Empty Pockets Stoked Discontent In Egypt, Tunisia

A vendor pulls his trolley past Egyptian army soldiers sitting and standing atop armored personnel  carriers in Cairo  on Saturday.

hide captionA vendor pulls his trolley past Egyptian army soldiers sitting and standing atop armored personnel carriers in Cairo on Saturday. But in Egypt, jobs are hard to come by. Most Egyptians live on about $2 a day, according to Isobel Coleman, a senior fellow at the Council on Foreign Relations. And the college educated face a 30 percent unemployment rate.

Victoria Hazou/AP

Demonstrators in Egypt and Tunisia were motivated, in part, by a lack of jobs and economic opportunity, especially for the young. Egypt and other countries in the region have lagged behind in transforming themselves into modern economies.

But the lack of economic opportunity in Arab countries is not a new concern — it's been an issue for some time. Back in 2002, the U.N. Development Agency produced a report citing a lack of freedom, education and lack of rights for women as factors holding back many Arab economies.

More recently, a Brookings Institution project focused on issues blocking the aspirations of young Arabs.

"You have a large segment of the population of youth that is unable to make this important transition to being productive, happy adults, and who at the same time happen to have no voice," says Brookings senior fellow Tarik Yousef, who was one of the project's directors.

Progress 'Not Fast Enough'

Access to global media also means young Arabs are far more aware than they used to be that their countries have not been keeping up with the faster-growing economies in Asia. That has stoked their discontent, says Zachary Karabell, president of River Twice Research, a financial consulting firm.

Demonstrators shout slogans next to Egyptian soldiers on  Feb. 1 as massive tides of protesters flood the Egyptian  capital's central Tahrir Square for the biggest outpouring of anger yet  in their relentless drive to oust President Hosni Mubarak's regime. i i

hide captionDemonstrators shout slogans next to Egyptian soldiers on Feb. 1 as massive tides of protesters flood the Egyptian capital's central Tahrir Square for the biggest outpouring of anger yet in their relentless drive to oust President Hosni Mubarak's regime.

Patrick Baz/AFP
Demonstrators shout slogans next to Egyptian soldiers on  Feb. 1 as massive tides of protesters flood the Egyptian  capital's central Tahrir Square for the biggest outpouring of anger yet  in their relentless drive to oust President Hosni Mubarak's regime.

Demonstrators shout slogans next to Egyptian soldiers on Feb. 1 as massive tides of protesters flood the Egyptian capital's central Tahrir Square for the biggest outpouring of anger yet in their relentless drive to oust President Hosni Mubarak's regime.

Patrick Baz/AFP

"The more awareness people have of others doing well, the more they are able to look at their own situation in a negative light — and demand change," he says.

The irony is that the Egyptian economy seemed about ready to take the next step in economic development, says Mohamed El-Erian, CEO of the giant bond investor PIMCO. It has been opening up and growing faster in the past half-decade, he says.

"Over the last few years, we've seen much more progress than we have in a long time," he says. "However, as it turns out from what's happening in the street, this progress wasn't fast enough given what people were feeling."

A Combustible Brew

Isobel Coleman, a senior fellow at the Council on Foreign Relations, is hesitant to generalize too broadly about the economic challenges in Arab countries. Not all of their challenges are the same, she says. But she agrees with El-Erian that growth rates have been very respectable in Egypt recently — around 6 percent a year. The problem, she says, is that most Egyptians live on about $2 a day and they aren't benefiting from the country's growth.

"Its economic gains have really been concentrated among the wealthy elite — and you've just not seen the trickle-down that people are looking for," she says.

Add to that the alienation of the college educated who face an unemployment rate of 30 percent in Egypt, far higher than the rate for the less educated. That creates a combustible brew.

Karabell says the problem is that President Mubarak flirted with economic reform, but never fully embraced it.

"In any reform, some vested interest loses out and you have to be willing to take that on," he says. "If it's your own bureaucracy, if it's the army, something has to give. And in Egypt, nothing has given."

Yousef, who is also the dean of the Dubai School of Government, sees another factor holding back Egypt and other Arab states. He says they have been distracted by pressing security issues during the past decade.

"The war in Iraq, the war on terror, and concerns about the Arab-Israel conflict and the emergence of Iran has been both a distraction and has been a reason for why the bigger issues became secondary — and increasingly absent from the policy debate," Yousef says.

That debate about both economic and political opportunity has now been taken out of the halls of government and into the streets where the outcome is even more unpredictable.

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