Egypt is perhaps the only Arab country which has been a coherent "state" throughout its existence since the days of the Pharaohs. They are not an artificial state such as Iraq, Lebanon, Syria and the like. They have been part of an Empire (ie. The Romans, the Mamluks, the Ottomans), but they were always distinctive and special. In fact, even during the days of Empire, Egypt enjoyed considerable autonomy and Mehmed Ali was one of the very first Muslim modernizers. Egypt has the potential to become a major player in the region. The West should support their journey.
Wikipedia also has this which seems amazing for the Middle East?
"El-Sisi has called for the reform and modernisation of Islam;[96] to that end, he has taken measures within Egypt such as regulating mosque sermons and changing school textbooks (including the removal of some content on Saladin and Uqba ibn Nafi inciting or glorifying hatred and violence).[97][98] He has also called for an end to the Islamic verbal divorce; however, this was rejected by a council of scholars from Al-Azhar University.[99]"
Sisi was apparently educated at West Point. Interesting.
Water for manufacturing really is not a problem. As with other dry places -- Pakistan and the US Southwest, almost all the water is used for intensely water-intensive agriculture --sugar, wheat and rice in Egypt and Pakistan, alfalfa, almonds etc. in California and Arizona. Egypt has the relative advantage that it is only misusing river water. California and Pakistan are misusing reiver water AND groundwater.
US multinationals have been trying to make a go of it in Egypt for many decades. Currency controls, the currency itself, tax and repatriation policies, rule of law, etc have made it unattractive.
It is extremely clear to me that N Africa needs to become economically integrated with Europe in the way that Mexico and much of Latam is integrated with the US. Not just for fossil fuels and solar energy and the power grid but also taking advantage of the large, young workforces for manufacturing and assembly. Either these countries become richer and more developed or they will be sending scores of millions people across the Med (even with development millions will come- see also: Mexico). The EU has really neglected and mishandled its near abroad (not just N Africa, Turkey and the Mideast but even the Balkans). There is more to diplomacy than aid budgets, bureaucrats and lectures (and the “more” includes military power in addition or economic integration). Another problem has been the German/French mercantilist, export-oriented approach.
We’ll see. Agree Egypt and Tunisia have potential, Morocco is doing well and what has been allowed to happen to Libya is a travesty (to be fair, the US and EU helped cause it). Algeria? Maybe someday (not soon).
This is good content thanks Noah. The Egyptians are great people. For investors considering FDI in Egypt though, the ability to get money out right now is a huge issue. As you pointed out, huge deficit is putting a strain on their Treausry. The country has no USD. So, practically, right now, if your Egyptian subsidiary has a foreign invoice, royalty payment or dividend to make, it probably won't be able to pay, especially in USD. This might not be an issue for some small cost plus entities (i.e. Internal shared service/ customer call centers), but any entity that is exporting and generating revenue, or need to pay anyone outside Egypt might run into problems, until Egypt can get a loan from the IMF to rectify the siituation (likely to come with currency devaluation). So, FDI right now comes with a good deal of risk not present in other economies. Hopefully they can fix it soon and realize some of the potential you have highlighted.
If Egypt can build out solar + storage and transition to EVs quickly, they'll have a lot more oil to export and cut the current account deficit. They (and anyone else who copied this idea) would also cut their geopolitical dependence on malignant petrostates.
Goldman Sachs had put Egypt in the N-11 countries (the next eleven countries that will dominate the global economy). I think the low savings rate is going to be killer. It will be kind of Brazil the emerging economy that is always in the cusp of emerging.
Not really related to your post (but quasi-related given your interest in speculative fiction)....
P. Djèlí Clark has a series of award-winning novellas & novels set in a 1910s alternate history Egypt where the resurgence of djinns 30 years previous gave Egypt the (magical) firepower to kick out colonial powers become a kind of djinn-powered steampunky developed country (by 1910 standards) and regional powerhouse. The stories themselves tend to be murder-mysteries set against that backdrop.
You write that stability is good and flashy megaprojects are bad. But what if flashy megaprojects are the regime's idea of a (costly) signal of stability to both the populace and foreign investors?
Your point about Egypt primarily existing along the narrow strip of the Nile River brings up the concern about the Ethiopian Renaissance Dam project which could diminish water supplies as the huge reservoir fills affecting both Egypt and Sudan. While Egypt may be relatively stable, neither Ethiopia nor Sudan can say the same. While there are possibilities for Egypt, there are a lot of pitfalls as well. https://en.wikipedia.org/wiki/Grand_Ethiopian_Renaissance_Dam#Impact_on_Sudan_and_Egypt
If only there was an OECD country close by with whom Egypt could properly partner with....a country with world-leading water and desalination technology.....a country with the highest number of tech start-ups per capita....a country with massive FDI/R&D from every tech firm you have ever and never heard of.....alas, even with "peace" for decades, you will not find Egyptian tourists in Israel, and most Israelis won't go to Egypt, save the Sinai/Red Sea resorts close to the Israeli border......
I'll note that Egypt does seem to produce a cadre of fairly strong professionals. Civil Engineers, for example. Many come out of Egypt and they are really well trained and strong, particularly in construction engineering. I think a lot can be said for it's talent pool.
Fine but it foolishly hasn't addressed its worst problem: its population is growing at 1.5 % yearly
while its only source of fresh water, the Nile, remains constant. Fresh water shortage has nearly reached a critical stage yet the govt. hasn't mandated tough water conservation measures or invested in expensive sea water desalination conversion. Ignoring this existential problem is suicidal.
Egypt is perhaps the only Arab country which has been a coherent "state" throughout its existence since the days of the Pharaohs. They are not an artificial state such as Iraq, Lebanon, Syria and the like. They have been part of an Empire (ie. The Romans, the Mamluks, the Ottomans), but they were always distinctive and special. In fact, even during the days of Empire, Egypt enjoyed considerable autonomy and Mehmed Ali was one of the very first Muslim modernizers. Egypt has the potential to become a major player in the region. The West should support their journey.
Wikipedia also has this which seems amazing for the Middle East?
"El-Sisi has called for the reform and modernisation of Islam;[96] to that end, he has taken measures within Egypt such as regulating mosque sermons and changing school textbooks (including the removal of some content on Saladin and Uqba ibn Nafi inciting or glorifying hatred and violence).[97][98] He has also called for an end to the Islamic verbal divorce; however, this was rejected by a council of scholars from Al-Azhar University.[99]"
Sisi was apparently educated at West Point. Interesting.
PPP seems to be doing a lot of work on the GDP per capita here. IMF has Egypt's nominal GDP per capita at $3.77k:
https://www.imf.org/external/datamapper/profile/EGY
Water for manufacturing really is not a problem. As with other dry places -- Pakistan and the US Southwest, almost all the water is used for intensely water-intensive agriculture --sugar, wheat and rice in Egypt and Pakistan, alfalfa, almonds etc. in California and Arizona. Egypt has the relative advantage that it is only misusing river water. California and Pakistan are misusing reiver water AND groundwater.
To be fair, the pyramids have probably paid for themselves in terms of economic value by now.
Good piece.
US multinationals have been trying to make a go of it in Egypt for many decades. Currency controls, the currency itself, tax and repatriation policies, rule of law, etc have made it unattractive.
It is extremely clear to me that N Africa needs to become economically integrated with Europe in the way that Mexico and much of Latam is integrated with the US. Not just for fossil fuels and solar energy and the power grid but also taking advantage of the large, young workforces for manufacturing and assembly. Either these countries become richer and more developed or they will be sending scores of millions people across the Med (even with development millions will come- see also: Mexico). The EU has really neglected and mishandled its near abroad (not just N Africa, Turkey and the Mideast but even the Balkans). There is more to diplomacy than aid budgets, bureaucrats and lectures (and the “more” includes military power in addition or economic integration). Another problem has been the German/French mercantilist, export-oriented approach.
We’ll see. Agree Egypt and Tunisia have potential, Morocco is doing well and what has been allowed to happen to Libya is a travesty (to be fair, the US and EU helped cause it). Algeria? Maybe someday (not soon).
This is good content thanks Noah. The Egyptians are great people. For investors considering FDI in Egypt though, the ability to get money out right now is a huge issue. As you pointed out, huge deficit is putting a strain on their Treausry. The country has no USD. So, practically, right now, if your Egyptian subsidiary has a foreign invoice, royalty payment or dividend to make, it probably won't be able to pay, especially in USD. This might not be an issue for some small cost plus entities (i.e. Internal shared service/ customer call centers), but any entity that is exporting and generating revenue, or need to pay anyone outside Egypt might run into problems, until Egypt can get a loan from the IMF to rectify the siituation (likely to come with currency devaluation). So, FDI right now comes with a good deal of risk not present in other economies. Hopefully they can fix it soon and realize some of the potential you have highlighted.
I would place the construction of Grand Ethiopian Renaissance Dam as a moderate international risk. As Native Americans say: Water is life.
If Egypt can build out solar + storage and transition to EVs quickly, they'll have a lot more oil to export and cut the current account deficit. They (and anyone else who copied this idea) would also cut their geopolitical dependence on malignant petrostates.
Goldman Sachs had put Egypt in the N-11 countries (the next eleven countries that will dominate the global economy). I think the low savings rate is going to be killer. It will be kind of Brazil the emerging economy that is always in the cusp of emerging.
Not really related to your post (but quasi-related given your interest in speculative fiction)....
P. Djèlí Clark has a series of award-winning novellas & novels set in a 1910s alternate history Egypt where the resurgence of djinns 30 years previous gave Egypt the (magical) firepower to kick out colonial powers become a kind of djinn-powered steampunky developed country (by 1910 standards) and regional powerhouse. The stories themselves tend to be murder-mysteries set against that backdrop.
You write that stability is good and flashy megaprojects are bad. But what if flashy megaprojects are the regime's idea of a (costly) signal of stability to both the populace and foreign investors?
Your point about Egypt primarily existing along the narrow strip of the Nile River brings up the concern about the Ethiopian Renaissance Dam project which could diminish water supplies as the huge reservoir fills affecting both Egypt and Sudan. While Egypt may be relatively stable, neither Ethiopia nor Sudan can say the same. While there are possibilities for Egypt, there are a lot of pitfalls as well. https://en.wikipedia.org/wiki/Grand_Ethiopian_Renaissance_Dam#Impact_on_Sudan_and_Egypt
If only there was an OECD country close by with whom Egypt could properly partner with....a country with world-leading water and desalination technology.....a country with the highest number of tech start-ups per capita....a country with massive FDI/R&D from every tech firm you have ever and never heard of.....alas, even with "peace" for decades, you will not find Egyptian tourists in Israel, and most Israelis won't go to Egypt, save the Sinai/Red Sea resorts close to the Israeli border......
I'll note that Egypt does seem to produce a cadre of fairly strong professionals. Civil Engineers, for example. Many come out of Egypt and they are really well trained and strong, particularly in construction engineering. I think a lot can be said for it's talent pool.
Fine but it foolishly hasn't addressed its worst problem: its population is growing at 1.5 % yearly
while its only source of fresh water, the Nile, remains constant. Fresh water shortage has nearly reached a critical stage yet the govt. hasn't mandated tough water conservation measures or invested in expensive sea water desalination conversion. Ignoring this existential problem is suicidal.