It might get harder before it gets better, but Egypt has a bright future ahead, writes David Halpert Listening to my friends in Cairo over the last few months, I have been sorry to hear a subtle shift in the way some Egyptians seem to be thinking about what is going on in their country. As a long-term friend of Egypt who has also had the privilege of spending some time in a somewhat parallel emerging Islamic democracy, Indonesia, I would humbly like to add my voice to your debate. I have lived on and off in Jakarta for more than 20 years now, but I am still a foreigner, so I am reluctant to write anything about the Indonesian transition to democracy for your paper. Unfortunately, all of my Indonesian friends, Muslim and Christian, seem to be too busy to sit down and write this article. So it falls upon me, a foreigner, but one who has fallen in love with both Jakarta and with Cairo, to write this article comparing the Indonesian revolution of 1998 with the Egyptian revolution of 2011, and in particular trying to give Egyptian readers some idea of what the future might hold for them. Indonesia did go through a process that could be quite instructive for people trying to consider what is going on in Egypt; it is a huge country (250 million people -- that is more than Egypt and all of her neighbours combined), four time zones, 13,000 islands, seven languages (or maybe 11, depending on who is counting), more Protestants than Holland, more Catholics than Portugal, and more Muslims than Egypt, all living in a messy, complicated country with lots of terrific dreams and unfortunately not much money. Egypt and Indonesia share a lot of history. Sukarno, the country's first president, counted Gamal Abdel-Nasser as a personal friend, and many of the country's greatest religious and even political leaders spent time at Al-Azhar. Visit the place this morning and you will probably find dozens of Indonesian students sitting on carpets taking in the wisdom of your scholars. Before democracy, Indonesia looked quite a lot like Egypt under a Pharaoh. There was one president, a former general, who ruled the country with absolute power from 1965 to 1998. Along the way, he did appoint a few vice presidents, but in his final weeks in office he confessed to parliament that he didn't really think his hand picked successor was "capable" of doing the job. Also, he had ambitious children, including several with active business careers, and a daughter who is rumoured to have fancied herself as a successor (she did run in the elections; she managed to hold down almost one per cent of the vote). The dictator was relatively kind to the Christian minority, deferential to the US embassy, and occasionally brutal to anything that looked like a meaningful threat to his regime, either from the left (human rights groups say his paramilitaries exterminated 500,000 communist sympathisers) or indeed from the religious right, where his army opened fire on Islamist demonstrations near the capital. The dictatorship fell, quickly and unexpectedly, although in retrospect we should have seen the signs, as the old man seemed to turn inward following the passing of his first lady. His final cabinet was something of an embarrassment (his daughter was appointed to the cabinet). But what really pushed him off the chair was the collapse of the economy, which fell over in heap when the currency devalued in the Asian financial crisis. What followed was really painful, for the elite but more importantly also for the common man, as factories around the country shut down because of problems with working capital, as well as labour, and the country's traditional commodity exports plunged in value following the broader problems in the Asian region. Almost every bank in the country seemed to collapse (so far this has not happened in Egypt) and some of the country's most significant private sector employers fled overseas, or went to prison. The stock market took it in the face, losing more than 95 per cent of its value in dollar terms from the start of the crisis to the finish. Politically and economically, Indonesia seemed to have fallen off the map, and some cynical analysts from neighbouring Australia were starting to use the "f" word (failed state). Inflation ate away much of the value of people's savings, while imported products such as medicine and spare parts suddenly saw their prices shoot up three and four times in rupiahs. Times were tough. Most alarmingly, while the policies of the democratic government were designed to be "pro-poor" and help the working man (most specifically a very strict labour law, which means that an employer seeking to cut back on staff would have to pay 36 months of compensation), unfortunately they had the effect of driving away almost all the investment in the manufacturing sector. Overnight, Indonesian industry collapsed, and the country became yet another export market for the factories of China. Unemployment rose in the cities, and nutritional statistics got worse than they had been under the dictatorship. It's a sad story, but it's a true one. Six years after the revolution, the country had had three presidents, all of which were honourable people but none of which really did a very good job of running the country. Finally, a new popular leader was elected, with a background in both the military and in economics, a moderate Muslim who was at the same time a talented musician. He charmed the voters with both speeches and his music, and won the popular vote in a reasonably fair election by a comfortable margin in 2004. Under the presidency of former General Susilo, Indonesia has done much better. The economy has grown, industry is back, and nutrition is improving again. The stock market has soared, and the currency has recovered about a third of the value that it lost during the transition to democracy. Some of this is because of his leadership and the talent of the people who work for him. Some of this is because of higher commodity prices (in particular coal, a major export for the country), and some of it is just the result of time, as the memories of the chaos of the financial collapse and the inflation problem fade into memory. Along the way, Indonesia has picked up some interesting new habits. Islamism, which was previously on the margins of the political system, is now firmly entrenched in parliament with not one but four different political parties, which between them make up the second largest bloc in the parliament, after the president's party. More alarmingly, terrorism has become a sad fact of life in both Jakarta and on the resort island of Bali, although in total the number of Indonesians and foreigners killed in motorcycle accidents still vastly exceeds victims of terror in the country. And then there is the traffic. Car sales and motorcycle sales first collapsed with the financial crisis, but have now come back to unprecedented levels in the country as the economy recovers. But pulling together the support in parliament to get much needed basic infrastructure work done is proving much more difficult, so the traffic gets worse and worse. Some people say that democracy is expensive; this has been the most obvious cost for the country. Some of the old habits likewise continue. Money politics remains an obvious fact of life in the Indonesian parliament; while the president is personally considered to be honest, there are plenty of rumours about his ministers, the political parties, and even the first lady. Looking back on all of this, it is probably safe to assume that Egypt will face a couple of years of confusion in politics before you set off on the road to a successful and prosperous democracy. The economy may well get worse before it gets better, and sectarian relations are likely to be under strain for the next few years in particular. But longer term, there is every reason to expect that the natural genius of the Egyptian people will pull through, and the country will flourish under democracy, just as Indonesia has done. You need the right leadership, some time, and also some luck. But it can happen. I am not a voter in either country and I don't think it is my place to offer advice to the Egyptian people. But for my friends in Cairo who may be wondering about what to do next in terms of policy or politics, a few brief suggestions: - Get used to the fact of political Islam. You may not agree with some of these people, but you now live in a democracy where you need to learn to respect their opinions anyway. And you need to work hard to help them to learn to respect your opinions and your beliefs as well. - Try to fix the agricultural sector. Egypt used to be the world's largest exporter of food and today it is the world's largest importer. If the new democratic government can solve the riddle of this Sphinx, it will win a long-term place in the hearts of the Egyptian people, in my opinion. - Don't go overboard with the witch-hunts. There were some dishonourable men in your old government and there were some dishonourable businessmen. And a few high-profile court cases will probably help to set an example for both government officials and business people going forward. But longer term, Egypt needs its entrepreneurs -- Muslim and Christian -- and it needs talented people in government. It was almost impossible under the last few decades of Egyptian history to get very far in either business or government without "playing the game". If you throw too many talented and educated people on the fire, your people will eat less going forward. - Above all, don't give up hope in your country. Don't move to Canada; don't sell your house; don't sell your shares. Longer term, Egypt is almost definitely going to get better. Cairo may not be a part of the French Riviera, but it is also not Mogadishu and it is not even Baghdad (and Iraq is getting better). Cairo is the largest city in Africa, full of hard working and talented young people at just the moment that Europe, the US, China and Japan are all running in to demographic brick walls. The world is getting concerned about the labour supply. Your problems are serious, but they are not insurmountable. Jakarta is one example to "prove" this; there are many, many others. With blessings for a peaceful, contemplative fast, and a prosperous democratic Eid. A friend in Jakarta. * The writer is an American-Indonesian investor who has invested heavily in Egypt in recent years.
