Four Narratives about the Egyptian Economy

by zunguzungu

Fareed Zakaria:

Egypt has had some successes, and ironically, one of them has helped foment change…Egypt, long moribund, began growing vigorously…Why would economic progress spur protests? Growth stirs things up, upsets the settled, stagnant order and produces inequalities and uncertainties. It also creates new expectations and demands. Tunisia was not growing as vigorously as Egypt, but there too a corrupt old order had opened up, and the resulting ferment proved too much for the regime to handle. Alexis de Tocqueville once observed that “the most dangerous moment for a bad government is when it begins to reform itself.” It is a phenomenon that political scientists have dubbed “a revolution of rising expectations.” Dictatorships find it difficult to handle change because the structure of power they have set up cannot respond to the new, dynamic demands coming from their people. So it was in Tunisia; so it was in Egypt. Youth unemployment and food prices might have been the immediate causes, but the underlying trend was a growing, restive population, stirred up by new economic winds, connected to a wider world. (Notice that more-stagnant countries like Syria and North Korea have remained more stable.)

Today a cabdriver drove me home from Tahrir Square. He said, I totally support the protesters. I live on a day to day basis, when I retire I will have almost nothing, and you are my first passenger today. Ordinarily he would have many passengers, tourists, business. But he knows: nothing comes for free, the revolution will require sacrifice. And frankly they weren’t doing well when the regime was stable. The 5 percent annual growth Egypt has seen for last 10 years is like East Asia. But the benefits and the billions are concentrated on top. The middle class has gotten smaller. People are more stressed. And the poor continue to be poor, even poorer, because of price inflation. People at the top are reaping the vodaphone contracts and the investment in foreign companies. The man on the street can’t afford to eat in MacDonalds.

The New York Times:

Egypt’s economy approached paralysis on Monday as foreign commerce, tourism and banking all but halted, placing acute pressure on President Hosni Mubarak to find a way out of the weeklong chaos. International companies closed plants and sent workers home or out of the country; food staples went undelivered to stores; and banks remained closed during a week when many Egyptians, who are routinely paid monthly, would receive their paychecks. A major ratings agency cut the country’s bond rating, while shortages led to rising prices. And poorer Egyptians told of cutting back to just two meals a day to cope. The protests’ crippling effects could give Mr. Mubarak and his new cabinet perhaps only a few weeks to re-establish order before shortages, rising unemployment and a deep crisis set in, economists said.

Timothy Mitchell (but actually, see his Rule of Experts: Egypt, Techno-politics, Modernity):

…“the economy” is a surprisingly recent product of socio-technical practice. It emerged not in the eighteenth or early nineteenth centuries, as Karl Polanyi (1944) and Michel Foucault (1991) in their different ways have argued, but only in the mid-twentieth century (Mitchell, 1998, 2002, 2005a, 2007). Before then, economists did not use the word economy in its modern sense. “Economy” (usually with no definite article) referred to the proper husbanding of material resources or to proper management—of the lord’s estate, for example, or the sovereign’s realm. The term referred to a way of acting and to the forms of knowledge required for effective action. Political economy came to mean the knowledge and practice required for governing the state and managing its population and resources (Poovey, 1998; Tribe, 1978).

In the twentieth century, new ways of administering the welfare of populations, of developing the resources of colonies, organizing the circulation of money, compiling and using statistics, managing large businesses and workforces, branding and marketing products, and desiring and purchasing commodities brought into being a world that for the first time could be measured and calculated as though it were a free-standing object, the economy. Economists claimed only to describe this object, but in fact they participated in producing it. Economists claimed only to describe this object, but in fact they participated in producing it. Their contribution was to help devise the forms of calculation in terms of which new kinds of socio-technical practice were organized, to monitor these forms of practice as though they formed a self-regulating system, and to put forward rival accounts of how the system worked. “Economy” no longer referred to a way of exercising power and accumulating knowledge; it now referred to an object of power and knowledge.