Saturday, July 13, 2013

Cheating Malthus: Egypt


It has been disheartening to watch the news from Egypt over the last couple of weeks.  The elected President Muhammed Morsi was deposed by the military.  The generals have installed a caretaker government, and promised new elections in the near future, but the lesson is clear: any new President has to keep the generals happy.

A friend asked me how things fell apart so fast, after the hopes raised by the Arab Spring movement that toppled the Mubarrek government, and allowed for free elections for the first time.  My response is that democracy doesn’t necessarily solve problems.  The question for me is whether any form of government can solve Egypt’s underlying problems.

The population of Egypt is around 84 million people, and the land area of the country is about the size of the state of Texas.  That would lead to a high population density, but it does not really tell the story.  Most of Egypt’s land area is desert, with almost no one living there.  Instead, the vast majority of the people live in the Nile valley and delta.  The arable land area of Egypt is only about the size of Maryland.

Egypt does not produce enough food to support itself.  Without significant natural resources or manufacturing industries, the primary means of raising foreign currency to buy food on international markets is tourism.  Even if all the recent unrest hadn’t caused tourism to tank, it still does not pull in enough wealth to support the population.  In recent years, as numbers have increased, the slices of the economic pie shared by the poor have continued to shrink.  Unemployment is rampant, and a significant percentage of Egypt’s population spends up to half their income on food.  The phrase “your daily bread” has real significance to many Egyptians.

This deep and worsening poverty is the true root cause of the political unrest in the country.  The hope was that, by electing a new government, more economic opportunities would arise.  The problem is that although governments can redistribute wealth, they are not very good at creating wealth.  Expectations were high, and the Morsi administration failed to deliver.  Although Morsi made significant missteps, it is hard to see what another administration would have done differently on the economic front.

One of the truisms of foreign policy is that you can’t solve political problems through military means.  It seems every generation of leaders has to relearn this lesson, as we have found to our sorrow in Afghanistan and Iraq.  I want to suggest a corollary for domestic policy.  You can’t solve economic problems by political methods.  With the miserable track record of stimulus spending and quantitative easing that we have seen in this country, that should be no surprise.  The Egyptians, to their sorrow, appear to be learning that lesson themselves.

It is disheartening to watch the democratic gains of the Arab Spring falter.  But it is not surprising.

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