Egypt: A Changing Country - Research Paper Example

 Egypt: A changing country Introduction Egypt was not only one of the great nations of antiquity, it can be a great nation in the future too. It has major ports, a large labour force, and relatively wealthy urban centres. It is well placed in terms of world trade. But the country is far from perfect. Like many countries in Africa and the Middle East it has severe economic limitations such as corruption that will be discussed in this essay. The situation in Egypt is not unique: many African countries rate very high on Transparency International’s list of the world’s most corrupt countries. Many experts agree that corruption is holding Africa back. Egypt's leaders need to open up their country. The need a democratic, responsive government, and a liberalized trade regime. They need to stop abusing human rights and censoring free speech, and then they should welcome back a wealthy and well-educated diaspora. They should also pursue a policy of regionalization, breaking down trade barriers with other countries in their region. All of these issues will be discussed in this paper. Description              Before discussing corruption and its impact, it is important to provide some economic background. Egypt has a market-based economy with a large agricultural sector. Most of its population lives along the banks of the Nile. Its gross domestic product is around $215 billion. Like many underdeveolped countries it is very dependent on agriculture and manufacturing and much less so on services. However, tourism is a more substantial part of its economy that many other countries in the region. Tourists are drawn to the ancient sites and diving opportunities and bring in much needed foreign money. Debt is high. But generally the country has a hard working labour force and a great deal of resources. So taking into account all of this economic data, the question that must be asked is: why is Egypt not a rich country? Throughout the continent of Africa corruption is rampant. In order to receive even the most basic services Africans must pay bribes. In order for companies such as Shell to do business in Nigeria (ranked 121 in the world by Transparency International) a huge amount of money must be paid out to local officials to “grease the wheels.” In hospitals, patients may have to put money in doctors’ consulting books in order to be treated. In schools, students may have to pay their teachers for passing grades (BBC). All of these situations are commonplace. Studies have shown that Africa loses $150 billion a year due to corruption and that products cost as much as 20 per cent more (Sita). It is impossible to measure how much more developed Egypt would be at this moment had not a culture of corruption existed there for so long. This is a serious problem that is not addressed by an undemocratic government. Egypt needs to think long and hard about its place in the world. It needs to consider all of its options and where it fits into the world. It needs to think about whether it wants to remain on the periphery or if it wants to take its rightful place among the powerful nations of the world. All power derives from prosperity. So Egypt should seek reforms that bring it prosperity. Analysis Part of the reason for this situation is that Egypt is not truly democratic. There are many political problems there. The current president has been in office for 30 years. Many opposition political parties are banned. People do not have a lot of rights to express themselves. The truth is that democracy is key to economic development. As John Mukum Mbaku of the Cato Institute argues:   In countries with poorly constructed, inefficient, and non self-enforcing constitutional rules, opportunistic behavior (including rent seeking) are usually quite pervasive. In such countries, the rules that regulate socio-political interaction, have failed to adequately constrain the government. As a result, state intervention in private exchange is equally pervasive. Excessive regulation of economic activities creates many opportunities for rent seeking, including bureaucratic corruption (Mbaku).   Many public servants in Egypt may have power to allocate resources, but they make small salaries. It is very easy for them to make a lot of money on the side by taking payments from special interests. Plus, public servants may have poor relatives who they are also supporting. They may not simply take bribes out of selfishness, but possibly to help feed their extended families. Nevertheless, it is clear that more rules and guidelines are required for public servants in their dealings with the private sector. Enforcement of such rules is desperately required (Anassi, 89).   John Githongo argues that corruption usually begins at the top of a country’s leadership, and that in Egypt, for example, keeping together a disparate political coalition of ethnic groups and tribes requires lots of patronage. Indeed this is true for President Mubarak. In order to stay in power the leader must provide something for everyone. This is especially true when a leader is not chosen by the people. Instead of being accountable to voters, the dictator or illegitimate leader must be accountable to the people who keep him power: among them, perhaps, the army, the businessmen, corrupt local leaders. Instead of providing proper services to African citizens, revenue is instead doled out to whomever the leader relies on (Bayart, 2000). Also, because so many institutions are weak—especially the judiciary—there is no way to challenge the authority of the leader. Tackling corruption at the high level, Githongo says, is one of the key first steps to solving Egypt's corruption problem.   With a lack of democratic accountability comes a sclerotic and onerous official economy. People have a hard time making a living. Because starting a business in Egypt takes a very long time and requires innumerable bribes to many bureaucrats, many Egyptian businesspeople are reduced to operating in the black market (BBC Business). This has many bad consequences: for starters, it means the government has less tax revenue to provide services. It also means that it is hard to enforce contracts and attract any sort of foreign investments. These consequences lead to a vicious cycle. Some of the problems facing Egypt are holdovers from the decline of the Ottoman empire a hundred years ago. Others from the socialism that dominated in the post-war period. The truth is that Egypt has not embraced freedom and capitalism. It remains, to a large extent, outside of the world's most successful systems. The socialism and centrally planned economic measures that have dominated Egypt are based on the notion of a socialistic utopia (Murphy, 67). The truth is that utopias are unachievable. In his famous article, Max Weber explains why he believes politics is the art of the possible. Very few single-issue or ideological people can win top office because politics is largely about building coalitions. If you take power and then you only work with a small part of the population and refuse to compromise or be pragmatic whatsoever, it is unlikely you will last very long. Additionally, he writes about the qualities required to be a good stateman. Weber also talks about the state as having a monopoly on the use of force, an idea that comes from Hobbes. This is especially true today in police states such as Iran, and in Egypt which with its arbitrary police power is closer to those kinds of countries than to the United States, for example. In the course of this essay Weber talks about how a state can control its people. He looks at the mechanism and function of a polity’s administration.   Organized domination, which calls for continuous administration, requires that human conduct be conditioned to obedience towards those masters who claim to be the bearers of legitimate power. On the other hand, by virtue of this obedience, organized domination requires the control of those material goods which in a given case are necessary for the use of physical violence (Weber 3).   This is part of a great debate in political science: how much control should people cede to their government? How much control should the state take in the best interests of its people? Plato thought if you just gave smart philosopher kings all the power they would always make the right moves. Indeed, some people believe in socialism and that everyone must be made equal by the government, the tall cut down and the short pulled up; others believe in a meritocracy where those people who have talent and work hard are rewarded for their labours. Is there a way to combine these two ideas? It might be possible, but it is unlikely that this “best of both worlds” approach would yield a society as productive as one that fully embraced individual freedom and capitalism. Egypt will have to choose if it wants to be prosperous and free or if it wants to be enslaved to an impossible ideal which has yielded few results (Murphy, 23). Recommendation The path Egypt should follow is clear. It should become a democracy and open its market. The best first step is to pursue the creation of a trade bloc in its area. Regionalization is used to describe the bringing together of people, trade, and ideas in a group of countries with similar economies or cultures. It is often used in a trade or economic sense. Through regionalization, people have become connected economically, politically, socially, and culturally. Examples of this process include NAFTA and the EU. Although regionalization can have a potentially negative impact, such as terrorism, it has often resulted in economic growth as a result of rising profits from exporting goods and services to other countries, such as China and other developing economies. It has done a lot to increase business productivity and trade and to bring prosperity to more people. One of the founding economic theorists of globalization is David Ricardo who focused on distributing income among landowners and workers. He also had a lot to say about wages and prices. One of his big contributions was the idea of comparative advantage which involves countries with different advantages trading with one another in free markets so that both maximize their benefits. This underpins much contemporary regionalization and trade theory. What one country can do well on its own, it often can do better with the help of its neighbours. Thus we see the process unfolding in Europe and Southeast Asia. It should also be happening with Egypt and its neighbours (Baker, 29).      Regionalization is not just about economics and blocs: it is also about the cultural and social shifts that accompany the reduction in tariffs and the easing of travel, communication, and trade. This is important and is something Egypt should keep in mind. It is about the way people from all across the world and in a geographic neighbourhood can come together to have a conversation and to collaborate on numerous projects and cultural products.  Cultural products are commodities too and they can be exchanged more easily in an open marketplace. Economic regionalization in the form of NAFTA in the 1990s went alongside the promotion of a new wave of American culture which found a receptive audience throughout North America. This is a good example of how effective the process can be.      The world is changing like never before. Economic trading blocs are becoming more common. They offer many benefits to their members. This process of regionalization is changing the world for the best. Egypt should pursue this plan. Conclusion Egypt was one of the great countries of the path. There is no reason why it cannot be a great country of the future. But it must make serious economic and political reforms. It needs to change quickly. It needs to work with its neighbours and other powers. Egypt could easily be a great power again and have a bigger role in the world. Egyptians could build triumphant buildings that rival the pyramids of yesteryear. The future could be bright for Egypt if it gets its act together.   Works consulted Anassi, Peter. Corruption In Africa: The Egyptn Experience. New York: Trafford Publishing, 2005.   Baker, Raymond William, Sadat and after : struggles for Egypt's political soul, London, I.B. Tauris, 1990. Bayart, Jean-Francois. State in Africa: The Politics of the Belly. London: Longman, 1994.   Cohan, William. House of Cards. New York: Doubleday, 2009.   Githongo, John. “Strengthening Governance.” 2020 Africa Conference Brief 13, published by IFPRI, Washington, DC, 2004.   Lerrick, Adam. “Aid to Africa at Risk: Covering Up Corruption.” Carnegie Mellon International Report. December 2005.   Mbaku, John Mukum. “Bureaucratic Corruption in Africa: The Futility of Cleanups.” Cato Institute. Spring 1996. http://www.cato.org/pubs/journal/cj16n1-6.html   Murphy, Carlyle, Passion for Islam: Shaping the Modern Middle East: The Egyptian Experience, NYC, Scribner, 2002 Sita, N. Masamba.“Crime and Development in Africa.” UNAFRI Paper. May 13, 2004.   Transparency International. Global Corruption Index 2008. http://www.transparency.org/policy_research/surveys_indices/cpi/2008   “How deep is corruption in Africa?” BBC News. June 18, 2004. http://news.bbc.co.uk/1/hi/world/africa/3819027.stm   “How easy is it to do business? “ BBC News. February 13, 2006. http://news.bbc.co.uk/2/hi/africa/4678380.stm Read More