There are many reasons for the protests. First, the Jasmine Revolution in Tunisia provided the incentive. From the economic perspective, a high unemployment rate, soaring prices, and a particularly more difficult situation for young people are the main reasons. Politically, the public is dissatisfied with Hosni Mubarak’s long-term rule, and they don’t want to see the presidency passed to his son. Those long-suppressed political organizations such as the Muslim Brotherhood demand the abolishment of the emergency law, and want to get more involved in political life. But why did the protests break out in early 2011? The reason is that the protests occurred against the backdrop of further development of economic globalization, world multi-polarization and accelerated transformation of the international system, particularly when the effects of the global financial crisis have not been completely eliminated. Therefore, the revolutions in Egypt and Tunisia are the aftermaths of the global financial crisis.
Global financial crisis
The outbreak of the global financial crisis in 2008 was a heavy blow to the world economy, and its negative impacts are still being felt. Developed countries headed by the United States have done everything possible to shift the financial and economic crisis, from which many developing countries, including emerging markets, suffer greatly.
In November 2010, the United States launched its second round of the quantitative easing monetary policy, implemented the bond purchase plan of $600 billion and retained short-term interest rates at almost a zero point rating. All these lead to the depreciation of the dollar and a new round of commodity soaring prices, which gave the developing countries and emerging markets huge inflationary pressure. Currently, the oil price remains high and fluctuates between $90 and $100 a barrel. Meanwhile, prices of agricultural products keep on increasing. All of the above-mentioned factors inevitably lead to inflation in developing countries and emerging markets, and exert increasing pressure on people’s livelihoods.
Since its economic reform in the 1990s, Egypt has been developing toward the direction of a free and market-oriented economy and become one of the second-tier emerging markets, second only to the BRICS (Brazil, Russia, India, China and South Africa) countries. It’s also included in the CIVETS (Colombia, Indonesia, Viet Nam, Egypt, Turkey and South Africa) and the Next Eleven (South Korea, Mexico, Indonesia, Turkey, the Philippines, Egypt, Viet Nam, Pakistan, Nigeria, Bangladesh and Iran).
However, among all the emerging markets, Egypt’s economic power is still relatively weak and limited in combating the global financial crisis. Its service industry accounts for about 50 percent of the country’s GDP, whereas its major industries are textile, food processing and other light industries. The rural population accounts for 55 percent of the total, while agriculture accounts for 14 percent of the GDP. Oil and gas, tourism, overseas remittances and the Suez Canal are the four major sources of foreign exchange. As an agricultural country, Egypt still needs to import food in large amounts. As one of the world’s largest food importers, it imports 9 million tons of wheat every year. The rise of commodity prices in the world market led to the soaring of food prices in Egypt. This caused the dissatisfaction of the public, and one of the protest slogans is related to the rise of food prices.
Economic imbalance
Egypt’s economy has maintained a rapid development since the beginning of this century, with an annual average economic growth rate of around 6 percent. However, the public are not satisfied, particularly the middle and lower classes, because they think they don’t benefit from the economic growth. Despite the economic development, unemployment, poverty and price hikes highlight domestic problems. About 40 percent of the population lives on less than $2 per day. In 2010, the inflation rate reached 10 percent. The official unemployment rate is 9 percent, while actually
about 20 percent of the population cannot find a job (30 percent for the youth). As a generation with new ideas, young people like to express their ideas together with the help of the advanced information technology in the modern age. Young people in Egypt networked via Facebook and Twitter, making the Internet the driving force behind the protests.
The inconsistency between economic growth and the improvement of people’s livelihoods is not only happening in Egypt and Tunisia - it’s a typical phenomenon in Africa. The paradox that economic growth cannot reduce poverty exists in African countries. Generally speaking, economic development always results in poverty reduction, but this is not the case in Africa. Since the middle of the 1990s, the African economy has kept a moder- ate growth, but people’s livelihood quality remains low. Poverty has not been alleviated, but rather become worse. In Sub-Saharan Africa, the GDP growth rate averaged 5.8 percent, and annual per-capita GDP growth rate was 3.7 percent between 1997- 2008. But Africa’s poverty rate has remained as high as about 50 percent, and the number of the poor keeps on growing. This is mainly due to the characteristics of Africa’s economic growth, such as export demand-driven, investment-led, the low-quality agricultural growth and the low economic structure, which is not conducive for the poor to share the economic growth.
No matter how the political situation develops in Egypt, the hope is that the new Egyptian Government will pay closer attention to the livelihood issues: It should focus on agricultural growth and rural development; it should speed up the industrialization process and provide more job opportunities for the poor; it should improve human resources training and enhance people’s ability to make use of economic opportunities; and it should pay more attention to young people’s employment problems and provide them with more opportunities. Of course, people’s livelihood is just one side of the coin. On the other hand, the government should also promote political reform, so that people from all walks of life can find their right places in the political system.
Impact on Africa
First of all, this event will promote the democratization process in Africa. Mubarak resigned as a result of the large-scale protests and the country’s heir issue was solved in a completely new way. Mubarak, who was a fighter pilot in the fourth Middle- East war, was a hero in the Arab world. After becoming the Egyptian President in 1981, he made his own contribution to the socioeconomic development in Egypt. However, in his ruling of the last 30 years, the political system has become more and more rigid, while the society has gradually lost vigor and vitality. Hence, the public’s discontent has gradually accumulated, which ultimately gives rise to the outbreak of the large-scale protests.
It has been nearly 20 years since the wave of promoting multiparty systems and democratization took place in African countries in the early 1990s. The movement has brought wars and suffering to many African countries, but democracy has been gradually accepted by Africans. They have made every effort to explore their own way of democratization with African characteristics. Through the street revolution, Egypt, Tunisia and other African countries have changed regimes quickly. It still takes time to see whether Western countries will use this method to promote a new round of democratization in Africa.
Second, this incident may affect the previously sound momentum of economic development in Africa. The African economy began to recover from the mid-1990s. Since the new century, it has experienced rapid growth, with the annual average economic growth exceeding 5 percent during 2003-08. However, under the impact of the international financial crisis, Africa’s economic growth fell to only 1.6 percent in 2009. Yet Africa is one of theregions in the world that moved out of the financial crisis rapidly. Its economic growth increased to 4.8 percent in 2010, and is expected to reach 5.5 percent in 2011.
However, will the Egyptian revolution and the Tunisia revolution lead to a domino effect in African countries? And will that see a worsening of the political situation in Africa adversely affecting its economic recovery? Many African countries are politically vulnerable because of complicated ethnic, religious and social conflicts. The unrests triggered by the presidential elections in Kenya and Zimbabwe in 2008 still remain clear in people’s minds.
Mubarak’s government looked powerful, but it was easily overthrown by a street revolution, which may bring new hope to the opposition. They may think that the cost of the revolution is low, which may make the vulnerable political situation in Africa even worse and affect the good economic momentum there. For instance, under the pressure from the West, the division between the north and the south will soon become reality in Sudan. Faced the pressure from the opposition, Sudan President Omar al-Bashir claimed responsibility for losing the southern part of the country. As Sudan is a very important oil producer, any future turmoil in the region may have great impact on the African economy and even the world economy.
Third, this offers an opportunity for African countries to adjust their policies, if they can learn lessons from the change of the Egyptian regime. It seems that South Africa, which has just joined in the BRICS group, has already taken actions. On February 10, South African President Jacob Zuma declared 2011 “the year of job creation.” The South African Government will spend 29 billion rand ($4.04 billion) on job creation, and the initiatives include setting up an employment fund and implementing tax incentives for investors. The Congress of South African Trade Unions welcomed the government’s measures, which is regarded as “a very good start.”
Egypt is the first African country to establish diplomatic ties with China. China has always attached great importance to the development of diplomatic relations with Egypt. China takes the relationship as an integral part of Sino-African cooperation and Sino-Arabian cooperation, and is actively developing a new strategic partnership with Egypt. The fourth Ministerial Meeting of the Forum on China-Africa Cooperation was held in Sharm el-Sheikh in Egypt in November 2009. Based on the independent foreign policy of peace, China is against the foreign interference in Egypt’s internal affairs, and advocates that Egypt should deal with its own affairs. China hopes that the situation in Egypt can remain stable, and the two sides will continue to push forward the development of bilateral strategic partnership
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