The Political Economy of Regional Cooperation in the Middle East

Ali Carkoglu, Mine Eder, Kemal Kirisci

• Publisher: Routledge
• Year: 2005
• ISBN:
  9781134648863
• Edition: 1
• Topic: Commerce
• Subtopic: Commerce Général

This book explores the current anatomy of regional cooperation and why it has often failed to take hold. It offers an alternative view of politics and international relations in the Middle East. The findings show that co-operation between many of the more open regimes, such as Israel, Jordan, Egypt, Palestine and Turkey can pave the way to increased stability in the region.
The authors argue that focusing on international and regional factors alone is insufficient in explaining the prevailing instability in the region. Instead they highlight domestic factors as crucial to understanding conflict and co-operation in the Middle East. Using many examples and looking particularly at Turkey's experiences, this study shows why it is essential to mobilize domestic support for co-operation amongst countries and regions of the Middle East. Without such support from economic and social groups, inter-governmental co-operation is less likely to last.

1
Introduction

‘The Middle East is a visionary’s paradise: An area whose most famous city is the City of Peace, but whose most common characteristic so often seems to be its perpetual war.’

Roberts (1995:11)

No other region in the world offers as contradictory a picture as the Middle East. Home of three religions, the region has an unparalleled diversity of culture and history. With its rich oil reserves, it is the host of one of the world’s most precious natural resources. Yet it has also been an ongoing host to historic conflicts between the Arab countries and Israel, between conservative and radical regimes, between Iran and Iraq, between Iraq and the Gulf-War coalition, between the oil-rich and non-oil states, between secularists and Islamic fundamentalists.

The 1980s and early 1990s witnessed developments that may indeed transform this land of political turbulence and conflicts. Can the Middle East become an ‘economically prospering’, ‘democratising’ region like most regions in the world and finally begin to fulfil its potential? Or is the region bound to remain ‘exceptional’, plagued with violent conflict, slow growth, relative isolation, and closed and inefficient economies? Can the existing barriers to political and economic cooperation be overcome in the region? If so, how can the Middle East join in the global trend of regional cooperation? What are the new opportunities and prospects emerging in the region that make such cooperation more likely? What are the conditions of successful economic and political cooperation in the Middle East? Do these conditions exist in the region? What role can states with democratic and open regimes with fewer inter-state conflicts, or what may be called ‘like-minded’ states, play in fostering cooperation in the region? What kind of a role can one of these ‘like-minded’ states, namely Turkey, play in order to enhance cooperation and peace in the Middle East? This study explores the answers to these questions by analysing the constraints and prospects of regional cooperation in the Middle East. In answering these questions, we observe that exploring the prospects of economic and political cooperation in the Middle East is a highly urgent and crucial issue. Such a focus is likely to have important repercussions not only for peace and development in the region but also for the world. The Gulf War has clearly shown that few conflicts in the Middle East can actually remain regional. Given the geo-strategic and economic significance of the region, ensuring stability through regional cooperation, is indeed a priority.

Five main arguments are developed throughout this study. First, we suggest that recent trends both in global economy, international politics as well as changes in regional politics have created an environment in the Middle East that is conducive to cooperation in the region. Indeed, the end of the Cold War, the Arab-Israeli peace process—fragile though it might be—the decline of Arab radicalism and the fragmentation of Pan-Arabism have opened new paths for cooperation. Further-more, changes in global economy such as increasing globalization, expansion of trade and the increased participation of the former Soviet republics and Eastern Europe into the world markets, have all created new economic pressures for the region to engage in economic cooperation. Most importantly, rapidly declining oil prices, which meant declining revenues and income for the oil-rich states, suggest that economic cooperation may well become inevitable. The need to find new sources of revenue may indeed help enhance cooperation in the region.

The second argument is that peace and economic cooperation in the region are mutually reinforcing processes, crucial in initiating and sustaining stability as well as economic growth. Both peace and economic cooperation are necessary but insufficient conditions for one another. Clearly, while the resolution of Arab-Israeli conflict and reduction of hostilities in the region is necessary for effective economic cooperation, so are the changes in regional and domestic economic structures for maintaining peace and stability in the Middle East. There are, however, significant barriers to such a restructuring often embedded in state bureaucracies and significant rent-seeking activities. State spending in the Middle East, particularly in the 1970s thanks largely to oil revenues, has in fact formed large entitlement groups (Anderson 1987). The size and composition of these entitlement groups varied significantly and began to change in the 1980s. As Chaudhry (1994:45) summarises, ‘(w)here the so-called “laissez-faire” regimes created large, dependent, and protected private sectors, the so-called socialist regimes cultivated large bases of support in society by directly setting prices and wages while systematically destroying the traditional private sector’. Either way, such state-society networks often created significant barriers to both peace and inter-state cooperation. Any study on the political economy of cooperation, in the Middle East, has to focus simultaneously on the dynamics of peacemaking and economic restructuring while analysing such domestic barriers. Meanwhile, even though economic conditions such as trade complementarity might not exist to any significant degree in the Middle East, these barriers can be overcome through political will. That is why coordination and increased harmony among domestic political and economic structures of the Middle East countries are crucial for regional cooperation.

Our third argument is that countries that had relatively fewer conflicts with more open economies, moderate and democratic regimes, or what we call ‘like-minded’ states, which include Jordan, Israel, Egypt, Palestine and Turkey, are more likely to initiate collaboration and can play a pivotal role in fostering overall cooperation in the region. Based on the extensive literature on ‘democratic peace’, we suggest that, despite its significant challenges and possible reverse effects, democratisation among Middle East governments is likely to improve chances of peace and cooperation in the region. For various reasons there are growing pressures for democratisation. Indeed, high levels of impoverishment, the increasing gap between the rich and the poor, persisting clientelistic ties and corruption in public policy and in resource allocation, along with the absence of legitimate channels to convey discontent on the part of the public, have all increased pressures for democratisation (Tessler and Grobschmidt 1995:136–137). As Norton and Wright argue,

the next phase of Middle East upheaval will centre on a more fundamental— but also more explosive—challenge. Instead of countries fighting each other, conflict will mainly occur within countries, often pitting societies against governments. And while it may take diverse and disparate forms over the next decade or more, these new conflicts will often be dominated by the same issue: economic, social and political empowerment.

(Norton and Wright 1995:7)

Nevertheless, relative democratisation in Middle Eastern states is a necessary though not sufficient condition for eventual regional cooperation and peace in the region. As the ‘democratic peace’ argument suggests, democracies tend to resort to violence less frequently even though they often fight non-democracies. The reasons as to why democracies are less war-prone than others lie in factors such as democratic norms which enhance non-violent forms of conflict resolution, institutional factors and the necessity to mobilise popular support. There are, however, several threats to the prospects of democratisation in the Middle East such as fundamentalism and intolerance as well as existing economic problems.

Furthermore, in many of the Middle East countries, economic cooperation has remained rather limited while political cooperation has developed only recently. The reason lies in the absence of sufficiently developed civil society and democratisation in most Middle Eastern states. These states lack elaborate domestic economic groups, associations and civil organisations that have developed a degree of transnational ties and that have a stake in the economic growth and political stability in the region.

Our fourth argument then is that in the absence of such domestic constituencies, which push their governments toward cooperation, mere intra-governmental agreements, with little or no reference to demands of respective societies leaving the domestic economic and political structures intact, are less likely to last. Any project for cooperation must thus include mobilisation of economic and social groups and most importantly support for democratisation. As Solingen (1996a) argues, however, democratisation without economic liberalisation might not be long lasting. Export-oriented groups that aim to liberalise their economy and increase cross-boundary interaction are indeed crucial for regional cooperation. In contrast, closed, nationalist and authoritarian regimes tend to become one of the major barriers to cooperation mainly because, Solingen argues,

the prospects of cooperation undermine the viability of the state agencies and enterprises associated with military functions and production, threaten with extinction the state’s ability (erstwhile justified in state building and national security terms) to disburse unlimited resources among rent-seeking groups, and deprive populist leaders of a rich fountain of myths.

(Solingen 1996a:96)

In short, regional cooperation will clearly threaten the interests of those that reap the benefits of the existing regime. They will vehemently oppose any attempt to change the political and economic status quo.

Our fifth and final argument focuses on Turkey and Turkey’s role in the Middle East as one of the ‘like-minded’ states, and addresses how this country can potentially help build economic and political bridges in the region. From the Kurdish problem to its urgent energy needs, Turkey’s security and economic interests are closely linked to that of the Middle East. The country has much to lose if the region drifts into violence and instability and much to gain if a new Middle East based on cooperation, peace and democracy can be established. That is why Turkey offers a compelling case study in discussing barriers and prospects of regional cooperation in the region. Clearly, a foreign policy that focuses on domestic groups’ interaction while demonstrating the political will at the governmental level through increased interactions among ‘like-minded’ states both at a bilateral and multilateral basis, can go a long way in enhancing cooperation in the Middle East.

This study is, in effect, an attempt to evaluate the emerging definition of a ‘new’ Middle East and the role of ‘like-minded’ states in this process. A new Middle East —not defined, as is usually done, through conflicts, mutual suspicion, military build-up, authoritarian and closed societies, but one based on open regimes and mutual trust where trade replaces arms and cooperation replaces conflict—might at first sight appear naive or too utopian. Clearly as Quandt suggests,

[the] twentieth century has not been kind to the peoples of the Middle East. Far too many have died in wars; far too many have lived in poverty and ill health; far too many have been deprived of their human rights…far too many may still die in future wars in which weapons of mass destruction may very well be used; and far too many still live under repressive, unaccountable political regimes. For a region rich in resources, this is not a record of which to be proud.

(Quandt 1996:10)

But as he also adds later:

Without being pollyannish, one can imagine the emergence of a zone of peace in the Eastern Mediterranean in the coming decade that would allow for a flourishing of democratic politics and economic growth in Israel, Palestine, Jordan and Lebanon, with beneficial spill-over effects in Syria and Egypt as well.

If this corner of the Middle East, possibly along with North Africa and Turkey, enters into the next century in conditions of improved governance, greater economic prosperity, and peace, a genuine revolution will have taken place. The region could become one in which real national independence might be achieved, cultural life would recover from the dead hand of bureaucratic control, diversity might be seen as a source of strength, individual rights would not be considered a threat to collective identities, and wasteful spending on arms might be reduced.

Needless to say, this vision is far from becoming a reality, but it is a vision that is not foreign to the aspirations of the people in the region, who, after all, are not so different from people elsewhere.

(Quandt 1996:17)

Identifying the barriers to the establishment of this alternative vision of the Middle East, offering ways of eliminating such barriers and evaluating the role of ‘like-minded’ states— particularly the role of Turkey in this transformation—are the main aims of this study. If democracy, economic liberalisation, normalisation of Arab-Israeli relations and regional cooperation are indeed intricately intertwined, how can these three goals be achieved in the Middle East? What role, if any, can Turkey and the ‘like-minded’ states play in achieving these goals?

Methodology of the study

In underlining the importance of domestic actors and, more importantly, how domestic actors interact with international ones, and how they both in turn influence foreign policy outcomes as well as domestic configurations in respective states, this study uses Putnam’s (1988) two-level game framework. Using this framework as a heuristic tool, it elaborates on how the metaphor of a ‘two-level game’ might be useful in understanding prospects of regional cooperation in the Middle East. Putnam’s framework notes that in a given interstate negotiation, two games are simultaneously at work at two different levels. One game is played at Level I, which refers to negotiators at inter-state level. The other game refers to the interaction between the negotiators and their respective domestic constituencies or Level II actors. In any given international negotiation, the statesmen strategically bargain on ‘two tables’, trying to achieve an international agreement at Level I and its ratification at Level II. The two-level-game framework suggests that both the bargaining phase at Level I and ratification at Level II in reaching an international agreement are intrinsically intertwined and strategically interactive. The two-level game approach, in short, allows for simultaneous analysis of the domestic game that is at work between the negotiators and their domestic constituencies, as well as the international game among the negotiators (Evans, Jacobson and Putnam 1993).

This emphasis on the interactive nature of domestic and international dynamics in the foreign-policy process is what gives the two-level game framework an advantage over the existing explanations of foreign policy. The international (or ‘systemic’) explanations of foreign policy, for instance, focus almost exclusively on how the changes in the international system—such as the end of the Cold War or changes in overall balance of power—affect foreign-policy outcomes. Domestic explanations, on the other hand, focus on the nature of state institutions, pressures from domestic groups and overall state-society relations, tending to see foreign policy as an outcome of these domestic constraints. The metaphor of ‘two-level game’, on the other hand, suggests that a mere understanding of conflicts and agreements at the governmental level (Level I), nor an exclusive focus on domestic factors (Level II) can be sufficient in evaluating foreign policy. As Moravcsik (1993: 15) aptly puts it, ‘the image of the executive as “Janus-faced”— forced to balance international and domestic concerns in a process of “double-edged” diplomacy— stands in sharp contrast to the images that privilege either the demands of domestic political constituents or the systemic logic of national interest.’

This conception of diplomacy as a strategic and simultaneous interaction between domestic and international factors provides a fertile ground for assessing the prospects and constraints of regional cooperation in the Middle East. A ‘systemic’ look at the region would focus on factors such as the Arab–Israeli peace process, the post-Cold War dynamics as well as the new international economic realities. There is no doubt that these factors have induced a reassessment of the possibilities of cooperation in the region. However, an exclusive focus on international and regional factors is insufficient in addressing some of the persisting problems as well as the new prospects in transforming this region from one of continued hostilities to one of cooperation and peace. An analysis of domestic factors, and how these domestic factors interact with patterns of intergovernmental ties and vice versa in the Middle East, is crucial in understanding the prospects of regional cooperation.

As such, the metaphor of the ‘two-level game’ leads to fruitful questions such as ‘what are the linkages between economic liberalisation, strengthening of civil society, democratisation and peace in the region’, ‘how do the existing Middle East governments use the status quo at the international level for domestic purposes, and how do the domestic factors in return reinforce or undermine inter-state ties in the region’, ‘what kind of domestic constituencies in the Middle East would support cooperative schemes’ and, finally, ‘how can these domestic constituencies be mobilised’. An attempt to answer these questions requires a simultaneous look at the relationship between Middle Eastern governments and their respective domestic constituencies (Level II), along with the international factors.

The use of the ‘two-level game’ framework also leads to the argument that mobilisation of domestic constituencies for various cooperative schemes can play a crucial and determinant role in pushing both for democracy and peace in the Middle East. That is why successful cooperation among such ‘like-minded’ states with relatively more open and democratic regimes can well have a demonstrative effect both at Level I and Level II. This could also form an initial step for gradual evolution towards a ‘democratic peace’ and cooperation in the Middle East.

Finally, this study utilises the political-economy approach and suggests that economic issues of the region such as oil, population, trade and water cannot be discussed separately from issues of political transformation and regime types. Thus, apart from exploring theoretical linkages between international, regional and domestic levels in the foreign policy-making process, this study also focuses on how economic and political issues are intrinsically intertwined at the nexus of economic liberalisation, democratisation and peace in the context of the Middle East.

In exploring the political economy of regional cooperation, we simultaneously analyse the political dynamics behind economic events and economic logic of political changes. At the domestic level we discuss, for instance, how political dynamics such as the nature of the regime, the nature of state institutions and the degree of the influence of various interest groups can help explain the patterns of economic policies. At the international level we raise such questions...