A fence erected by the Egyptian army on the border with Gaza/social networks
Egypt, the ultimate mediator between Israel and Hamas, is actually bankrupt.
The population is growing at a tremendous engineering pace and has already reached about 111 million inhabitants - doubling within 40 years.
In the Yom Kippur War, in 1973, the number of inhabitants was 37 million, in the "1948" war against Israel which fought for its independence, when the Egyptians reached "this far" in the entrances of Ashdod, the Egyptian population numbered 20 million inhabitants.
Today in Egypt there are no longer enough sources to feed the hungry mouths of a population of which half is under the age of 24, not even one mouthful per person per day.
The last thing Egypt needs right now is hundreds of thousands of hungry mouths knocking on its gates, fighting in the Rafah of Gaza, seeking to be swallowed up in the Egyptian Rafah and from there the path of the Palestinians is open to Egypt.
Naturally, the Egyptians will be required to spend a lot of money also for the health of the Gazans, if they reach their domain.
At the beginning of the century, Egypt tried to limit, as in China, the birth of two children per woman.
The birth rate did decrease from 3.4 children per woman to 3.1 in 2009.
But the revolution of the Muslim Brotherhood movement in 2011, when they became a legitimate party and in 2012 already won the presidency under the leadership of Mohammed Morsi, led to a renewed increase in the birth rate, and in 2013 the birth rate per woman rose again For 3.4 children.
After the Muslim Brotherhood was kicked out of power following a military coup and protests by millions of people in 2013, the birth rate dropped to 2.1 children per woman in 2021. A real drop compared to 5.9 children per woman in 1973.
Rafah crossing.
The last thing Egypt needs right now is hundreds of thousands of hungry mouths knocking on its doors/Reuters
A warning to Israel
Egyptian President Abdel Fattah Said Hussein al-Sisi, who came to power with the support of the army in 2014, is working in two directions.
The first: a warning to Israel not to push the population of Gaza to the Egyptian Sinai.
Egypt cannot and does not want to take in the Gazans, most of whom are from the Hamas movement, closely related to the Muslim Brotherhood movement that was established in Egypt back in 1928, which the Egyptian government suppresses.
Egypt, which has little means, is not interested in taking in Palestinians in the same way that Turkey, which supports the Muslim Brotherhood and the Hamas movement, took in millions of Syrian refugees from Syrian President Bashar al-Assad's war of extermination after the outbreak of the Syrian civil war in 2011.
The second: Al-Sisi realized that there was no choice and that economic policy had to be changed. To support and feed the population of Egypt.
The Egyptian government is now doing the unbelievable in the Arab world and selling land to foreigners, just like that, land that is always a kind of sacred property in the eyes of the Arab world.
But bankrupts and in the case of Egypt also bankrupts, must sometimes adapt to the murky reality.
Egypt is currently conducting advanced negotiations with a consortium of the United Arab Emirates to sell land on the shores of the Mediterranean Sea for a legendary sum equal to 22 billion dollars. The Emirates share in the project in the Ras al-Hakama area is 80% and the rest will be held by an Egyptian corporation , Mustafa Worm Group.
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In collaboration with Premier
A-Sisi.
The Egyptian pound fell from about 31 Egyptian pounds to the dollar to almost 50 Egyptian pounds to the dollar/Reuters
Cash now and immediately
The Egyptian government's business is mainly cash now and immediately.
The Egyptian government claims to the Egyptian public that the deal is good, will generate hundreds of thousands of jobs for Egyptians looking for a source of work, residence, livelihood and bread.
The Egyptian Investment Authority, which is responsible for free trade zones, is promoting the project, which it estimates will soon take off.
The cabinet of the Egyptian government will also approve the project "which will bring in a huge amount of foreign currency".
The emirate of Abu Dhabi, one of the seven emirates that make up the United Arab Emirates, is the pioneer in the Egyptian project.
The area they will open is 180 square kilometers in size. Egypt no longer has a choice, it must sell assets to meet its mounting debt payments to the international business community. Egypt has an external debt of 165 billion dollars. As of this year, Egypt must service a debt amounting to 29 billion dollars, per year Next its payments to cover foreign debts are another 19 billion dollars and in 2025 another payments amounting to 23 billion dollars. The
International Monetary Fund grants aid to Egypt only if it carries out sales of the country's assets, a kind of privatization. The sale to Abu Dhabi can facilitate Egypt's negotiations with The International Monetary Fund to raise new loans after Egypt already received a 3 billion dollar loan from the fund in December.
In order to convince the world's investors, at the beginning of this month, Egypt raised the interest rate by another 6% to 27.25% after having already raised it by 2% a month before.
The expectation is that this year's inflation in Egypt will reach 30%.
Immediately after the exchange rate was freed from mismanagement, the Egyptian pound, the Egyptian pound, popularly known as Ganya, fell from about 31 Egyptian pounds to the dollar to almost 50 Egyptian pounds to the dollar.
At that time, the Egyptian Ministry of Finance was able to issue a short-term loan for one year in the amount of 87.8 billion Egyptian pounds, which is about 1.77 billion dollars, with a yield of 32.30%.
In order for you to get an idea of Egypt's crisis, we note that Egypt's bond yield stands at about 30% throughout the yield curve between three months and ten years. There is no chance for Egypt to meet its obligations without help from the world in the short term. In the long term, you will have to encourage the reduction of the birth rate in the country Muslim, fewer mouths to feed.
The International Monetary Fund informed Egypt that as part of the agreement with it, the Republic of Egypt must carry out comprehensive reforms in order to receive another loan from the Fund. Egypt must, according to the IMF's demand, move to a flexible and uniform exchange rate for all government and business sector operations, not fixed, i.e. exchange rate in the free market. Egypt must switch to a restrictive monetary policy, that is to say, raise interest when necessary, as Egypt has just done at a sharp rate. Egypt must switch to a restrictive monetary policy, meaning that the commercial banks will not be so easily awarded the credit lines of the central bank.
Abu Dhabi.
The first Emirate to take part in the Egyptian project, will open up an area of 180 square kilometers / Yoav Itiel
I think I'm playing
Not only that: the Egyptian government must reduce its budget, a fiscal reduction.
To this end, Egypt must sharply cut its spending on infrastructure.
Until now, Egypt has played "I think", investing in infrastructure, including tunnels to the Sinai, with extra-budgetary capital originating from government companies, the Government Companies Authority and other hidden extra-budgetary funding sources.
From today, the Prime Minister announced in an official order, all expenses will be under the supervision of a central accounting budget supervision office.
Everything is designed to reduce the rate of inflation that affects every good part of what is left of the Egyptian economy.
The Egyptian treasury must prevent the continued inflation of the government's debt, says the fund, unequivocally.
Instead of wasteful government activity that led to the current crisis, the Egyptian government must encourage activity and entrepreneurship of the private business sector.
The Egyptian government had no choice but to agree to the demand of the International Monetary Fund to no longer discriminate favorably against government-owned enterprises, agencies and companies, to cancel all benefits for the public sector and to compare the conditions equally with the private business sector.
In this way, foreign direct investments in Egypt will be able to grow, says the International Monetary Fund, the confidence of business companies in the world will increase, encouraging growth for the benefit of the Egyptian economy.
The first good bud is the new investment in Ras al-Hakama, emphasizes the International Monetary Fund positively.
Only such actions will confirm the renewal of the confidence of investors and entrepreneurs in the Egyptian economy and thus further external shocks outside the Egyptian economy will be avoided.
The Egyptians demand from the International Monetary Fund that the additional amount of the fund be in the amount of 8 billion dollars instead of only 3 billion more dollars in the original demand.
This is in compliance with the conditions that the International Monetary Fund set for the Egyptian government.
The International Monetary Fund delegation, which completed its investigations into the Egyptian issue at the beginning of February, reached an agreement with the Egyptian government to meet the complex and winding challenge of the Egyptian economy.
The Egyptians presented their claims to the International Monetary Fund delegation, claiming that they are severely affected by the decrease in their income due to a sharp decrease in ship traffic in the Suez Canal due to the disruption of maritime traffic in Bab al Mandav by the Houthi rebels in Yemen who are equipped with Iranian missiles.
Egypt's revenues from ships and tankers using the Suez Canal route have dropped between 40%-50%, a drop of about 400 million dollars per month.
Egypt also claims that the Egyptian economy was severely damaged by the war between Israel and Hamas in the Gaza Strip.
Houthi soldier.
Egypt loses revenues of about 400 million dollars a month due to the decrease in ship traffic in the Suez Canal/Reuters
moving to a market economy
The International Monetary Fund will probably respond to the Egyptian request against the background of the fact that Egypt is ready to move to a market economy according to the conditions they set for it and against the background of the external damage from the Houthis and Gaza that came as a surprise to it.
In this way, the International Monetary Fund hopes to restore price stability in the land of the Nile, to return to the proper functioning of the exchange rate mechanism through effective exchange rate unification.
Exchange rates no longer discriminate between the government and the business sector, for various purposes, which will allow entrepreneurs and traders free access to foreign exchange at market prices. The fund's intention is to encourage structural changes in the Egyptian economy together with the private sector, which will create growth and finally the creation of additional jobs with price stability achieved.
The International Monetary Fund agreed to the demand of the Egyptian government, which announced that it would continue aid programs for the poor and needy who are currently affected by the ongoing price increases. Naturally, there is no mention in the IMF document of Egypt's military expenditures, which rose from a low of $2.8 billion in 2017 to a peak of $5.2 billion in 2021 and decreased in 2022 to 4.7 billion dollars, 1.1% of the GDP compared to 4.7% of the GDP in Israel in 2022, according to the World Bank data. In Israel, of course, this is defense spending before the massacre in the Gaza Strip. In
Egypt's meager budget for the war on terror, it preferred over the years to turn a blind eye to the weapons of Hamas which received tremendous and sophisticated equipment through smuggling in Egypt's territory in the Sinai, Israel's weakest species on a low budget. Now Egypt is paying the price of weakening Israel in the form of the masses who are marching on its border and does not have a penny in its hand nor the desire to take in those whom just yesterday Egypt covertly helped to arm itself against Israel Homet disaster of the Simchat Torah massacre.
This is a hard boomerang that the Egyptians did not describe and did not expect that would lead to their weakening to the point of selling the nation's land and submitting to the dictates of an international agency in the form of the IMF.
More on the same topic:
Egypt
Rafah crossing
Houthis
War of Iron Swords
Gaza war
Suez canal