As you will know if you’ve been watching the news recently, Egypt has hit a crisis point. Protestors are in the streets, calling for the government to step down. Hosni Mubarak has been president of the country for 30 years, and refusing to see himself as the problem, he has sacked his government and promised to appoint a new one this week. But Egypt’s problems run far deeper than a single politician with a stranglehold on democracy.
In the last 20 years, Egypt has been hailed as a something of an economic marvel. It has liberalized and opened its markets, privatized, reduced subsidies, and cut the rate of business tax, to generous applause from the IMF. Its faith in the neoliberal agenda appeared to be rewarded, with huge amounts of foreign investment and economic growth running at 7% a year.
As is often the case with GDP however, those growth figures disguised the real issues. The economy may have been growing, but it was making no difference to the lives of ordinary Egyptians. The minimum wage remained unchanged at £4 a month, and millionaires paid the same rate of tax as those at the bottom. The number of Egyptians living in poverty actually grew, 20% of the population were living on less than $2 a day when the reforms began, and it is now 44%. In 2009 a government report admitted that 9 out of 10 Egyptians had gained nothing from all that growth.
Even last year, Middle East magazine ran a feature on ‘Egypt’s economic success story’, but it proves how irrelevant GDP can be if inequality rises at the same time as economic growth. Is it really any wonder that the country is currently in uproar?