It’s the (Egyptian) economy, stupid

Without economic stabilization, a new and improved Egyptian democracy will collapse just like the old one did

By EVELYN GORDON
Anti-Morsi protesters in Alexandria 370 (photo credit: REUTERS/Louafi Larbi)
Anti-Morsi protesters in Alexandria 370
(photo credit: REUTERS/Louafi Larbi)
There’s nothing Israel can do about the fragile situation in Egypt except beef up its forces in the south and be prepared to contain any spillover violence. But since it has no interest in yet another failed state on its borders, there’s something very important it should be urging its Western allies to do: worry less about a new constitution and inclusive democratic processes and more about urgently reviving Egypt’s economy. For without economic improvement, the best constitution in the world won’t be able to stabilize the country.
To understand why, it’s first important to understand what last week’s popular revolution-cum-coup was really about. It wasn’t an uprising by would-be liberal democrats infuriated at the Muslim Brotherhood’s authoritarian, anti-democratic behavior in power: Though this behavior undoubtedly angered many Egyptians and played a role in driving them into the streets last week, for many, it was a secondary motive. Nor was this a coup by anti-democratic forces seeking to gain by force what they couldn’t gain at the ballot box, though this motive, too, surely animated some of the estimated 14 million demonstrators. But for most, the motive was something much simpler: economic desperation.
That comes through clearly in the reportage of journalists who bothered to interview ordinary demonstrators rather the Cairo elite. A small boat owner who used to earn his living taking tourists on Nile cruises, for instance, said he could no longer feed his children because tourist traffic had fallen so sharply. An unemployed engineer groused that “There's no construction in Egypt and no company is hiring workers.” A Cairo street vendor who voted for the Brotherhood last year summarized the situation succinctly: “The city is dead. Dead. No work. No food.”
People with no work and no food can’t afford to wait for the next regularly scheduled election, no matter how perfect their constitution and how inclusive their democratic processes. True, the constitution the Muslim Brotherhood rammed through was far from perfect, and the government it led was far from inclusive. But had the economy been improving, both problems could have been solved through normal democratic processes: In a few years’ time, new elections could have swept new forces into office, and they could have drafted and passed a new constitution.
Instead, the economy was tanking – both by objective standards (unemployment, foreign reserves, etc.) and by subjective ones: In an Egyptian poll taken last week, 63% of respondents said their standard of living had worsened over the last year, while only 13% reported an improvement. And in a country where nearly half the population lived under or just above the $2-a-day poverty line on the eve of the 2011 revolution, the standard of living couldn’t fall very far without people becoming desperate.
Thus to stabilize the country, the first step is arranging a massive infusion of economic aid. Fortunately, the Brotherhood’s ouster makes this a reasonable goal: The countries most likely to be able to provide aid quickly are oil-rich Saudi Arabia and the other Gulf states, and all these countries (except Qatar) loathed the Muslim Brotherhood. But they have long had close ties with the Egyptian military, which is now de facto running the country.
The next step, however, is much harder: carrying out a long-range economic reform program that can ease some of the country’s chronic problems. That means figuring out what needs to be done, rounding up donors both to finance the reforms and to provide aid that can cushion their effects on the population until the economy starts improving, and brow-beating the Egyptian government into actually implementing them.
All this may be impossible under any circumstances. But it will certainly be impossible if influential Western actors, especially in Washington, are more focused on a new constitution and inclusive democratic processes than they are on fixing the economy – or about “supporting a coup” to mobilize the necessary resources. The West only has so much influence, and it can’t afford to squander it on secondary issues.
One could argue that inclusive democratic processes would help promote economic reform – and sometimes, that’s true. But sometimes, democracy can actually hinder economic reform. Indeed, one reason the Muslim Brotherhood government refused to take steps that virtually every economist deemed essential, like eliminating the subsidies on staple products that eat up more than 28% of the government’s budget, is that these steps were widely unpopular.  
And democracy certainly isn’t necessary for economic reform. China’s highly undemocratic governments, for instance, slashed the country’s extreme poverty rate from 60% in 1990 to 12% in 2010. South Korea rose from the ruins of the Korean War to become the world’s 15th-largest economy under a series of undemocratic strongmen; it democratized only in the late 1980s.
Indeed, economic growth has frequently proven a necessary precursor to democratization, and the latest iteration of the Egyptian revolution shows why: Democracy is impossible if people can’t afford to wait for the next election to secure a change in policy. But without a modicum of economic security, too many people feel they can’t wait that long.
None of the above is meant to minimize the importance of democracy; it’s a much better system than the alternatives. If Egypt could have both democracy and economic growth, that would clearly be preferable, and this should be the West’s ultimate goal.
But right now, the economy is much higher priority, so that’s where most of the effort must be directed. And if it comes to a choice, then yes, in Egypt right now, democracy should be sacrificed in favor of economic stabilization. For once the economy has stabilized, democracy is likely to follow in time, as it has in numerous countries round the world (think Korea, Taiwan, Chile and Brazil). But if the economy doesn’t stabilize, no democracy has a prayer of lasting, and the dictatorship that follows could well be much worse than the military government now in place.
After all, history has a precedent for that, too: Just remember what followed the economic meltdown of the Weimar Republic.