Editor’s Note: February 18, 2019
Can Egypt be trusted on the economy?
Egypt’s parliament last week voted to extend presidential term limitsin a move that could see president Abdel Fattah el-Sisi remain in power for at least 20 years, until 2034.
They also voted to give the president more control over the judiciary, and to extend broad new powers to the military.
The changes reflect Sisi’s growing authoritarianism since seizing power in a 2013 coup. Dissent has all but vanished, with would-be critics either jailed or otherwise persuaded not to challenge the government.
This extends to the economy, which the government claims is flourishing due to IMF-backed reforms and austerity. Officials regularly and eagerly recite positive growth and investment figures to support this narrative.
Conspicuously absent is any acknowledgment of problems.
Egypt’s debt has almost doubled since 2016 – when it took out a $12bn IMF loan. The government already spends more than 40% of revenue on debt-servicing, a figure that will only increase as developed markets raise interest rates.
Also taboo is any discussion about how ordinary Egyptians are faring. The cutting of subsidies has seen inflation sore, and the government has not released poverty figures since 2016, when the rate stood at almost 30%.
Egypt’s economy needs reform, and the market has generally responded positively, but the government narrative is a bit too clean.
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