Why Economies in Muslim Middle East would not shift into top gear

Jonathan Power
Jonathan Power, writer on International Affairs




In one of history’s great ironies the Muslim world of the Middle East, once so far ahead of Europe and the rest of the world, in science, medicine, astronomy and mathematics has today fallen so far behind.

Most of it has never industrialized. Had it not been for the oil the region has in abundance, most of these countries would still be living in the poverty they lived in the early years of the twentieth century


Even today as skyscraper cities are constructed throughout the region, the foundations of these economies are mostly in the service sector of tourism and banking. According to recent UN Human Development Report most of these countries, Abu Dhabi apart, compared with countries of equal income, are low down in the world rankings: in areas such as education, health, science, and the status of women.

If it had kept going at the pace it did in the first millennium after Mohammed, the Muslim World of the Middle East would easily be among the world's leaders today. Why did the Muslim world lose its momentum and early lead?

The problem is routed Islamic law. It imposed a straightjacket on economic development. It did not matter that Mohammed argued in favor of private property, commerce and personal improvement.

We can single out a number of laws including the law of contracts and the laws of inheritance and marriage.

Moslem business men have often engaged in the pratice of forming partnerships. but the death of a partner terminated the partnership automatically. Active partners carried full liability. There being no bankruptcy laws, the firm's assets were exposed to demands from third parties.

Inheritance laws spread ownership into small parcels among many heirs. Polygamy compounded the problem. While Islam gave women more rights than women in Europe had at the time, its sum effect was to circumscribe economic progress.

Moreover, apostasy laws, infringement of which carried the death penalty, made it impossible for Muslims to do business under non Muslim systems, making international commerce difficult.

Banks could not be established to provide the large-scale financing necessary for mass transport, mass communications and mass production in factories.

In Europe where church and state were separate there was much more freedom for new ideas and new ventures. In Islam theology ruled almost everything.

If today these were still the senerios in the Muslim Middle East,  things would have been much worse there than now.

Pioneered by Ottoman Empire and later Ataturk's Turkey and a sizeable secular component of Egyptian society, change was introduced from the mid 19th century onwards and slowly spread to other parts of the Muslim world.

Although things have changed they have not changed as much as they needed to. Old attitudes and practices still abound. The apostasy laws are still invoked, if not nearly as often as in the past.

In the 1850s Egypt and Turkey adopted French legal practices. But it took time for the new system and new norms to take hold. Pre-modern institutions created bloated bureaucracies which are alive and well today. Government policies and conservative instincts hamper creativity and competition.

Losing the race against Europe led to the rise of protectionism. Arab socialism and Islamism have at different times inhibited the urge to create and invest and grow.

Today the influence of Islamic law has diminished, not least because of Western pressure. Turkey set the pace in the 1920s when it abrogated its old Islamic laws in their entirety.

Today even in conservative Gulf States Islamic laws have been modified beyond recognition. Today in the Middle East the modern business corporation is popular business model. Banks are alive and well in every country. Coming late to the party, Islamic Middle East has been able to borrow modern institutions in their most advanced forms.

There is in Islamic Middle East, rather than hold their own regimes to account, a tendency to blame the West for its development failures . The role of classical Islamic law in blocking economic development is understood by relatively few.

Unless the Muslim world can change gear and increase its annual GNP growth to a consistent 8% or more (currently only Qatar is doing) the gap between Muslim Middle East and the West will continue to widen.