Egypt's Economic Development and Challenges post Arab Spring: Can New Technology Quench Egypt's Thirst for Water and Enhance Good Institutions?

Abstract

53 Journal of South Asian and Middle Eastern Studies Vol. XXXIX, No.1, Fall 2015 Egypt’s Economic Development and Challenges post Arab Spring: Can New Technology Quench Egypt’s Thirst for Water and Enhance Good Institutions? Mohammed Akacem* Dennis D. Miller* I. Introduction Without a doubt the future of the Middle East hinges upon the success of the Egyptian economy. But Egypt confronts an obstacle course full of enormous hurdles that it must leap, especially its growing population, diminishing arable land, scarcity of water and its need to avoid a repeat of the conditions that led up to the Arab spring of 2011. Basic to effectively dealing with these hurdles is for Egypt to find creative ways to quickly develop its economy. This will lessen the population growth rate and lessen This paper is a revised and updated (July 10, 2015) version of the paper presented at the ACSIS 32nd Annual Conference in Philadelphia. *Mohammed Akacem is currently a professor of Economics at Metropolitan State University of Denver. Prior to joining MSU, he worked at the International Center for Energy and Economic Development in Boulder, Colorado. He was an economist at The Saudi Fund for Development in Saudi Arabia. He received his Ph.D. from the University of Colorado, Boulder. *Dennis D. Miller is the Buckhorn Endowed Chair at Baldwin Wallace University. Miller worked at the Center for Energy and Economic Development and the Institute of Behavioral Science at CU Boulder. He also taught at the American University in Cairo and was an analyst for the U.S. Department of Agriculture. He received his Ph.D. from the University of Colorado, Boulder. 54 1 It is generally now accepted in development economics that as a country develops population growth rates tend to diminish, thus diffusing the population bomb. One developmental economist, William Easterly, put it this way, “Development itself is a far more powerful contraceptive than cash for condoms.” See his book The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics (Cambridge, MA: MIT Press, 2001), p. 96. 2 Population figure for Egypt was for 2014 from the following on-line source: http://data.worldbank.org/indicator/SP.POP.TOTL Accessed August, 18, 2015. 3 Ibid. the severity of the other problems.1 Recent discoveries and technological developments concerning farming and water point to ways to do this. Before that, we review the obstacles that Egypt faces in order to put its economy on the path to a sustainable economic growth and development that answers the needs of the whole population. Later, the paper will present some of these promising developments that by themselves are not a solution but they are possible steps to push back the water and food constraints on economic development so that Egypt may move more quickly towards a prosperous and stable future. II. Egypt’s Importance and Its Major challenges: Why institutions matter: Egypt’s influence on history and now the Middle East and North Africa (MENA) is unparalleled. Few nations can boast five thousand years of civilization. Today it still occupies an important place in world affairs. Geographically Egypt controls the Suez Canal, the critical artery for the transportation of goods and materials from Asia to the countries on the Mediterranean and beyond. Archeologically, Egypt holds many of the world’s most treasured artifacts. It’s remnants of ancient history, such as the Great Pyramids of Giza and Sphinx have attracted tourists from all countries of the world. Religiously, Egypt is the home of Al-Azhar University, one of the largest and most revered Islamic universities in the world. And it has been for nearly two millennia, the home of the Coptic Christians, one of Christianity’s oldest branches. Culturally, Egypt influences a large part of MENA through its entertainment industry, including movies, music and literature. Egypt’s wellbeing is thus of major importance to the entire world. Even so, Egypt’s population growth threatens to overwhelm Egypt’s resources to sustain it. In 2013, the U.S. Central Intelligence Agency estimated that Egypt’s population was at 83.3 million and was growing at a rate of 1.84% per year.2 This meant that Egypt’s population grows...