The Wrap: Morsi Wealth Investigated, Libya Public Sector Wages Up 20%

  • EGYPT 

– Egyptian authorities examine Morsi family wealth – Ahram Online 

The ousted Islamist president is accused of taking advantage of his position, as well as squandering LE2 billion ($285.7 million) during his election campaign. Egypt’s Illicit Gains Authority, the organisation that has thus far failed to follow through on most of its investigations against Mubarak-era politicians and businessmen, is among the entities leading the investigation.

Unfortunately, the IGA along with Public Funds investigator and the half a dozen or so other “investigation committees” have demonstrated that they are driven more by politics rather than a genuine desire to crackdown on illegal transactions and wipe out corruption. Many former officials of the old guard linked to corrupt dealings have got away with dismissals, retrials and prolonged case hearings.

This investigation will probably cost as much as Morsi is thought to be worth. Even so, it is small fry compared to the billions of dollars lost in Egypt’s deep web of corruption. 

– BP Egypt announces new gas finding in North Damietta – Egypt Independent 

Finding gas is different to developing it. At the moment, it is costing energy companies more to retrieve oil and gas because the oil ministry is behind on payments to companies like BP.

It’s possible that even if this gas was developed, BP would sell it off to a third party, depriving Egypt of much-needed gas. 

– Global Competitiveness Ranking 2013-14 – Egypt comes 115th – World Bank 

It’s no surprise Egypt is among the least competitive countries in the world considering the difficulty in doing business right now (and it was difficult before the revolution!).

Egypt’s competitiveness ranking was worse than Ghana, Bangladesh and Nepal, but it managed to squeeze past Yemen and Pakistan, which isn’t saying much.

But it’s not all bad news….

– Is Egypt at risk to a freeze in capital inflows? – Economist 

This useful Economist chart linked to above shows that Egypt is, quite remarkably, not among those emerging markets most at risk of a sudden freeze in capital inflows, unlike Turkey (at Number 1 risk) and Brazil.

That’s probably because foreign direct investment to Egypt has been low for some time, and because of billions of dollars of Gulf funding that has somewhat kept the current account deficit at the same level. Plus Egypt’s external debt hasn’t skyrocketed as much as expected (again due to “gifts” from the Gulf and favourable loan terms), meaning the risk of default is lower.

  • LIBYA 

Public sector wages to rise 20% – Libya Herald 

This is part of the Libyan government’s plan to remove the subsidies on commodities, so that individuals can afford higher prices for fuel. But it’s also an attempt to crackdown on employees with multiple salaries in public sector positions.

Now that may look positive at the outset, but ultimately, spending more on salaries to cut salaries doesn’t make much sense. In a way, this is really a way to appease citizens, at a time of a lot of strikes, by handing out more cash. But, as we have seen in other Arab countries going through transition, people will not settle for money until long-term problems are solved.

The government should for instance focus on diversifying the economy and creating jobs away from oil.




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