Given the images we see on television screens of angry Egyptians defying an authoritarian regime, you might be surprised to know that Egypt was considered a success story. By the macroeconomic numbers, Egypt is doing quite well -- growth over 5%, booming foreign investment -- $10 billion was expected this year. Economic reforms are in place, winning applause from analysts.
So how to square that with the anger boiling over in Tahrir Square? Inflation. The poor simply can't keep up with food costs rising at double digit rates. They are falling behind while cronies of the regime build gated communities and skim off the cream of Egypt's economic growth.
I'm told the recently sacked Prime Minister dryly noted in an interview not too long ago that "people can't eat macroeconomic indicators."
Sound familiar? Around the world, economic growth is splitting in two. Not just between the slow-growing West and the fast-growing emerging markets. But also within economies between those riding a global wave of technological advances and those who are left behind.
Many of Egypt's problems are, of course, unique to Egypt, but some are all too universal.
Source: http://www.pbs.org/nbr/blog/2011/01/egypt_and_the_two_speed_world_1.html
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