On Egypt...

Things are not quite as they appear, I believe.

According to the mainstream observations of what is happening in Egypt, the people have taken a cue from Tunisia and are calling for democracy and an end to dictatorship.The dictator, Mubarak, is holding on to power by refusing to step down, and the Army is keeping neutral and letting politics work itself out.

The reality, I fear, is a tad more complex than that. Read this to understand why.

First and foremost: the Egyptian state has survived as long as it has because it provides bread and circus, with heavy emphasis on the former. The government controls bread and how it is distributed, for instance, rather than allowing private bakers to do that job. The reason for this is that bread prices are heavily subsidized and, as a result, supply and demand are seriously distorted.

The Egyptian government has been introducing liberalizations and reducing subsidies, but slowly. The designated heir-successor was following a neo-liberal approach to transforming Egyptian finances into some more sustainable, one where more private business activities were going to be possible and, at the end of the day, with greater efficiencies, prices would have remained at least stable, if not lower.

So far, so good: the problem really arises when you fail to communicate this and people suddenly no longer see the government supplying services that they have relied on for decades, for their entire lives. If you are used to getting up in the morning and pop down to the bread distribution point to pick up bread for the day, it is disconcerting and frightening to see that place no longer under control by the government. Never mind that the bakeries continue to sell bread: it looks like the government is no longer taking care of the people, ensuring availability at low price.

And that is the basis for the existence of the Egyptian government's longevity: it was seen as being the only institution that wasn't completely corrupted and wastrel, which is why it was charged with ensuring the availability of something as basic as bread.


Oh? Did I say government? The bread distribution in Egypt is in the hands of the military.

Now you can understand that this is a reactionary revolution: people are having their old, trusted system of guaranteed infrastructure dismantled and are reacting against that. The military is on their side: they do not want to lose the rights and privileges that come from fulfilling this fundamental role, resulting in a rejection of the changes in the status quo.

Hence things are not quite what they seem. What we have is the Egyptian people taking to the streets to protect their privileges and fighting reforms; the army is backing them, as they have the greatest to lose if things change.

This is not to say that the Egyptian government and military isn't corrupt and venally incompetent: they are. Many out on the streets have serious, long-term and legitimate complaints about the Mubarak government. But there is a lot more to the story than originally meets the eye.

This is less a revolution to end a dictatorship and bring in democracy as much more a reactionary revolt supported by those who have a vested interest in things remaining, largely, the same. Rather than modernize the Egyptian economy and reduce the role of the government, we will see lack of reforms and further stagnation.

This revolt is not solving the problems facing Egypt: while it probably isn't making them worse, it most certainly doesn't contain the fundamentals needed to move beyond re-arranging deck chairs on the Titanic.