It would be funny if it were not so tragic. With most of its population trapped in poverty and pervasive unemployment, and its national assets being plundered by a corrupt ruling elite and foreign business interests under the guise of an IMF structural adjustment programme, Egypt is being hailed as the first emerging economic tiger in the Middle East. This is an astonishing repeat performance of the 1980s feat of the Asian Tigers, now, alas, humbled in the 1990s worldwide economic melt-down.
Interestingly, the praise comes at a time when the rest of the world, including countries with far stronger economies, is gripped by fear of a world recession. And it is not confined to the normally sycophantic Egyptian media, with foreign broadcasting stations like the BBC world service waxing lyrical about the prowess of the Tiger-on-the-Nile.
Equally interestingly, the region as a whole is being described as an ‘emerging market’ at a time when oil prices have collapsed, and the oil-rich countries have to tighten their belts, giving less aid to others and buying less from them. Kuwait, for instance, is expected to lose half of its normal revenues from oil during the current financial year as a result of the fall in oil prices. Jordan, Lebanon, Morocco and Tunisia - all countries favoured as candidates for future economic success - depend on the oil rich Gulf States, not only as a source of economic aid but also as markets for their goods.
The occasion for the discussion of the region’s economic performance was a three-day conference which opened in Cairo on September 15 under the title of ‘Emerging Economies in the Arab world - Golden Shores for Investment.’ The meeting was attended by 700 businessmen and economists representing 26 Arab and foreign countries.
Media comments on the conference singled out Egypt as the tiger in the making. A BBC programme devoted to the topic, for instance, attributed Cairo’s economic success to a decentralised market-oriented economy, low inflation, a balanced budget and unrestricted access by businessmen.
Egypt’s preferential treatment of businessmen was compared to the restrictions imposed on them by countries such as Syria, Sudan, Iran and Libya, where ‘one-man rule prevails,’ as one commentator put it.
But a closer look at the media reports shows that what they are really praising is not economic efficiency or good performance but the willingness to implement IMF prescribtions and favour western business and political interests and programmes. One of the Egyptian policies which has come in for particular praise is Cairo’s determination to implement the programme of privatisation prescribed by the IMF. Since 1995, 90 public companies have been sold.
There is also an obvious hostility towards countries like Iran and Sudan, which prefer an Islamic way of life, and will not brook any dictation from western powers and agencies like the IMF and World Bank. It clearly makes no sense to say that president Husni Mubarak’s regime is less autocratic, or more open than the government of Iran and Sudan.
It also makes no sense to describe the Arab Middle East as a ‘golden shore for investment,’ as the title of the Cairo economic conference does. Most of the Arab money is invested outside the region, anyway. For example, foreign banks hold $350 billion of Arab money, which is not being invested in the region.
The talk about the region as an emerging market is clearly also exaggerated. The Middle East’s entire share of world trade is 3 percent - equivalent to that of South Korea. And there are no heavy industries to form the backbone of an export drive that is necessary to create an econmic tiger. Whatever industries the region boasts are light - a fact which makes it essentially an importer rather than exporter.
Most of the earnings from its leading exports - oil and gas - are either plundered or squandered on arms and equipment that are not used against the main enemy, Israel. The commissions from arms purchases happen to keep the power elites wealthy.
Then there is the issue of internal instability in many of the region’s countries, where there are virtual civil wars resistant to early resolutions. But without fair and genuine settlement of the conflicts there can be no economic miracles in the Middle East. The corrupt and autocratic ruling elites and dynasties that have made the region a byword for backwardness and graft must be swept away first, before there can be any talk of tiger economies.
In any case, the new economic elites in such countries as Egypt are too interested in showing off their newly acquired wealth than in investing it in the region’s real economic development. In Cairo, for example, the price of a new flat overlooking the Nile is $20 million. And when members of the new elite get married, they throw wedding parties of 1000 guests, coupled with singers and belly dancers. And as one wit put it, Cairo must be the only city in the world where one sees a Mercedes 500 next to a donkey cart.
This excessive display of wealth in a poverty-stricken country is far from being an indicator of economic growth, and is bound to lead to further social unrest. The average monthly income of an Egyptian is less than $15. And there are 5 million landless peasants. To speak of a Tiger-on-the-Nile in such circumstances is cynical, to say the least.
At any rate, the newly rich Egyptian elite should take note that tigers have a way of turning out to be man-eaters, no matter how tame they might be at first.
Muslimedia: October 16-31, 1998