Egypt: No Winners, 100 Million Losers
If you followed the Egyptian media during the days of the Presidential elections, one hopes that what is coming next won’t be de-je-vu all over again. The two candidates while awaiting the final vote tally that was to decide who Egypt’s next President was to be was quite telling. The two candidates in the running both announced to the general public that they were the winners early on even though the final election results were not out. A spokesman for one of the aspiring candidates said in the press two days before the results were to be announced that their sources indicate their camp won by 53 to 48 percent. The other camp quickly issued their own press release saying it was they who had won and they came out ahead 53 to 52 percent. Yes, one camp said they won 53 to 48 percent and the other 53 to 52 percent, I kid you not. Maybe both spokesmen were misquoted in the Egyptian press, but it is sad when you recollect that in the old days one candidate would say he got 99 percent of the vote, and that his math seemed to be better than those of his potential successors.
But, on a more serious note, whoever becomes Egypt’s next President is confronting a huge uphill challenge. The economy is in tatters and our incoming President will immediately have to deal with a budget deficit for FY12-13 of approximately $22.5 billion. The state budget has three quarters of its expenditures funding three items: civil service salaries, subsidies for foodstuffs and energy, and service payments on Egypt’s foreign debt. The Central Bank’s reserves are depleting at an average of $1.4 billion a month and the banking sector is being seriously challenged by extensive government borrowing. Fifty percent of the banks’ total deposits are now in treasury bills and state bonds. Worse still, 75 percent of all new deposits are going to fund state recurrent expenditures.
The Egyptian pound is now at a record low and predictions on further devaluations are dire. Foreign and domestic investors have run for the exits and FDI is now negligible to none. Worse still, Fitch, a prominent credit rating agency, downgraded Egypt’s sovereign debt to junk status.
The on-going instability has also chased away tourists , the revenue from which the current interim government can no longer bank on. The interim Government seems to be struggling on how to fund basic imports leading to a constant shortage of gas and various fuels like solar and botagas. According to various sources, the economy has contracted by 4.3 percent and lost 600,000 jobs since the beginning of the revolution.
In sum, whoever becomes Egypt’s next President is inheriting an economic quandary. In various interviews the former two candidates in the running were vague about what they will do to correct these declining economic trends. In fact, other than one candidate saying he’s not concerned about the economy at all because “Egypt is rich”, both candidates seemed to stumble when they talked about the economy. Their programs, however, were much clearer when it came to other things like improving garbage collection, the future use of a litany of Presidential palaces potentially as hotels, when and if tourism ever picks up again, along with a variety of social issues, prominent among them the issue of women’s’ outer wear, among other things.
Hotly debated women’s rights topics were the age of consent, proposed to be 14 thanks to the outgoing Parliament, female circumcision, and whether women should be allowed to wear pants. Some in the political arena, had been sparring over the need to create a new police force that compliments the already existing morality police. Some were proposing to remodel the morality police around either what exists in Iran, or Saudi Arabia. The morality police could then enforce laws on things like dress codes for women, among them rules on the use of attire like pants. And, when there is non-conformity for things like pants, members of this force would intervene. Will the intervention come in the form of a fine? Possibly, but more likely if modeled after some of the countries in the region, a woman can be accosted verbally, or physically, depending on the lack of compliance of attire like pants.
With the seriousness of what is clearly a severe economic crisis in Egypt, the debate in the past seemed to be elsewhere. It was as if the country’s economic problems were somehow marginal and didn’t really require that much attention. And, unlike Tunis, there has been only a marginal attempt to turn to Egypt’s best and brightest in the Diaspora who could assist government in charting the way forward. Maybe that’s because Egypt still has no viable government to speak of almost three years after the revolution took place.
This leaves many Egyptians confused over a very convoluted political transition, trying to survive day to day in an economy that is stumbling, with a security apparatus that is struggling, and it is no surprise that many are already alienated by what the revolution has brought to their door step so far. What has to come next is a singular focus on the economy and whether women wear pants or not, in my humble opinion, is not the country’s priority for the moment. Let’s leave the issue of pants to the gender it concerns and try and figure out how to improve the lot of 100 million people looking for an economic future that can only be described as bleak.