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Breaking up

By: Philip Whitfield Cut and run, or duke it out – Morsi’s dilemma during the interregnum. Feuding inside the Muslim Brotherhood rages. Khairat El-Shater berates Morsi for pussyfooting around the Brothers’ project to control every facet of Egyptian life. El-Shater reportedly craves the top job, goading Morsi to call a snap election. According to Mark …


Philip Whitfield
Philip Whitfield

By: Philip Whitfield

Cut and run, or duke it out – Morsi’s dilemma during the interregnum. Feuding inside the Muslim Brotherhood rages. Khairat El-Shater berates Morsi for pussyfooting around the Brothers’ project to control every facet of Egyptian life.

El-Shater reportedly craves the top job, goading Morsi to call a snap election.

According to Mark Twain lodging all power in one party ensures bad government and the sure and gradual deterioration of public morals.

The extremes are as vocal as ever. But they’re losing ground to centrists who are becoming more active and making life even more uncomfortable for Morsi the monomaniacal president.

Morsi’s a fatally wounded lame duck hanging on to a twig that’s saving him from drowning in the mess he’s created.

Topping up deposits from Qatar and Libya is window dressing for the IMF. Egypt needs spending money, not collateral. The IMF wants to see reform not division.

The talks over a USD $4.8bn loan from the IMF are coming to an end. The head of the IMF Christine Lagarde has booked a plane ticket to Cairo to wrap up the negotiations in two weeks’ time.

What’s Morsi going to tell her? Admit the loan wouldn’t even cover the government’s debts to the oil companies?

In the past, Egypt’s borrowings have been well within the IMF’s rules, less than USD $2bn borrowed between 1987 and 1993, and always for the same reasons as now: structural weaknesses, foreign debt, dwindling investment, and a falling pound.

During those negotiations, Egypt stressed its industrial and manufacturing base, growing numbers of consumers and attractiveness of its youthful labour force.

Morsi has to admit to Lagarde his government has been unable to restore output, has done nothing to comfort foreign investors, and has no plan to provide jobs for the millions of unemployed and underemployed.

Lagarde has to be frank with Morsi that the IMF is swamped with compelling cases. If Lagarde comes up with something, Morsi’s in a bind. Supporting the loan basted with austerity measures means he’ll face the wrath of his own Muslim Brotherhood and the Salafis who are supposed to rubber-stamp his decisions in the Shura Council.

There’s no way they’ll pass legislation authorising tax hikes and big subsidy cuts. As for paying the West 1.1% interest, they’d rather cut off their nose to spite their face and pay the 4.1% Qatar demands.

How’s he going to get the measures through?

He might put the cat among the pigeons by calling a snap presidential election effectively putting the IMF loan to a plebiscite. He might as well go down fighting.

What’s being lost in the political malarkey is the failure of the government or the opposition to come up with a coherent plan to address the root cause of Egypt’s and the Middle East’s malaise: its failure to provide jobs for the millions of young people who sparked the Arab Spring.

While the Muslim Brotherhood has been scrapping, alarming news has come out of the Massachusetts Institute of Technology (MIT). Professor Erik Brynjolfsson, Director of the Center for Digital Business, and his principal researcher Andrew McAfee have discovered that chasing productivity, which Egypt hopes to do, no longer guarantees more jobs.

Instead it opens up opportunities to introduce technology to lessen the dependence on people. In Britain, for example, a new distribution centre for the John Lewis department store chain has improved productivity by 700% without adding one job.

In the current issue of the McKinsey Quarterly, W. Brian Arthur, an external professor at the Santa Fe Institute, warns that technology is quickly taking over service jobs, following the waves of automation of farm and factory work. “This last repository of jobs is shrinking – fewer of us in the future may have white-collar business process jobs,” says Arthur.

For Egypt it means fewer foreign countries will be looking to outsource jobs. Indeed, they are repatriating work they sent abroad to places such as China. The auto and computer industries have figured out how to create much improved productivity using robots in their home markets and avoid costly global shipping costs.

Brynjolfsson and McAfee argue that the pace of automation has picked up in recent years because of a combination of technologies including robotics, numerically controlled machines, computerised inventory control, voice recognition and online commerce.

All of this means the Muslim Brotherhood’s Dark Ages economics are a disaster for the country.

The New York Times’ Thomas Friedman quotes Marc Lynch, the author of The Arab Uprising: The Unfinished Revolutions of the New Middle East as saying the Muslim Brotherhood has presided over economic failure and political collapse.

“They have lost the centre, they are feuding with the Salafis and they are now down to their core 25% of support. There is no way they should win a fair election,” he says.

Isn’t that the truth? Morsi and his gang are destroying themselves haggling over the spoils of a victory they blatantly stole.

Political wannabes veer off to the extremes of the right and left to get attention, then discover they need the centre to be elected.

The opportunity has arrived for the democratic opposition to get its act together, unite under new leadership, a sound economic plan promising youth a hopeful future, and dispatch the religious bigots to political oblivion.

What can you say to a man who tells you he prefers obeying God rather than men, and that as a result he’s certain he’ll go to heaven if he cuts your throat? Voltaire (1694 –1778).

 

Philip Whitfield is a Cairo commentator

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