The U.S. and Western European countries are still mired in the economic crisis and Arab countries have not recovered from the political crisis. These two different crises have engulfed the whole world and left it hanging it in the balance. The economic crisis has been caused by hyper-economic development, and the political crisis by political mal-development. 

In the West, financial capital has incapacitated the free market and corrupted industrial capital and undermined the entire capitalist system, while in the Arab world power has corrupted absolutely. However, we find that not all the countries in these two worlds suffer from these crises. In the West the anti-capitalist forces are gaining strength but they are much stronger in Anglo-Saxon and Mediterranean states than in the Nordic and continental European states. In the Arab world the pro-democratic movements are strong in pseudo-democratic states (Tunisia, Egypt, Libya, Syria and Yemen) but relatively weak in the Islamic monarchies (Saudi Arabia, the UAE, Oman, Kuwait, and Qatar). Why?

There are two different worlds in both the Western and Arab Worlds ― rich and well-functioning social welfare democratic states and less rich and malfunctioning social welfare democratic states in the West on the one hand, and rich and functioning Islamic monarchies and poor and mal-functioning pseudo-democratic states in the Middle East and North Africa on the other.

In the West, all states have a social welfare system, but some countries are experiencing a more severe economic crisis than others. Scholars classify the European social welfare systems into four models: the Anglo-Saxon, Nordic, continental and Mediterranean. In terms of the kinds of welfare programs and the extent of beneficiaries they vary to a certain extent but have little substantive difference.

In terms of social expenditure (in 2000) the Nordic model countries (Denmark, Norway, Sweden, Finland and the Netherlands) spend the highest percentage of GDP (33 percent); the continental model countries (Germany, France, Belgium, Austria, Luxembourg), the second largest (29 percent); the Anglo-Saxon model countries (the U.K. and Ireland), the third largest (24 percent); and the Mediterranean model countries (Italy, Greece, Spain, and Portugal), the lowest (23 percent). And in terms of efficiency (employment rate) and equity (lowering poverty risk), the Nordic model is the best in both; the continental model, the best in efficiency; the Anglo-Saxon model, the best in equity; and the Mediterranean model, the worst in both.

In terms of income level and parity, the Nordic model countries are richer and more egalitarian than other model countries except the Anglo-Saxon model countries; the latter are as rich as the former but less egalitarian. On the other hand, the continental model countries are rich as the Nordic model countries but less egalitarian except for Luxembourg. The Mediterranean model countries are less rich than the other model countries and least egalitarian among all the model countries.

These findings show that the different manifestations of crisis in Europe are related to the type of social security system, income level and income disparity. However, the government is ultimately responsible for such factors.

In the Arab world, non-democratic states (Islamic monarchies) with a well-functioning social welfare system and a high per capita income (Saudi Arabia, Oman, the UAE, Kuwait and Qatar) are safe from the Arab spring. Bahrain is an exception: it is politically unstable despite the fact that it belongs to the above category of states, mainly because its political system is in the process of transformation.

Non-democratic Arab socialist states (dictatorships with a democratic face) with a mal-functioning social welfare system and a lower per capita income (Yemen, Tunisia, Egypt, Syria and Libya) have been experiencing the Arab Spring.

A well-functioning social welfare system and a high income level cushion political instability. Another reason why the countries belonging to the former category is safe from the political crisis is that no Arab countries are truly democratic but the Islamic monarchy perhaps enjoys more legitimacy than the “secular” dictatorship. An additional reason can be the real or imagined support of the Islamic monarchies by outside great powers.

The above twin crises provide some lessons to South Korea. It is very difficult to establish a mature democracy and a stable capitalist system simultaneously. Democracy can guarantee freedom (political and economic) but cannot guarantee economic equality and continued economic prosperity. Capitalism can achieve economic prosperity but cannot guarantee economic equality.

In this situation, the best way to secure a mature democracy and a stable capitalist system is the social welfare system, because it can alleviate, if not eradicate, the shortcomings of democracy and capitalism and maintain both. But South Korea is a country in transition to a more perfect democracy and a more mature capitalism; therefore, it should adopt a social welfare system that is suitable to itself: one which can contribute to political stability and guarantee economic prosperity. 

By Park Sang-seek

Park Sang-seek is a professor at the Graduate Institute of Peace Studies, Kyung Hee University. ― Ed.