Abstract
Reforms that would empower citizens, promote inclusive economic and political institutions, improve the business climate, and help MENA’s economies thrive include:
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Adopt our proposed Citizen Empowerment Plan (CEP) where citizens own the oil and revenues are distributed directly to the citizens.
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Reduce the reliance on oil and diversify away from oil.
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Tailor education to develop new comparative advantages.
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Move towards more transparency and accountability.
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Reduce military expenditures.
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Reduce government employment.
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Improve youth employment.
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Empower women and reduce population growth.
Adopting the CEP as described in the previous chapter would facilitate these reforms. However, it is a chicken and egg problem. These reforms are needed in order to adopt the CEP, but the CEP is needed to adopt the reforms. Therefore, incentives needed for autocrats to make reforms and transfer ownership of oil to the citizens include but are not limited to the following:
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More publicizing of indices, ratings, and rankings
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Contingent international aid, finance, and loans
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Oil sanctions
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Membership and status in international and MENA organizations
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Empowering the citizens with a sense of resource ownership to insure government accountability
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Taxing and repatriating the assets in countries outside of MENA owned by autocrats and their cronies
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Adoption of constitutional monarchies and truly representative governments with clear separation of powers and press freedom
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Realization that the status quo is unsustainable
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Notes
- 1.
Not all of the oil MENA countries operate without a tax system. Algeria for one has one. Even in that case, if oil revenues were redirected to the citizens first and then taxed later, the waste, rent seeking, and all the ills associated with resource wealth would be reduced.
- 2.
This relates to the lack of consultations before new rules or regulations are enacted and feedback from those who are impacted by the new rules. This also reflects the lack of the citizen’s voice in the MENA region.
- 3.
- 4.
We admit that we may be naïve in proposing this since we suspect that others have proposed it and called out significant drawbacks. But by reconsidering it and tinkering with the idea in the presence of advance technology, harnessing hydrogen as a source for energy might just pay off. Breakthroughs are possible.
- 5.
The World Economic Forum meeting in Amman, Jordan in April, 2019 addressed the issue of education in the region, see Arab Education Should Focus on Early Childhood and Adoption of Technology, Say Regional Leaders, 6 Apr 2019, https://mailchi.mp/a0e3c831d176/arab-education-should-focus-on-early-childhood-and-adoption-of-technology-say-regional-leaders?e=eb1d7840ca.
- 6.
“Guns and butter” issue most countries confront referring to the trade-off between guns, implying military expenditures, and butter, implying domestic goods, or non-military expenditures such as private household expenditures or public expenditures on roads, bridges, courts, etc.
- 7.
This may change by the time this book is published.
- 8.
This transition would actually help and shield royal families from blame in the region when the oil markets are soft and would bring a rational approach to the pricing of public goods as well as the vast subsidies. In the case of Saudi Arabia where the benefits to the large number of royal princes and princesses do have an impact particularly when there is no accounting or transparency as to who gets what and why. See What Saudi Arabia’s crown prince can learn from Queen Elizabeth II, in Khashoggi and Lacey (2018).
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Akacem, M., Miller, D.D., Faulkner, J.L. (2020). Positive Directions for Reform. In: Oil, Institutions and Sustainability in MENA. Springer, Cham. https://doi.org/10.1007/978-3-030-25933-4_10
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