The Future of Middle-Income Countries

All of Egypt is having a problem, not just the rural areas. The IMF may not give them the next loan installment. Egypt borrows 49% of government spending and interest takes up 56% percent of their spending. Egypt has not been following the rules for their current loan from the IMF. They need to raise taxes by 16% just to cover debt servicing. If they want a national court or national defense, they will have to raise taxes even higher. Or, perhaps, they may want the nation to pay for schooling, rather than the local areas? If I was an Egyptian, I would not want to spend money on defense, as being ruled by another nation does not seem like it would be any worse than their local bandits. Why eat less food to get the same results?

Apparently, the Egyptian government wants to use borrowed money to slow the drop in their currency. The IMF also made a condition on the current loan, that Egypt provide economic transparency. They have not gotten around to that, at least as of yet. Perhaps the IMF should not have even given a loan, with multiple disbursements, without first getting financial transparency? Who knows, but maybe a foreign country(ies) may give money to Egypt to open their border to willing refugees? They could make life so bad for them later that they would have an incentive to go elsewhere. Meanwhile Egypt would still have some of the net amount, or at least some people Egypt would. Perhaps they could compete for international religious dollars, they could study wealthy US prosperity gospel ministers and apply that business strategy. A prosperity chapter for the Hadith?

I can say that graft and corruption does remove buying power for the many. Egypt has near zero press freedom, they are in 166th place. Not having a free press and not having investigative reporting and not having whistleblower protections and encouragements and equal justice under law can be expensive for the majority of the population. It is expensive to be poor in corrupt nations. Perhaps the world will continue to subsidize Egypt so they can rely forever on the kindness of strangers. Yet this creates inflation for nearly everyone in the world as Egypt is able to consume more than they give back to the world economy. If they let their currency drop, then their exports will go up. If they do not want to risk relying on the kindness of other nations forever, they may want to figure out what they want to export in exchange for food and whatever else they might desire to import. If the majority of the citizens get into even worse shape, perhaps that would be an incentive for a new government, perhaps even one bound by the rule of law and less corrupt? Perhaps the elites may then have to stop putting non earned money in the Caymen Islands, Malta, or Crete?

Or perhaps, if there is a need for labor in other counties, more Egyptians can move offshore and possibly send more remittances back. Money from abroad is already 7% of their GDP. That is one way to provide economic goods and services to the world. No doubt that would increase their brain drain and the percentage of people with a higher-than-average desire to get ahead. Based on their existing remittance inflow, the level of brain drain is not a current parameter to begin with.

Or Egypt could decide to offer up newborns for export. For nations with a low birth rate, and a desire for more future laborers, it may be cheaper to import newborns due to the medical and other expenses of maternity and birthing. Couples with fertility problems would be prospective parents. The rate of fertility issues has been rising for decades.

Importing nations will have to look at the higher future medical costs though of newborns deprived of adequate nutrition. Aso mothers who are in less than good social situations, esp with stress created cortisol abundance have children with shorter life expectancy, higher levels of future medical problems on average, and higher rates of sociopathy. Also, due to epigenetics, some of that cost will visit the kids and grandkids (and possibly their government, depending on who pays for medical costs of that newborn). If their life expectancy is lower, then the public costs of schooling will be amortized over a shorter working career.

Even though these costs are known to science it does not mean the importing country would let that hinder them, depending on the type of political system they have. Egypt would have better luck marketing to newborns to nations that have not as yet decided to address the socio-economic status of expectant months for long term cost savings. LS