Is Egypt Headed Toward Collapse?
Egypt has been described as “too big to fail.” However, further deterioration is possible.
by David Schenker
🧵 The National Interest
Egypt has been described as “too big to fail.” However, further deterioration is possible.
by David Schenker
🧵 The National Interest
The late February reception of the American Chamber of Commerce in Egypt was a swanky affair. Wine flowed in the majestic foyer of the new Grand Egyptian Museum, the buffet brimmed with sushi, and a harpist played soothing music. Despite the festive environs, however, the…
Today’s precipitous decline was set in motion nearly a decade ago, when Cairo embarked on an unsustainable spending spree, borrowing money for profligate outlays on weapons, megaprojects, and infrastructure. Making matters worse, during this period the military’s role in the…
The quagmire is deep. Since President Abdel Fattah el-Sisi was elected in 2014, the state’s external debt has more than tripled to nearly $160 billion. This year, 45 percent of Egypt’s budget will be devoted to servicing the national debt. Meanwhile, inflation hovers around 30…
Facing an inflection point, in December, Sisi signed Egypt up for yet another International Monetary Fund (IMF) program. The conditional arrangement promised to deliver $3 billion in cash and the prospect of an additional $14 billion in regional and international investment and…
Inflow of capital from the Gulf is predicated on military divestment from the economy. To this end, in February, the government published a list of some thirty-two military-owned companies to be sold off. Initial optimistic appraisals of this initiative quickly faded, however,…
Sisi’s reticence to undertake this reform is understandable. He’s a former flag officer, and his regime relies heavily on the continued support of the military. But Sisi has few options. This past January, Saudi Arabia—Cairo’s financier of last resort—made it clear the days of…
Meanwhile, average Egyptians are struggling. Amidst skyrocketing inflation, the nearly one-third of the population living below the poverty line—making less than $3.80 per day—is having a harder time making ends meet. The middle class has also been hit hard. Since Sisi took…
Ultimately, Sisi may relent, embrace IMF reforms, and stanch Egypt’s downward trajectory. Absent a significant course correction, however, it’s difficult to imagine the situation changing for the better. Should the crisis persist, the bitter experience of the 2011 Revolution…
With a population nearing 110 million, Egypt has been described as “too big to fail.” Hesitant to move the military out of the economy and without its traditional Gulf financial safety net, however, a further deterioration is possible. While Washington may not yet be seized with…
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