The staggering lack of opportunities for young people in Egypt and across the Middle East, especially young entrepreneurs without political connections, is clearly an important motive for the protests The firestorm of events across the Middle East over the past few days can’t be explained by long-term development factors: the link between politics and economic development (or lack thereof) is complex in the extreme. Still, the staggering lack of opportunities for young people, especially young entrepreneurs without political connections, is clearly an important part of the mix. That includes people like Mohamed Bouazizi, the 26-year-old whose self-immolation sparked the protests which brought down Tunisia’s president, and which in turn set off the remarkable events unfolding in Egypt. The Middle East has witnessed an incredible expansion of both youth populations and education over the past 20 years. Fully two thirds of the region’s population is below 24 years old. Tertiary enrollment in Egypt has climbed from 14-28% since 1990, and in Tunisia from 8-34%. Cairo University alone has around 200,000 students. But while educational opportunities abound, jobs do not. Unemployment among 15-24 year olds in the Middle East and north Africa is the highest of any region in the world, averaging more than 25%. In Egypt in 2005 that number was 34%, in Tunisia it was 31%. One big reason is anaemic private sector growth. And behind weak private sector performance is exactly the kind of favouritism that drove Bouazizi to desperation. Before coming to CGD, I worked in the Middle East and north Africa department of the World Bank for a year — not nearly long enough to become any kind of expert, but long enough to meet some. A report by some of my more seasoned colleagues looked at the region’s private sector in some depth. It noted that while Egypt might have been one of the top 10 performers on the bank’s own Doing Business reform measures in recent years and other countries in the region were also rising up the rankings, there was a big gap between de jure reforms and de facto implementation: “Firms in MENA are much older than in other parts of the world… Business managers are also older than elsewhere. Incumbent firms face less competition. Except in south Asia, fewer registered firms per capita are found in MENA… These are all symptoms of a discriminatory business environment that prevents the entry and exit of firms… the networks of privileges and the nexus between politics and business hurt the credibility of governments and reformers in particular. The perception that connections are an important source of competitiveness (some say the most important) discourages many would-be entrepreneurs… The large proportion of entrepreneurs… believe that rules and regulations will not be consistently and predictably applied [and] explains why policy reforms may not have a strong response from investors.” With good private sector jobs mostly limited to the few companies with political connections and government jobs largely the preserve of an older generation, there weren’t many places for young graduates to go but on to the streets. Given that, few in the Middle East or north Africa will have been surprised that frustrations have boiled over – even if the scale and early success of the protests has shaken regional leaders from the Atlantic to the Arabian Sea. Nic van De Walle suggests term limits for heads of state would do the region a power of good. Perhaps the same should apply to the employees and managers of privileged private firms and state-owned enterprises. In his CGD book, Overcoming Stagnation in Aid Dependent Countries, Nic argues that withholding aid can be a powerful lever for change — when countries are aid dependent. But it’s hard for me to see the crisis in the region as mostly a story about aid. Net Official Development Assistance (ODA) amounted to just 4% of central government expenditure in Tunisia in 2008 according to the World Development Indicators. It’s true that in Egypt in 1990, net ODA accounted for 36% of government expenditures. But by 2008, that figure was 3%. That year, ODA and other aid to Egypt was worth only 11% of tourist receipts or 14% of manufactures exports. And while Mubarak received a range of other types of diplomatic and military support from the United States, there are a number of long-lasting dynasties in the region that aren’t on the friends list of any major donor. In Pakistan, like Egypt a big US aid recipient that doesn’t always do what Washington would like, Nancy Birdsall emphasizes that billions of dollars in American aid can’t even guarantee the passage of fairly basic economic reforms — let alone fundamentally change the calculus of a political leader struggling to hold on to power. All of which suggests that what happens next is in the hands of the leaders and people of the region, not the diplomats and foreign officials who are watching from afar. Thanks to Wren Elhai for adding to this blog post. Egypt Middle East guardian.co.uk
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Visualising the US national debt: David McCandless updates Tetris for the recession.
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Barack Obama must accept the Muslim Brotherhood is likely to be part of Egypt’s post-Mubarak government When chaos in Cairo gives way to a resumption of government, the United States will face a crucial test. For three decades American policymakers have vilified the Islamic Republic of Iran. Likewise they have supported the oppression of Islamist parties and leaders by the likes of Zine al-Abidine Ben Ali in Tunisia and Hosni Mubarak in Egypt. They must now bring themselves to accept the reality of an Egypt in which the Muslim Brotherhood plays an important role in government. The spectre of Iran overhangs the Egyptian crisis, the Iran of Ayatollah Khomeini’s bearded visage, frustrated street protests, nuclear ambition and Mahmoud Ahmadinejad’s denunciations of Israel. But this is the wrong Iran. The right comparison is with the Iran of 1979-1980, which saw Cairo-like street demonstrations topple a dictator and endorse a makeshift revolutionary government. And which saw the Carter administration invite the ailing shah and his family to seek refuge over here. No one today is suggesting that President Barack Obama should grant asylum to Mubarak and his family, much less bar a new Egyptian government from recovering assets it may think the ousted leader is absconding with. But imagine the outrage such an invitation would produce on the Egyptian street. The United States does not oppose the aspirations of the Egyptian people, but a single misstep could reverse this perception overnight. For three decades the United States has supported Mubarak, albeit while occasionally tut-tutting his heavy-handed rule. Now Egyptians want to know where America stands. So far, the administration’s pronouncements have lagged behind the unfolding events. The White House is not urging Mubarak to leave even though it is clear to everyone in the world that the Egyptian people want him gone. Washington’s reluctance to embrace a post-Mubarak Egypt reflects gratitude for his past support of American policies in the Middle East. But even more a fear that the Muslim Brotherhood will somehow emerge as the dominant force in a new Egypt. Yet it was precisely America’s decision to cushion the shah’s fall and defy popular demands that he be held responsible for his autocratic rule that led to the debacle of the Iranian hostage crisis . There is no way of knowing how Iranian-American relations would have developed if America’s diplomats had not been held prisoner for 444 days. But that highly dramatised rebuke of American policy was clearly the tipping point in America’s demonisation of the Islamic Republic, and vice versa. And it paved the way for America’s support, first tacit and later overt, for Saddam Hussein’s invasion of Iran . The Obama administration needs to open its mind to the likelihood that the Muslim Brotherhood will be part of Egypt’s post-Mubarak government. The Brotherhood has long formed the primary opposition to Egypt’s dictatorship, and its members permeate Egyptian society from top to bottom. For them not to play a central role now would simply set the stage for continuing uncertainty, renewed oppression and future conflict. In Iran, ignorance of Islamist political forces led the United States to overestimate the secular leadership and overreact to the emergence of a religious leadership. In Egypt, the secular opposition, ill-formed and inexperienced, is being touted as the main hope for a transition to free elections. Yet free elections will certainly confer legitimacy on the Brotherhood and award them a substantial bloc of parliamentary seats. Carter-era policymakers knew little about Khomeini and the forces he represented. Analysts know a good deal more about the Muslim Brotherhood today. They know that it is not a stalking horse for al-Qaida and that it demands a pluralist democratic state rather than an Islamic Republic. The fear remains, however, that an Egyptian government responsive to Brotherhood pressure may turn its back on Egypt’s long-standing collaboration with Israel. This fear is not unrealistic, but the United States cannot afford to condition its acquiescence in a new Egyptian government on pledges of warm relations with Israel and opposition to Palestinian militancy. Israel and the United States will always be friends, but losing Egypt’s friendship would begin the unravelling of a half-century of American policy in the Middle East. Things may unravel nevertheless. The Arab world has been poised for a massive restructuring for decades. But apprehension about future uncertainty affords no basis for trying to sustain a crumbling status quo. The time has come to help Mubarak leave, persuade Egypt’s generals to allow a democratic civilian government to emerge and put our anxiety about the Muslim Brotherhood on hold. Regardless of American ideological preferences and our popular Islamophobia, Islamist political parties are destined to play a significant role in the transition to democracy in the Arab world. They deserve an opportunity to show how they can compete, and possibly govern, in a pluralistic electoral system. Obama should make this clear. • © 2011 Richard Bulliet – distributed by Agence Global Middle East Egypt Hosni Mubarak Islam Religion Richard Bulliet guardian.co.uk
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Military intervenes in attempt to end violence between government loyalists and anti-regime protesters in Cairo The Egyptian army intervened this morning in a belated attempt to end the violence that flared overnight in central Cairo as supporters of President Hosni Mubarak attacked anti-government protesters. A small group of soldiers cleared about 1,000 pro-government loyalists from a flyover in Tahrir Square, where they had been throwing stones at anti-government protesters below. It was not immediately clear if the steps were part of a wider decision for the army to begin protecting the demonstrations. The intervention came as a retired Egyptian army general told the BBC the military was losing patience with the embattled Mubarak, and would open fire at regime loyalists if there were fresh attacks on protesters. The general, who said he had spoken with tank crews in Tahrir Square, said he believed the military would move very soon against the president, possibly as soon as tomorrow. The moves came after a dramatic night of fighting on streets and rooftops around Tahrir Square and the Egyptian museum. Pro-democracy protesters succeeded in holding Tahrir, their main rallying point throughout the 10-day uprising, but about 1,000 pro-Mubarak militants continued to mass on the flyover. At about 9.50am local time, however, a group of soldiers appeared on the bridge, and cleared the pro-Mubarak crowd. One warning shot was fired, but most of the loyalists left after speaking with the soldiers. An army tank was parked where the crowd had been and four other tanks took up position between the pro-Mubarak forces and the largest group of anti-government demonstrators at the north end of the square near the Egyptian museum. Even though the two sides had been separated, crowds of Mubarak supporters – some carrying bricks – were still trying to reach the square. Local news channels reported that four had been killed in last night’s clashes, but doctors on the ground told the Guardian the death toll was higher. Witnesses who spent the night in Tahrir said there were major shooting incidents at 11pm and 4am, the latter involving a sniper equipped with a laser sight. Seven protesters were reported to be confirmed dead at a nearby makeshift medical centre, with three other bodies unrecovered. “We had over 1,000 injured through the night, including several dead from gunshots,” said Dr Ibrahim Fata, a professor of surgery and one of more than 70 doctors who have volunteered to help treat those injured at the square. “It’s like a war situation in here; some of the pro-change resistance did not bring their wounded to us because they didn’t want to leave their positions. I haven’t slept in the last day and a half.” As Fata was speaking the Guardian witnessed a man with a broken spine being brought in on a corrugated iron stretcher, while others walked around in bandages. Some protesters had taped cardboard boxes to their heads to serve as crude helmets. The shootings came after protesters seeking an end to Mubarak’s three-decade dictatorship were attacked yesterday by supporters of the Egyptian leader, many of whom were carrying police identification. Molotov cocktails were thrown from buildings and several fires burned through the night. This morning some sections of the road were so littered with debris and ripped up by those seeking rocks to throw that they are now impassable. But organisation among the pro-change forces remains strong, with groups cooking breakfast over fires and handing out food to the crowds. “Where have you been, this government is killing us,” appealed Wael Abdel Aziz, a pharmacist camped out in Tahrir. A second man, who would give his name only as Osama, added: “Mubarak decided to kill the Egyptian people. He is treating us like insects, trying to crush us.” Egypt Protest Middle East Peter Beaumont Jack Shenker guardian.co.uk
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Dramatic violence erupts in central Cairo, as more pressure mounts on the Egyptian president to leave office immediately – even though he says he wont run for re-election. Away from the demonstrations, there is worrying political uncertainty. Mubarak says he will stand down, but how will the transition of power be managed – and what role will Egypt’s military play in shaping the country’s future? What are the political options open to Mubarak?
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Optimists can’t endorse free elections in Arab world – as everyone should – without acknowledging the risk that accompanies a free expression of views Buried away inside today’s Guardian there’s a touching insight into the impact of the WikiLeaks cables on countries such as Tunisia and Egypt , the giant of the Arab world whose fate now hangs in the balance. The article suggests that when I fretted at the time about the asymmetry of the leaked diplomatic cables, the fact that we were all reading US material but not equivalent data from far shadier states, I got it back to front by concentrating on producers, not consumers. In their new book on the WikiLeaks affair, one of a flood heading our way, my colleagues David Leigh and Luke Harding note the varied response to the pre-Christmas publication in the Guardian, New York Times and other mainstream media then dealing with Julian Assange. On the kneejerk left some people felt the cables failed to reveal enough misconduct by US diplomats and therefore must have been censored. On the American right, populist politicians such as Sarah Palin denounced the leaks in extravagant terms as a major crime, virtually inciting Assange’s assassination in some cases. My own response was closer to what Leigh and Harding dismiss as the “metropolitan yawn from bien pensants who felt they knew it all”. Fair enough, we did feel that and that most people who read broadsheets newspapers or listen to Radio 4 must have thought leaks a bit over-hyped. That’s modern media for you. Where we were wrong, suggests today’s extract from WikiLeaks: Inside Julian Assange’s War on Secrecy (I’ve not yet paid my £9.99 or £6.99 for an online Guardian bargain), is in underestimating “the hunger for the cables in countries that didn’t have fully functioning democracies or the sort of free expression enjoyed in London, Paris or New York”. In consequence the Guardian’s leaks team took a flood of calls from editors and journalists around the world asking what the 300m-word cache said about their own country; not easy for colleagues sifting a mountain of cables in friendly competition with a vastly better staffed parallel trawl by the New York Times – I’m told that our lot emerged creditably. We still can’t draw solid conclusions about this kind of data journalism – trawling the internet for stuff – is going to affect the wider world long-term any more than we can confidently evaluate the convulsions now shaking the Arab world. Will the long-suffering people of these countries, rotting victims of a decaying Ottoman empire for centuries before the western European imperialists moved into the region in the 19th century, emerge with better, more accountable governments? Or slide into new autocracies like the cruel and increasingly incompetent theocracy in Iran? I suppose I should add Iraq too at this point for fairness, though that outcome too is uncertain. Since it’s always best to try and be optimistic, we may one day look back on the past decade – especially the events now unfolding – as the one when Islam in the Arab world (the two are politically and socially inseparable) finally embraced the modern world as more successful Muslim states such as Indonesia and Malaysia have now done. I don’t share Simon Jenkins’s well-defined pessimism, that all this is none of our business and that – from Kosovo to Kabul — the west (east too) does more harm than good by our interventions. Great powers have great responsibilities, as China is discovering and Britain (America’s “deputy sheriff”, as a senior British official put it this week) knows because it used to be a great power. We do good, we do bad, but either way we have interests. In the Middle East they are acute because the region still holds two-thirds of the world’s proven oil reserves (half the gas) which makes our faltering economies function and help China’s and India’s race ahead. Thus three of the past five global recessions have followed a geopolitical shock in the Middle East and even the bankers’ crash of 2007-9 became serious only in late 2008 after Lehman Brothers crashed but also after oil prices doubled to $148 dollars a barrel in a year. With characteristic calm, today’s Daily Mail predicts a £90 petrol tank for Mondeo Man in 2011. Oil is one just one factor. Immigration across the Med, crime, religious fanaticism (much of it funded by oil-rich Saudi Arabia) Iran’s nuclear ambitions, footloose capital from oil-sodden Gulf States which help – or hurt – our economies, the list is a long one. Watching Cairo’s crowds on TV you can be forgiven for being both cheered and fearful. Yesterday the pro-Mubarak goons were out on the street, menacing anti-government protesters. We should not be surprised by that, it’s part of the familiar pattern. I’ve seen it at first hand myself in Asia and Latin America. It does not mean that the regime will survive, only that it is fighting to rescue what it can for the Chinese-style military-industrial-political complex which enjoys most of Egypt’s growing economic wealth. The ace in its hand is stability and security – few people want chaos and disorder to engulf their country. Which of us would? The Egyptian army – backbone of the state – is the key. Such a law and order agenda can be manipulated and probably is, both in Egypt and in other Arab countries facing unrest like Jordan – and those still held down. The outcome in Tunisia, where WikiLeaks helped focus a simmering resentment (as the US ambassador noted in his cables), is far from clear. Leigh and Harding note that some Tunisians gave America brownie points for candour about the old regime — conspicuously absent from analysis by France, the ex-colonial power. No surprise there then! But the White House has to decide when it has to jump ship to maintain stability – it has now abandoned Hosni Mubarak – which is too expedient to ever look attractive. But optimists can’t endorse free elections – as everyone should — without acknowledging the risk that accompanies a free expression of views. Egypt’s Islamist Muslim Brotherhood seems to be accepted as a major player in society. Does that mean that Egyptians would vote for them – or treat them as most British Catholics treat their own theological leaders, to be listened to but not governed by? Listening to some evasive answers by a Muslim Brotherhood spokesman on Radio 4′s Today a few minutes ago I was not encouraged about his views on a religious council adjudicating on the laws of the state, the Shia Iranian model. We’re not against Israel, we are against injustice, he also said, which sounds better. But did I hear him say “if a lady like Margaret Thatcher ruled over Egypt we would support her”? I did. Steady on there, chaps. But that’s the thing about free elections, people get to elect who they want. Maggie or — dare I say it — even the Muslim Brotherhood. WikiLeaks The US embassy cables United States US foreign policy US national security Egypt Middle East Tunisia Michael White guardian.co.uk
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Violent clashes between forces loyal to the Egyptian president and anti-Mubarak demonstrators continued in Cairo’s Tahrir Square overnight and in to this morning, after a day of bloodshed yesterday
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Tui has cancelled all holiday bookings for Egypt from Germany, France, Belgium, the Netherlands and Scandinavia, but is still running holidays booked in the UK for the Red Sea resorts ‘in line with government advice’ Tui Travel, Europe’s biggest travel company, has warned that the unrest in Egypt and Tunisia will cost it up to £30m as customers cancel or reschedule holidays. As the clashes in Egypt turned increasingly violent , Tui said this morning that the current “economic and geopolitical uncertainty” casts a shadow over its outlook for 2011. “Early indications are that customers are choosing to rebook to alternative destinations and we are taking action to remix our programmes in line with customer demand,” said the company, which runs Thomson Holidays and First Choice. “The Egypt and Tunisia situation could impact the second-quarter result by £25m to £30m.” Tui has cancelled all holiday bookings for Egypt from Germany, France, Belgium, the Netherlands and Scandinavia, but is still running holidays booked in the UK for the Red Sea resorts “in line with government advice”. This means that, at present, UK customers would not get a refund if they cancelled their trip. “If we are not able to operate any further holidays to Egypt for the rest of the winter from any source market except for the UK, we estimate the second-quarter impact will be approximately £20m. If UK government advice changes and we can no longer operate from that source market we would expect the impact to increase by approximately £5m,” Tui said. It has incurred further costs of £5m in Tunisia to repatriate customers and from the cancellation of holidays. The comments came as the travel company reported a smaller underlying operating loss of £84m in the quarter to December (its first quarter), compared with £107m a year earlier. The Middle East turmoil is the fourth blow to Tui in the last year. The eruption of the Eyjafjallajökull volcano left around 100,000 customers stranded last spring, and bookings late last year were hit by the poor wintry weather. The company has also discovered a £117m black hole in its accounts . “The short-term impact from the events in North Africa is overshadowing the underlying strategic progress that is being made at Tui Travel,” said Nick Batram at Peel Hunt. “The impact on underlying earnings is uncertain at this stage and will depend on the margin delta on re-bookings. Our underlying profit forecast for 2011 is therefore under review.” Tui Travel Travel & leisure Egypt Middle East Tunisia Julia Kollewe guardian.co.uk
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