Where did it all go wrong for Egypt?

A protester at Tahir Square on February 10, 2011. Photo: Politico

As the Arab Spring wave swept onto Tahir Square in early 2011, Jack Shenker from The Guardian, like many others across the globe, shared a new sense of optimism that Egypt’s invigorated youth would lead a peaceful transition towards a democratic future for Africa’s third most populous country.

Just under five years later, Adam Roberts from The Guardian, like many others across the globe, pondered one simple question.

Where did it all go wrong?

A quantitative analysis of Egypt’s situation in the post-Mubarak era overwhelmingly points to a lack of funds as the primary reason behind the country’s inability to sustain a democratic system.

There is a general consensus that soaring double-digit unemployment, high income inequality and rising stagflation were among the crucial issues that sparked the initial revolution.

However, in the two years following the ousting of Mubarak, the economic situation in Egypt deteriorated further, with GDP growth plummeting to its lowest point in over 20 years.

While it is true that the economy is typically worse off immediately after political upheaval, as occurred after the Egyptian revolution of 1952, historically it would rebound within two or three years when the next boom phase of the economic cycle would kick in.

Conversely, this did not happen after the 2011 revolution, and Egypt’s economic dependence on the West could be largely to blame.

The vast majority of the $13 billion of foreign investment allocated towards key infrastructure projects in Egypt virtually disappeared overnight, as foreign investors are far more adverse to any signs of political volatility, in comparison to domestic investors.

To make matters worse, sentiment in the West turned against the Muslim Brotherhood, with many conservatives in United States claiming the party had strong links to Islamic terrorist organisations.

In response, Morsi’s supporters accused his opponents of colluding with the U.S to undermine the democratically elected government, which reignited long-standing sectarian tensions in Egypt that further fueled the volatile political climate.

This left Egypt in a catch-22 scenario, where they needed an injection of capital to fix their increasingly desperate situation, but no foreign investor would hand over the funds because of their situation.

To make matters even worse, many independent domestic companies and institutions had largely been replaced by overseas capital from multinational corporations over the years, so they could not fill the gaping economic void.

The lack of growth led to a rapid swell of disenchantment towards elected President Mohammed Morsi.

The turning tide against Morsi and fragile democratic institutions in conjunction with a financially crippled public sector, enabled Chief General Abdel Fattah al-Sisi to seize power and re-establish an authoritarian regime.

Where Egypt will be in another five years is hotly debated, but from the evidence there is one thing that is clear.

If the optimism of a peaceful, democratic future is to return, a stable, prosperous economic climate must exist first.