Egypt just elected its first democratic government in a really long time – the military has ruled over the country for 60 years.While some have been critical of the new government, Mohamed El-Erian, the CEO of global bond trading giant PIMCO, thinks this could be great news for the Egyptian economy.
In a new op-ed in Foreign Policy, El-Erian gives five reasons why the new president, Mohamed Morsi, and the new prime minister, Hisham Kandil, have an opportunity to make a positive impact:
- The current political situation recognises the importance of the economy. El-Erian points out that this is the first time in a long time that Egypt’s government has been attuned to the importance of the economy and what it means for Egypt. The revolution more or less hinges on its success.
- Egypt has all the right qualities to foster a fast growing economy. El-Erian writes that “Egypt has the physical and human attributes to sustain high economic growth, fuel a dynamic labour market, and undertake a developmental breakout phase.”
- A stable democracy will attract a surge of foreign investment. El-Erian thinks a stable democratic government will be huge for the private sector, attracting tons of interest from foreign investors who feel a little safer operating in a fast-growing country that isn’t being run by a dictator.
- Egyptians living around the world can get behind a democratic government. El-Erian writes that “the the large Egyptian diaspora is extremely willing and able to support the country in its quest to achieve economic, financial, political, and social stability.” Including himself. Others are even talking about moving back.
- A new sense of fairness in the economy will motivate everyone. El-Erian says that incentives are changing. People will begin to take pride in their collective productivity and recognise that it’s not just about financing the ruling elites anymore. He writes that there’s already been a “surge in community service and other civic engagement.”