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The MENA Region’s Uphill Struggle against Corruption

The struggle against corruption in the Arab world faces hurdles that may prevent today’s demonstrators from realizing the unformed and unrealized dreams of comprehensive political change.

Analysis | Middle East

In the Middle East and well beyond, 2019 has been a year of mass public protest and street mobilization. The region is seizing with disorganized and open discontent the scope of which attests to the lasting imprint of the political revolts that erupted in 2011 and continuing socioeconomic and political problems. That impact reveals itself in the contrasting lessons that regimes and oppositions have drawn from the nine-year aftershock generated by the Arab Spring. In Egypt, Bahrain, the United Arab Emirates, and Saudi Arabia, the Arab Spring’s tremors have convinced many autocratic leaders that their survival requires crushing all dissent. But where varying degrees of space for political contestation and electoral politics remain (in Iraq, Lebanon, Sudan, and especially Tunisia), or where ossified regimes lack the means or habit of engaging their societies (as in Algeria), citizens have mobilized to challenge ruling elites who have lined their pockets in the name of religious or sectarian parties. Their protests do not in fact portend an equally shared quest to banish sectarian political mobilization. However, because corruption is a scourge that all groups agree must be eliminated, fighting it provides a nearly perfect battle cry for a more inclusive—if as yet undefined—democratic politics.

The struggle against corruption in the Arab world faces hurdles that may prevent today’s demonstrators from realizing the unformed and unrealized dreams of comprehensive political change. These obstacles are partly rooted in the resolve of powerful regional autocracies, such as those in Iran and Saudi Arabia, to continue backing their allies in Iraq, Lebanon, Yemen, and elsewhere. But there are also potent domestic obstacles, not least of which is the still tight fit between patronage politics and sectarianism. Beyond this, there is also a range of inconvenient if basic economic and institutional realities that probably have not occurred to many of the young men and women who have taken to the streets. In fact, the struggle against corruption will require painful choices, though recognizing these inconvenient facts does not mean abandoning the battle against corruption. That said, it does require the emergence of a new cohort of leaders who have the charisma, authority, power, and commitment to clearly define the various and potentially conflicting priorities that the region’s popular movements must confront sooner rather than later.

The Wedding of Wasta and Corruption Provokes Increasing Outrage

The technical definition of corruption is when public officials and/or private citizens use state or public institutions, resources, or positions for private or personal political, economic, or social gain. This blurring of the boundaries between public and private can occur in any state, including established democracies. It is especially widespread in developing countries, where powerful ethnic, religious, or economic groups that have captured state institutions are loathe to give up the benefits that come with manipulating public offices. In the Middle East, this phenomenon has often equated with wasta, an Arabic term meaning intercession by individuals who have networks or connections that can be used to secure a wide range of services, benefits, or favors. The bureaucratization of traditional networks under the umbrella of state-led modernization has made wasta a vital element of everyday life, one that has been widely viewed as legitimate. But the growing capacity of powerful groups to secure benefits to which weaker groups do not have access has also transformed the notion of wasta.

Indeed, the use of intermediaries has become a handmaiden of corruption, thus provoking increased opposition from many citizens who had depended on what was previously viewed as a more benign form of wasta, such as client benefits. Some of the ire occasioned by this metamorphosis cuts across sectarian divides. Whether the protests attest to growing support for a more national-based identity, or in some cases a quest to share the spoils in ways that preserve or even strengthen sectarian solidarities, the result is the same: corruption is a major problem in the view of a large majority of Arabs. This was indeed reinforced by the results of the Arab Opinion Index of 2017-2018 which showed that more than three-fourths of the Arab public thought corruption is widespread. The concern is nearly matched by a widespread perception that escalating maldistribution of wealth flows from the ability of public officials and their allies in the private and public sectors to milk their positions for their personal or sectoral benefit.

While understandable, corruption is driven by a complex mix of forces; tackling them also involves complex and even difficult trade-offs. Thus, if the battle against this gathering hazard is to make any headway, the emerging leaders of the anti-corruption movement must grapple with some inconvenient realities, three of which are discussed below.

1. Democratic Change Fosters—and Can Even Expand—Corruption

There is no obvious relationship between corruption and regime type. While established democracies have institutional and legal assets to limit corruption, new democracies lacking these advantages often suffer from increasing and even rampant corruption. Moreover, the freeing of print and online media from state control gives these media the means and incentive to highlight the most egregious forms of corruption. Paradoxically, a more open political environment can foster an exaggerated perception of corruption in ways that undermine popular support for democracy. Conversely, some autocracies have judicial and administrative bodies that limit economic malfeasance, thus actually giving them an edge over some democracies.

The contrasting experiences of Middle Eastern states illustrates these different, and perhaps some surprising, relationships. For example, Transparency International’s Corruption Perception Index of 2018 gave the United Arab Emirates a score of 70 (with 0 being “highly corrupt” and 100 “most clean”). With a ranking of 23 out of 180 countries, the UAE ranked as the least corrupt country in the Arab world. Although it has a fully autocratic regime that forbids elections and stifles dissent, the UAE appears to suffer from far less corruption than other Arab states. Tunisia, for example, as an emerging competitive democracy, received a score of 43 and a ranking of 73; and Kuwait, a semi-autocracy that has a lively parliament and periodic elections, scored 41 and a ranking of 78. These results may be partly explained by the fact that the UAE’s bribery and corruption legislation sets out penalties that go much further than similar legislation in the Gulf region. Moreover, whereas previously these laws applied only to UAE public officials, the laws (as amended in 2018) apply to public officials as well as to private sector actors who are UAE and foreign nationals, thus addressing the rampant corruption in the region.

These laws are far from perfect. Echoing the U.S. experience, the UAE’s real estate market is poorly regulated, a situation that has earned Dubai the dubious distinction, in the words of Transparency International, of being a “global hub for money laundering.” Still, if it is no Singapore—and while it enjoys the distinct advantage of having a small national population that is well provided for, thanks to the country’s massive oil income—the UAE’s experience nevertheless suggests that its autocracy provides a hedge against the kind of corruption that is far more rampant in more politically competitive, if poorer, Arab states.

The fact that more pluralistic political systems that allow for some measure of electoral competition can be especially vulnerable to corruption is not surprising. In Kuwait, Lebanon, and Iraq, parliaments and their elected officials play a vital role in distributing patronage to their constituencies. Thus, while Kuwait’s semi-authoritarian system gives the royal family a way to limit the authority of the parliament, this latter institution is not an empty shell. On the contrary, electoral competition is fierce precisely because Kuwaiti citizens depend on members of parliament (MPs) to secure their fair share of the many benefits that come from oil income.

Tunisia’s experience is also instructive. Its democratic transition expanded the opportunities for what political economists like to call “rent seeking.” State institutions, such as the port authority and the security apparatus, have played their part in this process by exacting tribute from foreign and domestic businessmen seeking to invest in the economy. But a more competitive electoral system also increased the number of MPs and ministers who have ties to business tycoons, not a few of whom were linked to the ancien regime. Indeed, the September 2017 passing of an “economic reconciliation” bill gave immunity to public officials who had been accused of corruption under President Zine El-Abidine ben Ali. While late President Beji Caid Essebsi insisted that his government was merely trying to improve the business climate, granting amnesty also carried with it the prospect of even more corruption. Although the law provoked a fire storm of criticism at home and abroad, it was supported by the Ennahda Party’s leaders, who argued that backing the law was necessary to maintain the power-sharing arrangement with Nidaa Tounes. It is tempting to dismiss such arguments as crass opportunism on Ennahda’s part. But in a proportional electoral system that has deprived any one party of a majority, the fact is that the fractious politics of alliance building often shapes economic policy making.

2. Fighting Organized State Corruption

The primacy of politics over economics was illustrated by the timing of Tunisia’s reconciliation law, which was passed some four months after the government of Prime Minister Youssef Chahed announced a “war on corruption” that reached its peak with the arrest of seven ancien regime tycoons. This sequence of events fed the perception that Chahed’s “war” was less about corruption than about settling scores in an unfolding power struggle within the Nidaa Tounes Party, whose support for the reconciliation law was widely viewed as a payoff to businessmen who had funded the president’s party. Whatever the veracity of this judgment, Tunisia’s experience underscores the obstacles to fighting corruption that are common to emerging democracies.

The demonstrators who have taken to the streets of many Middle Eastern cities, big and small, have focused their ire on the twin maladies of pervasive corruption and rampant inequality. The view that these two ills are closely aligned is certainly correct: the distribution of patronage has given state officials and their cronies in public and private sector businesses the opportunities to secure untold fortunes. In Egypt, Algeria, and Iran, and quite possibly Iraq, top security officials have captured a lot of this booty, thus ensuring that citizens who dare protest this system will face severe consequences. Despite such risks, citizens have taken to the streets because, as they have made crystal clear, they are fed up with the economic and social injustices that come with institutionalized corruption.

But in taking on this system, they face hurdles that are not limited to possible retribution from powerful security forces or militias such as Hezbollah or the Popular Mobilization Forces in Iraq. The larger structural obstacle they face is that decades of institutionalized corruption have drained state budgets, thus leaving governments with little choice but to print more money or borrow abroad. In Lebanon, this debilitating syndrome has helped to produce a public debt of $86 billion. Confronted by the prospect of macro-economic collapse and pressed by international banks and the IMF to get their houses in order, many Arab governments are reducing budgets, imposing new taxes, and depreciating their currencies. It was, of course, precisely such steps that provoked the street protests in the first place. The region’s besieged middle classes reject paying the price of austerity measures while a small and wealthy elite remains untouched. But if these sentiments are justified, the fact is that many patronage systems are running out of steam (and money). Organizations such as the International Monetary Fund (IMF) assert that such a situation cannot be remedied without major structural reforms. Indeed, the IMF argues such reforms are essential to fighting corruption. While this judgment may be correct, it is not easily absorbed by the region’s angry protesters. They want the entire system to be dismantled. But they lack a unified leadership that can channel their fury behind an organized quest to negotiate with regimes and power centers—ones that have the means and incentive to ignore their demands.

3. Is Religion the Answer?

Faced by such daunting challenges and, even more so, the difficult compromises that must be addressed when it comes to the problem of economic corruption, it is not surprising that some leaders in the region prefer to frame the problem in moral or religious terms. This approach suffers on several accounts. First, the evidence does not support the claim that the absence of religiosity has any major impact on whether state officials or private sector actors behave in a corrupt way. To wit, Catholicism remains widely practiced in Brazil although corruption is rampant there; by contrast, in Poland where Catholics are less observant, corruption is relatively limited.

Islamists, of course, argue that their religion tightly links faith and politics, thus ensuring that in the minds of most Muslims, Islam must be part of the solution. But this judgment ignores the diversity of opinion in the Muslim world regarding the relationship between mosque and state—even in Muslim-majority societies. In Tunisia and Iran there is significant support for keeping faith out of both politics and economics; moreover, those who proffer an Islamic solution risk undermining their own cause. In Iran, the clerics’ ties with corrupt institutions contradict the guiding principles of the Islamic Republic. In the Arab world, mainstream Sunni Islamists may not accord clerics the same level of authority, preferring instead the leadership of lay Muslim intellectuals such as Ennahda’s Rachid Ghannouchi. But Ennahda’s effort to play the role of an ordinary political party while retaining its Islamic credentials has undermined its credibility, not only with secular groups but within its own base. The elected speaker of Tunisia’s new parliament, Ghannouchi, is walking a fine line by advocating a campaign against corruption and calling for including zakat in the finance bill—while also struggling to forge a governing coalition that, by some twist of fate, might even include1 the Qalb Tunis Party (Heart of Tunisia), whose leader, Nabil Karoui, is a prominent business tycoon who remains under investigation for money laundering. It may seem that opportunism is a requirement of coalition politics, yet its exercise by leaders who invoke religious pieties underscores the costs that come with any effort to champion an “Islamic” strategy for fighting corruption or economic inequality.

A Way Forward?

Given the daunting obstacles outlined above, today’s protesters must forge a strategy that will erode the power of deeply embedded political systems without provoking state repression or, perhaps worse, the prospect of escalating civil conflict. Civil society groups remain the most likely arenas for defining the long and uncertain path forward. On the domestic front, this will require new leaders; and on the global front, it will necessitate continued and defiant support from organizations such as Transparency International, Human Rights Watch, and the Open Society Foundation. In an age of populism that is infecting western governments, opponents of corruption and repression must look to new forms of international solidarity despite—or perhaps because of—the many hurdles before them.

Republished with permission from Arab Center Washington DC.

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