Egypt is being overwhelmed by the slow pace of economic change

Foreign reserves had plummeted from $36 billion before the revolution to about $13 billion in March

Foreign reserves had plummeted from $36 billion before the revolution to about $13 billion in March


The nation’s hopes for “bread, freedom and social justice” are being overwhelmed by the slow pace of economic change. Instead of undertaking reforms, Egypt has been relying on its wealthy neighbors for unconditional cash injections so that it can import food and fuel. Qatar’s recent infusion of $3 billion may provide temporary relief, but the unpredictability of such measures — which include Saudi Arabia’s promise last week of a $500 million loan — scares investors and postpones the inevitable fiscal consolidation that Egypt needs to stabilize its economy.
The need for reform is growing more urgent by the day. Unemployment is above 13 percent, from 9 percent in 2010. The most recent data show that one-quarter of the population is living in poverty, and the share is rising. Foreign reserves had plummeted from $36 billion before the revolution to about $13 billion in March of this year before funds from Qatar arrived. The black markets for dollars and fuel are thriving.

[Sept 14, 2012]

U.S. Secretary of Defense Leon Panetta, Egyptian Major General Rouini

U.S. Secretary of Defense Leon Panetta, Egyptian Major General Rouini

In an interview with Telemundo September 12,President Obama said that the U.S. relationship with the new Egyptian government was a “work in progress,” and emphasized that the United States is counting on the government of Egypt to better protect the U.S. Embassy in Cairo, which was attacked by protesters on Sept. 11.

“I don’t think that we would consider them an ally, but we don’t consider them an enemy,” Obama said. “They’re a new government that is trying to find its way. They were democratically elected. I think that we are going to have to see how they respond to this incident.”

Egypt was designated as a Major Non-NATO Ally in 1989 when Congress first passed the law creating that status, which gives them special privileges in cooperating with the United States, especially in the security and technology arenas.

The administration is not signaling a change in that status.

“I think folks are reading way too much into this,”a White House spokesman said.

Morsi, it is thought, negotiated a deal with younger members of the Supreme Council of the Armed Forces and was able to bring those men up while exploiting the dissatisfaction with the leadership from within the military, a deal that allows him to take back both presidential power but also legislative power while continuing to please what is still a very powerful force in Egypt, the military.

If so the military’s economic privileges are untouched according the drafts that are leaking out showing that their economic interests will be protected. There won’t be parliament oversight over the military budget. It will be a one-line item that goes to parliament.

So for now, it looks like the military still has the protections they want.

[August 1]Eighteen 18 months on from the downfall of Mubarak, publicly-accessible records from Companies House and Land Registry indicate that the fortunes of regime figures convicted of embezzling money from Egypt remain at least partially on UK solution and untouched by British authorities.

The problem is compounded by the apparent lack of political will in Egypt when it comes to chasing former regime assets – a situation which some experts attribute to the continued influence of major players from the Mubarak era. he believed they were working toward the same end—a transition to full civilian control.

[Earlidr] A U.S. goal, officials said, was to ease tensions between Mr. Morsi and Mr. Tantawi, who said in June that the army would prevent the country from coming under the control of a “certain group”—a reference to the Muslim Brotherhood.
Mr. Panetta’s vote of confidence in Mr. Morsi came a day after Secretary of State Hillary Clinton raised pointed questions about the Egyptian Islamists’ goals. Speaking in Washington, Mrs. Clinton said it is unclear how Islamist political parties intend to treat non-Muslims, and cautioned that the Obama administration’s future relationship with Mr. Morsi would hinge on how the government and the Muslim Brotherhood treat women and minority groups including Coptic Christians.

[July 15]

Eye to Eye

Eye to Eye

U.S. Secretary of State Hillary Clinton met July 15 in Cairo with Field Marshal Tantawi, a day after holding talks with newly-inaugurated President Mohamed Morsi. Field Marshal Mohamed Hussein Tantawi is Egypt’s defense minister and chairman of the Supreme Council of the Armed Forces, In June 2012, a tumultuous series of events raised questions about the military’s intentions. Days before the presidential runoff election, which pitted a candidate from the Muslim Brother against a former Air Force general who was Mr. Mubarak’s last prime minister, the military reinstated martial law. Then the country’s highest court, dominated by Mubarak-era judges, dissolved Parliament, asserting that as many as one-third of its members — mostly from the Brotherhood — had been elected illegally. The measures together amounted to a quiet coup by the military and judiciary.

 chief of staff of the Egyptian Army, Lt. Gen. Sami Hafez Enan

chief of staff of the Egyptian Army, Lt. Gen. Sami Hafez Enan

Hosni Mobarak, Heliopolis Palace

Hosni Mobarak, Heliopolis Palace

[June 2]An Egyptian court has sentenced ex-President Hosni Mubarak to life in prison for complicity in the killing of protesters during last year’s [2011] uprising.
[February 6, 2011]Egyptian protesters didn’t march to President Hosni Mubarak’s official residence Tuesday, as planned, but that didn’t stop the Republican Guard at his suburban Heliopolis residence from setting the table for the hundreds of thousands of “guests” they were expecting.

In front of the expansive white house and matching walls where, last week, stood a single tank, the Guard had erected tall barricades of razor wire. At every entrance to the extensive compound stood a tank or armoured personnel carrier with machine guns at the ready. On the road behind the Heliopolis Sporting Club stood the most notable receiving line – a line of no less than 60 tanks, across the sports fields which could come to the President’s rescue at short notice.

Although the Egyptian military has been widely described in news media reports this past week as commanding the respect of the population, a diplomatic cable released by WikiLeaks says that among the elite its influence has ebbed.

“Recently, academics and civilian analysts painted a portrait of an Egyptian military in intellectual and social decline, whose officers have largely fallen out of society’s elite ranks,” the cable reports.

The cable quotes a retired general who says that military salaries have fallen far below those in the private sector and that “a military career is no longer an attractive option for ambitious young people who aspire to join the new business elite instead.”

The cable says that the military nonetheless remains powerful through its wide commercial network, and that military-owned companies, often run by retired generals, are active in the water, olive oil, cement, construction, hotel and gasoline industries. The military also produces televisions — and milk and bread. In a move that made the military ever more popular, during food shortages in 2008, Mr. Mubarak called on the army to use its bakeries to bake bread for the civilian population.

But whoever becomes the new president after elections in September, American officials say that the rich and secretive Egyptian military holds the key to the governing of Egypt, the country’s future and by extension to the stability of the Arab world.

Administration officials nonetheless concede there is much they do not know about an institution that is hardly a monolith and that operates as a parallel economy, a kind of “Military Inc.,” involved in the production of electronics, household appliances, clothing and food.

Although the Pentagon has long promoted its close ties to the Egyptian military, which receives $1.3 billion annually in United States aid, top officials concede that neither Defense Secretary Robert M. Gates nor Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, have especially deep relationships with their Egyptian counterparts.

In an effort to ensure that the military kept enough peace on the streets so that talks with opposition leaders could begin, Mr. Gates made four calls to Field Marshal Tantawi in the past week; Admiral Mullen made two to the chief of staff of the Egyptian Army, Lt. Gen. Sami Hafez Enan. “But this is not a situation where you have, ‘Hey, Hamid, it’s Bob,’ ” said one official familiar with the situation. American officials are also unsure about the thinking of the midlevel military leadership, which is considered sympathetic to the protesters, and whether it could split with the generals tied to Mr. Mubarak. Specialists think that for now, the chances of a split are slim.

But a September 2008 cable from the United States Embassy in Cairo to officials at the White House, the State Department and the Pentagon recounts a midlevel officer corps disaffected by what it considered an encrusted military leadership. The cable reports on conversations with Egyptian academics and civilian analysts who describe midlevel officers as “harshly critical of a defense minister they perceive as incompetent and valuing loyalty above skill in his subordinates.”
Robert Springborg, a professor at the Naval Postgraduate School in Monterey, Calif., and an expert on the Egyptian military, said that the army had continued to cultivate its image as protector of the nation since the protests began in Egypt, as it held back from cracking down on hundreds of thousands of demonstrators in Tahrir Square in Cairo who called for Mr. Mubarak’s ouster. But Mr. Springborg said that he believed that the military’s leadership was orchestrating events, and had been involved in allowing attacks against the protesters by pro-Mubarak forces on horseback and camels — but not by the army, so as not to taint it in the public eye.

“Behind the scenes, the military is making possible the various forms of assault on the protesters,” Mr. Springborg said. “It’s trying to secure a transition for itself. There’s lots of evidence that the military is complicit, but for the most part Egyptians don’t even want to admit that to themselves.”

Western reporters on the ground in Tahrir Square say that it is hard to be so certain about the military leadership’s actions and motives, but that over all, the army rank-and-file has shown sympathy with the protesters and the leadership has been either unwilling or unable to order its troops to fire on the demonstrators.

As of this weekend, it appeared clear that Field Marshal Tantawi and the small circle of military men had weighed their personal loyalty to Mr. Mubarak against the threat to the military from the crisis — and chosen their own survival. The Egyptian government announced that the most important member of the circle, Omar Suleiman, the new vice president and a former military officer, would lead the military-backed transition to the elections in September. Political analysts on Friday said that he already appeared to be governing in Mr. Mubarak’s place.

Ragui Assaad, an Egyptian and a professor at the University of Minnesota, had predicted Friday that the military would make a cold-blooded decision about Mr. Mubarak. “They are a rational, calculating institution,” he said. “The moment they see it is not in their interest to retain him, they will usher him out.”

Mubarak up to now has had little patience for American prodding on democratic reform. “Certainly the public ‘name and shame’ approach in recent years strengthened his determination not to accommodate our views,” wrote an American diplomat in 2009, in a diplomatic cable released by WikiLeaks. “He is a tried-and-true realist, innately cautious and conservative, and has little time for idealistic goals.”
The speed with which Tunisia’s popular uprising inspired Egyptian demonstrators to take to the streets suggested that a revolutionary wave could sweep the Middle East the way Eastern Europe’s communist bloc crumbled.

But whether Middle Eastern governments will melt away like the Iron Curtain, or stand firm like the Chinese Communist Party after its crackdown in Tiananmen Square, remains far from certain.

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About huecri

Publishing on the Web is a fairly iterative process. ...NYT ...Not too long ago, reporters were the guardians of scarce facts delivered at an appointed time to a passive audience. Today we are the managers of an overabundance of information and content, discovered, verified and delivered in partnership with active communities. summer 2012 issue of Nieman Reports from Harvard, --- THE FIX by Chris Cillizza, WAPO blogger, quoting Matt Drudge: “We have entered an era vibrating with the din of small voices,” he said in the speech. “Every citizen can be a reporter.” Later, he added: “The Net gives as much voice to a 13 year old computer geek like me as to a CEO or Speaker of the House. "
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