Egyptian prime minister Hisham Qandil has said the country needs 267 billion pounds ($43.7 billion) in investment, as officials prepare to secure a $4.8 billion loan from the International Monetary Fund.
Local reports also cited Qandil as stressing that the IMF has not asked Egypt to devalue the Egyptian pound as a condition for granting the loan. The country’s economic program is “purely Egyptian without interference from any foreign party,” an Egypt Independent article said yesterday.
Aside from pointing out the obvious (that Egypt is in fact reaching out to “foreign parties” to meet its deficit gap) it is the wrong game to play to continue to appease the public with vague nationalism while simultaneously doing the exact opposite.
In the last four months, Qatar, Saudi Arabia and the Jeddah-based Islamic Development Bank have pledged more than $5 billion to help Egypt stave off a balance of payments crisis. The US this week said it was close to agreeing to write off $1 billion of debt. This has provided impetus to the local stock market which rose 2% on Tuesday to its highest level since June 2011.
It shows some indication that the government’s efforts to bolster the economy is successful.
The good news just keeps coming. Energy giant BP is to invest $11 billion in a natural gas project in Egypt, Zawya Dow Jones reported, quoting the State Information Service website.
The project is huge, and when it is completed in four or five years, it is expected to produce 40% of Egypt’s natural gas output. That is significant considering the country is struggling to meet domestic demand because of gas shortages. That was the main reason behind the electricity black-outs this summer (most electricity power plants are operated with natural gas).
Egypt’s former culture minister Farouk Hosni, once a candidate for the top job at the United Nations cultural agency UNESCO, is to stand trial on charges of making illicit gains, an official said on Tuesday.
International donors on Tuesday pledged $6.4bn of aid to help Yemen navigate its rocky political transition at a conference organised by the Friends of Yemen in Riyadh. It is the latest of such “Arab Spring” bailouts and far more than anything we’ve seen in neighbouring countries.
Al-Sayyed Hamed, a lawyer and member of the freedoms committee at the Lawyers Syndicate, has filed a suit with the Attorney General accusing former President Hosni Mubarak and other officials of killing Egyptians through the importation of spoiled wheat.
The website of Qatar-based satellite news network Al Jazeera was apparently hacked on Tuesday by Syrian government loyalists for what they said was the television channel’s support for the “armed terrorist groups and spreading lies and fabricated news”.
After this string of hacking incidents in both Saudi Arabia’s Aramco and Qatar’s RasGas, I asked a person in the know (an internet entrepreneur and CEO of internet security company) if something similar could happen in Egypt.
Egypt’s hacker community is mostly entrepreneurial, and the bigger companies (Vodafone, TEData, Damas, etc) have fairly modern IT infrastructure, so the probability of some spectacular attack due to corporate espionage or kiddie hackers is low.
Egypt is a bit different in that it doesn’t have a large globally competitive industrial monopoly to target by foreign entities, and the local fringe groups who are opposed to the post-revolution rule of law, large corporations, etc do not have the technical prowess to do anything of the sort.
Stuff of interest:
Turkey’s gold sales to Iran extended a record streak in July, the WSJ reported. It’s an odd mix, and especially so because usually Turkey exports most of its gold to Germany.
“The redirection of exports to the Middle East and away from Europe is a trick that few other countries have managed to pull off. Therefore, Turkey looks good in a world where most countries are struggling,” said Nigel Rendell, senior analyst at Medley Global Advisors in London in the WSJ story.
The Economist’s global debt clock is a great project the magazine has run for quite some time. Compare and contrast total debt of different countries. Try the US and Egypt for one stark comparison that might make you think twice about Egypt’s economic problems…