Suppose you are an investor looking to invest in a new and
promising product. It is a car whose operation is based on a new concept;
delivering all the desired features in the car of the future.
Someone comes to you and says you're about to make a mistake
investing in that car. You ask why and he laments that the car actually runs.
You shoot back: But this is what a car is supposed to do, and he says you're
wrong. To explain himself, he rants a long dissertation of useless
gobbledygook, and you stop arguing. You thank him, and promise that you'll get
back to him after you talk to his psychiatrist.
If you believe this does not happen in real life, you are correct
… unless. You see, my friend, there is always an exception to every rule. Yes,
something like this does not happen in real life unless you're in the business
of publishing. That's the place where cranks come up with all kinds of weird
ideas, and find a sympathetic editor or publisher who will use their work.
No harm is done in most of these cases when the editor properly
introduces the piece as a joke or solely the opinion of the writer ... not
shared or endorsed by the publication. But if the publication has been portraying
itself as a serious contributor to high level debate on serious subjects, and
the editor runs a screwball piece billed as a serious work, you'll be the one
to seek talking to his psychiatrist.
You may want to do just that after reading a piece that appeared
in Foreign Policy. It came under the title: “Egypt's Economy Isn't Booming,
It's Collapsing,” and the subtitle: “Abdel Fattah al-Sisi has sold his country
as an investment destination with the IMF's help––but the living standards of
ordinary Egyptians are plummeting as elites line their pockets.” It was written
by Yehia Hamed and published on June 7, 2019.
Like the guy that says there is something wrong investing in a car
that actually runs, Yehia Hamed began his presentation by showing how well the
Egyptian economy is running, and then attacked the current government for doing
the right thing. So you ask: What's the right thing to do when handling an
economy that was doing well but got caught in a five-year political turmoil,
yet kept chugging along despite the investors pulling their money out of it and
fleeing?
The answer is that you immediately take two major steps to remedy
the situation. First, you enact the necessary laws that will transform the old
bureaucratic maze into a friendly investment climate. It is one that will be
made of simple-to-understand procedures so that domestic and foreign investors
can operate within its boundaries with ease.
Second, you upgrade the infrastructure of the country so that the
investors don't have to worry about doing the right thing, and then discovering
that they have a problem with getting a steady supply of electricity, or
encountering difficulties with transportation and communication that suffer
from inadequate links, or lacking essential services such as education for
their workers, healthcare or financial services.
Implementing those two remedies is what Egypt has done, says Yehia
Hamed. He then forcefully argued that they are causing the economy to collapse;
not to boom like say the cold-eyed observers, the investors, the IMF, the World
Bank and the expert analysts. So, you want to know who this guy, Yehia Hamed is
that wants you to believe he is more credible than all those experts and
institutions.
You check him out and discover that he was the minister of
investment in the government that took the economy close to the point of
collapse, causing 30 million Egyptians to hit the streets and demand that the
government dissolve itself. When the latter ignored the call of the people, the
people asked the military to carry out the task. The military did so; a new
government came in and rescued the economy. So now, you have Yehia Hamed say
that he was right and those who replaced him are wrong. You know what; there
must be a few observers by now, who want to talk to this man's psychiatrist.
There was a time when, under the government of Yehia Hamed, nobody
would lend Egypt money. This caused the foreign reserves to almost deplete,
raising the specter of bankruptcy. Now, investors are falling over each other
to invest in Egypt and lend money to its government. The reserves were raised
from less than 3 months-worth of imports to more than 8 months-worth of
imports. And the surplus that's left over after the expenses are taken care of,
is spent on infrastructure projects that alleviate regional disparity,
encourage the start of labor-intensive industries, and upgrade the various
skills of the workforce.
In addition to all that, the old system of subsidizing products
such as food and fuel, is being phased out and replaced with the subsidization
of the poor via direct cash payments. This eliminates the oddity of having to
subsidize the rich in order to help the poor.
And that's not all. Right now, a universal healthcare system is
quietly being phased in. New hospitals and clinics are being built throughout
the nation, and cutting-edge equipment for hospitals, research centers and
colleges are being imported from abroad … parts of which are manufactured in
Egypt.