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Until two weeks ago, Egypt was an impressive economic success story. It was considered an awakening economy which had a high growth rate for an entire decade. Hosni Mubarak himself was praised for the reforms he introduced, the process of privatization and his fight against the bureaucracy. Officials of the International Monetary Fund would speak enthusiastically about the impressive growth of foreign investments in Egypt and the regime’s festive slogan “Egypt is open for business.”

But then the protests began and suddenly the economists became aware that they had missed the point, and by a large margin. Suddenly the good economic situation turned bad and Mubarak, the reformer, became a cruel dictator. The rating agencies hastened to lower the country’s credit rating and the United States president, Barack Obama, who not so long ago had embraced Mubarak with the deepest friendship, began to hint that it would be best if he vacates his seat immediately.

That is how Egypt became the sick child of the Third World overnight, the symbol of poverty and a country which suffers from enormous gaps in income between a narrow rich elite and the masses who exist on $2 a day. It is not by chance that the uprising is being dubbed “the intifada of the hungry.”

The economists immediately reached the realization that Egypt does not have a middle class, and that even someone who manages to get an academic degree ‏(one million graduates per year‏) does not find work other than in cleaning and peddling goods. This is the time to mention that the uprising in Tunisia − which set the ball rolling for the protests in the other Arab states − started when a frustrated university graduate, aged 26, immolated himself because the police had confiscated his vegetable stand.

Egypt’s Gross Domestic Product stands at $220 billion, exactly the same as Israel’s. But Egypt has some 80 million citizens while in Israel there are a mere 7.5 million. That is why the standard of living in Egypt is approximately 10 percent of that in Israel. And if one adds to this the enormous gaps between the rich and poor, it is possible to understand where the frustration and anger stem from.

Egypt finished 2010 with a high inflation rate of 13 percent, while the price of food went up by some 20 percent and real unemployment reached 25 percent. In a country where 40 percent of the average income goes toward food ‏(in Israel it is 17 percent‏), that is a central reason for the fury of the masses who are not able to earn a living. In addition, Egypt suffers from a corrupt regime, a lack of freedom of expression, security forces that arrest people on an arbitrary basis and rigged elections. How is it possible otherwise to get a 97 percent majority over a 30-year period?

The revolutions in Arab countries are always accompanied by a bad script. They start with prolonged poverty and a sharp rise in food prices. As a result, the masses take to the streets, the regime sends in the army to suppress the protests and if it succeeds, the revolution is postponed for a few years.

If the army does not succeed, it joins the masses and the dictator falls. Thereafter, “free elections” are held, the results of which do not correspond with the naive dreams about democracy of Obama and Angela Merkel, when well organized groups gain control of the regime. This is how extremist Islam rose to power in Iran, Hamas took over the Gaza Strip and Hezbollah gained control in Lebanon. The danger in Egypt lies in the possibility that the Muslim Brotherhood will gain control − which is the worst case scenario for the citizens of Egypt, for Israel, and for the entire world.

This frightening scenario, and the fear of the domino effect that could reach as far as the Saudi royal house, is what caused the price of oil to skyrocket. In Israel it found expression in a devaluation of the shekel since Israel’s risk premium rose from both the economic and the strategic points of view.

The saddest man in this story is Benjamin Netanyahu. Mubarak was the last regional leader who was still prepared to meet with him. Mubarak was also the only one who defended the peace with Israel with his own body in the face of strong internal opposition. The Turkish prime minister, Recep Tayyip Erdogan, does not want any connection with Netanyahu; the Jordanian monarch, Abdullah, is not prepared to speak to him; and the Syrian president, Bashar Assad, considers the struggle with Israel a strategic asset.

Now Netanyahu understands just how critical the peace with Egypt is for Israel. But now it is too late. Mubarak is already history.