Chance to establish fair and open Arab states for all

The elections planned in Egypt, Tunisia, Yemen (and eventually Libya) will bring new groups to power, but can the euphoria of the revolutions last sobering reality?

Egyptian women celebrate the news of the resignation of President Hosni Mubarak, AP Photo/Tara Todras-Whitehill

The elections planned in Egypt, Tunisia, Yemen (and eventually Libya) will almost certainly bring new groups to power, but unless the legacy structure of power in these countries changes, the "euphoria" of the revolutions will fade into the sobering reality of continued disempowerment.

Thenew elected governments will find empowering new groups such as youths, women and the poor, who constitute the majority of the populations, more challenging.

Fundamental aspects of the traditional power structure and governance in Arab societies will have to change.

Traditionally, the power structure in the Arab state has been a strong centralised "command and control" system of governance guarded by a large security machine.

It is particularly this pillar of the power structure that the revolutions have sought to bring down, and they might have succeeded.

But it would be naive to believe that the removal of the security state will empower the masses. The security machine is a major tool of people disempowerment, but it is not the only one. An important factor is the second pillar of the traditional Arab power structure, which is the "national bourgeoisie".

After the nationalisation movement of the 1950s and 1960s, an unholy alliance emerged between the state and some large businesses in the 1980s.

The state has sought to trade business rights in exchange for legitimacy and cooperation from co-opted businesses. "Arabia Inc" is largely a family-owned business, and therefore many business relations are mere extensions of inter-family and interpersonal relations.

This has added to the concentration of the circle of influence in these societies and the further marginalisation of the majority of the population.

The alliance was not extended to small and medium-size businesses, which represent a majority of the businesses in these countries, and thus the gap between the haves and have-nots increased.

For democracy to succeed, governments will have to address the systemic problem of disempowerment in the legacy power structure.

The state's style of governance in particular had to become more participatory and the business environment more open and representative.

Governments should decentralise power to regions and communities, and its governance mechanisms should shift from "command and control" to "guiding and facilitating" participation by non-governmental organisations, business and professional associations and community representatives.

This should help to weaken the traditional bonds between the states and the national bourgeoisie, replacing them with a more encompassing relationship between state and society at large.

Indeed, an engaging government gives rise to a more open and more professional businesses-society relationship.

Businesses will feel compelled to widen their own circle of cooperation to think tanks, advocacy organisations and PR agencies to influence and manage government and societal relations.

The dominance of family-owned businesses will make reform more challenging for governments. In the 1960s, governments chose to nationalise many such businesses, but nationalisation is a tested and failed model.

What is needed is a series of reforms in corporate governance law to make businesses more transparent, accountable and representative. Governments can entice businesses through a carrot-and-stick approach.

Board representation of employees, women and other groups should become the hallmark of the new reforms. Equal opportunity and quota systems for youths, women and long-term unemployed should also be considered.

Social corporate responsibility should expand to include issues of representation. Governments need to create legal institutions that will monitor and enforce compliance with the new reforms.

Increased transparency and representation in the business environment will help to attract new investments and reduce social unrest.

Without such reforms, nepotism and corruption can eat up the rewards of democracy.

Arab business culture continues to be characterised by secrecy and informality, with non-disclosure and corruption rampant.

Empowerment is a long journey, but like all journeys, it has to start somewhere.

Governments should reform their own administrations to make them more inclusive and participatory, and work in parallel to make business environments more open, responsible and representative.

A Dr Sami Mahroum is the executive and academic director of innovation and policy initiative at Insead Business School