Egypt Protests: One Reason for the Unrest

Egyptian anti-President Mohammed Morsi protesters (Xinhua/Sipa USA/Newscom)

Although millions have marched again in the streets of Cairo in recent days, it is still uncertain whether the revived demonstrations will deliver much-needed economic and political reforms that the people have demanded. Yet the struggles in Egypt clearly highlight an important truth: Economic freedom matters.

A stagnant domestic economy has long kept many of Egypt’s 80 million citizens deprived of economic opportunity. Egypt has foundered in the status of “mostly unfree” in The Heritage Foundation’s Index of Economic Freedom for over a decade. Prior to the Arab Spring, Egypt had implemented a series of reforms of business regulations, but they were only cosmetic. Over the past two years, critically needed improvements in economic policy have been delayed and even derailed. Worse, the effectiveness of reforms that might have helped open markets and improve productivity has been undercut by the fragile rule of law and a lack of serious commitment.

Indeed, for many ordinary Egyptians, fixing the economy is key. They are demanding a functioning economy that works under the rule of law. Particularly, the young in Egypt have been increasingly frustrated about their country’s outmoded economic system and discouraging reality. The continuing lack of economic reforms has fueled discontent since 2011, with state finances left drained by extensive subsidies on food, energy, and other key commodities.

Confronting Egypt is a festering economic crisis that threatens to shatter the nation’s already fragile social peace and alter political orientation. For too long, Cairo has postponed sorely needed structural economic reforms. President Mohamed Morsi has been more focused on expanding his own power and consolidating the control of the Muslim Brotherhood than in advancing the declared goals of Egypt’s democratic revolution and reviving Egypt’s worsening economy.

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As succinctly pointed out by Heritage Foundation distinguished fellow Kim Holmes, “unless Egypt’s economic structures are changed…the real cause of the unrest—the lack of economic freedom and opportunity—will persist and strangle Egypt’s infant democracy in its cradle.” Democratic elections will not change the unfortunate facts of life for ordinary Egyptians. The real agent of change is economic freedom.

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