The recent events in Tunisia now magnified in Egypt signal key flaws in state-run economies and societies where free markets are dictated by the so-called micro-elite. Rather than an affluent population that invests in infrastructure, new businesses, job creation and inflation, the micro-elite consolidate power, engage in price-fixing, and reduce access to basic health services and education which creates societal disparity among the working class and the ruling class.
I found several blogs that crafted these viewpoints, including StrategyPage and Nancy Reyes offerings in the Blogger Network who draws comparisons to the fall of the Shah of Iran. Nancy points to a Los Angeles Times article last August in advance of the Muslim holiday Ramadan, where Cairo shopkeepers were hoarding food stores to artificially drive up prices during the holiday season in defiance of government policy. (Note to self: governance and policy only works if people follow the policy.)
The great equalizer has been the internet and the “underground” internet sources since the Egyptian government this past Friday took the unprecedented move to sever internet and mobile connections to major regions of the country. Keep in mind that even during the Iranian “Twitter Revolution” and the Lebanese “Cedar Revolution” did the governments go to this extreme. This had simply never been done before – ever. The dramatic reduction and cast-off of the Egyptian society from the global mobile society can be seen in stark images such as those posted on Twitter. Carriers such as Vodaphone have opened up dial-up lines for connection into Cairo according to the Wall Street Journal. Key will be when business opens tomorrow, will the financial markets be able to function without internet and mobile phone service? This could be the final tipping point and one reason why the US State Department has issued a “voluntary evacuation order” for American ex-pats traveling abroad to leave Egypt by Monday (note the intentional down-play of this order as a “travel restriction” on the US State Department site).
For more information on the mobile society, see our 2011 CEO check-list blog post here.