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The events sweeping through the Middle East are unexpected. The Egyptian economy is not all bad – it has been growing at 5-7% over recent years and per capita incomes are around $6200 which is not too bad for a country of 80 million that exists on a pathetically narrow stretch of fertile land along the Nile.  However with rising public deficits after the GFC, close to 10% unemployment and high poverty levels the economic picture is not all that good either.

The current rioting in Egypt’s major cities is partly a cry for democratic reforms in an authoritarian state and partly a general cry of resentment from the disadvantaged.  The message here has been blunted by widespread looting and criminal behaviour – there are suggestions this looting may have been instigated by the hated State Police.

It is a complicated picture for the US. The authoritarian and corrupt Egyptian regime is a key to maintaining peace in the Middle East because of the Sadat-Begin Peace Treaty.  The US has provided Egypt with a sustained flow of aid funds to help sustain this Treaty (and the Mubarak regime) which helps to insure the security of Israel in the midst of a large set of authoritarian, militarist and hostile Arab states.

It will be interesting to see of a new regime in Egypt based on the premise of reform and which is both anti-American and partly influenced by the Muslim Brotherhood in fact provides better outcomes economically and politically than the current discredited regime.  Obviously it is difficult to see how a new regime will help much in promoting Israel or the US’s security interests.

6 comments to Egypt

  • observa

    “The events sweeping through the Middle East are unexpected.”
    Well some are beginning to connect the dots with the Blair and Bush ‘Beacon of Light’ theory-
    The same suspects pooh poohed Reagan and Thatcher at the time too and down came the Wall.

  • observa

    Typical of those suspects is a smug John Quiggin pontificating-

    “In geopolitical terms, the US spends a lot more on its military than anyone else (in fact, more than everyone else put together) and (contrary to the beliefs of most Americans) hardly anything on development aid or other efforts at promoting global public goods. The amount of sustainable influence generated as a result appears pretty trivial. The number of places in the world where the US can directly determine, or even substantially influence, political outcomes is approximately zero”

    as ironically he pronounces- “The end of US decline”

  • observa

    Mind you it can all be as simple as the price of bread when you aint lucky enough to have a whole lot of natural resources per capita lying about-

  • hc

    I am not sure governments can do much to reduce the price of bread. If you have an intrinsically poorly-resourced society (physical and human capital) the path to development will be inconveniently slow. Complaints about repression may be valid but maybe the prepression is partly at least an endogenous consequence of economic circumstances.

    I cannot believe a more fundamentalist Islamic government will do better. Less freedom and worse economic circumstances seem the likely outcome.

  • MikeM

    It won’t necessarily be a more fundamentalist government. According to this editorial today in The Washington Post:

    Though they surprised many in Washington – including the Obama administration – the Jan. 25 demonstrations that touched off Egypt’s rebellion were anything but spontaneous. They were carefully organized by an opposition coalition, led by the April 6 movement – a secular organization dominated by young people. The movement originated three years ago, when it organized a day of protests and strikes; its Facebook group has nearly 90,000 members. April 6 is one of several broad secular coalitions that formed in recent years to promote democracy in Egypt. Another, led by former U.N. nuclear energy official Mohamed ElBaradei, has more than 240,000 Facebook members.

    Over the weekend, most of the secular opposition groups and the banned Muslim Brotherhood met to form a joint platform. They called for Tuesday’s mass demonstration and worked toward consensus on a platform. This likely will call for a transitional government, possibly headed by Mr. ElBaradei, which would lift political restrictions and lay the groundwork for free and fair elections. The coalition contains business owners, former members of parliament and defectors from the regime, and it has the capacity to oversee a political transition.

    The Muslim Brotherhood remains Egypt’s best-organized opposition political movement, but so far it has played a marginal role in the demonstrations. Its long-term aim of establishing an Islamic government in Egypt is at odds with what the mostly secular and middle-class demonstrators have been calling for, which is the democratization and modernization of the country. The Brotherhood, unlike its Palestinian offshoot Hamas, abandoned violence decades ago.

    No one knows how the Islamists would fare in a free election, since one has not been held in Egypt during the past half-century. But many Egyptian analysts believe an Islamist party would attract a minority of voters and would be unlikely, in the short term, to come to power. In the longer term, the best defense against it is well-organized and dynamic secular parties – which will only be possible if the current authoritarian regime is dismantled.

  • observa

    “I am not sure governments can do much to reduce the price of bread.”
    Spengler reckons he knows who the blame lies-
    and not much Mubarak, least of all the Muslim Brotherhood can do about that.

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