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Thursday, May 23, 2024

Egypt’s Economic Recovery lies in the balance

by Khalaf Ahmad Al Habtoor

© Istockphoto
© AP Images, people protest on the streets of Egypt during the revolution
© AP Images, Egypt has suffered great financial losses since the revolution
© Istockphoto

Unlike those who cheered the collapse of Egypt’s former government, I had serious doubts about the country’s future. It was uplifting to witness young people ready to sacrifice their lives for their convictions. However, while I hoped for a happy ending for the sake of this nation, close to the heart of every Arab, I’m also a realist. Idealism alone cannot solve Egypt’s fundamental problems which have worsened since President Mubarak’s downfall.

On Monday, the ruling Supreme Council of the Armed Forces warned that the Egyptian economy could collapse.

“The poverty rate is approaching 70 per cent and domestic and foreign debt has reached 1,080 billion Egyptian pounds, which is 90 per cent of GDP,” said the Assistant Defence Minister for Financial Affairs Mahmoud Nasr. Moreover, there is zero foreign investment largely because the country has been downgraded as “risky”.

Mr Nasr said tourism is down 80 per cent, causing losses of US$40 million (Dhs147 million) a day; the foreign currency reserve has been reduced by US$8 billion (Dhs30 billion); there is a burgeoning budget deficit and national growth won’t exceed two per cent.

The reasons he gives for this grave downturn are mixed. They include corruption, declining social values, poor education and worsened relations between the public and those practising law enforcement. But, all is not lost, he says, as the economy’s infrastructure remains.

His panacea for improvement rests on “true democracy”, eradicating corruption and the creation of a stable investment climate. Those are fine aspirations but how can they be fulfilled while 70 per cent of Egyptians worry where their next meal is coming from?

The extent of the emergency hasn’t hit home yet, but I predict that when it does, there will be a revolution of the hungry – at this rate within three months – along the lines of the 1977 ‘Bread Riots’ when millions took to the streets shouting: “The people are starving”.

Last month saw rising food and beverage prices (up 21.7 per cent on last year) due to the high cost of fuel and a weakening of the Egyptian currency, making imports more expensive.

It seems to me that this caretaker government needs to get its priorities in order. It is one thing to be open to the concerns on the street and quite another to be a slave to them. When people don’t have jobs and can’t afford to educate their kids, ‘democracy’ rings hollow.

The first thing that should be done is for the interim government to get a grip on internal security. My friends in Egypt tell me people are afraid to go out late at night, for fear of being robbed or kidnapped for ransom, which wasn’t the case before the uprising. Young men on previously banned motorbikes are snatching handbags and thugs are extorting cash from motorists by threatening to damage their cars.

Then there is the growing rift between the Muslims and the Copts that spiralled out of control last month in Upper Egypt and again earlier this month when sectarian violence left 12 dead and over 200 injured in one of Cairo’s poorest areas where, until recently, Copts and Muslims had lived together peacefully.

Instead of pandering to the people’s lust for revenge by jailing politicians and businessmen, the military should institute a South African-style ‘Truth and Reconciliation’ commission and then, once they’ve admitted their mistakes, draw upon their experience and expertise to put the country to rights. Those currently in charge may be worthy individuals but they are mostly political novices.

Furthermore, locking-up high profile businessmen, who represent the country’s economic backbone, is destroying public confidence. Their wealth will disappear abroad, their companies will falter and what message does their incarceration send to potential investors?

I admire the efforts of Egypt’s former leader, Jamal Abdul Nasser, to unify the Arab world but his greatest error was to persecute the rich, expropriate their lands and factories and drive them from the country; a mistake from which Egypt never completely recovered.

Watching Egypt’s economy freefalling amid strikes, protests and lawlessness, I can’t help wondering whether the uprising truly emanated from grassroots and was spontaneous.

Or whether some of the young leaders of the April 6 and January 25 movements were, indeed, funded and trained by big powers eager to see Egypt brought to its knees to suit their own geopolitical agendas, as certain US newspapers have suggested.

If the ‘Mother of the Arab World’ is reduced to a shell by poverty, sectarian violence or civil war, or carved up like Sudan to allow for a separate Christian mini-state, the entire Arab world will be traumatised – and the powers that be in Israel and Iran will be rubbing their hands with glee.

There must be wise people in Egypt who forsee disaster on the horizon if action isn’t taken now to get things under control. Those people must be courageous enough to dampen unrealistic revolutionary fervour with a dose of tough love.

They must not allow chants of “The people want…” to drown out hard reality. There’s still time. I can only pray that influential Egyptians will make good use of that time before it’s too late.

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