At the onset of the Arab Spring, the global press appeared surprised at the great wealth that the Tunisian dictator Ben Ali had accumulated. A few weeks later, there was even more surprise about Mubarak and his family’s fortune. This was followed by revelations about the extraordinary riches of the Qaddafi clan, with unimaginable financial excesses and parties where singers purportedly got $1 million for singing a song or two. Frankly, the big surprise is that anyone in the world—especially the all-knowing global media—expressed surprise.
Where has the global media been? Arab autocrats, as well as Iranian mullahs, want power for one reason alone—money. They rule with iron fists to gain unencumbered access to the national treasury for themselves and their supporters. Accepting this simple fact sheds light on a policy that could put an end to such abuse—if the United States is serious about human rights and democratic reforms.
Face it! Dictators want absolute power to live in luxury and accumulate unimaginable riches. Control over wealth allows them to buy support from their military and cronies at home and from influential foreigners. Once a tyrant comes to power and goes down this road, there is no going back. Domestic and international backers, whose support is absolutely necessary to hold onto power, get accustomed to feeding at the trough, becoming more greedy by the day as their numbers grow. Their continued support for the regime in power is dependent on maintaining the status quo—an unjust economic system that fuels popular rage at the ruling elite and the foreigners that prop them up.
The most debilitating fallout of such corruption is that the rulers have no incentive to establish and nurture efficient institutions—such as an independent judiciary and the rule of law—that are at the foundation of economic development, sustained growth and broad-based prosperity. What economic injustice—theft, deprivation and no hope for a better future.
How can democracy emerge in a political and economic system where everything is organized around promoting corruption and theft? If true democracy and the rule of law were to emerge, the raison d’être for the regime would be trumped. Even after a successful revolution, the new rulers will be tempted to go back to the old system. Just look at Iran after the revolution or Iraq after the overthrow of Saddam Hussein. Unless this simple fact is recognized, Egypt will follow suit.
On the one hand, if grand theft can be reduced and stamped out, democratic reform will follow simply because the rewards of autocratic rule are expunged. On the other hand, mere regime change will not usher in democratic reforms because the rewards of autocratic rule are still in place. At a minimum, corruption, theft and cronyism must be addressed simultaneously with regime change and democratic reforms.
This may all sound well and good, but how? Here is where the United States can help. Washington has in-depth information (or can get it very quickly from commercial banks, investment banks, hedge funds and the like) about the assets and financial holdings of Mideast leaders, their families and cronies. The United States should simply release these figures. But hold on. Doesn’t this violate all privacy laws? No. First, we require full financial disclosure of elected and unelected officials in America. Isn’t it even more reasonable to demand it of foreigners? Especially foreigners that we know have robbed their people? Second, under the Dodd Frank financial reform legislation enacted in 2010, all hedge funds are required to register with the SEC by March 2012 if they manage more than $150 million in assets that belong to others. This law would call for all funds to report information about the assets they manage, potential conflicts of interest, and information on investors and employees. Again, the holdings of American investors will be reported and exposed. It is for this reason that George Soros will only manage his family holdings (exempted under the law). Should we not require the same of foreigners who have robbed their own citizens?
It is high time for the United States and other Western nations to renounce duplicity and support with all the tools at their disposal the struggles that have begun in the Middle East and North Africa. Exposing the holdings of corrupt rulers, their families and cronies is a tangible start in the right direction.