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| Africa North |
| Egypt's faltering economy – a local crisis; an opportunity for Israel |
| 2024-08-25 |
| [Ynet] Egypt, with its steadily growing population of some 113 million people (estimated to reach 160 million by 2050), is currently in the throes of a deep economic crisis, manifesting in a high inflation rate — approximately 34% as of 2023; a steep poverty rate at 29.7% as of 2019; a devaluation of the Egyptian Lira and a staggering debt to the tune of $165 billion. ...One of the main threats to Egypt’s economy is the construction of the Grand Ethiopian Renaissance Dam (GERD) on one of the Nile River’s sources. This project might cut off part of Egypt’s water supply, floating concerns of already soaring unemployment rates climbing even higher, as some 20% of the country’s population makes its living in agriculture. This also might deliver a blow to Egypt’s ability to produce food and supply electricity for its population, sinking the country’s GDP to a debilitating low. In turn, Egypt will find itself relying heavily on foreign imports, increasing its already staggering debt and dragging it into a whirlpool of financial crisis. If that were not enough, Egypt’s president, Abdel Fattah El-Sisi, has been fostering various grandiose projects that are costing the Egyptian tax-payer billions of dollars. He is expected to continue pouring funds into these initiatives over the next few years, which will demand additional economic aid that will dig the economy into even deeper debt. One such undertaking is the construction of the New Nile Delta project, aiming to enhance the country’s agricultural capacity to service its rapidly growing population. Egypt hopes that upon the conclusion of the Nile Delta expansion, it will be able to independently produce vaster quantities of food at lower costs, while at the same time creating jobs for millions of citizens. Another such project is The New Administrative City — a new state-of-the-art capital located between its current capital of Cairo to Suez. The new city is expected to sit on an area of some 725 square kilometers (280 square miles) and become home to millions of people. The estimated cost of this project is approximately $58 billion. An additional 14 cities are currently under construction across the country. Despite the fact that large swaths of the new city have already been completed, they remain unpopulated for the time being, and it is estimated that by the end of 2024, some 10,000 families will have relocated to the city. At the same time, El-Sisi is pushing the construction of a new coastal city on an area of 170 square kilometers (66 square miles), which is planned to include new residential buildings, hotels, tourist attractions, hospitals, universities and more. This project aims to increase the country’s inflow of tourism, investments and foreign currency as a means with which to boost its economy. For this project, Egypt had signed in 2024 a financing agreement with the UAE to the tune of $35 billion. Estimates in Egypt are that total investments in this endeavor will amount to at least $150 billion. In short, a typical Arab dictator with delusions of divinity. Another problem for the Egyptian economy is its debt crunch, wherein the country’s foreign debt now exceeds $165 billion. In the 23-24 fiscal year, approximately 56% of the budget costs were allocated to covering past loans and interest, and to date, about 49% of the government’s revenues come from new loans. This creates a state of affairs in which Egypt is taking out gargantuan new loans to repay old debt and is in effect digging itself deeper into its financial hole. In conclusion, in the current state of affairs, Egypt is entrenched in a near-crippling economic crisis that is not expected to end in the next several years. Additionally, since the start of the Gaza war, Egypt has been adopting actions and rhetoric that are contradictory to Israel’s interest. In response, Israel can — and must — bring into play the leverages it possesses in the form of control over the gas tap, its relations with the US and its diplomatic ties with Ethiopia, in order to advance Israel’s interest in the current armed conflict, i.e. the seizure of Rafah, the elimination of Hamas, the return of the Israeli hostages and the control over the Philadelphi Corridor along the Gaza-Egypt border, and ensure Egypt’s support of these interest, while receiving aid from Israel. Israel should consider its long term interests. Deniably assist the collapse of Egyptian central government and use the troubles to retake Sinai (third time ice-cream) and to clean out Gaza. |
| Posted by:Grom the Reflective |
| #2 ^Another such project is The New Administrative City |
| Posted by: Grom the Reflective 2024-08-25 11:06 |
| #1 "If that were not enough, Egypt’s president, Abdel Fattah El-Sisi, has been fostering various grandiose projects..." Those so-called grandiose projects are absolutely essential given the drastic present state of the Egyptian economy. |
| Posted by: Sligum Hupomoling9524 2024-08-25 07:59 |