Political Economy of the Africa and Middle East

By : Rosalina Sariowan 04320090036 International Relations Universitas Pelita Harapan

Analysis on Causes and Effects of Political and Economical Conflict in Egypt

I. Research Questions
World Banks report in 2010 outlined that in current decades, Egypt has obviously developed. The improvement can be observed from infrastructure enhancement in a few primary aspects, including transportation, telecommunication, power plants, water and sanitation. Centralized economy was inherited from President Gamal Abdel Nasser. It is beyond obvious, in the last 30 years, the government has managed to reform its economic policies. Regardless these vivid evident about the progression Egypt has achieved, the society still does not put more faith in the governance under Hosni Mubarak. In fact, the approval rate of Mubarak fell down. From this paper, the writer tries to find the deviation that happened. There are several research question, from general into more specific that will be hopefully answered : a. Does a leaders life background (Mubarak) affect the performance and decision making of him? b. Is dictatorship system always bad? c. How does the correlation between freedom status of society and other economical variables affect Egyptian governments approval rating? How do they affect the end of Mubarak regime? d. How are the current political and economical conditions in Egypt after majority-Arabicspeaking countries uprising, particularly by highlighting Egypt? The writer considers that it is crucial to comprehend the pattern of heated up Arab Spring issue. First thing first is to analyze the background of Mubarak who had been rejected by his civilians. The nature of his decision making and transformation he had brought are crucial. Then, we need to provide some statistical, journal or news report as empirical basic of this paper. After that, we should observe the current states of conflict in Egypt as the effect of the revolution protest. Political, economical as well as other aspects within conflicting country are important to be noticed to foresee and give some suggestion towards this issue. Generally, by at least knowing its pattern, we may find the background and possible future of specifically Egypt. More important thing to answer the questions above is that we may draw a conclusion about the broader issue, which is the cause Arab Spring. The revolution that has been taking places around Arab becomes international communitys concerns due to casualties and cost it has consumed. It is kind of domino effect because started from December 2010, the demonstration deployed from Tunisia, to Egypt, Libya, Yamen and many other areas around Arab.

II. Discussion and Literature Review

The writer will use some variables such as Gross Domestic Products (GDP) based on PPP (Purchasing Power Parity)1, Human Development Index (HDI) , freedom houses rate2, GINI3 which eventually lead into how their correlations with approval rating4 for the presidency under Mubarak. Later, the writer will include inflation rate, HDI comparison and freedom of press progress. Freedom PR 5 4 5 6 6 6 6 6 CL 5 4 4 6 5 5 5 5 Status PF PF PF NF NF NF NF NF GDP per capita PPP ($) 1.146,7 1.817,8 2.336,1 2.848,3 3.670,8 4.490,6 6.280,8 6.300* Approval Rating 10 10 10 10 10 5 5 1

Periode 1980 1985 1990 1995 2000 2005 2010 2011

HDI 0,406 0.461 0,497 0,539 0,585 0,611 0,644 0,630

GINI 32 30 34,4 32,1 -

Description :

- For Freedom Table, it is summarized by Freedom House, in the World Survey. The report is concluded annually. -PR : Political Rights, CL : Civil Liberties, Status means Freedom Status of the country. - F, PF, and NF, are the acronym of Free, Partly Free, dan Not Free. - Political Rights and Civil Liberties id measured from one to seven. One refers to the highest freedom while seven refers to the lowest. - Until 2003, the average scale of countries for their Political Rights and Civil Liberties which go between 1,0 and 2,5 are categorized as "Free" ; 3,0 and 5,5 as "Partly Free" and 5,5 and 7,0 as "Not Free.

http://www.indexmundi.com/facts/indicators/NY.GDP.PCAP.PP.CD/compare?country=eg ; GDP per capita based on purchasing power parity (PPP). PPP GDP is gross domestic product converted to international dollars using purchasing power parity rates. An international dollar has the same purchasing power over GDP as the U.S. dollar has in the United States. GDP at purchaser's prices is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources. Data are in current international dollars.
2 3

http://www.freedomhouse.org/template.cfm?page=1 http://www.indexmundi.com/facts/indicators/SI.POV.GINI/compare?country=eg 4 Approval ratings of a military dictator are subject to question given what can and usually does happen to those who disagree.

- World HDI in 2011 was 0,682, Egypt is categorized as Medium Human Development, but it placed the lowest position among all Arab League countries. - * is the sign of estimation and is the sign of unavailable data. - GINI index measures how the distribution of income (for some cases, it is the same as consumption expenditure) for both individual and household. GINI index, therefore, gives scale from 0 which refers to perfect equivalent, while 100 refers to perfect inequivalent. - the writer collects the data by herself to find the approval rating (the rate of one means the lowest to ten) of Egypt governance under Mubarak from 1980-2011

The following is the comparison of Human Development Index (HDI) among Egypt, Arab, World, and Medium Human Development;

The following is the key varible that is stated by mass media as one of the important reasons why Egypt society does not want to be governed by Mubarak, which is its inflation rate.5

http://www.indexmundi.com/g/g.aspx?c=eg&v=71

Inflation rate that was documented on October 2011 in Egypt showed 7,5%6. The summary of the very first table is that (a) freedom status is in proportion to government approval rating ( . To be oversimplified, when the society feels they start having

inconvenience to be active, there is a tendency to change the current existing system. According to the writer, it is much influenced by external factors such as news from mass media, political and economical globalization, as well as enlargement of knowledge. (b) the writer roughly finds that GDP per capita PPP, HDI and GINI in Egypt are equally increased, but they are not in proportion to the approval rate ( . This is the point that may answer one of the research questions that

dictatorship is not always bad. In the other hand, lack of transparency and human rights violation kept on happening, but the reconstruction and development are going on well even though they are not equally distributed. Then the writer wants to bring up another variable that is based on data from Reporters Without Borders, the Egyptian media ranks 133 of 168 in the case of freedom of the press, where it shows increased 10 points compared to 2005. Mubaraks fall then, to some extent, was affected by the rise of news media. Freedom of the press is one of the benchmarks of transparency of government is also true in the era of globalization because the media plays an important role, one of them in terms of imaging.
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http://www.tradingeconomics.com/egypt/inflation-cpi

It is hard for analyst, including the writer, to get approval rating about the presidency of Mubarak since the government system was military junta. Therefore, the writer put scale 10 when the society accepted Mubarak, then started to put 5 when the society started to held protest, until on 2011 it scored 1 because it is obvious that society urged Mubarak to step down from his position. On the protest at final year of Mubaraks leadership, a few communication access such as Twiiter and Facebook were blocked7 as so was the Vodafones performance8. However compares to previous years, the mass media access has currently been more transparent. Observing back to the data above, increased on GDP is well-done but GDP is not the only one standardization of measurement to see the welfare of society. In fact, inflation rate kept on jumping up. Inflation rate itself it much influenced by CPI and government debt. Therefore, it is not significant when the element to yield GDP (y=c+i+g+(x-i)) is high without being accompanied by distribution of income, money reserve in central bank, and many other aspects. Corrupt government really pissed society off. Mubarak is elected more than 4 times as the leader of Egypt. If we are trying to observe from broader area such as political, economical, cultural and educational aspects, we are going to have a hard time to conclude the reasons why Mubarak is rejected, especially on early 2011.

III. Plea
III.A Causes
Mubarak had ruled since October 14, 1981 to February 11, 2011. Nature of the military leadership is also influenced by past experience or background of leaders themselves. Mubarak achieved his bachelor's degree in military science, and he himself is a former Egyptian Air Force officer. Therefore, how Mubarak rules his leadership, as we have seen, very thick with the military manner. The same case is valid for Gaddafi and Soeharto who had military backgrounds. Mubarak also ruled under authoritarian system that is contradicted to the principle laid out in Article 21 of the Universal Declaration of Human Rights that everyone has the right to a democratically elected government, deriving its authority from the will of the people. Huge demonstration happened around Arab which actually sues the revolution of system to change it into democratic system, instead of authoritarian. Too prolonged period of governance by a single leader is not the ideal type in current era where liberal democracy is on. We may find this kind of pattern in Indonesia when it was ruled by Soeharto and also Tunisia. There is repetition of
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http://www.dailymail.co.uk/news/article-1351070/Egypt-protests-Twitter-Facebook-blockedGovernment.html?ITO=1490 : 28 Januari 2011 8 http://www.cbc.ca/news/technology/story/2011/01/28/egypt-mobile-phone-service.html?ref=rss : 29 Januari 2011

tragedy that does not want to dwell on the same leader and dictator system anymore. When this kind of mass movement happens, it surely takes time for its transition. Tendency of todays human behavior to be liberal (freedom) will continue to spread. Hypothesis the writer may conclude is that too prolonged leadership under dictator system will bring lethargy and refusal of its society. There is an urgent need to modify substantive and legislative system. Even China is slightly believing in Capitalist system. Military institution and policy have overlapped too much. Sometime as coercive institution, we may feel the shift in hierarchy and capital formation9. The correlation of many variables above shows that actually there is progress in terms of economical development with prolonged dictator leadership. It shows that dictator system is not always bad. In fact, some nature of country is not suitable to be regulated by democracy. Soft power instrument such as diplomacy, economic cooperation, and transfer of knowledge are more favorable rather than the use of coercive approach.

III.B Effects
There are actually huge effects of political transition where it took place in Egypt and its neighbor. After a year of unending turmoil and military rule, Egypt faces an acute financial crisis that could undermine its political transition and pose a defining challenge to Islamists now coming to power. It has been suffering mounting debts, negligible economic growth and dwindling foreign reserves, the military rulers and the new Islamist-led Parliament now confront some difficult choices, beginning with an all but inevitable further devaluation of Egypts currency that could send the prices of food and other goods soaring. The military rulers have also presided over a period of financial turmoil. Inflation has surged into double digits, and the exchange rate for the currency, the Egyptian pound, is under heavy pressure. Islamist group that controls half the seats in the new Parliament, also indicated its openness to the financial lifeline in its separate meeting with the IMF representatives, an even more stunning reversal after eight decades of denouncing Western colonialism and Arab dependency10. Even worse, the ruling military council has tried to sustain the governments growing deficits by borrowing internally, while businesses struggle to get the loans they need to expand and revive the economy.

http://www.jadaliyya.com/pages/index/516/why-mubarak-is-outhttp://www.nytimes.com/2012/01/25/world/middleeast/egypts-new-path-complicated-by-economicproblems.html?_r=2&pagewanted=all
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Still, many economists contend that Egypt can navigate around a potential collapse11. They note that the military-led government has recently announced plans to trim nearly $4 billion from the yawning deficit of over $30 billion, or more than 10 percent of gross domestic product. Among other things, it has begun to trim the energy subsidies to heavy industry, perhaps in preparation for changes the monetary fund might require. A little bit contrary but it shows a promising future of Egypt, Ahmed Galal, managing director of the Economic Research Forum, based in Cairo, said economists were increasingly optimistic about the policies of the Muslim Brotherhood. The group has made it clear that it supports free markets, and it has already begun talking about the urgency of subsidy reform. Its lawmakers began drawing up proposals to tackle the issue when they were members of the opposition minority under Mr. Mubarak.

IV. Conclusion and Suggestions

The people gave me the responsibility of building the future of this nation, and I did it with honor.
-Hosni Mubarak-

History and pattern of human behavior from past experience can predict that the social circumstances in the future. We are headed in the same movement that is trade liberalization, uphold democracy and human rights.

Revolution as it happened in Egypt and spread to neighboring countries which have a background or context similar to the Egyptian revolution can also do the system of government (Libya, Tunisia, Syrians, Yamen, Bharain, and various other areas in Arabic). The pattern directs the writer

to summary that people do not want another dictator system, the leader of a little more background would affect his decision-making system, and views of all the revolutions that occurred, surely there must be a transition period that invites violence, a decrease economy and takes time to stabilize again. To be once again oversimplified, it is generally found that revolutions of political transition in any country takes uncertain period of time and unfortunately involves chaos. The catalyst of Egypt refusal may be concluded by the shifting of thinking by its society regardless the positive economic progress it had attained in the past 30 years. The overlap between military forces and policy also make things worse. The tendency to reject authoritarian in such a prolonged period of time is no longer acceptable because society also find some violence in

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The same source of footnote 10, date : January 24, 2012

imposing the dictatorship policy under Mubarak. Absolute monarchy, human rights violations, government corruption, and lack of education are collection of reasons why protest happened. Many demonstrations have also met violent responses from authorities, as well as from progovernment militias and counter-demonstrators. Egypt underwent revolutionary processes and had now started difficult transitional phases. They now face three major short-term challenges12 : (a) Developing democratic institutions; it is obviously a complicated case to maintain political stability and a state of peace in the areas affected by the revolutionary wave. The national expertise exists in both countries for crafting new constitutions, new political party laws and new electoral laws. Regarding constitutional reform, the composition of the current constitutional commissions indicates that the Islamist movements are party to this process. (b) Returning the army to its professional role and bringing back a civilian government; the military drew the line between the regime and the state, between the pillars of support loyal to the regime (security and police forces) and those protective of state institutions. (c) Social and economic demands; the need to calm explosions and instability down. The protesters do not also have capable and sufficient representative to speak on behalf of civilians interest. Prescription that the writer may suggests are seeing from the need of United Nations to secure democracy in countries which are facing increasing political instability. The writer strongly urges each member state of United Nations General Assembly to put an end to any policies or practices that actively violate the Universal Declaration of Human Rights, and to do their utmost to ensure that the human rights of their population are fulfilled. The writer encourages all the member in UN to adopt policies encouraging open and democratic governance but without neglecting the sovereignty of any state. There is an urgent to formulate some measurements and steps to overcome current instability so that the domino effect will be avoided. Role of respective armies in politics should be determined clearly so that there will not be any more unnecessary overlap. The writer suggests, therefore, United Nations Department of Political affairs to oversee their elections, in order to facilitate the rekindling of trust between people and government. UNHCR (United Nations High Commissioner for Refugee), UNPKF (United Nations Peacekeeping Forces), UNICEF (United Nations Childen Fund) and other bodies under United Nations are significance to ensure basic needs of victims and civilians, who are facing political and economical transition, are met.

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BIBLIOGRAPHY

Book : The Council on Foreign Relations. 2011. The New Arab Revolt : What Happens, What It Means and What Comes Next. New York : CFR

Journal : The Journal of International Security Affairs : The Arab Springs Challenge to Moscow by Robert O. Freedman. (May 3, 2012) World Affairs Journal : Arab Spring or Islamist Winter by Michael J. Totten (January-February 2012) Amin, Galal. Whatever Happened to the Egyptian? American University of Cairo Press, Cairo, 2001.

Websites : literature.bandcamp.com/album/arab-spring http://mun.eusa.ed.ac.uk/Resolutions/2011_12%20Resolutions/11.10.22%20Week%207%20Arab% 20Spring%20Resolution.pdf date : May 1, 2012 http://www.indexmundi.com/facts/indicators/NY.GDP.PCAP.PP.CD/compare?country=e http://www.freedomhouse.org/template.cfm?page=1 http://www.indexmundi.com/facts/indicators/SI.POV.GINI/compare?country=eg http://www.tradingeconomics.com/egypt/inflation-cpi http://www.dailymail.co.uk/news/article-1351070/Egypt-protests-Twitter-Facebook-blockedGovernment.html?ITO=1490 : 28 Januari 2011 http://www.cbc.ca/news/technology/story/2011/01/28/egypt-mobile-phone-service.html?ref=rss : 29 Januari 2011 http://www.nytimes.com/2012/01/25/world/middleeast/egypts-new-path-complicated-byeconomic-problems.html?_r=2&pagewanted=all http://srmmun.weebly.com/uploads/8/5/0/1/8501689/disec.pdf