The Economist says Egypt is bust, policymaker incompetence stoking next uprising
The Economist had a field day bashing Egypt on Thursday, starting off by taking a big swipe at the country, again: Repression and official incompetence are stoking the “next uprising” in Egypt. The piece blames this on President Abdel Fattah El Sisi personally. “The regime is bust, sustained only by generous injections of cash from Gulf states (and, to a lesser degree, by military aid from America),” the magazine proclaims and adds that El Sisi has now “gone beret in hand to the IMF” for a bailout. The Economist concedes that Egypt’s economic woes stem partly from external factors including the drop in remittances with lower oil prices and tourists avoiding the Middle East altogether as well as legacy socialist policies, but stresses that policy decisions are “making things worse.” It specifically blames the president for “trying to control the cost of food” by defending the EGP, not slashing red tape, and overspending on “grandiose” projects. The Economist says the West needs to stop selling Egypt weapons it cannot afford and doesn’t need and should attach strict conditionality to any economic aid.
A bit less emotive was a second piece asking if Egypt is “at last ready to reform.” The newspaper is not optimistic; “Egypt’s government inspires little confidence. The new IMF package would be contingent on reforms that politicians have talked about for years, but failed to implement.” The piece makes a poignant reminder that the government is already shooting itself in the foot by having increased the tax rate on special economic zones to 22.5%, and compares that to Dubai’s Jebel Ali port, where companies will pay no tax at all for 50 years. The Economist gives a faint glimmer of hope that an economic collapse is not nigh, saying Egypt “has a history of muddling through.”
Two of the most noteworthy claims of both pieces is that Gulf aid has been slow to arrive due to the administration’s policies and that the UAE has pulled its advisors out of the country in frustration with the leadership.
Rounding out the trilogy: A parting gift from an Economist correspondent now based in Asia rounds-out the magazine’s coverage of the region. (Yes, you’re a magazine, not a newspaper, however much you protest.) Headlined “Arab Youth: Looking forward in Anger,” the piece is simply frustrating. It recycles stale tropes (“All too often taxi drivers reveal that they possess engineering degrees; sometimes driving is a second job taken to make ends meet after a day at work elsewhere”) and fails to mine the new (Beirut Madinati, which won 40% of the local vote in May’s elections, gets a sentence only.) Still, its warning chilling: “By treating the young as a threat, Arab rulers are stoking the next revolt.”