David P. Goldman (‘Spengler’) has been chronicling the decline and impending collapse of the Egyptian economy since the end of the Mubarak regime. With the tourism industry decimated, natural gas sales to Israel and Jordan halted by endemic terrorism, crime rampant, etc., Egypt’s foreign currency reserves will soon be gone. Agricultural production is down, and even in good times, Egypt does not produce enough food to feed its 83 million people.
When the money runs out, either Egypt will receive massive aid from other nations, or Egyptians will face starvation. Last month, Goldman wrote,
- The Food Industries Association warned Nov. 27 that lack of foreign exchange to purchase food commodities may reduce food imports by 40% during the next several months. Egypt imports half its total food consumption. Upper Egypt already is suffering a drop in food supplies (I presume other than state-subsidized bread) by 40%. Banks are refusing to provide financing for food imports because importers are already deeply in arrears.
- The Misr Beni Suef Cement company shut five plants due to a natural gas shortage.
- An epidemic of bird flu threatens to destroy Egypt’s chicken population because of a lack of natural gas to heat poultry farms.
- Egypt’s government electricity company warned that the provision of power is in danger because government agencies are 15 billion Egyptian pounds (US $2.5 billion) in arrears on their electricity bills.
- Gas and diesel supplies at filling stations are down 70% from normal levels since President Mohammed Morsi’s constitutional declarations.
- Shortage of fertilizer has cut agricultural exports by 10%, according to the Agricultural Export Council, and it is likely that overall production has fallen by a similar margin.
In thirty-five years of following debt crises in emerging economies, I have never seen anything like this. Latin American economies suffered from hyperinflation during the 1970s and 1980s, but no-one went hungry, because the economies in question all exported food, while Egypt imports half its food. The difference between Egypt and a banana republic is — the bananas.
Egypt is not the only Middle Eastern country facing a crisis — according to Goldman, all of the non-oil-producing Arab countries (e.g., Egypt, Tunisia, Jordan, Yemen) are in trouble. It doesn’t help that rising demand for food from the more functional economies in East Asia has pushed up prices.
While Islamists like to say that “Islam is the solution,” radical Islam is precisely the opposite. Because of its negative effects on women, Christians, the educated middle classes, secular education in general, etc. — not to mention the disruptions caused by violent extremists — Islamism is death to economic success.
Naturally, one ‘solution’ to a problem caused by the incompetence of Muslims is to attack Israel and the Jews. Essam el-Erian, an adviser to President Morsi, recently announced that Jews of Egyptian descent living in Israel should give up their property to Palestinian ‘refugees’ and return to Egypt, since Israel was about to be destroyed.
Unfortunately for him, el-Erian forgot that Egyptians hate Jews even more than they hate Israel, and was forced to resign after the Islamic Jihad organization complained that the re-introduction of Jews would “rot the Egyptian economy” [they should be so lucky as to have Jewish businessmen!] and that Shari’a requires Muslims to kill Jews.
If that isn’t surreal enough, what is the Obama Administration doing in the face of the imminent collapse of the largest and historically most important and powerful state in the Arab world, now ruled by an anti-Western and anti-Semitic radical Islamic regime (which it helped bring to power)?
Why, giving them advanced F-16 aircraft, of course.
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