Egypt is a basket case. It needs massive infusion of aid to survive. The Saudi regime and the putative potentates of the Gulf shaikhdoms cannot continue to finance the dictatorship indefinitely. It has had to beg the west for bailout.
Egypt’s economy is facing a dire future — military strongman Abdel Fatah el-Sisi’s bloody takeover of the country has demoralized the public, even as the Saudi and Gulf lucre that kept the country afloat is drying out. The project of buying out Egypt was macabre and lavish, in the usual Gulf-style.
Shortly after el-Sisi’s 2013 coup, Saudi Arabia and the Gulf States promised him an aid package of approximately $20 billion. Following these promises, in August 2014, the UAE agreed to extend a $9 billion loan to Egypt to finance the purchase of petroleum products. According to a 2013 Bank of America report, the value of the total promises made by Saudi Arabia, Qatar, and the UAE in the last fiscal year totaled $20.8 billion.
The nefariousness of the Saudi-Gulf axis’ economic bankrolling of el-Sisi is underscored by their former support of the Muslim Brotherhood, while Mursi et al. held political power. In their volte-face to support the US and Israel-anointed el-Sisi, they canceled their long-standing political alliances with the Brotherhood, which dated back to the Brotherhood’s persecution under the reign of Jamal ‘Abd al-Nasir. After ascending to power, Mursi’s administration tacitly recognized Saudi power and support, establishing alliances with the Kingdom and other Gulf States in preference to Iran, the only Islamic State in contemporary history.
Saudi money purchased a great deal of electoral power in Egypt during the 2012 elections with tacit Brotherhood assent, via the salafi al-Nour party and platforms. After the US and Israel helped engineer the political downfall of Egypt’s Muslim Brotherhood — helped by the Brotherhood’s own follies and political mistakes, as analyzed by Tariq Ramadan in his July 9, 2013 article titled “Egypt: Coup d’Etat, Act II” — the oil shaykhs were quick to signal where their true allegiances lay. Their economic support for el-Sisi amounted to nothing less than back-stabbing of their erstwhile allies, who now find themselves — literally — in the same cages in which Hosni Mubarak was placed.
In addition, Saudi largesse has allowed el-Sisi to finance one of the most gruesome blood baths in recent memory: the wholesale slaughter of the Muslim Brotherhood and their families including wives, daughters and even young children, a feat that not even Hosni Mubarak could conceive. In March 2014, el-Sisi declared that the Muslim Brotherhood would not exist under his regime.
“There will be nothing called the Muslim Brotherhood during my tenure,” el-Sisi declared
“There will be nothing called the Muslim Brotherhood during my tenure,” el-Sisi declared on Egypt’s privately owned CBC and ONTV television channels. His deployment of the beefed-up Egyptian military — whose $1.5 billion “aid” package from the United States was restored in January 2014 — to sack, burn, and kill. El-Sisi’s rampage has been carefully screened from the West’s corporate media, which has by and large represented him as a benevolent dictator with a soft-spoken bureaucrat’s concern for the economy. The latest travesty committed under his reign is the arrest of 516 Brotherhood supporters, which was announced by Interior Minister Mohamed Ibrahim on January 27, 2015.
Egypt’s economy now faces an impasse. Back in September 2014, when Gulf lucre was still pouring into the coffers of the Egyptian military, US and European media trumpeted el-Sisi’s “success” in turning around Egypt’s flailing economy. Now, with the cash infusions having halted and the low price of oil — which dipped down to $45 a barrel in January 2015 — Egypt is confronting an economic future that has been significantly weakened by the post-Arab Spring events. El-Sisi’s rampage through the neighborhoods of Cairo and towns and villages has destroyed public morale and infrastructure.
The mass killing and jailing of not just Muslim Brotherhood cadres but anyone suspected of critiquing the military state has robbed Egypt of skilled professionals and workers integral to the economic health of the country. As the military brass led by el-Sisi expands its tentacles into the diverse sectors of the economy, a significant portion of Egypt’s skilled labor and middle class has opted to flee the country for less troubled pastures abroad.
Meanwhile, el-Sisi has announced policies to stimulate “economic growth” in the moribund Egyptian economy, winning him accolades from the likes of Bloomberg News and The New York Times. Unfortunately, el-Sisi’s economic policy to ensure growth is to sack Egypt by opening up the country to the neoliberal reforms dictated by the IMF, World Bank, and other organs of international robber-baron capitalism. The “growth” means subjecting Egypt to speculation, multi-billion dollar development projects aimed to export the country’s national resources outside its borders, and breaking down the last bastion of public institutions into private money making ventures.
For instance, the Egyptian government recently cut energy subsidies, a critical component of the Egyptian social safety net — the result has been a spike in the price of petroleum and gas, harassing a population that is already subsisting on $2/day. The Egyptian government announced that electricity prices will double. Egyptian popular culture has already remarked on the country’s energy crisis through novels, serials, and cartoons lampooning the lines of taxicabs and cars lined up at gas pumps for hours. This despair will only worsen in the coming months, beyond its harassed population’s capacity for satire.
El-Sisi’s reliance on Saudi and Gulf funds has sold away whatever financial independence Egypt had left from the Mubarak-Mursi years (for Mursi too was happy to accept pledges from the oil shaykhs to the tune of $8 billion). Now, Egypt remains addicted on Saudi and Gulf wealth to fend-off state collapse. According to some financial reports, it is imperative for the Saudi-Gulf axis to fund Egypt with $12 billion each year in order to stave off the crisis.
The Saudi-Gulf axis’ aid package yoked the Egyptian economy even more firmly to the volatile oil market, which led to Egypt’s stock market shares plunging by nearly $22 billion (currently at $3 billion) when the price of oil slid over the past six months. With the price of oil hovering at its current low benchmark of $45 a barrel, the Saudi and Gulf oil barons are less likely to open up their purse-strings to el-Sisi and the rapacious Egyptian military.
El-Sisi’s brand of development involves selling off Egypt’s assets to the highest bidder, while collecting his cut and ensuring that the investments made by the global rich are protected from any shadow of protest by Egypt’s helpless population. For instance, the much touted Suez Canal project, that proposes building a bigger waterway parallel to the existing one, has been called “ominous news” by scientists who forecast the deterioration of ecological and marine health of Egypt’s coastline and the Mediterranean Sea. However, the articles in the corporate-owned and business-friendly journals have portrayed the new project as the mythic philosopher’s stone that will melt away all of Egypt’s economic woes. Even as international capital poses to benefit the most from this venture, el-Sisi has been persuaded to contribute $8 billion from Egypt’s bankrupt economy toward it, and to commit the Egyptian military to carry it out.
It has been a trope that the Arab Spring has given way to the Arab Nightmare in North Africa and the Muslim East. Egypt’s swift downsizing from a vibrant, proud, pluralistic country into a playground for its tyrannical military elite and the global super-rich is nothing less than a tragedy.