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The Brotherhood v 30 June: more debt to finance growth - Daily News Egypt

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The Brotherhood v 30 June: more debt to finance growth

Egyptian economy sees insufficient growth to improve quality of living, while government required to increase its resources

The Muslim Brotherhood only ruled Egypt for 368 days after Mohamed Morsi was elected president in June 2012. The regime’s economic, political, and security policies soon gave rise to military-backed demonstrations in June 2013. And in a matter of days, Morsi had reached his last day in office on 3 July.

On the third anniversary of the 30 June Uprising, Daily News Egypt analyses the extent to which economic trends governing Egypt have changed compared to during the rule of the Muslim Brotherhood. This shall answer the question of whether or not the overall economic indicators of growth, unemployment, deficit, debt, and inflation have at all improved, with a thorough examination of both regimes economic pillars and foundation used to correct the path of the country’s economy.

Official numbers, figures, and economic indicators show that both regimes—Morsi’s Brotherhood and Al-Sisi’s military rule—have leaned a great deal on foreign loans and aid to stimulate the economy, though their sources varied. For the Brotherhood to rule, they often relied on Qatar and Turkey for support, while Al-Sisi has been depended more on Saudi Arabia, the UAE, and Kuwait, who happened to be the three major supporters of the 30 June Uprising.

According to Finance Minister Amr El-Garhy, public debt jumped to exceed EGP 3tn, equivalent to more than 98% of GDP. Worse, the widening budget deficit (11.5% in the current fiscal year) pushes debt to grow even more. Meanwhile, the Egyptian state maintains sound reliance on borrowing internally and externally to finance the budget deficit and implement national projects.

Al-Sisi came to power only to find himself burdened with a legacy of huge debts, soaring inflation, a budget deficit, and slow economic growth. Through adopting a legislative reforms package and adjusting security conditions, Al-Sisi sought to facilitate investment flow into the country, yet this has not been enough to curb rising unemployment or improve the quality of life of Egyptians.

Topics: 30 june debt Finance

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