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Compared to America, Where Do
Egypt And Iran Stand?
Now that it has expelled one dictator for another, a military despot, has taken over?
Do the people have:
1) Freedom of religion
2) Freedom of Press, publication, transmission via radio-TV and Internet
3) Freedom of speech
4) Freedom of assembly
5) Freedom of movement between states and counties
7) Freedom of trade, without taxation, between states
8) Habeas Corpus
9) Freedom of contract and the sanctity of property rights
10) Equality for citizens – among all races, genders, and nationalities
Those are some of the U.S. economic and social freedoms against which life in Egypt and Iran – and any country – should be judged. If a country is free, if people have freedom, they will have all or most of the above freedoms. If not, they are under some other kind of system such as Sharia law that does not honor the female gender but discriminates against women and the rights they should have in a free society.
The lack of democracy, freedom and opportunities to prosper in Muslim countries which contribute to the closing of minds, have made the Muslim world a domain of discontent and the breeding ground for intolerance and extremism.
The revolutionaries in Egypt have now inherited a complex challenge. They must sustain their endeavors long enough to ensure that the transition is systematic, methodical and comprehensive. Cosmetic changes will only create opportunities for new tyrants to emerge.
It will not be enough that they redraw the organizational chart of Egyptian government and rewrite the constitution, but it is also important that initiatives to strengthen civil society and foster a culture of tolerance and compromise are undertaken simultaneously.
The revolutionaries must realize that unless the economic reality of Egypt is altered expeditiously, there is a chance that this revolution could degenerate into chaos and disarray.
What the man on the streets in Iran and Egypt does not understand is that freedom doesn’t equate with expulsion of a dictator. Especially not if the first dictator is closely followed by a second dictator as is the case in Egypt.
There is a newly released publication of an arm of the Omani organization, the International Research Foundation. One article written by Ian Vasquez is called “Economic Freedom of the Arab World.” This report shows how big differences in policies in the region can produce big differences in economic outcomes.
The report looks at 39 variables in 16 countries, ranging from size of government to monetary policy, trade openness, regulation and the rule of law.
Published by the Cato Institute in conjunction with the Fraser Institute, the report called “Economic Freedom In The Arab World” suggests what is true of the world is also true in the Arab region: Economically free countries tend to be more prosperous and faster growing.
“The Arab world is a patchwork quilt of economic regimes,” says Vasquez, director of Cato’s Project on Global Economic Liberty. He said the extent of voluntary exchange, the security of property rights, the freedom to compete and freedom of choice vary widely. Lebanon and Oman tie for first place in economic freedom, while the United Arab Emirates and Kuwait tie for second. Syria and Algeria rank at the bottom.
Vasquez reports that the economically freer countries, dominated by the oil states, tend to have higher incomes. Oman and Kuwait have per capita incomes of $13,032 and $17,073 respectively, while Syria’s per capita income is only $3,651, for example.
“But oil is not always a blessing. Many countries are rich in oil but, because their governments have easy access to oil wealth, little is done to improve their overall economies and the material conditions of their citizens. Oil wealth becomes an impediment to economic freedom”
The “oil curse” has afflicted such countries as Venezuela, Nigeria, Mexico and Russia, he reports..
He believes that the oil curse isn’t quite as severe in the Gulf. Oil states in general perform better than other Arab states. The reason for this may be related to trade. It is notable that the oil states included in the report (Iraq was not because of lack of data) have long maintained relatively high freedom to trade. A liberal trade regime is important because it creates a domestic political dynamic that encourages people to be productive rather than seek favoritism from government.
One must ask about the current Barak Obama administration in that regard. Obama has created his own political dynamic that is encouraging people and companies to seek favoritism from government rather than being productive. What is the negative long-term effect of this Democrat brand of favoritism? It can’t help but take America away from Capitalism, free enterprise, and the economies of competition that are so badly needed for a country to maintain a high standard of living?
Bailouts and stimulus bills aimed at popular Democrat-specific companies in particular are bound to cause problems in the future, and have already done so. Large amounts of money going to “bailout” GM, AIG, Fannie and Freddie, and to other companies favorable to the Democrats are seen as bribes to certain business owners at the expense of others. If competition is no longer needed in America, how many years will it take before the U.S. becomes a third-rate country closer in it’s business approach and economic success to Syria, Mexico, Venezuela, Nigeria, and Russia than to Oman and Kuwait.
Has America taken a dangerous step backward in encouraging government help to industry? In short, freer trade reduces special interests’ ability to compete, resulting in less economic freedom.
United Arab Emirates has played an especially positive role in promoting trade and economic freedom, Vasquez said.
Salem al Ismaily, co-author of the Arab economic freedom index, points to the UAE — the Gulf country with the longest-maintained liberal trade regime — as providing a demonstration for neighboring states. As its trade remained relatively free during the last 20 years, the UAE steadily increased freedom in other areas of its economy, attracting investment and producing growth. Other countries emulated the example. Policy competition among countries is as important as competition in the market.
The report notes that in the Arab world, “most types of economic interaction… remain remarkably limited and inconsequential.” Trade among Middle Eastern countries represents only about 8 percent of the region’s trade. The lack of economic freedom in many Arab countries limits commerce so richer states “find better and cheaper products outside the region rather than in the region’s labor-endowed states, where economic freedom tends to be relatively low.”
Other problems still remain even in the more economically free Arab countries. Unemployment is a high 15 percent in Oman, for example, and its government, which employs about half the Omani labor force, is large. Fortunately, the country seems aware its oil reserves will not last forever and has continued increasing its economic freedom.
Vasquez does not mention Iran and Egypt, so I will try to fill in the gaps.