Etatisme Versus Privatization: The Changing Economic Role of the State in Nine Arab Countries

In several Arab countries, the expansion or contraction of the public economic sector has been correlated with the availability of liquid capital. This may be domestically-based (e.g. nationalizations or 'agricultural squeeze') or externally-based (e.g. oil rents, aid and remittances). The tightening of finance also corresponds with domestic signals (e.g. declining revenues in the public enterprises and growing deficits in the state budget), and/or with external signals (e.g. from creditors, international financial organizations, trade partners and potential investors). The move towards privatization as a way of overcoming financial crises mostly takes the form of a public policy, initiated (sometimes in collaboration with international capital) by the State. The private sector may, if able, push ahead with the process. The pace and intensity of privatization will depend on the degree of capital accumulation and the extent to which both the State and the private bourgeoisie find it useful to seek autonomy from each other. Nine case studies suggest that the Arab State is not about to withdraw from the economy and that actual privatization remains quite limited.