Saturday, July 7, 2012

Make Money as a Dictator -- Become a Caliph!

Yesterday evening, driving past Qalandia checkpoint, some bearded guys were handing out paper flyers, calling for a meeting with the objective to re-introduce the Caliphate. This is their flyer:

That idea inspired me for this blog post, which looks at the financial aspects and feasibility of becoming Caliph, or in general any dictator. Take it with a grain of salt when reading.

Large parts of this post are inspired by The Dictator's Handbook, which I definitely recommend reading if you either want to become one, or if you want to ward off the risk of dictatorship being introduced somewhere.

The Caliph Was 100 Times More Greedy Than Hosni Mubarak

Let's start with the question how much money can a dictator make? To optimize your income, you take the entire governmental revenues (consisting mostly of taxes, natural resources exploitation, as well as loans you take), you pay just enough to your essential supporters to keep them loyal, and the rest you can keep for yourself.

For example, Hosni Mubarak's private accounts were growing by approximately 10 billion $ during his 30 years regime. That's about 330 Million $ per year. With governmental revenues of approximately 50 billion US$ annually, it is a mere 0.6% he kept for himself.

To put that into perspective, the caliphate's income for the years 918-919 was 15.5 million dinars, 10.5 million of which was spent on Caliph Al Muqtadir's household, that is a decent 68%. (S.E. Finer, The History of Government, 1997, page 724) 
So if you call Mubarak greedy, you have to remember that the Caliph was 100 times (!) more greedy than Mubarak.

If you would have a similarly greedy Caliph for Palestine of today, he would extract some 2.5 billion$ annually from the governmental budget of Palestine into his private coffers.

The idea of a caliphate however is that it spans all across the Islamic world. I didn't do the math, but you can use this page and this page, to calculate how much you could roughly extract as a Caliph. I would roughly guess you could make more than a trillion $ (that is 1,000,000,000,000$) annually as a pan-Arabic "Caliph-style" dictator.

Harun Al Rashid, The fifth caliph, with his impressive pumpkin-style turban

If you see that financial figure you can imagine that people are willing to take great risks and investments in their pursuit to become dictators (which in the history of the caliphate, they did a lot). The above mentioned PR campaign at Qalandia checkpoint is probably one of those investments. I would be too curious to know where the funding and political masterminding for that campaign comes from.

What is the Most Promising Approach to Become Dictator?

Traditionally, most dictators came into power through their military allies. Many were military generals that overthrew the president. Some made a military alliance to conquer some territory (like the Saud Family did together with Wahabi warriors). Today in the Middle East, some might see a third opportunity: As there is a general discontent about previous dictators, the loyalty of their military forces are severely weakened by the Arab spring. In most of those countries, education levels are low, there is no well established democracy culture, and there is a strong common identity by Islamic belief. 

Under these conditions, it seems realistic to convince a majority to overthrow the current dictatorship, to hold elections, just to introduce yet another dictatorship which comes along disguised as a "caliphate". This caliphate will resort to the historic leadership mechanisms, which according to today's wording is nothing else than dictatorship.
The minority of well educated and democratically minded people will call for elections, free speech, freedom of assembly, civil rights, and so on... The caliphate regime will answer that those infidels are only trying to weaken the divine reign of the caliphate, and therefore those offenders shall be punished according to a cruel interpretation of Sharia.

The hanging of Sufi saint and poet Mansur Al-Hallaj. He was hanged by Abbasid caliph, Al-Muqtadir in 922

Most education systems in the region are teaching about the caliphate's history in a positively biased way -- it is sometimes sold as part of Islamic faith to believe that this was the best regime that ever existed, free of any flaws, brutalities, discrimination, or economic exploitation. And I would agree that at that time, the Islamic ruleset as codified in Quran, and partly adopted by the caliphate was among the most modern ones around. But yeah, that was 1000 years ago. Long before enlightenment, abolishment of torture and death penalty, separation of powers, citizen's rights movements, liberalism, government accountability, minorities protection, individual freedoms, and ultimately democracy.

The Technicalities of Tax Farming

The method of tax farming of the caliphate is described in the Dictator's Handbook. Here is an excerpt:

The Special Situation of Palestine

Both Fatah and Hamas governments in Palestine seem to create good revenues, and let the essential supporters of the regime benefit from it. While Hamas levies taxes on tunnel transit and donations from supporters abroad, Fatah relies on the formalized economy, custom revenues, fuel and car taxes, and in large part foreign donors from mostly western countries. The latter financing is likely to fade away if a caliphate was to be introduced.

As Shlomo Ben-Ami describes in Scars of War, Wounds of Peace the Arafat government had to sign onto Oslo accords as Israels subcontractor for the occupation, because PLO was bankrupt after backing the wrong horse in the first Gulf War. This dependence on western money was perpetuated, because the PA government knows that the West will never let them go bankrupt, fearing an overtake by more radical forces.
In financial terms, this phenomenon is called "moral hazard", the PA being able to run their state budget into deep deficit by hiring more and more governmental employees, knowing that somebody will bail them out eventually, especially under the threat that PA halts salary payments to their security forces.

Therefore in Palestine, introducing a caliphate is a tricky one, lacking the financial means, and the means of full sovereignity. Any potential Caliph for Palestine probably needs to rely on foreign funding, i.e. he will be rather a pan-arabic Caliph, and have his branch administration in Palestine -- which is probably not one of his most profitable ones. Therefore I would expect a pro-caliphate political party to emerge in Palestine, but the rule of the Caliph, I would assume to start elsewhere in the region.

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