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Technology as a Social Change Factor in the Development of the Arab World

The control and direction of economic development is one of the most critical problems facing leaders in the Arab world. The complexity of the decisions associated with economic development and the concomitant social changes brought about by economic development have increased with the growth and development of modern technology. As in the past the key to economic development rests in four basic factors: "population, natural resources, capital formation, and technology."1  In the Middle East the interplay of the four basic factors of economic development has generated a considerable amount of consternation among not only Arab leaders but also international observers because technology has become the dominant factor in economic development.

Increasingly, the Arabs find it to their interest to do what they can to encourage the transfer of foreign technology and managerial talents to their part of the world. The Arab leaders of today are also fully cognizant of many of the pitfalls of rapid economic development facilitated by the transfer of foreign, to a large extent Western, technology and managerial talents to the Arab world. Indeed, "Prophets of gloom," says Rene Dubos in his book So Human an Animal, "now predict that mankind is on a course of self-destruction, or that, in the unlikely event of its survival, it will progressively abandon the values and amenities of Western civilization."
2 The goal then, of Arab leaders, is to modernize their societies without completely destroying their own culture.

The theory that economics plays an important part in the transformation of social institutions has been well established. The hypothesis that technology acts as a significant catalytic agent in the transformation of social institutions has only recently been truly appreciated by scholars. In The Great Transformation by Karl Polanyi one of the major themes deals with the effects economic development has had on social and political institutions. Today the Arab world leaders both public and private are faced with the situation of not only continued economic change but also a rate of change that has been greatly accelerated by modern technology. "The search for the mastery of nature and for unlimited growth," writes Dubos, "generates a highly stimulating, almost intoxicating atmosphere, where the very hint of approaching stabilization creates apathy."
3 Certainly nobody would assert that the Arab leaders have any special trait that will exempt them from the manifold pressures of rapid economic development. It is in that same intoxicating atmosphere that Arab leaders, both in government and in the private sector, must be willing to say:

We cannot make decisions just for partisan or monetary reasons, or for short-term gain. These decisions must be great beyond our lifetimes and not just for the moment.4

In short, Arab leaders must be bold enough to face the challenge of change.  

As the year 2000 approaches it will become increasingly important to recognize and appreciate the fact that mankind and its social institutions must keep pace with the ever increasing rate of technological change. This task will be especially difficult in nations, like those of the Arab world, that are underdeveloped or in the "neotechnic"5 phase of development. In those Arab states just beginning to feel the impact of technological change Paul A. Samuelson suggests that "one of developments most pressing tasks is to hasten internal growth of the scarce entrepreneurial and commercial spirit."6 A fundamental deficiency in the ability to marshal the needed internal drive and spirit necessary to proceed with rapid economic development and cope with the concomitant social changes serves only to further compound the problems the Arab world must face. William R. Polk seems to second Samuelson's suggestion when he states:

But development is only in part a matter of economics. Capital is a necessary but not sufficient cause for its achievement. Development must occur in the minds of men or it does not occur at all. It is, consequently, to be seen as a deeply psychological and political, as well as, economic phenomenon. It has taken us long years to come to understand this but still our understanding is only rudimentary. We understand how to assemble the tinder but not how to strike the spark.  Indeed, it is doubtful that outsiders can strike the spark.7

The gap between the state of technology in the post-industrial nations and the state of technology in the Arab world creates problems for the Arab nations at a rate that is directly related to the size of the gap. In spite of the tremendous oil revenues received by Arab oil producers, not the least of the problems facing the Arab world is the problem of capital formation.

Paul Samuelson devotes an entire chapter to the processes of development and his observations on capital formation in underdeveloped countries are strikingly simple:

Rates of productive capital formation in underdeveloped countries are low because of (a) poverty, (b) lack of a bourgeois ethic stressing frugality and acquisitiveness, (c) qualitative distortion of saving outlets towards unproductive hoarding of precious objects and idle inventory and luxurious real estate or money markets abroad, (d) emulation of consumption standards of advanced nations, and (e) nationalistic barriers to importing capital on terms acceptable to investors in the advanced countries.8

Note that all five reasons sited by Samuelson imply some type of social institution relationship that is directly related to the state of technology in the Arab world. Here it is important to make a distinction between having capital and capital formation. Even in the rich Arab oil producing nations, which produce large reserves of capital, there is still a need for capital formation at the middle and lower levels of the societies. Capital formation is extremely important to underdeveloped countries, but Samuelson asks his readers to remember that "the fingers and brains of men in the underdeveloped countries are much like the fingers and brains of their more prosperous brethren; but men in advanced nations work with a plentiful supply of capital goods built over the years."9 Again the undercurrent of Samuelson's remarks indicates that it is the social response to technology that determines how successful an underdeveloped country will be at capital formation.

Foreign investments by highly developed nations may or may not be desired by an Arab nation according to its ability to perceive not only the purpose but also the implications of outside investment. In the past some Arab nations, such as Saudi Arabia, have been able to recognize the importance and significance of developing their natural resources and have taken steps that would induce advanced nations to invest considerable sums of capital. While at present the Saudis do not really need foreign capital, "they want it because it is a guarantee that the overseas companies will work harder and stay interested."10 Other nations, in contrast, such as Egypt, have been unable, in the past, to recognize the importance of legitimate foreign investment and took steps that made foreign investment unattractive. "The approach was based on the assumption that private economic activity was by its very nature exploitative, inefficient, and distorting of the development process."11 Polk continues by saying:

The capitalist received a privilege, whether land or an industrial concession, was subsidized, and was protected from competition by the government. Often, the capitalist was a foreigner and this introduced an emotional factor of antipathy . . . The central fact was that he did not justify, by creating new wealth, the privilege he acquired. It was quite reasonable, therefore, that in many of the Arab countries, he should be expropriated, sequestered, or otherwise put out of business in the 1950's.12

The examples of Saudi Arabia and Egypt also illustrate Samuelson's reminder that "foreign investment will have to take into account the rising tide of nationalism."13 Although important, nationalism does not always play a key determining factor in rapid economic development.

Nations in the Arab world are beginning to recognize that nationalism alone is not the key factor in rapid development. In Iraq, for example, both before and after the 1958 revolution, the Iraqi government commissioned scores of millions of dollars for sophisticated plans on virtually every aspect of its economy. The result was that only those projects which could be commissioned and built by foreign firms were effectively implemented. Further, even those commissioned and built by foreign interests failed to produce a synergistic reaction in the general Iraqi populace.  Polk reports:

Thus, little by little, even the radical Arab governments have come to recognize (as apparently has the Soviet Union), that development is a process which requires participation and that participation, while occasionally effectively brought about by ideological, religious, or patriotic sentiments, is most efficiently, effectively, and rapidly produced by self-interest. This lesson has been particularly vivid in Egypt.14

So, the problem of the Arab world being able to keep pace with technological development and at the same time maintain a comfortable rate of social transformation is not beyond the realm of resolution. That does not imply that the impact of technology upon the social transformation process in the Arab world is insignificant, but it does establish the fact that the problem of technological impact is not so grave as to ward off any attempt at economic development.

Technology as a social change factor becomes an important economic parameter as an advanced nation or one of the oil-rich members of the Arab world assesses the feasibility of committing capital to the development of a foreign (Arab) resource. The nation or corporation (it makes little difference which for the purpose of this discussion) contemplating the prospect of an investment must consider not only the political and social condition of the country but also the cost and availability of labor and transportation. The level of technology is directly related to the skill factor of the local population, as well as, the type and availability of transportation.

Although slightly more complicated to compute, the cost of available local labor and transportation are also related to the level of technology. Labor expenditures and transportation costs are more difficult to analyze in that a simple "have" or "have not" equation cannot be applied. However, true labor costs can be determined by computing the original market value of labor in the selected country, which is a reflection of the level of technology, the cost required to train an initial labor force, and the projected market value of the new labor force. Similar computations would be required in the computation of the true cost of transportation. The role of technology as a social change factor, both before and after an investment is made, is a key determining factor in the rate of development. The assessment of the response a population will give to a given set of technological innovations is therefore a prime indicator to the total success factor of any development project in the Arab world. Of course, each time the level of economic development is increased and a new or more advanced set of technological innovations is introduced the situation will change and a new success factor must be established.

It would seem appropriate to insert an example of how the above model applies to development in the Arab world. For my purposes Saudi Arabia proves to be an excellent example. In spite of its new found wealth Saudi Arabia remains a backward feudal kingdom in many ways. Some of its major cities are ringed by shantytowns. Its desert wastelands are broken by few ground transportation links. Its major port, Jeddah, is so backlogged that important supplies must be airlifted into country, and those goods must then be unloaded amid scenes of mass confusion at Jeddah Airport. As one high Saudi official concedes sadly, "We are even ten years behind Kuwait."
15

Saudi planners recognize that the only way they will be able to accomplish their virtual overnight industrialization is by opening their doors to foreign businessmen. The Saudis are determined to let foreigners in only as partners with Saudis in joint ventures. The reason for the keen interest in joint ventures is, as one Saudi official says, "to insure that the other party is not just out for the fast buck."16 Apparently this restriction does not seem to dampen the enthusiasm of foreign investors.

Planning vast development projects is one thing; turning them into reality is quite another.  One unusual problem the Saudis face is an absolute lack of population let alone a population of skilled workers. The government has recently completed the Kingdom's first census, and though the official count has not been released, most businessmen believe the population will total around 4 million.17 Isham Nazer, UCLA-educated Saudi Planning Minister, openly admits, "There is also an appalling lack of specialized skills."18 Saudi Arabia's technical elite today consists of about 2,500 men19 who have studied at universities abroad. As a result, the majority of the people are poorly educated, and there is a backlog of development proposals because there are not enough trained people to deal with them.

To remedy the situation the government has established an industrial development fund, and it hopes to build vocational training institutes with the help of U.S. and other advanced nations.  "We have set up the fund to give low-interest loans for business purposes and the like," says Nazer, "But once a Saudi gets this help he has to make it on his own."
20 Isham Nazer's remarks are consistent with the expressed views of the late King Faisal. In a speech delivered at the dedication of one of the many public projects being implemented all over Saudi Arabia His Majesty King Faisal said:

This country is in a phase of its development which needs more emphasis on trades and technical skills since the implementation and continuation of projects require a working manpower which must be provided only by the sons of our own country.21

In the process of teaching the Saudi technical skills (technology) and putting him into a new technology career a whole string of social changes will occur.  There is a need to impart the skills needed to effectively utilize modern technology at all levels.  As Polk observes:

Everywhere in the Arab countries, as in most of the Third World, there are brilliant, highly skilled men at the top who compare favorably with the best anywhere in the world. But they suffer from two fatal defects: First, they are few in number and second, they are virtually unsupported by second-echelon talent.  The society tends to resemble an army with a highly competent general staff and no sergeants. To build a social and intellectual system productive of skills is certainly the challenge of the next generation in the Middle East.22

Surely, this attests to the veracity of the need for continued and increased application of the routines illustrated in the model for plotting the growth of technological development and its impact as a social change factor in the development of the Arab world.

The importance of using technology as a social change factor in the evaluation of the Arab world's response to economic development continues even as individual countries or groups of countries approach the development of an industrial or perhaps even a post-industrial state.  This process occurs even among the most advanced nations. The United States is one of the few post-industrial states in the world, but we still speak of growth and development in the United States. In his book The Children of Frankenstein: A Primer on Modern Technology and Human Values Herbert Muller comments, "In our society exploding appears to be a normal mode of expansion."
23 The same mode of expansion may be felt and witnessed on the streets of any major city in the Arab world.

While the total level of production and development reflects prosperity there are numerous "isolated"
24 areas in the Arab world that remain at a very low level of development, even when compared to the take-off stage of development for the Arab world. The existence of underdeveloped pockets in nations that are otherwise making significant development progress has become an important international issue. The mere presence of an underdeveloped area in an otherwise developing country would tend to indicate that technology spreads as a result of intentional development and not by diffusion. Surely, one of the primary objectives of every Arab nation that has underdeveloped pockets within its borders should be to implement projects that would raise the economic level of those areas to the same level as the rest of the nation. The situation can only get worse if steps are not taken to develop the poorest communities in the Arab world. As time goes on the cost factor will increase at the same rate it would if the conditions existed anyplace else in the world.

The immediate problems of development are not the only technology related problems facing the Arab world. The impact of technology as a social change factor increases at a rate that is very similar to what happens when a bellows is pressed together. If the number of folds per unit distance is compared to the relative impact of increasing technology and the rate at which the bellows is compressed is compared to the rate of increasing technology, then it is easy to visualize that the impact of technology increases at a rate that gives a society an ever decreasing interval to respond to the change. For instance, in Saudi Arabia planners are painfully aware that time is the major defense against the effectiveness of the oil-weapon. "We have five to eight years to lessen our dependence on oil and diversify our economy before the world lessens its dependence on us." says Isham Nazer, "There isn't a moment to be lost.
25

The impact of technology as a social change factor can be measured in many ways, but perhaps the final measure is in measuring the stability of the governments in the Arab world. There are important differences between building a state and building a nation. For one, the building of a state is much easier than the building of a nation. The state is essentially an administrative organization. A society is, on the other hand, essentially a political order. Many of the Arab governments which came into independence during the 1930's and 1940's have tended to confuse the two and have tried to rely upon the state in default of the society. Governments have not only been bureaucratized away from popular participation but also the state has been abstracted from politics. There is hope. In recent years governments have been increasingly learning that issues for which political solutions are not found cannot be permanently remedied through the use of military suppression. As Polk succulently points out:

Government is ultimately dependent for its effectiveness and even survival upon recognition of its legitimacy. And legitimacy is one of the most fragile and least understood concepts in politics.  Acquired in various cultures through a "mandate of heaven," through leadership of a widely recognized national cause, or formalistically through an election, it cannot, apparently, be imposed merely by force.26

Whatever the source of legitimacy throughout the Arab world, it is apparent that the impact of technology will be substantial.  Thus, the success with which Arab leaders are able to handle the tremendous social changes brought about through the introduction of modern technology into traditional Arab culture will to a great extent be a measure of the success with which those same leaders will be able to maintain the legitimacy of their governments. With maintenance of legitimacy within the individual Arab governments comes stability. And the stability of the entire world is dependent upon some semblance of stability in the Arab world. That makes technology as a social change factor a pretty important concept to understand.

F O O T N O T E S

1Paul A. Samuelson, Economics: An Introductory Analysis, sixth ed. (New York: McGraw-Hill Book Company, 1964),p. 773.

2Rene Dubos, So Human An Animal (New York: Charles Scribner's Sons, 1968), p. 9.

3Ibid., p. 7.

4Walter J. Hickel, Who Owns America? (New York: Paperback Library Edition, 1972), p. 278.

5Herbert J. Muller, The Children of Frankenstein: A Primer on Modern Technology and Human Values (Bloomington: Indiana University Press, 1970), p. 67.

6Samuelson, Economics, p. 774.

7William R. Polk, The United States and the Arab World, 3d. ed. (Cambridge: Harvard University Press, 1975), p. 438.

8Samuelson, Economics, p. 773.

9Ibid., p. 768.

10________, "Saudi Arabia: The New Breed of Empire Builders," Business Week (December 7, 1974), p. 42.

11Polk, Arab World, p. 438.

12Ibid., p. 439.

13Samuelson, Economics, p. 770.

14Polk, Arab World, p. 440.

15Arnaud DeBorchgrave, "Saudi Arabia Plays Catch-up," Newsweek (October 28, 1974), p. 39.

16Ibid., p. 40.

17________, "Saudi Arabia: A Cautious Spending of Petrodollars," Business Week (November 23, 1974), p. 52.

18DeBorchgrave, "Catch-up," Newsweek, p. 40.

19 Ibid., p. 40.

20________, "Petrodollars," Business Week, p. 52.

21________, Saudi Arabian Mobility Program: Operation Year Five: First Quarterly Progress Report (Riyadh: Saudi Arabian Army Ordnance Corps, 1971), p. i.

22Polk, Arab World, p. 441.

23Herbert J. Muller, Children of Frankenstein, p. 87.

24"Isolated" is used in context to mean both special and cultural isolation.

25DeBorchgrave, "Catch-up, Newsweek, p. 39.

26Polk, Arab World, p. 442.

SELECTED  BIBLIOGRAPHY

. Saudi Arabian Mobility Program: Operation Year Five: First Quarterly Progress Report. Riyadh: Saudi Arabian Army Ordnance Corps. 1971.

ADELMAN, M.A. The World Petroleum Market. Baltimore: John Hopkins University Press. 1972.

ARABIAN AMERICAN OIL COMPANY. ARAMCO Handbook. Dhahran: Arabian American Oil Company. 1968.

DUBOS, RENE. So Human An Animal. New York: Charles Scribner's Sons. 1968.

FANNING, LEONARD M. Foreign Oil and the Free World. New York: McGraw-Hill. 1954.

HICKEL, WALTER J. Who Owns America?. New York: Paperback Library Edition. 1972.

ISSAWI, CHARLES and YEGANEH, MOHAMMED. The Economics of Middle East Oil. New York: Praeger. 1962.

JACOBY, NEIL H. Multinational Oil: A Study in Industrial Dynamics. New York:  Macmillan Publishing Co. 1974.

KIRK, GEORGE E. Contemporary Arab Politics. New York: Praeger. 1961.

LANDERS, RICHARD R. Man's Place in the Dybosphere. Englewood Cliffs, N.J.:  Prentice-Hall, Inc. 1966.

LUNDBERG, GEORGE A. Can Science Save Us?. second edition. New York: McKay Company, Inc. 1961.

MOSLEY, LEONARD. Power Play: Oil in the Middle East. New York: Random House. 1973.

MULLER, HERBERT J. The Children of Frankenstein: A Primer on Modern Technology and Human Values. Bloomington: Indiana University Press. 1970.

O'CONNOR, HARVEY. World Crisis in Oil. New York: Monthly Review Press. 1962.

POLANYI, KARL. The Great Transformation. Boston: Beacon Press. (Paperback). 1957.

POLK, WILLIAM R. The United States and the Arab World. third edition. Bloomington:  Indiana University Press. 1975.

SAMUELSON, PAUL A. Economics: An Introductory Analysis. sixth edition. New York:  McGraw-Hill Book Company. 1964.

TWITCHELL, KARL SABEN. Saudi Arabia. third edition. Princeton: Princeton University Press. 1958.

VAN DER MEULEN, D. The Wells of Ibn Saud. London: John Murray. 1957. reprinted ed. New York: Praeger. 1957.

WELLS, DONALD A. Saudi Arabian Revenues and Expenditures: The Potential for Foreign Exchange Savings. Baltimore: Resources for the Future, Inc. 1974.

Journals and Magazines

"Saudi Arabia: A Cautious Spending of Petrodollars," Business Week. November 23, 1974.  pp. 50-52.

"Saudi Arabia: The New Breed of Empire Builder," Business Week. December 7, 1974. pp. 42-43.

DEBORCHGRAVE, ARNAUD. "Saudi Arabia Plays Catch-up," Newsweek. October 28, 1974.  pp. 39-40.

 

 

 

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