QUESTION TWO Do the Egyptian Islamist parties, who could dominate a future cabinet, have any idea of how to generate economic growth at a time when the Egyptian economy is sinking? Egypt today is burning through about $1 billion in foreign currency reserves a month and is now down to $21 billion. The Egyptian pound has crumbled to a seven-year low. Youth unemployment is 25 percent. Egypt’s main foreign currency earner is tourism, bringing in $39 billion last year, and today hotel occupancy is way down.
But the main focus of the Salafists is not boosting the economy. It’s segregating the sexes, banning alcohol and ensuring that women are veiled. The Muslim Brotherhood has been less doctrinaire but is a long way from liberal. How will they be able to advance their fundamentalist religious/social mores when this could drive away Egypt’s biggest source of income, not to mention foreign direct investment, not to mention foreign assistance from the European Union and the U.S.?
I don’t know. I just know that a key reason the Khomeini forces were able to hang on for so long in Iran was because the ayatollahs had a huge, unending source of oil revenue with which to buy off their people and ignore the world. And even then they faced a popular revolt. Egypt does not have such resources. Its only hope for growth is still free-market capitalism — spawning companies and workers who can compete on the global market. Therefore, whoever inherits power in Egypt will have to deliver a less corrupt form of capitalism, with more competition, more privatization and fewer government jobs, at a time when the Egyptian economy is sinking.
Join the conversation as a VIP Member