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Morsi’s end

By Philip Whitfield Chitchat is Cairo’s currency. Spotting a rare bird in the undergrowth has set the tongues wagging. One swallow doesn’t make a summer. But the return of this migrant to Egypt’s shores has stirred the jabberers into a chunter. In another conversation a medical man laid a bet that Morsi et al will …


Philip Whitfield
Philip Whitfield

By Philip Whitfield

Chitchat is Cairo’s currency. Spotting a rare bird in the undergrowth has set the tongues wagging. One swallow doesn’t make a summer. But the return of this migrant to Egypt’s shores has stirred the jabberers into a chunter.

In another conversation a medical man laid a bet that Morsi et al will be gone by July was as safe as my wager a few months ago that parliamentary elections wouldn’t take place before Ramadan.

How so, I asked? Morsi has united the people in shame for the way Egypt is behaving. Hangdog doesn’t sit well on Egyptian shoulders.

How do you know? I see 100 patients, doctors and nurses every day, the doctor said. The mood swing is amazing. The die-hards on either side are as mad as March hares. The nightmare must end.

How does business see it? In Nile City Towers the conversation is dominated by one topic: Getting Morsi and his gang out fast.

There are two problems. First, how do you dislodge him? The quick-and-easy way is to implore the Army to take a hand. Morsi has put together a personal protection squad. They’d be no match for the Supreme Council of the Armed Forces (SCAF).

SCAF’s difficulty would be to decide what to do with him. Probably best to lock him up somewhere safe and allow legal due process to take its course.

The second problem is finding someone to take over. There’d be a vacuum in the Palace. As we now know, you don’t actually need half a brain to do the job. But a figurehead would be required to greet visitors, though they’ve become few and far between. The IMF delegation is giving him a wide birth.

It’s not as if Egypt is operating under a democratic framework anyway. Two or three more months of un-democracy wouldn’t hurt. The head of the armed forces wouldn’t take the job on an interim basis, but the chatterers say there are a few candidates.

The reason for the rush is the imminent collapse of the economy. Egypt’s situation is far worse than Cyprus, Greece, Italy or Spain. Jiggery-pokery can make the books appear OK. But cash flow downs you in the end. The Central Bank is running on empty.

Morsi has failed to convince anyone he’s a fit person to lend money to. When Iraq and Iran turn you down, you know you’re peddling junk. Egypt’s doesn’t have the EU to bail it out and the IMF can’t. The IMF could lend Egypt enough to stabilise it. But only if a bold programme of economic and social reforms is introduced, which the Muslim Brotherhood can’t get its head around.

IMF money would be linked to other loans and grants, including the EU and the World Bank and probably investment from Saudi and the Gulf.

The economic collapse will entail a dramatic fall in value of the Egyptian pound, a rise in inflation, frequent power outages and petrol shortages, which will lead to strikes and civil disorder on a grand scale.

If everyone sits down to eat at the same time then parties for hours on end, this year’s Ramadan will be in a blackout. Imagine the mayhem.

So before then, something has to happen. The conversation I’m hearing focuses on an interim government of experienced old hands pledged to renounce politics as such and to take the measures required to prevent collapse and to stabilise the economy.

Among those who are relatively untainted is Dr Mahmoud Mohieldin, who left Egypt in September 2010 to serve in Washington DC as one of the World Bank Group’s managing directors. That job ended in December and he got a gong: the World Bank President’s Special Envoy on Millennium Development Goals and Financial Development.

So why show up in Cairo now?
My guess is Mohieldin is being encouraged to help the new centrist coalition that is forming. This is an interesting group that has emerged out of the intensity of recent times.
They are liberals and conservatives drawn from all religions and none, and, significantly, from the educated youth. It’s these youth who have a close affinity with Mohieldin, always a popular professor teaching economics at Cairo University even when serving as Minister of Investment.
His stewardship of the privatisation programme during his tenure in the General Authority for Investment building is what makes him appealing to international and local bankers and financial authorities.
Selling off the government’s non-performing assets is the only way out. As is reducing the non-performing public payroll.
If it were left to that, of course, the plan would get nowhere.

But there’s more to it. The Americans have started considering a new barter tactic if the Egyptian military want their continued aid. There’s talk of SCAF divesting significant parts of their non-military corporations: the pots and pans manufacturing plant; the Wataniyya petrol station network; Alexandria Shipyard that produces merchant vessels and warships and offers its repair services to private shipping companies, and the General Egyptian Company for Railway Wagons and Coaches.

Joint ventures include the Arab Company for Computer Manufacturing, Egypt’s only producer of computer hardware and laptops; the International Pipe Industry Company, the largest manufacturer of oil and gas piping in the region and Maxalto, which relies on technology from the German firm Schlumberger to manufacture smart cards.

The list seems endless.

How much could be raised? Probably $10 billion quite quickly and another $20 billion within two to three years.

Is Mohieldin up for the challenge? I did ask him via a mutual friend if he’d like to give me a scoop. But I didn’t get a reply.

There’s something for the news junkies to yak about.

Philip Whitfield is a Cairo commentator

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