Already a Bloomberg.com user?
Sign in with the same account.
On June 23, 2008, a cable arrived at the U.S. State Dept. from the American ambassador to Tunisia, Robert F. Godec. Its subject was corruption, cronyism, and graft in the North African nation, as practiced by relatives of President Zine al-Abidine Ben Ali. "Whether it's cash, services, land, property, or, yes, even your yacht, President Ben Ali's family is rumored to covet it and reportedly gets what it wants," Godec wrote. The cable documented the luxuries amassed at public expense by what Tunisians called "the Family"—from airlines and hotels to radio stations and beachfront mansions. Family members used connections to secure board positions at the country's biggest banks. Land obtained for free by the President's wife, Leila, a former hairdresser, was used to build a for-profit international school, which she then sold to Belgian investors for a "huge, but undisclosed sum." Two of the President's nephews, Imed and Moaz Trabelsi, stole a yacht from a French businessman, Godec reported, sailed it into Tunis, and gave it a new paint job to conceal the crime. Although the government arranged to have the yacht returned, the men were never prosecuted. "It is the excesses of President Ben Ali's family that inspire outrage among Tunisians," Godec wrote. "The conspicuous displays of wealth … have added fuel to the fire."
Godec's cable was supposed to remain classified until 2018, but last fall it surfaced in the cache of State Dept. documents made public by WikiLeaks. To Tunisians, the revelations of nepotism were hardly shocking, but never before had they been so publicly detailed by a credible source. ("The Family's corruption remains a red line that the press cross at their peril," Godec wrote.) Antigovernment protests erupted in late December as Tunisians took to the streets for the first time in decades to denounce the ruling family's profligacy. By mid-January, Ben Ali had fled to Saudi Arabia. Looters stripped the Family's palaces bare. What followed is a still unfolding, regionwide democratic revolution unlike any the Arab world has ever known.
Autocratic societies are like Tolstoy's families; each is unhappy in its own way. Yet there is one feature common to all embattled regimes in the Arab world today: chronic nepotism. It is manifested in the garish homes and pet tigers owned by Ben Ali's extended family members in Tunisia; the billion-dollar bank accounts of Hosni Mubarak's sons Gamal and Alaa; and the delusional ruthlessness of Saif al-Islam Qaddafi, the Western-educated mouthpiece for his father's assault on Libya's citizenry.
Nepotism exists all over the world, of course, but nowhere does it dominate political, economic, and social life as comprehensively as it does in the greater Middle East. "It's evident in Libya, in Tunisia, in Syria, in Yemen, you name it," says Ibrahim Sharqieh, deputy director of the Brookings Institution's Doha Center. "In every country in the region, you hear the same complaints from people, about the nepotism of the people around the President. It's hard to think of a country where this problem doesn't exist. And it's not limited to the nature of political systems themselves—whether it's a republic or a kingdom or a military leadership. The problem exists in all of these regimes."
Nepotism is one of the big reasons why so many of these strongmen now face extinction. The rage that has united young Arabs from Tunis to Tripoli is fueled not just by hatred of their rulers but also by the widespread and entirely valid belief that those rulers intend to bequeath power to their equally loathsome offspring. In Egypt, the protesters' insistence that Mubarak resign eventually swelled into demands for the wholesale removal of his family from public life. To many Egyptians, the possibility that Mubarak might remain in office until the end of his term was less repugnant than the notion that Gamal planned to succeed him, according to Steven A. Cook, a Middle East expert at the Council on Foreign Relations in Washington, D.C. "If Mubarak had done a couple things differently early on, we may not have seen this revolution," Cook says. "If in 2003 he had stood up and said, 'I will not run for President in 2011, and my son will not run,' he could have defused a fair amount of the anger that polarized Egyptian politics. One of the issues people focused on the most over the last six or seven years was the inheritance of power. And in Egypt you had a double whammy: One son had a reputation for thievery, and the other one was inheriting power. The optics of that just were not very good."
The collapse of patriarchal regimes in Egypt and Tunisia presents a cautionary lesson for monarchs and managers alike: The desire to pass on wealth and power to relatives and descendants may be natural, but prudent leaders should resist. In business and politics, nepotism is often the enemy of efficiency and a handmaiden to corruption. It inevitably creates backlash. Yet many societies, including our own, tolerate forms of soft nepotism that do not necessarily impede growth, freedom, or opportunity—and may even enhance them. (More on that later.) In that regard, the biggest mistake made by Arab leaders may be not so much that they engage in nepotism but that they do so badly.
Political dynasties are not unique to the Arab world. Nor are they found only in autocracies. Both the democratically elected President of the Philippines and the totalitarian dictator of North Korea are the sons of former heads of state. The President of Pakistan was married to a former Prime Minister; his 22-year-old son is the chairman of Pakistan's ruling party. The daughter and grandson of modern India's father, Jawaharlal Nehru, were both elected Prime Minister, and his great-grandson, Rahul Gandhi, will almost surely become India's leader sometime this decade. Argentina's current President is the widow of its former President. And do we even need to mention the names Kennedy, Clinton, and Bush?
The point is that there is nothing about Arab culture that makes it particularly tolerant of nepotism. Adam Bellow, the author of In Praise of Nepotism, a study of the history of patronage, says the prevalence of nepotism in Arab countries "is an outgrowth of an old, clan-based tribal system that is common in all societies transitioning to modernity—basically, anywhere outside of the developed, modern West." Bellow (who happens to be the son of the late novelist Saul Bellow) views nepotism as a necessary and generally accepted evil in societies that lack democratic institutions and well-developed markets. But "at a certain point it becomes too much," he says. "People do have an instinct, even in tribal societies, of when it has gone too far."
The people of the Arab world appear to have reached that point, in large part because nepotism is now practiced on such a massive, even comedic, scale. Take Yemen. The President, Ali Abdullah Saleh, has held power since 1978 and was thought to be grooming his son, Ahmed, to succeed him—until a surge of public fury forced him to rule out a hereditary transfer of power. Yet that only begins to address the underlying problem: Saleh's relatives hold virtually every important office in Yemen. One list circulated by ahewar.org, an influential pro-revolution Arab-language website, shows nearly two dozen of the President's kin occupying positions of influence, from commander of central security forces (Saleh's nephew) to chief executive officer of Yemen Airways (his cousin) to Yemen's ambassador to Washington (his brother-in-law).
This patronage system has given rise to an opaque economy that stifles development and dissuades foreign investors; Yemen ranked 146th out of 178 countries in Transparency International's 2010 corruption index. The trouble for Saleh is that while official corruption has been a corrosive fact of life in Arab countries for decades, now more people have the tools to spread the truth about it. "People are beginning to see the myths exposed," says Madawi Al-Rasheed, a professor of the anthropology of religion at King's College, London. "You can continue to lie. But these days you can't make everyone believe your lies."
One can't help but wonder why these strongmen thought they could get away with running their governments like Mafia-style rackets in perpetuity. Did the simple fact that they held power—in some cases, for decades—make them view it as a possession that could simply be handed down to their sons?
In truth, Arab dictators, like dictators everywhere, are trapped. Having imposed their will so brutally for so long, despotic leaders are all too aware of their enemies' motives for revenge. There is no graceful exit. At best, they may end up in the Hague. "These Presidents can't just leave," says Brookings' Sharqieh. "If they leave, they will be killed. For someone like Mubarak, he will never be allowed to come back to Egypt. So they have to protect their interests absolutely up to the very last moments of control. As a result, the natural progression in this kind of government is inheritance."
Now that the sons have shown that they can be just as venal as the fathers—witness the transformation of Saif Qaddafi from urbane, London-dwelling architect to paranoid desert thug—the region's revolutionary pulse is beating even faster. "People have indicated that the old way of doing business is no longer acceptable," says Cook. "And nepotism is one of those things that people find unacceptable."
That's a good thing, for now. But it would be a mistake to assume that family patronage and kinship networks will vanish, or that they should. As Bellow points out, nepotism is a common practice in American society, and though it is one factor contributing to the widening gap between the ultra-wealthy and everyone else, few cite it as a serious threat to national welfare.
Nine out of 10 businesses in the U.S. are family-owned, including 40 percent of the Fortune 500 companies. The halls of Congress are filled with elected officials who got their start in politics by virtue of their last names, which also describes the current Secretary of State, the most recent Republican President, and the leading contender for the 2012 GOP Presidential nomination. "Family tradition and continuity exist in our society, even though we pride ourselves on valuing merit above all," says Bellow. "We are more like Swiss cheese, where you have pockets of nepotism in a framework of meritocracy. It's the way things work and the way we want them to work."
The American idea holds that every citizen, regardless of parentage, should have an equal opportunity to achieve material success. In practice, few people hesitate to exploit whatever advantages they possess to help their children get ahead, even at the expense of others (which is why most people don't object to legacies being used as criteria in college admissions). That qualifies as nepotism, too.
The difference is that despite our natural prejudices toward our kin, we also believe that performance matters (which is why most people don't sue colleges when their kids don't get in). And in a mature democracy, the system corrects itself: Incompetence, laziness, and corruption among privileged elites can't be prevented, but neither are they rewarded. And so maybe the goal for Arab societies isn't to eradicate nepotism. Perhaps it should simply be to get to a point where the best person actually has a chance to win.