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Economic Factors in Violent Extremism

Veiled women walk past a billboard that carries a verse from Koran urging women to wear a hijab in the northern province of Raqqa March 31, 2014. The Islamic State in Iraq and the Levant (ISIL) has imposed sweeping restrictions on personal freedoms.

Economic disparity, often in combination with other factors, can open the door to violent extremism.

Economic disparity, often in combination with other factors, can open the door to violent extremism.

Across many parts of the Middle East and North Africa, economic policies have led to the creation of parallel but deeply polarized economies said U.S. Under Secretary of State for Economic Growth, Energy, and the Environment Catherine Novelli. One is formal and often extends the full range of society’s benefits to a relatively small and privileged group, but exacerbates perceptions of unfairness. The other economy is informal, marked by insecurity, and characterized by low pay and little hope for a better future.

According to the World Bank, the typical country in the Middle East and North Africa produces about 27 percent of its GDP in the informal economy and employs 67 percent of its labor force informally.

In many countries, it is almost impossible for an individual to move from the informal sector to the formal sector, said Under Secretary Novelli.

Women, she said, participate in the Middle East’s workforce at the world’s lowest rate. Many women when they can't find jobs in the formal sector become discouraged over time and end up dropping out of the labor force. ISIL has exploited these frustrations in its recruitment efforts by promising women valued positions in their state – and hundreds of women have fallen prey to this narrative.

It is important to note that ISIL wants to cast blame on capitalism, or “modernity” for creating many of these inequities. In the Middle East and North Africa, ISIL presents a false choice between the unjust status quo, and a romanticized version of a seventh century economy.

The most effective way to confront these challenges is for countries to pursue sound market-economy principles, embrace transparency and the rule of law, and ensure that all people have the opportunity to succeed. Embracing such reforms can go a long way toward blunting the message of violent extremists.