邪恶少女漫画萝莉漫画:Egypt's Backward Turn

The International Monetary Fund on Sunday extended a $3 billion loan to Egypt's transitional government. That pledge follows the World Bank's commitment of $4.5 billion and at least $2 billion in promised debt relief and loan guarantees from the U.S. All this because, as President Obama rightly put it last month, a key way to "support positive change in the region is through our efforts to advance economic development for nations that are transitioning to democracy."

Cairo has now proposed a budget that should give its donors a hint as to what kind of change all that money is buying. The headline measure is a 26% increase in food and consumer-goods subsidies, which already averaged 8% of GDP per year over the previous four years. The government will also hike housing subsidies by more than 50%, oil subsidies by 32%, social-security pensions by 71%, and welfare benefits by 50%.

The accepted wisdom is that all this "social justice" is a break from the "pro-business" Mubarak era. In reality, buying off a disgruntled citizenry with ever-more generous handouts is a preferred tactic of all autocrats.

That was certainly the case under Hosni Mubarak, despite some appearances to the contrary. Under his leadership, Cairo sold off hundreds of state-run businesses and built up billions in foreign-currency reserves. But too often these assets passed into the hands of cronies or groups controlled by the military. Workers were laid off but the marketplace never considerably improved for consumers, thanks in large part to Cairo maintaining a system of import bans and restrictions that protected domestic champions. Income and corporate tax rates have remained below world averages, but that doesn't account for the de facto taxation that came in the form of endemic corruption.

Then, too, the Mubarak government maintained its real hold over Egyptian enterprise with an army of bureaucrats, policemen and infrastructure workers, who make up 35% of Egypt's work force. Their wages are now set to jump in the next budget.

Those Egyptians who don't count on state sinecures are receiving the supposed gift of a minimum wage of 700 Egyptian pounds ($118) per month. Inflating the cost of Egyptian labor won't do anything to improve Egypt's unemployment, now close to 12%, and in the long term getting more money for the same work won't even make employed Egyptians more prosperous. To do that would require making Egyptians more productive. In a 2009 report on the textiles industry, the American Chamber of Commerce in Egypt remarked that while it takes an Egyptian worker between six and seven minutes to make a basic shirt, Sri Lankan and Bangladeshi workers did the same job in four minutes, and for less money.

It's hard to blame anyone for wanting more money in their pocket, especially in Egypt where inflation hovers near 12%. Yesterday the central bank announced it would keep its benchmark interest rate at 8.25%, a four-year low, with an eye to the paltry economic growth forecast for this year. But Egyptians will never get the kind of prosperity they want until they have a stable currency and the freedom to trade it.

Cairo's increased food and fuel subsidies only make that day more distant and further distort price signals that could otherwise encourage more productive allocations of capital. Since any government can only beg, borrow or steal so much subsidized bread, this alimentary welfare effectively creates artificial scarcities and informal markets that can gouge consumers who want more than their rationed quota.

The interim government and military council running Egypt for the time being insist they don't have the popular mandate to shrink the size of the state. You'd think that argument would also hold for the current expansion of the state, which sets the stage for an election that risks being the choice between the most benevolent dictators.

Whatever government Egyptians elect for themselves this fall will leave them no freer than they were last year, if they are still relying on that government for their daily bread. This is not the kind of reform that generous Western subsidies ought to abet.