Economics prof provides insights on Arab Spring

News Release Date: 
10.18.11

Aly: Income inequality helped trigger revolutions

Written by John Jarvis
The Marion Star

MARION - Hassan Aly need only step outside his apartment last February in Alexandria, Egypt, to watch the arrival of the Arab Spring in his homeland.

As an economics professor at The Ohio State University at Marion, Aly makes regular visits to Egypt and other Middle Eastern countries. He was visiting family early this year when the people of Egypt took to the streets of Cairo to demand the ouster of President Hosni Mubarak, known as the Arab Spring.

He spoke to an audience of about 30 about the causes, consequences and economic ramifications of the uprisings on Thursday in the Guthery Community Room at the OSU Marion Campus.

An increase in income inequality and the concentration of power among cities were two major reasons for the revolution that ousted Mubarak in February, he said.

Other contributors were a 30 percent unemployment rate among people age 25 and younger, which comprises more than one-fourth of the total population of Egypt. Not only unemployment but the lack of "decent employment," particularly among college graduates, was a significant factor, he said.

Egypt's history of authoritarian rule supported by a police state and lack of political and economic freedom manifested in a corrupt one-party-dominated system also fomented revolution, he said.

Similar conditions in Tunisia led to the ouster of President Zine El Abidine Ben Ali.

"The most dangerous ticking time bomb in the Middle East is the youth unemployment," Aly recalled stating a decade ago.

In the last 10 years, 40 percent of Egypt's population has been below the poverty line of $2 per day, he said.

The "straw that broke the camel's back is this issue of dynasty or power;" Mubarak grooming his son as his successor and likewise Ben Ali setting up his wife to follow him as Tunisia's president, Aly said.

"Assisting factors" in the Arab Spring were the prevalence of social networking and new tools of communication, such as Facebook and text-messaging. Revolutionists could organize outside of the view of government authority.

"It became clear government was not well-prepared to face this kind of organization," he said.

The Egyptian government quickly shut down the Internet, which Aly said was unwise as it drove people to the streets to find out what was happening, increasing the crowds that occupied Tahrir Square.

Less talked about but also contributing to the unrest was the exposure of residents of North Africa to the European political system and its lively and spirited debates, he said.

Rapid growth in exporting, which provided benefit in the northern cities of Egypt, only made greater the disparity in the level of wealth in the north compared to the poorer communities in the south.

The economics professor said the free market economy in a nation where those in power instituted a widespread system of nepotism, favoritism and discrimination magnified the society's inequities.

He said the current regional economic outlook for Egypt, Tunisia and Libya in the short term is "very negative" as the unrest discourages financial investments and sinks tourism income.

The long-term outlook is conditions will improve for the nations' residents "because now they have a voice."

In Egypt, rioting in the streets continues as people want "all of the ills of society" corrected quickly, factory production is in decline, the ousted government freed 500,000 prisoners, and the Army is trying to do the work the police used to do, he said.

"The major point is you have to have balance here between what people in the streets want and the long run," Aly said. For awhile, the Arab Spring nations will appear as if they have "to choose between a rock and a hard place."

Aly said a guided economy with "job-centered strategies" is needed, remarking, "Growth and distribution policies need not be at odds with each other."

The ramifications of the Arab Spring are ongoing and spreading, as governments in power in oil-producing countries become increasingly fragile, posing a major threat to oil exports to the rest of the world, he said.

Factors that led to the uprisings in the Arab world exist in the United States, too, he said, adding that some have pointed to the Occupy Wall Street protest in New York City as an outgrowth.

"Income inequality in the United States is worsening," he said, citing figures showing 10 percent of the population receives 50 percent of the income, and 0.1 percent of the population receives slightly more than 10 percent of the income.

The globalization of the economy applies additional pressure to individual governments. For example, a looming influx of 2.5 billion workers "coming to market" from China and India is pushing wages down internationally, he said.

"Hungry people are coming to the market, and they are accepting these wages," he said.

Communities in the United States now not only compete with New York, Chicago and Los Angeles, they compete with cities around the globe.

While staying in Egypt, he said, he was surprised to answer a knock at his door to be met by a Chinese woman selling appliances. A surplus of workers has "impacts to the local labor force."

He said he's concerned about income inequality in the United States.

"Renting books is a really bad sign of equality of access to education," he said, referring to college students renting rather than purchasing text books. "The average students is getting out of college with $65,000 in debt. The student loan debt is $1 trillion."

He said such statistics are signs the United States is not giving education what it needs.

"The income for wages is declining. The income for profits is growing," he said.

The rich getting richer and the poor getting poorer is a trend that's happened in the past 20 years in the United States, he said.

Aly saw immediate impacts from the Arab Spring in the streets of Alexandria, his hometown.

"The police were withdrawing from the streets," he said. "People were scared for their life. People very quickly formed neighborhood guards" to protect each other.

Physicians offered free service, bakeries provided bread and other items to support the people in the streets "because everything was closed."

He expressed confidence Egypt will improve in the long run, saying under Mubarak residents had become apathetic because they had no voice in the government.

"People will make sure they will contribute," he said. "They will go out and vote. The people are really taking pride in being Egyptian."

Reporter John Jarvis: 740-375-5154 or jjarvis@marionstar.com