Egypt’s economy draws parallels to US economy
Protesters in Egypt demand reforms in a country that has been ruled by a strong handed leader for the last three decades. The Egyptian people are demanding a complete shift in the way their government makes decisions and forms its economic policies. But why is the majority of the country so outraged? Surprisingly, because of the same policies many western countries are implementing on their citizens.
Author of “It takes a Pillage” Nomi Prins says, “The economic deterioration of the country in the last 5 or 6 years has created a situation where you have such a young population that is educated and facing the inability to find jobs. You have unemployment over 10% in Egypt as you have in the United States and similarly that doesn’t include the underemployed, employment prospects and the nature of jobs available in everything else. As well as the number of those under the poverty line continues to increase, not dissimilar to here in the US. There is an economic element to all of this, it’s definitely a catalyst and the timing is very much related to what was tremendous financial deregulation.”
The Egyptian government went through economic reforms over the past few years to attract foreign investors and facilitate GDP growth. As a result, it led to the rich getting richer and conditions for the average person getting worse. Egypt’s economy has been propped up by foreign financiers for years, couple that with the fact there have been many food shortages and a perfect storm for revolution is the result.
Around 40.5% of the Egyptian population is in the range of extreme poverty to near poor. Poverty has a strong regional dimension in Egypt and is concentrated in the Upper Egypt region, both urban and rural, while metropolitan areas are the least poor. The unemployment in Egypt is about 10%, however those employed are being underemployed. Many Egyptians are being underpaid or undervalued by their employer which can distort the unemployment number. Because the people are being underpaid they are not able to spend money to spur growth in the struggling economy, something sounding all too familiar to many westerners.
Nomi Prins adds, “In Europe, in Greece, we have seen people coming to the streets. In England, when the number of youths unemployed reached a million, the same day Goldman Sachs announced another boat load of bonuses and there were demonstrations in the streets. So, we have seen that in Europe and we have seen it come through the youth and multiple classes of people as we are seeing it in Egypt. A lot of the issues in Europe have been a result of the same type of, from an economic standpoint and a financial deregulation standpoint, the same type of money in, money out and leaving the ordinary citizens to suffer the consequences.”
US Representative Dennis Kucinich (D-OH) adds, “It is time for Washington to make a reappraisal of their relationship with the Muslim and Arab world, not just with respect to what is happening Egypt. But to look across the board and see that we are at a transformational moment in history, it is not up to the United States to pick the leaders of any country.”