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