Egypt on the brink (page 1 of 4)

A half-century ago, economists were abuzz about the need for "balanced development" in poor societies.

Wealthy economies enjoyed development over a broad and complementary range of activities, while poor countries were characterized by imbalance, as some sectors were relatively advanced while others were practically medieval.
Then along came an economist named Harvey Leibenstein, who argued that poor countries suffered from too much equilibrium rather than too little.

Competing forces were so well balanced, nothing happened. In such an environment, equilibrium was not liberating, it was sclerotic. It had the effect of quashing initiative, burying new ideas in bureaucracy and obstruction, and preserving the status quo. The casualties were innovation, entrepreneurship and progress.

After a half-decade of serious and sustained Islamist challenges, Egypt regained its equilibrium in the late 1990s. But welcome as that equilibrium was to many Egyptians after the uncertainty of the early part of the decade, it was also unsettling.

Among many Egyptians, there has been a growing sense that the status quo cannot hold, combined with deep uncertainty over how it might change. After so many years of staving off change for fear it would be disruptive, those both inside and outside the Egyptian government are increasingly united on the need for change, but increasingly unsure how it might be best pursued.

Adding to the uncertainty is a growing consensus that the longest-serving leader in Egypt's modern history, President Hosni Mubarak, is nearing the end of his rule. Thrust into office after the assassination of President Anwar Sadat in 1981, Mubarak has proven a far more skillful player in Egyptian politics than his many doubters predicted. But Mubarak is aging, and equally importantly, so is his entourage.

Virtually the entire senior Egyptian leadership would likely leave if Mubarak left office, making room for a fresh and energetic, but in many ways untested, new generation. Growing uncertainty over the political ambitions of Mubarak's son, Gamal, have had a chilling effect on the political ambitions of potential challengers.

Still, the succession issue is far from resolved, and whether the president, his key supporters or the military will swing strongly behind Gamal's putative candidacy remains an open question. At this point, they have not.

That a new generation will come to the fore is accepted wisdom in Egypt. When they will do so, who they will be and what they will do, remain open questions. Egypt remains in a state of equilibrium, but one that Egyptians are increasingly convinced will not hold for much longer.

It was not always so. As the world approached the Gulf War of 1990-91, there were signs that Egypt was stirring. President Mubarak was a prominent and vital supporter of the allied response to Iraq's invasion of Kuwait, and at the same time a strong voice counseling patience and consultation. In so doing, Mubarak enhanced his position as a leader of the Arab world, since Egypt's participation was a key signal that Arab support for allied action extended beyond the Gulf states.

Mubarak's actions also reaped significant rewards for Egypt, not least among them the cancellation of more than $6 billion in military debt. In the immediate aftermath of the war, the debt relief gave the Egyptian economy a shot in the arm, as did significant but conditional aid from the International Monetary Fund (IMF) and the World Bank.

The external prodding led to broad proclamations about the impending privatization of the Egyptian econonomy, including more than 312 government-owned firms.