The Incompetent StatePosted: November 13, 2015
The crash of the Russian airliner in the Sinai is now causing widespread damage to the tourism industry in Egypt, estimated to bring in 6-8 Billion USD annually. There is even talk of a “collapsing state” due to this loss. To put things in perspective, there are over 100 US companies whose net profits exceed that of Egypt’s tourism industry. This is a frightening picture of the fragility of the Egyptian state. Lost in all the noise and opinionating, based mostly on pre-conceived biases, is a discussion of how Egypt got to this sorry state.
Tourism, or at the least the current Egyptian version of it, is not a happy industry. A few magnates, owners of resorts and associated businesses, do well. The majority of workers are “service industry” types; literally people who cook, clean, and serve the tourists sunning themselves on the beaches. For a country to base half its foreign earnings on this industry is a humiliating and profoundly damaging state. This humiliation, rarely acknowledged in the open due to the overly sensitive Egyptian psyche, is at the root of what seems to be national madness. A sense of injury and hurt aimed at the world in general, and at any particular critic that dares point out problems that Egyptians themselves have identified. This should be a moment of reflection for Egypt. The loss of tourism revenue threatens the state because Egypt imports twice as much as it exports, and relies on food imports to feed its burgeoning population. To correct this state, it is important to identify and correct its root causes.
The country as a whole suffers from poor education, low social entrepreneurship and rapidly increasing population. These problems reflect badly on the system that Egyptians have constructed to misgovern them since 1954, when the first “native” state took over. We do not need to dive into post-colonial mumbo jumbo to discuss this issue. Many countries around the world have threaded the development needle, evolving from a backward state to advancing and prosperous development. Often this is done under the watchful eye of enlightened authoritarian systems, which eventually give way to better and more liberal governance, once the population hits a magic level of GDP and Middle Class prosperity. The trouble with Egyptian authoritarianism is that it has been largely incompetent at economics, and often too weak to face a population fond of religious orthodoxy and bent on social conservatism. To escape the current vicious economic cycle, there will need to be major investment in Egypt, probably by many outside actors. The reason to do so is simple. No one wants a failed state on the Nile, astride Africa, Asia and Europe. But such investments must be pre-conditioned on major changes in public policies that favor investments and encourage small and medium entrepreneurs, and end the back-scratching cronyism of large businessmen getting preferential treatment from the state, or the Army. Such conditions will undoubtedly raise Egyptian hackles; as the hyper-nationalism seems rampant today. But many Egyptians are waking up to the outline of the disaster looming ahead. As the adage goes, an impending disaster can focus the mind.
It is pointless to recommend “democratic reforms” on Egypt today. They will not come, and any democracy that might conceivably emerge today will be fragile, prone to demagoguery, and in the grotesque language favored by many think tankers “illiberal”. To have a democratic state one must start with an actual state. Sadly, the best that can be recommended to Egypt today is capable and competent authoritarianism, which the current version is not. Many are asking that relations and aid to Egypt be predicated on ending its “repressive” policies. This observer argues that aid and relations be predicated on the quality of managers and the policies in place. In the end, native prosperity is more likely to bring social and political freedom than the well-intentioned urgings of outsiders.
— Maged Atiya