When visiting US Secretary of State John Kerry sat one-on-one with Egyptian President Morsi in Cairo, Sunday, March 3, he talked at length about Egypt’s calamitous economic straits, relations with Israel, democratization and essential reforms. He had hoped to find the Egyptian president amenable to getting to grips with his country’s fast approaching bankruptcy. In the event, Morsi nodded politely but, debkafile’s Middle East sources report, he was far more preoccupied with pushing forward the three-point plan he and the Muslim Brotherhood’s supreme leader Mohammed Badie have begun implementing:
1. The Muslim Brotherhood will not settle for a parliamentary majority in the coming general election – most likely in April or June; it is aiming for 100 percent of the seats.
2. To set the stage for this campaign, the Brothers have installed their loyalists in the governates of Egypt’s 19 provinces. The spreading of Brotherhood values in the national constituency is going full steam ahead across Egypt.
The MB turned to this course when they saw they had no hope of exercising total control over the restive capital and the protest movements springing up regularly in Tahrir Square. So they decided to build up their support in the country at large in the hope of making Cairo an isolated Island in the predominantly Islamist country.
3. To boost their popularity in the coming election, Morsi and Badie decided they could not afford the painful measures required by the International Monetary Fund for a $4.8 billion loan to tide the economy over its current crisis – spending cutbacks, downsizing the vast Egyptian civil service, reducing food subsidies and cutting away dead wood.
Instead, they dropped their credit application to the IMF altogether and so avoided mass unemployment and widespread hardship in the months leading up to the election.
However, the US Secretary of State sternly called the Egyptian president’s attention to three major concerns which need to be addressed with the utmost urgency:
a) Egyptian foreign currency reserves continue to bleed dangerously and no one knows how to stop the disastrous drain. By April, it is predicted that no more than $4 billion will be left to sustain a population of 80-90 million souls.
2. Egypt’s industrial plants are working at just 50 percent capacity because fuel is scarce and the money to buy it even scarcer.
3. Gas for powering electricity is running out. More and more areas no longer receive regular electricity – some none at all. The water supply is also affected.
debkafile’s sources report two conflicting approaches on how to resolve Egypt’s calamitous economic emergency:
The Morsi Badiah upbeat approach which maintains that Egypt can keep going for three or four months until parliamentary elections. The Brotherhood will win 100 percent of the house and can then safely impose the necessary harsh economic measures that would hurt every part of the population, but hope to put the economy on its feet.
This pie-in-the-sky approach has Washington up in arms. They don’t believe the Egyptian economy can wait another three to four months before tough remedies are put in place. They warn that a delay that long will see the Muslim Brotherhood and President Morsi crash and Egypt slump into a failed state.
Whichever approach is realistic, the Egyptian people will very soon be faced with extreme hardship and a heavy price tab for their revolution.