Economic Connectivity to the Arab World as a National Security Imperative

One of the most important causes of the Arab Spring was a lack of economic opportunity. In his speech yesterday, the President articulated his administration's policy for helping foster prosperity in the region:

Now, even as we promote political reform, even as we promote human rights in the region, our efforts can’t stop there.  So the second way that we must support positive change in the region is through our efforts to advance economic development for nations that are transitioning to democracy. 

After all, politics alone has not put protesters into the streets.  The tipping point for so many people is the more constant concern of putting food on the table and providing for a family.  Too many people in the region wake up with few expectations other than making it through the day, perhaps hoping that their luck will change.  Throughout the region, many young people have a solid education, but closed economies leave them unable to find a job.  Entrepreneurs are brimming with ideas, but corruption leaves them unable to profit from those ideas. 

The greatest untapped resource in the Middle East and North Africa is the talent of its people.  In the recent protests, we see that talent on display, as people harness technology to move the world.  It’s no coincidence that one of the leaders of Tahrir Square was an executive for Google.  That energy now needs to be channeled, in country after country, so that economic growth can solidify the accomplishments of the street.  For just as democratic revolutions can be triggered by a lack of individual opportunity, successful democratic transitions depend upon an expansion of growth and broad-based prosperity.

So, drawing from what we’ve learned around the world, we think it’s important to focus on trade, not just aid; on investment, not just assistance.  The goal must be a model in which protectionism gives way to openness, the reigns of commerce pass from the few to the many, and the economy generates jobs for the young.  America’s support for democracy will therefore be based on ensuring financial stability, promoting reform, and integrating competitive markets with each other and the global economy.  And we’re going to start with Tunisia and Egypt.

First, we’ve asked the World Bank and the International Monetary Fund to present a plan at next week’s G8 summit for what needs to be done to stabilize and modernize the economies of Tunisia and Egypt.  Together, we must help them recover from the disruptions of their democratic upheaval, and support the governments that will be elected later this year.  And we are urging other countries to help Egypt and Tunisia meet its near-term financial needs.

Second, we do not want a democratic Egypt to be saddled by the debts of its past.  So we will relieve a democratic Egypt of up to $1 billion in debt, and work with our Egyptian partners to invest these resources to foster growth and entrepreneurship.  We will help Egypt regain access to markets by guaranteeing $1 billion in borrowing that is needed to finance infrastructure and job creation.  And we will help newly democratic governments recover assets that were stolen.

Third, we’re working with Congress to create Enterprise Funds to invest in Tunisia and Egypt.  And these will be modeled on funds that supported the transitions in Eastern Europe after the fall of the Berlin Wall.  OPIC will soon launch a $2 billion facility to support private investment across the region.  And we will work with the allies to refocus the European Bank for Reconstruction and Development so that it provides the same support for democratic transitions and economic modernization in the Middle East and North Africa as it has in Europe.

Fourth, the United States will launch a comprehensive Trade and Investment Partnership Initiative in the Middle East and North Africa.  If you take out oil exports, this entire region of over 400 million people exports roughly the same amount as Switzerland.  So we will work with the EU to facilitate more trade within the region, build on existing agreements to promote integration with U.S. and European markets, and open the door for those countries who adopt high standards of reform and trade liberalization to construct a regional trade arrangement.  And just as EU membership served as an incentive for reform in Europe, so should the vision of a modern and prosperous economy create a powerful force for reform in the Middle East and North Africa.  

Prosperity also requires tearing down walls that stand in the way of progress -– the corruption of elites who steal from their people; the red tape that stops an idea from becoming a business; the patronage that distributes wealth based on tribe or sect.  We will help governments meet international obligations, and invest efforts at anti-corruption -- by working with parliamentarians who are developing reforms, and activists who use technology to increase transparency and hold government accountable.  Politics and human rights; economic reform.

Something of a mini-Marshall plan for the region, these commerce and investment focused ideas are incredibly important in a region long isolated from the global economy and, with it, the marketplace of ideas. If we look at the greatest success stories of the early 21st century, predominantly Asian and Latin American countries, we see a pattern of connectivity to the global economy. Ending the Arab world's economic isolation should be a cornerstone of America's national security strategy.