Europe’s Anti-Communist Fighters See Battle in Middle East

Lech Walesa travels to Tunisia today to advise the country’s new leaders on building a democracy after they ousted dictator Zine El Abidine Ben Ali. Based on Walesa’s experience, the transition may be a long one.

Walesa led a strike at the Gdansk shipyard in 1980 that sparked a wave of protests, forcing Poland’s communist rulers to negotiate with workers and fueling a period of relative freedom. A year later, General Wojciech Jaruzelski imposed martial law, threw Solidarity leaders into jail and outlawed the movement.

It wasn’t until 1989 that communism finally collapsed.

“A revolution may only take one day, but that doesn’t mean all the problems have been solved,” Walesa, 67, said in an interview. “A positive conclusion to these events is possible, anything’s possible. But it’s not even close to inevitable.”

While uprisings toppled Ben Ali and Egyptian President Hosni Mubarak, authoritarian leaders are clinging to power in Libya, Syria and Yemen. Prolonged unrest in the region, which accounts for 40 percent of the world’s oil reserves, may lead to higher, more volatile energy prices, slowing global economic growth, according to Uri Dadush and Marwan Muasher, analysts at the Carnegie Endowment for International Peace in Washington.

Oil has risen 23 percent this year in New York, trading today at $112.76 a barrel. Libya’s oil production has dropped by 76 percent, or 1.2 million barrels a day, this year. The Gulf Cooperation Council is trying to broker the departure of Yemeni President Ali Abdullah Saleh to prevent al-Qaeda from increasing its influence and using the country as a base to target Saudi Arabia, the world’s biggest oil exporter.

‘Potential Elite’

The Middle East’s pro-democracy movements must overcome challenges that countries such as Poland and Hungary didn’t face two decades ago, including the lack of an educated elite and extreme poverty fueled by rising food prices.

“You have to look at whether there’s a potential elite and who would form it,” said Wiktor Osiatynski, a law professor at Central European University in Budapest who helped write Poland’s post-1989 constitution. “They existed in Poland and Hungary, and there weren’t really any in Ukraine, Romania or Bulgaria. And you can still see that now.”

Ukraine, which has a population almost five times that of Portugal and an economy half the size, elected Viktor Yushchenko to replace former Soviet strongman Leonid Kuchma after the so- called Orange Revolution in 2004.

Corruption Allegations

Since then, Ukrainian politics have been marked by brawls in parliament and allegations of corruption. Transparency International ranked Ukraine 134th in its corruption index last year, tied with countries such as Zimbabwe and Sierra Leone.

“Elections alone cannot solve the fundamental political problems confronting Egypt and Tunisia,” said former Prime Minister Yulia Tymoshenko, a leader of the Orange Revolution who is under investigation by Ukraine’s Prosecutor General for misusing funds and abuse of power. “In particular, they cannot create a liberal order and open society.”

Central Europe didn’t face the extreme poverty and rising youth unemployment that is fueling unrest in some Middle Eastern countries, said Boguslaw R. Zagorski, a lecturer in Arab and Islamic Studies at Collegium Civitas in Warsaw who was a member of underground organizations in the 1980s.

Unemployment among those aged 15 to 24 in the oil importing countries of the Middle East and North Africa exceeds 25 percent, the highest for any region worldwide, according to the International Monetary Fund.

Rising Poverty

Yemen has the region’s highest levels of poverty, with 34.8 percent of the population living below the poverty line, followed by Egypt at 22.8 percent, World Bank data show.

Rising food prices are contributing to the pressures, with 44 million people worldwide falling into poverty since June, according to the World Bank. Global food costs rose to an all- time high in February, according to the United Nations Food & Agriculture Organization.

“Food will be one of the most pressing challenges for North Africa,” Zagorski said. “Political stabilization, but also simply ensuring that there’s enough food to go around.”

Egypt’s benchmark stock index, the EGX30, has fallen 30 percent this year, the steepest decline among 90 primary indexes tracked by Bloomberg. Tunisia’s Tunindex is down 17 percent, the third-biggest drop.

The yield on Egypt’s benchmark dollar bond due in 2020 rose to a record high 7.21 percent on Jan. 31 as the protests against Mubarak intensified. The bond traded at 6.34 percent yesterday, compared with 4.49 percent on Aug. 23. Tunisia’s dollar bond due 2012 rose to 5.09 percent on Jan. 17, two days after Ben Ali resigned, and traded at 2.90 percent yesterday.

Geopolitical Dimension

There is also a geopolitical difference between Eastern Europe in 1989 and the Middle East today, according to George Soros, the Hungarian-born billionaire who set up the Open Society Institute in 1993 to help formerly communist countries make the transition to democracy.

While the U.S. and Western Europe shared a common enemy with anti-communist movements, they supported the Middle East’s authoritarian rulers, Soros said.

“These revolutions were directed against some of our allies,” Soros said. “It is all the more important that we regain the confidence of the people by supporting their legitimate aspirations. If we do so, we will end up with more dependable and desirable alliances.”

As demonstrators in Yemen and Syria die in clashes with police and Libyan leader Muammar Qaddafi shells rebel forces, the question may be how long people are prepared to wait for democracy, said Polish central bank Governor Marek Belka, who was director of economic policy for the Coalition Provisional Authority in Iraq from 2003-2004.

“Sometimes it takes a generation, and people are not that patient anymore,” Belka said. “So then they could turn their back on democracy or democratically elected bodies and look for some other options. This is the problem.”

To contact the reporter on this story: Katya Andrusz in Warsaw at kandrusz@bloomberg.net

To contact the editor responsible for this story: Willy Morris at wmorris@bloomberg.net

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Former Polish President Lech Walesa

John Guillemin/Bloomberg

Lech Walesa, former president of Poland.

Lech Walesa, former president of Poland. Photographer: John Guillemin/Bloomberg

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April 28 (Bloomberg) -- Polish central bank Governor Marek Belka talks with Bloomberg's Katya Andrusz about pro-democracy movements in the Middle East and the outlook for the region. They spoke on March 16. (Source: Bloomberg)