Middle East nations try to buy off dissent

A Jordanian protester shouts slogans during a demonstration outside the Egyptian embassy in Amman in support of the mass protests taking place in Egypt calling for an end to Egyptian President Hosni Mubarak's regime.

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Kai Ryssdal: Starting in Tunisia -- and to a degree in Egypt and now certainly the past few days in Iran and Bahrain -- governments in the Middle East have tried to keep a lid on pro-democracy protests with violence. Police officers and soldiers have been deployed. But governments have also been turning to fiscal policy of a sort. In Jordan, they've been throwing public money at protesters, in the hopes they'll just go away.

Marketplace's Stephen Beard reports from Amman.


Stephen Beard: It's the oldest trick in the book. The Romans called it "bread and circuses:" Stuff the people with food or line their pockets with cash and hope that will placate them.

The same is happening today across the Arab world.

Muhammad Al-Masri: All the governments in the Middle East are using their money and distributing money nowadays in order to calm the people.

Muhammad Al-Masri of the University of Jordan says Arab governments had been slashing public spending and cutting subsidies. But suddenly austerity is going out of style. Largesse is all the rage.

Al-Masri: Let's give the people money. The people will be calm and they are not going to question our authority. They're not going to talk about their basic freedoms and political freedoms. It is a form of a bribe.

The most blatant example is in Kuwait. The small, immensely wealthy oil rich sheikdom is giving everyone of its citizens $3,500 and free food for a year.

But everyone is at it, says economist Ibrahim Saif, including dirt poor countries with little or no oil.

Ibrahim Saif: In Jordan, immediately the response was to increase the public servant wages by -- not a significant amount -- but that was the response. And there was also a decision not to continue cutting subsidies.

That will set the Jordanian government back a half billion dollars, which it can ill afford. Syria can't afford its largesse either. Raising its heating fuel subsidy by 72 percent will cost a fortune. This spending spree cannot go on, says Saif.

Saif: It's not sustainable, because most of the countries now, the Arab countries, are running huge budget deficits. They're slowing down in their economic performance.

Many commentators here believe that even the oil-rich countries that can easily afford the extra spending will not get a return on their money. They won't deflect dissent. Take the relatively prosperous nation of Bahrain in the Persian Gulf. It promised every household a gift of $3,000 but the protests rage on.

Muhammad Al-Masri says what the Bahrainis want is democracy.

Al-Masri: They are not looking for more cash in their pockets. They want to be partners in the decision-making process.

The protests sweeping across the Arab world may have been triggered by economic concerns: Rising food prices, stratospheric unemployment. But now, claims magazine owner Mustafa Harmaneh, it's developed into a full-blown revolution that won't be stilled by a splurge in public spending.

Mustafa Harmaneh: To resort to these measures show that these regimes are really historically trapped. And when the conditions develop in these societies for change, it's unstoppable.

But can governments with enough money smother the urge for freedom and democracy? Saudi Arabia will be the ultimate test. If the unrest breaks out there -- in a country with an estimated 20 percent of the world's known oil reserves -- the effects will be felt around the globe.

In Amman, I'm Stephen Beard for Marketplace.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

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