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Book Review: Forces of Fortune

Book Review: Forces of Fortune

The rise of the new Muslim middle class and what it will mean for our world.

Author: Vali Nasr
Reviewed by: Kamran Arshad

In my opinion, this book could not have come at a more better and opportune time given the current predicament of the Muslim World in general. In Forces of Fortune, a paradigm-changing revelation is presented that will transform our understanding of the Muslim world at large. The author, Vali Nasr, reveals that there is a vital but unseen rising force in the Islamic world- a new business-minded middle class- that is building a vibrant new Muslim world economy and that holds the key to winning the war against fundamentalists and extremists.

The groundbreaking analysis in this book shows an alternative way of how the  West can best contend with the threat of Islamic extremism. According to Nasr, the great battle for the soul of Iran, the Arab world, Pakistan, and the entire region will be fought not over religion, but over business and capitalism.

With a deft combination of historical narrative and eye-opening contemporary on-the-ground reporting from constant trips to the region, Nasr  reveals a Muslim world we’ve not seen; a Muslim world in which the balance of power is being reshaped by an upwardly mobile middle class of entrepreneurs, investors, professionals, and avid consumers-who can tip the scales away from extremist belligerence. The author’s insights into the situations in Iran, Pakistan, Afghanistan,  Dubai and Turkey, provide a whole new way of thinking about the troubles and prospects in the region.

This book offers a powerful reassessment of why both extremism and anti-Americanism took hold in the region- not because of an inevitable “clash of cultures”, but because of the failure to develop a formidable middle in the nineteenth and twentieth centuries, largely due to the insidious effects of colonialism and followed by dictatorial regimes, often supported by the West. The author then shows that the devoutly Islamic yet highly modern Muslims of what he calls the “critical middle” in Iran, Pakistan and Turkey, and the stealth force behind the extraordinary growth of aggressively capitalist Dubai has resulted in the formation of the middle class that the region so  desperately needs. They are building a whole new economy- as the middle classes did in both India and China- and their distinctive blend of Islam and capitalism is the key to bringing about lasting reform and to defeating fundamentalism. They are people in the region the West can and must do business with.
Forces of Fortune  highlights the power of commerce and how it has transformed various regions of the Islamic world for the better such as Turkey and Dubai, and how the same dynamics offer a lot of hope for Iran and Pakistan, two of the most strategically important  nations of the Islamic world today; and how the future can be won by instilling business and commerce and using them as a tour de force to fight off extremism and fundamentalist attitudes.

Trade between Iran and the five Central Asian states was worth over $1 billion in 2008 (up from $580 million in 2001). The Iranian Rial changes hands there as easily as local currencies. Including  the unaccounted for cross-border trade, Iran does about the same amount of business with Afghanistan (up astronomically from a paltry $52 million in 2001). Trade with Iraq topped $4 billion in 2008 and with the United Arab Emirates reached $14 billion- a figure that does not include all the black-market trading that goes on across the Gulf. In fact, Iran has such a vital interest in this trade that the regime has created banking and financial ties and invested in infrastructure projects in these countries ranging from roads, railways, and piers to pipelines and electricity pylons. Businesses of all kinds have grown in these countries on the back of this trade.

In so many ways, Iran is well qualified to become a true economic powerhouse driving wider growth in the region. Its nearly 70 million people give it a population about the same size as Turkey’s. It has vast oil and gas reserves, plus a strong industrial base by regional standards. Labor is cheap but the literacy rate is high, over 75 percent. As the country’s thriving art scene and internationally acclaimed movie industry suggests, Iranians are also far better plugged into world culture than is the norm in the region. Iranians are Web and mobile savvy (Persian is the world’s third most widely used language online, the country boasts the most bloggers per capita anywhere in the world, and almost two-thirds of the country- some 48 million people- are mobile phone users). They are also technically adept: The country’s leading technical school, Sharif University of Science and Technology in Tehran, turns out world-class engineers and scientists. Stanford regularly admits Sharif alumni into its graduate programs in engineering, and according to one Stanford professor and former department chair, “Sharif now has one of the nest undergraduate electrical-engineering programs in the world.”

The hard-line Ayatollahs and their minions tried their best to strangle the Internet, but what could they do about the explosion of cell phones? In 2000, fewer than a million Iranians had a cell phone. Now some 48 million- about two-thirds of the country- have one. And its not just Iran- next door in war-ravaged Afghanistan, the close of 2008 found eight million mobile phones in use- about one quarter of the population. Pakistan’s numbers are even more impressive; in 2008, 78 million were using mobile phones; up from a mere 750,000 in 2001.

Americans are easily dazzled by the size of China’s economy, the speed of its growth, and the room it has to expand. In recent years, India’s economy has also made remarkable strides. Thinking of the notional “Muslim-world economy” provides an interesting basis for comparison. The global Muslim population of a billion-plus is about the same size as both India and China’s populations. In 2008, the GDP of the economies of the five largest countries in and around the Middle East- Egypt, Pakistan, Saudi Arabia, and Turkey, with a combined population of 420 million- was $3.3 trillion, the same size as that of India, which has three times the population. The bottom line is: A billion consumers have clout.

Recently the term “Islamic Finance” has started becoming increasingly popular, even though when you use both words separately: “Islamic” and “Finance”, it tends to conjure up concerns about terrorism. Yet there is a flip side to the story…a very impressive one indeed.  The American consulting firm McKinsey & Co. estimates that by 2010, assets held by Islamic financial houses will total $1 trillion, a fivefold growth in five years. The Western ratings agency Standard and Poors estimates that these assets could ultimately grow to as much as $4 trillion. The 2008 global financial crisis gave a good boost to these numbers as more Muslims decided to pull their money from traditional investments for perceived security of the Islamic alternative. When in 2006 the Dubai Port Authority acquired British Peninsular and Oriental Steam Navigation (which managed a number of U.S. ports), some in the United States pointed to the $3.5 billion Islamic bond that had financed the deal as a proof of a threat to U.S. security. Islamic bonds were then unknown to most Americans, and the mere mention of Islam with relation to financing was enough to ring alarm bells. Yet a number of American companies had already dipped their toes into these waters. In 2004, the Texas-based oil group East Cameron Partners became the first American company to issue Islamic bonds. Recently, Ford Motor Company’s $848 Million sale of Aston-Martin to the Kuwait-based Islamic bank Investment Dar required Islamic financing. Caribou Coffee, America’s largest specialty coffee chain after Starbucks, is owned by a shariah-compliant private-equity firm in Bahrain. In Europe, British developers have financed the multibillion-dollar purchase of London’s historic Chelsea Barracks complex with Islamic bonds.

Commerce, as David Hume and the other great minds of the Scottish Enlightenment liked to point out, softens manners and makes a politics based on reason and deliberation, rather than fighting and romanticism, far more imaginable. Places like Turkey and Dubai that have embraced commerce wholeheartedly are forging ahead at astonishing speed. Dubai boasts not only the world’s tallest building but also its two biggest shopping malls, its largest airport, largest arched bridge, largest man-made archipelago, largest mand-made harbor, and soon to be largest theme park, which is set to be twice the size of Disney World. Until the global recession of 2008 slowed its stride, 80 percent of the world’s water-dredging equipment was in use in Dubai, as were a fifth of the tallest cranes on earth. This emirate seeks to set world standards for luxury and consumerism, to be first in everything, especially the kinds of things the West appreciates. Until 2008, Dubai attracted more tourists than the whole of India, more shipping vessels than Singapore, and more foreign capital than many European countries. Money escaping political troubles and economic stagnation in Iran and Pakistan was attracted to Dubai, as was a good deal of Saudi and Russian investment, along with money from China and India. All that money coming in generated demand for financial services and large volumes of trade, and soon turned Dubai into a regional investment hub. Dubai sits between the major financial centers of Europe and Asia-London and Singapore-perfectly placed to be a crossroads between Asia and Europe.  Just as Hong Kong and Singapore developed as entry ports for a rising Asia, the emirate of Dubai is positioning itself at the center of a rising Middle East and South Asia, a region of some 2.2 billion people with a combined GDP of $2.5 trillion, from Egypt to Iran to India. There is plenty of money in this region and Dubai has figured out the way to tap into it. Consider the fact that Mumbai’s Jawaharlal Nehru Trust port, which handles 60 percent of India’s container traffic, has berths for only nine cargo vessels as compared to seventy-one at Dubai’s Jebel Ali port, which can accommodate 14 million containers. The author Robert Kaplan argues that the Indian Ocean will be at the heart of world trade in the twenty-first century. Half of the world’s containers on tankers and “70 percent of the total traffic of petroleum products passes through the Indian Ocean from the Middle East to the Pacific,” and those numbers are only expected to grow further in the coming decades. Dubai has tied its future to that trade. Its rival’s failings, Karachi port included, have been Dubai’s good fortunes. Such is the power of commerce.

The power of commerce has yet to fully make an impact on our motherland, Pakistan, and the leaders who constantly toy with it and leave no leaf unturned in speeding its collapse. From Pakistan’s mostly corrupt politicians to its double-dealing military establishment and incorrigible intelligence agencies, the truth is that the West’s best ally against fundamentalism and extremism would be empowerment of the civil society and pro-democracy forces. And putting them on the path of economic prosperity and good fortune. Leaving aside the corrupt politicians and benefactors of the infamous NRO, when asked if India should be worried about Pakistan’s generals, former Indian premier A.B. Vajpayee mockingly asked, “What do we have to fear from these property dealers?”

Pakistan has indeed come a long way since its foundations were laid in 1947. After 9/11, the international sanctions imposed on the country for having tested a nuclear device in 1998 were lifted and Western markets were opened to Pakistani goods. Exports doubled from around $9 billion in 1999 to the high mark of $18.5 billion in 2008. Some $5.5 billion in labor remittances (from those working in the Persian Gulf or Europe/USA) complemented $5.1 billion in new foreign direct investment.  Unofficial estimates of the flow of cash out of Pakistan in prior years indicated that upward of $15 billion a year was leaving Pakistan for Dubai. Money flowing in the opposite direction was a welcome development, and Pakistani entrepreneurs and businesses leaders made good use of the money. Small cities in Punjab such as Sialkot or Gujranwala saw fresh investments and started growing rapidly on the back of small-scale enterprises that make everything from carpets to soccer balls to surgical tools. However, the trend could not be sustained and we now face the same rut and glut that we have faced for most of our history. Our political leaders in the corridors of power have constantly plundered national wealth and never have been able to lead by example.

Two decades ago, Pakistan’s private sector was doing better than its Indian counterpart and the Pakistani middle class could claim to be more prosperous than the same class across the border. India too suffered- and still does- from fractious politics and a society that is too deeply divided by caste, religion, and ethnicity. India too has harbored religious fanaticism and suffered from fits of extremism. Only twenty years ago some observers of Indian affairs thought there might be no India in the twenty-first century. Yet India managed to turn the corner. Economic reform integrated India into the global economy, creating new business opportunities at home, and a booming middle class demanded more political and economic reforms. Where do we stand today as a nation? A poor country. Only a fraction of the 180 million Pakistanis, perhaps no more than 10 to 15 percent or about 20 million people, have the financial means to fuel economic growth. But that slice of the population has been growing in size and purchasing power. This is both a promise and a peril. A widening chasm between the vast majority of the poor and the far smaller middle and upper class could spell trouble. The middle must grow faster-and wealth must spread more quickly and widely-if Pakistan is to avoid continuing chaos. Pakistanis are capable of getting the job done. When outside their own country, in Dubai, London or New York, they are every bit as competitive as Indian or Chinese business-people. It is back at home that constraints hobble them.

If the United States does not want to keep worrying about nightmare scenarios involving a nuclear-armed, jihadi-ridden Pakistan, then it must work to assist the forces of the center in the country to get on this course. To determine the best methods for doing so, the West should look to the lessons of Turkey- not as that country was in the 1930s or 1950s, but as it is today. Turkey is the exemplary case of capitalist and democratic development in the region, and it got to where is today largely with the European Union’s help. The EU took the long view and building ties with Ankara required measures to be taken by the Turkish government that have stimulated economic development. This is the constructive role that the United States must emulate not only in aiding Pakistan, but all around the troubled region.  If Turkey can transform within 2 decades into an economic powerhouse of the Muslim world, then why cannot Pakistan with its far greater natural resources and superior agricultural background?  Such is the power of commerce and we leave it to the forces of fortune to reshape the destiny of our ailing nation.

About the author:
Born in Iran, Vali Nasr is a professor of international relations at the Fletcher School of Law and Diplomacy at Tufts University, an adjunct senior fellow at Council on Foreign Relations, and a senior fellow of The Dubai Initiative at Harvard University’s John F. Kennedy School of Government. His book The Shia Revival was a New York Timesbestseller. He has contributed to the The New York Times, The Washington Post, and Timeand appeared on Anderson Cooper 360, The Situation Room, Fareed Zakaria GPS and The Today Show.

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