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The economist attack on the Egyptian economy

 By : Ahmed Hussein

The ruining of Egypt

IN EGYPT they are the shabab al-ahawe, “coffee-shop guys”; in Algeria they are thehittistes, “those who lean with their backs to the wall”; in Morocco they go by the French term, diplôméschômeurs, “graduate-jobless”. Across the Arab world the ranks of the young and embittered are swelling.

In most countries a youth bulge leads to an economic boom. But Arab autocrats regard young people as a threat—and with reason. Better educated than their parents, wired to the world and sceptical of political and religious authority, the young were at the forefront of the uprisings of 2011. They toppled rulers in Tunisia, Egypt, Libya and Yemen, and alarmed the kings and presidents of many other states.

Battle of the youth bulge

As our briefing on young Arabs sets out (see Briefing), the Middle East is where people are most pessimistic and most fearful that the next generation will fare worse than the current one. Arab populations are growing exceptionally fast. Although the proportion who are aged 15-24 peaked at 20% of the total of 357m in 2010, the absolute number of young Arabs will keep growing, from 46m in 2010 to 58m in 2025.

As the largest Arab state, Egypt is central to the region’s future. If it succeeds, the Middle East will start to look less benighted; if it fails, today’s mayhem will turn even uglier. A general who seized power in a coup in 2013, MrSisi has proved more repressive than Hosni Mubarak, who was toppled in the Arab spring; and he is as incompetent as Muhammad Morsi, the elected Islamist president, whom MrSisi deposed.

The regime is bust, sustained only by generous injections of cash from Gulf states (and, to a lesser degree, by military aid from America). Even with billions of petrodollars, Egypt’s budget and current-account deficits are gaping, at nearly 12% and 7% of GDP respectively. For all of MrSisi’s nationalist posturing, he has gone beret in hand to the IMF for a $12 billion bail-out (see article).

Youth unemployment now stands at over 40%. The government is already bloated with do-nothing civil servants; and in Egypt’s sclerotic, statist economy, the private sector is incapable of absorbing the legions of new workers who join the labour market each year. Astonishingly, in Egypt’s broken system university graduates are more likely to be jobless than the country’s near-illiterate.

Egypt’s economic woes stem partly from factors beyond the government’s control. Low oil prices affect all Arab economies, including net energy importers that depend on remittances. Wars and terrorism have kept tourists away from the Middle East. Past errors weigh heavily, too, including the legacy of Arab socialism and the army’s vast business interests.

ButMrSisi is making things worse. He insists on defending the Egyptian pound, to avoid stoking inflation and bread riots. He thinks he can control the cost of food, much of which is imported, by propping up the currency. But capital controls have failed to prevent the emergence of a black market for dollars (the Egyptian pound trades at about two-thirds of its official value), and has also created shortages of imported spare parts and machinery. This is stoking inflation anyway (14% and rising). It is also hurting industry and scaring away investors.

Sitting astride the Suez Canal, one of the great trade arteries of the world, Egypt should be well placed to benefit from global commerce. Yet it lies in the bottom half of the World Bank’s ease-of-doing-business index. Rather than slashing red tape to set loose his people’s talents, MrSisi pours taxpayers’ cash into grandiose projects. He has expanded the Suez Canal, yet its revenues have fallen. Plans for a new Dubai-like city in the desert lie buried in the sand. A proposed bridge to connect Egypt to Saudi Arabia sparked protests after MrSisi promised to hand back two Saudi islands long controlled by Egypt.

Even MrSisi’s Arab bankrollers appear to be losing patience. Advisers from the United Arab Emirates have gone home, frustrated by an ossified bureaucracy and a knucklehead leadership that thinks Egypt needs no advice from upstart Gulfies—mere “semi-states” that have “money like rice”, as MrSisi and his aides are heard to say in a leaked audio tape.

Better the general you know?

Such is Egypt’s strategic importance that the world has little choice but to deal with MrSisi. But the West should treat him with a mixture of pragmatism, persuasion and pressure. It should stop selling Egypt expensive weapons it neither needs nor can afford, be they American F-16 jets or French Mistral helicopter-carriers. Any economic help should come with strict conditions: the currency should ultimately be allowed to float; the civil service has to be slimmed; costly and corruption-riddled subsidy schemes should be phased out. The poorest should in time be compensated through direct payments.

All this should be done gradually. Egypt is too fragile, and the Middle East too volatile, for shock therapy. The Egyptian bureaucracy would anyway struggle to enact radical change. Yet giving a clear direction for reform would help to restore confidence in Egypt’s economy. Gulf Arabs should insist on such changes—and withhold some rice if MrSisi resists.

For the time being talk of another uprising, or even of another coup to get rid of MrSisi, has abated. Caught by surprise in 2011, the secret police are even more diligent in sniffing out and scotching dissent. But the demographic, economic and social pressures within Egypt are rising relentlessly. MrSisi cannot provide lasting stability. Egypt’s political system needs to be reopened. A good place to start would be for MrSisi to announce that he will not stand again for election in 2018.

The true picture of theEgyptian  economy

T wenty billion dollars the size of grants to Gulf Egypte

This grants is using in restructuring the infrastructure of the Egyptian economy again and the construction of large logistics projects around the Suez Canal, “ports, tunnels, hotels and maintenance centers”, also used some of the social dependency programs, health care and insurance layers toiling poor n is reversed some of those grants and loans again most recently the Turkish Grant responded and also in 2018 will be refunded the amount of $ 2 billion of the Libyan Republic                   .

The unemployment rate in Egypt in an average 13% and not 40%

According to the current unemployment in Egypt crisis, and the inflation of the government in Egypt and increase the number of employees for 6 million employees, the Egyptian government is now trying to view the Civil Service Law on the Egyptian parliament, “the law works” to reduce government staff ratio in the future, and reorganize the administrative body again through scalable process appointment and make it through competitions, electronic, where it was to be set is the best and most efficient. “

For solving the unemployment crisis the government is seeking under the leadership of President Abdel-Fattah El-Sisi to open new areas of investment in Egypt “Sharm el-Sheikh economic conference ” in order to reduce the Egyptian unemployment rates among graduates, also seeks to train young people’s future through the “Rehabilitation presidential program” on job skills and leadership to create a labor market for containing runs the eligible categories actually to build the future and the leadership of the nation.

Inflation rate 14%Egyptian

The main reason for the increase in the rate of inflation is the decision of central bank governor, “TarekAmer” to float the pound against foreign “dollar, euro, sterling ” in order to attract the attention of investors and tourists, Arabs and foreigners again to visit Egypt and invest them, but devaluation hit the Egyptian citizen of price increases and the proportion of poverty to 26,4%, therefore the government is trying to solve that problem through solidarity programs and social welfare “solidarity and the dignity program” and to support food commodities through the Ministry of Supply programs “occasion summer cuts prices” supports the reduction of basic commodities at affordable prices suited to the poor and destitute categories, however, the float of the pound against US dollar helps in the medium and long term to attract more investment.

 

Egypt increased revenue from the Suez Canal to 449.2 million dollars in October from 448.8 million dollars in September:.

According to data published by the Suez Canal Authority, on Thursday that, it has the country’s hard currency income from $ 400 thousand of the canal have risen.Commission data showed that the number of ships passing in October fell slightly to 1,500 in 1515 from a ship ship in September.

Egypt opened the sixth of August, the new Suez Canal, with expectations that contribute to raising revenues by 2023 to $ 13 billion, more than twice as much revenue for the channel in 2014 was $ 5.4 billion.Revenue during the first ten months of this year, 4.338 billion dollars.

The sovereignty of the Egyptian state

Egypt is a sovereign country to adopt in its foreign policy sovereignty and neutrality in its relations with various countries of the world and an article  the economist that Egypt is a country you need to compress and conditions more complex in its economic relations with major countries such as America, Italy tan Issue F-16 is not true at all, Plan of President Abdel Fattah Sisi and the Egyptian leadership do not come compliant according to the American vision, though Abdel Fattah political seek the Egyptian Foreign Ministry to restore and open relations with everyone without resorting to party sample and state specific relations of Egypt now stretches from Africa have to Asia without yielding to pressure state what proof is bending state turkey recently along the Egyptian.

المركز الديمقراطى العربى

المركز الديمقراطي العربي مؤسسة مستقلة تعمل فى اطار البحث العلمى والتحليلى فى القضايا الاستراتيجية والسياسية والاقتصادية، ويهدف بشكل اساسى الى دراسة القضايا العربية وانماط التفاعل بين الدول العربية حكومات وشعوبا ومنظمات غير حكومية.

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