Monday, November 24, 2014

What We Owe Egypt

CAMBRIDGE – The question that still underlies much thinking about economic development is this: What can we do to kick-start economic growth and reduce poverty around the world? The “we” is sometimes the World Bank, sometimes the United States and other rich countries, and sometimes professors of development economics and their students huddled in a seminar room. It is on this question that the entire development-aid complex is based.

But what has transformed Tunisia, Egypt, and Libya over the last two years has not been efforts by the outside world to improve these societies or their economies, but grassroots social movements intent on changing their countries’ political systems. It started in Tunisia, where the revolution swept President Zine El Abidine Ben Ali’s repressive regime out of power. It then spread to Egypt and Libya, ending Hosni Mubarak’s and Muammar el-Qaddafi’s even more repressive and corrupt regimes.

The people who poured into the streets and risked their lives were fed up with the repression and the poverty that these regimes caused. The average Egyptian’s income level, for example, is just 12% of the average American’s, and Egyptians can expect to die 10 years sooner. Fully 20% of the population lives in dire poverty.

The protesters in Tahrir Square perceived the cause of Egypt’s poverty in its non-responsive, repressive political system, its corrupt government, and the general lack of equality of opportunity in every sphere of their lives. They saw their current leaders as part of the problem, not part of the solution. By contrast, most outsiders, asking “What can we do?”, emphasized geographic or cultural factors, or some purely economic “poverty trap,” whose effects should be countered by foreign aid and advice.

There should be no illusion that the transformation that the protesters started will be smooth. Many previous revolutions have deposed one set of corrupt rulers only to bring in a new bunch who are equally corrupt, vicious, and repressive. There is also no guarantee that the previous elites will not be able to re-constitute similar regimes.

Indeed, the military, the bulwark of Mubarak’s regime, is now in charge in Egypt, and has been repressing, jailing, and killing protesters who dare to stand up. Most recently, it has unveiled plans to write a new constitution before the presidential election, and its electoral commission has disqualified 10 of the 23 presidential candidates on flimsy grounds. And, if the military loosens the reins, the Muslim Brotherhood could take over and form its own authoritarian, non-representative regime.

But there are also grounds to be optimistic. The genie is out of the bottle, and people know that they have the power to topple governments, and, more generally, that their political activism has consequences. That is why people have continued to fill Tahrir Square whenever the military has tried to consolidate its power and suppress dissent.

Though it is ultimately the Egyptian people who will decide the country’s fate, and whether it can finally take decisive steps towards more inclusive political institutions, this does not mean that outsiders can do nothing. In fact, there is much that “we” can do – even if none of it will be central to the outcome.

For example, the US will again give more than $1.5 billion of aid to Egypt this year. But who is receiving that aid? Unfortunately, it is not the people who are trying to change their country’s future, but the Egyptian military and the same politicians who ruled Egypt under the previous regime.

The least we owe to the Egyptian people is to stop supporting their repression. That does not mean cutting foreign aid. On the contrary, though foreign aid will not by itself transform Egypt’s society or economy, and though some of it will inevitably be wasted and fall into the wrong hands, it can still do some good. More important, the US and the international community can work to ensure that the bulk of the funds go not to the military and to business-as-usual politicians, but to grassroots causes and groups.

In fact, foreign aid can also be used as a small inducement for national dialogue in Egypt. For example, foreign aid could be placed under the stewardship of a committee of representatives from different social factions, including the civil-society groups at the center of the uprising and the Muslim Brotherhood, with the clear understanding that if the committee fails to agree, the aid will not be disbursed. This would force the military and the elites to work together with opposition groups that they often attempt to sideline.

Beyond bringing important but politically marginalized groups to the table, such a committee might also produce a demonstration effect, with successful power-sharing in a small setting possibly encouraging power-sharing writ large. That may not be the sort of outside intervention that could cure the ills of centuries of repression and underdevelopment overnight, but “we” need to stop searching for a non-existent panacea, and instead do something better than feeding the Egyptian military.

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    1. CommentedYasser Shaaban

      Daron Acemoglu ,

      What a constructive essay that is :) , I , as an Egyptian see it all full of lies that you claim against the " Army" , well , of course , as you do work " for" the ones who staged the so called " Arab Spring" , mainly targeting the Egyptian Army , for whatever is going to unfold in the coming few months , after the fall of Syria , which is and has always been also staged and inevitable .

    2. CommentedProcyon Mukherjee

      Egypt is no more than an example where State capacity continues to be low in absence of institutions that can channelize public investments that spur job creation and growth. I have the same example as in the case of Nepal, where fall of monarchy led to anarchy and mayhem and its state capacity has changed only a whisker from the days of monarchy and absolutism.

      Aid is just one form with or without conditions and sanctions that could facilitate change. In most of history we have seen that it is not aid, but proliferation of trade and ideas leading to trade that had changed much of the conditions. The Egyptians must get the act together of finding their place in the market, whether domestic or foreign, which they are completely shut out from; politics and power seem to be flourishing with the polity under the veiled ignorance that the problem lies with controls and security.

      Procyon Mukherjee

    3. Portrait of Michael Heller

      CommentedMichael Heller

      My comment here is only to point out that elsewhere on this site I criticize the analysis of development which Daron Acemoglu and James Robinson promote and which is evident in this commentary. Readers may find it useful to see that alternative view:

      Like so many countries before it, Egypt will get a new and better central government under its own steam. People who are hoping to form the new government -- or at least to influence it -- have been assembling policy ideas ready for implementation over a very long period of time. I have taught one or two of them at masters level.

      Egyptians obviously want to be fully informed of divisions (both new and classical) that exist between the various bodies of knowledge about rapid modernization and the optimal procedures and sequences for achieving it.

    4. CommentedAhmed Gamal

      Well, I dont like the statement "if the military loosens the reins, the MB could take over". I disagree with describing the SCAF as if it protects democracy or revolution from any certain group. I disagree with many of the MB's principles, actions and decisions; however, they have a great support among Egyptian people and, in the presence of clean and real elections, they are gonna win!
      On the other hand, the fore-mentioned 10 presidential candidates, were disqualified based on legal issues and regulations. I echo what u said concerning SCAF, it is indeed not supporrting the revolution and democratic transform in Egypt!