On Monday Robert Walker who heads the US based Population Institute andÂ worked for 14 years on Capitol Hill wrote a devastatingÂ analysisÂ about Egypt’s severe economic crisis in the Huffington Post. In the article titled:Â ‘Egypt: too big, too late to save?’Â , Walker paints a bleak picture of Egypt’s immediate future. The country desperately needs cash and its food, energy and foreign currency reserves are steadily shrinking.
Following are some excerpts from Walker’s analysis:
With a population of 82 million, Egypt has more people than Saudi Arabia, Jordan, Palestine, Syria, Lebanon, Libya, and the United Arab Emirates combined.Â Half or more of Egypt’s food, including its wheat, is imported. Egypt is also heavily dependent on diesel imports to transport its food and run its agriculture machinery.
For years, Egypt has relied heavily upon tourism to pay the bills, but unless political stability is restored, it has no hope of bringing the tourists back. And without a healthier economy, there’s no end in sight to the political unrest.
Egypt’s poor and middle class are heavily dependent on government food and fuel subsidies for their economic survival. Believing – and correctly so – that the subsidies are wasteful and inefficient, theÂ IMF is insisting that the government agree to trim them. Doing so, however, would almost certainly fuel widespread protests and further undermine the government. It’s a colossal Catch 22.
Given sufficient time and aid, Egypt might be able to muddle through for some years to come, but time may be running out and when it does, so will the aid. The IMF is not an international relief agency; it expects its loans to be repaid. Without a reasonable prospect of repayment, the IMF will not extend credit, and neither will many other international lenders.
Egypt is not just food dependent, it is young and poor. One-third of its population isÂ under the age of 15, and, by some estimates, as many asÂ 40 percentÂ of Egyptians are living on less than $2 a day. Egypt’s population growth rate, unfortunately, makes it highly unlikely that it will turn the corner on food dependency and poverty anytime soon. In 13 years or less, Egypt’s population, currently 82 million, isÂ projectedÂ to reach 102 million, and by 2050, 135 million.
At the end of the article Walker writes that Egypt is not the only country in the region whose long-term prospects appear dim. Syria is a political nightmare. Yemen is a hydrological disaster; Sanaa, its capital city, could run out of water by the end of this decade. Who will ultimately bail these countries out? Not Saudi Arabia; Citigroup Inc.Â warnedÂ last year that the kingdom could be a net oil importer by 2030. He then concludes that Egypt may be ” too big to save”.
Two days later Middle East expert Barry RubinÂ analyzedÂ Israel’s economic situation. He wrote the following: