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Egypt's Four Step Recovery Plan


Everybody is staring transfixed at the US-Iran relationship and the UN struggle over Syria, but Egypt remains the key to Middle Eastern stability. The biggest question in the region is whether the new Egyptian government will stabilize the situation beyond the short term. The economics minister has laid out a plan:

1. Use money from friendly Arabs (the Muslim Brotherhood-hating Saudis and friends) to avoid the IMF and its strict conditionality for a while.

2. Spend the new money on job creating public works programs.

3. Don’t take the unpopular step of reforming entitlements and subsidy programs immediately, but try to save some money by improving the efficiency of those programs and addressing the (rampant) corruption in them, at least a little bit, while slowly preparing the way for deeper reforms down the road.

4. Hope that the government will succeed in restoring enough security and order that both tourists and foreign investors return. (Without them, the Egyptian economy is as dead as the Pharaohs.)

The biggest problem is of course step four. Anybody who wants to destabilize Egypt’s government has a fairly easy task ahead of them: just keep the pot boiling with enough violence and instability to keep the tourists at bay. That won’t take a whole lot of violence at this point; tourists are a skittery lot with plenty of alternatives for sun and fun, and the damage to Egypt’s image as a safe and peaceful destination has been severe. Deep discounting of prices combined with aggressive and effective patrols might begin to restore life to the Sinai resorts, but bringing people back to the Nile valley—including Cairo, the Pyramids and the southern archaeological sites—will be harder.

As far as outsiders can see, the government appears to be betting that its deep files on the Muslim Brotherhood and various splinter groups, the powerful apparatus of suppression and security developed before the fall of Mubarak, and the support of Saudi-funded clergy can suppress enough violence to create the public calm that tourists and investors are looking for. There doesn’t seem to be much interest in real political compromise as a means of calming the situation. There is too much distrust in the military, too much hostility from the Saudi paymasters, and too little political capacity on the Islamist side for that path to be appealing.

But will the more muscular option work? Should we hope that it does? The first question harder to answer than the second. Unpleasant though the new government is in many respects, from a practical point of view it is hard to see anything better—whether we mean “better” as judged by ordinary Egyptians who are desperate to earn enough to feed themselves and their families, or “better” from the perspective of the countries that have an interest in the political stability of the region.

If Egypt stabilizes, there is hope that the Arab Middle East as a whole can find some kind of political balance and stability. But if things fall apart in Egypt and a new era of civil conflict opens up, bringing deeper polarization, more violence against Christians and others, and increasing desperation on the part of millions of people on the edge of real hunger and privation, then the problems we have seen in the region so far will look small and manageable in comparison with what’s to come.

[Photo of Adli Mansour courtesy of Getty Images.]

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  • wigwag

    Here are some other things they could do:

    1) Try China’s one child policy. The population explosion in Egypt has been a disaster for the Egyptian economy.

    2) Give up on the Palestinians (the Generals already have; the rest of the population needs to be convinced). The partner that could really teach Egypt about building a world class economy is Israel. The opportunities for partnership abound from tourism to energy to agriculture to high tech. What the Egyptians need to do is recognize their failures and emulate the Japanese in the aftermath of World War II. The Palestinians are useless; Israel could really help Egypt.

    3) Empower the Copts. They are far and away the most educated and entrepreneurial Egyptians.

    4) Stop the genital mutilation. A country where 90 percent of the women experience cutting of the clitoris will never amount to anything.

    5) Teach girls to read. In the modern world a nation that completely marginalizes its female citizens will never have a modern economy.

    • f1b0nacc1

      As I expect from you, an intelligent and reasoned comment. Some problems however….
      1) Implementing China’s One Child policy is going to require the sort of political and physical muscle that I rather doubt that the military has. More to the point, such a policy (however desirable in the long view) will alienate a significant number of those ‘on the fence’, whose support that the military needs, not to mention giving the MB a superb issue to work with. Finally, in a societ as deeply corrupt as Egypt, the potential for misuse of the policy (just look at China for an excellent example of that) is extreme. This will only drive more wedges into the rifts within society there.
      2) Embracing the Israelis looks great on paper, but it isn’t going to happen. I don’t dispute that it would be a great idea, but it simply won’t happen. Likewise, cutting the Palis loose is a very long-shot policy wise….
      3) The Copts are…well…there Copts, and they are NOT muslims. Great concept, but simply not likely to be implemented…
      4 & 5) Of course tehse are excellent ideas, but once again, good luck on making it happen…
      We are talking about a largely uneducated, deeply conservative MUSLIM country…short of killing most of the population and/or forceably converting the rest, I simply don’t see any of the (quite sensible) suggestions that you make becoming reality.

    • Pete

      You have good ideas here, Wig.

      And yes of course, Israel could significantly help Egypt’s economy, but to ever expect Egypt to be a ‘world class economy’ is beyond absurd.

  • Jacksonian_Libertarian

    Stability is over-rated, it really is just another word for stagnate. If we are ever to see a free, democratic, and civilized middle-east, the Cultures in that region must change, and that is inherently destabilizing.
    I’m looking to a distant future where a new Stability, and a new heavily modified Culture, forms in the middle-east.

  • ljgude

    I think there is too little attention being paid to agricultural crisis behind the political crisis in Egypt (and Syria for that matter). From the little I’ve read they are 9n ned of land reform and farming methodology reform. They import 50% of their food.

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