THE BLOG

Egypt's and the Middle East's Grim Futures -- Revisited

Two years ago, on January 31, 2011, The Huffington Post published my blog titled: "The Outlook For Egypt And The Middle East Is Grim." Referring to a likely new government in Egypt to replace then President Mubarak, the thrust of the post was that

The problem is that the new government, any more than a Mubarak government, will not be able to provide the economic conditions that the demonstrators are demanding. It will not be able to provide jobs for the millions of young people who are unemployed and it will not be able to keep prices of food, oil and other commodities from rising. Egypt does not have the financial resources or borrowing capability to provide its people with subsidies to offset the inflationary rise in food and other commodities. It does not have the industry that can create jobs for the unemployed. And in the face of the violence, it will be even less able to attract new capital or retain the capital it has, even to continue the unacceptable current levels of employment.

The post concluded: "The result of a failure of a democratic government to solve the Egypt's woes can well result in another wave of demonstrations and violence." It then went on to suggest that the same set of conditions would likely affect other nations in the Middle East.

Now we are witnessing what I predicted -- a resurgence of high levels of protest and street violence. It is spreading beyond Cairo to other major cities in Egypt. It has reached a point that the Defense minister, Egypt's top General Abdul Fattah el-Sisi has publicly warned that "the disagreement on running the affairs of the country may lead to the collapse of the state and threatens the future of the coming generation."

The commentators -- media and academic -- continue to focus most of their attention on the political differences between the Morsi-led Muslim Brotherhood party in power and the opposition groups, suggesting that a solution lies in some reconciliation of the Islamists and secular groups. The fact is that the problems facing Egypt, as reflected in my earlier blog, are grounded in economics and go far beyond the power of the political system to correct. Moreover, as discussed below, these same problems beset Syria and other nations of the Middle East and represent a growing cancer in the region that cannot be repaired under the circumstances of today's world.

Put in its simplest terms, the problem is that there are not enough jobs to employ the young people of the region and as the population grows, the number of unemployed will keep rising. In a few countries like Saudi Arabia and some of the Gulf States, there is sufficient funding available from the sale of oil that the governments can for the while provide subsistence levels of support to the increasingly large proportion of younger people. But in Egypt, Syria and Jordan, the governments do not have the resources to palliate the pain of unemployment and the youthful population is left with no jobs, no future and no reason to do anything but violently protest, risking death and pain to express their anger and frustration.

There is no immediate, visible solution for the problems facing these countries. The developed nations in Europe and the United States are facing their own issues of high unemployment and low economic growth. They are not in a financial position to provide significant help to the Middle East countries, even if the political circumstances warranted it which, given the levels of chaos in Egypt and Syria, for example, they do not.

Finally, we should recognize that the conditions in the Middle East are not unique to that region. There are dramatic changes taking place across the whole world as technology increasingly replaces human labor, as productivity continues to increase without being shared by the working and middle classes. These changes will put pressure on the developed countries to find employment for their youthful populations, which, while not growing as rapidly as that of the Middle East, are nevertheless growing at a pace that requires new jobs to be created at a much faster rate than is happening now. The danger is that a failure to find solutions for the youth employment problems of the developed countries may lead to some form of tear in the fabrics of those societies, as well. As the younger population continues to be frustrated in the effort to find jobs, build families and enter the normal patterns of life, that frustration may spill over to protests that eventually runs out of control. We already saw a hint of that in the "Occupy" movements. There seems to be a growing complacency about the employment situation, but the world economies are not out of the woods yet. There are still too few jobs being created to meet the population growth. The political and business leaders would do well to focus far more attention on this problem than they are at present.

Mr. Lifton is a businessman and political activist. His book, An Entrepreneur's Journey: Stories From A Life In Business And Personal Diplomacy, has recently been published by Author House.

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