North Africa and Asia

Are there long-term consequences for East Asia in the revolts which have been stirring an Arab world long lost in self-pity, outmoded systems and oppressive governments?

It has long been obvious that Western Europe has failed to develop the kind of links with Arab neighbors across the Mediterranean which developed Northeast Asia has with the lower income Southeast. The northeast's capital and manufacturing technology, together with access to western markets, have done wonders for its neighbors thanks to their being – with the glaring exception of Burma – open to foreigners and generally favoring market-driven economic policies and private ownership.

Not so the likes of Egypt, Algeria, Libya and Syria. Europe's only major success with its southern neighbors has been in bringing Turkey into close association with the EU – and even that could be threatened by French and German hostility to Turkey ever becoming an EU member.

The long-term issue for Asia is neither oil nor construction projects nor remittances. It is the possibility that the Arab nations, or at least the populous North African ones, really do try to emulate east Asia and that Europe gives them every assistance to see that they succeed, thus providing new markets for Europe's aging but advanced economies and providing employment at home for millions of young people who might otherwise create massive illegal immigration problems for Europe.

If a country such as Egypt, with a population of 80 million – not far from Vietnam and Philippine levels – were to undertake the kind of reforms seen in Vietnam or to become as open to foreign trade and investment as Thailand, two things would follow. First the EU would be at pains to help the process not only through aid and encouragement to its own firms to invest, but by offering highly preferential access to imports.

Some such preferential access already exists and Egyptian-made clothes, etc. are common enough in the EU. Yet even populous, strategically important Egypt lags far behind even a trade latecomer such as Vietnam in supplying western markets with low-cost products. For example, according to Bloomberg, factories making Nike shoes and related products employ nearly 200,000 Vietnamese but only 5,000 Egyptians. The consumer products that stock the malls of the oil-rich Arab countries come mostly from East Asia. Nigerian and Ghanaian traders flock to Guangzhou and Bangkok for supplies, not to their North African neighbors.

Will the revolutions sweeping governments out of power and making others talk of reform lead to economic and social revolutions which produce thriving modern economies?

At first glance, that looks unlikely. The immediate pressure is for populism, not capitalism or closer ties with the outside world. People want cheaper bread and, at least in Egypt, equate capitalism with the cronyism which characterized the partly privatized economy. Huge numbers of public sector workers stand in the way of economic reform and may now be more influential than ever.

Then there is the pressure from Islamists. They are unlikely to get power but the Muslim Brotherhood’s organizational abilities give it influence which exceeds its numbers and they tend to equate economic opening with opening to social liberalism, women’s rights and other issues where religion and modernization are seen to clash.

Nor is history very encouraging. Egypt's last revolution, the overthrow of the monarchy in 1952, was followed by the imposition of a socialist and economic nationalist system which even now has not been wholly undone. That era was also characterized by the demise of much of the old Levantine trading class, many of them Greeks, Armenians, Jews, Lebanese and assorted other foreigners. This is now an economy which, apart from its agricultural base, relies largely on tourism and remittances, not manufacturing and merchandise trade.

Algeria is in even worse shape politically and socially, and has an oil-based economy which provides scant employment opportunities and much potential for graft. It has suffered years of political violence and the economy still bears the scars of colonial period when traders were mostly French. Morocco has a rather better situation and has already gone some way in attracting foreign capital and developing relations with the EU. But a lot more could be done and needs to be if the rising expectations of a youthful population are to be met.

But despite these obstacles, do not assume that this region cannot take an East Asian path. Not only does it face across the Mediterranean a rich Europe desperate to see Arabs modernize, not least the eastern European countries also once hobbled by socialism. It has the example of a China spreading money and people around the region. And of countries in Latin America which were once similarly dismissed as incapable of reform.

If Egypt could find a modernist, reformist future others in the region would follow. And the west, particularly Europe but also a US keen on diverting Arab attention from the Israeli expansionism which Washington underwrites, will go a long way to help with trade access and other benefits. Whatever may be said about conforming to WTO rules the result would be a bigger EU-centric bloc perhaps even consciously trying to present a counter to the Asean plus Three group to which East Asia is in words at least committed.

The bottom line may be that reform in a North Africa flush with youthful labor would be a new global focus and challenge for a Southeast Asia that is aging more rapidly and where the gains in education and investment which characterized the second half of the 20th century may have stalled.

In short, though it seems unlikely, Arabs might yet show up an arrogance in East Asia born of 50 years of success.