By Lisa Anderson
Excerpt of an upcoming article in The Cairo Review of Global Affairs.
Ensuring Private Interests: Promising the Future
“Never underestimate your role… for you are in the business of shaping lives, planning futures and building nations.” —Mohammed bin Rashid Al-Maktoum, on leadership, 2019
What was the logic of the newly emerging regional dynamic? The neoliberal foundations of globalization were presented as a new opportunity to reframe state–society relations, bypassing both states and regimes—the “babble of politics”—for an entirely new notion of governance modeled on the modern multinational corporation. As Al-Maktoum, himself a prominent advocate of this new approach, argued: “maybe the time has come for [the Gulf Cooperation Council or the Arab League] to be overseen by leaders, managers, businessmen, heads of industry and entrepreneurs instead of foreign ministers.”
The ruling families of the Gulf were among the most eager proponents of the retreat of the state and the restructuring of regimes as they adopted the watchwords of the global private sector, positioning their countries as “flexible, adaptive, entrepreneurial, and innovative.” They characterized themselves less as stewards of states or members of political regimes than as management committees of family-owned businesses. Indeed, Crown Prince Mohammed Bin Salman of Saudi Arabia was soon dubbed the “CEO of Al-Saud Inc.,” having taken control of Aramco, the national oil company, and quickly became “deeply entwined with the fabric of the global financial system” as the major investor in the $100 billion Vision Fund as well as in other international government funds. It was a role the rulers embraced publicly: As Ahmed Kanna notes in Dubai: the City as Corporation, Muhammad Bin Rashid Al-Maktoum called himself the “CEO of Dubai.”
But the Gulf rulers were hardly alone in accenting finance, entrepreneurship, and investment. Many governments seized the initiative to drive economic investment that they had once left to crony capitalist allies, including a number of what are conventionally understood as military regimes. In 2020 Algeria’s government, for example, announced that foreign investors could take majority stakes in projects in non-strategic sectors and took additional steps to seek new financing sources, including developing the Algiers stock exchange. Many of the countries of the region managed sovereign wealth funds; of the world’s top fifty sovereign wealth funds, twelve were in the Middle East, including Egypt’s at number forty-three.
These funds invested in projects designed both to generate domestic growth and employment and to partner with international private funds that typically made investments in riskier ventures such as technology firms, entertainment companies, and real estate projects, as befit funds responsible not to citizens, but to shareholders.
Other ways to attract private investment were proliferating as well. Various kinds of exceptional jurisdictions and privatized enclaves operating under special legal regimes, profiting and protecting their investors, appeared across the region. From special economic zones, self-contained “techno-cities” and science parks, gated residential communities and offshore cruise ships, to labor compounds and private islands, such enclaves provided a regional and even global class of wealthy entrepreneurs with bespoke legal regimes, including not only tax exemptions but dispute arbitration rather than the jurisdiction of national courts, and private security in lieu of the local police.
The role of the “shareholder” was increasingly complicating and even supplanting rights-based claims on governments. This citizen-as-economic actor may have been born in the Gulf but was also transregional; wherever there was foreign investment, there were local partners, agents, and representatives looking for shares of the wealth: and governments prepared to accommodate them. When protests against a law granting amnesty to corrupt civil servants broke out in Tunisia in 2017, in what Nadia Marzouki called a “shift from transitional to transactional justice,” President Caid Essebsi argued that it was necessary to restore the confidence required to bring back investors after the upheavals of the uprisings earlier in the decade.
For those who were the beneficiaries of such arrangements, the rights of citizenship are superseded by the privileges conveyed by patronage and protection in private systems of governance that are often inconsistent with, even contrary to, national law. This disregard for local law permitted the growth of what might be called an archipelago of enclaves stretching across the region that knit together transnational networks of special financing, exclusive investment opportunities, commercial security firms, isolated airports, cloistered villas, and private meetings. Although Saudi Arabia had ambitious plans for Riyadh, one of the most dramatic efforts to create a new investment-ready governmental enclave was Egypt’s new administrative capital. As part of Egypt’s Vision 2030, the new capital was being built halfway between Cairo and Suez, with all of the national ministries in a dedicated campus, twenty-one residential districts, several thousand schools, a technology and innovation park, nearly seven hundred hospitals and clinics, 1,250 mosques and churches, a ninety thousand-seat football stadium, forty thousand hotel rooms, a theme park four times the size of Disneyland, and a new international airport. The population was expected to be 6.5 million; part of the avowed purpose was to decant the overcrowded downtown of Cairo with its overburdened and decaying infrastructure.
From the vantage point of the denizens of these kinds of gated communities with private security and special economic zones with exclusive jurisdiction, the purpose of government had shifted from securing independence or safeguarding stability to ensuring the ease of doing business. In the twenty-first century, the purpose of government was fast becoming facilitating the ability of captains of industry and finance to fly from enclave to enclave, making deals, securing licenses, and visiting theme parks easily and conveniently. In this context, establishing relations with Israel was merely a smart business arrangement; the Jewish state was understood as neither a nationalist settler-colony nor a sectarian regime but a business-friendly enclave of technology transfer, investment financing, and technological innovation.
The appeal of this new approach to governance in the Arab World—the promise of socially tolerant, economically prosperous illiberal autocracy—was considerable, at least for those who expected to benefit. It shared the “techno-optimism” of Silicon Valley, where companies from Facebook to Amazon transformed social life by making communication and commerce easier and more convenient, all the while creating vast invisible stores of surveillance data and fast growing disparities in wealth. Still reeling from the Arab Spring, many governments were, as Jon Alterman put it, “converging on a model that combines authoritarianism with a social safety net, strict limits on religious expression, a more liberalized social space, and an invigorated private sector. It might be called the “GCC consensus,” but its practice reaches from Tunisia to Jordan and beyond.”