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After 12 years, is another protest Tahrir possible in Egypt? | Harici Special Interview Dalia Ziada

Originally published on Harici

Hosni Mubarak’s 30-year rule in Egypt came to an end with the popular movement that finalized on January 25th 2011. After the initial wave of protests, which lasted for 18 days, Mubarak was compelled to resign on February 11th.

In 2013, a new round of actions and military intervention brought an end to Mohammed Morsi’s administration, which had been elected to power after Hosni Mubarak. The leader of the military coup during the polls in May 2014, Defense Minister Abdel Fattah Al Sisi, won the presidency with 90 percent of the vote while just 45 percent of eligible voters cast ballots.

The “crazy projects” of the Sisi administration, such the construction of a new headquarters in the Egyptian capital Cairo, had a major impact on the nation’s economy in the past ten years, when the Egyptian army was swiftly modernized and significant resources were allocated to this sector.

The Russian-Ukrainian war, the pandemic, and other health concerns caught the Egyptian economy off unprepared. The foreign capital that Russian and Ukrainian tourists had brought to Egypt was lost. Foreign investors withdrew about $25 billion in fresh capital from the Egyptian market in less than a year. Egypt’s currency, the lira, dropped by 50% from the previous year as it quickly lost value against the US dollar.

Due to the rapid currency increase, import prices increased. Accessing basic consumer goods has been more difficult for the underprivileged. Meat and eggs are now often regarded as high-end goods. The middle class’s standard of living has declined.

In Egypt, a nation of 104 million people where 70% of the populace receives bread subsidies, the grain crisis has also turned into a serious national security concern.

Egypt called the IMF for the fourth time in the previous six years due to these challenging circumstances. The Sisi administration, which took $3 billion, was forced to agree to the IMF’s stringent requirements.

The IMF’s requirements include privatization, a cessation of currency manipulation, and limitations on the military’s influence over the economy. The swift fall of the lira was the first sign that letting exchange rates float

What kind of future has in wait for Egypt, the center of the Arab world, where skyscrapers are rising on one side but poverty is spreading on the other?

Will the deteriorating economic situation lead to a new Tahrir uprising?

How eager are Egyptians to demand their rights in the squares in light of the bitter experience of the last 10 years, when social upheavals quickly turned into civil wars?

It appears that the huge winds of revolution have temporarily turned to a disappointment. However, it is absolutely impossible to lose belief in the Nile River’s never-ending flow.

12 years had passed since December 25th 2011, when tens of thousands of people started to swarm the Tahrir Square,. We questioned Dalia Ziada, the director of the Center for Eastern Mediterranean and Middle East Studies, on the state of Egypt’s economy and the broken ties between Egypt and Turkey.

  • “Things are difficult, but we are in control of it and we will be able to overcome it,” said President Abdel Fattah Al-Sisi in Military Academy. As I understand President Sisi is trying to give message to Egyptian to be relax and calm So, what kind of economic challenges Egypt is currently facing. During the past few months, the dollar has been in rise. What is the current pressing economic issue, and what steps will Cairo take to overcome it?

  • What is the army’s role in economy? It is being criticized by the West.

  • If I remember it correctly Egypt took IMF loan four times … Well, didn’t IMF’s credit programs work in Egypt?

  • Economic issues may be caused by the Coronavirus era or the conflict in Eastern Europe, and the devastation it caused on a worldwide scale is evident. Particularly in Europe, one might observe several protests against the government in France or England. I’m not sure how these public protests will affect or will change politics in Europe, but I wonder if social movements could start in the Middle East again, especially in Egypt after the so called Arab Spring. Is there any possibility in Cairo or the other capitals in the Middle East?

  • I would like to ask to you the current feelings of the middle class? After 10 years what is their mood?

  • There is rapprochement process between the Arab nations between Türkiye and Arab World and also we can add Iran to this list. So, how do you evaluate this process? What king obstacles we have between Ankara and Cairo?

  • The process has frozen. What is the expectations of Cairo from Ankara?

It is a very good question to start the conversation with, because this is what is preoccupying the minds of everyone right now either in Egypt or worldwide but specifically in Egypt. Because this time, unlike before, the crisis is too complicated in many ways because it is in a sense a combined crisis. It is not new, it is not made by the Covid or by the Russia-Ukraine War but these recent global events have enhanced the crisis that has been in place since the 1960s or even 1950s in Egypt.

I call it the chronic crisis of the Egyptian economy. So, right now we are facing this challenge, which we are at a crossroads. Perhaps the economic plan or macroeconomic policy at that time did not start on the right foot. They first started as a communist republic and started to apply socialist policies. And then years later they said let’s have try on liberal market policies. And then all this has changed and we ended up with a very distorted macroeconomic system that we had to deal with throughout the 1990s and 2000s. In addition, of course to a long heritage of administrative and financial corruption. All this led to the image of the distorted economy or macroeconomic systems that we are having in Egypt today. So, the two crises that came each other, the Covid- and then the Russian Ukraine War, have brought Egypt at a crossroads. So now you have either to deal with this chronic crisis and solve it for good and start a whole new macroeconomic system or you just turn a blind eye to what’s going on and keep going on like this. And sooner or later this will lead to the collapse of the macroeconomic system and the entire political stability that we have been trying to keep for a while.

In the past week we have seen several statements by the senior state officials starting from the President, the Prime Minister, assuring the public that everything is fine while trying to keep it under control but unfortunately this is not translated on the ground. When you tell this to me as a citizen, I get happy and excited, but when I go out to the street to buy food or do any other activity that I used to do as a middle-class person, it has simply become too difficult. For example, in Türkiye and in many other countries when there is a such case of inflation, they are always accompanied by raises in salaries and the minimum wage, we do not have this here in Egypt because the country is already in deep debt and they cannot even afford an increase in salaries. On the contrary they are talking about removing subsidies on essential household commodities goods like the bread, cooking oil and energy which also will end up in more inflation. There is zero control over the market.

This military-owned enterprises issue is somehow complicated for someone who does not understand how things are working in Egypt. The military is I would call, the backbone of the Egyptian State both politically and economically. In other words, the civilian government here in Egypt can’t do without the military being involved, as a safety net or as an insurance I would say in both politics and economy. Of course, like from a democratic point of view this is completely wrong and it should change one day if we really want Egypt to become a democratic country. But are we ready for this now? Unfortunately, no. The economic reform that the IMF is currently requesting, are very tough on the Egyptian market and for the merchants and the manufacturers, as much as they are on the Egyptian people itself.

And the only entity in the country that have an autonomous economic system of its own and that is not affected by what is happening in the market is the military. And they have enterprises that can fill the gap between what the civilian government can offer and what the people need. Because this gap is believe me, really big. Only entity in Egypt right now that can fill in this gap, is the military. So, in the long run, yes the military should get completely out of the market and allow private investors to do their work and for the market to be liberated because this is essential if we really want to develop the Egyptian economy and the Egyptian political life in general. But right now, it would be a very tough decision with all the mess that we are having in especially in the economic arena.

Since the 1960s we have been receiving loans from the IMF. It is not only the recent ones but in these ones are very different. I would speak specifically and make a very quick comparison between the current loan that is three billion dollars over 48 months. And the previous loans which comprised of about twenty billion dollars, came in three parts like first twelve billion dollars, and then two emergency loans of the IMF that are I think something around five and two billion dollars, totaling in twenty billion dollars in these past six years. And why is these six years in particular being important because they are the years when we have this new regime in Egypt of President Al-Sisi. Before that it was a different state and a completely different scenario in politics and macroeconomics. The first loan which was given to us in 2016, was based on some policies that I think worked very much in the favor of the Egyptian people.

That is not only serving to rescue the state from collapse. But they included some policies, which I think is because of Christine Lagarde’s activist spirit, which was towards development and socio-economic wellbeing, all tied together. So, this loan helped Egypt to improve its infrastructure in a very positive way, and provided a good support to the poor and social development in general in Egypt. For example, these programs were made for the Haya Karima, which means “Dignified Life”, for the people who cannot afford a living and also for urban redevelopment for the people who are living in slums.