(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own)
DUBAI, Dec 29 (Reuters Breakingviews) - The Arab revolutions
have altered perceptions of the region. The new regimes may have
democratic foundations but they won't look like anything the
West or liberals may hope for, especially in Egypt. Still, even
if they end up being governed or dominated by Islamist parties,
the new regimes that have sprung up along the Mediterranean may
look more like Turkey than Iran.
The new governments, chosen by popular vote, will find it a
struggle to shake off the deposed autocrats' legacies. Several
months of protests, and elections, can't eliminate decades of
corruption. Nor can they consign still-powerful armies to their
barracks. Even if elections are free and fair, protesters in
varying numbers and of different stripes will keep coming to
Egypt's Tahrir Square. Meanwhile, exacerbated tribal differences
will delay Libya's transition.
It will be a painful adjustment for business. Dictators
provided relatively safe and stable investment climates.
Economic growth flourished while rampant cronyism ensured riches
were held by a lucky few. True, private enterprise was stifled
in Libya, but foreign oil companies were kept happy enough. The
discrepancy between rich and poor will continue to widen in 2012
and cause more unrest. But it should narrow over time as
politicians set policies that will help meet, at least
partially, the economic aspirations of the poor that were at the
heart of the revolution.
Education, wealth and demographics will decide how that is
achieved. Libya's riches will enable the country to open itself
up to foreign investment and maintain a generous social net for
citizens. In Egypt, new and higher taxes will help government
finances, some privatisations will be reversed, but reform of
subsidies could remove market distortions and present new
business opportunities. Tunisia will come closest to the Western
concept of a free market.
The rise of political Islam will be a source of concern for
some but shouldn't undermine the economy. Egypt will continue to
welcome foreign investments. Islamic finance will boom alongside
conventional banking. But hard line Islamists should be kept in
check by the unlikely alliance of liberals and the army.
The idea of an Islamist democratic free-market government
may run counter to usual assumptions -- but it could be one of
the ultimate surprises of the 2011 Arab Spring.
Predictions: Breakingviews is publishing a series of
articles over the holiday that look ahead to 2012. The pieces
will be collected together in the annual 'Predictions Book',
produced in print and electronic form early in the New Year.
-- For previous columns by the author, Reuters customers can
click on
(Editing by Pierre Briançon and Sarah Bailey)
37 comments