Egypt Needs To Employ The Chilean Model

Discussion in 'Politics' started by pspr, Jul 6, 2013.

  1. pspr


    In fact, you will notice parallels to problems right here in the U.S. that are throttling our own economic growth and freedom because of a corrupt, over-reaching government.

    Leadership: Egypt's sorry excuse for "democracy" has gone the way of the pharaohs after Friday's military coup. Good riddance. Coups are the only way out of fake democracies. But what's the way out of coups?

    The big risk in Egypt is that the same corruption, special interests and disillusion will return after the military coup that threw the Muslim Brotherhood's odious Mohamed Morsi out of power.

    Egypt's men in uniform again showed that only two political forces really matter in Egypt — Islamofascists like Morsi and the secular military.

    As political scientist Daniel Pipes notes, civil society doesn't really count. So the concerns of Egypt's people — corruption, red tape, economic misery — could go unheeded and another revolution will return.

    Yet a template from recent history shows just how to end the cycle of military and militants that will make Egypt's citizens matter.

    The example is Chile.

    Like with Morsi, Chile in 1973 was ruled by a so-called democrat, Salvador Allende, who after barely winning election revealed he didn't intend to govern democratically. A Marxist, Allende moved fast to ram through radical, Cuban-style "reforms" on an unwilling public.

    Allende foreshadowed Morsi, demolishing political institutions, trampling the free press, disrespecting minority rights, ignoring the constitution, disregarding the separation of powers, trashing property rights and ruining the economy. Also, Allende was in thrall to a failed and inhuman foreign ideology — communism — just as Morsi was to Islamofascism. In both cases, the only exit was a military coup.

    Had Chilean military commander Augusto Pinochet simply handed the country back to "democracy" without changing the root causes of the turmoil and tyranny, the cycle would have had a replay.

    But he didn't. He used his military government as an incubator for free-market changes, transforming his country into not just Latin America's best economy, but also Latin America's most durable democracy. Pinochet — who stepped down dutifully after 17 years upon losing a referendum — understood that economic freedom had to precede political freedom. He employed a brilliant group of mostly University of Chicago-educated young Chilean economists, known as the Chicago Boys, to transform the society by cleaning out thousands of weed like laws choking Chile's economy — on labor, mining, currency, fishing, vineyards, startups and pensions.

    They made the central bank independent and instituted hard-core fiscal discipline that has left the country debt-free and pushed its credit rating toward triple A.

    Thousands of businesses were freed to open and operate without thickets of regulations — resulting in the spate of Chilean products now seen in America's supermarkets: wine, fruit, fish.

    They signed free-trade pacts with 60 countries to expand the reach of their tiny market to a global one — the better to attract foreign investment.

    And in what economist Milton Friedman called "the crown jewel" of these reforms, Chile's 30-year-old Labor Minister Jose Pinera offered Chileans a choice of public or private pensions — making each worker a mini-capitalist with a stake in the system — and giving the country a vast pool of capital to develop the country.

    Right now, frankly, this is what Egypt needs — a free-market economy that enables it citizens to matter.

    America now pushes for political freedom before the economic kind. It did this in Iraq and now in Egypt, creating weak or failed democracies. In 2011, Secretary of State Hillary Clinton said she was getting calls from Egyptians during the Arab Spring asking how to replicate Chile's reforms — and we've heard nothing (from her) since.

    But the Chilean example shows that economic freedom is what makes political freedom possible .

    Peruvian economist Hernando de Soto points out to IBD that one of America's greatest success stories — Japan — under another military government, that of Gen. Douglas MacArthur — also focused on enacting economic freedom, particularly property rights, before restoring political freedom.

    Egypt's military should look to that example, too, because the hard reality shows that for every country under a military regime, this is what works.
  2. I'm afraid it would be easier to get Nancy Pelosi to vote for lower taxes.

    Egypt has a vast bureaucracy that strangles the country. The mindset is that everything has to be subsidized and the government has to control everything. Of course, this works out nicely for those in power, as they are able to line their pockets. It's kind of like you made Chicago a separate country, only with some pyramids.

    Probably the best thing that could happen to them is for the US and the rest of the donors to withdraw all aid and force them to sink or swim on their own. Unfortunately, there would probably be widespread starvation until they got thing sorted out, so that's a nonstarter.

    Meanwhile, Obama is actually trying to get Morsi back in power and demanding a role for the muslim brotherhood. You have to wonder why.
  3. pspr


    If that can't be worked out then Egypt may be doomed to just move from one strong man to the next.
  4. pspr


    Under Mubarak I believe the Muslim Brother hood was not allowed to have political candidates. And, prior to the elections the Muslim Brotherhood said they would not bring out a Presidential candidate but they did anyway.

    They may go back to banning the MB from participating in national politics. Obama is trying to have the MB's back. You would think he is a member.

    Bloomberg has an interesting article on this topic.
  5. Military coup in Egypt
    USA and the West are supporting the coup