By Hernando de Soto in The Financial Times
A few weeks ago I met Salem, the younger brother of the
brave Tunisian fruit vendor whose self-immolation
triggered the Arab uprising. When I asked him what his brother in heaven
would say if we asked what he hoped his sacrifice would bring to the Arab
World, Salem did not hesitate: “That the poor also have the right to buy and
sell.”
It is worth remembering these words as experts busily
debate the challenges for the future of the Arab revolution as countries
balance the quest for democracy, fidelity to Islam, with secularism and tribal
power.
In the wake of the overthrow of three autocrats, not
enough credit has been given to the mighty consensus that triggered the
uprising – the desire of a vast, underclass of people to work in a legal market
economy. In the culturally diverse Middle East and north Africa, the one common
thread is its informal economy. This is the key to future growth and indeed
stability.
This huge shift began after all when the 26-year-old
Tarek Mohamed Bouazizi, immolated himself in front of the governor’s offices in
the town of SidiBouzid last December, after his merchandise was confiscated.
One day after he set himself alight, thousands of people
in his town and neighbouring villages took to the streets. Before a few weeks
passed, many of the 180 million Arabs who work in and around the informal
markets in the Middle East and north Africa were identifying with his
disempowerment and sending their shouts to heaven.
Millions marched under banners for reform. According to
research by colleagues of mine, at least 35 businessmen followed his desperate
example and set themselves on fire (13 more in Tunisia, 17 in Algeria, four in
Egypt, three in Morocco and so on).
People identified with his dire situation: like 50 per
cent of all working Arabs, he was an entrepreneur, albeit on the margins of the
law, who died trying to gain the right to hold property and do business without
being hassled by corrupt authorities.
If the region’s new leaders want to make a difference,
they have to appreciate the underclass of such aspirant capitalists, a
supranational movement that spans Arab cleavages, different languages,
political environments and cultures. That will be the driving force in the
months ahead.
If Marx taught us anything, it is that the powerless can
crystallise into a revolutionary class when they become conscious that they
share a common suffering –and especially when a martyr embodies that suffering.
There is no doubt that millions of Arabs see Bouazizi as their icon. “We are
all Mohamed Bouazizi,” Mehdi Belli, a university IT graduate working as a
merchant in L’Ariana market in Tunis, told me.
To understand this you have to appreciate the details:
Bouazizi flicked his lighter on at 11.30am, one hour after a policewoman,
backed by two municipal officers, had expropriated his two crates of pears
($15), a crate of bananas ($9), three crates of apples ($22) and an electronic
weight scale ($179, second hand). While a total of $225 might not appear to
justify suicide, the fact is that, as a businessman, Bouazizi had been
summarily wiped out.
Without those goods, Bouazizi would not be able to feed
his family for more than the next month. Since his merchandise had been bought
on credit and he couldn’t sell it to pay his creditors back, he was now
bankrupt. Because his working tools were confiscated, he had lost his capital.
Because the customary arrangement to pay authorities three dinars daily for the
property right to park his vendor’s cart on two square yards of public space
had been terminated, he lost his informal access to the market. Without
property and trade, his reputation as a reliable administrator of goods was now
undermined in the only market he knew.
He was not on a salary. He was a budding entrepreneur.
According to his mother and his sister, his goal was to accumulate capital to grow
his business. But this was impossible as we discovered when we investigated the
records and the laws he had to comply with.
To get credit to buy the truck he so needed, he needed to
demonstrate he had some kind of legally recognised collateral. The only legal
collateral he had access to was the family house in SidiBouzid. However, he had
never been able to record a deed in the property registry, an indispensable
requirement for using the house as a guarantee. Compliance requires 499 days of
red tape at a cost of $2,976.
To create a legal enterprise he would have had to
establish a small sole proprietorship. This would require taking 55
administrative steps during 142 days and spending some $3,233 (12 times
Bouazizi’s monthly net income, not including maintenance and exit costs). Even
if he had found the money and the time to create a sole proprietorship firm the
law did not enable him to pool resources by bringing in new partners, limit
liability to protect his family’s assets, and eventually, issue shares and
stocks to capture new investment.
The forces of the market have come to the Arab world –
even if governments didn’t invite them in. Political leaders must realise that,
since Bouazizi went up in flames and his peers rose in protest, poor Arabs are no
longer outside but inside, in the market, right next to them.
The Arab consensus ahead is undoubtedly about more than
just emancipating the entrepreneurial poor. But Middle Eastern and African
leaders cannot afford to forget what the industrial revolution was about: if
their agenda does not include tackling the nitty-gritty institutional
deficiencies that make most Arabs poor, they will eventually open the doors to
the anti-democrats and enemies of modernity who fight democracy and modernity
in their name.
