Niall Ferguson: The Revolution Blows Up
Niall Ferguson is a Newseek columnist and Harvard professor.
I recently sat at the desk where John Maynard Keynes wrote The Economic Consequences of the Peace, his coruscating 1919 polemic against the Versailles Treaty. I asked myself what Keynes would be writing if he were with us today. I think the answer is The Economic Consequences of the Arab Spring....
It is now nearly six months since the Tunisian street vendor Mohamed Bouazizi made himself the fuse for a regionwide revolutionary explosion. His self-immolation not only toppled Tunisian President Zine al-Abidine Ben Ali, but also his Egyptian counterpart, Hosni Mubarak. A wave of protest swept through Algeria, Bahrain, Jordan, and Syria. Rebellion turned into full-blown civil war in Libya. The same seems close to happening in Yemen.
Western journalists flocked to Cairo’s Tahrir Square and wrote euphoric articles echoing William Wordsworth’s lines on the French Revolution: “Bliss was it in that dawn to be alive, But to be young was very heaven!” With a blithe disregard for historical accuracy, they dubbed it the Arab Spring, an allusion to the (unsuccessful) 1968 Czech uprising against Soviet communism....
The big story, however, is capital flight. Egyptian businessmen complain of soaring crime in the cities, the difficulty of carrying out normal transactions, and, above all, nerve--racking political uncertainty. Rich Arabs do not trust this revolution. Since January they have been rushing to get their cash into safe havens, some arriving in London or Zurich with suitcases full of cash. According to Reuters, the country’s foreign--exchange reserves fell by as much as a third in the first three months of the year. Al-Hayat newspaper estimates that $30 billion has left Egypt since the onset of the Arab Spring....