By Steven A. Cook
FORTUNE -- As Ukraine's political strife continue making headlines this week, and as armed men on Friday occupy the country's pro-Russia region of Crimea, it's easy to get lost in the news.
Over the last three years, as uprisings and demonstrations have erupted around the world, journalists, pundits, and other analysts have wrongly drawn parallels between these events. When protests broke out in Istanbul last spring, some news outlets wondered whether Taksim Square was Turkey's "Tahrir Square" -- a reference to the now iconic traffic roundabout in central Cairo where Egyptian demonstrations brought an end to then president Hosni Mubarak's rule in early 2011.
More recently, journalists covering Ukraine's uprising against ousted President Viktor Yanukovych have made direct comparison to Tahrir Square. These comparisons make great copy and perhaps keep viewers interested, but they are largely superficial. It is true that the protests that brought down both Mubarak and Yanukovych were in squares whose names are derived similarly, but other than at that most abstract level, the political dynamics in Egypt and Ukraine are hardly analogous.
Yet there is one specific area where the Egyptians and the Ukrainians have strikingly similar challenges: Both countries are broke. And this raises the prospects for further political instability.
MORE: Delta takes off
Neither Egypt's 2011 uprising nor the recent demonstrations in Ukraine was principally about economic grievances, however. Egyptians poured into the streets wanting to live in a freer and more just society. Ukrainians were responding to Yanukovych's rejection of an agreement with the European Union in favor of a generous financial assistance package from Moscow. Although the trigger for the protests in Kiev may have been linked directly to trade, finance, and the country's economic well-being, for many Ukrainians, the demonstrations were about their country's identity.
There is a temptation for Western analysts and policymakers to rush into Ukraine's currently unsettled political and tenuous economic environment with promises of aid, loan guarantees, debt relief, and an International Monetary Fund agreement. This is positive -- and something that bureaucrats know how to do -- but Ukrainians have an obligation to undertake difficult political reforms to improve the chances that the country's economy does not collapse.
Within the policy and academic communities there has long been a debate about what is often referred to as "sequencing." That is, should countries that are undergoing political transitions focus on economic development or democratic reform? Although efforts to answer this question have taken up reams of paper, it actually sets up a false choice. Countries need to do both simultaneously. Consider, for example, Egypt. It became clear relatively quickly after Mubarak's fall that a deteriorating economy would have an impact on the country's politics and stability. Although Egypt boasted good macroeconomic indicators during the mid-2000s, the uprising laid bare a reality of massive debt, unsustainable subsidies, stunning rates of poverty, and high unemployment, especially among young Egyptians. The political uncertainty and chaos around Mubarak's fall also contributed to steep declines in tourism -- a principal source of foreign currency -- and also chased away foreign investments outside a faltering hydrocarbon sector.
Following Mubarak's fall, Egyptians believed that prosperity and democracy were within their grasp. Yet the Supreme Council of the Armed Forces, which held power in the immediate post-Mubarak period, did little to address Egypt's yawning economic challenges nor -- in the officers' own words -- did they "pave the way for democracy." When the country's first democratically elected leader, Mohammed Morsi, came to power he presided over a near economic collapse while seeking to institutionalize the power of his Muslim Brotherhood. After a year, Egyptians took to the streets en masse to demand Morsi's ouster -- a call the military seemed only too happy to oblige.
As Egyptians have made clear on social media, their experience is a cautionary tale for Ukrainians. Egypt's present political uncertainty, its instability, and its spasms of violence might have been avoided had the country's leaders -- first military commanders and then the Muslim Brothers -- provided an opportunity for Egyptians to process their grievances through democratic institutions. The uprising in 2011 was not solely about economics, but the enormous demonstrations of late June and early July 2013 were at least in part a response to worsening economic conditions such as fuel shortages, rolling blackouts, inflation, the rapid deterioration of critical infrastructure, and Morsi's clear authoritarian tendencies. Had Egyptians understood that they would be able to hold their leaders accountable, they likely would not have supported the return of the armed forces to politics, yet they believed that President Morsi was working to make it impossible to hold him responsible for the country's near economic collapse.
Ukraine is different from Egypt of course, but not all that different. The country's new leaders -- if they are actually leaders -- not only need to pursue policies that will pull the country from the economic brink, but they need to establish the mechanisms for citizens to hold them accountable should they fail.
Steven A. Cook is the Hasib J. Sabbagh Senior Fellow for Middle Eastern Studies at the Council on Foreign Relations. He is the author of The Struggle for Egypt: From Nasser to Tahrir Square (Oxford University Press).
With Egypt sadly facing a dangerous situation in the weeks ahead, and with outsiders unable to help, it is tempting to give up on the country's journey to democracy. We shouldn't.
By Mohamed A. El-Erian
FORTUNE -- Increasingly, the unfolding Egyptian tragedy is seen in Washington circles as confirmation that the U.S. has lost influence in a critical part of the world, and particularly vis-à-vis a military that receives lots of MOREAug 19, 2013 7:06 AM ET
Advice for Egypt's armed forces and politicians in the wake of President Mohamed Morsi's ouster.
By Mohamed A. El-Erian
FORTUNE -- Egypt is navigating its third, largely unplanned government transition in just two and a half years. A fourth one is likely to be months away (and hopefully better-planned).
Almost by definition, and certainly by force of circumstances, this is an inherently tricky phase in the country's proud and long history; and MOREJul 5, 2013 7:13 AM ET
An Egypt-focused venture capitalist gives her thoughts on what today's events mean for the country's economy and its entrepreneurs.
FORTUNE -- With all of the change today in Egypt, Fortune decided to check in with Leslie Jump -- a Washington, D.C.-based partner with Egyptian venture capital firm Sawari Ventures. She also is the wife of Edward Walker, U.S. Ambassador to Egypt between 1994 and 1997.
We first talked to Jump during the original MOREDan Primack - Jul 3, 2013 8:08 PM ET
By putting himself above the law, Egyptian President Mohamed Morsi is putting America's sympathy - and dollars - on the line.
By Nina Easton, senior editor
FORTUNE -- "It's the economy, stupid," Vali Nasr, dean of Johns Hopkins School of Advanced International Studies, tells a Washington dinner party. Nasr isn't applying that familiar bromide to U.S. politics. Egypt is the topic of this gathering, sponsored by Bridges of Understanding, a U.S.-Arab MOREJan 11, 2013 5:00 AM ET
Despite the economic uncertainty and social unrest in Egypt, tech start-up investors are finding plenty of promising options.
By Christopher M. Schroeder
FORTUNE -- It's been more than a year since Egypt's former president Hosni Mubarak resigned after the Arab Spring uprising began. Many Egyptians had high hopes for major reforms after the dictator's 30-year rule, but so far few of them have been realized. But despite the economic turmoil and MOREApr 25, 2012 12:02 PM ET
Leaders around the world are facing angry voters who want real change. Can they keep getting by on the same old promises, or is it time to clean house?
By Geoff Colvin, senior editor-at-large
FORTUNE -- Rarely -- maybe never -- has global leadership been more up for grabs in a single year than it is now. Seven major nations are holding presidential elections -- in chronological order, Russia, France, Egypt, Mexico, Venezuela, MOREMar 6, 2012 5:00 AM ET
One year after the uprisings in the Arab world, some nations in the region say they're open for business. Foreign investors will need to learn a whole new set of rules.
By Vivienne Walt, contributor
FORTUNE -- If you want to gauge the Arab Spring's economic health one year after revolutions exploded in Tunisia, Egypt, and Libya, meet Abu-Bakr Makhlouf. Last February, Makhlouf, founder of a construction supply company in Cairo, stood MOREMar 5, 2012 5:00 AM ET
The ongoing revolutions across the Middle East would seem to be good news for markets. But so far they've scared most foreign investors away.
By Peter Carbonara, contributor
FORTUNE -- A few investors look at the Arab Spring -- the wave of protest and revolution that began last December when a Tunisian street vendor set himself on fire to protest his harassment by police -- and don't see a particularly big deal. MOREDec 13, 2011 10:15 AM ET
Fannie Mae is nearing another not so magical milestone.
The government-owned mortgage investor posted its latest quarterly loss Friday, blaming the recent house-price double dip for a rise in credit costs. Fannie (FNMA) also said its regulator will ask the government for more money to cover those losses.
The $6.5 billion request from the Federal Housing Finance Agency will bring the company's cumulative draw on Treasury funds since its September 2008 takeover MOREColin Barr - May 6, 2011 5:02 PM ET
|GM's $1.3 billion recall cost wipes out profit|
|Taxpayers are subsidizing CEO pay - The Buzz|
|Regulators pave way for Internet "fast lane" with net neutrality rules|
|Will 7 Apples a day keep the bears away? - The Buzz|
|Female gun instructors in hot demand|