In looking for a solution, Egypt has returned to a revolutionary mode

By: Michael Armanious

Two years after Mubarak’s fall from power, Egyptians are still demonstrating on the streets of many cities across the country as they search for solutions to mounting challenges in food, healthcare, energy, transportation, land and much more.

Currently, less than 6% of Egypt’s landmass, 1,000,000 Km², is inhabited by its 92 million people. By the year 2050, the Egyptian population will increase by 60 million people. The core problem for Egypt is the redistribution of the population over new areas, which requires new lands, new energy sources, new water resources, and the creation of new cities with industrial sections, homes, schools, and transportation systems.

In effort to help Egypt’s social and economic challenges, a few local Egyptian-American professionals from MIT and Harvard started Egypt NEGMA, a non-profit organization, to search for new ideas and to promote innovative and entrepreneurial projects that respond to the broad social and economic needs in Egypt. The NEGMA conference will be held on March 23 at the Massachusetts Institute of Technology (MIT) media lab.

This year’s keynote speaker at the NEGMA conference is Dr. Farouk El-Baz. Dr. El-Baz, an Egyptian-American, worked for NASA during the Apollo program and assisted in the planning of scientific exploration of the Moon, including the selection of landing sites for the Apollo missions and the training of astronauts in lunar observations. As the director of the Center for Remote Sensing at Boston University, Dr. E-Baz also developed a “Development Corridor” project that would give Egypt large, new, urban, industrial and agricultural areas ($24 billion Estimated cost in 2010) as a response to Egypt’s historical land problem.

As part of the project headed by Dr. El-Baz, there would be a superhighway and a railway network running from the northern coast to the southern border of the country that is connected to the Nile River. This project would have both short and long term solutions to the high rate of population growth and expand the limited inhabited area (6%) outside of the Nile valley into adjacent, and then further successive areas. 

Over 43 years ago, Dr. El-Baz was trusted with assisting the spacemen in landing safely on the moon during the Apollo missions; however, Dr. El-Baz’s “Development Corridor” project is still trying to clear the ancient Egyptian bureaucratic processes.

There are thousands of villages in the desert vicinity known for very low income, high illiteracy rate, and the absence of any economic opportunities, the inhabitants of which are the main source of migration to the slums area in Cairo and other major Egyptian cities. These villages would benefit from El-Baz’s “Development Corridor” project by being given another option: moving west to the new communities that this project would create.

This integrated project, coupled with an incentive campaign that includes low-cost homes, new social service benefits—and most importantly employment focused vocational and technical training, would attract people to these new communities. 

For the past two years the NEGMA conference has been held on the campus of MIT, the source of much innovation in the digital age and recently responsible for the massive open online course (MOOC). With over 65 million cell phone and web users in Egypt, MOOC can be configured in Arabic to deliver online courses that are relevant to the local and the international market needs. Egyptians can also integrate Khan Academy free courses with MOOC to optimize their outdated education system.

These technological innovations in education can help Egypt to move away from its physical borders and integrate with the rest of the world much more quickly, and can help the world also to learn from and about the rich culture of Egypt.

There is daily unrest, looting, and riots on the streets of many cities in Egypt because the youth have lost faith in the old guards. Two years ago, they used Google, Facebook, and twitter to overthrow the old regime in just 18 days. Their movement was peaceful because they know how to use technology to mobilize millions of people to disarm the totalitarian government.

Technology is the undisputed solution that Egypt needs in order to get out of the current stalemate. If this continues unchecked, it will lead to a civil war and an uncertain future not just for Egypt, but for the region, and perhaps for the rest of the world.

Food Crisis in Egypt…It’s a Matter of National Security!

By: Michael Armanious

The January 25th Egyptian Revolution was an inspiring event for the entire world. 

In Egypt, it was the force behind a long waited and much needed shake-up in Egypt’s political scene.

It was a beacon of light!

Unfortunately, 6 months later, the influential leaders are busy discussing artificial topics, such as behavior, appearance, and religious etiquette.

Moreover, no intellectuals or experts are talking about the specifics of how to move the country forward economically and socially. Furthermore, little attention is being paid to figuring out how to make Egypt become a productive member of the world community.

Instead of focusing on the countless challenges that Egypt faces, the current leadership still considers foreign aid to be the solution to Egypt’s troubles.

This thought process is problematic because it limits the type of aid given to dollars and cents. In the information age, aid can be a broader category that includes the examination of Egypt’s competitive advantages and the improvement of the Egyptian business processes.

The two areas that need immediate attention in Egypt are food and poverty!

Many observers predict a new revolution in Egypt -

“The Hungary revolution” - in the near future.

Previously, Egypt was spending $4 billion a year on bread subsidization to support feeding almost 40% of the population (nearly 34 million people). This was part of an unwritten agreement between the regime and the citizens – let us rule and we will subsidize most of your food. These subsidies were necessary because over the past 59 years there has been a significant decrease in arable land, which has rendered the agriculture system in Egypt inadequate to provide products for its people.

Even after the January 25^th revolution, most of the emerging leaders have not offered fresh ideas on how to tackle the food challenges that face the country. Instead, they are still discussing the same old political issues. As a result, nothing has been done about the dramatic increase in the price of food, which has left food beyond the reach of many ordinary Egyptians. 

The above video shows an Egyptian mother greeting her young son (approx. 10 years old) at the door. He just returned from his daily trip to the bakery to pick up the family bread. He starts his trip everyday at 6:00AM and comes back around 10:00AM and sometimes late in the afternoon, missing his chance to attend school.

In the video, the boy’s father confirms that this boy has no future. The father is partially correct; schooling is not part of the boy’s future any longer. The choice was made for him to spend hours every day at the bread line instead of going to school. Thus, his future is limited to either crime or membership in an extremist organization. 

The video shows a young Egyptian girl working as a maid in order to support her family. This is someone who could be a science teacher, a judge, a doctor, but instead she has been forced to work, at such a young age, as a servant.

Her situation is not uncommon.

These videos illustrates that both boys and girls are affected by the poor economic conditions in Egypt.

There are millions of children like the boy and the girl, who cannot afford to go to school because they need to work to support their families who live in poverty. Sadly, these children will pass the same deprivation on to their own children in the future.

Many of these children are the engine of Egypt’s underground economy, which is the largest employer in Egypt. According to the public figures, the private sector employs 6.8 million people, the public sector employed employs 5.6 million, and the underground sector employs over 9.6 million people.

No doubt, Egypt is facing an enormous food crisis in the very near future as a result of:

·         Its rapid population growth - 2.8 births per woman – 2009.

·         Its massive unemployment - 9.7% (2010 est.), which is a result of the detachment between the public education system and the market needs. That is, the education system is training people in positions that are not needed by the market.

·         Widespread poverty – there are more than 17 million Egyptians who live on less than $1 a day (CIA world factbook, 2005 est.) and many more millions have absolutely nothing and live on charities.

·         Very old and inefficient bureaucratic system – Mr. Hernando De Soto reported in WSJ recently that to open a bakery would take more than 500 days, to get a legal title to vacant a piece of land would take more than 10 years of dealing with red tape, and to create a business, an entrepreneur would have to deal with 56 different government agencies.

Since 1979, Egypt has been receiving billions in financial aid for peace and security from the US. $1.3 billion of this aid was for military assistance.

In the fiscal year 2011, US President Obama requested $1.5 billion as financial aid to Egypt. However, $1.3 billion of this aid is still going to the Egyptian military. As a result, the proportion of US aid going to help ordinary Egyptians, who are facing extreme poverty, has significantly decreased.

For years the Egyptian regimes prevented the Muslim Brotherhood members from participating in the political life in Egypt. However, they were allowed to build a well organized religious and charitable system. The Muslim Brotherhood attracts followers through a wide range of social programs that include education, health and job training, and recently the distribution of food, such as meat, at cheaper than government prices. Having a piece of meat is a dream for millions of poor Egyptians.

Undoubtedly, Egypt’s food crisis will have a negative domino effect on the entire region and beyond if this crisis is allowed to destabilize Egypt. 

We need to consider that: 

• Egypt is a religious, cultural, and intellectual center for the Islamic and the Arab word. Egypt is a connector between the Arab world, Asia, Europe, and Africa in trade, diplomacy and security.

• Egypt’s geographical location, the Suez Canal, is important to commercial and military routes. The Canal is vital for the transportation of oil and liquid natural gas as well as for carrying close to 8 percent of the world’s container traffic.

• It is the most populous country in the Arab world and it was the first to sign a peace treaty with Israel.

• Many of the fiber optic cables go near its coasts and through the Suez Canal, which connects Asia to Europe and beyond.

• Egypt is the home of many historical and religious sites and very precious antiquities.

Egypt was, and should remain, a partner of America. However, ensuring Egypt’s food security in the short and long term through financial assistance is not a solution. America must adopt a new strategy to improve the economic opportunities for all Egyptians.

Solutions:

• Supply chain - The integration of Egyptian industries and similar global industries to develop better relationships and transmit ideas across cultures.

• Legalize property ownership – over 90% of Egyptians hold their property without legal title, which could be over $400 billion worth of assets. Legalizing property ownership will open the door for Egypt to build wealth and enforce a legal code to protect property rights.

• Encourage vocational and technical schools vs. colleges and universities.

• Legal system – encourage an open and fair legal system that supports the international standards of human rights.

• Encourage the military to turn their ownership of many businesses over to the private sector. Paul Sullivan, a National Defense University professor, says that the military's business accounts for 10% to 15% of Egypt's $210 billion economy.

Even though, the financial aid to Egypt is a very small part of the United States’ budget, it still can be used differently to improve Egyptian lives and lift millions out of poverty and help them to become self-sufficient.

America and the youth of the revolution can work together to change the future of these nameless young children and millions like them by adopting the above solutions and can start to arrange the foundation for long-term economic growth.

Debt Swap to help Egypt…Wrong approach!

By: Michael Armanious

Edit by: Nancy Girgis

In May 25, America and its G8 partners discussed ways to help Egypt to convert its debts— a multi-billion dollar plan— into investments to create new jobs. Previously on May 19, President Obama had announced that the US would forgo up to $1B, from the $3B, that Egypt owes to the US. As a result of these decisions, Egypt will have another $3B loan agreement with IMF and $2.2B with the World Bank.

In early 2010, Egypt announced its external and internal debts. The country owes over $35B to external entities and over almost a half trillion Egyptian pounds to internal entities. 

Stop! 

We have tried this way before! Financial aid and more loans – it does not work. The main problem is the central planning strategies. For the past 59 years, Egypt has used the central planning strategy and it has failed miserably. Egypt needs a new type of planning. 

Rather than continuing to offer cash loans, why not try offering a new motivation for productivity? If the US could capitalize on the resources and competitive advantages available in Egypt and offer to buy the products thereof, Egypt would simultaneously gain the self-sufficiency it needs to potentially compete with the other great nations of the world while paying off their external and internal deficit. 

 At one time, Egypt was known as the breadbasket of the entire Roman Empire. Today, Egypt imports over 40% of its food, especially wheat (60%). The central government still subsidizes bread and energy.

The debt swap should be used as incentive for American companies to work with private Egyptian local partners to solve Egypt’s short and long term challenges, both Egypt and the U.S. It must be invested in projects that will have a long term impact on Egypt. 

Less than 6% Egypt’s landmass, 1,000,000 Km², is inhabited. By the year 2050, the Egyptian population will increase by 60 million people. The core problem for Egypt is the redistribution of the population over new areas, which requires new lands, new energy sources, new water resources, and creation of new cities with industrial sections, homes, schools, and transportation systems.

The Map was copied from Dr. El Baz's website

Over 25 years ago, Dr. El-Baz, a geologist at Boston University, submitted a proposal for a project “Development Corridor” that would give Egypt large, new, urban, industrial and agricultural areas ($24B Estimated cost in 2010). As part of the project, there would be a superhighway and a railway network running from the northern coast to the southern border that is connected to the Nile River This project would have both short and long term solutions to the high rate of population growth and expand the limited inhabited area (6%)  outside of the Nile valley into adjacent and then further successive areas. 

Unfortunately, there are some objections that have delayed the project for 25 years: the high cost and un-renewable source of water. 

Over 42 years ago, Dr. El-Baz successfully assisted the spacemen to land on the moon during the Apollo missions, but Egypt today has been unable to instill their trust in Dr. El-Baz’s vision for the country.  Unable to find solutions to the renewable source of water and how to fund such a project, “Development Corridor” remains in the bureaucratic processes.

Egypt is abundant with energy resources (solar & wind) and empty desert land. The debt swap can be directed toward projects where Egypt can take advantage of the current technology to produce enough clean electricity to fulfill its needs and export the surplus. Furthermore, the solar energy can be used in water desalination from the Mediterranean and the Red Seas which can further agriculture by drip irrigation, and the energy from this could then be transferred to several other related industries.

If Dr. El-Baz’s “Development Corridor” could be integrated with the solar energy and water desalination project, then the hindrances to his proposal—the cost and renewable water sources—would immediately be alleviated. 

Rather than viewing the proposal as one $24B project, the integrated projects would be customized for the unique needs and capabilities of the various regions throughout Egypt.  Implementing the projects in conjunction within specific regions would allow the productivity of each area to be realized to its fullest potential.  

There are thousands of villages in the desert vicinity known for its very low income, high illiteracy rate, and the absence of any economic opportunities, the inhabitants of which  are the main source of migration to the slums area in Cairo and other major Egyptian cities. These villages would benefit from El-Baz’s “Development Corridor” project by giving them another option of moving west to the new communities that this project would create.

This integrated project coupled with a incentive campaign that includes low-cost homes, new social service benefits, and most importantly an employment directed vocational and technical training,  would attract people to these new communities. 

To alleviate the financial concerns about how to finance such a big project, this project can be implemented on a smaller scale with unique deliverables for each region. The region to the northwest of the Delta Nile, for example, renowned for its handcrafted goods, desert tourism, grazing and marine activities, will be a stakeholder in the project. The Middle of upper Egypt, especially the three governorates; Menia, Suhag and Qena can be another project for their region has different needs to address than the people in the North.

United States has its own problem with large debts; therefore, let’s be creative in helping ourselves and Egypt.

Let’s use the debt swap payments in moving Egypt forward and open a new market for our own companies.

Moving Egypt Forward by Vocational/Technical Training & Technology and not financial aid

By: Michael Armanious, MBA

Edit by: Nancy Girgis

Lately, there have been many depressing reports about the state of Egypt’s economy.

Egypt is in a severe state of economic and human crisis despite the fact that it has tremendous resources[1] such as human (with over 24 million employable persons), the River Nile and land (while Egypt covers an area over one million km2, only 6% of Egypt’s land is inhabited). Tourism is the driving force of the Egyptian economy and has the potential of creating millions of jobs. There are also resources such as the Suez Canal, petroleum, natural gas and much more. Despite all that, Egypt is still dealing with some serious challenges, especially after the January 25 popular uprising. 

Sadly, following the revolution, there was a near-complete shutdown in the tourism industry ($10 billion in revenue in 2010 alone). Foreign reserves are decreasing sharply, which will impact the country’s ability to borrow more money or attract foreign investment. Furthermore, the country’s “traditional” challenges such as corruption, insufficient infrastructure, and, most importantly, its large workforce that is lacking the necessary job skills coupled with high unemployment.

Are there any solutions to these numerous challenges? Should they take the form of traditional aid and loans, or should we perhaps think outside the box?

On May 19, President Barack Obama announced a new financial assistance package geared at creating new jobs in Egypt. While this might be a viable solution in the short term, I doubt it will have any sustainable impact on the long-term challenges facing the country.

Egypt needs a new vision and different solutions to its long-term challenges, particularly the unskilled work force.

In reality, Egypt needs a revolution in its education system. Not in the post-secondary level, but in vocational/technical training.

On the same day President Obama announced his aid package for Egypt, I visited Minuteman High School in Lexington, Massachusetts. I wanted to learn more about vocational/technical training and if this formula could apply to Egypt. Let me say that I was blown away from what I learned that day. Superintendent Dr. Edward A. Bouquillon had arranged for two students (Mike Breen and Alejandro Cuellar) to give me a tour of the school and explain the vision behind the school’s curriculum.

I learned that the main component of the Minuteman formula is to understand the needs the market place and work with the employers to create courses. In recent years, the school created new departments such as electromechanical/robotics, biotechnology, business finance & marketing, and computer technology.

My two young tour guides took me from one department to another, explaining the vision and mission statement behind each one. At times, I was lost in the terminology they used; I thought I was talking to people at MIT as their intelligence was astounding. They further explained their career and academic path. Mike is aiming to obtain his PhD while Alejandro is working as a research assistant at a major hospital’s liver disease lab.

I was left wondering about the environment the school created for them, and if a similar environment could benefit Egypt’s students.

Mike and Alejandro selected this “alternative” path because they were interested in math and science and hands-on experience. The school not only offered them the opportunity to select a career they love, but also give them the skills to be employed upon graduation as well as the option to pursue a higher education.

Egypt has a great potential of becoming an energy exporter, not only to other Middle Eastern countries, but also to Europe. Historically, Egypt has proven that it is capable of massive engineering undertakings. Ancient Egyptians created one of the original wonders of the world, the Pyramids of Giza. More recently, in 1859, Egyptians began excavating the Suez Canal[2], which has since become a major source of revenue for the country. Meanwhile, in 1960, Egypt began work on the Aswan dam, which quickly became main source of electricity for the country, and in the process created Lake Nasser, a 6,000 km2 artificial lake.

 

Author and clean-energy entrepreneur Tony Seba believes that if Egypt took the equivalent landmass of Lake Nasser³ (which represents only 0.6% of Egypt’s landmass) and created a solar power plant, the country would have the capacity of becoming a global energy leader. 

Egypt needs a new vision to achieve its full potential, and I firmly believe that a radical change at the vocational and technical training level is the solution.

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[1] http://wwww.iie.com/blogs/?p=2136

[2] http://seaplus.com/suez.html.

[3] http://tonyseba.com/desert-power/can-egypt-join-the-ranks-of-energy-world-powers/
 

Michael Armanious is founder of Egypt Forward, which works to educate the American people about current events in Egyptian society.