Call It A Comeback: Egypt’s Economy

comeback

Egypt’s democracy. Egypt’s politics. Egypt’s economy. As mainstream popular reaction in the West suggests, the essence of democracy is the vote. As mainstream popular reaction in Egypt itself suggests, the essence of democracy is liberty. Ultimately, the essence of a free and prosperous society is an inclusive political system and an inclusive economy that provides opportunity in education, employment, and enterprise.

As the political crisis in Egypt hangs in the balance, the economy of Egypt remains subdued and locked down by high unemployment, currency troubles, rising prices, and uncertainty. Yet, the shakiness of Egypt’s economy, which is putting Egyptians lives on hold, is poised to come soaring back. Unlike some European countries whose economic crises are structural in nature, Egypt’s is not.

Yesterday, Mohamed El-Erian laid out five reasons why Egypt’s economy will recover:

First, Egypt has several economic growth, income and employment engines that can be easily restarted once calm is restored. Be it tourism or manufacturing, agriculture, industry or regional finance, socio-political instability has subjected a consequential part of the economy to a detrimental pause…

Second, the country’s internal finances, while messy, are not beyond repair. The soaring budget deficit reflects both a reversible decline in revenues and compositional spending patterns that can (and should) be reformed…

Third, Egypt can alleviate immediate foreign reserve and currency pressures through emergency financing on highly attractive terms…

Fourth, for too many years, Egypt has been undermined by avoidable economic governance mishaps and excessive political overreach. Helped by the freedom of expression won by the January 2011 uprising and reinforced by the recent repeat performance aimed at resetting the revolution, national awareness of the country’s “own goals” is widespread. Moreover, judging from recent words and actions, various political actors and the military seem to be learning from past mistakes and are implementing course corrections, albeit partial and tentative at first.

Fifth, an empowered and engaged Egyptian youth is doing more than just influencing the destiny of the country; the greater sense of ownership and belonging is changing facts at the micro level.

Most crucial is his fourth point on Egypt’s new recognition of its “own goal”, realized when freedom of expression was won after Mubarak’s ouster in January 2011. It is true that these last two years in Egypt have offered valuable experiences to learn from, but I only hope it is true that “various political actors and the military seem to be learning from past mistakes and are implementing course corrections”.  At this point, one expects that that should be the case, but we have yet to see if that is indeed true.

El-Erian’s fifth point is surely the most exciting, and is where Egyptians can bring their country back to leadership in this new age.

How about we start with El-Erian as PM??

 

 

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