Egypt’s coup caught some people off-guard. It shouldn’t have. Egypt’s becoming increasingly hard to rule. In the short and medium term, Egypt’s going to experience more and more chaos. Alas, because of Egypt’s deeply-rooted problems, no government – Brotherhood or military, secular or Islamist – is going to be able to govern Egypt successfully anytime soon.

Egypt’s got too many people with too little resources

Green irrigated land (3.4 million ha) along th...
Ain’t no mountain high enough. (Photo credit: Wikipedia)

Egypt’s spent a huge amount of its history under foreign control for a reason. Egypt was a powerhouse back in the days when power was measured in agricultural output. The Nile River provides excellent farmland with a predictable and relatively lovely flood season. But alas, Egypt has few mountains, fewer mines, and virtually no metal.

As a result, Egypt’s never been able to build good weapons or develop a manufacturing base. Once neighboring civilizations found a way to cross the Sinai desert, Egypt’s independence was doomed. It was only in the era of decolonization that Egypt was allowed its independence again – and allowed by the United States, which wanted clients over colonies.

The Arab Spring came along as a reaction to this

Virtually all Arab Spring countries suffer the same problem – too many people in countries with too few resources (Bahrain and Libya were the exceptions, where minority governments deliberately denied resources to certain groups as part of their divide-and-rule strategies). Besides Yemen, Egypt is the worst off. Egypt’s primary exports – agricultural goods – are just not as valuable as they used to be. Their cotton must now compete worldwide with far more efficient economies.

The population boom screwed Egypt

Had the population not exploded in the 20th century, Egypt might have been able to leverage its farming sector’s exports into trade for new technologies that would have allowed for diversification of its economy. On a limited scale, this was done. Egypt does have an industrial sector, a banking sector, real estate sector, etc., just simply not on the scale to provide most Egyptians with jobs.

From the 1970s onwards, with a massive, hungry population below, Egypt’s dictatorships were forced to adopt increasingly populist measures to keep people off the streets. They gave them subsidized food, water, electricity, and fuel to be sure Egypt’s poor could make basic ends meet. But this was damned expensive and got more so as the population grew.

Egypt’s governments earned some limited income from agricultural exports, rents from the Suez Canal, and its handful of gas and oil reserves. But this just wasn’t enough. Sadat choosing America over the Soviet Union in the 1970s was as much a desire to access generous American aid as a genuine conversion from socialism to capitalism.

So Egypt manages with quite a bit of help from its friends

In addition, from the 1980s onwards, Egypt earned huge incomes from tourism. These two piers – tourism and foreign aid – kept Egypt on balance. Mubarak and his cronies experimented, typically under IMF or American pressure, in diversifying the economy. But the nature of his dictatorship, where loyalty was rewarded before efficiency, meant these efforts could never make the headway they needed.

The revolution cut one of these legs out from under the country

Tourists aren’t going to Egypt anymore, drying up its foreign reserves. Western donors are becoming wary of giving money to a country that might use that cash to oppress women, beat up protestors, or start a war with Israel. Qatar has been stepping up, providing billions over the past year, to keep Morsi’s government afloat. But that’s just enough to keep the ship from sinking. The Egyptian people are well aware things aren’t getting better.

It used to be enough to crack just one skull to keep ten more at home

But no longer. Egyptians aren’t afraid of taking to the streets and throwing rocks at soldiers, cops, or Muslim Brothers. They want a higher standard of living, and they want to see movement on that now. This goes to show their relative immaturity (an immaturity nurtured by Mubarak’s dictatorship) about how long economic growth can take, but also shows how they won’t accept anything that even remotely looks like Mubarak’s decades of crony capitalism again. They want a democratic society that gives them jobs. Unfortunately, the opposition parties don’t really have a plan to do that.

Not that it would matter

Egypt has to become competitive, but can only do so through some truly painful reforms, reforms that will ensure poor families go hungry or can’t afford fuel for months at a time. The other problem is that Egypt just doesn’t have enough to trade up into a modern economy. Egypt’s 80+ million people depend on subsidies to simply survive. But those subsidies strangle the government’s budget and doesn’t allow it to build the roads, schools, and power plants a modern economy needs.

Damned if you do, damned if you don’t

Cut the subsidies, and people take to the streets and possibly overthrow you. Keep the subsidies and go broke a bit later when foreign donors and investors decide your country just isn’t worth it. Regardless of president, there are no good options going forward to get people to work and out of Tahrir throwing petrol bombs.

And the dictator card is played out

Egypt The Tent NationIn the past week, Egyptians learned they can pretty much overthrow anyone. The Egyptian military doesn’t seem to have the stomach to go Stalin all over everyone’s asses and establish a new iron-clad dictatorship. It’s doubtful that would even work these days and might even cause a civil war. So a new government has no way to tell Egyptians to just shut up as they make the adult decisions that will eventually benefit everyone. Rather, the incentives are to keep making bad choices that make everything worse.

So Egypt will keep getting poor

And the poor will get, naturally, angrier.

Until something massive happens that changes Egyptian society

Egypt will have to grow up. It won’t be pretty and people will die. But no condition is permanent. Egypt will eventually learn that its current methods don’t do the trick. But until they do, Egypt will be near-ungovernable. Woe to the next president.

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