The heart of the Arab world is in need of a transplant

What better way to begin a series of articles on Egypt than to start by examining the country’s composition to explore why it’s teetering on the brink of being a failed state.

The descent of Egypt and the region as a whole into what is increasingly looking like the Middle East version of the equally brutal Thirty Years War which gripped Europe between 1618 and 1648 and ended with a totally new system of governance, is seen by some as confirmation of a well-worn Orientalist trope that the region’s cultural – Arab and Islamic — and historical composition does not allow for successful democracy. A few Arab leaders have imbibed such Orientalist prejudice, including Egypt’s former intelligence chief Omar Suleiman, who echoed the mantra by declaring confidently that, “Egypt is not ready for democracy.”

Stereotypes like this become fashionable during times of crises because they provide easy explanations for complex problems and, more crucially, because they conceal the real structural problems confronting Egypt and the region as a whole. Islam and Arab culture are indeed important factors in understanding the composition of the region. However, their combined imprint on the Middle East’s contemporary problems is of far less significance than other less attended to structural weaknesses that have plagued regional regimes following their evolution into “sovereign” and “independent” states.

Hopefully without risking accusations of overstating the case, it is fair to say that modern Egypt was born with crippling deficiencies that gravely impaired its ability to hurdle over the challenges of modern society. It is becoming increasingly clear that countries like Egypt have inherent fundamental flaws that have made them volatile, ungovernable and unsustainable political units; their very composition determined that their long term viability could only be ensured by remaining one of the most “unfree” regions in the world.

With a population of over 82 million, the largest in the Arab world, Egypt has been a major pawn in governing the region described by the US as “a stupendous source of strategic power”; it is known as the “heart of the Arab world”. Cursed with detrimental levels of strategic significance, the country’s power bloc has been locked into a framework of shared interests with foreign powers which do not have the best interests of the vast majority of its people at heart.

Why Egypt is fated to fail and the reason its people are forced to endure apparently never-ending political upheaval and misery is best explained by the dependency theory, a concept born within the science of political economy which was in vogue during the 60s and 70s but is less so now. Economic historians like Andre Gunder Frank advanced the notion that certain countries are locked into dependence and have undergone “development of underdevelopment”, a process that has fostered impoverishment of societies in the developing world and raised obstacles to their future development.

The theory holds that there was more to underdevelopment than the conventional explanation of wrong policies or government corruption. Conventional explanations failed to examine the key underlying cause for the abject cycles of poverty and misrule of developing nations. It maintained that the factors identified superficially as causes were at best contributing factors as to why countries like Egypt were locked in a cycle of misgovernment. It concluded that the development of poor countries was stunted because they were locked into dependency under the existing international system, which was exploitative and characterised by the dominance of some countries over others. These poor countries were integrated from the start into the global economy and incorporated within the political system in a position of dependency uon the rich.

Although the theory has come under fire as a result of “miracle” economies in Asia, which undermine some of its assertions, its relevance in explaining Egypt and the wider region’s structural problems should be appreciated.

An influential paper published in the journal “World Development”, by Adeel Malik, who teaches the political economy of the Middle East at Oxford University, and Bassem Awadallah, a former Jordanian Finance Minister, makes the critical observation that a country like Egypt ought to have experienced much higher levels of prosperity based purely on its geography. It is well-positioned to be a global trade and production hub; it lies at the cross-roads of major sea and trading routes with easy access to Europe, Africa and the near East; and it is sufficiently urbanised, which also has a major correlation with growth and prosperity. “Egypt alone has a strategic location that any other emerging economy will be eager to trade places with,” Malik and his co-author noted.

Furthermore, everywhere else in the world, proximity to coast is associated with lower transport costs and access to global markets. However, despite all the natural advantages, which in theory should have resulted in a much more favourable political economy, Egypt “defies these forces of gravity” and has been pushing against natural forces that ought to have enabled the country to experience far greater economic prosperity as well as political stability.

“Egypt is a far worse scenario than Pakistan,” Malik told me. “It has been dodging the bullet through billions of aid money pouring into the country from the US and the Gulf Countries.” His argument on the political economy of the Arab Spring identifies another crucial feature of the Egyptian state: its “original sin”, the regime’s unearned income, an over-reliance on foreign revenue streams and foreign patronage. The aid-flow that has sustained Egypt for decades undermines deeply the country’s sovereignty and its capacity to steer an independent path to future political and economic viability. Without exception, aid-flow to Egypt is driven largely by geo-political considerations rather than considerations of economic development.

The emergency life support machine sustaining Egypt is the inevitable outcome of decades of damaging and harmful addictions, in particular the toxic effect resulting from the structural imbalance between state and society; between the regime and civil society. This is a “disconnect” that has chronically impaired the country’s ability to pursue the interests of its people. This disjuncture, which began under British rule, has now become an irreversible fissure.

British colonialism rested upon large domestic landowners; 0.4 per cent held 33 per cent of the country’s agricultural land while 44 per cent of the rural population were landless. Prior to World War One, Egyptian state debt was held mainly be Europeans. The country was penetrated by European capital during the 1920s. All of Egypt’s exports, much of its internal commerce, the mortgage of its most valuable assets, land and currency, were all in the hands of Europeans. As a one-crop export economy with 90 per cent of its exports derived from the sale of cotton and cottonseed its sustainability even before independence was dependent precariously on external markets.

Egypt’s independence in 1922 failed to extricate the country from external dependence. This trend continued through its early modern history and by 1937 foreign capital accounted for 47 per cent of the country’s entire wealth.

The depth and influence of foreign penetration was powerful enough to resist Arab nationalism. President Gamal Abdul Nasser’s efforts to win back the country and create a Socialist Arab State failed to remove the yoke of western dominance. He nationalised the Suez Canal and pushed through land reform, redistributing land to around 350,000 families in an attempt to reverse the extreme concentration of land ownership. “Arab nationalist regimes strengthened capitalism by creating a capitalist class within the country which had little to do with socialism,” said Dr Adam Hanieh in his book “Lineage of Revolt”, which explored some of the reasons for the “resilience of authoritarianism”, a prevailing characteristic of the region. The lecturer of development studies at SOAS noted that Arab nationalism was subsumed into the structures of imperial rule through a combination of political, economic and military means.

On the economic front, by the 1960s Egypt became the major recipient of the Kennedy-era Food for Peace Programme which served to dispose of the US surplus and, more crucially, lock Arab governments like Egypt into import dependency. US aid made up 77 per cent of Egyptian wheat imports, which increased to 99 per cent by 1962. With a cheap supply of US wheat being one of the major legitimising forces for Egyptian regimes, it became a powerful political tool.

The Egyptian military’s foreign dependency was sealed when President Anwar Sadat, who also reversed Nasser’s land reform, signed a peace treaty with Israel.

Egypt’s total foreign debt in 1973, the year of the Ramadan (or Yom Kippur) War was $3 billion; by 1979 it had grown to $16 billion when Sadat signed the Camp David peace agreements with Israeli premier Menachem Begin. Servicing these debts alone absorbed more than a third of export earnings. Egypt had adopted a development strategy that required a continuous flow of imported goods and capital. Thus, by the 1980s, Egypt was firmly ensconced in the ranks of the Third World’s most dependent and financially troublesome economies.

The persistence of regimes such as Egypt has confounded expectations that authoritarian governments were merely a transitional phase before democratisation. Under certain conditions, and Egypt is a prime example, authoritarianism can last and even flourish.

Egypt’s revolution and counter-revolution demonstrates the remarkable tendency of elites to endure and use revolutions as a means for greater continuity. This kind of political endurance is neither new nor rare. History is replete with examples where seemingly radical institutional changes have turned out to be moments of transition, rather than moments of transformation. Indeed, neither the abolition of slavery in the United States nor the end of Apartheid in South Africa broke the back of status quo immediately.

For the foreseeable future, the “durable dictatorship” of the Egyptian regime is set to continue with the largesse of the Gulf regimes. For now, a country that’s too big to fail is in grave danger of becoming too heavy a burden to carry. Egypt, the traditional heart of the Arab world, is in need of a transplant.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.