– US faces substantial losses if Egypt aid halted – Reuters
Finally a story that reflects pragmatic ties between the US and Egypt that go far beyond the politics. Washington has been considering whether to continue its US $1.23 billion in military assistance, but while the aid institutionalises the political links between the two countries, the money at stake is arguably much more costly if this bond was broken.
A particularly talkative senior Pentagon official told Reuters:
“There’s a whole bunch of contracts out there. The bills keep coming in and we’ve got to be able to pay them somehow otherwise we go in default.”
Apparently last year, when the Obama administration decided to continue military aid to Egypt despite its failure to meet pro-democracy goals, US officials cited as one of their reasons the fact that the termination costs could have exceeded $2 billion.
Reserves crept up by $34 million in August to reach $18.91 billion, the Central Bank of Egypt said, reflecting how billions of dollars of cash from Saudi Arabia, the United Arab Emirates and Kuwait was used to defend the currency’s value and pay for imports.
Last month, international reserves jumped $4 billion to $18.88 billion after Gulf countries injected $12 billion in aid. But the minimal increase in foreign reserves this month shows how much of that cash is being used to plug financial gaps.
– Libya has moved into lawlessness and ruin – The Independent
A round-up of how Libya has slumped into its worst economic crisis since the fall of Gaddafi. The key reason is that Libyans are increasingly at the mercy of militias who are dictating the direction of the economy.
But in addition, “one of the many failings of the post-Gaddafi government is its inability to revive the moribund economy,” the author says. “Libya is wholly dependent on its oil and gas revenues and without these may not be able to pay its civil servants.”
This report on Libya’s economy, that Rebel Economy linked to earlier this week, sets out a handful of priorities for the government to avoid falling into economic crisis. One of those is to diversify the economy away from oil.