The Private Sector in the Arab World – Road Map Towards Reform

In the Middle East, the private and public sector do not have distinctive and independent roles to play; rather, the dividing line between what is public and what is private is not clearly defined. As an example, the 10 largest listed companies in the GCC remain state-owned. The private sector is also dominated by family businesses that have a close relationship to the state, and these ties prescribe their attitude toward political reform. This is, in fact, neither unusual nor surprising: in all industrial countries, major business families have found it convenient to nurture close ties with holders of political power, and sometimes, directly run for office. The demand for greater accountability and political reform is born out of the progressive widening of the ranks of business entrepreneurs, and the increasing competition between business groups. In some instances, this has led to clear demands for greater transparency and accountability in government decision making, primarily with respect to business interests. The private sector in the Middle East does have a role as governments fail in most cases to establish and execute reforms by themselves. It has to reach beyond its natural boundaries and support governments to encourage reform measures in areas that directly reflect on their interests such as judicial reforms. The private sector could start by establishing non-political associations or task forces to represent civil society. It could also issue initiatives whereby it acts as a partner with government to establish effective reform measures.