Wednesday, February 12, 2014

time running out for egypt, iran...,


dailyimpact | Never forget that where you see rebellion, it arises from terrible privation and loss of hope. Nor forget that where you see privation and despair, you will soon see rebellion. It does not matter whether Egypt is governed by the army or the Muslim Brotherhood, by a dictator or a democrat; what matters is that the Egyptian people cannot get enough food, water or fuel. It does not matter whether Iran is governed by a cleric, a moderate or a Southern Baptist; if the people do not have enough food, water or electricity, the government will fall. And that won’t solve the problems.

It’s hard to even imagine how Egypt could find any relief from its intractable problems. Formerly oil rich, it must now import oil for its people; formerly blessed with abundant grain reserves, it must now buy 70 per cent of the wheat needed to keep its people alive. The loss of the oil income, and the new expenses, mean that the government cannot afford to keep subsidizing bread and fuel, in a country where cheap bread and fuel is the difference between subsistence and privation, between hope and despair.

The finance minister in the interim Egyptian government, Ahmed Galal, can add and subtract. One fifth of the country’s entire budget is being spent on the subsidies. Its balance-of-trade deficit, its operating deficit, and its debts to sellers of grain and oil are all growing exponentially. Its declining oil industry, its drought-plagued agriculture industry, its vanished tourist industry — none of these can offer help. The only help Egypt has received in recent years is a whopping $12 billion from the sheikdoms of Arabia, desperate that Egypt not start a trend of failing, formerly oil-rich states.

Minister Galal knows what has to happen. He is talking, ever so delicately, about reducing the subsidies on bread and petroleum. Mubarak tried it, and Mubarak is gone. Morsi found no alternative, and Morsi is gone. In a recent interview for the eternally gullible USA Today, Minister Galal murmured weasel words about moving toward “more sustainable development down the road,” and about “simultaneously [somehow] creating jobs and improving education and health care” — a very nice trick indeed, if anyone could do it.

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