Last night I was at a house party in Cairo. I believe the way house parties have changed after the revolution deserves a fully fledged ethnographic study. Suffice to say that the usual trite ice-breakers now feature a new acquaintance’s in-depth analysis of the scenarios for the military rule and/or the possible implication of this and that on the future of Egypt. Well, maybe it’s better than the usual ‘ohwhatdoyoudohere, howlonghaveyoubeenherefor, wheredoyoulive and sodoyouspeakarabic conversation combo.

Anyways, I am digressing. Since everyone is onto this revolution bandwagon I thought, what about me??! For sure I must have some half-arsed ideas I can share with the rest of humanity on this.

So here’s the thought process. I have no idea what is going to happen to the constitution, the military rule or the incumbent minister of water and irrigation. What I am really curious about is whether this revolution will eventually end up into decent-paying jobs, not having to struggle with double-digit inflation, not having to pay for private care because public hospitals are in shambles and why not, having the luxury of attending a protest where protesters are not out-numbered by police and/or harassed by misogynist fuckers.

A lot could be said about the dismal performance of the Egyptian economy. Let’s start with income inequality. According to the CIA factbook Egypt page, the poorest 10 % of Egyptian families hold 4% of the total income of the country, versus the top 10% who holds 28%. Of course there are worse cases.  In the US, the 10% of poorest families hold 2% of the total income, while the highest 10% hold 30%. What is interesting is to look at trends in the past 30 years. Data from the World Bank shows that in the past 30 years, despite economic progress on paper, the situation has not changed. If anything, the situation has marginally in terms of the wealthier becoming slightly more wealthy.

Data also show another interesting pattern. If you look at the evolution of per capita income measured in dollar terms and in purchasing power parity (PPP or how much food 1 dollar buys in Egypt vs US, for a quick intro to how national income is measured, check out this wiki entry) you will notice two things. The per capita income in dollar (nominal) terms has increased by 70% in the past 4 years. That’s good news. It means that if someone made 100 USD per month in 2005, now they make on average 170 USD per month. But if you look at the purchasing power of the money (the orange line), you will find that the 2005 wage will only buy 30% more goods and services in 2009 than it did in 2005.

Where did that 40% go? Well, inflation, exchange rate, many things, most of them too boring to be discussed even here. So what does that mean? In absolute terms it means the wonder of pro-business economic policy  heralded by the (now ousted ?) Gamal-clan did not fully  translate into a better life for people (my parents would love to know that my university tuition has given me the same knowledge that I would have gained in a 30 mins cab ride in Cairo). And in relative terms, the average Egyptian may look at people who are better off than him or herself and think, well things have not changed in the past 30 years.

So I thought well, what could happen in the future? In simple terms, there are four scenarios depending on whether there will be economic growth in Egypt and whether this growth will be equally redistributed. Because I have nothing else better to do in my spare time, I made a pretty picture

Well let’s start from sci-fi. A case in which there is economic stagnation and pro-poor growth (i.e. more redistribution). I don’t think this has ever happened in the history of humanity.

Then there is the old scenario of economic growth but widening inequality. Well, that would allow real estate investors to make sure that the density of golf courts per person in Qattameya will reach adequate levels.

Then there is the nightmare scenario, little growth and more inequality. That would be a case in which a nation succumbs to oligarchy that sucks all of its resources away or civil war type scenario. Or also, simple mismanagement. Or Italy.

And finally there’s the happy scenario. One in which Egypt grows and everyone gets a bigger share of a bigger pie. So well, how do you achieve this? Well, here is how Brazil did it: political accountability and political commitment (interestingly, it also took them two years to draft a new constitution after military rule ended).

On the chance of this happening any time soon, well you may want to read this piece on Al Masry Al Youm: The Economic Revolution is Yet to Happen.

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