Monday 23 Jul 2018 | 04:26 | SYDNEY
Monday 23 Jul 2018 | 04:26 | SYDNEY

Egypt: What do the neighbours think?


Rodger Shanahan


4 February 2011 14:14

The closer you are to events, the less principled and more pragmatic you become. 

Hence, while Western governments advocate for the departure of President Mubarak, views from the region are somewhat different, even if the likelihood of the Tunisian contagion spreading beyond Egypt is limited (an argument well summarised by Foreign Policy's Marc Lynch, although he does equivocate later in the piece). 

For outsiders, the Egyptian protests are all about regime removal and the desire for political freedom. This is true, to an extent, but the protests are also about economic issues. Many Arab states have long operated on the unwritten social contract of exchanging limited (or no) political freedom for state economic protection, be it through food and energy subsidies, employment in bloated state-owned enterprises or bureaucracies, and pensions. 

But burgeoning populations, moves towards economic privatisation and the reduction of state subsidies mean that the Arab state finds it increasingly difficult to uphold its part of the social contract. Hence the people's unwillingness to countenance political business-as-usual. (The Gulf states are largely immune from this because oil and gas revenues allow governments to provide a cozy little existence for their relatively small populations, although Saudi Arabia is acutely aware of its youth bulge.)

Egypt, for example, was spending 8% of its GDP on subsidies (or close to 25% of its budget). Economic necessity meant that steps needed to be taken to reduce it. But Mubarak failed to understand the political ramifications of doing so in the post-Tunisia climate; reversing the decision was too little, too late.

Both Syria and Jordan have burgeoning populations and an active program of reducing state subsidies, but they have been quick to heed the warning from Cairo. In this interview, President Assad said that '(i)f you didn't see the need of reform before what happened in Egypt and Tunisia, it's too late to do any reform'. Self serving, for sure, particularly when short-term economic salves such as heating oil subsidy rises and electricity price freezes were announced post-Tunisia. But it's also an acknowledgment that the Syrian Government needed to pay more attention to its part of the social contract. Jordan raised the wages of civil servants and ordered more subsidies to quell increasing protests at the Government's failure to address the needs of the poor.

Yemen is the other Arab state offered up as a victim of the Egyptian contagion, and while President Salih advised that he would not seek re-election in 2013, nor would he seek to place his son in the position, there is a degree of cynicism about whether he will follow through with this pledge. And while his country is an economic basket case, with the security problems Yemen faces, both Saudi Arabia and the US see little alternative to the long-term strongman. Salih has also instituted a cash-for-loyalty program, halving income tax rates (for those who actually pay any tax) and raising the wages of civil servants and the military. 

As long as Salih retains the support of the key tribes and the security forces, he is likely to survive. Even now, there are indications he has countered growing anti-government demonstrations with his own supporters.

The non-Gulf states seem to be trying to buy their way out of political trouble in the wake of the Egyptian crisis. And while the Levantine countries try to chart a steady course by reinforcing their half of the social contract, it remains to be seen whether their populations will be sated so readily. I think they will, although the economic unsustainability of this approach means that the larger problems regarding the traditional Arab social contract will only be delayed.

As for Yemen, normal political considerations do not really apply, so while all seems terminal for Salih's long-term political health, he remains one of the region's great survivors.

Photo by Flickr user zen.