On Friday 11th February, when Hosni Mubarak stepped down as president of Egypt, it brought an end to 18 days of protest and 30 years of rule. It also ended the world’s fascination with Egypt, as media attention moved on to the next ‘domino’ seemingly waiting to fall. But for millions of Egyptians it merely signalled the start of a reconstruction process, with demands for jobs, development and a fairer share of Egypt’s wealth than they were previously offered.
The overthrow of this regime presents an important case study. How are the Egyptian people to rebuild their country, with more job opportunities, better life prospects and less income inequality in the years to come? This is the challenge for Egypt, but it also offers a window into a process of change where many of the building blocks exist, but where cronyism and corruption have prevented meaningful development. At Biz/ed we intend to use our blogs to report on this process of reconstruction and transformation in Egypt, and elsewhere in the region.
This first entry offers a brief outline of the negative and positive aspects of development in Egypt. First, the bad: Mubarak is believed to have accumulated a personal fortune of $40 to $70 billion through a regime enforced by a hated secret police force. Deregulation of the state sector in the 1980s brought in private corporations which are credited with widening income inequality. Privatisations were meant to retain 51% of state enterprises in the hands of the people, but in effect these majority shares were spirited away by Mubarak, his family and close associates.
As a military government tries to reintroduce calm and order to the streets of the Egyptian capital, Cairo, politicians have to work on getting the economy moving again, with the banking, industry and tourism sectors being relied on to restore growth. It is thought that GDP this year will grow by only 3.5% compared to the forecast 6%. Despite the fall of Mubarak, workers continue to protest about jobs and wages. The challenge is to find solutions to peoples immediate grievances while ensuring that people get back to work and the safety of the millions of tourists who visit Egypt is assured.
Which brings us to the positive aspects of the country: Egypt has a rapidly growing population of more than 82 million. Almost one-third is below the age of 14; only 4.5% are 65 or over. There is a capacity for work, innovation and education, if investment can be made. The fertile Nile River plains provide much of Egypt’s cultivated land, with cotton, rice, wheat, corn and beans among the main agricultural goods grown. Egypt’s major industries include textiles, food processing, oil and gas, chemicals and, of course, tourism.
Can Egypt seize this opportunity to become a more affluent and peaceful country where the fruits of its resources and labour are shared more evenly throughout the population? There are certainly grounds for hope, provided that productive employment is found for its growing population. In many ways Egypt’s demographic profile is one of its biggest strengths. Can the country capitalise on its advantages including its history and culture, while creating opportunities and wealth for its people? We will report on developments in the future.