Egypt on the brink (page 4 of 4)

It is slowly gathering energy, and remains the only game in town.

Some reformists are choosing to sit out the current period, waiting for a more auspicious time to mount a challenge. They are resigned to protecting their own interests. Others have enlisted with the NDP conditionally, arguing that they retain the prerogative of walking away if reform turns out to be a charade. Still others believe that Gamal is truly committed to change, and is waiting patiently to advance his agenda.

Party-led change is unlikely to be dramatic, as it will be constrained by all of the constituencies that currently support it. Whether such change will be sufficient to address Egypt's challenges remains to be seen.

Egypt does face daunting challenges, but it has considerable assets at its disposal. The economy remains a key weak point, as it was for much of the last century. Although overall population growth has slowed, the continued flow of new entrants to the job market will test Egypt's ability to create jobs for some time to come. Because of their history, Egyptians have often been ambivalent about foreign Edirect investment, but the general mood in the country seems more welcoming to such investment than it has been for some time.

Another challenge is the management of one of Egypt's key exports: trained Egyptians. Amidst efforts in the Gulf to hire more nationals to alleviate their own unemployment problems, and Western security concerns after September 11th, Egypt will be hard pressed to turn toward more overseas employment as a safety valve for the domestic workforce.

At issue is not just remittances, which bring more than $3 billion annually to the Egyptian economy, but also providing work for hundreds of thousands of Egyptian workers, both skilled and unskilled.

A third challenge is managing a transition in the US aid relationship, which has continued relatively unchanged for a quarter century. Spurred in part by Israel's decision to phase out economic assistance, and in part by a sense that the US-Egyptian aid relationship is serving neither side very well, Washington has been studying revisions for more than a year. The current absence of warmth between Washington and Cairo suggests that the overall level is likely to be cut, but it remains unclear to where remaining funds will flow.

In the face of these challenges, Egypt has many advantages. Chief among them is that it is Egypt, the diplomatic, artistic, intellectual and population capital of the Arab world. Although its preeminence is no longer what it once was, Egypt has long used its position to attract significant assistance from a wide range of outside powers.

Egypt remains sought after - by parties inside and outside the Arab world. There are also some promising economic experiments, from the information technology sector to agriculture to light manufacturing. While far from an entrepreneurial society, there are the beginnings of an entrepreneurial class, and the country is well placed to exploit them.

Egypt has often managed to muddle through. But it has also set the tone for the Arab world, leading it into war and peace, into socialism and into capitalism. On the brink of change, Egypt may again lead the region in a new direction.
But in order to lead, Egyptians themselves must have a better idea where they are going. A bold leader could do much to set an agenda for progress and necessary change. Whether that leader will come, who that leader will be and where that leader will lead - all remain open questions.