Reactionary Not Progressive: Egypt’s Economic Policy

Cairo Airport

In a desperate move to save power, Egypt’s international airport will close most of its runways for four hours each day from early June, Reuters has reported.

The airport is the latest casualty of Egypt’s struggle to pay for fuel imports.

As if to soften the blow, Reuters quoted the civil aviation minister Wael al-Maadawi as saying:

The closure should not have any impact on air traffic as the airport had seen a dramatic reduction in flights, and runways had been kept open without being used.

“The decision came after detailed study on the rate of work that had witnessed a huge reduction (in traffic) in the past two years,” he added.

So he’s essentially saying it is OK to shutdown the airport sometimes because tourism is down the drain anyway.

It’s simply a poor and lazy excuse to ignore the real root of the problem – more frequent power cuts caused by shortages, which is in turn ultimately caused by delayed reform of energy subsidies.

But it is also a reflection of the Egyptian government’s approach to the economy: reactionary in every way.

If a problem crops up, a plaster is swiftly administered. If it leaks, the patch is replaced or stuck on harder, and so on.  In this case, closing the airport for a few hours each day is conceivable only because there is another problem – flights into Cairo have dramatically reduced because of the political situation.

It may be a short-term solution, relieving the government of more energy bills, but it is by no means sustainable. 

Aside from actually making concrete moves to the energy crisis, shouldn’t the government invest some time and money into improving the airport, a tourist and international investor’s first impression of Cairo? At least, work on smaller aspects such as creating a managed system that would help allocate arriving passengers to a designated driver, saving passengers who have just touched down the hassle of haggling over fees with tax drivers.

Instead, Egypt has decided to ignore the underlying problems that will plague most Egyptians this summer in chronic blackouts and also manage to limit arrivals into Cairo at a time when the country is desperate for the hard currency.

Under Morsi, the government has repeatedly made these ad hoc decisions, which seemingly disconnect from one another and stray far from a long-term economic plan.

The biggest ad hoc decision that has come back to haunt President Morsi is of course the backflip on tax reforms in November when announced a broad spectrum of tax hikes in the early hours of the morning, only to rescind the next day. That is now being used as ammunition against the Morsi and has severely hurt any government efforts.

At one point, Egypt also imposed a curfew on shops to save money, only to backtrack a week later. And most recently, the government raised customs on luxury imports in a basic manoeuvre that misses the point (i.e. the need to overhaul the tax collection system and widen the income tax base discussed more here). 

No, let alone any attempts to restructure of the economy, Egypt still has no long-term economic plan and the government has fallen back on reactionary measures time and time again.  

Morsi, whose presidential campaign was based on the Brotherhood’s 20 year Renaissance Project, has failed to plan even a few days ahead. 

Egypt should drop its shrill and reactionary approach to the economy, abstaining from shutting huge operations down when they cannot sustain them any longer and look immediately to gradual reform using a progressive and transparent plan. 


  • Zorg
    Posted March 31, 2013 at 5:44 pm | Permalink

    Simply reintroducing daylight savings time, whose abolition was the sole concrete achievement of the Sharaf government, would conserve far more energy than closing Cairo Airport for good.

  • Posted March 31, 2013 at 8:01 pm | Permalink

    I think you are expecting too much from a transitional government. Right now, there is a dangerous game of chicken going on, with the refusal of the opposition to participate in anything because they have opted for a strategy that delegitimates Morsi. At the same time, were Morsi to try to impose the kinds of changes that Egypt needs, he will again be accused of heavy-handedness, being a neo-liberal stooge, etc. and further accusations that he is a dictator on the path of Mubarak. So, the government refuses to put itself in that position. Sad to say, I don’t think there will be any possibility of progress in Egypt until the economy actually collapses and then politicians will be forced to be serious. But there is a serious risk that by then it will be too late.

  • Posted March 31, 2013 at 8:15 pm | Permalink

    Reblogged this on shanfaraa and commented:
    I think Rebel Economy is simply expecting too much from a transitional government whose legitimacy to make decisive changes to substantive economic policies is necessarily limited. There is a real Catch 22 here: without a legitimate government, it will be impossible for any Egyptian government to make the structural changes Egypt needs, but there does not appear to be any path to forming a legitimate government in the near-term. In other words, I don’t think there will be any prospect for change until the predicted economic catastrophe comes to pass, in which case political forces will have to stop playing their destructive game of chicken, and face up to their responsibilities of governing the country. Of course, it may be too late by that time, and Egypt may find itself irreversibly on the path toward state failure. That is my great fear.

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