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Thread: Egypt's Spring Revolution (2011-2013)

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    Council Member Dayuhan's Avatar
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    Default We should all try to be nice, really...

    But this:

    Quote Originally Posted by Fuchs View Post
    a)
    GDP growth was way bigger than population growth.
    That's a real world fact and easily accessible.

    http://en.wikipedia.org/wiki/Economy...ypt#Reform_era : Economic growth p.a. about 5%
    http://en.wikipedia.org/wiki/Demogra...on_growth_rate : Population growth p.a. about 2%
    has little bearing on the matter under discussion. Higher GDP does not necessarily translate into higher disposable income for the average Egyptian or higher capacity to buy food. It also doesn't necessarily translate into higher government revenues and thus higher capacity to subsidize wheat imports.

    What we do see beyond doubt is that while Egypt's wheat imports fluctuate, the trend is steadily up, and while the world wheat prices fluctuate, the trend is also steadily up. That means the slice of Egypt's government revenue devoted to subsidized wheat imports has steadily increased (of course you realize that total trade deficit and government budget deficit are very different things). That means either pulling money from other parts of the budget or increasing government revenue or going deeper into debt, all of which pose difficulties of their own. Regardless of GDP and population, it's fairly clear that the cost of subsidized wheat imports to the Egyptian government had reached a level that made it impossible to avoid passing the increase on to consumers.

    Quote Originally Posted by Fuchs View Post
    A thirty-year one-man dictatorship was overdue. We need no facebook, wheat imports or other fashionable (Malthus is apparently never out of fashion!) explanations for Mubarak's demise.
    Undoubtedly true, but these events do have triggers, and economic events can be triggers.

    Egypt's inflation rates have been very high, well outstripping average personal income: almost 12% in 2010, over 18% in 2009. That's 30% in 2 years, and that tends to piss people off. Unemployment remains high, and overall population growth is less an issue than a large demographic bulge of young people entering the job market at a time when jobs are scarce.

    Throw a steep sudden increase in staple food prices in on top of that and you turn incipient trouble into actual trouble.

    In any event my previous comment was less on the role of food prices in sparking the uprising than on the potential impact of food prices on transition frustration. The people will want the government to make prices drop. Of course government's capacity to do this is limited, but that's not widely understood. This needs to be considered by economic policymakers and the multilateral bodies that set conditions for the loans and other assistance that a transition government will need. Subsidy structures will need to be dismantled, but trying to eliminate them all at once is likely to have a devastating political impact on what will already be a shaky government.
    Last edited by Dayuhan; 02-15-2011 at 12:25 AM.

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