Hear I Go Google!

Sunday, March 31, 2013

Crisis in Egypt: Fear of Another Revolution

The African Spring of 2011 has a good chance of perpetual eruptions as Egypt finds itself faced with economic collapse due to money constraints that affect energy and food priorities.

From the New York Times:

“Did you hear about the donkey who drank diesel and died?” Mr. Farash [Egyptian supply minister] asked, suggesting that anxious farmers had filled barns with fuel. “There is enough,” he said, “but people are behaving like there will not be enough, and a large part of the problem is the behavior of the people.”
He said the Morsi government was installing a “smart card” system for tanker trucks, to track the supply of fuel and ensure that full shipments reached their destination. “In one week or two weeks the problem will be solved,” he said. 
As for wheat — used for subsidized bread that the government says sustains 16 million families — Mr. Farash said Egypt had enough on hand to last through the end of the fiscal year in June. Contrary to news reports here, he said, the government sees no need to ration it.

Economic aide from the IMF is being held up, by the Morsi government, even as conditions on the ground get worse. Let me be clear: the IMF influx of money always comes with caveats. Higher taxes and cut of subsidies, which of course, affect the affluent and the powerful in industries in whatever country is in trouble. The population need aide, but the price is not painless. But from the article, such aide would logically increase creditworthiness, and the ability to garner more loans, in order to turn over Egyptian debt.

Instability was to be expected with the revolution against Hosni Mubarak's rule. However, this does not bode well with the Iranian threats on one side of Israel, and Egypt on the other - because, it presents plenty of opportunity for bad guys to do bad things, using the real crisis as cover or diversion.

Where would Egyptian people go? And with other African nations always near the brink, what happens next?

Post a Comment