Monday, July 15, 2013

Managing the Chaos in Egypt and Syria

From the beginning of the Arab Spring I have relied on David Goldman to provide background analysis. Had we not been reading his columns we might have been fooled into thinking that it was all a struggle between political freedom and tyranny.

Or we might have imagined that it would all be solved if the Israelis and the Palestinians signed a peace treaty.

Goldman has kept us grounded in the economic basis for the rebellion in Egypt and the ongoing civil war in Syria.

Writing in the Wall Street Journal, he is anything but optimistic:

Half a century of socialist mismanagement has left the two Arab states unable to meet the basic needs of their people, with economies so damaged that they may be past the point of recovery in our lifetimes.

On Egypt, he writes:

Of Egypt's 90 million people, 70% live on the land. Yet the country produces barely half of Egyptians' total caloric consumption. The poorer half of the population survives on subsidized food imports that stretch a budget deficit close to a sixth of the country's GDP, about double the ratio in Greece. With the global rise in food prices, Egypt's trade deficit careened out of control to $25 billion in 2010, up from $10 billion in 2006, well before the overthrow of President Hosni Mubarak.

The future does not look very bright either:

Egyptians are ill-prepared for the modern world economy. Forty-five percent are illiterate. Nearly all married Egyptian women suffer genital mutilation. One-third of marriages are between cousins, a hallmark of tribal society. Only half of the 51 million Egyptians between the ages of 15 and 64 are counted in the government's measure of the labor force. If Egypt counted its people the way the U.S. does, its unemployment rate would be well over 40% instead of the official 13% rate. Nearly one-third of college-age Egyptians register for university but only half graduate, and few who do are qualified for employment in the 21st century.

That is the tragic outcome of 60 years of economic policies designed for political control rather than productivity.

Similarly, Goldman explains, economic mismanagement laid the groundwork for the current civil war in Syria:

In Syria, the government's incompetent water management—exacerbated by drought beginning in 2006—ruined millions of farmers before the May 2011 rebellion. The collapse of Syrian agriculture didn't create the country's ethnic and religious fault lines, but it did leave millions landless, many of them available and ready to fight.

In particular:

Since 1988, Bashar Assad's regime misdirected Syria's scarce water resources toward wheat and cotton irrigation in pursuit of socialist self-sufficiency. It didn't pan out—and when drought hit seven years ago, the country began to run out of water. Illegal wells have depleted the underground water table. Three million Syrian farmers (out of a total 20 million population) were pauperized, and hundreds of thousands left their farms for tent camps on the outskirts of Syrian cities.

Unfortunately, Goldman does not see an easy or quick way out for either nation. What then can America do? Very little, but not nothing:

It may not be within America's power to reverse their free falls; the best scenario for the U.S. is to manage the chaos as best it can.

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