Egypt’s missing marker: Economic freedom

J.D. Gordon

SFS Board of Directors

Meet our expert




Export this article as a PDF.

Much has been written about the Muslim Brotherhood’s disastrous influence in Egypt and the Obama administration’s unwise foreign-policy decisions throughout the Arab Spring, but both are merely byproducts of larger underlying problems that threaten Egypt and its neighbors.

To better grasp these problems, it might be useful to look at Egypt from a broad, strategic view and discuss key factors of economics, population density, literacy and geography that have been mostly absent from the dialogue. For the sake of comparing Egypt’s land area, apart from an immense swath of the Sahara Desert, the inhabitable section consists of the Nile Valley and Delta, which fans out into the Mediterranean Sea. At roughly 10,000 square miles, it is about the size as Massachusetts. Picture the Bay State with more than 80 million people, instead of more than 6 million. Next, imagine nearly 30 percent of the adults are illiterate. Throw in 40 percent living on less than $2 a day, with an estimated 17 percent in danger of starvation. Egyptians remind themselves they were the world’s greatest civilization 2,500 to 5,000 years ago, and they wonder what happened. Now they follow an ultraconservative religion that oppresses women on a massive scale, they see themselves as victims of Western-dominated globalization, and finally, they glorify martyrdom for the cause. Under such circumstances, Massachusetts would be a basket case and practically ungovernable. Yet that’s the reality Egypt faces as the population has swelled from 20 million to 80 million during one lifetime. It was somewhat miraculous that former President Hosni Mubarak and Egypt even managed to stay afloat, thanks in large part to more than $30 billion in U.S. military and economic aid over the past several decades, effectively restraining the Middle East’s cultural leader from leading a regional war with Israel for a fourth time since 1948. Pandora’s Box was pried open with Mr. Mubarak’s ouster and the help of a woefully naive Western media establishment reporting from Cairo’s Tahrir Square, pushing an inexperienced Team Obama into making shortsighted policy decisions. With the dumping of Mr. Mubarak and the hasty call for new elections, it’s no surprise that the supremacist Muslim Brotherhood took over. Having ruthlessly survived as an outlawed terrorist organization for about 80 years, the Muslim Brotherhood was the only organized political force with a ground game to get out the vote. It promised the most benefits and appealed to something familiar — a devout adherence to Islam. A Pew Global Attitudes Survey in 2010 showed that 60 percent of Egyptians identified with Islamists. The notion that they would replace Mr. Mubarak with a religious extremist in a general election was a no-brainer. The Muslim Brotherhood ran the country for a year — dismantling democratic institutions at every turn, drafting a new Constitution based on Shariah law, placing President Mohammed Morsi above the courts, and turning a blind eye to open season on Coptic Christians. The combination of these measures with a crashed stock market and shortages of gas, electricity and food as tourism and investment dollars dried up made it apparent to Egyptian masses that the Muslim Brotherhood had to go. Fortunately, the military stepped in and took out Mr. Morsi and his Islamist inner circle before more damage was done — replacing them immediately with more secular civilian authorities who actually know something about the economy. This brings us to identifying the core problems facing Egypt today and how to get the country back on track. Intricately linked to security — a key challenge as displaced Islamists resort to terrorist tactics enraged by their ouster — the country’s fundamental problem is the lack of economic freedom. Though it was bad under Mr. Mubarak, it is now far worse. According to the Heritage Foundation’s Economic Freedom Index, Egypt ranks No. 125 in the world, and 13th of 15 in the Middle East/North Africa. It suffers from widespread corruption, lack of government and corporate transparency, weak institutions, regulatory inefficiency, and appallingly low trade and investment freedom. These conditions have stifled entrepreneurial activity, hurt business development, blocked job creation and prevented Egyptians from achieving success in the global marketplace. Though the U.S. government should not engage in nation-building, it can work with partner countries — particularly in Europe, Saudi Arabia and the Gulf states — to keep the military in business in exchange for maintaining peace with Israel, while restoring basic security so that economic conditions can improve. Civil society can and should play a role as well, with think tanks and nongovernmental organizations advising and assisting Egyptian policymakers on how they can better serve their constituents. It may take some time, yet fixing Egypt’s economic-freedom indicators is essential before general elections are held again. Elections on some artificial timetable for the sake of democratic appearances are not advisable. The country is just not ready. Without solving the underlying core problems, Egypt would revert to the same dysfunction that resulted from voting for whatever group, extremists or otherwise, that promises the most and has the best political machine. Let’s remember, Rome — or Egypt, for that matter — wasn’t built in a day. Read original article in the Washington Times.