Egypt's Economic Fear

Tahrir Square on 27 November 2012. Image from Lilian Wagdy at Jadaliyya
Images of protesters flooding the Egyptian streets are surging once again through out the pages of the international media.  The most recent controversy is centered around Egyptian President Mohammad Morsi's decree on the new powers of the office of the president, under which he is no longer subjected to the rulings of the judiciary. In response many are stopping their daily routines to take to the streets demanding once again the right to a free a democratic nation.  And once again, Egyptian daily life stalls due to its politcal instability.

The ire of the crowds is directed at President Morsi for what many describe as a ruling style reminiscent of ousted President Hosni Mubarak, yet the protests deal only indirectly with one of the root causes of instability: the continuous downward spiral of the Egyptian economy. Egypt is hoping to secure a 4.8 billion dollar loan from the IMF to help jump start its economy by reducing the national debt and increasing trade. The terms of the deal require Egypt to eliminate existing fuel subsidies. In addition, the IMF recently reported that the Egyptian Pound may need to be depreciated. This would allow more competition and foreign investment inside of Egypt, but also increase domestic prices of all imported goods. Egypt is heavily dependent on imported food, and the spike in food prices coupled with a rise in fuel costs would lead to widespread demonstrations among the already restive middle and lower classes. When judging the seriousness of these consequences it is important to remember that the lack of economic opportunity was a problem frequently cited by participants in last year's revolution.

Prior to the latest protests, the Muslim Brotherhood and President Morsi already had reason for concern over their political stability. The recent tragedy in the Assiut governate, where 51 children were killed when a train hit a school bus caused outrage among Egyptians from all political camps, who began questioning "whether the president is up to the responsibilities of his office." The public also faulted President Morsi for his inaction during the recent battle in Gaza; many felt that Egypt was not doing all it could to help Gazans or stand up to Israel. The Gaza-Israel conflict also increased the growing rifts between Morsi and the military, whose leaders are increasingly questioning the ability of a civilian President to oversee their operations.  President Morsi and the Muslim Brotherhood are becoming increasingly fearful that these protests could exacerbate the growing political and economic frustrations many Egyptians are beginning to exhibit.

Benjy Rogers

Diwaniyya Contributor