Third World Nanny States & Forced Poverty

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Why is it that Egyptians do well in the U.S. but not Egypt? We could make that same observation and pose that same question about Nigerians, Cambodians, Jamaicans and others of the underdeveloped world who migrate to the U.S. Until recently, we could make the same observation about Indians in India, and the Chinese citizens of the People’s Republic of China, but not Chinese citizens of Hong Kong and Taiwan.

Let’s look at Egypt. According to various reports, about 40 percent of Egypt’s 80 million people live on or below the $2 per-day poverty line set by the World Bank. Unemployment is estimated to be twice the official rate pegged at 10 percent.

Much of Egypt’s economic problems are directly related to government interference and control that have resulted in weak institutions vital to prosperity. Hernando De Soto, president of Peru’s Institute for Liberty and Democracy (, laid out much of Egypt’s problem in his Wall Street Journal article (Feb. 3, 2011), “Egypt’s Economic Apartheid.” More than 90 percent of Egyptians hold their property without legal title.

De Soto says, “Without clear legal title to their assets and real estate, in short, these entrepreneurs own what I have called ‘dead capital’ — property that cannot be leveraged as collateral for loans, to obtain investment capital, or as security for long-term contractual deals. And so the majority of these Egyptian enterprises remain small and relatively poor.”

Egypt’s legal private sector employs 6.8 million people and the public sector 5.9 million. More than 9 million people work in the extralegal sector, making Egypt’s underground economy the nation’s biggest employer.

Why are so many Egyptians in the underground economy? De Soto, who’s done extensive study of hampered entrepreneurship, gives a typical example: “To open a small bakery, our investigators found, would take more than 500 days. To get legal title to a vacant piece of land would take more than 10 years of dealing with red tape. To do business in Egypt, an aspiring poor entrepreneur would have to deal with 56 government agencies and repetitive government inspections.”

Poverty in Egypt, or anywhere else, is not very difficult to explain.

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  • JRHowosso

    What are the odds that no one in D.C. reads this article????

    • LibertyLover

      Sadly, 101% against it.

  • Mike

    About 100%.

  • tanstaafl

    You mean they can read in D.C.?

  • Dan

    I recall an interview several years ago with a high mucktetymuck in Saudi Royal family who lamented that perhaps there was too much emphasis on religious instruction in his country/kingdom. He finished up with something like, "Frankly, what we need is more people schooled in economics and business and less clerics."

  • sneed5

    This would be a good time to start pulling out of all the countries in which we have our noses and U.S. taxpayer money. Cut off the funds we give them, reinforce our defenses here at home, get busy drilling for oil and natural gas, produce more coal, and strive for more renewable energy(with no taxpayer subsidies)! To a man, all countries of the world hate us!! So I say, let them go on their own and let's take care of our own people. We are now being held hostage by the Islamists!!

  • minnieiam

    After WWII we engaged in a plan to upgrade the economies of third world countries by bringing their best and brightest here to be educated in our colleges and univeristies, at US taxpayer expense, so they could go back home and help their countries prosper. The few that did go back have used their new found knowledge to build bombs and weapons to attack us. It's beginning to look like those who found ways of remaining here have morphed into a 5th column intent on aiding and abetting their fellow countrymen in bringing down our system so that we will have no more than they have. This is called the unintended consequences of good intentions. Or you can't make a silk purse out of a sow's ear. It's time we stopped trying.

  • MarkW

    I read somewhere that Mexicans open up more small businesses last year in Houston then in all of Mexico. The banks are taking in over $40 billion dollars a year from drug money. If the cartels wanted to be pro Mexico, they should relax the banks credit that are holding their deposits for small businesses.