The deceptive allure of imagery
The public relations machinery of numerous Arab regimes is operating at full tilt. The behind-the-scenes reality is, however, sobering: In terms of democracy and the quality of governance, the region shows the worst scores of any region ever in the history of the BTI. It also performs poorly in terms of economic output and social safety nets. We see momentum gaining in Saudi Arabia, where the new strongman has ignited an astonishing – though strictly autocratic – transformation process.
With the help of lavish promotional videos, multimillion-dollar football deals and spectacular construction projects, many Arab regimes have invested considerable effort in portraying their countries as modern and forward-thinking nations. The BTI 2024 data, however, reveals a very different reality behind the gloss and glitter: In terms of the dimension of political transformation, the average score of 3.47 for the Middle East and North Africa (MENA) region is the lowest ever registered by the BTI across all regions. The same holds true for the Governance Index (3.76 points). Moreover, the level of economic transformation (4.70 points) is at its lowest point.
Certain countries are playing a pivotal role in driving this negative trend. Tunisia, once on a promising path of reform, now finds itself at a standstill as it regresses into autocracy, resulting in a loss of 1.57 points in terms of political transformation. Tunisia is also struggling with its ongoing economic crisis (-0.46 points). Türkiye has experienced a similarly sharp decline, continuing the noticeable downward trend observed over the last decade. Meanwhile, Sudan’s Governance Index score has plummeted to 1.30 points under re-established military rule, aligning with Syria at rank 134 in the Index.
The ossified Iranian regime, at rank 133 in the Governance Index, stands in stark contrast to its western neighbors along the Persian Gulf. Most other autocratic regimes in the region purport to champion progress. However, it is a controlled kind of progress that they can manipulate. Their public relations campaigns suggest that an authoritative, dictatorial approach to modernization can usher in stability, prosperity and progress for their populations. While Qatar and the United Arab Emirates have embraced this strategy for the past 30 years, Saudi Arabia, under the leadership of Crown Prince Muhammad bin Salman (MbS), has now adopted a similar course, yielding significant gains across all three BTI indices. However, it is important to note that the kingdom remains among the most hard-line autocracies in the world. Iran’s rulers, meanwhile, do not even seem to care about their image, neither internally nor externally.
Political transformation
Uncompromisingly autocratic
Although backsliding, Lebanon is the only country in the region that is still classified as a democracy in BTI terms. By contrast, Tunisia has been reclassified as an autocracy due to President Kais Saied’s deliberate undermining of the country’s democratic institutions and his crackdown on opponents. In a particularly bold move, he declared a state of emergency in July 2021, leading to the dissolution of parliament and his cabinet. Despite the formation of a new government, Saied now wields power as an autocrat. The introduction of a new constitution in July 2022 has evoked memories of the era under long-term ruler Zine El Abidine Ben Ali. The newly elected parliament is primarily composed of toothless representatives lacking the means and, seemingly, the will to exercise robust oversight over the executive branch.
In Iran, renewed mass protests erupted across the nation following the death of 22-year-old Mahsa Amini on September 16, 2022, rallying under the banner of “Women, Life, Freedom.” Ebrahim Raisi, who assumed the presidency just a year earlier after a contentious election, has upheld his reputation as an ultra-conservative hardliner. In 2022, Amnesty International reported at least 582 executions, with security forces responding harshly to demonstrations. Consequently, by early 2023, most protests had been quelled.
Sudan’s democratization process came to an abrupt halt after only a few months, resulting in a decline of 0.97 points. Scoring no higher than four on all political transformation indicators, Sudan continues to be categorized – along with Libya, Syria and Yemen – as a “failing state.” There is no other region in the world with a higher concentration of failing states.
In Türkiye, President Recep Tayyip Erdoğan has solidified his authority since the country's political system shifted from a parliamentary to a presidential republic. He now exercises control over the legislature, judiciary, military and media, and the degree of political transformation in the country continues to deteriorate (-0.57). The much-anticipated parliamentary and presidential elections in the spring of 2023 did not bring about a change of leadership, a result partially secured through the revised electoral law passed by Erdoğan’s AKP-dominated parliament in April 2022. Prior to that, in June 2021, the government had initiated proceedings to ban the second-largest opposition party, HDP. By contrast, when it comes to tackling rampant corruption, the government proceeds with caution, particularly if members from its own ranks or associated business circles are implicated.
We see seemingly positive developments in Iraq (+0.27) and Saudi Arabia (+0.23). In the case of Iraq, these gains stem from various minor improvements, such as the state’s expanded monopoly on the use of force and a reinforced separation of powers. Saudi Arabia has become an astonishingly dynamic country since MbS, who acts as a representative of the aged King Salman and has also held the office of prime minister since 2022, came to power. MbS has not only marginalized the once-dominant Wahhabi clerics but also loosened the state’s grip on arts and culture, a change embraced particularly by the country’s young urban classes. However, these shifts shouldn’t be confused with genuine political reforms. The state’s repressive apparatus still has the capacity to take arbitrary action against anyone at any time and without legal constraints.
Economic transformation
Major concerns about stability
Iraq and Saudi Arabia are also the only countries in the region making noteworthy progress in terms of economic transformation. Apart from these two, the familiar pattern prevails, with the resource-rich Gulf monarchies maintaining their dominance. The United Arab Emirates, having strengthened its business-friendly environment and invested heavily in education, is now classified as a “highly advanced” economy, while Kuwait has ascended to the group of “advanced” economies.
Six countries have experienced considerable economic deterioration. They all struggle with challenging structural constraints that are compounded by major failings or misguided priorities on the part of their governments. Lebanon (-0.36) is a telling example in this regard. Already burdened by the global surge in commodity and foodstuff prices, the nation is further hampered by those in power who, operating within the confines of confessionalism, have stubbornly resisted necessary reforms for decades. This refusal to embrace reform is the primary cause of Lebanon’s current state of financial crisis.
The devaluation of the Lebanese pound, which is the national economy’s key problem, remains unresolved. As of February 1, 2023, Lebanon’s central bank devalued it by 90% against the U.S. dollar, partly to curb rampant inflation, which soared to 154.8% in 2021. Official figures indicate that the national debt reached 150.6% of GDP in 2020, and that the GDP shrank by nearly 25% between 2018 and 2021.
Three of the region’s political heavyweights – Egypt, Iran and Türkiye (each -0.43) – are caught in a structurally similar downward spiral. Monetary stability is a significant concern in each of these three countries as well. The Iranian rial (IRR), officially pegged at IRR 42,000 per U.S. dollar, was traded on the foreign exchange market at a rate six times as high, at IRR 260,000 per U.S. dollar. Inflation officially reached 52.2% in 2022. Scores of Iranian economists argue that social unrest and the viability of business activities have reached a critical threshold.
In Türkiye, where President Erdoğan has directly influenced central bank policy on multiple occasions, inflation surged to an alarming 72.3% in 2022. From September 2021 to October 2021, the Turkish currency plummeted from 8.5 to 18.6 lira per U.S. dollar. Egypt, which partially liberalized its currency in 2016 and faced significant devaluations thereafter, mirrors similar trends. Following the full floatation of the Egyptian pound, its value declined against the U.S. dollar, and inflation rose to 21.3% by the end of 2022. The central bank attempted to counter with multiple key interest rate hikes, but none has yielded significant success so far. Public debt reached 89.9% of GDP in 2021.
Across the board, a substantial portion of the region’s population lives in relative or even severe poverty. While the regional average for the BTI social safety nets indicator was 5.63 in 2010, this figure has fallen to 4.79. This decline is paralleled by a substantial contraction in output strength, which has plummeted to a new all-time low of 4.58, far below the 7.16 recorded in the BTI 2010.
Governance
Saudi Arabia’s ambivalent role
Most governments in the region are failing to adequately address the array of issues at hand. In Sudan, the quality of governance has dropped by 1.75 points, sinking even lower than the near-rock bottom observed during the al-Bashir dictatorship. In October 2021, Abdel Fattah al-Burhan, the commander-in-chief of the armed forces, assumed de facto control of the state. During protests against this military coup, the police and security forces killed at least 124 demonstrators. This led donor countries and organizations to halt their cooperation, and the African Union also suspended Sudan’s membership. The framework agreement for collaboration among power elites that was introduced in December 2022 collapsed when armed conflict erupted in April 2023 between al-Burhan’s forces and the Rapid Support Forces (RSF) led by General Mohamed Hamdan Dagalo, thrusting Sudan once again into civil war. Sudan now numbers among those countries in the Sahel region in which military governments appear to be gaining ground.
Clear setbacks in the quality of governance have also been registered in Tunisia under the rule of Kais Saied (-0.79). Observers are astonished that few Tunisians voiced objections as the former law professor systematically dismantled the country’s democratic achievements, military courts began, once again, to target critics of the regime, and even former allies faced house arrests, travel bans and similar forms of harassment. It seems that a substantial portion of the Tunisian population has favored the dissolution of their parliament over allowing the Islamist Ennahda party to maintain its dominance as the largest parliamentary group. Many advocates of secularism in Tunisia have been skeptical of the party’s professed moderation. Many Tunisians appear willing to accept the authoritarian trend, even though the current government has few accomplishments to celebrate.
Regressions in the Governance Index were also observed in two neighboring countries, Algeria and Morocco, which have strained relations due to the Western Sahara conflict. In both cases, the governments have successfully quelled protest movements. This is significant for Algeria because, similar to Sudan, the aging long-time ruler Abdelaziz Bouteflika was compelled to step down in 2019 after months of protests that had raised hopes for sustainable liberalization. However, these hopes have faded, and the old regime, under the leadership of President Abdelmadjid Tebboune, is back in power. The monarchical regime in Morocco, under King Mohammed VI, has also consolidated its authority once again.
In Iran, ideological shortsightedness hampers the formulation of effective policies. In the realm of foreign relations, the directives of the Guardian Council persisted in maintaining a confrontational stance toward Saudi Arabia and fostering ongoing military rivalries in Lebanon, Syria and Yemen. The extent to which the steps toward rapprochement with Saudi Arabia, announced in the spring of 2023 under Chinese mediation, signal a shift in this confrontational policy remains to be seen.
Meanwhile, Saudi Arabia is the only country in the region that has achieved significant progress in the Governance Index (+0.37), albeit from a low level. As part of the “Vision 2030” strategy, MbS is pushing forward with the desired modernization, taking major steps, but without showing any concern for the negative effects of his top-down model of authoritarian governance.
Outlook
Beyond its rapprochement with Iran, Saudi Arabia plays a significant though ambivalent role as a regional leader. On the one hand, it was among the first signatories of the “Abraham Accords,” which involve cooperation agreements between specific Arab states and Israel. It also contributed to the reconciliation with Qatar. On the other hand, however, according to this year’s BTI country report, Saudi Arabia has become a “more and more aggressive player,” taking overt actions against unpopular governments and groups in other countries. The country strongly supports Egyptian dictator Abdel Fattah al-Sisi, has inflicted severe damage on Yemen through bombings, and – let us not forget – orchestrated the destabilization of the Lebanese Hariri government in 2017. Saudi Arabia clearly plays a pivotal role in the region’s lack of democracy, and the current leadership shows no interest in the prospect of political liberalization among neighboring countries.
However, MbS is not the only one attempting to mask undemocratic actions with cosmetic reforms. Tunisia’s Kais Saied numbers among this group, along with Abdel Fattah al-Sisi in Egypt, Turkish President Recep Tayyip Erdoğan, King Mohammed VI of Morocco, Mohammed bin Zayed Al Nahyan, emir of Abu Dhabi and prime minister of the United Arab Emirates, as well as Sheikh Hamad of Qatar. This mode of governance falls short of offering the necessary solutions for a fair exercise of power in the future. Regardless of how polished and professional the presentations of elite projects may be, they will not deliver the changes needed.