Posted on 07/09/2012 3:56:03 PM PDT by Nachum
Egypt has enough foreign exchange on hand to cover six weeks’ of its imports (US$7.8 billion in liquid reserves, against a $5.5 billion monthly import bill). It would have run out of cash in June except for emergency loans from Saudi Arabia, which backs the Egyptian military but abhors the Muslim Brotherhood, whose candidate Mohammed Morsi won Egypt’s presidential election last month. Total reserves are listed at $15 billion, but this includes gold, International Monetary Fund (IMF) drawing rights and other non-liquid items.
The economic context is necessary to make sense of Egypt’s politics: it points to an important conclusion, that no path exists to stable rule by the Muslim Brotherhood. Saudi help has kept Egypt’s economy away from the brink of collapse, but only just. A paralyzing fuel shortage threatens to shut down essential functions, including bread supplies. If the Muslim Brotherhood were to push the military out of power, the Saudis almost certainly would pull the plug and leave Egypt in chaos. Advertisement
Figure 1: Egypt’s Liquid Reserves Cover Six Weeks of Imports
(Excerpt) Read more at pjmedia.com ...
The Obama Administration Is Setting up a Bloodbath in ________________________ (fill in the blank)
There...fixed it.
The USA....
Great article. Thanks for posting. Anyone who is somewhat familiar with the political situation in Egypt knows that this confrontation between the MB and the military is inevitable. If we were smarter, we would have supported the military sooner.
Now it appears that bloodshed and instability are in the offing unless the MB and the military can come to some understanding. One would have thought that this was done before the MB announced its decision to reconvene parliament.
I wasn’t aware of how tenuous the financial situation was and the role the Saudis have been playing behind the scenes. If the Saudis cut off funding/loans, I wonder who will fill the vacuum. The mention of IMF loans is scary enough. And such loans don’t come without strings attached. Egypt is in a precarious situation, which doesn’t bode well for the region and in particular, Israel.
An ultimate weapon for either side within Egypt is the canal. Much room for mischief.
On 6/25 Morsi told he will “reconsider the Camp David Accord” with Israel. If the peace treaty is gone, Israel should take the Sinai back and maybe extend its control to the Suez canal. Sure, the world will howl and cry, the UN will pass a couple more resolutions against Israel... but deep inside most countries will be glad if Israel takes control of the canal.
Seriously, it would almost take an act of God to prevent utter chaos in Egypt in the short term. 80 million people, only 40 million of which have enough money to buy food, mostly imports that the country can no longer afford. 8 million of them have Hepatitis C.
And starving people are worse than a hundred swarms of locusts.
There is no place for Egyptian refugees to go, as there is only one road into Libya, that the Libyans will quickly block (otherwise impassable desert). North Sudan can take precious few, and it is already descending into a Sharia state.
BHO2 is an atheist and communist. He is only Muslim or Christian when politcally advantagious.
What he has done, via the “Arab Spring”, is use radical Islamists to destroy whatever emerging markets existed in north Africa.
I believe he did this in order to set those nations on a path to anarchy. The goal: eventual takeover by Russia.
What isn’t broadly known by the western public is that Egypt, once the breadbasket of Rome and Byzantium, is now a net importer of food. That nation sold natural gas to Israel in order to buy food on the global market, and now that the Muslim Brotherhood has stupidly axed that contract, Egypt will have no cash to buy food.
“...starving people are worse than a hundred swarms of locusts.”
Yes, very true.
Millions of Egyptians will starve in the next 2 years, if not the next 12 months. Long before that, Egypt will be at war with Israel. It will end badly for Egypt as well as other nations in the ME.
He’s a walkin’ talkin’ bloodbath. All toltaltarians are.
There are some possibilities, however. For example, the only functional part of Egypt left is the military, so when things get too bad, they can set up a military government.
Probably the best thing the military government can do would be to set up massive agricultural projects with lots of hand labor, moving millions of unemployed Egyptians out to the countryside, to live in modest conditions for a year or two as they produce an overabundance of food.
Just having the poverty burden reduced would allow the educated public breathing room to restart their economy.
Oddly enough, Israel might get rid of one of its major problems by helping to subsidize this. That is, if the Egyptians were willing to take the Gaza Paleos, the Israelis could stake the Eqyptians for several billion dollars.
All Egypt would have to do is put Gaza under military administration. No more trouble making by Hamas, and any Paleo who cuts up rough would be hoeing a field near the Nile, under less pleasant management.
And being smart about it, the military would likely restore the pipeline to Israel as well. Even more money for Egypt.
This could only happen if the military took control, correct? You know then the Muslim Brotherhood would cause problems. I just don't see Egypt righting itself anytime soon.
A map of the Sahel region showing where Al Qaeda operates (AFP/Graphic)
It would have run out of cash in June except for emergency loans from Saudi Arabia, which backs the Egyptian military but abhors the Muslim Brotherhood, whose candidate Mohammed Morsi won... no path exists to stable rule by the Muslim Brotherhood. Saudi help has kept Egypt's economy away from the brink of collapse, but only just. A paralyzing fuel shortage threatens to shut down essential functions, including bread supplies. If the Muslim Brotherhood were to push the military out of power, the Saudis almost certainly would pull the plug and leave Egypt in chaos.IMPOSSIBLE!!! Everyone knows the Saudis are behind the Bros!!! /s
I would imagine that tourism is in the tank for many years to come as well.
Small dirty tac nuke at the base of Aswan. Problem solved, forever.
Why anyone would visit a Muslim country in the first place is beyond me.
What happens is some mischief happens with the Dam.?...
You know.... that great big old Dam?..
Why do so many of them have Hep C? It’s not that easy to catch, are lots of them homosexuals or mainline drugs? Or is it just re-using needles for medical use?
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