Saturday, January 29, 2011

THE LAND OF THE PHARAOH IT IS A LAND OF MYSTERY! On the Arab Spring: Egypt is the poster child of Modern " Free market economy" failure


Egypt was always a mystery to Human Civilization...
Mathematicians and Scientist, Architects and Engineers even today stand affront of the great Pyramids of Giza and scratch the head puzzled  how that ancient civilization build those marvels of Human Imagination!

The fertile Nile valley was more then a cradle of Human civilization, it was also a food supplier for the known Ancient world, Failure of the Egyptian harvest meant a famine in Ancient Rome and the rest of the Mediterranean cities of the Ancient world...

Today Egypt is one of the major food importer in the world...

To understand this dramatic change in perspective is to solve the puzzle of the event that are taking place those days on the streets of Cairo and Alexandria, to name just a few of the metropolitan area in this historical country...

If we can single out an event from our latest history, an resent event that send Egypt to the road of the current unrest what will that be?
When do the levee of National Prosperity shot the door to so many of the Egyptian people and left them behind with their broken dreams of world integrations...
Many will focus on the current President, many will point to the People that surround him, or support him, but on those pages we will not do that...

To understand the turmoil that Egypt is undergoing  is to understand the engine of the Middle East, what make them thick and boil those days...

I can tell You my Dear Readers right from the start that the Story of Egypt is nothing new, nor complicated, and certainly is far a way from the sphere of mysticism of the religious domain cause Egypt is nothing but a Poster Child of the modern "Free Market Economy" failure...

Yeah simple as that...

In defence of Mubarak who did not do anything more or less then following the grand plan of globalization, a road that is chosen those days carefully and deliberately from the  International Institution of Power that any country in the developing world is bound to follow...
It is a predicament of compliance, or the International Community will left any given country in the doorstep of the Civilized World...

       "During the 1990s, a series of International Monetary Fund  arrangements, coupled with massive external debt relief resulting from Egypt's participation in the Gulf War coalition, helped Egypt improve its macroeconomic performance. The pace of structural reforms, including fiscal, monetary policies, privatization and new business legislation, helped Egypt to move towards a more market oriented economy and, since the turn of the new millennium, prompted increased foreign investment., reduced subsidies, reduced inflation, cut taxes, and partially liberalized trade and investment. Manufacturing become less dominated by the public sector, especially in heavy industries. A process of public sector reform and privatization has begun to enhance opportunities for the private sector.
The reform program is still a work in progress and the government will need to continue its aggressive pursuit of reforms in order to sustain the spike in investment and growth and begin to improve economic conditions for the broader population. Egypt's export sectors—particularly gold and natural gas—have bright prospects...


source: Wikipedia: the free encyclopedia: Economy of Egypt


What Mubarak wanted  making the deal with the IMF was probably Egypt to be a part of the World, simple achievement of the ones glorious place in human history...at least every projections of the foreign expert designing the loans prospect was telling him...or so the story goes...

The ink on the loans paper was not properly dry yet  when the great bankers ask him to give them the keys to the National Treasure: to all the resources of the fertile Nile Valley along the black gold hidden in the desert send and under the blue Mediterranean sea...

And so as promised came the foreign investments: new glamorous Resorts become the jewelry  under the Saharan sun offering ancient history, curtailed with the world famous fashionable restaurants and malls bringing the latest tech goodies and design clothing, never mind they were made someplace else...
During all those years Mubarak become aware that Egypt get short side of the deal, he most have realized that the never ending demand for subsidies, tax cuts, privatisations and the heavy burden of the Interest payments will catch up with the dissatisfaction of his people in the manners he was leading the country so just in case he was building the security, the military and the police forces around himself, cutting political deals and making friends and Allies against the will of his people...

Of course he knew all that, he just decide to ignore his own people plea for help...

Or maybe he was counting that when the unrest came he will not be around, or maybe he was hoping that people will forget the atrocity, especially if he and his closest official  make sure that enough of the people are well fed, well wormed, well housed in a better neighborhoods, and a way from stinking stench of Poverty that was in their doorstep for the most of their lives...
Yeah...Mubarak and the rest of the puppet Government in the middle East, they all new that, they just did not care!
Things were going good for Mubarak the last decade or so, it was the best of time for the ruling class of Egypt, never mind that more and more of the Egyptian populations was fighting with starvation, no things were going good for the Wealthy in Egypt...
The Free Market Economy in full bloom:

- Egypt open the door for liberalizations of the trade: the finest Egyptian fruits and veggies find the way to the natural markets of Europe and USA, the best seafood, shellfish and the best Egyptian spices enrich the table of the refined customers, while the population of the country get rationing food cards!


      Agriculture Minister Amin Abaza, in a speech before the Food Security Conference, said that Egypt imports 40 percent of its total foodstuffs and 60 percent of its wheat.
    "Yet the government is keen to offset rising global food costs by allocating billions of pounds for this purpose," he said.
In an effort to help low-income citizens, the minister explained that the government had recently increased the number of ration-card beneficiaries, added more strategic goods to them--such as sugar and rice--and reduced customs duties on food needed for domestic consumption.
source: Almasry Alyoum online English edition



All of  those "Market Oriented" Reforms become a field of unfulfilled dreams leaving the open questions:
- What good came out of them?
Or even better questions will be:
- What are the "benefits" that the Egyptian people stumble upon?

Surly they, the Egyptian people, can't expect the Global multinational corporations to open Factory in Egypt when they can produce in China and India for the fractions of the labor cost, right!

Surly the Government need to loosen the tax code,and give more incentives to the multinational corporations
in order to make investment opportunity favorable for the fragile middle eastern market, given the danger of the religious fanaticism and instability of the whole regions, right!


Surly the trend in the ever changing labor market demand more and more educated and skilled workers to follow the technological advantages and naturally leave so many people behind in the gusher of poverty and misery, but self reliance is the exit for the millions left behind...and taking responsibility for its own actions, right!

And if all of this sound familiar to the persons who read those pages, not to worry cause it is the familiar lines:
- It is the way of the Globalization and the "Free market Economy"
A familiar blend of policies designed to suit the business cause feeding the racing horse there  will always be left overs for the small sparrows...

So they say...

Those of us who are watching the news with a distant fear of rising fuel prices hitting our shore, especially if the tide of protest get wild and shot down the major Suez ports: the bloodstream of energy supply, we should not miss the big picture:
The story of Egypt is the story of Us:

The pressure to break the levees of our social safety net are stretch so tin, they can broke every day now...
It will take a few votes thru the Congress and a President willing to sign then into a Law...

Cause those wretched Social Program are the only thing that keep us roaming the streets in a need for food...forget about our fancy lifestyle of kitchen gadget and the newest Apple goodies...

Hungry people roam the street of Alexandria and Cairo...hungry, malnourished and forgotten from its own Government...

If our Corporate Media is afraid of the Domino Effect of the Egyptian Revolution I suggest they look at the following two maps:
- The first one show the in dept of the country in the world...the more dept the country faces the greater are the chances of social unrest!
- The second one show the GINI coefficient of the countries of the World...the greater the coefficient the greater are the chances of unrest!

- The third indicator of the future instability and unrest in the World is the flexibility of the different Political System mach up with the Social Safety Net, or shall we say the absent of them...less safety net feature, the greater the risk of unrest!

Combination of all tree of them is the Perfect Storm that is heading toward the shores of any given country, even the one that seams to be the least expected!





File:Debt.PNG

source: From Wikipedia, the free encyclopedia: External Dept
Map of countries by external debt based on 2005 CIA fact book figures


File:Gini Coefficient World CIA Report 2009.png

source: From Wikipedia, the free encyclopedia: Gini coefficient
Gini-coefficient of national income distribution around the world

*The GINI coefficient is a measure of the inequality of a distribution, a value of 0 expressing total equality and a value of 1 maximal inequality. It has found application in the study of inequalities in disciplines as diverse as economics, health science,ecology, chemistry, and engineering!
It is commonly used as a measure of inequality of income or wealth!


source: Wikipedia, the free encyclopedia









12 comments:

  1. Democracy is a process, not the outcome. As more effort is put into the process, often the outcome is also better. The people of Egypt will be the arbiters of this process for their country. I hope they get the Government they want.

    ReplyDelete
  2. Nice talking to You again...And yes, I will like to debate more on the topic, arguing or not, lol...
    My argument is that even if the opposition become less corrupted Government, the situation will not improve much for the people of Egypt, and eventually for the people of the World, cause politics is just a way to control the outcome of the economy, not the other way around...
    Ruling class of Egypt is doing well...the people aren't!
    30 years or so, Mubarak was the opposition too...
    So, the ball is in your court again...lets play on the field of Idea and Imaginations...shall we?
    Marie

    ReplyDelete
  3. Marie - Excellent analysis IMO. I believe you are pointing to a trend that seems quite apparent to me, that of unrest threatening to come to the U.S. Previously, the fruits of U.S. Imperialism have been sufficient to buy off those who felt our economy could be a bit more egalitarian, but it looks as though those days are gone.

    I have long felt a change in this country would come from somewhere we probably least expect it. I'm keeping my eyes peeled, while at the same time striving to live the remainder of my life as well as possible. The clear trajectory of this nation is toward a much higher GINI. It's only a matter of time before there is no middle class and there will be a critical mass of people who are essentially left out, while people in other nations live "The American Dream".

    I am hopeful the results aren't too bloody. At 63, I'm a bit too old to man any barricades, but my heart will be there.

    ReplyDelete
  4. Thank You for taking participation in the debate Rick...
    So I did get my massage across pretty successfully...and its not such a long post...lol
    I'm glad...
    Hopefully we will find the way to straighten our Safety net so no one will need to go on any barricades...
    Hopefully...
    Marie

    ReplyDelete
  5. I agree Marie -- the outcome will not change much for the people of Egypt regardless of any 'new' system.

    Wonderfully thought-out and written!

    It seems to me we are going to see much more of the Leo Strauss type plutocracy in control of the planet, and I believe it is only a matter of time before they all join internationally to control the world (and not just through the IMF and it's adjunct affiliates).

    Cheers,
    Sa

    ReplyDelete
  6. Marie as usual your blog is really interesting, I'm just twitted for friends, because as you followed up on my blog, I was developed with Rodom project in my town, today was the finished of the activities and I returned of the event. Tomorrow I'm going to check out the video and read carefully your blog. Have a nice weekend.

    ReplyDelete
  7. During the period of Military government we lived a difficult period, I mean we had a dictatorship in Brazil, actually we don't have to back to the past, and sincerely we hope that the Egyptians get the democracy, we don't know the reality, corruptions, unemployed fees increase day after day. All the best readers.

    ReplyDelete
  8. I don't give a rats ass about Egypt

    ReplyDelete
  9. To my anonymous reader:
    Thank You for visiting my blog, but next time will You please read the pages also?
    Cause if You read the post You will know that it is about Egypt as much the rest of the World, and I quote:
    " The story of Egypt is a story of us..."
    Free market economy also fancy called "globalization", the way it occur elsewhere as well as in our midst, the misinterpretations of it, the consequences of it, how to recognize the false promises...that's the story about...
    Egypt is just a country that have enough of it, that's all...
    To all of my other readers, thank You for Your understanding and support...

    Marie

    ReplyDelete
  10. The people of Egypt have a long way to go because they must break the stranglehold that the upper families of Egypt have on the proceeds of the economy. Who will they elect? Will those officials represent the people, or will they quickly become tools of the major economic interests of Egypt?

    In the US, the issues are not that far apart, as you note. However, very few people realize this. They look at the "tea party" and see a party of the people. But, those people are backed by major corporations, and the espouse a political and economic philosophy that will eventually kill them. But, they feel like "they" are the "workers" and the "producers" of the economy. The small businessman. The so called "risk taker". Who borrows money to start his business, and only if he can convince someone to lend to him. Only a foolish business person takes on personal risk when starting a company.

    So, these tea party people identify with the major corporations and the ultra-rich, but the joke is on them. The small business person is not getting the special tax breaks, access to federal lands, or special deals with import/export. It is only the large companies with expensive lobbyists getting those deals. Ever see a locally made product in Walmart? Of course not. About the best thing I can find is Home Depot contracting locals to do installation work. But, the rates they pay are low, and those low rates in turn drag down the rates that can be charged by all the other people doing similar work.

    When I purchased a new door from a local business, and contracted with a friend to do the install, he said "well, Home Depot pays about $500, so that's what I charge now." Two guys, six hours, so $41.66/hour. While a decent hourly rate, that is not a good small business rate. Plumbers from large outfits get about $100/hour.

    I can't tell you how many people I have argued with that say something like "we must have the tax breaks for the rich, because after I get done paying all my expenses, there is hardly anything left." Umm, if you are paying expenses, then you are not rich because you have a small net income. I just don't get it.

    Anyhow, there is no way that a revolution in the US will be as civilized as the one we just saw in Egypt. Who knows where Egypt will end up, but in the US - the military is full of teabaggers and would have shot down the liberal hippies.

    ReplyDelete
  11. Dear Mike,
    So nice talking with You again...
    Couple of issues You touch that are of utter importance for USA...
    1) It is up to the people of Egypt!
    2) What will happen if a similar protest start on the streets of America?
    3) The role of prejudice in the common people mind about the small business...
    Not necessary in that order!
    So I will try to answer all of them to the best of my knowledge, so lets start:

    On the issues of Egypt:

    I consider Egyptian Revolution an Economic revolutions for this obvious reason:
    People of Egypt are hungry for the most part...
    It is not just the unemployment rate that are officially over 12 %, and that is understatement, like all the statistics numbers should be taken with a grain of salt, cause that not include underemployment figures, or employment within pure agricultural populations, ( run more then 50 %)as well as the city populations with an underpaid jobs that can barely provide for existence!

    Couple that with the age of those unemployed, vast majority younger then 30 years, all of them in the age when they suppose to start families, most of them highly educated, and there You have a Molotov cocktail of the Economic turmoil that was ready and did explode...
    Now, how do we know thing will be better or they will not change:
    Look for drastic structural change in the ownership of the National treasure of Egypt:

    If the lease agreement are kept the same, nothing really will change, no matter how many lipstick they use in coloring the grime outcome of the capital labour exchange!
    If the International Loan agreement are not reprogram, and renegotiated, nothing will drastically change but the name of the drainage of the National Treasure of Egypt...
    If the social network is not erect in a forms of a Law, including international Corporations paying due into the budget of Egypt, nothing will change for the people on the long run...
    The change of Mubarak will be gone with the wind just to be replace with some other political name, and dont misunderstand me: the shuffle of political power always bring shuffle of economical structure, but on a vertical level: some people will get ahead of course,but I'm interested in horizontal higher ground, and without those tree major changes, I dont see any higher ground for the Egyptian People...

    Let see how this cant be transfer in our Society, cause we also have high unemployment, we sew profound dissatisfaction of the American people with the Economy, and we have middle class ( horizontal structure ) that is going flat and tiner each year...

    I wrote so many time about the tea party people, and the powers that stand behind them, so now I will just say this: used and abused, every single one that was not of the payroll to provoke, unrest, stir, or delude the population...every single one of them...
    And its our job to point and coin that in the conscience of our fellow teabagger with the fallacy that we sew for the latest tax break and the new budget solutions...
    To say it shortly Americans are not hungry, no matter how many of us fall thru the cracks of prosperity, no matter how many of us loose all the possession in a foreclosure or in a case of a lay offs, we have a social safety net that will feed us to the point that we feel numb enough to be disable to march the streets, but aware to dream of our own small business, witch i call an ultimate escape in a delusions of independence...
    You point to the shortcomings of the small business so well, that i have nothing more to say, but people should do the math, that's all...
    Speaking of hunger, and the lack of it is the answer to the last premise...
    Good for us we are not hungry to pull our guns ( i heard that American have more guns then any nation on Earth) and clash with the army...
    Good for us...
    Marie

    ReplyDelete
  12. Marie, I wrote a couple of essays on this subject myself. This one is all about corruption in Mubarak's Egypt -->http://www.scribd.com/doc/95225262/The-nexus-of-power-and-wealth-in-Mubarak%E2%80%99s-Egypt

    Jazzguyal, how could the Egyptians get the government they want? They all want a different government. Some want liberal, some Islamist, some socialist and some want the corrupt old regime back. Why is it right that they should force their choice of government on the rest of the population? No one ever gets the government they want.

    ReplyDelete