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Ed Webb

The Coronavirus Oil Shock Is Just Getting Started - 0 views

  • People in the West tend to think about oil shocks from the perspective of the consumer. They notice when prices go up. The price spikes in 1973 and 1979 triggered by boycotts by oil producers are etched in their collective consciousness, as price controls left Americans lining up for gas and European governments imposed weekend driving bans. This was more than an economic shock. The balance of power in the world economy seemed to be shifting from the developed to the developing world.
  • If a surge in fossil fuel prices rearranges the world economy, the effect also operates in reverse. For the vast majority of countries in the world, the decline in oil prices is a boon. Among emerging markets, Indonesia, Philippines, India, Argentina, Turkey, and South Africa all benefit, as imported fuel is a big part of their import bill. Cheaper energy will cushion the pain of the COVID-19 recession. But at the same time, and by the same token, plunging oil prices deliver a concentrated and devastating shock to the producers. By comparison with the diffuse benefit enjoyed by consumers, the producers suffer immediate immiseration.
  • In inflation-adjusted terms, oil prices are similar to those last seen in the 1950s, when the Persian Gulf states were little more than clients of the oil majors, the United States and the British Empire
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  • In February, even before the coronavirus hit, the International Monetary Fund was warning Saudi Arabia and the United Arab Emirates that by 2034 they would be net debtors to the rest of the world. That prediction was based on a 2020 price of $55 per barrel. At a price of $30, that timeline will shorten. And even in the Gulf there are weak links. Bahrain avoids financial crisis only through the financial patronage of Saudi Arabia. Oman is in even worse shape. Its government debt is so heavily discounted that it may soon slip into the distressed debt category
  • The economic profile of the Gulf states is not, however, typical of most oil-producing states. Most have a much lower ratio of oil reserves to population. Many large oil exporters have large and rapidly growing populations that are hungry for consumption, social spending, subsidies, and investment
  • Fiscal crises caused by falling prices limit governments’ room for domestic maneuver and force painful political choices
  • Ecuador is the second Latin American country after Argentina to enter technical default this year.
  • Populous middle-income countries that depend critically on oil are uniquely vulnerable. Iran is a special case because of the punitive sanctions regime imposed by the United States. But its neighbor Iraq, with a population of 38 million and a government budget that is 90 percent dependent on oil, will struggle to keep civil servants paid.
  • Algeria—with a population of 44 million and an official unemployment rate of 15 percent—depends on oil and gas imports for 85 percent of its foreign exchange revenue
  • The oil and gas boom of the early 2000s provided the financial foundation for the subsequent pacification of Algerian society under National Liberation Front President Abdelaziz Bouteflika. Algeria’s giant military, the basic pillar of the regime, was the chief beneficiaries of this largesse, along with its Russian arms suppliers. The country’s foreign currency reserves peaked at $200 billion in 2012. Spending this windfall on assistance programs and subsidies allowed Bouteflika’s government to survive the initial wave of protests during the Arab Spring. But with oil prices trending down, this was not a sustainable long-run course. By 2018 the government’s oil stabilization fund, which once held reserves worth more than one-third of GDP, had been depleted. Given Algeria’s yawning trade deficit, the IMF expects reserves to fall below $13 billion in 2021. A strict COVID-19 lockdown is containing popular protest for now, but given that the fragile government in Algiers is now bracing for budget cuts of 30 percent, do not expect that calm to last.
  • Before last month’s price collapse, Angola was already spending between one fifth and one third of its export revenues on debt service. That burden is now bound to increase significantly. Ten-year Angolan bonds were this week trading at 44 cents on the dollar. Having been downgraded to a lowly CCC+, it is now widely considered to be at imminent risk of default. Because servicing its debts requires a share of public spending six times larger than that which Angola spends on the health of its citizens, the case for doing so in the face of the COVID-19 crisis is unarguable.
  • Faced with the price collapse of 2020, Finance Minister Zainab Ahmed has declared that Nigeria is now in “crisis.” In March, the rating agency Standard & Poor’s lowered Nigeria’s sovereign debt rating to B-. This will raise the cost of borrowing and slow economic growth in a country in which more than 86 million people, 47 percent of the population, live in extreme poverty—the largest number in the world. Furthermore, with 65 percent of government revenues devoted to servicing existing debt, the government may have to resort to printing money to pay civil servants, further spurring an already high inflation rate caused by food supply shortages
  • The price surge of the 1970s and the nationalization of the Middle East oil industry announced the definitive end of the imperial era. The 1980s saw the creation of a market-based global energy economy. The early 2000s seemed to open the door on a new age of state capitalism, in which China was the main driver of demand and titans like Saudi Aramco and Rosneft managed supply
  • The giants such as Saudi Arabia and Russia will exploit their muscle to survive the crisis. But the same cannot so easily be said for the weaker producers. For states such as Iraq, Algeria, and Angola, the threat is nothing short of existential.
  • Beijing has so far shown little interest in exploiting the crisis for debt-book diplomacy. It has signaled its willingness to cooperate with the other members of the G-20 in supporting a debt moratorium.
  • In a century that will be marked by climate change, how useful is it to restore profits and prosperity based on fossil fuel extraction?
  • The shock of the coronavirus is offering a glimpse of the future and it is harsh. The COVID-19 crisis drives home that high-cost producers are on a dangerously unsustainable path that can’t be resolved by states propping up their uncompetitive oil sectors. Even more important is the need to diversify the economies of the truly vulnerable producers in the Middle East, North Africa, sub-Saharan Africa, and Latin America.
Ed Webb

Egyptian households turn to credit as inflation bites - Al-Monitor: Independent, truste... - 0 views

  • Consumer finance is on the rise against a backdrop of price hikes in Egypt, where many households are struggling to make ends meet. Consumer finance rose by roughly 7% to 7.32 billion pounds ($374 million) in the second quarter (Q2) of 2022, against 6.84 billion pounds in 2022 Q1, according to data from the state-run Financial Regulatory Authority (FRA).
  • Egyptian breadwinners are buying clothes, school books, stationery and groceries on credit. Consumer finance companies are prospering with more and more customers due to high inflation rates that have made it rather hard for many households to buy in cash.
  • although the law has laid out clear-cut regulations to protect consumers and traders, several unauthorized companies and some individuals offer consumer credit, taking advantage of this highly prospering business.
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  • “In the past, people used to buy only durables in installments. Nowadays, we literally can get anything on credit, even lunch. Living costs are on the rise. This is a global issue. Prices are going wild everywhere,”
  • “It’s not about buying cars or luxury goods. I have to pay school fees for my kids. I cannot under any circumstances get a loan from a bank as it is too expensive. A consumer financier is cheaper and offers easier terms,” Nahed Khalil, a 45-year-old pharmacist, told Al-Monitor. “The interest rate on my consumer finance averages around 8%, which is cheaper. As a consumer, a bank loan is out of the question,”
Ed Webb

Food crisis looms as Ukrainian wheat shipments grind to halt | Financial Times - 0 views

  • Russia and Ukraine supply almost a third of the world’s wheat exports and since the Russian assault on its neighbour, ports on the Black Sea have come to a virtual standstill. As a result, wheat prices have soared to record highs, overtaking levels seen during the food crisis of 2007-08.
  • agricultural experts and policymakers have warned of the impact of delayed shipments on countries reliant on the region for wheat, grain, sunflower oil and barley
  • The surge in prices will fuel soaring food inflation — already at a seven-year high of 7.8 per cent in January — and the biggest impact will be on the food security of poorer grain importers, warned analysts and food aid organisations
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  • Ukraine accounts for 90 per cent of Lebanon’s wheat imports and is a leading supplier for countries including Somalia, Syria and Libya. Lebanon is “really struggling with an already high import bill and this is only going to make things worse,”
  • Russia also provides its Black Sea neighbour Turkey with more than 70 per cent of its wheat imports
  • Even before the Russian invasion of Ukraine, inflation in Turkey had had hit a 20-year high of 54.4 per cent in February. “The war is only going to exacerbate the cost of food,”
  • “What’s critical here is that the Black Sea offers a logistical and price advantage . . . Costs will rise significantly when [Turkey] buys from the US or Australia,” he said. “Even if the war ends tomorrow, Ukraine’s planting season has already been disrupted and it will impact the 2022 harvest regardless.”
  • The UN World Food Programme, which procures grains and food to distribute to poorer countries, bought just under 1.4m tonnes of wheat last year of which 70 per cent came from Ukraine and Russia.
  • The last time wheat prices spiked to these levels in 2007 and 2008 because of severe production declines in leading producing countries such as Australia and Russia, protests spread through nearly 40 countries from Haiti to the Ivory Coast, while a jump in grain prices in 2009-10 is regarded as one of the triggers of the Arab Spring uprisings in the Middle East.
  • Egyptian authorities say their wheat inventories will last until mid June and the Egyptian local harvest should start coming in by mid April. Any rise in subsidised bread prices and further increase in food inflation in Egypt “increases the threat of social unrest,”
  • Wheat inventories are tight everywhere and as Chinese and South Korean buyers of Ukrainian corn, used to feed livestock, sought sellers elsewhere, EU agricultural ministers on Wednesday discussed allowing farmers to boost production using the 10 per cent of land they usually leave fallow in response to the war in Ukraine.
  • “The supply chain is broken,”
Ed Webb

Cash and contradictions: On the limits of Middle Eastern influence in Sudan - African A... - 0 views

  • In Sudan, the revolutionaries who overthrew President Omar al-Bashir and who continue to organise are well aware of the threat posed by neighbouring Arab countries. Protesters’ murals show the people rejecting the interfering hands of Saudi Arabia and the United Arab Emirates (UAE). One of the most popular chants is “Victory or Egypt”, voicing activists’ determination not to succumb to a military counter-revolution as happened in their northern neighbour.
  • many Sudanese believe that the 3 June crackdown in which scores of protesters were killed only came after the green light from Saudi Arabia, the UAE and Egypt
  • In this struggle between the “Pax Africana” and Arab authoritarians, there’s no doubt that the democrats have the weaker hand. But not everything is going the Arab troika’s way.
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  • Sudan wasn’t following the script of Bahrain, where the demonstrators dispersed after a single crackdown, or Egypt, where the army took control through co-option and repression.
  • A major split between Saudi Arabia and the UAE was on show in July when the latter abruptly withdrew most of its forces from Yemen. No official explanation was given, but the decision was evidently not coordinated with Saudi Arabia, which remains bogged down in an intractable war. The UAE’s decision also shows it can be mercurial and that its policies towards the Horn of Africa may be less strategic and more opportunistic than commentators have assumed.
  • Egypt prides itself on understanding Sudan and sees Saudi Arabia and UAE as newcomers seeking influence solely by dispensing money. Egypt limited its demands on Sudan to handing over Egyptian Islamists in exile, suspending the deal for Turkey to develop a naval base, and ceding its territorial claim to the Halaib Triangle.
  • As Arab countries find themselves pulled in to the internal negotiations among the Sudanese, they will face another potential point of contention. Sudan doesn’t just need democracy, but peace. This means a role for the Islamists both in Khartoum and the provinces. For a decade, the custodian of the Darfur peace process has been Qatar, the troika’s arch rival, and it will be impossible to ignore Qatar’s role or that of Sudan’s diverse constituency of Islamists. Some of these dynamics are already playing out and reveal the lack of a common strategy among the Arab troika
  • After the secession of South Sudan in 2011, Sudan lost 75% of its oilfields and an even greater proportion of its hard currency earnings. The following year, it literally struck gold and within a few years, gold was providing 40% of Sudan’s exports. As much as a third of it, however, came to be smuggled to Libya, Chad or directly by plane to the region’s biggest gold market in Dubai. The government in Khartoum, desperate to control the commodity, responded by using the Central Bank of Sudan as its sole buying agent, paying above the market price to gold traders and printing money to cover this outlay. Buying gold to convert to hard currency became the engine of Sudan’s inflation, which skyrocketed. By 2018, the price of essential commodities such as bread and fuel was so high relative to stagnant wages that the people across the country took to the streets to protest.
  • Hemedti. His RSF militia controls the gold mines and he personally owns a number of concessions. Through Sudan’s monetary policy, vast resources were transferred from wage earners in the centre of the country to militiamen and gold traders in the peripheries
  • Hemedti has also benefited massively from providing mercenaries, which may be Sudan’s second biggest source of foreign exchange today. A few months after the Saudis launched their war in Yemen in March 2015, Sudan volunteered to send troops. The first contingent was a battalion of the regular army, but then Hemedti struck a parallel deal to dispatch several brigades of RSF fighters. Within a year, the RSF comprised by far the biggest foreign contingent fighting in Yemen with at least 7,000 militiamen. Hemedti was paid directly by Saudi Arabia and the UAE for this service. He says he deposited $350 million in the Central Bank, but has not said how much he kept to himself for his own enrichment or political spending.
  • the Central Bank of Sudan has become an instrument for Hemedti’s political finance. And since becoming the central actor in Sudan’s ruling cabal in April, he has exerted an even tighter grip on gold production and exports while moving aggressively into other commercial areas. He has increased the RSF’s deployment in Yemen and sent a brigade to fight in Libya alongside General Khalifa Haftar, who is backed by Egypt and the UAE, almost certainly in return for Emirati financial rewards. Hemedti is also expanding his family business conglomerate, the Al-Junaid companies, and running his political business on the basis of personally handing out cash to key constituents such as tribal chiefs, the police, and electricity workers.
  • none of this addresses Sudan’s macroeconomic crisis: its rampant inflation, rapidly increasing arrears on international debt, and ostracism from the dollar-based international financial system
  • Sudan’s Gulf patrons are bailing out the country with a $200 million monthly subsidy in cash and commodities, but the bailout amounts needed will quickly become too big even for the oil-rich Gulf States’ deep pockets
  • a clash between Hemedti’s political market logic and Sudan’s macroeconomy is looming.  The Sudanese technocrats associated with the FFC are well aware of this, which is why the economists called upon to put themselves forward for cabinet positions have been reluctant to agree. There is a race between Hemedti’s consolidation of power and a re-run of the economic crisis and protests that led to al-Bashir’s downfall.
  • as Sudan’s economic crisis deepens, they will have to turn to the IMF and western creditors for assistance
Ed Webb

Can Cairo stave off discontent over soaring prices? - 0 views

  • As pressure builds on Egyptian livelihoods following the devaluation of the pound and the slashing of fuel subsidies in November, some analysts are wondering if another uprising is looming on the horizon for Egypt. They warn that a new wave of unrest would be bloodier than the 2011 uprising and could spell disaster for the country, still reeling from the turbulent post-revolution transition.
  • Prices of basic food items, medicine, transport and housing have soared, prompting Egyptians to cut spending to make ends meet. The prices of some basic food items have shot up by up to 40%, according to CAPMAS, the Central Agency for Public Mobilization and Statistics
  • protests broke out in at least four Egyptian provinces March 7. The demonstrations were triggered by bread shortages in some bakeries after Supply Minister Aly Moselhy announced a new bread subsidies system that he defended as “necessary to curb waste and corruption.” Hundreds of demonstrators blocked roads and cut railways in Alexandria, Giza, Kafr El Sheikh and Minya in protest at the minister’s abrupt decision to reduce the share of bread allotted to holders of paper ration cards to 500 loaves per bakery a day from the original 1,000 and 4,000 loaves (depending on the number of consumers in the bakery’s vicinity.)
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  • The decision to implement the new system was quickly reversed, however, over fears that the simmering bread crisis could provoke wider tumult. Seeking to allay citizens’ concerns that the move was a prelude to a reduction in their quotas of subsidized bread, Moselhy held a televised press conference on the day of the protests, apologizing to “all citizens who had not received bread” and asserting that their quotas would remain untouched. Promising to resolve the crisis within 48 hours, he blamed bakery owners for the crisis, hinting they were making profits off the subsidized flour they received from the government.
  • In the last six years, government spending on food and fuel subsidies has represented more than a quarter of annual government expenditure (more than the country spends on education and health services combined)
  • a thriving black market for the subsidized wheat, which is often resold by the bakeries at a profit rather than turned into bread
  • The real test will be the government’s ability to stave off unrest that could undermine the progress made so far. Nafaa said it is possible to quell the rising anger over soaring prices “through more equitable distribution of wealth, better communication of government policies, transparency and accountability.”
  • Tensions have been simmering since the pound’s depreciation — a key requirement by the International Monetary Fund for Egypt to secure a $12 billion loan needed to finance the country’s budget deficit and shore up dwindling foreign currency reserves. Economists and analysts have lauded the flotation as “a much-needed reform that would restore investors’ confidence in the economy, helping foster growth and job creation.”
  • shrinking middle class was already struggling with flat wages, high inflation and mounting unemployment
  • Sisi’s approval ratings, which according to a poll conducted in mid-December 2016 by Baseera (Egyptian Center for Public Opinion Research) fell by 50% during his second year in office
  • the weak currency is helping the economy by boosting exports and luring back tourists. A 25% increase in non-petroleum exports in January (compared with the same month last year), along with new loans from the IMF and other sources, is beefing up foreign currency reserves, according to The Economist. The weaker currency is also proving to be a blessing in disguise for local manufacturers as more consumers are opting to purchase local products, which are more affordable than their imported alternatives
  • “The patience of Egyptians is wearing thin,” Cairo University political scientist Hassan Nafaa told Al-Monitor. “Despite the economic pressures they are facing, citizens have so far restrained themselves from protesting because they are weary after two revolutions. They also fear further turmoil as they see the civil wars in some of the neighboring Arab countries. But if people are hungry and if their basic needs are not met, there is likely to be another rebellion,” he warned, adding that if that happens, “It would be messy and bloody.”
  • “The government must also ease the crackdown on dissent, release detainees who have not committed terror crimes and bring more youths on board,”
Ed Webb

Bad company: How dark money threatens Sudan's transition | European Council on Foreign ... - 0 views

  • The civilian wing of the Sudanese state is bankrupt but unwilling to confront powerful generals, who control a sprawling network of companies and keep the central bank and the Ministry of Finance on life support to gain political power
  • Chronic shortages of basic goods and soaring inflation have come to define the life of ordinary Sudanese. In villages and towns that rely on gasoline pumps – such as Port Sudan – the taps have often run dry, forcing people to queue to buy barrels of water.
  • Western countries and international institutions have let the civilian wing of the government down: they failed to provide the financial and political support that would allow Prime Minister Abdalla Hamdok to hold his own against the generals
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  • a coalition of trade unions called the Sudanese Professionals Association (SPA) established informal leadership of nationwide demonstrations
  • In February 2020, the International Monetary Fund (IMF) described Sudan’s economic prospects as “alarming” – unusually blunt language by its standards. Then came covid-19 and the associated global economic downturn. The IMF revised its assessment: Sudan’s GDP would shrink by 7.2 percent in 2020. By April, inflation had risen to almost 100 percent (one independent estimate finds that inflation may have hit around 116 percent). Adding to this grim catalogue of calamities, the swarms of locusts that have ravaged the Horn of Africa in the worst outbreak in 70 years are widely expected to arrive in Sudan in mid-June. The United States Agency for International Development estimates that more than 9 million Sudanese will require humanitarian assistance this year.
  • Despite the fact that a “constitutional declaration” places the civilian-dominated cabinet in charge of the country, the generals are largely calling the shots. They control the means of coercion and a tentacular network of parastatal companies, which capture much of Sudan’s wealth and consolidate their power at the expense of their civilian partners in government
  • In particular, Hamdok will need to establish civilian authority over the parastatal companies controlled by the military and security sector. The task is daunting and fraught with risks, but Hamdok can acquire greater control by taking advantage of the rivalry between Hemedti and General Abdelfattah al-Buhran, the de facto head of state.
  • draws on 54 recent interviews with senior Sudanese politicians, cabinet advisers, party officials, journalists, former military officers, activists, and representatives of armed groups, as well as foreign diplomats, researchers, analysts, and officials from international institutions
  • Sudan’s chance for democratisation is the product of a difficult struggle against authoritarianism. For three decades, Bashir ruled as the president of a brutal government. He took power in 1989 as the military figurehead of a coup secretly planned by elements of the Sudanese Muslim Brotherhood, before pushing aside Islamist ideologue Hassan al-Turabi, who had masterminded the plot. During his rule, Bashir survived US sanctions, isolation from the West, several insurgencies, the secession of South Sudan, a series of economic crises, and arrest warrants from the International Criminal Court for war crimes, crimes against humanity, and genocide in Darfur. He presided over ruthless counter-insurgency campaigns that deepened political rifts and destroyed the social fabric of peripheral regions such as Darfur, South Kordofan, and Blue Nile.
  • he turned pro-government tribal militias from Darfur into the Rapid Support Forces (RSF), an organisation led by Hemedti, as insurance
  • Throughout the 2010s, the Bashir regime put down successive waves of protests. But the uprising that began on December 2018 – triggered by Bashir’s decision to lift subsidies on bread – proved too much for the government to contain
  • The April 2019 revolution, which ended Omar al-Bashir’s 30-year military rule, brought hope that a civilian regime would emerge to govern Sudan. But – less than a year since the appointment of the transitional prime minister, Abdalla Hamdok – this hope is fading fast.
  • As junior officers vowed to protect demonstrators, the leaders of the military, the RSF, and the NISS put their mistrust of one another aside, overthrew Bashir, and installed a junta
  • On 3 June, the last day of Ramadan, the generals sent troops to crush the sit-in. RSF militiamen and policemen beat, raped, stabbed, and shot protesters, before throwing the bodies of many of their victims into the Nile. Around 120 people are thought to have been killed and approximately 900 wounded in the massacre.
  • prompted Washington and London to pressure Abu Dhabi and Riyadh to curb the abuses of their client junta
  • envisioned a transition that would – over the course of a little more than three years, and under the guidance of a civilian-led cabinet of ministers – reach a peace deal with armed groups from the peripheral regions of Sudan, while establishing a new constitutional order and free elections
  • When Hamdok, a UN economist picked by the FFC, took office on 21 August, there were grounds for cautious optimism. The peace talks with armed groups began in earnest and seemed to make rapid progress. Hamdok inherited a catastrophic economic situation and political structure in which the generals remained in high office but the constitutional declaration put civilians in the driving seat. Western countries expressed their full support for the transition. The journey would be difficult, but its direction was clear.
  • Sudanese citizens have gained new civil and political rights since the transition began. The new authorities have curtailed censorship. The harassment and arbitrary, often violent detentions conducted by NISS officers have largely ended. Minorities such as Christians now have freedom of religion. The government has repealed the public order law, which allowed for public floggings. And it is in the process of criminalising female genital mutilation.
  • The authorities have not achieved much on transitional justice.[3] The head of the commission in charge of investigating the 3 June massacre of revolutionary demonstrators said he could not protect witnesses. The authorities said they are willing to cooperate with the International Criminal Court to try Bashir and the other wanted leaders, but the generals are blocking a handover of the suspects to The Hague
  • By 2018, the authorities were struggling to finance imports, and queues were forming outside petrol stations. The economic slide continued, prompting Bashir’s downfall. It has only continued since then. The Sudanese pound, which traded at 89 to the dollar in the last weeks of Bashir’s rule, now trades at 147 to the dollar.
  • Donors want the Sudanese government to commit to reforms that will have a social cost in return for a promise of unspecified levels of funding. The pledges Sudan receives in June could fall far below the estimated $1.9 billion the government needs, forcing the authorities to create the social safety net only gradually.[8] This would go against the logic of a temporary programme designed to offset one-off price hikes. In these conditions, subsidy reform – however necessary – is a gamble for the government.
  • The European Union has pledged €250m in new development assistance (along with €80m in support against covid-19) to Sudan, while Sweden has pledged €160m, Germany €80m, and France €16m-17m. Yet these are paltry figures in comparison to Europeans’ declared commitments
  • The path to debt relief under the Heavily Indebted Poor Country (HPIC) Initiative is long in any circumstances. But US indifference, European timidity, and the indecisiveness of Hamdok’s cabinet have combined to kill off hopes that the diplomatic momentum Sudan established in September and October 2019 would quickly translate into substantial international assistance
  • Although the state sponsor of terrorism designation does not impose formal sanctions on Sudan, it sends a political signal that stigmatises the country, deters foreign investment and debt relief, and casts doubt on Washington’s claim to support civilian government. Unfortunately for Hamdok, Sudan does not sit high on the list of priorities of the current US administration. President Donald Trump decided not to fast-track Sudan’s removal from the list of state sponsors of terrorism, allowing the process to take the bureaucratic route and become enmeshed in the conflicting perspectives of the State Department, national security and defence agencies, and Congress
  • Failure to stabilise Sudan’s economy would have far-reaching consequences for not only the country but also the wider region. Since Hamdok’s appointment, the domestic balance of power has once again tilted in favour of the generals, who could seize on the climate of crisis to restore military rule. If they remove civilian leaders from the equation, rival factions within the military and security apparatus will be set on a collision course.
  • Within the government, the configuration of power that has emerged since September 2019 bears little resemblance to the delicate institutional balance – enshrined in the constitutional declaration – that the FFC fought so hard to achieve in its negotiations with the junta.
  • The generals’ public relations machine is now well-oiled. The military opened a bakery in Atbara, the cradle of the 2018-2019 uprising. Hemedti has established health clinics and a fund to support farmers; his forces have distributed RSF-branded food supplies and launched a mosquito-eradication campaign.
  • Neither Hamdok nor the FFC has attempted to mobilise public support when faced with obstruction by, or resistance from, the generals. As such, they have given up one of the few cards they held and created the impression that they have been co-opted by the old regime. The popularity of the FFC has collapsed; Hamdok earned considerable goodwill with the Sudanese public in late 2019, but their patience with him is wearing thin. Many activists say that they would be back on the streets if it were not for covid-19 (which has so far had a limited health impact on Sudan but, as elsewhere, led to restrictions on public gatherings).
  • The so-called “Arab troika” of the UAE, Saudi Arabia, and Egypt have taken advantage of the revolution to sideline their regional rivals Turkey and Qatar, which had long supported Bashir’s regime. The Emiratis, in cooperation with the Saudis, are playing a particularly active role in shaping Sudan’s political process, reportedly spending lavishly and manoeuvring to position Hemedti as the most powerful man in the new Sudan
  • The Emiratis are widely known to be generous with their covert financial contributions, which flow either directly to various political actors or, indirectly, through Hemedti.[20] Mohammed Dahlan, the Palestinian exile who runs many important security projects on behalf of Emirati ruler Mohammed bin Zayed, handles the UAE’s Sudan file.[21] Former Sudanese general Abdelghaffar al-Sharif, once widely considered the most powerful man in the NISS, reportedly lives in Abu Dhabi and has put his formidable intelligence network at the service of the UAE.
  • The Arab troika has also worked to undermine Hamdok and prop up the generals
  • Saudi Arabia and the UAE have avoided financing transparent mechanisms such as the World Bank’s Multi-Donor Trust Fund. Meanwhile, Hemedti appears to have a large supply of cash with which to support the central bank. In March, he deposited $170m in the bank. These developments suggest that the Gulf powers could be using their financial might to shape the outcome of Sudan’s domestic political process, redirecting flows of money to prop up Hemedti and exacerbating the economic crisis to position him as a saviour
  • The levels of resentment between the RSF and SAF are such that many officers fear a local incident could escalate into broader clashes between the two forces
  • Beyond subsidies, the economic debate in Sudan has recently turned to the issue of how the civilian authorities can acquire greater revenue – particularly by recovering assets stolen by the Bashir regime, and by gaining control of the sprawling network of parastatal companies affiliated with the military and security sector.
  • It is not difficult to identify who to tax: companies owned by NCP businessmen, Bashir’s family, the SAF, the NISS, and the RSF play a dominant role in the economy, yet benefit from generous tariff and tax exemptions
  • the military and security apparatus has shares in, or owns, companies involved in the production and export of gold, oil, gum arabic, sesame, and weapons; the import of fuel, wheat, and cars; telecommunications; banking; water distribution; contracting; construction; real estate development; aviation; trucking; limousine services; and the management of tourist parks and events venues. Defence companies manufacture air conditioners, water pipes, pharmaceuticals, cleaning products, and textiles. They operate marble quarries, leather tanneries, and slaughterhouses. Even the firm that produces Sudan’s banknotes is under the control of the security sector.
  • These companies are shrouded in secrecy; high-level corruption and conflicts of interest make the boundaries between private and public funds porous
  • The generals are using dark money to keep the civilian government on life support, ensuring that it remains dependent on them
  • Following decades of consolidated authoritarianism, Sudan has entered a rare period of instability in its balance of power.
  • The US, Europe, and international financial institutions have left Sudan to its own devices, allowing its economy to tank and its political transition to stall. In the interim, the generals have expanded their reach and FFC leaders have returned to Sudan’s traditional elite bargaining, at the expense of institutional reform. Western inaction has also enabled regional actors – chief among them Abu Dhabi and Riyadh – to play a prominent role in Sudan, dragging the country closer to military rule or a civil war.
  • Across the region, Saudi Arabia and the UAE have demonstrated their preference for military governments over civilian-led democracies. Their recent actions in Sudan suggest that they may hope to repeat their success in helping return the military to power in Egypt in 2013. But this would be both cynical and naïve. A strong civilian component in the government is a prerequisite for stability in Sudan. The country’s conflicts are a direct result of state weakness – a weakness that pushed Bashir’s military government to use undisciplined militias to repress citizens, fuelling cycles of instability and the emergence of a fragmented military and security apparatus. In the current political environment, any attempt to formally impose military rule could ignite further instability and even a civil war.
Ed Webb

Neither Public nor Private: Egypt Without a Viable Engine for Growth - The Tahrir Insti... - 0 views

  • The program has the ambitious objective of reducing the role of state-owned enterprises—in which the IMF includes military-owned companies—and encouraging their replacement with “inclusive private sector led growth.” Indeed, Egypt’s Prime Minister Mostafa Madbouly called for just that last year, saying he is aiming for the share of private investment in Egypt’s economy to rise from 30 percent to 65 percent in the coming three years. However, when one examines the market conditions in Egypt and globally, it becomes clear that such an expansion of private investment is clearly unrealistic.
  • a massive parallel market for hard currency emerged, with its own exchange rate. The parallel market even operated internationally, with Egyptian expatriate workers paying their Saudi rials or Kuwaiti dinars to dealers in the countries where they worked, who then had partners in Egypt who would disburse Egyptian pounds to awaiting relatives at the black-market rate. In 2015, before new reforms were introduced, the central bank governor at the time Hisham Ramez estimated that as much as 90 percent of Egypt’s remittances were being lost to the parallel market, circumventing the country’s official banking system and starving banks of much needed hard currency liquidity. For perspective on the seriousness of this issue, remittances in recent years have brought more dollars to Egypt than Suez Canal revenue, Foreign Direct Investment (FDI), and tourism combined.
  • Inflation already pushed past 20 percent last month and this is only the beginning of a year or more of price corrections as markets absorb the latest dramatic devaluation of the country’s currency. While in 2016 and 2017 consumers cut back on beef and chicken, replacing them with eggs as a source of protein and fats, eggs today are too expensive for many, leading the government to encourage the consumption of chicken legs.
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  • The new IMF program requires 20 million vulnerable Egyptians to receive cash transfers by the end of January, but three years ago when things were far less precarious, there were already 30 million Egyptians in poverty and the World Bank estimated 60 million Egyptians were near or below the poverty line. Today, poverty levels are almost certainly higher and despite a modest increase in social protection coverage, domestic demand in the coming year will likely weaken even further
  • the IMF appears unrealistic about the coming pain, estimating just 14 percent inflation in the coming year. They are also likely to be unrealistic about how quickly growth can be achieved. It is not just the private sector that will not grow in the near term due to the many deterrents facing Egypt’s business community. 
  • Egypt’s GDP growth for the past several years was buoyed by enormous levels of public spending on roads, bridges, new cities (including a new capital city), massive rail projects including the world’s longest monorail line, and even a number of presidential palaces.  Now that the state is being required by the IMF to cut unnecessary large project stimulus and its ability to borrow is heavily constricted, the country’s growth model is at risk of decelerating.
  • The IMF has finally started to seriously engage with Egypt’s sizable governance issues and calls for reducing the size of the military’s economic empire which has done enormous damage to the country’s economy and private sector
Ed Webb

Top Africa Stories in 2022 - 0 views

  • On Feb. 24, Russia invaded Ukraine, and sanctions imposed on Russia by Western states led to surging food, fuel, and fertilizer prices. Burkina Faso saw two successful coups and a third foiled putsch. There were failed power grabs in São Tomé and Príncipe, the Democratic Republic of the Congo, and against Mali’s military junta, sparked by armed groups’ escalating attacks and creeping inflation on food and services. It was a continuation of a trajectory set in 2021, a year that saw four successful coups in Africa (in Chad, Guinea, Mali, and Sudan).
  • Tunisia is just one of many countries experiencing a rollback of democratic gains. Amid an economic crisis worsened by the pandemic and made even more acute by the war in Ukraine, democratic backsliding is increasing. As reported in Africa Brief this year, Sudan’s democratic future still hangs in the balance, and Mali’s putsch leaders agreed to a two-year democratic transition that would allow coup leader Col. Assimi Goïta and other military members to run in general elections in 2024. Ibrahim Traoré, an army captain in Burkina Faso, proclaimed himself the new president of the country’s military junta in the country’s second coup in eight months while Guinea’s military rulers issued a three-year ban on public demonstrations to combat growing calls for democracy. And around 50 people were killed by security forces as Chadians took to the streets to demand a quicker transition to democratic rule.
  • Recent elections in Kenya and Angola showed democratic gains as Kenyans defied their outgoing president’s chosen successor and young Angolans increasingly challenged their one-party state. Africans want more democracy even if their leaders want less of it.
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  • In the midst of this global energy crisis, African leaders have argued that their nations should also be allowed to ramp up fossil fuel use to improve domestic energy access—given they had contributed so little to historic carbon emissions. Indeed, 43 percent of Africa’s 1.4 billion people still lack access to electricity. As a result of soaring energy prices, the number of people without access to energy across Africa rose for the first time in decades, threatening to erode all gains made. According to the International Energy Agency, around 1 billion Africans will still rely on dirty fuels, such as firewood, for cooking in 2030. However, Western governments demanded that multilateral lenders, such as the World Bank, stop funding fossil fuel projects to reduce global carbon emissions.
  • Egypt, Africa’s second-largest economy, agreed on Oct. 27 to a $3 billion bailout from the International Monetary Fund (IMF). It was the country’s fourth since Abdel Fattah al-Sisi took power in a coup in 2013, making Egypt the IMF’s second-largest debtor after Argentina. Long a top choice for emerging market investors, Egypt had become heavily dependent on hot money, but investors panicking over the war in Ukraine pulled around $20 billion out of Egypt between February and March.
  • Inflation in Ghana rose to 15.7 percent in March as the Ghanaian currency lost 16 percent of its value against the dollar, prompting protests in June over the soaring cost of living.
  • Africa is seeking more than just climate reparations as it looks to transform the global system. African leaders want a permanent seat for the African Union at the G-20, two seats on the U.N. Security Council, and a reordering of global tax rules under the United Nations.
  • 2022 was a year for the restitution of Africa’s historical artifacts stolen by colonial powers. The Smithsonian Institution agreed to return its collection of Benin Bronzes and placed legal ownership with Nigerian authorities. In July, Germany handed back two bronzes and put more than 1,000 other items into Nigeria’s ownership while a digital database—known as Digital Benin, which documents Western museums’ existing collection of Benin’s artifacts—was unveiled in November. Despite this progress, there are still unanswered calls for the British Museum, the largest holder of Benin Bronzes, to return its loot. In September, the world marked the 200th anniversary of the deciphering of the Rosetta Stone, a fragment of written decrees issued by Egyptian priests during the reign of Ptolemy V (204 to 180 B.C.). Egyptian scholars and archaeologists renewed their demand for the stone’s return, which has been housed at the British Museum in London since 1802. Their call has garnered more than 135,000 signatures on an online petition.
  • An online archive to showcase Mali’s cultural history was launched in March, digitizing more than 40,000 of Timbuktu’s ancient manuscripts, some dating to the 12th century and originally written in medieval Arabic but translated to several languages in an online platform. Malian librarians and their assistants secretly transported hundreds of thousands of documents into family homes in a bid to save them from destruction by jihadis. Through those efforts, some 350,000 manuscripts from 45 libraries across the city were kept safe.
Ed Webb

Egypt increases food prices for second time in three months | Middle East Eye - 0 views

  • Egypt has increased the prices of subsidised sugar and cooking oil for the second time in three months, amid rising inflation and a struggling economy.The decision, announced last week, increased the price of subsidised sugar by 14.3 percent – from seven to eight Egyptian pounds a kilo (about 40 cents), and increased the price of subsidised oil by 20 percent, from 10 to 12 Egyptian pounds.Last November, Egypt suffered a sugar crisis that increased tensions in the country.Egypt imports about one million tonnes of sugar annually, but an acute shortage of dollars has cut the imports by private traders, leaving the market short as the government scrambles to fill the gap
  • the government supports about 70 of its 90 million people through more than 20 million ration cards that give recipients access to subsidised goods
  • annual urban consumer price inflation had jumped for the second month since the Egyptian pound was floated last year to reach 23.3 percent in December from 19.4 percent in November
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  • “There are many other alternatives, including tax dispute settlements with business owners, the settlement of tax evasion cases, as well as stopping the corruption in various state institutions, saving the resources of officials’ extravagance, and finding economic development alternatives in various economic sectors,”
Ed Webb

Syria Comment » Archives » What Does Turkey's "Yes" Vote Mean for Democracy - 0 views

  • The coastal region is Kemalist, but the major cities, Istanbul and Ankara and most of Anatolia is for Erdoghan and the AK Party.
  • Turkish voters decided that they want the army to return to its barracks and not deployed on Turkey’s streets. They want generals and judges off the front pages of the newspapers, where they have been so prominent for a century. Officers and judges have viewed themselves as the guardians of the state rather than of law.
  • It strengthens gender equality and bars discrimination against children, the elderly, the disabled and veterans.
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  • It recognizes the right to protection of personal information and limits government access to personal records.
  • The struggle between supporters of the old secular but authoritarian elite, who have held power since 1923, and the AK government is likely to continue despite the government’s narrow victory.
  • The Istanbul Stock Exchange 100 index rose 2.7 percent yesterday to a record, helped by the referendum results. Erdogan, 56, has plenty to brag about in the Turkish economy. “A Turkey that in 2002 was the 26th-largest economy in the world is now the 17th,” he said in a speech in Ankara on June 29. “Turkey is being talked about as an example for the world. We’re being watched with envy.” Under the AK Party, the government has tamed the inflation that plagued the country for decades. Since early 2004, consumer price increases have been no more than 13 percent. That’s a victory in Turkey, where the inflation rate touched 73 percent as recently as February 2002 and was even higher, on average, throughout the 1990s.
Ed Webb

As Egypt's economic crisis deepens, an affordable meal is hard to find - The Washington... - 0 views

  • To blame the crisis solely on the war in Ukraine would be “barely true,” said Egyptian political economist Wael Gamal. Years of borrowing and investment in megaprojects made Egypt especially vulnerable, he said. Those projects have been championed by President Abdel Fatah El-Sisi, who took power in a military coup in 2013 and has made infrastructure development a hallmark of his presidency.
  • Until recently, Ramadan said, he could buy a ton of rice for around 8,000 Egyptian pounds. Now, he said, it costs 18,000 pounds. The cost of his pasta supply has jumped by 6,000 pounds. Even the plastic containers and bags they use to package the meals are pricier than before.
  • Egypt’s economic troubles, Gamal said, become “deeper every time they go to the IMF and take more loans and cover older loans with new loans.”
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  • “It’s a wonder how people survive,”
Ed Webb

Cutting Subsidies to Rein in a Budget Deficit: A Necessary Trade-Off? - Tunisia Live : ... - 0 views

  • the continuing costs of inflation since the revolution of January 2011
  • the current government is only a transitional body and that according to constitutional bylaws, it is not allowed to make any crucial decisions that have direct effects on consumers and the country’s economy. Zarouk went on to explain that the decision will harm consumers; The cost of household consumption has already increased by 5.9% between January 2012 and January 2013. Fuel is also vital to various segments of the economy, averaging 13% of general production costs in areas such as clothes and food. It also accounts for 50% to 60% of total expenses in the production of cement and bricks, which represent an important element of the country’s economy. “So it [the rise in fuels prices] harms such sectors,” he said. “And they are crucial in our economy.”
  • savings rates are insignificant in Tunisia – 17% – and decreasing, according to Zarouk. “People can no longer afford to save,”
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  • Though economics professor Mohsen Hassen echoed Zarouk’s assertion that increasing fuel prices will negatively affect consumers, he said the government’s decision was justified in order to salvage the country’s economy. Hassen told Tunisia Live that the budget deficit grew by 12.6% since the revolution; in 2012, alone it rose by 6.6%. “It is extremely dangerous that the deficit keeps growing,” Hassen said. “That’s why better management of subsidies funding is crucial.” Goods are generally subsidized in order to preserve consumer purchasing power, especially for citizens with low incomes. “Only 12% of the poor are benefiting from the fund…” he stated, adding that a larger proportion of Tunisians with high incomes are the ones gaining the most from subsidies. “Subsidies are serving those who don’t need them most,” Hassen said. “That’s the dilemma that was unveiled by the revolution thanks to transparency in statistics.”
Ed Webb

Erdoğan's next moves - 0 views

  • Corruption is prevalent in Turkey, but voters tend to punish politicians for corruption only when the economy is perceived to be doing poorly. After a volatile 1990s, the AKP has presided over steady high growth and modest inflation. Despite the slowdown in economic growth over the past year, Turkish voters seem to credit the government for the economic development and relative stability that have marked the nearly 12 years of its rule.
  • After being targeted by Gulen supporters within the judiciary and the police force, Erdoğan’s first move will be to root out Gulenists within the state and target businesses and civil society organizations close to the movement. That Gulenists allegedly posted a recording on YouTube of a secret meeting of security officials about possible intervention in Syria right before the elections has given such action new urgency.
Ed Webb

Mohammed bin Salman Isn't Wonky Enough - Foreign Policy - 0 views

  • Like Western investors, the kingdom’s elites are uncertain about what the new order means for the country’s economy. The new Saudi leadership has indeed created new opportunities, but many of the deep structural barriers to diversification remain unchanged. The bulk of the public sector remains bloated by patronage employment, the private sector is still dominated by cheap foreign labor, and private economic activity remains deeply dependent on state spending. Addressing these challenges could take a generation — and it will require patience, creativity, and a clearer sense of priorities.
  • While a band of Al Saud brothers used to rule collectively with the king as a figurehead, decision-making has now become centralized under one man
  • ruthlessness and willingness to take risks radically at odds with the cautious and consensual political culture of the Al Saud clan
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  • New policies and programs are announced constantly, while the delivery capacity of the sluggish Saudi bureaucracy continues to lag. Below the upper echelons, the Saudi state remains the deeply fragmented, bloated, and slow-moving machine that I described in my 2010 book. The government seems to have no clear strategy for reforming this bureaucracy
  • While space for political opposition arguably has narrowed, women will soon be allowed to drive and the religious police force that once harassed them has been almost entirely neutered. By relaxing religious controls over the public sphere, the crown prince is seeking to attract more foreign investment and facilitate diversification into tourism and entertainment
  • Saudi Arabia has tackled fiscal reforms more vigorously than most local and international observers expected, introducing unprecedented tax and energy price measures, including the introduction of a 5 percent value added tax, new levies on foreign workers, and increases in electricity and transport fuel prices. The government is now experimenting with new non-oil sectors with an increased sense of urgency, including information technology and defense manufacturing.
  • As limits on government employment kick in, young Saudis will increasingly have no choice but to seek private jobs. But they will face tough competition on the private labor market where employers have become accustomed to recruiting low-wage workers from poorer Arab and Asian countries
  • public sector employment remains the key means of providing income to Saudi nationals. Cheap foreign labor dominates private sector employment, thereby keeping consumer inflation at bay and business owners happy. Citizens, however, are parked in the overstaffed public sector. Out of every three jobs held by Saudis, roughly two are in government. The average ratio around the world is one in five. Public sector wages account for almost half of total government spending, among the highest shares in the world
  • Local economic advisors fear that the majority of private petrochemicals firms — the most developed part of Saudi industry — would lose money if prices of natural gas, their main input, increase to American levels.
  • Saudi wage demands will have to drop further if private job creation is to substitute for the erstwhile government employment guarantee. For the time being, private job creation has stalled as the government has pursued moderate austerity since 2015 in response to deficits and falling oil prices
  • The government has also underestimated how dependent private businesses are on state spending. The share of state spending in the non-oil economy is extremely high compared to other economies. Historically, almost all private sector growth has resulted from increases in public spending
  • As long as oil prices remain below $70 per barrel, the goal of a balanced budget will cause pain for businesses and limit private job creation. This will pose a major political challenge at a time when an estimated 200,000 Saudis are entering the labor market every year. More than 60 percent of the population is under 30, which means that the citizen labor force will grow rapidly for at least the next two decades.
  • It would be far more prudent to gently prepare citizens and businesses for a difficult and protracted adjustment period and to focus on a smaller number of priorities
  • The key structural challenge to non-oil growth is the way the Saudi government currently shares its wealth, most notably through mass public employment — an extremely expensive policy that bloats the bureaucracy, distorts labor markets, and is increasingly inequitable in an era when government jobs can no longer be guaranteed to all citizens. A stagnating economic pie that might even shrink in the coming years must be shared more equitably.
  • A basic income would not only guarantee a basic livelihood for all citizens, but also serve as a grand political gesture that could justify difficult public sector reforms. A universal wealth-sharing scheme would make it easier to freeze government hiring and send a clear signal that, from now on, Saudis need to seek and acquire the skills for private employment and entrepreneurship. The government could supplement this scheme by charging fees to firms that employ foreigners while subsidizing wages for citizens to fully close the wage gap between the two.
  • Focusing on such fundamentals might be less exciting than building new cities in the desert or launching the world’s largest-ever IPO — but they are more important for the kingdom’s economic future. No country as dependent on petroleum as Saudi Arabia has ever effectively diversified away from oil
Ed Webb

Toughing It Out in Cairo | by Yasmine El Rashidi | The New York Review of Books - 0 views

  • In search of my story, I got in my car and drove east in mid-May 2015 from Cairo to Suez. Nine months earlier, Sisi had announced the revival of a decades-old “mega-project” to expand the 150-year-old Suez Canal. He pledged that the project would be finished in exactly twelve months, and that every Egyptian would see “immediate returns.” I was skeptical about the promised date of completion and drove through the desert to see for myself. Celebratory billboards lined the route leading out of the city, as if the project was already complete. At the site of construction, I was told that the army had been working round the clock.The new canal was in fact inaugurated on August 6, 2015, twelve months to the day from when the project was first announced, and thousands of Egyptians took to the streets in celebration. Downtown Cairo was awash in flags and fireworks, music, flashing strobe-light shows, and animal-themed blow-up dolls as tall as townhouses whose only visible relationship to the canal might have been symbolic, in their exaggerated size. It brought back memories of the day in February 2011 when President Hosni Mubarak stepped down
  • The financing of the project under Sisi was shrewd—a tax-free public bond with certificates in denominations as low as ten Egyptian pounds (marketed to students), and a 12 percent interest rate with the option of quarterly payouts. The necessary $8 billion was raised in a week. People everywhere spoke of having put their savings into Suez Canal bonds. Lives felt quantifiably changed—I heard references to “free money.”
  • the illusion of safety
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  • human rights begin with the conditions under which we live. The revolution made life harder for us—us being the poor—so of course when they arrest these activists, I say it’s for the better, we can’t afford another revolution. We can hardly afford to eat each day
  • December, four months after the opening of the new canal, and, aside from those who had bought bonds and received the first payout, most people I heard began describing it as el-tira’a (a sewer). When I asked one woman, Sabah, a cook who juggles jobs in six homes each week, why her opinion of the canal had changed, she said: “They promised revenues and immediate returns, and now everyone says revenues are down. Where are the immediate returns? The project has failed.”
  • Sisi was no Nasser, but his nationalist credentials as a former army general lent him credibility. He also spoke the language of the street—his public speeches were matter-of-fact and colloquial
  • I kept tabs on the shrinking number of people who showed up to protest, and then on the decreasing number of protests. Only a handful of people still voiced their dissent, including Laila Soueif, the matriarch of a family of longtime activists, whose son Alaa Abdel Fattah is serving a five-year prison sentence on trumped-up charges; or the team behind the online paper Mada Masr, led by the journalist and editor Lina Attalah, who continued to publish despite scrutiny and censorship (the paper’s website was eventually blocked, along with 127 others). The risks of human rights work had become almost prohibitive, with arrests, disappearances, and travel bans all commonplace. I counted the number of activists, academics, and artists who had left the country, and friends who were emigrating. Regeni’s name often came up in conversations—his murder lingered in our minds
  • in April, the president declared that two Red Sea islands, Tiran and Sanafir, long perceived as Egypt’s, fell within the territorial waters of Saudi Arabia and would be transferred to the kingdom. Public attention shifted to this new declaration, which brought revolutionary and pro-government Egyptians together in opposition to it
  • muffled grumbles, but the answers to the others were invariably: “The government’s job is to keep us fed, and at least the country is safe again.”
  • More and more, on the streets of Cairo, in government offices, and in informal settlements on the outskirts of the city, I heard references to Syria: “We could have ended up like them.”
  • Passivity has been their particular mode of survival
  • Discontent surged in February over the shifting official accounts of what had happened to Giulio Regeni, an Italian graduate student who disappeared and was then found dead on a highway in Cairo, his body bearing marks of severe torture
  • A friend’s activist neighbor was dragged from his home in the night and disappeared for four days on allegations of being an “Islamist sympathizer” (he was not); a writer was imprisoned, on grounds of “offending public morals,” for sexually explicit scenes in a novel; gay men were being hunted by undercover police on the hookup app Grindr; a poet was jailed on charges of “blasphemy” and “contempt of religion” for calling the slaughter of sheep during a Muslim feast “the most horrible massacre committed by humans”; two women were threatened with jail for allegedly “kissing” in a car (they were not)
  • I, too, had slipped into some variation of the so-called inertia. A friend one evening described our often-dulled responses to news and events that once enraged us as a type of PTSD
  • As a result of severely dwindling currency reserves, the government was forced to implement a series of long-overdue austerity measures to secure a $12 billion loan from the IMF. The risks of implementing the loan program were described by the agency’s staff as “significant.” Morsi had considered these same measures but backed out after a public outcry. Sisi had little choice but to take the risk. First gas and fuel subsidies were suddenly lifted (causing price hikes of 50 percent), then the Egyptian pound was floated, plunging the currency from seven to twenty pounds against the dollar. Overnight, the price of milk, tomatoes, pasta, cigarettes, soap, water, sugar, oil, chicken, chocolate, bread, juice, toilet paper, matches, bananas, plumbing services, and household goods leapt
  • They want to make it impossible for us to be political
  • By August, I heard people everywhere talking about the price of school supplies. School bags seemed to be the measure of the state of things. What cost 90 pounds a year before cost 350 pounds now. Inflation was at its highest (33 percent) since 1986 (when it was 35.1 percent), and second-highest since 1958. When, over the months that followed, I asked my grocer or the man who delivered the bread or the garbage collectors how they were managing to keep afloat, the invariable answer was “baraka”—blessings from God.
  • “They say he is building a $10 million palace in the desert for himself when the rest of us can hardly eat, but what is the alternative? To be fair, he inherited a mess. At least he is a nationalist, one of us.”
  • “We would have descended into chaos had the Brotherhood stayed in power. The country would not have survived the remainder of Morsi’s term.”
  • There was a handful of people who knew what military rule would bring, who anticipated the crackdowns, the closing-in of the state. Some had forecast the outbursts of violence to come. But perhaps nobody quite anticipated that the deep state would be resurrected with such ferocity, and so unabashedly
  • When I asked a range of political figures about the surveillance, the answer I got was “paranoia”—to this day, no one fully understands the political and emotional causes that led to the revolution on January 25, 2011.
  • radicalism seems at once to undermine and to strengthen Sisi’s hold on power. The country feels more and more mired in such contradictions
  • “I admit,” a brass worker in Cairo’s old city told me one evening in November, “I’m not happy with how things have unfolded. This was never a revolution to begin with. It was all scripted from the start, by military intelligence, so what is one to do now except put your head down and try to make a living?”
Ed Webb

Erdogan Plans to Tighten His Grip on Turkey's Economy - Bloomberg - 0 views

  • Turkish President Recep Tayyip Erdogan said he intends to tighten his grip on the economy and take more responsibility for monetary policy if he wins an election next month.
  • Erdogan told Bloomberg TV in London on Monday that after the vote transforms Turkey into a full presidential system, he expects the central bank will have to heed his calls for lower interest rates. The central bank’s key rate is now 13.5 percent, compared with 10.9 percent consumer-price inflation.
  • The lira slid to its weakest level ever against the dollar after his remarks were published
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  • Erdogan last month called snap elections for June 24, when a victory would consolidate his one-man rule of a country he’s governed since 2003. Since defeating a coup attempt in 2016, Erdogan has used emergency rule to increase his control over the region’s largest economy
  • A referendum last year weakened the role of parliament and gave the president sweeping authority in the most radical constitutional overhaul since the republic was founded 95 years ago.
  • Turkey’s relations with its NATO allies fray and its diplomatic focus shifts toward Russia and Iran. The country faces the unprecedented risk of sanctions from the U.S., a risk that Erdogan downplayed
  • “If we’re allies with the U.S., we need solidarity, not sanctions.”
  • The rapidity of the changes to Turkey’s economic and foreign policies has shaken investor confidence, which is critical because Turkey’s current-account deficit demands steady inflows from abroad
  • Erdogan has routinely criticized the central bank for setting interest rates that he says have helped stoke rising prices, an argument that contradicts conventional economic theory
Ed Webb

Tunisia - between instability and renewal | European Council on Foreign Relations - 0 views

  • Even though the 2011 revolution was motivated in large part by socio-economic concerns, the governments that have held office since then have been unable to improve the situation. Growth has remained low, and unemployment is high: 15 percent of the population is without work, and the rate for those with a university degree is over 30 percent. Inequality between the more prosperous coastal region and the deprived interior of the country remains striking. Around half of all workers are employed in the informal economy. Many young Tunisians lack any prospect of being able to afford a home or a car, or of being secure enough to start a family.
  • Faced with increasing debt and deficit levels and shrinking foreign currency reserves, Tunisia agreed a loan of $2.9 billion with the International Monetary Fund in 2016. The IMF called on Tunisia to cut public spending, overhaul its collection of taxes to raise government revenue, and allow the currency to depreciate. The IMF argues that it has been fairly flexible so far in enforcing public spending cuts, but it is now stepping up its pressure on the Tunisian authorities.
  • Wages in the public sector account for 15 percent of GDP (up from 10 percent in 2010), so it is hardly surprising that the government is now trying to limit spending in this area. Yet it is doing this at a time when inflation (worsened by the deflation of the Tunisian dinar that the IMF has promoted) and subsidy cuts have already had a severe impact on people’s purchasing power.
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  • It is an anomaly of the Tunisian political scene that the UGTT’s anti-austerity position has little representation among elected politicians: the largest political groups (the Islamist Ennahda party and various offshoots of the secular-modernist Nidaa Tounes party) have backed the IMF agreement
  • unemployment and the proliferation of grey-sector jobs are linked to structural biases in the economy that systematically favour a small group of politically connected businesses. Measures that might address this problem include increasing access to credit for would-be entrepreneurs, changing regulations and practices within the public and banking sectors that are tilted to a narrow elite, and reducing corruption. According to Tunisians, corruption has not been reduced but only “democratised” since the revolution. Investment in infrastructure serving disadvantaged parts of the country could also help spur more inclusive growth
  • Since the revolution, the overarching priority of political life in Tunisia has been to seek enough stability to preserve and complete the political transition. Much has been achieved, though a few important steps (notably the establishment of a Constitutional Court) remain unfulfilled. But Tunisia has now reached a point where the greatest threat to stability is no longer political rivalries around religious identity but unmet social and economic aspirations. Until now, the country’s political parties have not organised themselves to offer distinctive and coherent visions of how Tunisia’s socio-economic development can be improved, and they are paying the price in public alienation from the entire political system
Ed Webb

On the Breadline in Sisi's Egypt | Middle East Research and Information Project - 0 views

  • By February 2017, food inflation reached 42 percent. [3] Key staple goods have been particularly affected: Over the past year, Egyptians have seen the cost of bread and cooking oil go up by nearly 60 percent. [4] To put this into perspective, in the year leading up to the 2011 Arab Spring, food prices in Egypt were subject to an annual increase of around 15 percent. [5] Citing these and comparable developments, scholars have argued that grievances arising from food insecurity were a key factor in the outbreak of the 25th January Egyptian Revolution. [6]
  • In recent years, austerity measures have been thwarted by street-level mobilization in Morocco, Tunisia, Jordan, Yemen and Mauritania.
  • In total, we identified 24 food protests occurring between March 6 and 7, 2017, in 17 districts across five governorates.
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  • Rather than trying to occupy squares and politically symbolic urban spaces, protestors acted locally to where they lived, inflicting an immediate cost on the authorities by impeding the flow of traffic and disrupting the functioning of local government.
  • Since the 2013 coup that ousted Islamist president Muhammad Mursi, the military-backed government has used a draconian anti-protest law to detain thousands of protestors. It is striking then that of the 24 food protests that we were able to identify, only four were met with any kind of repression
  • fearful that the protests may scale up again following Friday prayer, the Ministry of Endowments issued a sermon that called on Egyptians to reflect upon the country’s tightened economic circumstances and to be prepared to make sacrifices for the homeland. [22] This was followed by President Sisi himself making a public statement, pledging that the bread quota would not be cut again.
  • the trajectory of the mobilization suggests that economic grievances alone do not predict the scale of protest. Between March 6 and 7, millions of Egyptians faced an immediate threat to their food security—but only a small minority of those affected took to the streets in what were highly localized protests
  • as the March protests clearly show, the poor, both rural and urban, are also willing and able to mobilize against subsidy cuts. The class dynamics of bread subsidies seem not to have been lost on Egypt’s poor, either. In Alexandria, women protestors chanted, “They eat fino [higher quality] bread, and we can’t find our bread.” Several protestors interviewed by the media complained about the quality of subsidized baladi bread, with one woman commenting that it should be used as chicken feed. “Would the Minister of Supply eat this?” she asked the camera, as a group of children jostling around her yelled out “No!” in unison. The regime’s behavior in the face of these disruptive protests shows that not only were the authorities unprepared for this backlash, but that the regime fears provoking this constituency further, manifest in the Minister of Supply’s immediate volte-face and the police’s reluctance to crack down on residents. Even small localized protests, this suggests, can be an effective tool for extracting concessions from Sisi’s regime.
Ed Webb

Lebanon and Iraq Want to Overthrow Sectarianism - 0 views

  • In Iraq, the protesters mostly consisted of angry young working-class men, and they were quickly confronted with violence. In Lebanon, meanwhile, the protests have been marked by that country’s unmistakable sense of style and festive spirit, and the initiators have mostly been from the upper social classes. In downtown Beirut this past weekend, the sea of protesters included a woman in white-rimmed retro sunglasses with her dog named Pucci and a young man waving a Lebanese flag while lying in an inflatable kiddie pool. Yet despite the stark contrast between the protests, the rebels in both countries are in fact very similar. They are confronting many of the same political problems and are making essentially the same demand. They want the downfall of their countries’ existing self-serving elites, and big changes to the sectarian constitutional systems that enabled them
  • if austerity measures were a trigger, the protesters now have much bigger complaints on their minds
  • Iraqi protesters share the Lebanese view of their ruling elite as corrupt and inefficient (although they have also learned their government is quicker to resort to violence to restore order)
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  • Politicians give whatever work there is to their henchmen, not to us
  • Many of the politicians in Lebanon and Iraq are the direct material beneficiaries of sectarian systems instituted after conflicts in both countries.
  • Wealth and national resources were carved up along sectarian lines, with no party having an interest in upsetting the status quo.
  • After the 2003 U.S. invasion, Iraq borrowed from Lebanon to build its own muhasasa taifa, or balanced sectarianism. Power is likewise shared between the ruling elite of Shiites, Sunnis, and Kurds. As a result, while elections can shift the balance of power, they do little to change the faces of those who wield it, from whichever sect or faction
  • such division of power has reduced sectarian conflict but failed at making government efficient or transparent
  • one side of the protests is that they are against any political parties that are religious or ideologically charged
  • At least two generations of Iraqis have been scarred by sectarianism, beginning with Saddam Hussein’s killings of Shiites in Iraq, the subsequent revenge by the Shiite militias on Sunnis, and then the formation of the Islamic State. They are not just exhausted from the chaos unleashed by sectarian rivalries, but also disdainful of them. The most recent Iraqi protests were held mainly in Shiite cities and against a Shiite-dominated government.
  • In Lebanon, meanwhile, the protests comprise different sects, ages, sexes, and ideologies. However, perhaps most notable were the protests by Shiites in the south of the country against the Amal Movement, historically the dominant Shiite political party. The streets of Tyre resonated with curses aimed at Nabih Berri—Amal’s leader, the Shiite speaker of the parliament, and a Hezbollah ally.
  • In both countries, Shiite militias backed by Iran have come to play a dominant role in government in recent years: Hezbollah in Lebanon, and groups that belong to the Popular Mobilization Forces, the irregular army raised to fight the Islamic State, in Iraq
  • many Lebanese feel that Hezbollah can no longer claim the moral ground it once claimed for itself as a political outsider, now that it’s clearly a part of the faulty system
  • In last year’s elections, a new movement of independent, nonsectarian “civil society” candidates stepped up, and though only one succeeded in winning a seat, amid claims they are too disparate and divided to succeed, they are still determined to try again
  • For now, however, the very act of protest offers a sense of possibility. “It’s very beautiful,” said Azab, “when you feel that you managed to defeat all your fears and say what you want out loud.”
Ed Webb

Erdoğan's Turkey and the Problem of the 30 Million - War on the Rocks - 0 views

  • Erdoğan’s brand is waning in the cities, the coasts, and among young people. Neither the new Erdoğan-shaped presidential system, nor his expansionist foreign policy are popular in these parts. Even before the COVID-19 pandemic, chronic unemployment and inflation extinguished any hope of him bouncing back in the polls. Despite his total control over the state, mainstream media, and major capital groups, the president is unlikely to ever get much more than half of the popular vote.
  • The Erdoğan government now faced a question that all successful populist regimes must solve: What to do with the minority? They certainly can’t be granted free and fair elections, lest they attain the means to exact revenge. Nor can they be deprived of all their rights of representation, lest they be driven to revolt or treason. So how does a very slim majority of a country suppress the other half indefinitely? How does it rest easy, knowing that its hegemony is locked in?
  • The Erdoğan government surely knows that an attempt to “nationalize” all of the 30 million would be unrealistic. Rather, it seeks to separate the leftists and Kurds among them and brand them as terrorists, then turn around and securely pull the center opposition into the nationalist opposition.
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  • the government first needs to contain the spread of the left
  • the People’s Republican Party (CHP), Turkey’s founding and currently main opposition party, has tried to contain this “patriot-terrorist” polarity. Its umbrella candidates for the presidency, ranging from the soporific Ekmeleddin Ihsanoğlu in 2014, to the firebrand Muharrem Ince in 2018, have failed. In the 2019 municipal elections, however, the CHP’s mayoral candidates did well, uniting the Kemalist-nationalist camp, Islamists, liberal cosmopolitans, as well as leftists and even some sympathizers of the Kurdish movement. These candidates won against Erdoğan’s men in all major cities, including Ankara and (in a repeat election) Istanbul. This was the first, and so far only, time Erdoğan’s containment of the left had been breached.
  • Many in the urban middle class, who are fairly indifferent about Kurdish rights, wanted to see Demirtas grow the HDP into a Turkish-Kurdish version of the European Greens. The idea at the time was to also expand into a grand center-left coalition that would prevent Erdoğan from establishing his hyper-centralized presidential system. Their momentum was cut short when months after the coup attempt, in December 2016, the government detained Demirtas on charges of terrorism and began a ruthless crackdown on the HDP’s activities that has since only gained in intensity.
  • The second part of the government’s strategy is to keep the left — crippled and branded as terrorists — within the political system. While Turkey’s politics is polarized between the government and the opposition, this creates a second polarization, this time within the opposition camp. It is this second polarity where the vast majority of political discourse takes place. From the perspective of a nationalistic system of valuation, in which being “local and national” reigns supreme, this is a fatal flaw. On the one hand, the various factions of the opposition can’t win a national vote unless they partner with the HDP to form a 50 percent bloc against Erdoğan. On the other, the nationalists within the opposition cannot be seen working with the “terrorists” of the pro-Kurdish left.
  • The left, however, puts up genuine systemic resistance: They reject the idea that the Turkish nation is pure and infallible. Like leftists elsewhere, they deconstruct official history, focusing on massacres of minorities and exploitation of the working classes. There is also an inextricable tie to the Kurdish movement, which in turn is linked to the Kurdistan Workers’ Party (PKK) — an insurgency that has been waging war on the Turkish state for over four decades. The connection between the non-Kurdish left and the Kurdish movement is complicated and has gone through various stages in the recent past. For the Turkish right, there is little difference between leftist subversion and Kurdish insurrection. “I joined the police to beat up Communists” a crescent-mustached officer once told me, and he was talking about arresting Kurdish protesters.
  • the Erdoğan government finally seeks to pull the entire bloc to the right. This means focusing on liberal-minded urbanites whose nationalism has lapsed, and rekindling their faith in the national mythos. This is the most challenging aspect of its effort, and where it has done most poorly.
  • restructuring of the media. For the past few years, the government has been taking over media channels that centrist voters traditionally follow, then gradually shifting their tone to favor the government. The Dogan Media Group, owner of Hurriyet (Turkey’s former newspaper of record) and CNN Turk (a 24-hour TV news channel) used to cater to a secular, urban, and increasingly progressive audience. The group’s main audience overlapped with the centrist-opposition CHP’s voter base, whose older members are secularist-nationalists and younger members (often their children) are leftist-progressives. In March 2018, the media group was sold to an Erdoğan-friendly conglomerate, which fired many of its veteran journalists and changed editorial guidelines. The result has been a desensitized, less colorful version of the jingoist carnival running across Erdoğan’s formal channels. CNN Turk, especially, became a tool for the government to enter the living rooms of CHP voters and tell them that they were voting for terrorist collaborators. So insidious were these attacks that the CHP had to ban its members from getting on the channel, and call upon its electorate to boycott it.
  •  Erdoğan said “We have 18 martyrs and close to 200 wounded. In our country, we have the terror group’s so-called political organism. Aside from that, our nation is now in a state of Yekvücut.” The term is a favorite of the president. It is a combination of the Farsi term “Yek” meaning “single” and the Arabic word “vücut” meaning “existence,” or in the Turkish use, “body.” Erdoğan was thinking of the nation as a single biological organism, with the leftists and the Kurdish movement as foreign bodies
  • The opposition media — largely relegated to the internet — was reporting on the plight of the working class and the brewing economic crisis. Like free media across the West, they also questioned the quality and veracity of their government’s COVID-19 data. In a speech delivered in May, Erdoğan was unusually angry. He had clearly expected a Yekvücut moment and was struggling to understand why it hadn’t come about. His strategy to create a “local and national” opposition wasn’t working, and the frustration of it seemed to hit him head on. “I want to warn once again the media and other representatives who are in league with the CHP’s leaders,” he said, before launching into what was — even for him — an unusually vituperative attack: “You are not national, and your localness is in question,” he said, “you have always sided with whoever was treacherous [bozguncu], whoever was perverted, whoever was depraved” adding, “you are like the creatures in mythology that only feed on enmity, hate, fear, confusion and pain.”
  • The absurd accusations of fraud and coup-abetting aside, there is something to the idea that the opposition wants things to get worse. The Erdoğan government’s consolidation over the past decade has been so suffocating for opposition voters that many do look for deliverance in economic or natural disaster.
  • The Erdoğan government may have cut short the HDP’s rise, but it hasn’t been able to prevent leftist ideas from spreading. The CHP’s youth wings today are highly class-conscious and hostile to militant nationalism. Figures like the CHP’s Istanbul provincial head Canan Kaftancıoğlu , who campaign on a mix of feminism, workers’ rights, and anti-fascist slogans, are gaining a national following. The polarization within the opposition is likely deepening, with part of the 30 million become more “national,” while another part is becoming more leftist. This means that the great mass of right-wing sentiment is growing, but so is the left-wing minority. The “problem,” in the government’s view, may no longer be 30 million strong, but it is more acute, and perhaps more vexing, than before.
  • (gun ownership has soared since the 2016 coup attempt)
  • To Turkey’s governing class, the military coup of their imagination is not a matter of defending against an armed force trying to take over the government. Rather, it is a night of free-for-all, in which politics is stripped down to its violent core, and a majority at the height of its powers can finally put down the enemy within: the haters, the doubters, the creatures of mythology.
  • “Turkey will not only reach its 2023 goals [the centennial of the Republic], it will also be rid of the representatives of this diseased politics,” he said in May, hinting that he might cut the left out of the political system entirely. If this should happen, politics would be an uneven contest between Islamist, pan-Turkic, and secularist hues of Turkish nationalism. Far off, in the back streets of the big cities and in the Kurdish provinces, in second-hand bookshops and hidden corners of the internet, there would be a progressive left, weathering out what is surely going to be a violent storm.
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