Background on the Egypt Crisis

Protests in Egypt began last week after a revolution in nearby Tunisia ousted President Zine El Abidine Ben Ali. Years of economic frustration with no democratic outlet have boiled over into mass demonstrations against the 30-year rule of Egyptian president Hosni Mubarak. Anti-government protestors in Egypt planned a “million man march” for February 1^st to mark one week since the start of the upheaval. Though Egypt is not a major oil producer, the continued campaign has stoked fears that shipping traffic at the Suez could be interrupted or that the unrest could spread to major oil producers elsewhere in the region.

The unrest has come as no surprise to many in the region; in fact, for some, the surprise is that it didn’t happen earlier. Back in 2007, King Abdullah of Saudi Arabia said in his opening remarks to the 2007 Gulf Cooperation Council summit:

“Our Arab region is besieged by a number of dangers, as if it were a powder keg awaiting a spark to explode.”

There are three main causes of the situation developing in Arab countries, and all contain opportunities for business:

• Youthful Demography: 50% of the Arab population today is represented by a teenager or young adult, and most of them have a strong desire to be part of an increasingly globalized world. Right now, many are demanding change and eagerly using new technology to do so, but their long-term desires are to take a calmer and productive role in a global economy, one that guarantees jobs and a strong rule of law.
• Insufficient Education and High Unemployment – In traditional authoritarian educational systems, Arab children have learned to obey and memorize and been deprived of the opportunity to learn the skills they need to succeed in today’s world. However, many are eager to learn and develop independent thinking and innovation skills; firms which offer the right training could tap into committed talent pools that will bring original perspectives to the firms they work for.
• Embryonic Economies – Some Arab governments, particularly those of Saudi Arabia, UAE and Qatar, have made notable efforts to modernize their countries in the last five years but, for many governments, it may be too little, too late. The pressure for change from many Arab populations has risen exponentially in the past decade. When the dust settles, it is likely there will be numerous opportunities for multinational firms to tap into markets for new goods and services.

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