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Egypt needs a mindset revolution

By Hdeel Abdelhady (Ahram Weekly, October 6-16 2011 edition)

In the aftermath of Egypt’s political earthquake, the army, interim civilian government, political parties, and other contenders have jostled for political position. All the while, Egypt’s economy has languished, exacerbating the poor social and economic conditions that catalysed the popular uprising.

Egypt’s interim leadership has scrambled to meet immediate funding needs with financial aid from the West and the Arabian Gulf. But none of Egypt’s current or aspiring leaders has put forward a development plan worthy of popular aspirations for freedom, dignity and social justice.

Ultimately, the success of Egypt’s political transition will be measured not at the ballot box, but at the breadlines. Egypt needs a national economic vision to transform its political aspirations into reality. But first the country must undergo a national mindset revolution.

Egyptians must ask themselves and their leaders the clichéd question: where do they see themselves in the next five, 15, or 50 years? Will Egypt remain a foreign aid recipient whose fortunes twist in unpredictable political winds? Will its economic path continue to be paved with off-the-rack structural adjustments thought up in the halls of the World Bank and International Monetary Fund? Will Egyptians continue to accept — and expect — economic mediocrity?

The answers, and Egypt’s future, will depend on the health of the national mindset.

Egypt suffers from a mindset malady that has stunted its economic growth and development. Years of corrupt and ineffectual rule have led the country to regress decades, disenfranchised the majority and deflated national self- esteem. In the national psyche, economic hardship is as Egyptian as the Nile, the Pyramids and falafel. The theme is well documented by inexhaustible Egyptian television and film portrayals of families dutifully struggling to make ends meet.

The cure for Egypt’s malaise is an alternative narrative for the future, starting with a truly national economic vision that breaks with the passive, self- limiting and unambitious mentality of the past and present.

Egypt is crippled by a decades-long pattern of passivity and reliance on externally sourced financing and economic policies. In the 1970s, the government adopted an economic “openness” policy ( infitah in Arabic). Its central objective was to break the state’s economic monopoly, through privatisation and externally-mandated austerity measures. Introduced by president Anwar El-Sadat, the infitah policy was part of a turn away from the Soviet Union and towards the West, largely in response to the USSR’s fecklessness in the lead up to the 1973 War.

As continued under president Hosni Mubarak (albeit inconsistently and under different headings), the infitah policy effectively set Egypt on a path of reliance on conditional financial aid, with abysmal results on the ground. Illiteracy skyrocketed, infrastructure deteriorated, the poverty rate climbed and high unemployment levels became the norm.

Rather than openness, infitah ushered in an era of closed-mindedness, with the government attached to unipolar economic policies that were subordinate to its unipolar international politics. Egypt became maladjusted in an increasingly multipolar global economy, and regressed as its contemporaries in the global South thrived. The outcome was ironic for a founding member of the Non-Aligned Movement, a group of developing nations that, in theory, rejected the bipolar paradigm of the Cold War.

If Egypt is to meet its economic potential, the pattern of passivity, unipolarity and external dependence must be broken. One need only look to “Third World” success stories, such as Brazil, India, China and the Asian Tigers, to see that economic advancement is born of an ambitious national vision and sustained by local will.

Closer to home, Dubai is a testament to the transformative power of a homegrown vision and leadership. Egypt must look within for solutions. And its economic policies must be calibrated for a world in which, alongside North America and Europe, markets in Asia, Latin America, the Middle East and Africa play significant roles.

Egyptians must also adjust the lens through which they see their economic potential. For years, many have compared Egypt’s economic fortunes to those of its rich oil and gas neighbours in the Middle East. This is understandable as for many Egyptians, a labour contract in the Gulf has long been a coveted economic opportunity. But the comparison breeds resignation. It assumes wrongly that the oil and gas exporting model is the only alternative to economic mediocrity in the Middle East. Egypt’s economy is not natural-resource based. But neither are the world’s largest and most innovative economies.

Egypt has the geographic, cultural, human and other resources to join the ranks of prosperous economies based on the production of goods and services, innovation and strategic investment.

Flanked by the Red and Mediterranean seas, anchored by the Nile, and central between Africa, Asia and Europe, Egypt is physically well placed to be a strategic trading hub and production base. The Suez Canal and Egypt’s ports are clear manifestations of Egypt’s geographic value. Geography is an invaluable platform for growth across industries, sectors and markets.

Egypt’s cultural resources — historic, media and entertainment and tourism — are well known. But they have yet to be developed to full capacity. Instead, the country has pursued a largely one-dimensional cultural tourism model. Egypt has failed to seize growth opportunities afforded by advances in technology, travel and tourism, and culture and travel-related goods and services markets. A 21st- century plan is needed to leverage Egypt’s unparalleled cultural offerings, and the country’s tech-savvy youth might have something to say about incorporating technology to expand the culture sector.

Egypt’s population is its most valuable asset. The most populous Arab nation and the second most populous in Africa, Egypt possesses the human resources necessary for economic growth. Here again, the lens through which Egypt’s population is viewed must be wiped of the cynical haze of the past. For years, Egypt’s government treated population growth as a burden, and failed to cultivate its citizens for meaningful participation.

The highest priority of Egypt’s future leadership should be to position the people as producers, rather than just consumers of foreign goods and services. A truly national development strategy is needed to integrate the majority of Egyptians into political and economic life.

All of Egypt’s governorates, not just Cairo, and all its people have important roles to play in development. This includes the least educated and trained, women, farmers and rural populations. Through targeted small and medium enterprise financing, women’s economic empowerment, agricultural initiatives, education and vocational training, the talents of disenfranchised citizens can be mobilised for growth. Inclusiveness is in the national interest.

As Egyptians consider their political options, they should bear in mind that past failures to utilise the country’s resources for development have caused greater damage than instances of corrupt misappropriation of state assets, for which high-profile figures are being prosecuted. Remedies for policy failures will not come from the courts, but from the people.

Egyptians will soon possess a valuable currency — the vote. They should use this to say resoundingly that voluntary economic underachievement is no longer acceptable. Candidates and political parties that seek political office or influence must put forward credible economic and development plans that advance the national interest, rather than their own insular political agendas. There is too much at stake to reward political aspirants for rhetoric, goodwill, or past public service. The vote is not deferred compensation for past good deeds, but an investment in the future.

In the interim period, the duration of which is yet undetermined, the interim civilian government should facilitate a national dialogue about the country’s economic future. Civil society, professional syndicates, labour unions and grassroots activists have a role to play in prioritising national development. Inclusive national dialogue will not happen on Twitter or Facebook alone. Traditional methods of organising are critically needed now.

The spoils of Egypt’s popular uprising will have to be tangible for the countless millions of Egyptians who supported (or did not oppose) change. The act of voting in free and fair elections will be illusory so long as mass queues for government-subsidised bread remain ubiquitous in Egyptian life.

Government passivity, popular complacency, and political insularity will not beget economic growth and development. Egypt needs a national mindset revolution to meaningfully transition.

* The writer is a Washington DC based lawyer who focuses on international and emerging markets investment, including in the Middle East and Africa.

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