Egypt needs more than democracy

by Max Nelsen

There is no doubt that the hundreds of thousands of protesters flooding Tahrir Square in Cairo for the last several weeks have much to be upset about. Unemployment is high, economic growth is low and they are living, for the time being anyway, under a dictator of 29 years who has strong­ly repressed political dissent.

Despite having good relations with the Mubarak regime, President Barack Obama and Sec­retary of State Hillary Clinton have recently been highly vocal about the need for true democracy in Egypt. According to a writ­ten statement issued by President Obama on Thursday, “The Egyptian government must put forward a credible, concrete and unequivocal path toward genuine democ­racy, and they have not yet seized that op­portunity.”

While the protesters are certainly right in pressing for increased democracy, there are economic concerns that cannot be solved solely through democratic reforms. These must also be addressed in order to achieve true stability.

Indeed, in Egypt and the broader Middle East, a reliance on government to provide for the economic needs of the people is contributing to the volatility of the situa­tion. Consequently, democratic reforms need to be coupled with increased eco­nomic freedom that relies less on the government.

When unemployment is high in the U.S., people tend to get frustrated with the gov­ernment and expect it to simply “do some­thing” to create jobs. We’ve seen this for the last two years as our country has attempted to recover from a financial crisis.

This same sentiment is seen in Egypt, though the feelings have been magnified by the extremity of conditions there. Accord­ing to David Wessel and Chip Cummins of the Wall Street Journal, “Unemployment among the young, of all education levels, is particularly pronounced. In Egypt, ac­cording to the most recent IMF data, overall un­employment was 8.9%—but stood at 25.4% among those under age 25.”

In addition, many nations in the region have focused on educating their people, prompting Wes­sel and Cummins to note that in recent years, “many Arab countries spent heavily on higher education.”

However, Wessel and Cummins also write that “Education has raised expecta­tions and broadened world views.” But what kind of expectations?

A Reuters article by Yasmine Saleh, not­ed how “Hundreds of Egyptians demand­ing cheaper apartments rallied outside a government office” as part of the previous week’s protests. The article goes on to note that “The government has long promised to provide cheaper homes for Egyptians on low incomes as well better living condi­tions and more jobs across the board, but citizens had been largely resigned to the fact that it may never happen.”

It is also insightful to note that “70% of Egyptian workers work for the govern­ment,” according to Wessel and Cummins.

By now the problem should be abun­dantly clear: the people’s expectations all center on the government. The government is expected to provide for all the economic needs of its citizens, including education, good jobs and decent housing. Attempting to appease its peo­ple, the govern­ment promises to fulfill these needs. The unfortunate reality, however, is that government — whether Egyp­tian, Jordanian, Yemeni or American for that matter — can­not possibly fulfill such expectations.

Wessel and Cummins note that, “While China,” a notoriously oppressive regime, “and other booming economies were cul­tivating private sectors, Egypt clung stub­bornly to a state-dominated model.” The result, as the world has seen over the last several weeks, has been catastropic for the regime. Wessel and Cummins cite the International Monetary Fund, noting that the “‘dominant role of the public sector as an employer’ — particularly in Egypt, but throughout the region — has inflated the graduates’ wage expectations, put a premium on diplomas over useful skills and diverted talented workers from what might have been more dynamic private-sector enterprises.”

Instead of realizing their failure, Arab governments have been more vocal than ever about fixing their respective nations’ economic problems. Alistair Lyon of Re­uters writes, “From Morocco to Yemen, many Arab leaders have acted swiftly to as­suage popular anger over economic gripes, creating funds for the poor, reversing sub­sidy cuts or raising salaries.”

These measures are well and good, but they ignore the fundamental problems with government-run economies such as the lack of incentive for private entrepre­neurship.

For now, the people expect what cannot be, and governments promise what they cannot give.

While democratic reforms in Egypt and elsewhere in the Middle East could be beneficial, long-term stability will be dif­ficult to attain as long as the region relies on state-run economies. Consequently, in order to achieve greater stability and pros­perity, democratic movements must be ac­companied by greater economic freedom and capitalistic reforms. This may require different measures in each nation, but it is clear that more than political democracy is needed in the Middle East.

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