The Arab region, just like other parts of the world, is at an important crossroads following a series of events that culminated in a global financial crisis. At this crucial time, it is imperative that we define the social, economic and cultural paths that will shape our future.
The paths we carve out to lead us into the next stage should be radically different from the ones we took in the past. After all, the abundant growth of the global economy in the pre-2008 era did nothing to prevent inequality in income and living standards, reduce the enormous disparities between countries in the north and the south, or indeed, to protect the environment. Nor did it really help achieve social harmony and peaceful coexistence among people of different cultures and beliefs.
A cohesive and unified society is the key to ushering in a more prosperous era. However, apart from government institutions, companies must also take responsibility for achieving this goal. Civilisation is a collective human accomplishment. It is a product of basic relationships, values and principles that are the essence of political systems and fair distribution of the outcomes of wealth, rather than distribution of wealth itself. One of the most important outcomes of wealth is the universal right to food and other basic human needs, as well as decent living, education and healthcare.
Currently, the world seems to be preoccupied with shallow forms of urbanisation rather than with aiming to build a proper civilisation. Such urbanisation, with a focus on materialism and luxury consumption, contradicts all aspects of civilisation. The prevalent neglect of the millions of people who are unable to provide for themselves is a proof that this kind of urbanised economy cannot achieve justice and equal opportunities for all.
How can the economy produce a true civilisation as opposed to the superficial urbanisation we now see? How can it protect the values that were once common but are now largely absent in our human relationships? More importantly, how can we build the foundations of a fair economy?
The fierce competition among multinational conglomerates and their relentless focus on profits have resulted in ignoring the detrimental effects of their activities on the climate, environment and society. Channeling profits that could fuel the production cycle into illusory financial transactions that play no role in development has eroded huge amounts of liquidity - depriving millions of people from benefitting from their wealth outcomes.
It is a known fact that multinational corporations choose to operate in third-world countries to capitalise on the differences in wages, prices of services and raw materials, as well as exchange rates. These multinationals do not necessarily care about developing the poverty-stricken countries or improving the living conditions of their people.
During the World Economic Forum 2010 in Davos that took place amidst the reverberations of the global recession, a survey on the crisis was conducted among 130,000 respondents from 10 countries of the G20. Two-thirds of participants thought that in addition to an economic crisis, we were also facing a crisis of morals and values, and that only a quarter of multinational corporations took positive human values and morals into consideration in their activities. This state of affairs is the result of global trade laws, free trade and elimination of tariffs on goods.
Free trade has had a major negative impact on people whose production mechanisms were unable to withstand global competition. Farmers could not compete with multinational corporations that inundated their countries with millions of tons of agricultural products. Factory workers lost their jobs because their output could not keep up with the influx of cheap merchandise from abroad.
These are the reasons for people’s animosity towards globalisation and cross-border economic relations. Unless we want the relationship between people and companies to trigger a conflict scenario, we must examine this attitude in greater depth.
Although the economy is a source of wealth, it also has the potential to lead to crises within society. The more wealth the social elite accumulates, the more destitute and disenfranchised people express their anger over daily injustices, often with crime and disruption.
While we do not condone any forms of hatred and violence, we must identify the reasons behind the current divisions in the Arab world, and address the underlying issues step by step. The region’s unemployment, poverty and social marginalisation statistics reflect its present status in the world, and indicate that it is high time we got serious about real, comprehensive and fair development.
Conflicts in Arab countries began with people voicing their disagreement with the ruling regimes. Unless something changes, the same people will soon direct their disdain towards companies that enjoy greater leverage than governments.
Regardless of the political regime, companies will dominate resources, own the markets and have real influence on general policies. This is precisely why regime changes in some countries, instead of bringing about positive results, complicate the situation even further through weakening the political and legal systems - while local and foreign companies continue to rule the roost.
With its significant impact on political and social systems, the economy plays a key role in building relationships between companies and people. A fair economy creates real job opportunities, continuously expands production and promotes values that form the foundation of human civilisation.
In many cases, the economy is more responsible for the problems that plague our region today than politics. Ignoring the role of economy in enhancing stability or causing conflicts will lead to a vicious cycle that perpetuates poverty, inequality, injustice and dissent in various shapes and forms. We must acknowledge the problem and address it at the source if we want to lay out the blueprint for a brighter future. The author is the Executive Chairman of Investcorp and an International Advisor to the Brookings Instituition. All the views and opinions expressed in the article are solely those of the author and do not reflect those of Times of Oman.