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What Latin America’s Populist Experiences can Teach Middle East Reformers – Jean R. AbiNader

Enabling Grassroots Capitalism is Key for Restructuring Societies Equitably

Jean R. AbiNader, MATIC
April 1, 2016

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

Roger Noriega and Andres Martinez-Fernandez argue in a recent article that populism failed as an economic growth strategy in Latin America because it lacked essential qualities such as transparency and sustainability. Rather than enabling citizens to acquire skills that would equip them to achieve a better quality of life, it perpetuated a system of handouts and elitism that in reality keeps the poor in their historically disadvantaged status.

To Ambassador Noriega, who has decades of experience in the region, revolution and reform based on slogans and distribution of rewards has shown its deficiencies. The introductory summary notes that “Grassroots capitalism is the only solution to poverty, empowering poor and marginalized citizens to make them stakeholders in their country’s economic access.” And that “Policymakers also must address the systematic barriers to equitable growth, including corruption, stifling bureaucracy, crime, and violence.”

This could easily serve as a description of the dysfunctional social and economic development policies plaguing oil-rich and not-so countries in the Middle East and North Africa (MENA). The past decade has been unkind to those countries long attached to socialist and paternalistic policies that treat people as clients and beneficiaries rather than citizens valued for their participation in the country’s future.

Reforms that inch a country closer to a citizen-centric model hold the most promise for a holistic model of human development, one that includes capacity-building for institutions as well as individuals. But where does one begin to assess countries in the MENA region where, like Latin America, countries are in a transition from a top-down system of economic and political empowerment to something more interactive and less prescriptive?

Morocco can serve as a template for measuring intentions vs. results, since King Mohammed VI is committed to redefining relations between people and government. His early reform of the family law, transparent handling of the abuses of the previous regime, and reduction of the role of the palace as a key economic engine in the economy demonstrate his understanding that Morocco must change if it is to progress.

The challenge of course, as described in the article, is that grassroots capitalism is not a mere refinement of traditional capitalist models. Rather, it empowers and enables people through institutional respect for rule of law, property rights, relevant training and education, and support for individual enterprise and entrepreneurship.

The “emphasis must also be placed on internal reforms that speak to peoples’ priorities…and cultivate a popular consensus around a new brand of grassroots capitalism: policies that generate sustainable growth with free-market solutions; consciously extend economic opportunity and political freedom to the very poor; generate decent jobs and social mobility; incentivize entrepreneurship to unlock the potential of those outside the formal economy; and fortify the rule of law to fight that corruption, crime, and violence that debilitates societies.”

Despite the long-term commitments required, Morocco has started on that path: the National Initiative for Human Development (INDH); educational reform and investments in training and entrepreneurship; advanced regionalization; and improvements in childcare, women’s rights, and equitable access to basic infrastructure are propelling it in the right direction.

The hovering questions “Is there enough time,” and “Will the country stay the course,” can only be answered with confidence if the results of the country’s growth and enhancements to personal and collective rights are shared equitably. A diverse society like Morocco has much at risk without a shared vision of what Morocco will be and how all will benefit. This is where the king’s role as enabler-in-chief is so critical – generating national buy-in to a vision of an equitable, just, inclusive, and fair society that takes none for granted, at any level.

How Can the US Help?

While small government is a virtue to free-market advocates, progress is not free. “If leaders committed to democratic capitalism are to succeed in winning and maintaining public confidence, they must attach greater value to poor and marginalized citizens and integrate them into plans for a better future.” And here is where the US is already helping, by enabling Moroccans to have a voice in their local governments.

A recent USAID grant to Counterpart International has set up a Civil Society Strengthening Program (CSSP) to be piloted in two cities in Morocco to help both “government and civil society work together to ensure a more inclusive government that represents all Morocco’s citizens.” As described in the information on the project, In the northern city of Tetouan, it works with the Municipal Council on implementing a three-year action plan to “strengthen local Civil Society Organizations (CSOs) and improve their participation in public affairs.”

The President of the municipality, Mr. Mohamed Idaomar, points out that there is “a real need for the involvement of an effective civil society in order to represent the concerns and the expectations of citizens and to identify priorities of the municipal action plan.”

In a similar way, the agreement between CSSP and the municipality of Temara “focuses on creating a consultative body to represent civil society, promote gender equality and equal opportunities for all citizens, and hold communication meetings with citizens.” USAID will provide technical and logistical support for the municipality to build its capacity for organizing training sessions for municipal staff on how to improve communications with citizens and CSOs.”

While these are small steps, taken together, they continue to move Morocco towards a more responsive, equitable, and just society, based on all hands working together.

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