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.
There was a very good article in newspaper I read about comparison of India and Egypt. Both countries have sizeable minority and somewhat tension between them (in India Hindus and Muslims; in Egypt Muslims and Christians); both are ancient civilisations, both have phases of democracy and dictatorship with Egypt more inclined towards dictatorship while India on democracy although in both countries strong leader are appreciated as they bring stability (in Egypt generals and in India Indira Gandhi and now Modi). Both are relatively secular with phases of religiosity.
Both were founding members of Non-aligned movement and now both are seeking strategic autonomy; both during cold war had greater relations with Soviets and now are aligning towards USA.
Both were under British colonialism and gained independence around same time; and first leaders of both countries Nehru and Nasser were friends.
FYI when India freed Goa from Portuguese in 1961, Nasser blocked Portuguese from crossing Suez canal
Both share convergence in terms of fighting terrorism and religious extremism
And there was sizeable trade links between Indus valley civilisation and Mesopotamia civilisation around 5000 years ago
Yeah it is most probably because while Christianity is declining minority where as Muslims in India are increasing minority (share increased from 10% to 14% over 75 years of independence). Scars of partition are recent and many believe changing demographics may trigger another partition in India or dilution of majority culture.
As someone once said: There are two kinds of problem real and imaginary out of which imaginary are more real
I am interested to know that if there are any successful/ partial successful countries where religious minority is greater than 10%? We are already seeing backlash in European societies over increasing share of Muslims..
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.
The currency lost half its value between February 2022 and February 2023.
I visited just at the end of that period and everyone thought the economy was a dumpster fire. But it was certainly a very cheap vacation, and you can make the case that a drastic devaluation was just what they needed.
Unclear how they'll pay their foreign debts under those circumstances, but apparently Saudi Arabia and the United Arab Emirates (which used to give the Sisi regime a lot of aid and loans for geostrategic reasons) are now fed up with all the inefficiency and are asking for equity in state enterprises instead. That might be helpful.
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.
I would assume that sugar, wheat, and rice are much more important for the local economy in Egypt than alfalfa and almonds are in California. So trying to divert water from these uses to manufacturing uses isn't obviously as useful as diverting California's water from alfalfa to residential use.
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.
Egypt will go nowhere as long as radical Muslims hate Jews. We are next door and here to help and do business, but peace does not exist at citizen level, IMO (not that Israeli citizens even think about Egypt, except as it relates to Gaza and our shared border).
If being religious radicals and hating Jews made you poor Europe would have never industrialised. I just don't think a clan based society will ever succeed in the modern day.
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.
But that population growth rate has been decreasing every single year for the past decade. And even though 2014 was higher than some earlier years, every year since 2018 has been lower than every year before, and even the high population growth rate years of the early 2010s were lower than most pre-1990 years: https://www.macrotrends.net/countries/EGY/egypt/population-growth-rate
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.
There was a very good article in newspaper I read about comparison of India and Egypt. Both countries have sizeable minority and somewhat tension between them (in India Hindus and Muslims; in Egypt Muslims and Christians); both are ancient civilisations, both have phases of democracy and dictatorship with Egypt more inclined towards dictatorship while India on democracy although in both countries strong leader are appreciated as they bring stability (in Egypt generals and in India Indira Gandhi and now Modi). Both are relatively secular with phases of religiosity.
Both were founding members of Non-aligned movement and now both are seeking strategic autonomy; both during cold war had greater relations with Soviets and now are aligning towards USA.
Both were under British colonialism and gained independence around same time; and first leaders of both countries Nehru and Nasser were friends.
FYI when India freed Goa from Portuguese in 1961, Nasser blocked Portuguese from crossing Suez canal
Both share convergence in terms of fighting terrorism and religious extremism
And there was sizeable trade links between Indus valley civilisation and Mesopotamia civilisation around 5000 years ago
I'd argue the Christian minority is not seen as a threat in Egypt as it is convenient to portray in India.
Yeah it is most probably because while Christianity is declining minority where as Muslims in India are increasing minority (share increased from 10% to 14% over 75 years of independence). Scars of partition are recent and many believe changing demographics may trigger another partition in India or dilution of majority culture.
As someone once said: There are two kinds of problem real and imaginary out of which imaginary are more real
I am interested to know that if there are any successful/ partial successful countries where religious minority is greater than 10%? We are already seeing backlash in European societies over increasing share of Muslims..
1) Lebanon
Majority Religion: No clear majority
Minority Religion (>10%): Christians, Shia and Sunni Muslims (percentages vary)
2) India:
Majority Religion: Hinduism (79.8%)
Minority Religion (>10%): Islam (14.2%), Christianity (2.3%), Sikhism (1.7%), others (Various minority percentages)
3) Israel:
Majority Religion: Judaism (74.5%)
Minority Religion (>10%): Arab Muslims (17.8%), Arab Christians (1.9%) (Various minority percentages)
4) Sri Lanka:
Majority Religion: Buddhism (70.2%)
Minority Religion (>10%): Hinduism (12.6%), Islam (9.7%), Christianity (6.1%) (Various minority percentages)
5) Mauritius:
Majority Religion: Hinduism (48.5%)
Minority Religion (>10%): Islam (17.2%), Christianity (31.7%), Buddhism (Various minority percentages)
6) Singapore:
Majority Religion: Buddhism (33.2%)
Minority Religion (>10%): Islam (14%), Christianity (18.8%), Hinduism (5%) (Various minority percentages)
7) Nepal:
Majority Religion: Hinduism (81.3%)
Minority Religion (>10%): Buddhism (9%), Islam (4.4%) (Various minority percentages)
8) Bangladesh:
Majority Religion: Islam (90.4%)
Minority Religion (>10%): Hinduism (8.5%), Buddhism (0.6%), Christianity (Various minority percentages)
9) Egypt:
Majority Religion: Islam (90%)
Minority Religion (>10%): Christianity (9%) (Various minority percentages)
Out of these:
1) Bangladesh, Egypt & Israel -> Shrinking minority and Clear discrimination in Israel & Bangladesh against minorities
2) Lebanon -> Failed state
3) Mauritius and Singapore -> Very small country
4) Sri Lanka -> Went through a prolonged civil war
5) India & Nepal -> Increasing minority share and increasing tensions with tendencies of majoritarianism
and not to forget.. both have similar living standards
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.
Atatürk also put imams on the government payroll and gave them instructions on what to preach. It seems to have worked.
Similar to what MBS and MBZ are doing in Saudi Arabia and UAE respectively now
I think the post war solution in Gaza is forgive a lot of Egypt debt to have Sisi administrate gaza and implement reform islam.
PLEASE!!!
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
The currency lost half its value between February 2022 and February 2023.
I visited just at the end of that period and everyone thought the economy was a dumpster fire. But it was certainly a very cheap vacation, and you can make the case that a drastic devaluation was just what they needed.
Unclear how they'll pay their foreign debts under those circumstances, but apparently Saudi Arabia and the United Arab Emirates (which used to give the Sisi regime a lot of aid and loans for geostrategic reasons) are now fed up with all the inefficiency and are asking for equity in state enterprises instead. That might be helpful.
Noah's argument is so weak.
FFS Israel's GDP is larger than Egypt, despite 1/12th the population. But you'll never hear Noah spare a good word.
Israel is not in a position to become an upper middle income country the way Egypt is, because Israel is already a high income country.
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.
I would add that some of that solar potential can also be used for desalination.
I would assume that sugar, wheat, and rice are much more important for the local economy in Egypt than alfalfa and almonds are in California. So trying to divert water from these uses to manufacturing uses isn't obviously as useful as diverting California's water from alfalfa to residential use.
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.
Negotiable as long as Ethiopia does not get too greedy with the terms on which it will implicitly sell the water downstream.
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.
Egypt will go nowhere as long as radical Muslims hate Jews. We are next door and here to help and do business, but peace does not exist at citizen level, IMO (not that Israeli citizens even think about Egypt, except as it relates to Gaza and our shared border).
If being religious radicals and hating Jews made you poor Europe would have never industrialised. I just don't think a clan based society will ever succeed in the modern day.
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.
But that population growth rate has been decreasing every single year for the past decade. And even though 2014 was higher than some earlier years, every year since 2018 has been lower than every year before, and even the high population growth rate years of the early 2010s were lower than most pre-1990 years: https://www.macrotrends.net/countries/EGY/egypt/population-growth-rate
I've seen the growth rate listed at 1.3., 1.5 and even 1.7 but even if it's only 1.0 a serious fresh
water shortage isn't far off because at best the Nile is constant but doesn't increase. Why wait
until that happens to begin intense public & private sector water conservation like Singapore?
https://www.cia.gov/the-world-actbook/countries/egypt/#:~:text=Egypt%20is%20the%20most%20populous,5%25%20of%20Egypt's%20land%20area.