by A swedish kind of death
Sat Jul 13th, 2013 at 07:49:40 AM EST
In Egypt, things are getting interesting. Morsi is unseated but his supporters do not accept it. The military has installed a new government but its backing is falling to pieces. No common framework is established to settle conflicts, and the tourism economy is not doing well.
Now, I am no expert on Egypt, but if I jot down my impression of things, and you all chim in with comments, info and analysis maybe the picture will get clearer.
front-paged by afew
Morsi and the perils of power
Morsi was elected mainly on being the leader of the largest bloc from the revolutionary side. However once in power, the Brotherhood came into conflict on one side with reactionary forces in the judiciary and on the other front the rest of the revolutionary side over the rules of democracy. I don't know how much wiggle room Morsi had, considering that the expectations within the Brotherhood after all of these years in opposition must have been massive. But his presidency alienated the rest of the revolutionary side without reaching reconciliation with the military. So massive demonstrations to topple Morsi, and then the military stepped in again. Now the various parties are quickly distancing themselves from the new rule while Morsi's supporters are clashing with the military. The situation is far from stable.
Bread and power
Mubarak's rule was weakened by the high prices of food in the aftermath of the financial crisis. Since the structural insolvency in the financial world remained, speculators looked for safe places to keep their money so at least not to loose them, and food was one such place. Egypt had ran the classic neoliberal package in the 1990s and 2000s with huge fortunes for the rich and stagnation for the rest, and destroying the import-replacement industries in the process, leaving the country exposed to the good fortunes of international trade. With food prices and unemployment rising the situation got desperate and the usual suspects of unions and left-wing organisers got joined by huge crowds.
The crisis has since continued with fuel shortages and high bread prices.
Egypt imports both food and fuel. And since 2010 Egypt has been running a current account deficit, my guess would be tourism going down with the permanent financial crisis. So whoever inherits the current mess has few options of fixing the bread and fuel situation. The one I can see are:
- International support. Loans to support continue running a current account deficit and possibly widening it gives the government some breathing space for actions to aleviate the situation. Depends on who is in government and comes with strings attached.
- Hope and pray. If the international economic crisis turns around, then a rising economy may lift Egypt too. Not likely to happen anytime soon.
- Internal redistribution. This is the 400 pound gorilla in the corner. With redistribution a government could provide for the population on the expense of the rich. But the rich includes the brass as the military is a large economic actor. And so far, anyone who rules does so with the tacit approval of the military.
So how will it turn out? Your guess is as good as mine, please make them in the comments.