Egypt: One Year On

One Year On: Are Egyptians better off?

Stephen Beard Jan 26, 2012

Kai Ryssdal: The old phrase “freedom doesn’t come free” has been playing out in Egypt pretty clearly over the past year. Since Hosni Mubarak was deposed, there have been parliamentary elections. But the Egyptian economy seems to be stuck.

Marketplace’s Stephen Beard is in Cairo for our series One Year On, about Egypt’s post-revolutionary economy. Hello Stephen.

Stephen Beard: Hello Kai.

Ryssdal: So let’s test the premise here — one year on, are Egyptians better off economically?

Beard: Many are not better off. Because of the continuing unrest and uncertainty, tourism and foreign investment here have fallen off a cliff. Twenty percent of the people depend on the tourist trade, so many are suffering. Many of the cab drivers I’ve spoken to in this city say their earnings are down by a half. But there is one small group of wily entrepreneurs that have been doing very nicely out of the crisis.

Man yelling in Egyptian

Yes, the street vendors of Tahrir Square. That guy was selling a small sweet called freska, but they sell everything that protesters might need, including, during the recent unrest, cheap Chinese gas masks to protect against tear gas.

Ryssdal: Now is that Tahrir Square I hear behind you there, Stephen?

Beard: It is indeed.

Ryssdal: Wow. What about — mini-vendors aside — what about the rest of the economy, the bigger picture?

Beard: Things are bad. Things are worse than under Mubarak. I mean, growth has slowed to only about 1 percent compared with around 5 percent under the last year of the Mubarak regime. He was achieving sort of 6 or 7 percent annual growth rates. But Ahmed Galal of the Economic Research Forum says those growth rates are misleading.

Ahmed Galal: The Egyptian economy was being sold to a lot of people are a tiger on the Nile, because economic growth was relatively high, but the trouble was, most of the benefits were going to a few.

That, of course, was one of the reasons for the revolution: poverty. Forty percent of the people in this country live on around $2 a day.

Ryssdal: So a year on, though, Stephen, a year after this revolution, what are the prospects? I mean, what could go right and what could go wrong?

Beard: Well the biggest threat is probably the Islamists. They won 70 percent of the parliamentary seats in the recent election, and that has raised, at least for some people, a specter of the country sort of lurching back into some sort of fundamentalist backwater with a government hostile to business.

But a leading Egyptian businessman, Tarek Tawfik, says he doesn’t believe it. He doesn’t think that Egypt will turn into another Iran.

Tarek Tawfik: Iran has an oil pump. The regime can finance his way or buy his way out. All the resources of Egypt are integrated in the global economy. Egypt cannot afford to go at odds with the world.

He says, sir, the country can’t isolate itself — it cannot, for example, ban alcohol or ban bikinis on the beach, because it depends so heavily on tourism.

Ryssdal: Marketplace’s Stephen Beard in Cairo, in Tahrir Square, just overlooking it in his hotel room, as you can hear. Stephen, thanks a lot.

Beard: OK Kai.

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