indicators chosen to form this group connect the income distribution in a given country with economic growth and the nature of proper food intake.

The most recent Gini coefficient available for Egypt is that of 2008 and yields 30.8. The time series for this variable is not available. However, because it takes long for the Gini coefficient to change significantly, the recent values fairly represent the income distribution in Egypt.

390 World Bank (2014).

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Chart 6: The GINI coefficient for Egypt (1996, 2000, 2005, 2010)391

The undernourishment index for Egypt has been rated at 5% for a great period of time, which is a minimum threshold recorded in World Bank data, and so the real number may be less than this. It is fair to say that this is, at worst, a relatively minor concern in Egypt.

The third CEI is the consumer price Index as shown in Chart 7 below. The chart clearly shows that there has been an increasing consumer price index in the years that preceded the Arab Spring. The three indicators can show that the economic condition in Egypt has been deteriorating starting from the few years that led to the Arab Spring to the latest. This is due to the lower GDP growth compared to the inflation and the moderately high inflation observed in the data.

Chart 7: Consumer Price Index for Egypt, 2002 to 2013392

391 World Bank (2014). 392 Transparency International (2014).

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Educated Malcontent and Technological Adaptation

The fact that only 3.7% of tertiary-educated emigrated393 in 2008 (see Chart 8 below), i.e. well prior to the uprising, signifies that educated Egyptian youth do not emigrate.394 However, this also suggests that the educated and potentially malcontent strata of Egyptian youth may indeed have been ready to vigourously oppose the Mubarak anocracy.

Chart 8: Emigration Rate of Tertiary Educated from Egypt (1990, 2000)395

Of the large majority of tertiary-educated youth who do not emigrate, a rather large percentage remain unemployed (see Chart 9). Casual observations during the Tahrir Square demonstrations, first to topple Mubarak and then Morsi, showed the prominent presence of youth and their ease at communications.

393 OECD (2008). 394 We note that nearly the half of actual emigrants to OECD countries are tertiary-educated (OECD, 2008). 395 This graph combines World Bank (2014) and OECD (2008) data.

This section investigates two CEIs: the emigration rate of tertiary educated persons and the adoption of social media, as proxied by ‘internet users per 100 population’. The first provides a measure of labour market tightness and can serve as an indication of discontent with the conditions in the country. The second CEI concerns the prevalence of social media and interconnectedness among the tech-savvy youth of Arab countries.

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Chart 9: Unemployment Rate for Educated Persons in Egypt, 2008 to 2012396

The second CEI, in the absence of figures on youths with access to social media, is the use of the percentage of internet users as a proxy for the pervasiveness of social media. Chart 10 shows that internet use has been increasing fairly rapidly for the past decade or so.

Chart 10: Internet Users Per 100 People in Egypt, 2002 to 2013397

In the recent Arab Spring uprisings, the pervasiveness of social media as a coordination device and method of conveying grievances device was observed. This last section combines the emigration of tertiary-educated and the internet usage rates to estimate the youth discontentment. Of course, the youth unemployment index could be combined with these two variables to have a more complete understanding of youth involvement in unrests.

Egyptian uprising saw youth playing a major role. Combined with relatively high youth unemployment, low emigration rate and high levels of corruption that might not have gone undetected, the activism of Egyptian youth was a major factor in the fall of Mubarak.

396 Transparency International (2014). 397 Transparency International (2014).

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iii. Country-Specific CEIs

Arguably the most fundamental stressor in and around Egypt is the management of water resources. Egypt relies for 97 percent of its water from the Nile. But so do neighbours and countries in the region, though not to that extent. Egypt does not enjoy rainfall like Nile upstream riparian nations such as Burundi, Eritrea, Ethiopia, Kenya, Rwanda, Sudan, South Sudan, Tanzania, Uganda and the Democratic Republic of Congo. These countries have a combined population of 450 million people. This regional population is expected to double in the next twenty five years, thus generating a very high demand for water and stressing the environmental carrying capacity, demands deriving from industry, agriculture and domestic use.398

Water sharing agreements in the region descend to early 20th century. The Nile Water Agreement in 1929 endowed Egypt with a right to veto any upstream Nile water project. In 1959, Egypt and Sudan signed another Nile Water Agreement that gave Egypt three quarters or 55 billion cubic metres of the Nile's water flow of 84 billion cubic metres. In 1997, the riparian countries initiated the Nile River Cooperative Framework which resulted in the Entebbe Agreement in 2011, signed by Ethiopia, Rwanda, Uganda, Kenya, Tanzania and Burundi. South Sudan and Democratic Republic of Congo pledged to sign it in the future. Egypt and Sudan refused to sign the agreement alleging that it impinges in their pre-existing rights.399

The provisions of the 1929 Agreement and Ethiopia’s $4.2 billion mega-dam project expected to be completed by 2017 generated a collision course between the two countries, risking an armed conflict. In January 2014, Egypt requested Ethiopia to suspend the mega-dam project. Upon rejection of the request Ethiopia, Egypt asked a temporary halt to the project so that its effects downstream are determined. “Otherwise, it has vowed to protect its ‘historical rights’ to the Nile at ‘any cost.”400

The second, but not necessarily less important stressor is Egypt’s role in Middle Eastern politics. Egypt is allied to Saudi Arabia, the United Arab Emirates and Kuwait against Muslim Brotherhood and other political Islamic movements. For instance, these four countries “are discussing the creation of a military pact to take on Islamic militants, with the possibility of a joint force to intervene around the Middle East.”401 The alliance is also meant to counterbalance Iran. In terms of these geo-strategic considerations, Egypt is a critical actor by its (and its military’) size, by its control of the Nile and by the geo-strategic importance of the Suez Canal.

4. Current and Future Challenges There are several challenges that Egypt is currently facing and it seems that these challenges may persist

398 Di Nunzio (2013). 399 Di Nunzio (2013). 400 Hussein (2014). 401 Hendawi (2014).

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in the long term. First, as the countries on the upstream of the Nile have started projects on the Nile, the lifeline of Egypt, and these international problems will remain in Egypt’s agenda. Disagreements with the upstream countries that contribute water to the Nile through their tributaries will have to be settled or managed. Second, population growth, youth unemployment and food price inflation pose a second level of challenges. Third, the securing of transparency and reducing corruption are rather daunting challenges to the heavily state-run economic system. Finally, the brief flirtation with democracy ended with the military’s takeover and renewed domination; unlike Tunisia, Egypt has until now been unable to produce a steady transition to democracy.

References BBC (2011). “Egypt: Cairo's Tahrir Square fills with protesters”. Published 7/8/2011. http://www.bbc.co.uk/news/world-middle-east-14075493. Accessed 12/1/2014. Business Anti-Corruption (2014). “Business Corruption in Egypt”. http://www.business-anti-corruption.com/country-profiles/middle-east-north-africa/egypt/snapshot.aspx. Cabras, A. (2010). "The implications of the youth bulge in Middle East and North African populations". NATO Parliamentary Assembly Report. 138 GSM 10 E rev 3. http://www.nato-pa.int. Accessed 11/1/2014. Caraley, D. (2004). “American hegemony: Preventive war, Iraq, and imposing democracy”. Academy of Political Science. CIA World Factbook (2014). Country Backgrounds. http://www.cia.gov. Accessed 11/1/2014.

Cooper, A.F., A. Antkiewicz , and T.M. Shaw (2007). “Lessons from/for BRICSAM about South-North Relations at the Start of the 21st Century: Economic Size Trumps All Else?” International Studies Review 9(4), pp. 675-687. Di Nunzio, J. (2013). “Conflict on the Nile: the future of trans-boundary water dispute over the world longest river”. Future Directions International. Published 11/25/2013. http://www.futuredirections.org.au/publications/food-and-water-crises/1452-conflict-on-the-nile-the-future-of-transboundary-water-disputes-over-the-world-s-longest-river.html. Accessed 12/1/2014. Enders, K. (2008). “Egypt: Reforms Trigger Economic Growth”. http://www.imf.org/external/pubs/ft/survey/so/2008/car021308a.htm. Accessed 12/1/2014. Global Firepower (2014). “Egypt”. http://www.globalfirepower.com/country-military-strength-detail.asp?country_id=Egypt. Accessed 11/1/2014. Hendawi, H. (2014). “Egypt, Gulf Arab Allies Eye Anti-Militant Alliance”. Associated Press. http://bigstory.ap.org/ article/7da735d6ad77416d9867bb1897867345/egypt-gulf-arab-allies-eye-anti-militant-alliance. Accessed 12/1/2014.

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Hussein, H. (2014), “Egypt and Ethiopia Spar over the Nile”. Al-Jazeera. Published 2/6/2014. http://america.aljazeera.com/opinions/2014/2/egypt-disputes-ethiopiarenaissancedam.html. Accessed 12/1/2014. IMF (2008). “Egypt: Reforms Trigger Economic Growth”. http://www.imf.org/external/pubs/ft/survey/so/2008/car021308a.htm. Accessed 11/1/2014. Jerusalem Post (2014). “Egypt to build anti-terror fence in Sinai”. Published 3/27/2014. http://www.jpost.com/Middle-East/Egypt-to-build-anti-terror-fence-in-Sinai-346633. Accessed 12/1/2014. Lesova, P. (2008). “As food inflation soars, Egypt reforms may slow”. http://www.marketwatch.com/story/as-food-inflation-soars-reforms-in-egypt-may-slow. Accessed 12/1/2014. Martini, J. and J. Taylor (2011). “Commanding Democracy in Egypt”. Foreign Affairs. September/October, pp. 127-137. OECD (2008). “A Profile of Immigrant Populations in the 21st Century: Data from OECD Countries”. Organisation for Economic Co-operation and Development. www.oecd.org/els/mig/40647145.xls. Shehata, S. (2004). “Egypt After 9/11: Perceptions of the United States”. Contemporary Conflicts. http://conconflicts.ssrc.org/archives/mideast/shehata/. Shenker, J. (2010), “Egyptian Elections: Independents Fight for Hearts and Minds in 'Fixed Ballot'“. The Guardian. Published 11/22/2010. http://www.theguardian.com/world/2010/nov/22/egypt-elections-muslim-brotherhood-ndp. Accessed 12/1/2014. Systemic Peace (2010). Polity IV Country Report – Egypt. http://www.systemicpeace.org/polity/Egypt2010.pdf. Accessed 11/1/2014.

Transparency International (2014). Corruption Perceptions Index. http://www.transparency.org. Accessed 11/1/2014.

Vatikiotis, P.J. (1991). “The history of modern Egypt: from Muhammad Ali to Mubarak”. 4th ed., London: Weidenfeld and Nicolson. World Bank - World Development Indicators (2014). http://data.worldbank.org/data-catalog/world-development-indicators. Accessed 12/1/2014.

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Libya

1. Introduction

After a long period of Ottoman domination, Italy began the colonization of Libya in 1911 and did not leave the country until 1943 when facing defeat in the Second World War. At the end of the War, Libya became a United Nations protectorate and was granted independence in 1951. Between 1951 and 1969 Libya was a monarchy led by King Idris. Following a 1969 military coup, Col. Muammar al-Qaddafi assumed leadership of a junta and began establishing a new political system, which was a combination of socialism and Islam. Two laws enacted in the 1970s outlawed political dissent and the formation of opposition parties; in fact, any attempt at forming an opposition party would be punishable by death. Instead, the government had decreed that the Revolutionary Committees would interface with citizens as a means of direct political participation for all Libyans rather than a party-based representative system.402

"During the 1970s, Qaddafi used oil revenues to promote his ideology outside Libya, supporting subversive and terrorist activities that included the downing of two airliners - one over Scotland and another in Niger - and a discotheque bombing in Berlin."403 Libya continued to support insurgent and revolutionary groups around the world up to early 1990s, particularly in the Middle East and Sub-Saharan Africa including Egypt, Saudi Arabia, Morocco, Sudan, Jordan, Sudan, Chad, Niger and Mali.

In 1992, UN sanctions isolated the country politically and economically as a result of the Qaddafi regime's support of terrorist activities. The sanctions were lifted in 2003 following Libyan acceptance of responsibility for the bombings and upon agreement on claimant compensation. Moreover, Qaddafi also agreed to end Libya's program to develop weapons of mass destruction, and he made significant strides in normalizing relations with Western countries.404

Unlike what happened in Tunisia and Egypt, the political unrest that began in mid-February 2011 took the form of armed resistance from a very early stage, which is largely due to the history of the country and the political regime Qaddafi set up in 1970s.405 "The consequence of this radical refusal of the principle of representation has been to stunt the development of anything approaching effective, formal institutions or civil society."406 At the same time, and particularly since the late 1980s, because Qaddafi mistrusted the regular armed forces, he kept them weak and under-equipped.407 As a result, when the unrest broke out there was no institution to act as a buffer between the people and the regime.

2. Overview of Events 402 Ham (2007). 403 KPMG (2013). 404 Ibid. 405 International Crisis Group (2011). 406 Ibid. 407 Ibid.

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Immediately after the government was overthrown in Egypt on February 11, a new uprising that would soon spiral into a civil war began in Libya on February 15. This civil war was to be contested between the loyalists of Muammar Qaddafi, in power for 42 years, and demonstrators and rebel groups that wanted to oust his government. As the conflict escalated, a U.N. Security Council resolution was adopted, involving several measures: authorizing a no fly zone over Libya, taking "all necessary measures" to protect civilians, demanding the immediate establishment of a ceasefire, strengthening the arms embargo, and imposing a freeze of assets owned by the Libyan authorities and others close to Qaddafi. Over the course of the civil war, the National Transitional Council was recognized as an official representative of Libya by the United Nations and other diplomatic unions. By the end of hostilities, the civil war had resulted in over 25,000 causalities. On October 20, 2011, Qaddafi was captured and killed while attempting to escape from Sirte.

From 2011 onwards, the Libyan territory was divided into semi-autonomous regions controlled by hundreds of militias, which gave rise to regional identities, with "politicians, in the oil-rich Eastern Libya, calling for self-rule that would keep oil profits from flowing to the capital Tripoli."408 Despite the elections held in July 2012, the central government remains weak, and the state police and military lacks the full ability to maintain law and order. Currently, "violence is endemic, including turf wars between rival militias, shadowy Islamist extremists trying to seize power on the local level, and various criminal networks taking advantage of the state’s weakness."409 In addition, Egypt, the United Arab Emirates and Qatar continue to encourage local factions to fight instead of compromise. It seems that the more foreign countries get involved in Libya, the more unstable the situation becomes. Egypt and the United Arab Emirates back the internationally recognized government led by Abdullah al-Thinni operating in the east. Qatar is supporting Libya Dawn, which controls the capital Tripoli. Libya Dawn is an alliance of Islamists and militias from Misrata, 100 miles east of Tripoli. The party has broken with the newly elected parliament in Tobruk, setting up its own government with a former Islamic fighter, Omar Al-Hasi as its "prime minister".410

3. Discussion of Critical Economic Indicators (CEIs)

This section introduces a set of indicators for Libya. In addition, to provide further background for countries that have experienced vigorous opposition movements - with many swelling to full-scale uprisings - a smaller set of indicators are used to measure the population's attitude towards their respective country's governance. Although no causality conclusions are implied, the Critical Economic Indicators (CEIs) may serve as barometer readings ahead of potential civil unrest. Three groups of factors are covered within this section. The first concerns general summary statistics and important contextual economic facts on the country in question. The second group covers selected political factors such as the total number of personnel in the country’s military and the Polity government legitimacy measure. The third group consists of the selected political and socioeconomic factors which we argue played a role in the development of the unrest for the country. Both country- 408 Manfreda (2014). 409 Ibid. 410 Stephen (2014).

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specific factors and factors that are common to other Arab Spring-affected nations are discussed within this group. The selection of CEIs is guided by the observations made during the Arab Spring uprisings as well as similar popular uprisings elsewhere in the world, in particular recent experiences in Turkey, Ukraine, and Hong Kong. The robust participation of educated and connected youth against various perceived governance problems and with democratic demands has been a commonly observed factor in virtually all unrests. Therefore the three groups of CEIs are representative of youth activism by taking into account the demographic, economic and technological dimensions of youth malcontent. The demographic dimension as captured by the youth bulge and youth unemployment has been extensively studied.411 The literature distinguishes popular uprisings from armed conflicts and this Report concentrates on the former. The economic dimension of CEIs includes the GINI coefficient, the Undernourishment Index and the Consumer Price Index. Moreover, the first block of numbers in Table 1 includes, as general indicators, the population and GDP figures. Finally, the technological dimension aims to capture the educated youth phenomenon observed prominently in popular uprisings and includes the Emigration Rate of Tertiary Educated Persons and Internet Users per 100 People.

The people of Libya are predominantly of nomadic Berber descent. However, the long series of foreign occupations have had a profound and lasting impact on Libya's demographics. Like most of North Africans, Libyans are primarily Arab or a mixture of Arab and Berber ethnicities, or a mixture of Arab and Turkish ethnicities. The Turkish minority are often called "Kouloughlis" and are concentrated in and around villages and towns. "Other ethnic minorities include Libyan blacks, the Tuaregs, and the Tubu. Among foreign residents, the largest groups are citizens of other African nations – including North Africans (primarily Egyptians) – and Sub-Saharan Africans. By 2011, there were also an estimated 60,000 Bangladeshis, 30,000 Chinese and 30,000 Filipinos in Libya." 412

Libya does not have reliable data on its population. In 2006, a census conducted by the Libyan government confirmed that 5,670,688 people were living in the country, which represented a significant increase when compared with the findings of 1995 which estimated the total number of Libyans at 4,405,000 individuals. It is still difficult to assess the accuracy of more recent data, which are largely collected by organizations located outside of the country.413 Despite the lack of accuracy, recent data indicates that the population is growing at a steady pace. The CIA World Factbook (2014) estimates the Libyan population at 6,733,620 in 2012.

411 Cabras (2010), Lin (2012), Schomaker (2013), and Urdal (2013). 412 KPMG (2013). 413 World Population Review (2014).

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Libya's Human Development Index was the highest in Africa prior to the overthrow of the Qaddafi regime. In a recent report, UNICEF noted that Libya had achieved significant socio-economic levels. In 2009, the country enjoyed:

Robust growth, with GDP having risen from $27.3 billion in 1998 to $93.2 billion (current USD) by 2009 according to the World Bank;

Relatively high per capita income (estimated by the World Bank at $15,853 in current USD) High literacy rates (95 per cent for males and 78 per cent for females aged fifteen and above); High life expectancy at birth (74 years overall; 77 for females and 72 for males).

Consequently, Libya then ranked 55th out of 182 countries in terms of overall "Human Development".414

The country has benefitted from significant petroleum revenues. In fact, this accounts for the lion's share of Libya's GDP. When compared to other African and Middle Eastern countries, the data above indicates that Libya had achieved a relatively comfortable overall economic performance. However, the expansion of the GDP did not necessarily translate into the well-being of its population. Indeed, over 30% of Libyans were estimated to live below the poverty line. The revenue that the country collected from oil exports was mainly used for the purchase of armaments and for the support of military groups around the world.415

Like other transition economies with stronger social security traditions, more than 15 per cent of GDP was allocated towards social transfers. However, indirect transfers were very large particularly "through fixed low consumer prices (e.g. for petrol) and low prices charged to producers (e.g. for fuel oil used to generate electricity). State firms charge less than the market price, an advantage the consumer could also have obtained through direct government subsidies."416

Indicator417 Value General Population GDP Per Capita

6.20M (2013) 12,167 (2013, current USD)

Political Armed Forces Personnel Contiguity to Instability Government Legitimacy (Polity IV)418 Ruler Longevity

35,000 (2014) Egypt, Algeria, Chad, Niger and Tunisia (Since 2011) -7 (Autocracy) Muammar Qaddafi in power from

414 UNICEF (2010). 415 Simons (1993). 416 OECD (2008). 417 Unless otherwise indicated, data obtained from the World Bank’s WDI dataset (2014). 418 "The "Polity Score" captures the regime authority spectrum on a 21-point scale ranging from -10 (hereditary monarchy) to +10 (consolidated democracy). The Polity scores can also be converted into regime categories in a suggested three part categorization of "autocracies" (-10 to -6), "anocracies" (-5 to +5), and "democracies" (+6 to +10).” ).(…) The Polity scheme consists of six component measures that record key qualities of executive recruitment, constraints on executive authority and political competition.” Systemic Peace (2014).

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1969 to 2011 Economic (CEIs) Corruption Perceptions Index (rank and index) Youth Bulge419 Youth Unemployment GINI coefficient Undernourishment Index Inflation Emigration Rate of Tertiary Educated Internet Users

172/177 and 15/100 (2013) 45.1% (2013) 23.9 (2012) No recent data available 5% (2012) 6.1% (2012) 5.3% (1990), 4.3% (2000)420 16.5% (2013)

Table 1: A selection of indicators on Libya

i. Political Indicators

This section very briefly reviews the four political factors introduced above in Table 1.

Armed Forces Personnel

Before the 2011 uprising, Libya's armed forces officially totalled around 76,000 active personnel, plus a reserve or people’s militia of some 40,000.421 As the table above shows, in 2014 the armed forces personnel have since been reduced to 35,000.

Contiguity to Instability

The political upheaval that began in 2011 transformed Libya from a stable dictatorship into an exporter of instability. On the eastern border, the Egyptian government and to the west, the Tunisian and Algerian governments all worried about the influx of Islamist violence in their respective countries. This is largely due to "differences of approaches, or even a conflict between political agendas of local actors, regional organizations and their international partners." 422 "The marginalization of the African Union‘s (AU) efforts for a negotiated solution to the Libyan crisis may appear a posteriori as one of the factors exacerbating the crisis." 423

Government Legitimacy (Polity IV) and Ruler Longevity

The Qaddafi regime came into power through a bloodless coup in 1969 that deposed King Idriss Sanusi, the monarch of Libya. King Idris owed his installation to the United Nations and was considered an ally of the west during the early days of the Cold War and Arab-Israeli conflict. Qaddafi’s coup was in line with the "revolutionary wave that engulfed the Arab world, beginning with Egypt in 1952." 424 During the

419 For the purposes of this review, the Youth Bulge refers to the percent of the population under the age of 24. Data obtained from CIA Factbook (2014). 420 OECD (2008). 421 Apps, MacLean (2011). 422 Luntumbue (2012). 423 Ibid. 424 Gheblawi (2013)

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early years of his regime, Qaddafi enjoyed a great deal of public support for his government because "many Libyans from different classes and backgrounds welcomed the revolution-branded military coup, and believed that they could work from within the new political structures to achieve a more modern society. Democracy and human rights, as we know them today, were not a priority at that time, as there was more of a focus on achieving more socio-economic equality and ridding the country of the remnants of the colonial era."425 As these initial socio-economic objectives were relatively attained, the regime began facing new demands for reform and, in 1973, Qaddafi built a new system, which he named the "Third Way". Qaddafi claimed his new regime was neither liberalism nor communism - the two alternative political systems at that time. In reality, however, the new regime and its "political structure [were] akin to a …feudal system with tribal elements aimed at ruling and controlling a small population scattered over a large geographic area that had historically manifested its resistance to any central government."426 Qaddafi owed his longevity in power to the flow of oil revenues and to a government structure similar to that of an organized crime group, where decisions are made in secrecy and in close loyalty to him, while any political opposition would be brutally crushed.

Chart 1: Authority Trends, 1954-2014: Libya427

425 Ibid. 426 Ibid. 427 Systemic Peace (2014).

Polity Score

C: Change in ruling regime

S: Overthrow of regime

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ii. Common CEIs

This section covers all relevant CEIs displayed in Table 1.

Corruption Perceptions Index

Libya's Corruption Perceptions Index in 2010, the year prior to the uprising, was a mere 22, ranking 146th out of 178 countries. Qaddafi and his family had amassed a vast personal fortune over his 42-year rule; his lavish lifestyle did not sit well with the populace, the majority of whom could barely make ends meet. Moreover, political corruption is considered to be the most important factor in Libya's revolution. Inequality, as the cause and consequence of corruption, also adversely affected the resilience of the political system, rendering it less resistant to internal and external shocks.

Chart 2: The Corruption Perceptions Index for Libya, 2003 to 2013428

The 2010 Democracy Index429 categorizes Libya as an authoritarian state with a poor human rights record. As expected, the index for electoral process and pluralism was 0.00. The political culture and the civil liberty indices of Libya were among the lowest in the world. The World Bank governance indicators also showed a consistently poor record for such indicators as Control of Corruption, Government Effectiveness, and Regulatory Quality indices. Though the index for political stability had been somewhat favourable in the years prior to the uprising, all other indicators had been poor.

Year Rank 2003 2004 2005

118/133 108/146 117/159

428 Transparency International (2014). 429 Economist Intelligence Unit (2010).

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2006 2007 2008 2009 2010 2011 2012 2013

105/163 131/180 126/180 130/180 146/178 168/183 170/176 172/177

Table 2: Corruption Perceptions Rank430

Endemic corruption was a primary reason why the country could not absorb the shock created by the Tunisian revolution. The Tunisian revolution had a profound social impact on Libya, despite the fact that in 2009, the Freedom of the Press Index (2009)431 rated Libya the most-censored state in the Middle East and North Africa. Censorship of online communications describing protest activities was employed extensively by the Qaddafi regime, eventually shutting down all internet communications in the country during the uprising and arresting Libyans who had given phone interviews to the media. Cell phone services were also turned off and some land lines were disconnected.

Youth Bulge and Youth Unemployment

In demographic terms, "the proportion of the working-age group (15-64) has been increasing since 1980 where it went up from 51.0 per cent in 1980 to 66.0 per cent in 2010. The proportion of the elderly (65+) population has been increasing since 1985 going up from 2.9 per cent to 4.6 per cent in 2010."432 These are significant changes that the country was not prepared for in terms of education, employment and health measures. According to the International Crisis Group,433 Libyans compared their country to other oil rich Arab countries and found their country inferior, highlighting years of neglect of infrastructures, poor planning and insufficient development in all domains. Indeed, when compared to oil rich Arab countries, Libyan wages remained amongst the lowest in real terms.

430 Transparency International (2014). 431 Freedom House (2009). 432 UN - ESCWA (2014). 433 International Crisis Group (2011).

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Chart 3: Youth Bulge for Libya, 1980-2010 and projections to 2020434

The population pyramid below shows that in 2010, the fertility transition is underway, where families are increasingly having fewer children and slowly approaching the fertility rate of developed nations. However, this does not reflect a "Malthusian" phenomenon where fertility is low and per capita incomes grow rapidly. In fact, the robust GDP growth was due more to the end of economic sanctions. Nevertheless, one question remains: it is not clear whether younger Libyan families decided to reduce the number of their offspring by delaying their childbearing or avoiding having children altogether. Paradoxically, contrary to Malthusian theory, what may explain this fertility transition is the impoverishment of middle classes and housing shortages. Libyan middle classes had and continue to have increasing economic difficulties; even state employees have taken additional jobs, mostly in the private sector. "Most doctors, for example, work in the public sector during daytime and perform private surgeries in the evenings."435 The country is also plagued by an acute housing shortage: a a 2007 study estimated that 500,000 additional units were needed to accommodate the populace.436 This resulted in many young adults remaining in the dwellings of their parents.

434 UN Dept. of Economic and Social Affairs (2012). 435 Otman, Karlberg (2007). 436 Libya Herald (2013).

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Charts 4 and 5: Population pyramids for Libya (left) and Canada (right), 2010437

Though accurate statistics are not available, an estimated 13% of Libyan citizens were unemployed in 2005. More than 16% of families had no members earning a stable income, while 43.3% had just one.438 Unemployment was clearly pervasive among young adults without children and parents, which was estimated in 2006 by the World Bank to be around 25 per cent. Other institutions including the ILO have reported for years that more than 50 per cent of the population is under the age of 20 and, in this context, it was predicted that youth unemployment would have dangerous political repercussions.

Chart 6: Unemployment, youth total for Libya, 2002 to 2012439

437 UN Dept. of Economic and Social Affairs (2012). Horizontal axis represents thousands of persons for Libya and millions of persons for Canada; vertical axis represents 5-year age groups. 438 Braun, Jones (2013). 439 World Bank (2014).

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Prior to the 2011 uprising, in spite of high unemployment amongst Libyans of all age categories, there were large numbers of expatriate workers with better education filling jobs at all levels. Not unlike in many oil producing Arab countries, this presence of expatriate workers was partly due to the fact that foreigners were prepared to do the work young Libyans often did not want. The foreign workers were willing to earn less than Libyan workers in comparable jobs. The World Bank reported, in 2000, "that 20 per cent of expatriates were earning over LYD 300 per month, compared with 12 per cent of Libyans earning this amount in the same period."440 This means that Libyan youths were not prepared to adapt to the Libyan labour market, a phenomenon typically exemplified by educated graduates working in unskilled employment or in areas completely unrelated to their studies.441

It is well known that high income inequality is intrinsically related to the level of corruption; "(the) wealthy have both greater motivation and more opportunity to engage in corruption, whereas the poor are more vulnerable to extortion and less able to monitor and hold the rich and powerful accountable as inequality increases."442 This was the case of Qaddafi who abused public office for his personal gain.

Economic difficulty indicators: Undernourishment and CPI

Economic difficulty indicators are meant to convey the economic stress endured by residents. The three indicators chosen to form this group examine both relative income (GINI) and absolute income (undernourishment) while taking into account the effect of prices. Note that no recent data was available for Libya on the GINI coefficient, so this indicator is not discussed herein.

Despite data limitations, undernourishment does not appear to have been a significant issue in Libya for the majority of the population, with the undernourishment prevalence rated at or less than 5 percent over at least the last 10 years.

440 Ibid. 441 Ibid. 442 You, Khagram (2005).

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Chart 7: Consumer Price Index for Libya, 2002 to 2012443

Educated Malcontent and Technological Adaptation

This section investigates two CEIs: the emigration rate of tertiary educated persons and the adoption of social media, as proxied by ‘internet users per 100 population’. The first provides a measure of labour market tightness and can serve as an indication of discontent with the conditions in the country. The second CEI concerns the prevalence of social media and interconnectedness among the tech-savvy youth of Arab countries. The unfavourable economic and political conditions explain why some highly skilled Libyans left the country. Indeed, in 2010, it is estimated that 2.4% of tertiary-educated population, 800 or 10.6% of physicians trained in the country,444 585 or 8.4% of physicians born in the country445 391 and 2.2% of nurses born in the country emigrated. This is reflected in the annual net migration rate in Libya, which stood at -3.0 migrants per 1,000 population in 2005-2010, indicating a trend of emigration.

443 World Bank (2014). 444 Bhargava, Docquier, Moulla (2010). 445 Clemens, Pettersson (2006).

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Chart 8: Emigration Rate of Tertiary Educated from Kuwait (1990, 2000)446

Other projections show that the annual net migration rate "will increase to -7.7 migrants per 1,000 population in 2010-2015 and then decrease afterwards to reach -0.3 migrants per 1,000 population in the period 2015-2020. It will remain at this level up to the period 2035-2040 and will decrease further to -0.2 per cent in 2040-2045."447

Chart 9: Internet Users per 100 People for Libya, 2002 to 2013448

The internet may not have played an important role in the revolution as, despite relatively good economic conditions, internet usage was very low. This may well be due to the nature of the authoritarian regime. In 2011, only 14% of the population had access to the internet. On the other hand,

446 World Bank (2014). 447 UN - ESCWA (2014). 448 World Bank (2014).

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mobile subscriptions were 155 per 100 people in 2011. One notable observation is that all the data in internet and telephone use had been increasing since 2000. An important role seems to have been the 89.5% literacy rate of people aged 15 and above in 2011. The literacy rate for youth aged 15 - 24 was listed at 100%.

iii. Country-Specific CEIs

Tribal social and political structure and absence of civil society

Prior to 1973 - when Qaddafi established his new regime - Libya could be described as a moderately tribal society because tribal divisions, affiliations and alliances are commonplace. While some Libyans value their tribal identity, many openly dismiss it as a relic of the past; there are others who do not even know their tribal origin. In Libya, there are some 300 tribes, though the majority of them are not identified to a territory. Many groupings "are simply networks of people who live far from each other and barely (if at all) know the identity of their tribal leaders." 449

Indeed, current "Libya’s tribal dynamics must be viewed in the context of the effects of Qaddafi’s political project on Libyan society. For four decades, the Qaddafi regime has prevented the formation of a real civil society."450 The country has lacked political parties and civil society organizations, which is why many Libyans have resorted to tribal affiliations. "For many Libyans, tribal affiliation had become a central theme in their everyday lives. It was the only way to get jobs, justice or financial support from the state (…) Tribal loyalty strengthened the maintenance of Qaddafi’s power."451

During his 42-year reign, Qaddafi "pursued a policy of ‘statelessness’ – rejecting parliamentary democracy and the formation of political parties – thus preventing the development of effective governing institutions."452 Qaddafi, his ‘Revolutionary Sector’, consisting of members of his own family and members of the Revolutionary Council, exercised total control over the country - thus prohibiting the creation of any institution that could potentially challenge his authority.453 "The legislative framework which governed civil society under Qaddafi’s regime was embodied by the law number 19 of year 2001 which was drastically restrictive and arbitrary." 454 The process of registering a civil society organization could take up to two years and the request for registration could still be denied. "The existing associations had been approved by the security apparatus and had to include members of the government among their executive board or leadership." 455

449 Cherstish (2011). 450 Ibid. 451 Sangha (2014). 452 Ibid. 453 Schewan (2014). 454 Foundation for the Future (2011). 455 Ibid.

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4. Current and Future Challenges

Libya’s inability to control militia groups constitutes a serious threat to state unity and sovereignty. Libya must generate a government and defence force that dissolves militias by integrating them under one military structure. Eliminating the presence of non-state armed groups is also a way to prevent the unwelcome meddling of foreign powers in internal affairs. Another challenge centers on how best to represent the regional and ethnic diversity of the country.

Economically, a major issue is that militias are in of control oil fields, limiting the ability of the government to exploit the country's natural resources. Now, it is increasingly difficult for the central government to trade with foreign entities, gain foreign investments and stabilize the country economically.

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Clemens, Michael A. and Gunilla Pettersson (2006). "Medical Leave: A New Database of Health Professional Emigration from Africa". Center for Global Development. Working Paper Number 5, 2006, http://www.cgdev.org/files/9267_file_WP95.pdf.

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Freedom House (2009). "Freedom of the Press 2009". https://freedomhouse.org/report/freedom-press/freedom-press-2009. Accessed 12/1/2014.

Foundation for the Future (2011). "Assessing Need of Civil Society in Libya - An analysis of the current needs and challenges of the Civil Society in Libya". Published November 2011. http://www.foundationforfuture.org/en/Portals/0/PDFs/ASSESSING%20NEEDS%20OF%20CIVIL%20SOCIETY%20IN%20LIBYA.pdf. Accessed 12/1/2014.

Gheblawi, Ghazi (2013). "Libyan Re-Independence and Reclaiming the Revolution". Heinrich Böll Stiftung. https://www.boell.de/sites/default/files/assets/boell.de/images/download_de/Perspectives_02-25_Ghazi_Gheblawi.pdf. Accessed 12/1/2014.

International Crisis Group (2011). "Popular protests in North Africa and the Middle East (v): Making Sense of Libya". Middle East/North Africa Report No. 107.

Knoema World Data Atlas (2012), "Libya - Prevalence of undernourishment in total population", http://knoema.com/atlas/Libya/Prevalence-of-undernourishment.

KPMG (2013). "Libya Country Profile KPMG Africa Region 2012/2013". http://www.kpmg.com/Africa/en/KPMG-in-Africa/Documents/2012-2013%20Country%20Profiles/Libya%20Country%20Profile_2012-2013_02.pdf. Accessed 12/1/2014.

Libya Herald (2013). "Libya to invest $140 billion in projects over the next decade". Published 6/1/2013. http://www.libyaherald.com/2013/06/01/libya-to-invest-140-billion-in-projects-over-the-next-decade/#ixzz3HdfoKRew. Accessed 12/1/2014.

Lin, J.Y. (2012). "Youth Bulge: A Demographic Dividend or a Demographic Bomb in Developing Countries?”.World Bank blog. http://blogs.worldbank.org/developmenttalk. Accessed 11/1/2014. Luntumbue, Michel (2012). "Le partenariat Afrique-UE à l’épreuve de la crise libyenne". Groupe de recherche et d’information pour la paix et la sécurité. Published 5/29/2012. http://www.grip.org/sites/grip.org/files/NOTES_ANALYSE/2012/NA_2012-05-29_FR_M-LUNTUMBUE.pdf. Accessed 12/1/2014.

Manfreda, Primoz (2014). "Current Situation in Libya: Failing Democratic Experiment" About.com, Middle East News. http://middleeast.about.com/od/libya/tp/Current-Situation-in-Libya.htm. Accessed 12/1/2014.

Otman, Waniss A. and Erling Karlberg (2007). "The Libyan Economy: economic diversification and international repositioning". Springer. ISBN: 978-3-540-46460-0. P 132.

Organization for Economic Co-operation and Development (2008), "Libya", http://www.oecd.org/dev/emea/40578167.pdf. Accessed 12/1/2014.

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Sangha, Angie (2014). "Ethic and Tribal Relations", Chapter in "Unpacking Democratic Transitions: The Case of Libya" by Rishita Apsani (2014). Western University’s Leadership and Democracy Lab. http://www.democracylab.uwo.ca/research/libya1/Libya%20Final%20Report.pdf. Accessed 11/1/2014.

Schewan, Megan (2014). "The Absence of Solidarity: Political Institutions", Chapter in "Unpacking Democratic Transitions: The Case of Libya" by Rishita Apsani (2014). Western University’s Leadership and Democracy Lab. http://www.democracylab.uwo.ca/research/libya1/Libya%20Final%20Report.pdf. Accessed 11/1/2014.

Simons, G. L. (1993). Libya - The Struggle for Survival. New York City: St. Martin's Press, 1993.

Stephen, Chris (2014). "Tripoli residents face dilemma after Libya Dawn take control of capital". The Guadian. Published Sunday 31 August 2014. http://www.theguardian.com/world/2014/aug/31/tripoli-residents-libya-dawn-islamist-militias. Accessed 12/1/2014.

Systemic Peace (2010). Polity IV Country Report – Libya. http://www.systemicpeace.org/polity/. Accessed 11/1/2014.

The Economist Intelligence Unit (2010). "Democracy Index 2010 Democracy in Retreat". https://graphics.eiu.com/PDF/Democracy_Index_2010_web.pdf. Accessed 12/1/2014.

Transparency International (2014). Corruption Perceptions Index. http://www.transparency.org. Accessed 11/1/2014.

UN Dept. Of Economic and Social Affairs (2012). "World Population Prospects: The 2012 Revision". http://esa.un.org/unpd/wpp/unpp/panel_indicators.htm. Accessed 11/1/2014.

UNICEF (2010). "The Situation of Children and Women in Libya", Middle East and North Africa Regional Office. http://www.unicef.org/media/media_pr_mena.html. Accessed 11/1/2014.

United Nations - Economic and Social Commission for Western Asia (UN - ESCWA) (2014). "The Demographic Profile of Libya". http://www.escwa.un.org/popin/members/libya.pdf. Accessed 12/1/2014.

Urdal, H. (2013). "A clash of generations? Youth bulges and political violence". UN Department of Economic and Social Affairs, Population Division. Expert Paper No. 2012/1.

World Bank - World Development Indicators (2014). http://data.worldbank.org/data-catalog/world-development-indicators. Accessed 12/1/2014.

World Population Review (2014). Libya Population 2014. http://worldpopulationreview.com/countries/libya-population/. Accessed 12/1/2014.

You, J.-S. and S. Khagram (2005). "A Comparative Study of Inequality and Corruption". American Sociological Review. Vol. 70, 136–157.

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Morocco

1. Introduction

In the eyes of most observers of the Arab Spring, Morocco has fared better than many other Arab countries. Classified as a middle income country, the Moroccan GDP per capita is about $3092.456 The country is the world’s largest exporter of phosphates by volume and recently emerged as an exporter of manufactured and agricultural products, and also has a growing tourism sector. The country is, however, falling behind in terms of income distribution; Morocco is showing inequality figures similar to Egypt and Tunisia. Unemployment and external debt are major concerns for the country, despite the government's ongoing efforts to diversify the economy. The government, led by the king, has put a great amount of effort into ensuring economic expansion and investing in the country’s future. The positive results of these efforts have allowed the royal family to avoid having to step down as a result of the Arab Spring protest movements, in stark contrast to the experience in counterparts Tunisia and Egypt. The monarchy is widely considered to be performing better than most other Arab countries due to its political reforms and system of government.

The Moroccan chapter of the Arab Spring began with calls for mass protests, mainly led by the ‘20 February’ movement, though the movement would not enjoy the widespread popular support as seen in other countries. Although Morocco faces similar problems as other Arab Spring-affected nations, the protests did not call for the head of state to stand down. Unlike Ben Ali or Mubarak, King Mohammed VI was not removed from power; instead, the constitution was amended in order to appease the comparatively modest protest movement, leaving the regime in power and ultimately staving off real change. Indeed, the constitutional amendments still granted the King supremacy over religious, security and judiciary institutions in the country. After the legislative elections of 2011, a new prime minister was chosen from the winning party.457

2. Overview of Events

The kingdom of Morocco is one of the oldest kingdoms in the world. The king, also known as Amir Al-Mu'minin,458 rules the country over the political and religious systems. Although political parties alternate and take control of government ministries, and the authority of politicians and the ruling family is defined and delineated in the constitution, the king still wields considerable political power.

After obtaining independence from France and Spain in the mid 1950s, King Mohammed V proceeded to build a modern governmental structure with a constitutional monarchy vision in which he would exercise an active and key political role. His son, Hassan II, assumed power after his death in 1961. The reign of Hassan II started with political turmoil, forcing him to take control of the government and of the 456 Valued in 2013 USD. 457 The moderate Islamic Justice and Development Party won the 2011 general elections. 458 Literally ‘Prince of the Faithful’.

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political arena as a whole. He then managed to draft the first constitution, legally defining the role of the king as the prime political entity in the country. This new method of governance was immediately challenged by a large portion of the current political establishment, leading to a period of political unrest in 1965, forcing Hassan II to proclaim a state of exception where he assumed full legislative and executive powers. This unrest would not be short-lived – the King’s regime would be challenged by two military coups in the early 1970s.

Morocco developed tensions with neighbouring Algeria, as each country successively tried to destabilize the other in a bid to achieve regional dominance. The Western Sahara conflict and the decolonization of the territory from Spain in the mid-1970s was a good opportunity for Algeria to exert indirect control through the arming and financing of an opposition group fighting against the Moroccan takeover of the territory. The financial cost of this conflict was exorbitant, and may have significant hindered domestic development in a country where poverty has been and remains a serious concern.

By the mid-1980s, the Moroccan government was forced to pursue a structural adjustment and privatization programs. Indeed, under the control of the International Monetary Fund (IMF), Morocco had to undertake painful macroeconomic reforms cutting subsidies and social welfare programs for millions of people. Despite the social impact of these programs, the Moroccan economy improved its competitiveness and increased the manufacturing industries’ productivity and exports by the mid-1990s.

With regards to developments in the political environment, Hassan II opened the government to political opposition and a ‘rotation government’ was formed. This move was perceived as setting the stage for the accession of his son, Mohammed VI who would eventually become king after his death in 1999.

Mohammed VI remains generally popular amongst the majority of the population. His generally benign monarchic rule is seen as a relatively acceptable form of governance. Despite this, Mohammed VI promised further democratic reforms, opening the way for a 2011 general election and allowing the victors to form a government.459 With the amendment of the new constitution and with this government in power, Morocco avoided much of the turmoil generated by the Arab Spring movement. Although the popular support for the monarchy remained high, and despite the constitutional amendments in 2011,460 concerns that the government acts merely as a vocal expression of palace authority have not abated.

In recent years, given the cautious monetary policy the central bank has pursued, the relatively stable exchange rate461 and a generous system of subsidies, Morocco has maintained a structurally low inflation rate. The annual growth of consumer price index has hovered around 2% to 3% which is easily the lowest rate in the region. External accounts are also under pressure with recent reductions in

459 The Islamist Justice and Development Party (PJD) formed a coalition government and assumed power following the general election. 460 The 2011 constitution was not crafted by a representative body but was, as usual in the country, granted by the king. 461 The Moroccan currency, MAD, is pegged to a portfolio of currencies, including 80% euro and 20% US dollar.

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tourism revenues and historic low remittances from the Moroccan diaspora. Further, imports have grown two points faster than exports on average for the last decade. While the unemployment rate has declined over the past decade, the job market is still faring rather poorly in terms of youth employment. Youth unemployment is still twice that of the general population and almost four out five unemployed people are aged 15 to 34. Other critical challenges also include prevalent corruption and relatively high government spending; budget deficits continue, and public debt has risen to almost 60 percent of GDP.

3. Discussion of Critical Economic Indicators

This section introduces a set of indicators for Morocco. In addition, to provide further background for countries that have experienced vigorous opposition movements - with many swelling to full-scale uprisings - a smaller set of indicators are used to measure the population's attitude towards their respective country's governance. Although no causality conclusions are implied, the Critical Economic Indicators (CEIs) may serve as barometer readings ahead of potential civil unrest. Three groups of factors are covered within this section. The first concerns general summary statistics and important contextual economic facts on the country in question. The second group covers selected political factors such as the total number of personnel in the country’s military and the Polity government legitimacy measure. The third group consists of the selected political and socioeconomic factors which we argue played a role in the development of the unrest for the country. Both country-specific factors and factors that are common to other Arab Spring-affected nations are discussed within this group. The selection of CEIs is guided by the observations made during the Arab Spring uprisings as well as similar popular uprisings elsewhere in the world, in particular recent experiences in Turkey, Ukraine, and Hong Kong. The robust participation of educated and connected youth against various perceived governance problems and with democratic demands has been a commonly observed factor in virtually all unrests. Therefore the three groups of CEIs are representative of youth activism by taking into account the demographic, economic and technological dimensions of youth malcontent. The demographic dimension as captured by the youth bulge and youth unemployment has been extensively studied.462 The literature distinguishes popular uprisings from armed conflicts and this Report concentrates on the former. The economic dimension of CEIs includes the GINI coefficient, the Undernourishment Index and the Consumer Price Index. Moreover, the first block of numbers in Table 1 includes, as general indicators, the population and GDP figures. Finally, the technological dimension aims to capture the educated youth phenomenon observed prominently in popular uprisings and includes the Emigration Rate of Tertiary Educated Persons and Internet Users per 100 People.

462 Cabras (2010), Lin (2012), Schomaker (2013), and Urdal (2013).

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Indicator463 Value General Population GDP Per Capita

33.3M (2014) 3,092 (2013, current USD)

Political Armed Forces Personnel Contiguity to Instability Government Legitimacy (Polity IV)464 Ruler Longevity

245,800 (2012) Libya, Western Sahara (interior) -4 (Autocracy) 1999 to present (Mohammed VI); ruling family in power since 1957

Economic (CEIs) Corruption Perception Index (rank and index) Youth Bulge465 Youth Unemployment GINI coefficient Undernourishment Index Inflation Emigration Rate of Tertiary Educated Internet Users

91/177 and 37/100 44.4% 20.6%466 40.9 (Global Peace Initiative estimate) 5% 1.9% (2013)467 23.0% (1990), 18.6% (2000) 56% (2013)

Table 1: A selection of indicators on Morocco

i. Political Factors

This section very briefly overviews the four political factors introduced above in Table 1.

Armed Forces Personnel

The Moroccan Armed Forces are relatively large with about 245,800 total personnel in 2013, representing about 2.2% of total labor force. This level represents a significant increase from 195,000 in 1990, though is only marginally higher than the 240500 in 2000 (these numbers represent, respectively, 2.5 % and 2.4% of total labor force). The Moroccan forces are also expensive, costing the country on average 4% of GDP per year over the last two decades.

463 Unless otherwise indicated, data obtained from the World Bank’s WDI dataset. 464 "The "Polity Score" captures the regime authority spectrum on a 21-point scale ranging from -10 (hereditary monarchy) to +10 (consolidated democracy). The Polity scores can also be converted into regime categories in a suggested three part categorization of "autocracies" (-10 to -6), "anocracies" (-5 to +5), and "democracies" (+6 to +10).” ).(…) The Polity scheme consists of six component measures that record key qualities of executive recruitment, constraints on executive authority and political competition.” Systemic Peace (2014). 465 For the purposes of this review, the Youth Bulge refers to the percent of the population under the age of 24. Data obtained from CIA Factbook (2014). 466 Source: Moroccan High Commissariat of Planning (HCP), http://www.hcp.ma/Chomage_r70.html. 467 Annual Inflation rate based on the CPI index. Source: Moroccan High Commissariat of Planning (HCP), http://www.hcp.ma/

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Chart 1: Total Armed Forces Personnel for Morocco, 2003 to 2013468

The royal forces are well-trained with extensive experience in counter-insurgency, desert warfare and combined air-land operations, as well as peace-keeping operations.

Contiguity to Instability

As is the case for all Arab countries, the continuing Palestine-Israel conflict has been and continues to be one of the most prevalent generators of instability issues. Morocco has, however, its own conflict, the partially-recognized ‘Sahrawi Arab Democratic Republic’ (SADR) state in the Western Sahara region. Morocco refers to this disputed territory in its annexed lands as its southern provinces, and these have long posed many sensitive political and economic issues for the country’s leaders. After Spain’s withdrawal in the 1960s, Moroccan monarchs have been locked in an economically costly and politically sensitive battle with the liberation movement known as the Polisario front. The continued expenses associated with the defense of the territory remain high, reaching a peak of 30% of GDP during the 1980s and moderately below since then.469

The state of anarchy in neighboring countries such as Libya and recently in Mali is another threat to the stability of Morocco. With a mind to dampening regional tensions, the country has historically been known for its efforts to promote security and development across northwest Africa and beyond. Morocco is geographically well positioned with relative political stability, an open economy and balanced international relations. The country is also increasingly aligned with the regional interests of the U.S. and Europe.

Government Legitimacy (Polity IV) and Ruler Longevity

468 World Bank (2014). 469 White (2001).

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The history of Morocco spans over twelve centuries, without taking classical antiquity into consideration. Since the Muslim conquest of the Maghreb started in the middle of the 7th century AD, Morocco has been under the control of a series of different dynasties. The Alaouite dynasty is the current royal family, which initially rose to power in 1631. The current king, Mohammed VI, took power after the death of his father Hassan II in 1999. He enacted successive reforms to modernize the country, with a new constitution adopted in 2011. It is however a fact that Mohammed VI and his close advisors470 hold substantial political, social, and economic power in Morocco.

Government legitimacy scores have always been low in Morocco, with a recent Polity score of -4.471 Even if Morocco exhibits a multi-party system, the result is that the parties are fragmented and generally unable to assert themselves. Elected officials are duly installed in government, although their power to shape policy is sharply constrained as the king and his advisers control most of the levers of power.

ii. Common CEIs

This section covers all CEIs introduced in Table 1. With the exception of the GINI coefficient we present short time-series data on the performance of Morocco in these dimensions.

Corruption Perceptions Index

Morocco has consistently ranked rather poorly in corruption perceptions, and is currently ranked 91 out of 177 countries by transparency International with a score of 37.

Chart 2: Corruption Perceptions Index for Morocco, 2003 to 2013472

470 Referred to in Morocco as the Makhzen. 471 The Polity IV Project traces and assesses all countries’ governance systems with a view to democracy. For comparison: Canada rates a 10, Russia 4, and North Korea -10. 472 Transparency International (2014).

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The country ratified the United Nations convention against corruption and, since 2005, has committed to implementing a governmental plan to fight corruption. As stated by transparency international, ‘the fight against corruption has gained importance in the country’s political debate and has become a mobilising factor for civil society organisations. The press is highly receptive to denunciations of corruption by citizens and civil society, and thus a powerful means to convey the need for change’.473

Year Rank 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

70/133 77/146 78/159 79/163 72/180 80/180 89/180 85/178 80/183 88/176 91/177

Table 2: Corruption Perceptions Rank

Youth bulge and youth unemployment

The youth bulge, together with high levels of unemployment, has frequently been mentioned as being a main cause of the “Arab Spring” uprising.474 The level of exclusion is high: a recent innovative World Bank survey revealed that 49 percent of Moroccan youth are neither in school nor the workforce.475

Analyzing the evolution of the ‘15-24’ age category in Morocco over time, one can easily understand the challenges faced by the Moroccan economy in terms of employment opportunities. Indeed, this age group consisted 22.1 per cent of the total population in 1950; between 1950 and 2010, the percentage of youth in the population fluctuated, decreasing to 15.3 in 1965 and increasing to 21.9 in 1980, and stood at 19.8 percent in 2010. It is projected to continue to decrease and is projected to reach 13.2 per cent in 2050.

As can be seen in Chart 3, half of the Moroccan population is under the age of 25 with a slight decline in recent years due mainly to the slow decrease in fertility (births per woman). It is however a fact that the youth bulge poses opportunities as well as challenges for development especially in countries where unemployment disproportionately affects this age category.

Chart 4 displays the unemployment rate for persons aged 15-24.

473 Ibid. 474 LaGraffe (2012). 475 Source: World Bank Reports, http://www.worldbank.org/en/news/feature/2012/05/14/challenge-of-youth-inclusion-in-morocco.

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Chart 3: Youth bulge for Morocco, 1980-2010 and projections to 2020476

Chart 4: Unemployment, youth total for Morocco, 2003 to 2013477

Charts 5 and 6 display the Moroccan and Canadian population pyramids. The Moroccan pyramid clearly displays a bottom-heavy age distribution. This bulge is projected to disappear in the coming decades.

476 UN Department of Economic and Social Affairs (2012). 477 World Bank (2014).

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Charts 5 and 6: Population pyramids for Morocco (left) and Canada (right), 2010478

Economic difficulty indicators: GINI, Undernourishment and CPI

Economic difficulty indicators are meant to convey the economic stress endured by residents. The three indicators chosen to form this group examine both relative income (GINI) and absolute income (undernourishment) while taking into account the effect of prices. Morocco’s economy has been performing relatively well with an average growth rate of 5% over the past few years, despite successive external shocks due notably to the global economic crises. These performances have greatly contributed to reducing poverty and extreme poverty is eradicated which lead to a good score on the undernourishment index (rated at 5% or lower). In terms of the GINI index, Morocco scores 39.5 in 1999 and 40.9 in 2007479 with no improvement of income distribution in the country. As for the inflation rate, Chart 7 below illustrates that the central bank target of 1 to 3% has been respected over at least the past 10 years.480

478 UN Dept. of Economic and Social Affairs (2012). Horizontal axis represents millions of persons; vertical axis represents 5-year age groups. 479 UNDP (2014). 480 Price stability has been the fundamental mission of the central bank of Morocco since the banking system reform of 2006.

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Chart 7: Consumer Price Index for Morocco, 2003 to 2013481

Educated Malcontent and Technological Adaptation

This section investigates two CEIs: the emigration rate of tertiary educated persons and the adoption of social media, as proxied by ‘internet users per 100 population’. The first provides a measure of labour market tightness and can serve as an indication of discontent with the conditions in the country. The second CEI concerns the prevalence of social media and interconnectedness among the tech-savvy youth of Arab countries.

The emigration rate of tertiary educated shows the proportion of the country’s tertiary-educated population that permanently leaves the country over a 10 year span. The rather large figures of 23% in 1990 and 18% in 2000 can be a consequence of the difficulties being faced by the young educated in Morocco, causing many of them to seek out better opportunities abroad. Statistics show that high numbers of Morocco’s youth attempt immigrate to nearby European countries.

481 World Bank (2014).

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Chart 8: Emigration Rate of Tertiary Educated from Morocco (1990, 2000)482

In the absence of direct figures on the proportion of youths with access to social media, we adopt the measure ‘Internet Users per 100 People’ as a proxy for the pervasiveness of social media. Chart 9 shows that internet use has been increasing rapidly since 2006.

Chart 9: Internet Users per 100 People for Morocco, 2003-2013483

iii. Country-Specific CEIs

Morocco compares favourably in the region in terms of political cohesion. The country has witnessed a form of political liberalization, which remains superficial upon closer inspection. The concentration of all meaningful political power has remained in the hand of the Makhzen, the political power apparatus

482 World Bank (2014). 483 World Bank (2014).

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behind the palace. Even though the country is known to have most diverse and vibrant civil society in the region, the freedom of association remains restricted by the Makhzen.

Firstly, the country lacks an independent judiciary. Secondly, NGOs always faced great difficulties related to the process of registration of an association, and their ability to freely conduct activities thereafter. Most such difficulties derive from pitfalls in the laws on liberties whereas others are “rooted in the predominance of informal rules and the lack of practical implementation of legal provisions.”484 Thirdly civil society organizations have limited access to “the public sphere both in terms of public assembly and in terms of access to a wider audience via independent broadcasting media...”485 The Makhzen implements administrative obstacles to the practice of liberties and uses informal rules to prevent free assembly. It has a de-facto control over broadcasting media.

4. Current and Future Challenges

Morocco remains far from a perfect model of governance and its key economic statistics are somewhat worse than neighboring Tunisia’s; for example, its populace earns only two-thirds as much income on average as compared to its smaller counterpart, with Moroccans earning 6,778 USD in per capita income at PPP, while Tunisians earn 9,900.

The unemployment rate dropped to 9.5% in 2013, a reduction from 13.4% in 2000. While employment patters have improved on aggregate, a striking feature of unemployment in the country is that 18% of the youth (15-24) and a staggering 22 % of the tertiary-educated are unemployed. The education system has been consistently cited as one of the reasons for these high levels of unemployment. The latest World Bank statistics show that the share of population aged 20 to 24 having completed at least upper secondary education is less than 30% of total population (2009). The persistent gap between skills needed in the workforce and the education acquired by students is also pointed out as a major problem. Despite a recent African Development Bank-sponsored initiative to improve the education system, the campus-to-workplace transition remains a problem for many graduates.

During the last decade, however, the country achieved higher economic growth than it did during the the 1990s, with almost 2 million Moroccans moving out of poverty over this period. As stated in the UNDP National Millennium Development Goals 2010 report, extreme poverty has nearly been eradicated in the country, now sitting at just 0.9% in 2011. Many issues, however, remain unresolved: democracy, income inequality, corruption and overall economic growth, to name just a few.

484 Kuasch (2008). 485 Ibid.

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References

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Freedom House (2014), https://freedomhouse.org/report/freedom-world/2014/morocco-0#.VGk_UWeIg9U, accessed November 2014.

Kuasch, K. (2008), “Morocco: Negotiating Change with the Makhzen”, Working Paper February 2008, http://fride.org/download/WP54_Morocco_Makhzen_ENG_mar08.pdf.

LaGraffe, D. (2012), “The Youth Bulge in Egypt: An Intersection of Demographics, Security, and the Arab Spring”, Journal of Strategic Security 5(2), 65-79.

Lin, J.Y. (2012). "Youth Bulge: A Demographic Dividend or a Demographic Bomb in Developing Countries?”. World Bank blog. http://blogs.worldbank.org/developmenttalk. Accessed 11/1/2014.

Mundi Index (2014). www.indexmundi.com. Accessed 11/1/2014.

Schomaker, R. (2013). "Youth bulges, poor institutional quality and missing migration opportunities - triggers of and potential counter-measures for terrorism in MENA". Topics in Middle Eastern and African Economies 15(1), 116-140.

Systemic Peace (2010). Polity IV Country Report – Morocco. http://www.systemicpeace.org/polity/. Accessed 11/1/2014.

Trading Economics (2014), http://www.tradingeconomics.com/iraq/gdp-growth-annual. Accessed 11/1/2014.

Transparency International (2014). Corruption Perceptions Index. http://www.transparency.org. Accessed 11/1/2014.

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Urdal, H. (2013). "A clash of generations? Youth bulges and political violence". UN Department of Economic and Social Affairs, Population Division. Expert Paper No. 2012/1.

White, Gregory (2001). “A Comparative Political Economy of Tunisia and Morocco”. Albany, NY, State University of New York.

World Bank - UNDP (2014). "Economy Watch". http://www.economywatch.com/economic-statistics/country/Morocco/. Accessed 12/1/2014.

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Sudan

1. Introduction

Sudan was a British Colony until achieving independence in 1956. From 1924 onwards, the British had a policy of governing Sudan as two separate territories: the Muslim north and the Christian south. This division led to a lengthy civil war which finally culminated with South Sudan achieving its own independence from Sudan in 2011.

Ismail al-Azhari was the first elected Prime Minister of Sudan. A coup d'état occurred in 1969, with the leader of the coup, Gaafar Nimeiry, becoming prime minister. Parliament was swiftly abolished, and all political opposition rendered illegal. In 1972, the Addis Ababa Agreement led to a cessation of the north-south civil war, according a degree of self-rule to the south. This resulted in a ten-year hiatus in hostilities.486

Colonel Omar al-Bashir led a military coup on 30 June 1989 and appointed himself President of Sudan. The new military government imposed Sharia law nationwide.487 In 1996, al-Bashir was elected in a one-candidate election, after which Sudan became a single-party state under the National Congress Party. This political system is considered to be authoritarian as the National Congress Party controls the judiciary, executive and legislative branches of the government. Because of its associations with Islamic fundamentalist groups, Sudan came to be regarded as a state sponsor of Terrorism in the 1990s.

In February 2003, the Sudan Liberation Movement/Army (SLM/A) and Justice and Equality Movement (JEM) groups in Darfur took up arms, accusing the Sudanese government of oppressing non-Arab Sudanese in favor of Sudanese Arabs, precipitating the War in Darfur. The conflict has since been described as a genocide, and the International Criminal Court (ICC) has issued two arrest warrants for al-Bashir. Arabic-speaking nomadic militias known as the Janjaweed have been accused of many atrocities.488

In 2011, the Nairobi Comprehensive Peace Agreement was signed between the Sudan People's Liberation Movement (SPLM) and the government of Sudan in order to put an end to the Second Sudanese Civil War. The agreement led to a referendum in 2011 resulting in the secession of South Sudan. This decision excluded the oil-rich region of Abyei.

An estimated seventy percent of Sudan's population is ethnically Arab. Other major ethnic groups include Fur, Beja, Nuba and Fallata.489 The great majority of the population are Sunni Muslims.

2. Overview of Recent Events 486 Embassy of the Republic of Sudan, London (2008). 487 Bekele (2008). 488 International Criminal Court (2008). 489 CIA World Factbook (2014).

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As popular protests started in other North African countries, the Sudanese people began their own protest movement in January 2011. Because of the longstanding independence movement that was nearing its conclusion, demonstrations took on a different flavour than in Arab Spring countries, and were neither as intense nor as common.

Following the secession of South Sudan, Sudan was left struggling for funds to pay for its imports. About three quarters the original Sudanese oil fields were located in the south of Sudan, which were appropriated in the secession. While South Sudan had previously depended on the former Sudan's pipeline and port system to export crude oil, there was no agreement as to how much South Sudan would have to pay to make use of the infrastructure. This has been a source of conflict and disagreement between the two countries recently.

Following the South Sudan, the Sudanese government announced austerity plans as revenue from oil export dwindled. This included raising taxes on consumer goods, cutting the number of civil servants on its payroll, raising the price of a gallon of petrol by 5 Sudanese pounds, and lifting fuel subsidies. This had a serious effect on consumer prices, which contributed to the series of protests beginning in December 2011.

In response to protests, al-Bashir announced that he would not seek re-election in 2015. The US State department condemned the assaults and detention of the anti-austerity protesters. Human Rights Watch stated that the Sudanese security forces arrested scores of protesters, opposition members, and journalists, even physically assaulting detainees. It also reported that the government security forces used rubber bullets and even live ammunition to break up the anti-austerity protests. It called on Sudan to end the crackdown on the mostly peaceful protesters, to release detainees, and to allow journalists to report freely on the events.490

Another major issue facing Sudan is the ongoing military confrontation between Sudanese government and the Sudan Revolutionary Front (SRF). The conflict began as a dispute over the oil-rich region of Abyei in the months leading up to South Sudanese independence.

3. Discussion of Critical Economic Indicators (CEIs)

This section introduces a set of indicators for Sudan. In addition, to provide further background for countries that have experienced vigorous opposition movements - with many swelling to full-scale uprisings - a smaller set of indicators are used to measure the population's attitude towards their respective country's governance. Although no causality conclusions are implied, the Critical Economic Indicators (CEIs) may serve as barometer readings ahead of potential civil unrest. Three groups of factors are covered within this section. The first concerns general summary statistics and important contextual economic facts on the country in question. The second group covers selected political factors such as the total number of personnel in the country’s military and the Polity government legitimacy measure. The third group consists of the selected political and socioeconomic 490 AllAfrica (2012).

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factors which we argue played a role in the development of the unrest for the country. Both country-specific factors and factors that are common to other Arab Spring-affected nations are discussed within this group. The selection of CEIs is guided by the observations made during the Arab Spring uprisings as well as similar popular uprisings elsewhere in the world, in particular recent experiences in Turkey, Ukraine, and Hong Kong. The robust participation of educated and connected youth against various perceived governance problems and with democratic demands has been a commonly observed factor in virtually all unrests. Therefore the three groups of CEIs are representative of youth activism by taking into account the demographic, economic and technological dimensions of youth malcontent. The demographic dimension as captured by the youth bulge and youth unemployment has been extensively studied.491 The literature distinguishes popular uprisings from armed conflicts and this Report concentrates on the former. The economic dimension of CEIs includes the GINI coefficient, the Undernourishment Index and the Consumer Price Index. Moreover, the first block of numbers in Table 1 includes, as general indicators, the population and GDP figures. Finally, the technological dimension aims to capture the educated youth phenomenon observed prominently in popular uprisings and includes the Emigration Rate of Tertiary Educated Persons and Internet Users per 100 People.

Indicator492 Value

General Population

GDP Per Capita

39.1M (2014) $1,753 (2013, current USD)

Political Armed Forces Personnel

Contiguity to Instability Government Legitimacy (Polity IV)493 Ruler Longevity

109,500 (2014) Egypt, Eritrea Ethiopia South Sudan, Central African Republic, Chad, Libya -2 (Anocracy) Omar al-Bashir in power from 1989 to present

491 Cabras (2010), Lin (2012), Schomaker (2013), and Urdal (2013). 492 Unless otherwise indicated, data obtained from the World Bank’s WDI dataset. 493 The "Polity Score" captures the regime authority spectrum on a 21-point scale ranging from -10 (hereditary monarchy) to +10 (consolidated democracy). The Polity scores can also be converted into regime categories in a suggested three part categorization of "autocracies" (-10 to -6), "anocracies" (-5 to +5), and "democracies" (+6 to +10).(…) The Polity scheme consists of six component measures that record key qualities of executive recruitment, constraints on executive authority and political competition.” Systemic Peace (2014).

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Economic (CEIs) Corruption Perceptions Index (rank and index) Youth Bulge494 Youth Unemployment

GINI coefficient Undernourishment Index Inflation Emigration Rate of Tertiary Educated Internet Users

173/177 and 13/100 61.7 (2010) 23.8 (2012) 35.29 (2009) Not available 37.4% (2012), 22.1% (2011) 6.8% (1990), 6.8% (2000) 22.7% (2013)

Table 1: A selection of indicators on Sudan

i. Political Factors

This section very briefly overviews the four non-economic factors introduced above in Table 1.

Armed Forces Personnel

Armed forces personnel are active duty military personnel, including paramilitary forces if the training, organization, equipment, and control suggest they may be used to support or replace regular military forces. Sudan's armed forces personnel, as reported by the World Bank, were numbered at 126,800, 264,300, and 264,300 in the years 2010, 2011, and 2012 respectively. A CIA report495 shows that there are over 13 million people fit for military service according to a 2010 estimate. The manpower reaching militarily significant age annually is over half a million.

The Sudanese military is consists of the Sudanese Armed Forces (SAF) which includes Land Forces, Navy (including Marines), the Sudanese Air Force, and the Popular Defense Forces. Sudanese citizens ages 18-33 had previously faced a mandatory 1 to 2 year commitment of military service in order to participate in the public or private sector; as of 2012, the requirement was lifted.

Contiguity to Instability

Sudan has had constant ethnic and rebel militia conflict since the mid-20th century. These have sometimes spilled over into neighboring states. Chad has expressed a willingness to act as mediator in order to resolve the Darfur conflict, and in 2010 established a joint border monitoring force with Sudan. This has helped to reduce cross-border banditry and violence.

By mid-2013, Chad, Egypt, Ethiopia, Israel, the Central African Republic, and South Sudan provided shelter for more than 600,000 Sudanese refugees; during the same period, Sudan, in turn, hosted about 115,000 Eritreans, 32,000 Chadians, and smaller numbers of Ethiopians and Central Africans.

494 For the purposes of this review, the Youth Bulge refers to the percent of the population under the age of 24. Data obtained from CIA Factbook (2014). 495 CIA World Factbook (2014).

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Sudan has accused Eritrea of supporting Sudanese rebel groups. Efforts to demarcate the not-well defined boundary with Ethiopia is progressing slowly due to civil and ethnic fighting in eastern Sudan. In the north, Sudan has claimed the Halaib region north of the 22nd parallel, but the security and economic development of this area is de facto governed by Egypt. Periodic violent skirmishes with Sudanese residents over water and grazing rights persist among related pastoral populations along the border with the Central African Republic. The final sovereignty status of the Abyei region, pending negotiations with South Sudan, is another outstanding issue for Sudan.

Government Legitimacy (Polity IV) and Ruler Longevity

Sudan's leadership has a poor reputation both domestically and internationally; al-Bashir is the first sitting head of state to ever be indicted by the International Criminal Court. However, the Arab League and the African Union condemned the warrant. Al-Bashir has since visited Egypt, Qatar, and Chad. All three countries refused to arrest him and surrender him to the ICC.

ii. Common CEIs

This section discusses the CEIs introduced in Table 1.

Corruption Perceptions Index

Transparency International's report on Sudan asserts that corruption permeates all sectors, and manifests itself through various forms, including petty and grand corruption, embezzlement of public funds, and a system of political patronage well entrenched within the fabrics of society. Evidence of the impact of corruption is scarce and concealed by the country’s economic and political instability. Nevertheless, there is evidence that patronage has had a negative impact on small and medium sized enterprises. Also, corruption in the police and security forces undermines internal security and allows abuses of civil and political rights. The lack of transparency in the oil sector contributes to political instability between Sudan and South Sudan.

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Chart 1: The Corruption Perceptions Index for Sudan, 2003 to 2013496

Table 2 and Chart 1 show that the Sudan's Corruption Perception Index and Rank have been deteriorating since 2003. This may be attributed to the ongoing conflict in the Darfur region, continuing border issues, and the various other problems faced in the country that continue to hamper any possible improvement in institutional quality and public perception.

Year Rank 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

106/133 122/146 144/159 156/183 172/180 173/180 176/180 172/178 177/183 173/176 174/177

Table 2: Corruption Perceptions Rank497

496 Transparency International (2014). 497 Transparency International (2014).

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Youth Bulge and Youth Unemployment

Sudan has an exceedingly large youth bulge, with about 60% of the population falling between the ages of 0-24. While this has decreased slightly over the past few decades, the absolute change is very small. This trend will likely continue; a medium fertility projection scenario, displayed below in Chart 2, that the youth bulge will persist, possibly for decades to come.

Chart 2: Youth Bulge for Sudan, 1980-2010 and projections to 2020498

Charts 3 and 4: Population pyramids for Sudan (left) and Canada (right), 2010499

498 UN Dept. of Economic and Social Affairs (2012). 499 UN Dept. of Economic and Social Affairs (2012). Horizontal axis represents millions of persons; vertical axis represents 5-year age groups.

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Youth unemployment, meanwhile, has been hovering around 24% for about 10 years according to a World Bank estimate, before increasing slightly in 2013 to about 25%. This number, while elevated, is not greatly higher than that of a typical highly developed nation, but when coupled with the fact that a very large portion of the population falls within the 15-24 age range, this can be rather concerning.

Chart 5: Unemployment, youth total for Sudan, 2003 to 2013500

The youth bulge is an experience to be expected further in Sudan. For example, population growth of 2.5%; total fertility (children per woman) of 4.83 indicate the Sudanese population should continue to rise. Such a trend coupled with instability and a seemingly endless conflict virtually guarantees a dire future for Sudan unless action is taken.

Economic difficulty indicators: GINI, Undernourishment and CPI

Economic difficulty indicators are meant to convey the economic stress endured by residents. The three indicators chosen to form this group examine both relative income (GINI) and absolute income (undernourishment) while taking into account the effect of prices. Sudan's GINI coefficient has been estimated by the World Bank as 35.29 (2009). This rating is not particularly out of line - it rests between that of Canada on the lower end, and the United States on the higher end - though perhaps not indicative of the economic situation of the average Sudanese citizen.

Data on the prevalence of undernourishment could not be obtained.

The consumer price index, however, describes a rather troublesome situation. While inflation was relatively "stable" in the region of 5-10 percent over the 10 year period leading up to the beginning of the Arab Spring, it increased markedly in 2011, hitting a high of 37% in 2012. As of 2013, the inflation rate was 30%.

500 World Bank (2014).

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With the drop in oil prices in late 2014, this may signal further economic difficulty in store for Sudan's short-term future.

Chart 6: Consumer Price Index for Sudan, 2002 to 2013501

Technological Adaptation

This section investigates the technological adaptation of the Sudanese population. To proxy for this, "Internet users per 100 people" is used; the effect of interest concerns the prevalence of social media and interconnectedness among the tech-savvy youth of Arab countries. Sudan has been a relatively slow adapter of the internet, with barely above 15 percent of the population having internet access by 2011, and only modest growth since then. Social media did not play as prominent a role in Sudan as in the experience of other Arab Spring countries.

501 World Bank (2014).

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Chart 7: Internet Users per 100 People for Sudan, 2002 to 2013502

iii. Country-Specific CEIs

Management of water resources in Sudan is a serious national concern. It benefits from the Nile and the Nile Basin but does not receive rainfall like in Nile upstream riparian nations such as Burundi, Eritrea, Ethiopia, Kenya, Rwanda, South Sudan, Tanzania, Uganda and the Democratic Republic of Congo. The Nile Water Agreement in 1929 endowed Egypt with a right to veto any upstream Nile water project and their 1959 Nile Water Agreement allocated 55 billion cubic metres of the Nile's water flow of 84 billion to Egypt. In 1997, the riparian countries initiated the Nile River Cooperative Framework which resulted in the Entebbe Agreement in 2011, signed by Ethiopia, Rwanda, Uganda, Kenya, Tanzania and Burundi. South Sudan and Democratic Republic of Congo pledged to sign it in the future yet Egypt and Sudan refused to sign it alleging that it impinges in their pre-existing rights.503 Water may well be a source of future conflict in the region.

In Darfur and the North the water problem is critical except in the Nile Basin, along the Atbara River and smaller rivers between the two while the wetlands are found in South Sudan. Sudan has massive underground water reserves (aquifers) that are large sources of freshwater in the country. Yet no integrated coordination and management of these flows and stocks exists. Furthermore, water waste arising from inefficient irrigation and destructive rain-fed farming methods aggravate the water problems. The country is, on average, water rich, but exhibits poor management and maintenance of the resource. (Sullivan (2011)) Further serious challenges for Sudan are its long-term relationships with South Sudan and Chad. The long civil war ended with the independence of the South in 2011. In parallel, and since 2003 the lingering Darfur conflict was intensified and being transformed into a proxy war between Sudan and

502 World Bank (2014). 503 Di Nunzio (2013).

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Chad; while Sudan supported the Chadian armed opposition, the Chadian government provided arms, money and combatants to Darfuri rebels. When the proxy war ended in 2008, the internal Darfur conflict continued with a varying intensity and spread to the region of South Kurdufan, which is contiguous to Darfur and South Sudan. The South Kurdufan conflict is the remnant of North/South conflict and kindled by the newly nascent South Sudanese government as a pressure against the North that remains intransigent on the Abeyi issue, a contested territory between the North and the South containing large reserves of hydrocarbon. The mostly urban phenomenon of Arab Spring also had a brief echo in Sudan but was limited to Khartoum, the capital of Sudan. Currently, both Sudans continue to suffer from internal conflicts. While the conflict in South Sudan remains strictly tribal, the Sudanese conflicts revolve around tribal, political and confessional lines.

4. Current and Future Challenges

The status of the Abyei region was one of the most contentious issues in the negotiation of the Comprehensive Peace Agreement of Sudan. The first protocol signed in this regard - the 2002 Machakos Protocol - defined the area of Southern Sudan as that which was demarcated as of independence in 1956. It therefore did not expressly include the Abyei region. The SPLM negotiators spent several years attempting to give the regions the right to a referendum in which they could decide if they want to be under the administrative control of the north or south. This would potentially mean that Abyei would become part of South Sudan after the 2011 independence referendum. The government blocked these attempts, stating that the Machakos Protocol had already delineated the border.504 The dispute over Abyei is a serious threat to the peace process and may trigger a resumption of civil war.

Historically, revenue from oil has helped in ensuring some level of economic stability in Sudan. As the south has become independent, the support from oil revenue will decline as the South owns 75% of the oil of the former greater Sudan. This causes greater financial pressure on Sudan, a country already long suffering from economic doldrums.

References

AllAfrica (2012). "Sudan: HRW Urges Govt to Rein in Security Forces, Release or Charge Detainees". Published 6/27/2012. http://allafrica.com/stories/201206280255.html. Accessed 12/1/2014.

Bekele, Yilma (2008). "Chickens Are Coming Home To Roost!". Ethiopian Review (Addis Ababa). Published 7/12/2008. http://www.ethiopianreview.com/index/2929. Accessed 12/1/2014.

Cabras, A. (2010). "The implications of the youth bulge in Middle East and North African populations". NATO Parliamentary Assembly Report. 138 GSM 10 E rev 3. http://www.nato-pa.int. Accessed 11/1/2014.

504 International Crisis Group (2007).

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Center for Systemic Peace (2014). Polity IV Dataset. http://www.systemicpeace.org/inscrdata.html. Accessed 11/1/2014.

CIA World Factbook (2014). Country Backgrounds. http://www.cia.gov.Accessed 11/1/2014.

Embassy of the Republic of Sudan, London (2008). "Brief History of the Sudan". Published 11/20/2008. https://web.archive.org/web/20081120035130/http:/sudan-embassy.co.uk/en/content/blogcategory/28/37. Accessed 12/1/2014.

International Criminal Court (2008). "ICC Prosecutor Presents Case Against Sudanese President, Hassan Ahmad al Bashir, for Genocide, Crimes Against Humanity and War Crimes in Darfur". Office of the Prosecutor, 14 July 2008.

International Crisis Group (2007). "Sudan: Breaking the Abyei Deadlock". http://www.crisisgroup.org/~/media/files/africa/horn-of-africa/sudan/b047%20sudan%20breaking%20the%20abyei%20deadlock.ashx. Accessed 12/1/2014.

Lin, J.Y. (2012). "Youth Bulge: A Demographic Dividend or a Demographic Bomb in Developing Countries?”.World Bank blog. http://blogs.worldbank.org/developmenttalk. Accessed 11/1/2014. Sullivan, P.J. (2010), “Sudan – Land of Water and Thirst; War and Peace”, http://www.circleofblue.org/waternews/2010/world/perspective-sudan-land-of-water-and-thirst-war-and-peace/ Systemic Peace (2010). Polity IV Country Report – Sudan. http://www.systemicpeace.org/polity/. Accessed 11/1/2014.

Transparency International (2014). Corruption Perceptions Index. http://www.transparency.org. Accessed 11/1/2014. UN Dept. Of Economic and Social Affairs (2012). "World Population Prospects: The 2012 Revision". http://esa.un.org/unpd/wpp/unpp/panel_indicators.htm. Accessed 11/1/2014.

Urdal, H. (2013). "A clash of generations? Youth bulges and political violence". UN Department of Economic and Social Affairs, Population Division. Expert Paper No. 2012/1.

World Bank - World Development Indicators (2014). http://data.worldbank.org/data-catalog/world-development-indicators. Accessed 12/1/2014.

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Tunisia

1. Introduction

Modern Tunisians are descendants of indigenous Berbers who still inhabit large swaths of North Africa as well as parts of Sahara. Numerous civilizations invaded or immigrated, and were assimilated into the local population over the millennia. Phoenicians, Romans, Arabs and Ottomans invaded while Spanish Muslims and Jews immigrated. After the Ottoman rule of 1574-1881, Tunisia became a French protectorate till independence in 1956.

Upon Tunisia's independence from France in 1956, Habib Ali Bourguiba, leader of the independence movement, was elected president and declared Tunisia a republic in 1957. By 1959, Tunisia adopted a presidential system modeled on France, a highly centralized presidential system with an apolitical role for the army and rigid secularism. The rigid secularism which would eventually led to tensions everywhere else has, over time, been moderated by the specific conditions of Tunisia, synthesizing into Ennahda, a moderately Islamic political party.

A modernizer but autocrat nevertheless,505 President Bourguiba placed strong emphasis on economic and social development, especially education, the status of women, and the creation of jobs. 1960s saw a statist economic experience, with “state-induced industrialization and import substitution”506 followed by economic liberalization and strong economic development in the 1970s, exploiting Tunisia’s proximity to Europe.

The result was strong social progress with high literacy and school attendance rates, relatively low population growth and low poverty rates, and steady economic growth. These pragmatic policies, combined with the corporatist structures of an essentially one-party state, have largely contributed to social and political stability. Over 31 years, Bourguiba ran for re-election several times unopposed and was named "President for Life" in 1974 by a constitutional amendment. Throughout, his Neo-Destourian Party enjoyed the status of the sole legal party. Opposition parties were banned until 1981. Despite apparent stability, the system was accumulating latent social and political pressures. The Bourguiba corporatism failed to unleash a meritocratic environment that might have absorbed the malcontent. The first signs of trouble appeared in the 1970s507 when leftist students and labour organizations started demonstrating against economic difficulties and authoritarianism and early Tunisian Islamists went beyond religion, to reach wider audiences but ending up forming alliances with secular forces. This would contribute to conditions conducive to the Tunisian spring as well as its aftermath.

Bourguiba’s health issues and age caught up with him in the 1980s when Tunisia’s Islamists were severely persecuted and the country was unstable. The period was also marked by a realignment of

505 Global Security (2014). 506 BTI (2014). 507 Alexander (2012).

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Islamist political forces, Rachid Ghannouchi and his Ennahda508 continuing to represent democratic Islamist forces.509 Prime Minister Ben Ali, formerly an ex-army general and minister of the interior, became president in 1987, having engineered a constitutional coup510. The new president promised and delivered, early on in his tenure, some democratic and human rights, presumably to consolidate his power. He signed the 1988 National Pact with secular opposition parties and introduced constitutional and legal changes. The Pact promised national reconciliation, introduction of presidential term limits and inclusion of opposition parties into the political system. He even engaged Ghannouchi511 as an interlocutor from amongst Islamists. The period 1988-1989 that followed Ben Ali’s rise to power witnessed an incredible rise in the number of Civil Society organizations, a jump from 2,527 in 1,987 to 6,024 in 1989.512 Yet, the ruling party, renamed Democratic Constitutional Rally (DCR), continued to rule, unopposed. To Ben Ali, inclusion really meant co-option.513 On the economic front, Ben Ali continued the economic liberalization policies of the 1970s by liberalizing foreign trade and privatizing state-owned enterprises.514

Ben Ali ran for re-election, unopposed, in 1989 and 1994. Emboldened with his hold in power, Ben Ali clamped down particularly on Ennahda in the 1990s. However, Ennahda found support from other opposition groups, human rights activists and some secular politicians. This broad opposition that had started in the 1970s was strengthened in the 1990s and led to what was to be the coalition that brought Ben Ali down in 2011.

In later multi-party elections, Ben Ali captured nearly 99% of the vote in 1999 and 95% in 2004. In both elections he faced weak opponents. The DCR had won all parliamentary seats in 1989 and continued to do so all directly elected seats in the 1994, 1999, and 2004 elections. The co-option continued with constitutional amendments that provided for the distribution of additional seats to the opposition parties in 1999 and 2004 elections. Ben Ali changed the constitution by a 2002 referendum so that he could run for a fourth term in 2004 and a fifth in 2009. Moreover, the constitutional change granted him judicial immunity during and after his presidency. Not only was the president for life was in the making but also his complete impunity was legalized. The pressures triggered by the one-party system under Bourguiba and that had been building continued spiralling upwards especially towards Ben Ali’s later years.

2. Overview of Recent Events

508 Previously al-Nahda. 509 Ghannouchi (2014). 510 The constitutional provisions empowered the Prime Minister to determine the president's incapacity based on seven doctors' certifications and hence his incompetence to carry out the functions of his office (Global Security, 2014). 511 Ghannouchi is the current leader of Ennahda, the main Islamist party that formed the government, with two minor parties, from December 2011 to February 2013 when it voluntarily ceded power in favour of a technocratic government. 512 A further jump would have to wait until the 2010-2012 period when corresponding figures were 9,969 and 14,966. (FfF (2013)). 513 Sadiki (2002). 514 BTI (2014).

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In addition to oppression by the Ben Ali autocratic rule, early 2000s were marked by increasing economic disparity between “Sahel” and hinterland, economic stagnation, rising unemployment, especially for youth515, and mounting evidence of grotesque corruption within Ben Ali’s family.516 Discontent spread even into the ruling party. “By 2005, Ennahda and several other opposition groups agreed to a joint platform of demands. In the deal, Ennahda committed itself to a multiparty democracy and to the progressive rights that Tunisian women by then enjoyed.”517 This platform constituted the precursor to the Tunisian spring.

The December 2010 demonstrations drove Ben Ali from power within weeks, by January14th, 2011. The months that followed the January 14th uprising, its organization and financial resources made Ennahda the most effective party in Tunisia. It enjoyed name recognition, national grassroots structures, money, and credibility that no other party could equal. It rallied a broad base that stretched beyond religious voters to include social conservatives, human rights activists, and voters who saw Ennahda as a representative of Tunisian identity. However, this period also witnessed an unprecedented expansion of politics as the period was marked by the legalization of 100 political parties and the foundation of nearly 5,000 civil society organizations, from 9,969 in 2010 to 14,966 in 2012.518

3. Discussion of Critical Economic Indicators (CEIs)

This section introduces a set of indicators for Tunisia. In addition, to provide further background for countries that have experienced vigorous opposition movements - with many swelling to full-scale uprisings - a smaller set of indicators are used to measure the population's attitude towards their respective country's governance. Although no causality conclusions are implied, the Critical Economic Indicators (CEIs) may serve as barometer readings ahead of potential civil unrest. Three groups of factors are covered within this section. The first concerns general summary statistics and important contextual economic facts on the country in question. The second group covers selected political factors such as the total number of personnel in the country’s military and the Polity government legitimacy measure. The third group consists of the selected political and socioeconomic factors which we argue played a role in the development of the unrest for the country. Both country-specific factors and factors that are common to other Arab Spring-affected nations are discussed within this group. The selection of CEIs is guided by the observations made during the Arab Spring uprisings as well as similar popular uprisings elsewhere in the world, in particular recent experiences in Turkey, Ukraine, and Hong Kong. The robust participation of educated and connected youth against various perceived governance problems and with democratic demands has been a commonly observed factor in virtually all unrests. Therefore the three groups of CEIs are representative of youth activism by taking into account the demographic, economic and technological dimensions of youth malcontent. 515 Paciello (2012). 516 Alexander (2012), Ben Ayed (2014). 517 Alexander (2012). 518 FfF (2013).

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The demographic dimension as captured by the youth bulge and youth unemployment has been extensively studied.519 The literature distinguishes popular uprisings from armed conflicts and this Report concentrates on the former. The economic dimension of CEIs includes the GINI coefficient, the Undernourishment Index and the Consumer Price Index. Moreover, the first block of numbers in Table 1 includes, as general indicators, the population and GDP figures. Finally, the technological dimension aims to capture the educated youth phenomenon observed prominently in popular uprisings and includes the Emigration Rate of Tertiary Educated Persons and Internet Users per 100 People.

Indicator520 Value General Population 10.94M (2014) GDP Per Capita $4,329 (2013, current $US) Political Armed Forces Personnel 47,800 (2012) Contiguity to Instability Libya, Algeria Government Legitimacy (Polity IV)521 + 7 (Democracy) Ruler Longevity 1987-2011 (Ben Ali)522 Economic (CEIs) Corruption Perceptions Index (rank and index)

77/177 and 41/100 (2013)

Youth Bulge523 39% (2014) Youth Unemployment 29.3% (2012) Gini coefficient 38 (2005), 36 (2010) Undernourishment Index 5% (2010-2012) Consumer Price Index 6.1% (2013) Emigration Rate of Tertiary Educated 12.6% (2000), 14.3% (2008)524 Internet Users 43.8% (2014)

Table 1: A selection of indicators on Tunisia

i. Political Indicators 519 Cabras (2010), Lin (2012), Schomaker (2013), and Urdal (2013). 520 Unless otherwise indicated, data obtained from the World Bank’s WDI dataset (2014). 521 "The "Polity Score" captures the regime authority spectrum on a 21-point scale ranging from -10 (hereditary monarchy) to +10 (consolidated democracy). The Polity scores can also be converted into regime categories in a suggested three part categorization of "autocracies" (-10 to -6), "anocracies" (-5 to +5), and "democracies" (+6 to +10).” ).(…) The Polity scheme consists of six component measures that record key qualities of executive recruitment, constraints on executive authority and political competition.” Systemic Peace (2010). 522 Zine al-Abidine Ben Ali, ex general and minister for security, ruled Tunisia 1987-2011. 523 For the purposes of this review, the Youth Bulge refers to the percent of the population under the age of 24. Data obtained from CIA Factbook (2014). 524 OECD (2008).

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This section very briefly overviews the four political factors introduced above in Table 1. Armed Forces Personnel The Tunisian Armed Forces has had a numerical strength of 47,000 to 48,000 for the past 18 years.525 While the Army had been 35,000 strong till 1994, a significant but temporary increase to 58,000 could be attributed to the then ongoing civil war in neighbouring Algeria. However, 1997 onwards, the Army’s numerical strength was reduced to what it is today. In the post-Arab Spring uprising Tunisia, the security threat is mostly posed by Islamic terrorists. First, by frequently breaching the porous eastern border with Libya, they have been regularly smuggling weapons in both directions and, in the process, clashing with the Army and the border guards. Second, the armed jihadi groups rooted on the western border with Algeria have been instigating terrorist attacks in collaboration with similar Algerian groups. Third, several hundred homegrown jihadists have joined the jihadist groups in Syria and Iraq. Upon returning home, they could unsettle communities and undermine investment and the tourism sector by generating a climate of instability. The Tunisian army is inexperienced in counter-terrorism operations and numerically weak to control Tunisia's long borders. An additional security concern, though less to do with the Army, is human trafficking. First, “Tunisia is a source, destination, and possible transit country for men, women, and children subjected to forced labor and sex trafficking.”526 Second, Tunisia’s proximity to Europe makes the country particularly attractive as a transit to Europe, not only from the failed state of Libya but also from other regions of Africa, facilitated by Tunisian smuggling networks. Contiguity to Instability The current instability around Tunisia originates from two sources. First, the nineteen-country coalition’s 2011 intervention in Libya under the U.N. Security Council resolution 1973 brought down the long-reigning autocrat Gaddafi but eventually resulted in a failed state. The instability in Libya continues unabated.527 As briefly mentioned above, Libyan instability spills over to Tunisia through several channels: Through weapons smugglers, Jihadist connections and refugees. Interestingly, Tunisia receives large numbers of Egyptian refugees through Libya. During September 2014 the number of Egyptian refugees stranded at the Matmata airport in Gabès, close to the Libyan border, rose to 10,780.528 Refugee camps in Ben Gardane, a border city approximately 100 miles west of Tripoli, hosts several thousand Libyan and Egyptian refugees. However, the scale of the refugee problem in Tunisia is relatively low compared to that in Jordan, neighbouring the civil war in Syria and the turmoil in Iraq. This

525 World Bank (2014). 526 U.S. State Department (2012). 527 See the Libya section in this report. 528 IFRCRCS (2014).

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is due to the fact that Egypt is far, the Libyan population is small and the current battles between various militias do not reach the scale of war in Syria.529

Government Legitimacy (Polity IV) and Ruler Longevity

Standing alone amongst Arab countries, Tunisia was characterized by a deep modernization process under the rule of Bourguiba. Partly due to a corporatist autocracy rather than a tribal rule like that under Gaddafi in Libya or a militarized dictatorship under Saddam in Iraq, Bourguiba projected his legitimacy as the leader of resistance against the colonialist power France onto his rule over two decades, 1956 to 1987. Modernization included the integration of women into the labour force as well as high levels of educational attainment. In addition to sporadic periods of political liberalization, the corporatist nature of Bourguiba dictatorship allowed the formation of civil society organizations.

An examination of the Polity IV index in Figure 1 below reveals the political windows that allowed significant progress in Tunisia. The Arab defeat of 1967 in Middle East prompted an awakening against the Bourguiba authoritarianism in early 1970s. A crackdown on leftist student and labour organizations in 1971-72, the seeds for the democratic platform of today were sown as Islamists were drawn to opposition and developed a stronger political orientation.530 Tunisia persisted as an autocracy according to Polity IV index, without challenge to Bourguiba rule till 1980s. When Ben Ali became president, he promised and delivered a significant period of political liberalization that saw, amongst other organizations, the legalization of Ennahda. Ben Ali ran unopposed for his first two elections in 1989 and 1994 but allowed opponents in 1999, 2004 and 2009. His vote fell to 89% in 2009 from 99% in 1999 and 94% in 2004, implausible pluralities. However, it must be noted that, under Ben Ali, Tunisia climbed from autocracy to closed anocracy in Polity IV scales.531 The successful uprising of January 2011 ended the Ben Ali rule after 24 years. The ensuing developments up to and including the October 2014 election when Ennahda peacefully conceded to the secularist Nidaa Tounes allowed Tunisia climb from a closed anocracy in Polity IV rankings all the way up to a moderate democracy in the space of a few years. As we noted in the Introduction, the opposition alliances of the 1970s against Bourguiba autocracy continued in the 1980s till 1988 when, under the 1988 National Pact reconciliation, Ben Ali engaged Ghannouchi as an interlocutor as representing moderate Islamists. This early integration of Ennahda arguably led to a wide spectrum of political forces upon January 2011 revolution and legitimized the elected governments. The Ennahda government peacefully stepped down in January 2014 in favour of a technocratic transitional government that would oversee the final drafting of a new constitution and the October 2014 elections based on the new constitution.532

529 UNHCR (2014). 530 Alexander (2012). 531 Systemic Peace (2014). The Polity IV scheme consists of six component measures that record key qualities of executive recruitment, constraints on executive authority and political competition. It also records changes in the institutionalized qualities of governing authority. 532 Alexander (2013).

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Chart 1: Authority Trends, 1959-2014: Tunisia533

ii. Common CEIs

This section covers all CEIs introduced in Table 1. With the exception of the GINI coefficient, we present short time-series data on the performance of Tunisia along these dimensions.

Corruption Perceptions Index

Two complementary measures of corruption are provided. Chart 1 displays the Corruption Perceptions Index for Tunisia. Recalling that this Index varies from 0 to 10 (worst to best), Tunisia ranks between 4 and 5 but falling over the 2001 to 2013 period.

533 Systemic Peace (2014).

Polity Score

C: Change in ruling regime

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Chart 1: Corruption Perceptions Index for Tunisia, 2003 to 2013534

The steady increase in corruption, as suggested by the Corruption Perceptions Index, can be easily attributed to Ben Ali and Trabelsi535 families and others connected with them. The blatant corruption generated under Ben Ali rule may well have been the fundamental trigger of the Tunisian uprising.536

Chart 1 above and Table 2 below are consistent and indicate a slow but steady rise in corruption as the Index value has fallen and the rank of Tunisia deteriorated over the time period 2001-2011. Both indicators seem to be stabilized under the new governance in Tunisia.537

Year Rank 2001 31/91 2002 36/102 2003 39/133 2004 39/146 2005 43/159 2006 51/163 2007 61/179 2008 62/180 2009 65/180 2010 59/178 2011 73/182 2012 75/174 2013 77/177

Table 2: Corruption Perceptions Rank538

534 Transparency International (2014). 535 Leila Trabelsi is Ben Ali’s wife. 536 See more details on corruption in Tunisia in section 3.c below on country-specific CEIs. 537 Tunisie - Les Ben Ali pèsent (toujours) lourd (Tunisia: Ben Ali was loaded), http://www.slateafrique.com/95211/tunisie-confiscation-biens-ben-ali.

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Youth bulge and youth unemployment

Chart 2 shows that Tunisia’s youth bulge is decreasing at a moderate pace. The Tunisian population pyramid compared to those of some other countries, e.g. Iraq, is significantly more mature or, in other words, the bulge has moved upwards in the pyramid. Below, in Charts 3 and 4, a comparison of the population pyramids of Tunisia and Canada is presented. As Chart 2 suggests, the subsidence of the youth bulge and a demographic convergence towards those typical of highly developed countries may come sooner rather than later as Tunisian society settles into an established democracy.

Chart 2: Youth Bulge for Tunisia, 1980-2010 and projections to 2020539

Charts 3 and 4: Population pyramids for Tunisia (left) and Canada (right), 2010540

538 Transparency International (2014). 539 UN Dept. of Economic and Social Affairs (2012).

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Chart 5 below provides the aggregate youth unemployment, a figure hardly different from comparable countries but, in the case of Tunisia, this aggregate masks the high educational level of Tunisian youth.

Chart 5: Unemployment, youth total for Tunisia, 2002 to 2013541

Economic difficulty indicators: Gini, Undernourishment and CPI

Economic difficulty indicators are meant to convey the economic stress endured by residents. The three indicators chosen to form this group connect the income distribution in a given country with economic growth and the nature of proper food intake. The first CEI in this group is the GINI coefficient. Since it is not available as a time-series, we provide the four data points available below in Chart 6. We observe improvement, i.e. the evening out of the income distribution, despite modest economic growth over the same period and the ever-increasing corrupt appropriation of national income by Ben Ali’s family and relatives.

540 UN Dept. of Economic and Social Affairs (2012). Horizontal axis represents millions of persons; vertical axis represents 5-year age groups. 541 World Bank (2014).

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Chart 6: The GINI coefficient for Tunisia (1995, 2000, 2005, 2010)542

The second CEI is the Undernourishment Index. For Tunisia, the minimum 5% threshold (World Bank does not report below this amount) indicates that that no serious undernourishment problem exists in the country.

The third CEI is the Consumer Price Index as given in Chart 7 below. Since both corruption and per capita GDP growth are moderate on average, this latter is not expected to signal economic stress whereas, if they are present, price increases will tend to reflect the stress more accurately. Whereas real growth rates attained 3.6%, -0.2%, 4.1% and 2.8% over the period 2010-2013, inflation hovered around 4% till the January 2011 Tunisian Spring uprising. We underline the contraction in 2011, in the immediate aftermath of the Tunisian Spring.

Chart 7: Consumer Price Index for Tunisia, 2002 to 2013543

542 World Bank (2014). 543 World Bank (2014).

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Taken together, these three indices provide an indication as to whether economic conditions for certain sections of society are improving. The observed reality in Tunisia is one where standards of living don’t appear to have deteriorated over the 2009-2013 period despite the revolutionary turmoil and its unstable aftermath.

Educated Malcontent and Technological Adaptation

Chart 8 displays the emigration rate of Tunisia’s tertiary-educated residents. Each of the values presented – notably over 14 percent in 2008 – are indicative of an elevated rate of departure for highly educated individuals. This likely reflects structural problems in the labour market, with few jobs available for those at the high end of the education spectrum. Over time, this has led to a greater propensity for job seekers to emigrate.

Chart 8: Emigration Rate of Tertiary Educated from Tunisia (1990, 2000, 2008)544

The second CEI in this section is the percentage of the population with access to internet; this is used as a proxy for the pervasiveness of social media. Chart 9 shows that internet use has been increasing fairly rapidly for the past decade or so.

544 This graph combines World Bank (2014) and OECD (2008) data.

This section investigates two CEIs: the emigration rate of tertiary educated persons and the adoption of social media, as proxied by ‘internet users per 100 population’. The first provides a measure of labour market tightness and can serve as an indication of discontent with the conditions in the country. The second CEI concerns the prevalence of social media and interconnectedness among the tech-savvy youth of Arab countries.

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In the recent Arab Spring uprisings, the pervasiveness of social media as a coordination device and method of conveying grievances device was observed. This last section combines the emigration of tertiary-educated and the internet usage rates to estimate the youth discontentment. Of course, the youth unemployment index could be combined with these two variables to have a more complete understanding of youth involvement in unrests.

Chart 9: Internet Users Per 100 People in Tunisia, 2002 to 2013545

iii. Country-Specific CEIs

Educated unemployed, strong civil society and corruption by state capture

The pre-uprising Tunisia was uniquely characterized by three phenomena. First, tertiary-educated youth faced high unemployment. Second, Tunisia differed from all other Arab countries by its exceptionally high generation of civil society organizations. And third, the rampant corruption was personalized in the president, his family and his entourage.

The unemployment amongst recent university degree holders increased from 34 percent in 2005 to 56 percent in 2011.546 Tunisia “attempted various reforms aiming to promote employability or self-employment among university graduates.”547 Whereas Tunisia compared favourably to its neighbours in terms of general youth unemployment, the unemployment problem specifically affected university graduates.

545 World Bank (2014). 546 Premand et al. (2012). 547 Premand et al. (2012).

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Also, Tunisian citizens had a significant tendency to set up civil society organizations.548 As mentioned in the Introduction, this bodes rather well for building a strong institutional democracy. Tunisia’s strong civil society was also instrumental in the overthrow of Ben Ali.

Finally, but perhaps most influential in bringing down Ben Ali was the corruption empire the president built around his family and friends. The post-uprising Confiscation Commission549 discovered 220 very successful firms belonging to Ben Ali and family.550 Their success was due to presidential decrees over 17 years, decrees that captured state’s industrial policy and regulation for the benefit of the 220 firms by creating a protected environment for them. The president issued 25 decrees, authorized requirements in 45 different sectors and restricted foreign direct investment (FDI) in 28 sectors. This resulted in over one fifth of all private sector profits accruing to connected firms. At its peak, this conglomerate appropriated a fifth of the realized profits in the Tunisian economy. This “… corruption was widely known and was a source of palpable frustration for the Tunisian public, as evidenced by the targeted and systematic looting of Ben Ali family holdings after the 2011 uprising.”551

4. Current and Future Challenges

Tunisia is alone in following its successful Spring uprising with a transition towards a full-fledged democracy. After nearly four years since the uprising, a new constitution, two elections and soon a presidential election, the country is achieving a normalcy unseen elsewhere in the Arab World.

Arguably the most critical element in this transition has been Ennahda’s behaviour. The Islamist party won the first election in October 2011 and ruled Tunisia till October 2013 when it accepted that a technocratic government should steer the country through the new constitutional process till elections. In fact, Ennahda stepped down peacefully unlike Muslim Brothers in Egypt, accepted women’s full participation in society and the new constitution of February 2014. Although not so surprising given the Tunisian Islamists’ long-time cooperation with other opposition forces against autocracy, Ennahda’s full participation as a democratic force legitimizes the process by integrating Tunisian Islamists. Ennahda conceded defeat in the October 2014 elections and prepares for its opposition role while it is not fielding a candidate for the November presidential election.

Tunisia’s developing democracy seems to have so far failed to deliver economic success. The newly elected Nidaa Tounes government’s major challenge will be to swiftly introduce reforms to rebuild the economy derailed by Ben Ali corruption.

548 The period 1988-1989 that followed Ben Ali’s rise to power witnessed an incredible rise in the number of Civil Society organizations, a jump from 2,527 in 1,987 to 6,024 in 1989. 549 “La Commission Nationale de Gestion d'Avoirs et des Fonds objets de Confiscation ou de Récupération en faveur de l'Etat”. 550 Riskers et al. (2014). 551 Ibid.

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