Turkey and Indonesia Muslim Success Stories Economic Upturn in Egypt

Here are some trends that I hope continue and deepen in 2008. Turkey and Indonesia are making strides as secular democracies in Muslim-majority countries, with impressive political participation on the part of the public, with elections that produce surprises for the powers that be, and with steady economic growth. The striking thing about both of them is that they did it mostly on their own. You have to contrast their success with Bush’s two experiments in imposing democracy from the outside, both of which are having a rockey ride. A third good news story is Egypt, which has in the past few years seen impressive economic growth and foreign investment, though it has not significantly democratized.

Turkey weathered several major political crises and yet remained relatively stable and relatively democratic. The powerful Turkish military clearly did not want former Foreign Minister Abdullah Gul to become president, because he (although no fundamentalist) is too religious for their taste. Gul was nevertheless elected, and the military swallowed it. Turkey’s democracy is fragile and the country has a number of objectionable laws that limit key freedoms, but it certainly is the most democratic state in the Muslim Middle East. The demonstration that secular elites will allow an Islamically tinged party like the AK Party of Gul to come to power could be an important lesson for, e.g., Egypt. Turkey’s rate of population growth has slowed, a key requirement for economic progress. A package of changes in Turkish penal laws is being introduced by parliament as part of the attempt to harmonize Turkish law with that of the European Union (which Turkey wants to join). Turkey has been having strong economic growth for the past six years, in the range of 5% or 6%. That growth slowed in 2007, apparently mostly because of a drought that hurt agriculture and a slightly over-valued Turkish lira that hurt exports. While the ongoing crisis with Iraqi Kurdistan is worrisome, the OECD thinks that Turkey’s economy will post good growth of 6% a year during 2008 and 2009. Turkey’s tourist sector is expanding especially quickly, with lots of new airline routes to Istanbul and billions of dollars in foreign investment.

Democracy appears to be entrenching itself in Indonesia, which is a secular democratic state with a Muslim majority. Neither of the two major parties is interested in moving toward a theocracy. The country had a peaceful transition in the presidency in 2004, and weathered the devastating tsunami the following year. The economy is doing well, a 6.3% growth rate and a 10% increase in exports. The Jemaah Islamiyah, an affiliate of al-Qaeda, turns out to have no grass roots in the country, and the horrific Bali bombing of a nightclub was more an echo of the 1980s Afghanistan jihad than a harbinger of the future. Although there are Muslim parties that want to make Islamic law the law of the land, they are peaceful and small, and are unlikely to get their way, at least any time soon. Indonesia is the world’s fourth-largest country, with a population of 234 million. It is also the largest Muslim country in the world (about 201 million are Muslim). While it has a fairly restrictive press law on government information, it is a genuine democracy by any measure, with some 800 newspapers that publish freely without government censorship. It is instructive that Indonesian newspaper editorials have seen Pakistan’s current crisis as a result of military rule, and have generally agreed that their country avoided such crises by democratizing from 1999. Tom Ginsburg argues that Indonesia is among a handful of “third wave” democratizations that have been success stories, and he notes that many of them (Taiwan, the Philippines, South Korea, & Mongolia) are in Asia. He contrasts Muslim Indonesia’s success with the return to forms of authoritarianism in Russia and the rise of authoritarian populism in Latin America.

Egypt, which grew 7% in 2007, saw a drop in poverty levels, and attracted $11 billion USD in foreign investment. Egypt was an economic basket case and turgid military dictatorship for so long that these numbers make my head spin (it has been growing five and six percent for the past few years). These changes have not passed without controversy. Some neoliberal policies have provoked labor strikes, by workers afraid that their job security will be lessened. Egypt’s population growth rate is slowing, but it faces more problems from increased population than Turkey or Indonesia.

One explanation for Egypt’s growth in the past half-decade is that the Gulf oil states are at last investing in local economies. The United States has made it unpleasant for Saudis and Qataris to come to the US, and investors like to be able to visit the places they park big capital. So, some of them are investing in Egypt, which has cheap labor, an increasing literacy rate, and expanding rates of internet use. Tourism generated $2 billion USD more in 2006 than it had in 2005, so Cairo is a pretty good place to own a five star hotel. If this theory is correct, and the vastly increased petroleum revenues in the Middle East are being put to use productively in the region itself, that could be an omen of big, positive changes.

Despite the Muslim Brotherhood’s having won an unprecedented 88 seats in the lower house of the Egyptian parliament last year, the fact is that Egyptian elections are fixed and there is more or less a president for life. It seems to me unlikely that Egypt can maintain its current high growth rates unless it moves more quickly toward democracy. The perils of military rule in a growing economy with a restless but disenfranchised new middle class are obvious in Pakistan.

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