Given CATO's theory that trade deficits are linked to low unemployment, Egypt should have a severe worker shortage by now.
Posted on 07/05/2013 8:58:48 AM PDT by SeekAndFind
As Communist writer Bertolt Brecht offered after East German workers rose against their Moscow-backed masters in 1953, perhaps the Egyptian government should dismiss the people and elect a new one.
Don’t laugh. Mexico did this after the debt crisis of the early 1980s: it dismissed the fifth of its population that moved to the United States. China has dismissed its rural population and recreated a new urban population, by 2020 shifting the equivalent of twice the American population from countryside to city.
Egypt’s problem is that it has no practical way of acting on Brecht’s advice. The Egyptian people are dying; the question is whether they will die slower or faster. I prefer slower, so I am pleased by this turn of events.
Starvation is the unstated subject of this week’s military coup. For the past several months, the bottom half of Egypt’s population has had little to eat besides government-subsidized bread, and now the bread supply is threatened by a shortage of imported wheat. Despite $8 billion of aid from Qatar and smidgens from Libya, Turkey, and others, Egypt is struggling to meet a financing gap of perhaps $20 billion a year, made worse by the collapse of its major cash earner — the tourist industry. Malnutrition is epidemic in the form of extreme protein deficiency in a country where 40% of the adult population is already “stunted” by poor diet, according to the World Food Program. It is not that hard to get 14 million people into the streets if there is nothing to eat at home.
Nearly half of Egyptians are illiterate. Seventy percent of them live on the land, yet the country imports half its food. Its only cash-earning industry, namely tourism, is in ruins. Sixty years of military dictatorship have left it with college graduates unfit for the world market, and a few t-shirt factories turning Asian polyester into cut-rate exports. It cannot feed itself and it cannot earn enough to feed itself, as I have explained in a series of recent articles. Someone has to subsidize them, or a lot of them will starve. Unlike Mexico, Egypt can’t ship its rural poor to industrial nations in the north.
Egypt’s people embraced the military because they remember that the military used to feed them. In fact, the military probably can alleviate the food crisis, because — unlike the Muslim Brotherhood– Egypt’s generals should be able to count on the support of Saudi Arabia. Saudi King Abdullah Bin Abdul Aziz congratulated Egypt’s military-appointed interim president on Wednesday night, while the United Arab Emirates expressed “satisfaction” at the course of events. Only the crazy emir of Qatar, the patron of al-Jazeera television and an assortment of Islamist ideologues, had backed the Brotherhood — and his son replaced him last week. The Saudi monarchy hates the Brotherhood the way Captain Hook hated the crocodile: it is the only political force capable of overthrowing the monarchy and replacing it.
Former President Morsi seized power from the military in August 2012, the day that the visiting emir of Qatar appeared in Cairo with a $2 billion pledge to the regime. At the time I warned (in a note for the Gatestone Institute) that “Qatar’s check to the Muslim Brotherhood makes Egyptian stability less likely.” I argued at the time:
Qatar’s $2 billion is a drop in the bucket; it just replaces the reserves that Egypt lost last month. So is a $3.5 billion IMF loan, under discussion for a year. The Obama administration has been telling people quietly that the Saudis will step in to bail out Egypt, but the Qatari intervention makes this less likely. The eccentric and labile Emir is the Muslim Brotherhood’s biggest supporter; its spiritual leader, Sheikh Yusuf al-Qaradawi (who supports suicide bombings against Israel) lived in exile during the Mubarak regime. Qatar funds al-Jazeera television, the modern face of Islamism. The Saudis hate and fear the Brotherhood, which wants to overthrow the Saudi Monarchy and replace it with a modern Islamist totalitarian political party. Qatar has only about $30 billion in reserves and can’t sustain Egypt for long.
Qatar is something of a wild card: it is ruled by an Emir without even the checks and balances that arise from having a large family behind a monarchy, as in Saudi Arabia. The whimsical Emir just bought the Italian firm of Valentino as a gift for his fashion-conscious second wife — not a dress, but the entire company. His support evidently emboldened the Muslim Brotherhood in Egypt to take on the military in the aftermath of the Sinai crisis. But that makes stability in Egypt less rather than more likely, because it gives the Saudis, the only funder capable of bailing out Egypt, reason to stand aside.
Qatar has spent nearly a third of its foreign exchange reserves in a Quixotic effort to project power in Egypt, which might explain why the old emir abdicated in favor of his son. With the Muslim Brotherhood out of the way in Egypt, the Saudis have uncontested influence with the military. Presumably the military will suppress the Brotherhood unless it chooses to dissolve spontaneously. No one should mourn the Brotherhood, a totalitarian organization with a Nazi past and an extreme anti-Semitic ideology.
The notion that this band of Jew-hating jihadi thugs might become the vehicle for a transition to a functioning Muslim democracy was perhaps the stupidest notion to circulate in Washington in living memory.
The Saudis have another reason to get involved in Egypt, and that is the situation in Syria. Saudi Arabia’s intervention in the Syrian civil war, now guided by Prince Bandar, the new chief of Saudi Intelligence, has a double problem. The KSA wants to prevent Iran from turning Syria into a satrapy and fire base, but fears that the Sunni jihadists to whom it is sending anti-aircraft missiles eventually might turn against the monarchy. The same sort of blowback afflicted the kingdom after the 1980s Afghan war, in the person of Osama bin Laden. Saudi Arabia and Qatar have been fighting for influence among Syria’s Sunni rebels (as David Ottaway reported earlier this week at National Interest). Cutting off the Muslim Brotherhood at the knees in Egypt will help the KSA limit potential blowback in Syria.
Egypt probably can be kept on life support for about $10 billion a year in foreign subsidies, especially if the military regime can restore calm and bring the tourists back (although that is a big “if” — one of President Morsi’s last acts was to appoint as governor of Luxor province an associate of the Islamist terrorists who massacred 62 tourists in Luxor in 1997). With about $630 billion in foreign exchange reserves, Saudi Arabia can carry Egypt for a couple of years while the Syrian crisis plays out. Saudi Arabia also has covered a good part of Turkey’s huge payments deficit during the past couple of years, which means that Ankara will dance to Riyadh’s tune.
This is the background to the Saudi monarch’s enthusiastic statement of congratulations to the Egyptian military, released almost immediately after the takeover was announced:
In my own name and on behalf of the people of the Kingdom of Saudi Arabia, I congratulate you on assuming the leadership of Egypt at this critical point of its history,” said the king in a cable carried by the Saudi Press Agency (SPA). “By doing so, I appeal to Allah Almighty to help you to shoulder the responsibility laid on your shoulder to achieve the hopes of our sisterly people of the Arab Republic of Egypt.
At the same time, we strongly shake hands with the men of all the armed forces, represented by General Abdel Fattah al-Sissi, who managed to save Egypt at this critical moment from a dark tunnel God only could apprehend its dimensions and repercussions, but the wisdom and moderation came out of those men to preserve the rights of all parties in the political process.
Please accept our greetings to you and deep respect to our brothers in Egypt and its people, wishing Egypt steady stability and security.
I expect Saudi Arabia to offer Egypt subsidized oil as well as cash for urgent food purchases, allowing the military to appear as national saviors — at least for the time being. It is not clear what the Muslim Brotherhood will do, but apart from seeking martyrdom, there is not much that it can do.
In the Beltway, to be sure, the same folk on left and right who thought the “Arab Spring” would usher in a golden era of Muslim democracy are wringing their hands over the tragic fate of Egypt’s first democratically elected government. These include Republicans as well as Democrats, whom I qualified as “Dumb and Dumber” in a May 20 essay for Tablet.
The sequel — call it “Dumb and Dumberer” — is still playing on CNN and Fox News. No matter: the important matters are now in the competent hands of Prince Bandar, whose judgment I prefer to that of John Kerry or Susan Rice or John McCain any day of the week. The best-case scenario would be for the grown-ups in the region to ignore the blandishments of the Obama administration as well as the advice of the Republican establishment, and to do what they have to do regardless.
Americans who want to conduct a great experiment in democracy will have to take their laboratory somewhere else.
Update:
Why can’t we get 14 million people into the streets to proclaim that Obama is an idiot like the Egyptians did? Over at ZeroHedge, Jim Quinn posts pictures of the banners in the mass demonstrations. They are inspiring. One read: “Obama you jerk, Muslim Brotherhoods are killing the Egyptians, so how come they can guarantee you the security of Israel. Hey Obama, your deal with the Muslim Brotherhood is unsuccessful. Obama you idiot, Keep in mind that Egypt is not Muslim brotherhoods and if you don’t believe that go and see what’s happening in Tahrir Square now.” Another reads, “Obama, your bitch is our dictator.” A picture of Hillary Clinton read, “Hayzaboon [ogre] go home.” Many banners simply read, “Obama supports terrorism.” Others were too harsh to mention in a family site. Happy 4th of July!
ABOUT THE AUTHOR:
Spengler is channeled by David P Goldman. His book How Civilizations Die (and why Islam is Dying, Too) was published by Regnery Press in September 2011. A volume of his essays on culture, religion and economics, It’s Not the End of the World – It’s Just the End of You, also appeared that fall, from Van Praag Press. He is an Associate Fellow of the Middle East Forum.
Morsi was elected with 9 million votes. If the MB has 40 million supporters, why didn’t they vote?
Have you seen any of the big-mouthed imams leading the cheers for Morsi? Of course not; they only encourage others to die. The crowds aren’t so big when the Egyptian Air Force is flying over them.
Morsi was never beloved even by the MB. He was their Mitt Romney and they wanted someone more radical. Morsi was seen as an American puppet.
No good will come of any of this at all.
The other thing to remember is Morsi was elected with 9 million votes in a run-off in which the only other choice was an old Mubarak crony, and only after promising all the sorts of things Obama and the nit-wits in Foggy Bottom though Egyptian democracy would bring, on which promises he and the Muslim Brotherhood promptly reneged, most egregiously drafting a constitution without any input from non-Sunnis (or even non-Muslim-Brotherhood non-Salafist Sunnis) and forcing its adoption by a simple majority vote.
The folks who didn’t vote for Morsi in the first round (and even some who did), representing a sizable fraction of those 9 million, turned against him over those broken promises and his failure (noted in stark terms in the article) to do anything to fix the Egyptian economy, so the Egyptian Army chiefs, I think rightly, decided that they had majority support to remove him. Recent events there are some odd mixture of military coup and informal recall election.
Given CATO's theory that trade deficits are linked to low unemployment, Egypt should have a severe worker shortage by now.
Given CATO's theory that trade deficits are linked to low unemployment, Egypt should have a severe worker shortage by now.
Socialist governments have a long history of disposing of segments of the population they don’t want or who doesn’t support them. The question is what does the democrats and rinos have planned for the Conservatives?
FYI
True but Spengler leaves out the key examples.
In Europe, the efforts of the ruling class to replace Europeans with Moslems/Third Worlders. "A people can recover from an economic crisis or a war but not from the replacement of its native population: without French, there's no more France." Génération Identitaire
In the US, the same thing, begun by Teddy Kennedy's immigration "reforms" and to be continued by the current ones.
Off hand I’d have thot international payments was pretty low on Egypt’s list of concerns, but no way we can say it was their trade deficit that caused the coup...
The notion that this band of Jew-hating jihadi thugs might become the vehicle for a transition to a functioning Muslim democracy was perhaps the stupidest notion to circulate in Washington in living memory.
He's right on the above...not even second stupidest - but absolutely THE stupidest.
Something that we're starting to lose over here with our thuggy FBI, IRS and Homeland Insecurity.
Well it’s the unemployment and high food costs that caused the coup.
The question is what caused the unemployment and high food costs?
In Egypt’s case, I think their is a spiritual cause that trumps economic policy. Their land is a desert, like most Muslim lands, because they have rejected God’s truth in favor of a lie.
But I bet Egypt has pursued the same free trade policies that the U.S. has been practicing and recommending to others. Thus the lack of other industries and the high trade deficits.
Well it’s the unemployment and high food costs that caused the coup.
The question is what caused the unemployment and high food costs?
In Egypt’s case, I think their is a spiritual cause that trumps economic policy. Their land is a desert, like most Muslim lands, because they have rejected God’s truth in favor of a lie.
But I bet Egypt has pursued the same free trade policies that the U.S. has been practicing and recommending to others. Thus the lack of other industries and the high trade deficits.
As Communist writer Bertolt Brecht offered after East German workers rose against their Moscow-backed masters in 1953, perhaps the Egyptian government should dismiss the people and elect a new one. Don’t laugh. Mexico did this after the debt crisis of the early 1980s: it dismissed the fifth of its population that moved to the United States. China has dismissed its rural population and recreated a new urban population, by 2020 shifting the equivalent of twice the American population from countryside to city. Egypt’s problem is that it has no practical way of acting on Brecht’s advice. The Egyptian people are dying; the question is whether they will die slower or faster. I prefer slower, so I am pleased by this turn of events. Starvation is the unstated subject of this week’s military coup. For the past several months, the bottom half of Egypt’s population has had little to eat besides government-subsidized bread, and now the bread supply is threatened by a shortage of imported wheat. Despite $8 billion of aid from Qatar and smidgens from Libya, Turkey, and others, Egypt is struggling to meet a financing gap of perhaps $20 billion a year, made worse by the collapse of its major cash earner -- the tourist industry. Malnutrition is epidemic in the form of extreme protein deficiency in a country where 40% of the adult population is already “stunted” by poor diet, according to the World Food Program. It is not that hard to get 14 million people into the streets if there is nothing to eat at home.
For the past several months, the bottom half of Egypt’s population has had little to eat besides government-subsidized bread, and now the bread supply is threatened by a shortage of imported wheat. Despite $8 billion of aid from Qatar and smidgens from Libya, Turkey, and others, Egypt is struggling to meet a financing gap of perhaps $20 billion a year, made worse by the collapse of its major cash earner -- the tourist industry.
That's pretty awesome.
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