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After a review of the size and origins of Egypt's mounting economic problems during the 1980s (international indebtness, macro-imbalances, micro-distortions, employment creation and poverty alleviation) the causes of Egypt's failure to implement policy reforms are analyzed. These are seen to lie in domestic blockages (role of interest groups), and especially, in the "strategic rent", which Egypt has been able to extract from the U.S. and, to a lesser extent, from other OECD countries and international agencies like the IMF. Such rent derive from Egypt's contribution to U.S. foreign policy goals in the region. The Iraqi invasion of Kuwait has merely reinforced this "strategic rent". (DÜI-Hns)

The sources of Middle East extremism are profoundly complex and intertwined, composed of economic, social, political, and cultural dimensions. As important as the socioeconomic and political aspects of the present crisis are, however, the cultural difficulties are equally challenging, perhaps uniquely so.

Why do "Islamic radicals"—including the partisans of al-Qaeda and other followers of Osama bin Laden--enjoy so much sympathy in the Middle East and the wider Muslim world? This Global Policy Brief explores four socioeconomic roots of Islamic radicalism: - The multidimensional crisis of the Muslim world - The rage of the young, a majority of the population in the Middle East, are faced with poor livelihood prospects - Increasing poverty and collapsing cities - Failures of government.

Why do "Islamic radicals"—including the partisans of al-Qaeda and other followers of Osama bin Laden--enjoy so much sympathy in the Middle East and the wider Muslim world? Understanding such a phenomenon is a necessary (but not sufficient) condition for crafting a strategy to cope with the murderous violence of September 11, 2001. This GLOBAL POLICY BRIEF explores these socioeconomic roots of Islamic radicalism: - The multidimensional crisis of the Muslim world - The rage of the young, a majority of the population in the Middle East, faced with poor prospects - Increasing poverty and collapsing cities - Failures of government

Water is becoming increasingly scarce all over the world. All indicators of water availability show that per capita supplies will continue to decline in the years ahead. A conservative recent estimate projects that 1.8 billion people will live in regions or countries with "absolute water scarcity" by 2025: that is, they will not have enough water to maintain their current level of per capita food production and also meet burgeoning urban demands, even at high levels of irrigation efficiency (Seckler, Molden, and Barker 1999). An additional 350 million will live in regions with "severe water scarcity," "where the potential water resources are sufficient to meet reasonable water needs by 2025, but (only if the country) embarks on massive water development projects, at enormous cost and possibly severe environmental damage, to achieve this objective" (ibid., 1). There will also be additional, sometimes severe, localized water scarcities, even within countries that, in aggregate, have abundant water (for example, Sri Lanka: see Amarasinghe, Mutuwatta, and Sakthivadal 1999). Water scarcity will not go away. It is encouraging that past predictions of future water use have been consistently too high. Linear projections of the past into the future have consistently underestimated the potential for changes in technology, social organization, and incentives that have made it possible to reduce per capita water use without negatively affecting welfare. This tendency offers opportunities for policy makers, since it can direct their action to those changes that can facilitate such benign responses to increasing water scarcity. Nevertheless, rising water scarcity poses serious challenges. This paper develops a simple framework for analyzing the political implications of diverse strategies for managing water scarcity from attempts to augment supplies to managing demand by changing water users' incentives. All responses provide opportunities for cooperation and creativity; all contain pitfalls and potential for conflict.

Improving demand management or enhancing water conservation is a complex and difficult governance problem, involving a complicated mixture of decentralization in some areas and instances (e.g., to promote greater on-farm efficiency via water-users associations) and re-centralization in others (e.g., to cope with pervasive third-party effects). Both the infrastructural and institutional changes are likely to be significant. Further, significant interest groups in society and within the state apparatus stand to lose important rents and/or privileges. In some cases, these interests may be able to stall or to block reforms. Given the lags involved and the possibilities of significant unexpected negative shocks, the consequences of "business as usual" could be severe. That is, failure to reform systems, and, therefore, failure to deliver adequate water supplies to increasing numbers of people, has destabilizing potential for some governments. Yet the process of decentralizing decision making can itself be destabilizing, depending upon the specific context. The dynamics of political reform of water allocation policies have important potential to add to social and political conflict within increasingly water-scarce societies. By the same token, however, there are significant opportunities to smooth the transition to more water efficient allocation systems.

In der Epoche der strukturellen Anpassung, in der sich die nah- und mittelöstliche Region wirtschaftsgeschichtlich befindet, können die zentralen wirtschaftlichen Probleme - Mangel an Arbeitsplätzen, Nahrungsmitteln und Kapital - nur durch Dezentralisierung der politischen Ökonomien gelöst werden. Vorbedingung ist eine erhöhte Partizipation sowie Rechtsstaatlichkeit. Die Ausweitung der Partizipation muß nicht zwangsläufig westlichen Demokratiekonzepten entsprechen, vielmehr werden die Nationen der Region nach eigenen, kulturell authentischen Wegen suchen. (DÜI-Hns)

The paper explores the political economy of Egypt's failure to implement policy reforms during the 1980s despite mounting problems of international indebtness, macroeconomic imbalances, microdistortions, lack of employment creation, and the need for poverty alleviation. After reviewing the size and origins of these problems, the causes of reform failure are analyzed. (DSE)