 president of the Carnegie Endowment for International Peace, and I'm very pleased to welcome all of you to Carnegie and to today's conference. I'm especially pleased to co-host today's conversation with Mike McFall, Frank Fukuyama, Larry Diamond, and their remarkable colleagues at Stanford University's Center on Democracy Development and the Rule of Law. Although we come from opposite coasts, we share a mission to bring scholarship to bear on some of the world's most pressing challenges. We also share an admiration for Amr Hamzawi, a remarkable and courageous Egyptian scholar and activist. We're thrilled to have shared Amr for a number of years, and I want to thank him for bringing our two institutions together again. And finally, let me thank our distinguished guests and panelists for being here today. I know it was a long journey for a number of you, and it means a great deal to all of us to have the chance to listen to you and to learn from you. To state the blindingly obvious, the Middle East has bedeviled generations of American policy makers. It's a region that embodies the powerful political, economic, and social currents reshaping today's international landscape. Sectarianism, authoritarianism, populism, and extremism are centrifugal forces pulling this region apart and leaving in their wake the kind of instability and human tragedy that we haven't seen since the establishment of modern Arab states after the First World War. We face no shortage of crises in this part of the world, from the devastating war in Syria to the geopolitical clash in the Gulf and from Tunisia's vulnerable transition to the increasingly fragile nuclear agreement with Iran to name just a few. These and other headline issues understandably demand our attention and deserve thoughtful debate. But it's also important to look beyond today's tumult to the long-term trajectory of this region, its people, and its place in the world, and to draw the right implications for U.S. policy. This has been the focus of our Arab Horizons project at Carnegie, of a lot of terrific work at Stanford, and it's certainly the focus of today's conference. The test before governments from Morocco to Saudi Arabia is finding a governance structure and a compact that can provide their people with security, prosperity, and dignity. This is obviously easier said than done, and it's a relationship that will inevitably vary across societies. But it's a task no leader or country in the region can escape. Those that address those challenges thoughtfully and honestly ultimately become healthier and more stable places. Those that don't often become brittle and break. We're very fortunate to have the chance over the course of today to hear from leading experts from the region about how specific security and economic challenges across six different country case studies relate to governance structure and strategies. At the same time, we'll look to draw lessons from other regions that have undergone their own turmoil and re-examination and see what lessons apply to today's Middle East. Finally, we'll turn to the question of U.S. policy and lessons learned from senior policy makers in both Republican and Democratic administrations. Many of us learned those lessons the hard way and came by whatever wisdom we acquired with lots of mistakes and scars along the way. So let me conclude by again extending my warm welcome to all of you and to all of today's panelists and my thanks once again to our Stanford colleagues for another terrific collaboration. And let me now turn to Dr. Lisa Blades to launch our first panel discussion. Thank you. So it is my great pleasure to be the moderator of our first panel, which is focused on the subject of economic prosperity in the Arab world. So as all of you know, the deep sources of economic inequality in the Arab region were a major source of frustration, particularly for young people across the many countries of the MENA region. So today we're going to be talking a little bit about the state of economic affairs in three major cases with experts from Tunisia, Palestine, and Saudi Arabia. So I'd like to start by asking our panelists to begin by discussing the state of the economy in each of their respective country cases since 2011 to get a sense of to what extent were the economic conditions, the sort of blocked economic frustrations of people across the region, are these still salient concerns? And what is the changing nature of the economic situation that might lead us to consider some new political and economic facts on the ground? So Ola, I thought we would start with you to begin by talking about the case in Tunisia. Thank you. Hello and good morning everyone. Tunisia's political and economic environment was highly centralized. This was before the revolution, which was both a strength and a weakness for the government. It was the context that governance problems worsened during the last decade, and especially the areas of corruption, government effectiveness, and accountability. What we have to do as a member of parliament and the new government in place is to shape better policies, more efficient, and essentially to decentralize to make sure that distribution on the chair of distribution will be equitable for everyone and the access of citizens to this prosperity. Democratization empowered the citizens to write and improve the governance. Essentially one of the pillars is the access to information, to be sure that the data on public finance will be okay. One of the problems in economy was the recession registered after the revolution, essentially with the terrorism attack, tourism collapse, budget deficit, high raise up. The rate of unemployment, unemployment of youths, essentially on women, on girls, on high skilled students. And third, how to spend the resources of the government. It's a problem of taxation, it's a problem of fiscal equity, and what about the public services, education, health, transport, and infrastructure. One of the major reforms shaped is how to switch from the public investment to private investment. By passing the law of public-private partnership, it was one of the pillars to shape the policy for decentralization to give the autonomy of every region and not to focus only on coastal area but to go everywhere. So one and more important is how to create jobs. How to create jobs by use, for use. The access of finance for social and youth entrepreneurship, this is what the government today is looking for with the fighting of anti-corruption to make sure that the good governance will be implemented everywhere in the public institution. Mudarkasis from Berset University, professor of philosophy. We'll talk about the Palestinian case. Good morning. Well you see in Palestine there was hardly a case really. Let me just give a few things of how I personally acquainted with our economy. Back in the 90s, right after the Oslo agreements and the peace process started, the Palestine GNP per capita was in the order of $2,000 in the early 90s per year. In Jordan, it was something like 700 at that time. I think so. Something in that order. Then we moved with this promise of Hong Kong of the Middle East. I think it was called Singapore of the Middle East. Everybody is looking forward to get better jobs, better income, what have you. Things started sort of moving around up to up to 96, 97 maybe. Then they suddenly stopped with some political turmoil, quite local. Then we got to 2000 in Tifada where we dwindled back from 2000 down to probably 1200 I think or 1100 maybe. In the meantime, Jordan has exceeded us, Egypt has went much higher. I mean probably Yemen is still below the Palestinian GNP per capita in the region. Syria is of course still lower. Then we got stuck there. We barely made it back by now till the 2000 threshold. Now if you look at, so I asked one of the industrialists in Palestine one time, I said look, you bought this factory, you sacked 105 employees and the laborers, etc. You made it into a storage and you're importing chocolates from Turkey where they were used to be done locally. So what's the point of, you keep talking about developing the economy? And he said, look, as long as water and energy are much higher in price in Palestine than they are in Jordan, Syria, Turkey, Egypt, etc., it will never be feasible to produce anything. Import is the only way out. And import means in this case is that we will be more and more independent. The amount or the percentage of international aid in our sort of general budget is, I mean, they claim it's going down but as a matter of fact what's going down is the standard of living together with international aid but it's not about really getting a more local or national component to the economy. The reason why I went this way to describe the economy is that of course it is never fair to describe anything in Palestine as Palestinian because the Israeli occupation is overwhelming. I mean, it controls everything. It controls the borders. It controls the trade. We cannot have our own taxation regulations, especially in relation to commerce, like import and export and so on and so forth. But then to keep, I mean, and it's important to get rid of the occupation. I mean, it's crucial. We will not be able really to move anywhere in the current situation. But the serious question is, okay, suppose we do that tomorrow. Suppose there is no occupation in the next morning. Where will be the economy? And not only the economy. Where will we be heading? And I think that we will find ourselves in layers and layers of problems and sophistications that this sort of old, good old dream of the Palestinians being more susceptible and more interested and more inclined to democracy and human rights protection, et cetera, because of many, many factors. The diaspora is one of them, the sort of traditions of political work in the exile in various atmospheres, the multiplicity of ideologies within the PLO and within the Palestinian National Liberation Movement. It all gave us lots of those sort of ingredients for a typical liberal democracy if we had a typical nation state. But neither exists, neither the sovereignty nor the conditions to move further. And today, I think that the perspectives are much more loomy. They're much worse than 20 years ago, for example, or 30 years ago. Much worse. Not only because the conditions are worse, but because the potential is not there anymore. In part because it was de-developed, because it was destructed over years, but also in part because the modes of operation are completely different nowadays, and a place like Palestine doesn't really have much of a say on itself on how to work. So if we look at the figures, they are frightening. The likelihood of getting a job if you get a university education is less than if you don't. In both cases, you won't get a job with an employment rate of about 40%. I mean, of course, the Central Bureau of Statistics is significantly different than this one. But you all know the question of how to count and who to count. But people are much more frustrated. People are much more in-depth. People have less and less reserves to talk about. The number of students who drop out for a semester at my university because of financial reasons is growing. This wasn't the case many years ago. We had dropped out, for example, when the Israeli labor market was open and it was extremely feasible to work for like four months and get your money for the next two years or something like that. Now this doesn't exist, but then neither do any other resources exist and so on and so forth. With the current sort of what I call the swallowing the world bank catalog by the Palestinian prime ministers, one after the other actually. I mean, there's not much difference between the current prime minister and Salam Fayyad in this particular sense. It creates a situation where you are using rules that are not designated for the place. It simply doesn't work and I think it will not work. Unless we can find a way to adjust and in Palestine there is no adjustment without external interference. Of course this interference can be of different source, but on our own we don't have the resources to feed ourselves and that would be the bottom line of the story. Jamal Khashoggi from the Saudi columnist and journalist, do you want to comment on the status of the Saudi economy since 2011 and what implications it might have for governance and political stability? The Saudi economy, which makes it different from any other economy in the world. Oil revenue, a cheap foreign labor and government handout. We should not compare cheap foreign labor to what you have here in America, the huge debate. In America you are worried or debating the presence of about 12% of the labor force who are non-Americans. While in Saudi Arabia we have a problem of 80% who control the labor market who are non-Saudis. That makes it a very unorthodox economy. Foreign labor are very essential for the Saudi private sector, for the Saudi plans for diversification. But at the same time they are a huge liability, a critical liability that could eventually lead to unrest because they deprive the Saudis from their jobs. And not only the jobs, they deprive the Saudis from the skills and the knowledge to learn. And that will be a problem, I think this is the most important thinking problem that's going to face the government. It is the unemployment issue. The government handout, I sum up in handout everything that the government do for us the Saudis. From the literal handout in the form of a royal stevedant or a stevedant to a tribal sheikh. And they do make a trickle-down economy because those sheikhs and those royals when they get money from the government, they pass it to the people. Of course they enjoy it, but they will also pass it to the people. And MBS even defended those stevedants in a private gathering from that perspective. He used the trickle-down economy theory and honestly it does work. I mean there are many Saudis who go to royals and receive help from them. Of course that is not a proper economy, but it is making people happy, or some people happy. Also a government handout in the form of subsidies. Government handout in the form of huge government contracts and huge mega jobs, mega projects. And that makes the Saudi private sector revolve and work. But if the government handout is stopped, and that is what is happening right now, MBS is doing very good in stopping waste in this handout with formula. He is cutting on subsidies, he is cutting on unneeded government contracts and unneeded huge projects. But that had a negative effect on the economy. Now we have a recession of our own. Even though many Saudis are unhappy with it, I think it is healthy because it will force us to go into real economy. Away from this artificial economy that we the Saudis should not have. Saudi Arabia is not a small Gulf state. It is a real country with a population of 20 million people. 70% of them are young and they want jobs. And they will never have jobs with the presence of 30% of the population as foreign who control 80% of the jobs. So it is oil handout and the cheap labor. MBS, I think he come on the right time. He put out a plan, the 2030, to diversify the Saudi economy free Saudi Arabia from oil. The good thing about his plan, it brought all of the ills of the Saudi economy above the table. The formula that worked in Saudi Arabia for decades and kept it free from the effect of the Arab Spring, I don't think it was sustainable. And I think the young crown prince doesn't think it's sustainable. Saudi Arabia could have continued on that wasteful expenditure of revenue, but it will eventually come to an end. It is just like a wealthy man who is going on a trip and just spending money and not checking his balance. So we were doing that. We were building projects that were totally unneeded. And something very interesting to read. It is the Bloomberg interview with Muhammad bin Salman last year where he admitted that there were billions of dollars being wasted away in the past. So despite whether his plan is going to work or not, it is our last chance. It has to work. We the Saudis have to support it. But the downside of the plan, it doesn't have a check and balance mechanism by the people. It has its own mechanism of check and balance. He, the crown prince from his position as the head of the Economic Affairs Council, he is the one who is going to monitor the plan, hold his ministers accountable by using KPI. They imported this measure of key parameter indicators from the private sector and inject it into the government, which it could work. There are ones who argue that there are countries who developed, who make a huge economic transformation without democracy. Actually, I wrote that last year and I quoted a professor who claimed that China, and Vietnam, and Burundi made it without democracy. I said maybe we the Saudis can do the same thing. Honestly, I would rather to have democracy or to add muscle to the Shura Council. But the people in Saudi Arabia are not interested in that. If I call for this, no one is going to rally behind me. So we just have no choice but to put our trust in the young leadership and pray they will do it right. It sounds as though there's a consensus that the conditions associated with blocked economic opportunities or blocked ambition on the part of young Arabs across the Amina region remains a salient concern and one that it does not seem to, there doesn't seem to be the political will to really engage in the forms of structural adjustment that would be required to solve some of those foundational problems. Now, the basic formula for the IFI formula for how to engage in those structural reforms, the expertise for how to implement that has existed for many years. To what extent do you think that these structural reform programs can be successfully implemented in your country cases? Maybe we'll start with Ofa. I really need, essentially after evolution, when we never registered low rate goals around one and now we are going for three. So to implement because the wage in the public finance is one of the highest in the world. So we have to do it for the pension, for the public labour and to boost for the private sector to give more assets and fiscal assets and fiscal equity. So reforms on fiscal, reforms on tax consumption to be sure for the informal sector and for the tax customs that people are not going to buy from the informal sector, the private economy. And subsidies are one of the problems that we have to put it on. It's the meaning time because the price of the oil has come down and we are readjusting the prices to be sure to be more efficient to target on people who really need the subsidies to be more efficient and less cost for the government. And to what extent do you think the political will exist to make these changes? We have to make a consensus and a social dialogue to be sure to share the risk and to share the principles and objectives to be sure that we can reach it. The flexibility of labour market and the social dialogue will be able to adapt those reforms and with the support of all the coalition, political parties in the parliament, it will pass, the law will pass anonymously. It's a social dialogue that is starting and discussing essentially how to cut the public wage, how to boost for the private sector, how to switch for the private sector. We are implementing a new line for more transparency and accountability to know how the impact of private sector and the private partnership, the public-private partnership in the budget load. So it could help even citizens to be more aware and consensus about accountability and for the government, for the public finance to know what really are the impacts on GDP and what will bring the growth in the future. Let me start with your political will and again, what is political when we talk about the political will? Whose politics? Whose political will are we talking about? In the structural adjustment program, I mean there's nothing, we're talking about the political will probably of corporations, of something international, of something, in the case of Palestine, more Israeli than Palestinian and in the case of the Arab world, more American and European than Arab. It's very external. Now, I mean if I understand correctly that we are in the framework of discussing these economic issues with an eye on democratization, with an eye on government, et cetera, I think it's futile. I mean it's just redundant to look at the current way of implementing structural adjustments if these adjustments actually remove any remote even possibility of having a public or national will. I mean look at Palestine, again with this notion of Singapore you said it was, foreign direct investment simply cannot exist with Israeli regulations. So you can adjust as much as you want. We've got more laws than any other country in the south probably. And now we have, since the division in Palestine, since 2007, with the parliament being absolutely inactive, we have a president who listens very well to the IMF and implements whatever Salam Fayyad used to tell him in Nawra, who listened to the IMF. And we have, you know, he has a free hand with legislation. And he's been doing it. In the past nine years Abu Mazil has issued more laws than the Palestinian Legislative Council has issued in the ten years of existence, free handed, basically, and nonetheless nothing improved. And not only did it not improve, it actually went back in major steps. So it's not about structural adjustment, it's not about legislation. I work on something called the Arab Democracy Index, I'm not sure if you're familiar with it. In the Arab Democracy Index, comparing ten different Arab countries, we found out that the more there is legal reform, including economic legislation, the more there is legal reform, the further is the sort of theory from practice in the sense of democracy. So a place like Palestine where we had an absolute free hand, you know, starting from scratch, we could legislate whatever we want to. We had a very interesting kind of combination in the first Palestinian PLC of 1996, intellectual civil society organization actors and what have you. They wrote, you know, very interesting legislations with lots of experts from the US, Europe and what have you, lots of foreign and Arab advice, and we've created a very interesting bundle of legislation. As a matter of fact, we stand only about a point, sort of 10% beyond the Saudi Arabian situation in democratic practices, while we stand 80% beyond them in legislation. So what's the point of legislating? The same happened actually in Egypt during the era when there was a great push for legislative reforms, several stages. I mean, even during the Sadat first attempt to reform in the late 70s, then two phases during the Mubarak era of legislative reforms, they produced nothing in terms of localizing or creating the atmosphere for people to create politics. So if we're talking about external politics, then we probably would be, if I'm allowed to use a Foucauldian term, we're probably discussing governmentality and not governance, which will not lead to any democratic change, obviously. If we want to discuss governance in the sense of the existence of some participation, et cetera, I think structural adjustments in the framework, I mean, in the general sense that they do exist in the world are not only useless. They are actually, they do have negative impacts on such places as Palestine, because again, foreign direct investment in Palestine meant immigration of capital, an immigration of actually vital resources from the financiers who suck the money in the country and put it back. Something that Egypt suffered from a lot, you know, evidently in the past, but there was, you know, in that condition there was, you know, something probably to balance it, in a sense, in Palestine there is nothing. The other thing, for example, it's fascinating, it took about privatization. There is no public investment in Palestine to start with. I mean, things, real estate, land, state-land, state-owned property is basically land. It belonged to the, you know, to the Ottoman Emir or to the Ottoman government, then to the British, then to the Jordanian, now to the Palestinian Authority. But it's meaningless. It is now put, I mean, all of it is now put in a fund to camouflage the economic failures. So what we do is basically, when we look at the major investment arm of the Palestinian Authority, I forgot what it's called, the main fund for the Palestinian Authority that was created, what they do is they spend money as they wish and then they reevaluate real estate which keeps growing high and they report, you know, income. And that's what it says. Nothing else. There's nothing to privatize to start with. And it is not clear to me. I mean, what is it that we're talking about when we talk about structural adjustment when there is no structure of the economy to really start with? So maybe we should put the thing, you know, flip it the way around. Let us ask ourselves what kind of economic changes do we need in order to create democracy or to enhance, to create some sort of governance to get people involved and engaged, to get some political participation. We probably need to create jobs. It's not about who's the investor. It's not about even if it will be, in my sense, I mean, one of the things I would usually ask in a relatively rhetoric question, but I still think it's valid. We, like Jordan and many other countries, Egypt included, we have a bloated public sector. Now it's bloated with what? It's bloated with mostly nowadays with security personnel who constitute probably, I don't know, maybe some 40% of the public sector and it is bloated. And I ask myself, so why don't we send them to, you know, to do agriculture? I mean, they're getting their salaries. Let's not, you know, let's not empower them completely. We cannot just sack them because they will turn into monsters on the streets probably. It's not good for the, neither for the economy, nor for, nor socially, nor for the justice sector, or for what have you, to get more unemployed people. But maybe we can engage in a public sector developed, developed agricultural endeavor, no matter how this sounds strange, but let them do something. Instead of just sitting there claiming to be policemen or what have you. So you've pointed to two fundamental characteristics of most Arab states from a historical perspective, which would be state control of agricultural land, which is a long standing sort of pattern. No, no, no. The state land is very unagriculturally. But a centralization of state control of land, at least in many cases, is a common characteristic. And the centralization of political power and the relative lack of constraints on executives in the sense that the populations don't have the mechanisms to necessarily constrain centralized forms of political control. If we think about these constraints as being quite historic and quite structural, what are the opportunities to really overcome that? You mentioned the structural adjustment programs, which are intended to improve the economic conditions. If that is not one way forward, what would be the way to overcome these structural constraints? I mean, look, after we've seen the indicators of very successful structural adjustments in Tunisia and Egypt, right, in the 2010 reports, actually, and what they led to, we probably should revisit the whole notion of what kind of structural adjustment we want. I mean, we know the story. This paradigm failed no matter how it sounds interesting and nice. It just didn't work. It led to the conditions that we're discussing today, and we probably should consider other alternatives. Now, it is so evident that we cannot do politics without economy. It is so evident that we cannot get people enthusiastic about the economy and not looking for immigration if there is no political environment. And the question of the middle ground between these two is a question of making sure simply that people, once they endeavor into something, once they become entrepreneurial, they should be able to be entrepreneurial on both fronts at the same time. Both in politics and in economy, whether this takes place in... One of the things about structural adjustments is that in Palestine, for example, do I have some time to tell you a small story? Okay, so one time I go to the barber and I found out that his son is coming to ask for pocket money, and his son was my student. So I look in the mirror and I say, hey, that's you. So where are you? He said, I'm graduated. I said, so how come you're asking for pocket money if you're graduated? He said, I'm still looking for a job. So what are your plans? I said, look, me and three of my friends, our parents gave us $3,000 each. So we have a total of $12,000. We want to open a small business. I said, what business? He said, it's a company that is happy to deliver any service you want. I mean, we don't really know what we want to do, but we're going to get an office, a phone number, and we're going to do whatever people ask us to do. Arrange a party, wash the car, create a conference, whatever. And they have, you know, it's four youths who have $12,000, which is good, you know, in the scale of our economy. So a few months passed by and I'm cutting my hair again, and the guy came in and asked for pocket money. And I said, so what happened to your business? And he said, look, I went, we went to register the company, and we had to pay about $1,500, a little more than $1,500 for the fees that are obligatory to hire a lawyer to register the company. And then we had to open files in the tax authority, that authority, the other authority, whatever, get licensed from the municipality, this, that, and the other, all with fees. And then we went to higher space. We were looking for 50 squared meters, which is what? I don't know. But probably as big as smaller than this one, smaller than this one. So we can operate. We subscribed for a phone number, and by the time we were opening the place, we had zero money to operate. They spent the sort of the capital that they had basically on running through the, but not the bureaucracy this time around. It's the corporatized system of bureaucratization of the, because who needs all these regulations? For young people, on the contrary, for example, if you look at a country that still has some very funny type of socialist components in the economy in Algeria, for example, a university graduate who opens even a kiosk to sell cigarettes will get a tax waiver for five years from old taxes. I mean, that's one way to look at it, and the other way to look at it is how the Palestinian system works. So a couple or three years ago, we had one more tax reform, and so the highest bracket was, I think, 30%. And then the ex-communists and the PFLP, the ultra-left, if you weren't, went on to demonstrations, and these demonstrations got to be successful in two places, in Hamburon and in Nablus. I don't know why, maybe because they're more populated. And they succeeded in going down to the street against the new tax law. And what they managed to do is to remove the higher brackets from 30% down to 25%, but nothing that had to do with the poorer people. And only three days ago, I hear our Minister of Finance declaring that they are thinking of getting the tax bracket now from 15% to 10% the highest. So what they are doing is everybody has to pay taxes, and the income is so low anyway. And people are really frustrated with these taxes, while businesses like the telecom in Palestine keep getting these waivers from taxes under the investment promotion law. They even had a case in court against them because they have declared introducing fiber optics. For example, our telecom company, they've introduced fiber optics for the 15th year in a row as an innovation, and it's a reason to get a good amount of taxes. And when they lost the court case, they went to the president and they still got it. They still got the tax name. So maybe we should look into more communal modalities, more of get a job, don't pay taxes for a few years, find a way to do a job, get involved. Not only because we need to find room for people not to starve, but also because we need to find a way to tell people that you do have, without reaching a major threshold, you do have a way to get into the shaping of your own country. It's very important to deliver this message, and I think with all the existing structural adjustment modalities and whatever goes together with them, the whole package, we are exactly doing the opposite. Jamal, the challenges facing the Saudi economy are quite different, and the 2030 Saudi Vision proposal lays out a roadmap for what some of those changes might look like. To what extent do you think that this proposal will be realized in the timeframe that it's been suggested? The proposal, in essence, is great. It's just a very good election of promises that we, as a Saudi Arabian, I want them to be visualized and to succeed. But I see two problems in it. Without freeing the Saudi economy from dependency on the foreign labor, the extensive use of foreign labor, I don't think the project can succeed. They have to address this issue first, because that will transform the Saudi into a real economy, not a virtual economy, economy based on the people on production, not the elite production. Who benefit from cheap foreign labor? It is a Saudi private sector who are rich, business people who hire cheap laborers, while the majority of the Saudi people do not benefit from those transformations. They will just wait for government hand out, some form of a government hand out, and the government cannot continue doing hand out. So we need to transform our economy into a classic economy where people work, increase production, pay taxes, or not necessarily pay taxes, but I will be stoned in Saudi Arabia to say that, because the Saudi don't pay taxes, but we need some form of a real economy, not an economy that is artificial like the Gulf States. That is the most important challenge facing the plan. The other challenge, the plan or the implementators of the plan, they need to be more tolerant to criticism. They are addressing huge decision to be made, like selling Aramku or part of Aramku, and this issue is not being debatable in Saudi Arabia. This is a livelihood of every single Saudi, and the Crown Prince, the government, they need to listen from experienced Saudis who maybe have a better ideas than to sell Aramku, for example. They need to review their plans, but the government, it is in a very strong position. I will go back to your ideal question about the political will. The Saudi government has all the political will it could ask for right now. They enjoy the support of the people, the trust of the people. They are free from any foreign pressure. The government is not indebted to any government in the world. It is not receiving aid or subsidies. So literally they can't do anything they want, and they are doing that right now. I began to see things which previous governments of Saudi Arabia were reluctant to do, like opening up Saudi Arabia for entertainment. The silly issue of women driving, for example, there has never been a better time to remove it from our way as of today. And I'm sure if Mohammed bin Salman come out tonight or tomorrow announcing that women will be allowed to drive, he would receive huge applause from the Saudis. There would be few Saudis who would object, but I'm sure the majority of the Saudis will support that. So they have the benefit of the political will, but as I saw the Arabian, I would like the government to be more tolerant to listen to counter opinions and to engage the Saudi Shura Council or some form of power sharing. So we will share together this important transformation, because again it is our last chance. If it goes wrong, there are millions of unemployed Saudis who need jobs, and then we will have a situation. Tunisia 2011 or Egypt, he will get angry when they don't have jobs, and that's eventually going to happen in Saudi Arabia. There is a drive for solidization, but it is not working. There is a huge dispute about the number of unemployment. You could write an extensive article about what is the true unemployment figure in Saudi. It is worth percent, as the government says, or 20 percent, as many other researchers argue. I think it is more than 2 percent. We have also the numbers, some of the false elements of those numbers. There are false Saudi Saudis. There are Saudis who are being hired in the jobs so the businessman can get by hiring one Saudi five visa or something like that. To bring in foreign laborers. So the Saudi will have a job that actually is not working. Maybe he is also being asked to stay at his home. What matters to me as a businessman is just to respect the government criteria and the government conditions, so I will have the chance to import foreign laborers because I am used to foreign laborers. So those are the two challenges, foreign laborers, and we need to share into the decision making of the year 2030. Thank you guys. I wanted to react on the adjustment program. Tunisia is a successful case on the adjustment program, but the adjustment program on the 90s is starting and now we have to move to a new framework. There is a political will and there is a new framework on investment, how to boost investment, essentially how to reduce the delay, to build a trust to reduce between the rules and the practices. It is a unique desk where entrepreneurs can go and can open their own entrepreneurship enterprise and they have five years to not pay the laborers' tax. This is one of the measures to boost investment, essentially for youth. The second thing is for women. There is a special line credit dedicated for women to reduce the risk when they are married and they cannot get the credit because the man has the credit and had opened his own project. So those kinds of practices boost private investment but essentially how to create jobs for youth but by youth. Probably we need to think about adjusting the notion of structural adjustment because the way it works is that it is not feasible for small businesses. It is designed to create foreign investment which is usually big and huge and hence you get stuck with your youth. So the whole notion of structural adjustment needs restructuring. So I want to open up the floor to our audience. Larry, I know you are anxious to ask a question. Excellent. Kargi, recent of the two, I guess late last year, identified some priorities for reform. One on the corruption front which many people are talking about that really needs to be more concerted action was very specifically that the declarations of assets for public officials be made public and as someone who has thought about this problem, I don't think you really get traction on endemic corruption unless these assets declarations are made public. I also think you need a really independent counter corruption commission and I'd be interested in your views on that. And the second was that Tunisia gets serious about collecting taxes and being more assertive about the capital outflows that are going out in illicit ways. So I was just wondering if you could speak more specifically to those two issues. And to Jamal, you dismissed the idea that Saudi Arabia could or should collect taxes and I wonder if that should be dismissed. I mean the core problem of a renter economy and many people think a core obstacle to democracy or better governance in a renter economy is precisely that people don't pay taxes and therefore they have no stake in things. So maybe if you could move even with all of Saudi Arabia's wealth which is increasingly stressed as the population gets larger, if you could move even to modest and symbolic taxation maybe it would be a healthy thing for politics. So for the declaration of public asset, how to make it public. For politicians it's obliged to do it but it's not public, it's that account call, account call. But we are obliged by law to do it. All politicians, ministers. So there is transparency, they are not getting wealthier when they are in position or abuse of power. This one thing on transparency let's say. And reforms on corruption, there's a big let's say war of anti-corruption started those last months. It's a national strategy on fighting corruption. It starts by putting a fixed and strong pillar in institutional and by law. So there is a law of access to information of course but a law of reporting corruption, cases and protecting the whistleblowers and this low pass anonymity in the parliament. There is an independent national institution of anti-corruption and there is an expand of the budget given by the sheath of government last year. And there is one of the media now international media. Reporting is the operation of King Hans which is an extensive crackdown of the business man and figures on informal sector. Tackling corruption at different levels from let's say public institution to private to informal is really important to accountability by fighting. I totally agree with you. It will make the Saudi economy very healthy if even a minimal tax to be collected from the people. It will make the government see us. A couple of years ago there was a debate in Saudi Arabia on the diminishing middle class and they were people exchanging all kind of numbers. I wrote an article that said why we don't have a figure about the number of middle class and their diminishing number because we do not count. We are cost center to the government. We are not a generator of revenue. So actually the government doesn't see the people whether their income increase or decrease. So you are right. We need to introduce taxes. But this is very risky. This is a huge political implication to that. Whether it's coming from a writer like me, worse if it comes from an official. If MBS wants to lose the huge popularity he has today, he should hint at collecting taxes. But maybe he should leave it to his minister of planning. Because now in Saudi Arabia everything that the people don't like, like the subsidies, the fees, they blame it on the minister of planning. So maybe Adil Faki should come up with a statement about taxes and how useful taxes would be for the Saudi economy in the long term. Michelle. Thanks. Michelle Dunn from Carnegie Endowment. Ulfa, you raised a very interesting point that I think really connects economic prosperity with governance which is the point of access to information. The point of whether it's citizens, whether it's businesses, civil society organizations, parliamentarians such as yourself or whatever. Having access to government information in order to make their plans one way or another. Economic plans, business plans, etc. So I was wondering if each of the speakers could comment briefly on this issue of citizen access to government information and what you think about it. What role you think it plays or doesn't play in, for example, generating jobs and generating economic activity. I think that Tunisia, from what I understand, Tunisian civil society groups placed a very high premium on gaining access to information. Including information about the Tunisian parliament and about parliamentarians and how they were voting. And a lot of things like that early in the game in Tunisia which is very different from what happened in a lot of the other countries that had uprisings. For example, this was not too many people paid attention to this. Anyway, I'm curious what you all think about this issue. Okay, thank you, Michelle. I think it's one of the most important... Sorry? I think it's one of the important... One of the important low in voting in the parliament is given access to information, given access to data to every citizen. Our information is politician, is economical, is social, and this access will shape policy based on evidence. So policy will be more efficient and citizens will be more engaged to contest on what things are not. Tunisia, for the work of the parliament, civil society... In Tunisia, I think I'm going to put it... In Tunisia, civil society is very present, essentially, on the work of committee in the parliament, given in full transparency all the votes and all the decisions and discussion and hearing session. And I think more over two or three are always present in our sessions in the parliament, trying to report to citizens on open data on the decision and the voters of every MP. And I invite all parliament in the Arab Spring to do this thing. Adar, do you want to comment on the issue? The value of information and access to it in the relation between information and accountability is... You cannot underestimate it, it's so important. But you know what I'm thinking about is how do we go about it? So in a situation, for example in Palestine, what do you think will happen to Abu Mazen, our president, if he reveals all the information vis-à-vis his security cooperation with Israel? Or what will happen with the Muslim Brotherhood presidency in Egypt if they reveal the information of the relations with Qatar? Or what will happen if our government will tell us what kind of phone calls they get from the US Embassy in Tel Aviv and how they act upon it? And beyond this, in this era of what I call extreme securitization, information is the privilege of security personnel, not the politicians actually. And nowadays politicians are actually working for security, not vice versa. And things don't seem to be very different in the US by the way. I mean, with the sort of with the needed differentiations, so it is important but then to get information as in information that is relevant to the action of the polity, we need to first maintain the polity. So the answer is yes, but I mean it is extremely important to have laws on access to information, but then we have to have also the system that allows for the flow of information without backfiring on the whole notion of stability of the political system because it might in all the regimes I described as a matter of fact. I mean, look at the question of information with the Trump administration on his relation to Russia, look at the Palestinian-Israeli relations, look at the, you know, who are the real actors in Syria, what really happened in Libya. I mean, do you want all of this? I mean, it's important, but do you want to open the Pandora's box really? It is very essential, very important, but you need a full functioning democracy to achieve such a thing as a public information act. In Saudi Arabia, there are attempts toward public information act or providing information. Government announced or encouraged municipalities, for example, to list their contracts on a website, but it's still being done on a voluntary basis and on a selective basis. I don't think it will happen without a full functioning democracy with an empowered consultative council or a parliament in Saudi Arabia. It will not happen. The prevailing mindset, we are a tribal society, a tribal leadership that the sheikh knows better. Whom are you to ask? And this requires a huge transformation, but it is very essential. I wrote about it a number of times in a book to be published. I called it a Citizen Vision 2030 where the government put its vision and here is my vision as a citizen. I listed a number of demands I want from the government and the last one of them was an information act and I wasn't really keen about political issues like where Abu Mazin gets his phone calls from I was more keen about municipal issues and I think they are more important. I would be very much happy to start with that. Why did such company get that contract and for how much they got the contract? That will have a major effect in stopping corruption and monitoring municipalities' affairs. I've been a journalist all my life in Saudi Arabia. It is one of the most difficult things to call even the mayor of the city and ask him how much it costs to fix the sidewalk on such a street. He's not obliged to answer. So there has to be some kind of information act in Saudi Arabia at least in the municipal level. I would never ask the government how much they are spending on Egypt for example or their position about CC or this or that. I would be much happy just to ask about municipality issues. Mike McFaul, you had a question. I don't want all the questions to be in the front. I'll pass it back in the spirit of democracy next time. Mike McFaul from Stanford. So in the spring, MBS brought a giant delegation to the Silicon Valley and we heard some of us that they are going to build in Saudi Arabia their own Silicon Valley. Could you all comment on how crazy that is? Is it a complete pipe tree? Is it possible? What are the necessary conditions in all three of your countries for development of high tech? Right next door to you is a country that's figured out how to do it. So what are the conditions that Israel has that are not present in Palestine or other places that's prevented this? And push your answer out not just to two to five years but 20 to 30 years. Why couldn't this happen? Because after all, there are lots of people from your part of the world that work in my neighborhood who do really quite well. These cultural arguments seem to suggest to me that they're actual institutional constraints or other factors. But tell us the state of the condition of the information economy in your countries and does it have a future? Information economy in Saudi Arabia is one of the most prosperous economy and some of the benefit of this economy it succeeded in overcoming the problem of dependence on foreign labor. Many young Saudis who were educated here and elsewhere returned to Saudi Arabia with great ideas and they started some information entrepreneurship. Some of it even becomes successful here in America. There's a Saudi who launched a very cynical app where Allah was people to receive frank opinions from their friends without knowing their friends. I don't advise anybody to do it. It is called saraha and it had become popular even throughout the world. But back to your question about the vision to create our own Silicon Valley. What worries me about vision 2030, it is based on the Dubai model. The Dubai model it is like Walt Disney standing over a huge map of future Disneyland and he and a few consultants around him they are the one who decide where to put this and where to put that. In Dubai they did that. They built this beautiful city Dubai to serve Saudi Arabia and Iran and Russia and everybody and it had become a success. Can we do the same thing in Saudi Arabia where MBS stand and plan where to build a Disneyland and where to build a Silicon Valley. I would much rather those things to be built from the bottom up by the people by the needs of the project. So we will not end up with more elephant projects. We already have King Abdullah city near Jeddah which is struggling to succeed. We spend billions there. It is a government initiative right in the center of Riyadh. If you go to Riyadh you will drive by King Abdullah financial district. It is about what 50, 60 buildings, a small city and now the government is struggling how to bring people into, how to move business from downtown Riyadh into the financial district which the cost of rent double or triple the cost those Saudi businesses be elsewhere. I think we should re-sold the Arabia as a real country, not a Disneyland. If the government should be a regulator, support. It had in the past lead into building the country. Now they need to step back and play the role of a government, not the role of a developer, the role of a regulator and let the people build what they think is needed. So we will not, we have lost so much, a huge amount of money in mega projects, they were totally unneeded. Mudar comment on the possibility of a Palestinian Silicon Valley in the shadow of the Israeli Silicon Valley. I think I have three different answers for this question. The first is that actually there were very serious plans to develop high-tech industry in Palestine for two reasons. One is to act as a bridge between the Israeli Silicon Valley and the Gulf and other Arab countries. It's failed for political reasons. And the other was a very interesting, quite stupid but interesting fantasy of finding a way to develop the economy without land. So I mean, so what is the sort of the least space, this demanding kind of activity in the world, its virtual work? So if you get especially Jerusalemites, that was the plan to develop, especially Jerusalemites to engage in high-tech production, programming, etc., etc., you will not need to expand the Arab areas in Jerusalem for providing jobs for Arabs. So you can keep expanding West Jerusalem without expanding East Jerusalem if you get the East Jerusalemites to focus on. But it was so stupid that it simply didn't, I mean, it didn't go out of the drawers and the discussions in smaller meetings than this one. But I mean, this took place pretty much in the late 90s early, about 10, 15 years ago, it was a fantasy. What one can notice easily about high-tech industry, I mean, look, it's very successful in India, right, Russia. So I think it will have room to be successful in Egypt but not in Palestine. In Jordan it failed. And there was quite a bit of investment, by the way, in Jordan, and it failed because I think high-tech industry depends on critical masses. It's a place where, you know, 1,000 people work, 990 of them do not really produce anything, but the 10 who produce something, which Google or Microsoft or somebody like that would buy, would make the whole difference for the whole 1,000. And you cannot succeed with it in small countries. I think it's a bad project for small countries like Palestine, Jordan, etc. I think Egypt is a very good candidate. Israel doesn't produce high-tech. Israel is the hub. Israel actually takes, they do have factors, etc., but the R&D is not the programming work behind, you know, how Intel eventually and Cisco work. Having a hub, a high-tech hub, like what Israel has actually done, is you import know-how from all around, through the U.S., etc. In Palestine, we cannot import even janitors because this will be almost the implementation of the right to return. So, you know, I mean, we don't have external labor, not to mention cheap or fancy or whatever. I mean, we cannot do that. But then look at the Jordanian experiment. It completely failed, completely failed. And people who went into this business, enjoyed them in the South, in Badaba, in Balqa, etc., etc., there was lots of, you know, social talk. There was a very negative social impact because they were all seen as spies for Israel, you know, working for the Israeli high-tech, etc., which created some isolation for them. And it became sort of a secret kind of a job, etc. Nonetheless, nonetheless. I think if there is no scientific base, which needs a high population, I don't think it can work. So, it's a very good plan for big countries, not for small countries, white countries. Well, Tunisia has very high levels of investment in human capital. Could this type of a model work in the Tunisian context? I think so. It could really work. Is it too small? Not enough. It's medium. It's medium, but it can work. And there is a huge human capital, and the human resources work on high-tech and engineering and well-export in Europe, and it could be even Arab, when there is a political will and there is a comparative advantage for the region. So, they are going for it, too. 20, 20, 20, 20, 20, 20. But they have a lot of things to do. They produce very good food. Shoes. There's olive oil, tourism. One of the worst, tourism. Tourism, tourism, tourism. The thing is, what do we do with high-tech if we're hungry? I mean, somebody has to produce food. That's the problem of the future. You wouldn't receive it. Yeah, I know, I know. So, we have many, many questions in only five minutes. So, can we take multiple questions and then we'll just give our panel a very quick opportunity to respond? So... I'm Barbara Slavin from the Atlantic Council. Thank you for your interesting remarks. Jamal, you can't talk about economy in Saudi Arabia without also talking about foreign policy. What are the prospects for resolving the quarrel with Qatar, getting out of Yemen, and reconciling with Iran? Thanks. One more question. I'll make this quick. Fouad Shah with the National Center for State Courts. I struggle to try wrapping my head around the concept of democratic progress, democracy, and it being a sense of moving forward in the Middle East when there is an inherent concept that state secrecy is acceptable. How do we discuss transparency, whether it's economic, socio-economic, and political progress in the Arab world, Arab states, when you could almost say culturally, we're willing to accept state secrecy and the idea that leadership and governance does not need to be accountable. Whether your argument or belief is it's this idea that we trust our leadership, our sheikh, or our familial or social structure. Hi, my Sebastian Gasky also from National Center for State Courts. I actually had a specific question for Madame Chirif. You mentioned the importance of political will to be behind the... to be one of the main drivers for the reform process that you described, the process of, like, gradual shift to private investment. And I wanted to know from your experience within Tunisia, is there a consensus within most of the main Tunisian political actors, whether it be Nida Tunis or Inada, that this path to private investment needs to go forward, or is there opposition that could potentially... opposition that says, no, we need a different approach? The last question, and then you guys will have just one answer. I'm Richard Seig, retired from the Department of Agriculture, working on Middle East agriculture and economics. I'll tell a very, very short story. I lived in a country which is the largest country in the world. About four or five years ago, the Minister of Education was fired. I asked my son, why is he fired? They just graduated 7 million people from the university. He said, Dad, you don't understand something. These people are not marketable. And that's a huge problem. So my question is education. I'll give you a quick example in Technion. And then going to the university is a room smaller than this. Get into that room, they say to the students, and discuss anything that comes into your head. Anything. And these things are coming onto the world market now. That's the difference. The difference is education and the value of education. And that's all I'll say. So the question is, you know, does the education system turn out marketable people for the jobs that are needed? And what are those jobs? Very interesting discussion. Thank you. So I know it's very unfair to ask you to sum up in one minute each, but I'm going to ask you to make an attempt to do so. And Ova, I'll start with you. So you have transparency, human capital development, quality of education as issues on the table. So many things. I'm going to start with education. Improve and reform the education system for better-oriented market needs. Just to give you two figures. 40% of graduates from social sciences are unemployed. Only 20% of engineering are unemployed. The mean unemployment rate is just 15%. But it's the double for the women. So it's much less secure for women. What we have to do is to work with the private sector to shape the education needs for the sector, for the labor market. And now we are launching a program at the national level with all the universities. We call it the 4C. It's the center of competence, capacities. It's like a virtual or real platform for all students to be sure that they can directly hide from university and match it from their capacities to the employment, to the labor market. The second thing is about the private sector and the public sector. So we have to work with the private sector and the labor market. The second thing is about the private sector and how to shift to the private experience. The problem before the revolution there is so different monopolies in different sectors. So to open the private sector, less licensing licenses to give and authorize everyone to have the authorization to launch its own project. The second thing is decentralization of the private sector, not everything in the capital and the creation of comparative advantages between the areas, from marginalized areas to costed areas to be sure that people can get new sectors and launch a new project given value edits in the chain of bad yet. Mudar and Jamal, you've involuntarily seated half your time to Ulfa, so I'm going to ask you to just take 30 seconds each to sum up. I'll just give two very brief comments. On the question of secrecy, take Palestine, there are no secrets. Really, there are no secrets. There's always somebody sitting next to those decision makers who would take it off. The question is not about what we know, it's about how we use it and how can we make people accountable. And then the real question is, who is accountable to whom? Because if you're accountable to the people, then you need the information. If you're accountable to the very vague notion of international legitimacy or the world community or whatever, I don't know. What information is needed and for whom? The question is not about, my point was, the question is not about information as such, the question is about in what system is this information operating? Now, in higher education, let me say that the problem goes beyond the marketability, so to speak. Higher education has become, it did become a park for unemployment. So you delay the jobs. And this is a duty that you do. Whatever you do, the ratio of employment after university has to do with the capacity of the market and not with how much you can do marketable product. There's only that much job in the market. That's number one. Number two, with the structural adjustment policies that took place for a while, it's quite a bit of impact there was on higher education. In a place like Palestine, where there was nothing to struggle for, nothing, I mean, we can't be conservatives. There's nothing to maintain from the past. We design everything, a new at ease. The tuition fees that our students pay compared to the per capita are at the max possible in the world. And what our entrepreneurs get is a free product educated with zero investment because they don't really pay taxes. And the taxes they pay do not go into higher education. And so if there was a taxation system where capitalists sort of pay for the investment of creating these jobs and for creating these exports and then use them in the job, your note will be a valid one. But in the context which was developed on purpose by a whole program that was called QIS or something, something about quality in university education that the World Bank has led in several countries in the global south that actually produced a situation whereby people are delayed from entering the labor market on the coast of their parents with the government has nothing to do with this and the big capital has nothing to do with this. It doesn't work. The other thing that I briefly would like to say here is that in a place, in a small place like Palestine, the total investment of capital, land, real estate, expertise and equipment in higher education is actually greater than any other industrial sector. And nonetheless, we are supposed to see what the market needs but we are not never considered part of the market. The degree of investment in Palestinian higher education to count buildings, land, equipment, labs, expertise, know-how, what have you, is much greater for example than the medical, and the pharmaceutical industry which is a successful thing for the strange reason in Palestine or for dietary products in Palestine. I mean it's larger than any of those sectors and nonetheless, nobody is asking us what kind of graduates do we need. Alright, for Barbara's question, I think Saudi Arabia has reached the end in all those issues and they need a friend. President Trump always blamed Obama for withdrawing and not being effective in the region. Then he should not make the same mistake but he should leave it for the State Department, not himself, to engage in those issues. So thank you all so much for your conclusions and for your participation. Please join me next door for lunch. We will be reconvening in only half an hour so it will be a very quick break. See you all back here at 1 o'clock.