A few weeks ago, at one of the Friday demonstrations in Tahrir Square, the epicentre of Egypt’s popular revolution, a woman protester told me that Libya’s uprising had “achieved more” than Egypt’s.
It was a perplexing assertion given that Libya was clearly heading towards civil war. In Egypt, two months had already passed since the overthrow of Hosni Mubarak, the former president, and there was optimism that the country might be able to turn the page on dictatorship and corruption.
The woman’s reasoning, however, did not take any of this into consideration. She explained that Muammer Gaddafi, the Libyan leader, was handing out cash to buy the favour of his people, whereas in Egypt no one had yet achieved a pay rise.
It was a reminder that many of the millions of people who joined, or just cheered on, the Egyptian uprising did so because they were fed up with their economic circumstances.
Forty per cent of the population is poor, and during the last years under Mr Mubarak, there was a perception of a widening gap between a narrow class of very wealthy people and the overwhelming bulk of the population. Ministers’ assertions that the economy was growing steadily – it was – sounded hollow as soaring inflation severely eroded purchasing power.
Officials bragged about improving fiscal discipline, better tax collection and rising investment, but still failed to make an impression on the millions of struggling Egyptians suffering from the dire state of public services such as health and education.
Most Egyptians are now expecting a speedy improvement in their incomes after the revolution.
The feeling that there should be a quick economic dividend has been stoked by reports in the Egyptian press, many outlandish, about the size of the fortunes made through corruption by members of the ousted regime.
Back in the real world, economic growth is forecast to fall in the year to end in June to 3 per cent – down from the 6 per cent expected before the revolution – and the deficit is likely to widen to 9 per cent of gross domestic product. Tourism, investment and exports have all been hit as a result of the political turmoil.
Even so, the interim authorities are under enormous pressure to meet at least some of the popular expectations. Previous weeks have witnessed many strikes and demonstrations by workers and civil servants demanding pay increases and the institution of a minimum wage – something the authorities have promised to study.
There are now moves to allow independent trade unions to replace the government-dominated syndicates that under Mr Mubarak failed to represent the interests of workers.
The business community may resent these developments but it would be a step forward if employers and unions were finally able to conduct genuine negotiations not just on wages but also on ways to improve both productivity and working conditions.
Many of the negative practices of the past, such as making workers sign resignations the day they are hired, need to disappear. But higher salaries will also be unsustainable if there are no efforts to address low productivity.
There is concern, however, that as Egypt tries to chart a new economic path and distance itself from the legacy of Mr Mubarak’s system, it will adopt populist policies and jettison not just the bad practices of the past but also some of the good ones.
“I am worried because the signs are that economic policy might cater to public pressure and uninformed public demands,” says Ahmed Kamaly, an economist.
He cites suggestions that there will be a rethink of the property tax introduced in 2008 under Mr Mubarak but deferred due to public pressure.
The tax is levied only on properties worth more than $100,000, which excludes the vast majority of housing in the country.
Only the well-off, many of whom have several homes, would have been liable to pay. Even so, the tax faced enormous resistance – a sign of the deep mistrust that existed between Egyptians and their rulers.
“We should avoid the mistakes of the past,” says Mr Kamaly. “But it is wrong to say that we should rethink everything from scratch. There were some good policies to improve investment and encourage exports. The main problem, though, was that were was a total lack of accountability.”
By Heba Saleh