Libyan revolt is the news story du jour. It is the most prominent part of the Arabic revolution, which may move politics in the region beyond religion, past Islamism. This, for the world, can be as important as the fall of communism a couple of decades ago. It remains unclear whether this will happen, as the events are still recent and we don’t have a big picture yet – thus we concentrate on isolated facts and regions. Several weeks ago it wasn’t Libya, but Egypt, which was on everyone’s mind (meaning the permanent presence in mass media, which is the pre-eminent driver of people’s thoughts). Media coverage and consequently public conjecture were confined to the fight against Hosni Mubarak, the President of Egypt for almost 30 years.
Overthrowing a blandiose dictator is the easy part though. Given the right amount of simple-minded stubbornness it can be achieved virtually effortlessly. In the case of Egypt it was quite easy, especially compared to the situation in Iran, where there’s a swelling number of bad men with good weapons. But even the liberation of Iran will happen eventually, possibly within our lifetimes. This comparison is not intended to undermine the magnanimousness of Egyptian citizens standing against the despotism and terror of the reptilian President and the literal danger of standing against the police and the army. It is however apodictic that we already knew it would happen, it was merely a question of timing. Sigmund Freud explains the inevitability of revolts in The Future of an Illusion, although he’s making a bigger point too when saying:
“If, however, a culture has not got beyond a point at which the satisfaction of one portion of its participants depends upon the suppression of another, and perhaps larger, portion — and this is the case in all present day cultures – it is understandable that the suppressed people should develop an intense hostility towards a culture whose existence they make possible by their work, but in whose wealth they have too small a share. In such conditions an internalization of the cultural prohibitions among the suppressed people is not to be expected. On the contrary, they are not prepared to acknowledge the prohibitions, they are intent on destroying the culture itself, and possibly even on doing away with the postulates on which it is based. The hostility of these classes to civilization is so obvious that it has caused the more latent hostility of the social strata that are better provided for to be overlooked. It goes without saying that a civilization which leaves so large a number of its participants unsatisfied and drives them into revolt neither has nor deserves the prospect of a lasting existence.”
Now that the collective obsession with overthrowing an old, mush-headed tyrant is over and the public is no longer interested in Egypt we can safely proceed with thinking about its future. The country will need a series of multifarious, ground-shaking political and economic reforms to bring it up to par with standards of the First and Second World. Political instability in the region has to be taken into account, and it most certainly will not be helpful, but I ignore this aspect for the time being as I am more interested in the economic side of Egypt’s chances. It is not to say that the political environment is less significant for Egypt; in fact Christopher Hitchens describes the problems of Egyptian revolution and its political aftermath in an illecebrous manner in April’s issue of Vanity Fair. I am however more interested in ratiocinating Egypt’s chances to build economic power that the revolution brought.
There seem to be four major pillars upon which the economic reforms can be built. The first one consists in rapid economic growth. Egypt has a GDP per capita (PPP adjusted) of about $6000, which is considerably lower than the average for the world (around $11000). Egypt needs to be moving significantly faster than the First World to end the overwhelming torpor and build modern and competitive economy. International Monetary Fund predicts growth of about 5-6% during the next 4 years, which is enough in short-term, but Egypt needs to maintain that pace during the next generation or two. This is not going to be easy and will require many reforms rebarbative to the general public. One of the most important things to do right now is to promote entrepreneurship based mostly on domestic capital.
The second pillar brings Freud’s ideas quoted above to mind – the fair distribution of wealth. In particular Egypt needs more money in education, which is the main lever of development and one of the best ways to fight poverty. This pillar also consists in trying to lower unemployment in the country, which is stubbornly high for many years now (officially around 9-10%, which is, in all likelihood, lower than the real number). Egypt should shift the centre of gravity of its economy by promoting activities and sectors which have large labour content, such as services, construction and agriculture. This also means reforms of national income redistribution systems, especially the fiscal system and the budgetary policy.
The third principle Egyptians should be paying attention to is trade integration with its immediate neighbours, which may not be a very easy thing to do given the political and economic instability in the region. But they also should seriously consider trade integration with the whole world, especially with the European Union, which is close and wealthy enough to provide an excellent partner for Egypt. The government should also promote integration in other fields, principally education.
The last pillar is expressed by efficient state. Recent trends in economic thought seem to indicate that strong but labile institutions greatly facilitate economic development and might have been one of the main reasons why some countries developed faster than others over the centuries. Egypt needs strong political scene and strong fiscal and economic institutions with people educated in the West. These institutions should be friendly to its citizens, avoiding bumbledom, discouraging bribery and promoting entrepreneurship.
To make all this possible Egypt needs real opposition and political debrouillards to lead it. The country also needs good policymakers and great economists ready to lead the laborious process of transforming the economy. Hence the most important question from economic standpoint seems to be: is there an intelligentsia which can get the country through transformation in a way that will make Egypt better, not worse; is there a man like Leszek Balcerowicz of Poland’s transformation of the early nineties? The protests are about the lack of reforms, but do the protesters have any idea about what reforms do they want or need? In fact, are there any people in Egypt who have a coherent and feasible vision of economic and political change? Wanting reforms isn’t enough, a country needs people who can earn public trust, who have the kind of vision described above and who also have the charisma and political strength to proceed with these changes.
No one can see strong and coherent opposition in Egypt, nor does anyone believe in the supposed bouleversement of members of the fetid plunderbund governing Egypt over the course of the last thirty years, and due to severe problems with education in the country there are not many people who can lead economic reforms and policies. Therefore Egypt’s future doesn’t have a bright outlook for change, which many people assumed would follow the recent developments. Freud predicted the revolt, but not its consequences. The future of this uprising is caliginous, even if not yet wholly clear. During the mutiny no one asked themselves: can the price of freedom be too high? If it can Egyptians may soon find themselves nympholeptically indebted.