When Egyptians took to the streets celebrating the departure of the long-reigning president Hosni Mubarak nearly four months ago, a wave of euphoria seemed to grip the country. A new dawn beckoned. Exhilaration abounded. The Egyptian people would decide their own destiny.
Today, while much of that pride remains, according to a newly released poll conducted by the Abu Dhabi Gallup Center, an undercurrent of anxiety about the economy and security has settled in. The dawn has broken, but the future is foggy.
The poll, entitled Egypt from Tahrir to Transition, released on Monday, noted that "Egyptians are less satisfied with their standard of living and the availability of necessities like quality health care, good affordable housing, and jobs". It further stated: "They feel their communities have become less safe and less tolerant, and many no longer trust the police."
These are not insignificant points. They represent the core needs of the individual: economic and physical security. Of course Egyptians understand that these are early days in their revolution, but revolutions rarely lead to better economic conditions in the short or even medium-term, and often spawn sharp reversals of economic fortune. This will be true in Egypt too.
Economic growth for fiscal year 2010-11 ending this month is estimated at about 1 per cent, a dramatic fall from the previous year's 5 per cent growth, and the worst growth number in a decade. Tourism - a key plank of Egypt's economy - has yet to recover.
Meanwhile, the government's macroeconomic position looks increasingly unsustainable, facing looming deficits and dwindling cash reserves, needing to make up a potential $20 billion shortfall. All the while, the Egyptian pound is deteriorating, new industrial investment is down, and the strong foreign investment run that Egypt enjoyed has ground to a halt.
While announced foreign aid and debt relief - from the IMF, World Bank, the US and Saudi Arabia - will help Egypt stem a short-term fiscal crisis, returning faith to an economy shaken by such a political storm will be a challenge.
Of course, it must be noted that Egypt is a land with many gifts. Its geographic location links Africa to Asia and Europe, with sea ports on the Mediterranean and short air links to major global trade centres. Its large and mostly young population - the largest and among the youngest in the Arab world - give it the potential of a tremendous "demographic dividend" similar to East Asia's tigers in the 1990s. Its rich cultural heritage has bequeathed it some of the world's most recognised tourist sites. And its oil and gas resources and Suez Canal receipts provide a steady stream of income.
These gifts, however, have not translated into the sort of economic prosperity that Egyptians deserve. Young and old Egyptians suffer from inflation, stagnant wages, high unemployment and an economy that - while improving - had failed to meet the growing demands of a large, young population.
The irony of the Egyptian revolution, however, is this: things may not get much better for awhile, and they will certainly turn for the worse in the short-term. And this leads to the second irony of Egypt's revolution. It occurred at a time when, at long last, it seemed that Egypt was getting its economic house in order. Policy reforms enacted by seasoned technocrats beginning in 2004 - some of whom are now in jail, in exile or on the run - led to sizzling growth rates, a stock market boom, employment gains, and record-breaking foreign investment.
A 2008 IMF report lauded Egypt's "bold reforms", noting that the country's 7 per cent growth at the time had expanded beyond energy, construction and telecommunications to more labour-intensive sectors such as manufacturing and agriculture. The IMF report noted that "between end-2004 and end-March 2007, 2.4 million jobs were created", dropping unemployment a full 1.5 percentage points to 9 per cent.
Of course, this growth trend sat atop a diseased economic structure, afflicted by years of Nasserist command-and-control planning and inefficient state-owned enterprises. What's more, critics alleged that Egypt's growth owed as much to the favourable external environment of rising oil prices and a liquidity-soaked world seeking new investment as with the "bold reforms" of policymakers. As for those "bold" policymakers, critics suggested that they spawned a form of crony capitalism - considerably enriching themselves from the growth.
Still, it's hard to quibble with the numbers and one hopes that Egypt can get some of its sizzle back, and that it does not lapse back into the economic stupor that held it back for five decades. In the year 1950, Egypt and South Korea had roughly similar sized economies. Today, South Korea dramatically outperforms Egypt: its economy is the 11th largest in the world. South Korea, it should be noted, was also famous for crony capitalism.
Why did South Korea succeed and Egypt fail? Mostly because South Korean policymakers made the right choices. They chose markets over the state, they created incentives for innovation, developed a strong educational infrastructure, supported a regulatory environment that provided space for the private sector, and encouraged industrial investment through tax and other incentives.
The creation of economic "plumbing" required to build the foundation for a strong economy will not excite the masses, generate Facebook groups, or spawn national heroes, but it will, in the end, be the most important test of the new Egyptian government.