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Episode 94. Egypt's Economic Crisis: A Perfect Storm?

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In this episode, we take a deep dive into the looming economic crisis in Egypt. With inflation on the rise, foreign investment declining, and a mounting debt burden, the country's economy is facing significant challenges. We discuss the roots of the crisis, its impact on Egypt's people, and the potential for social unrest. We'll also look at the role of the government and the military in responding to this crisis and ask what the future holds for Egypt's economy. Is this the first domino of the next Arab Spring? We ask our panel of experts.


Episode Overview:

Part 1: Armed and Dangerous (2:56)

  • Mirette F. Mabrouk begins our conversation with a passion debunking of the notion that Egyptians do not care about democracy. She also breaks down the extent to which the Egyptian military has embedded itself within the government and the nation's economy.

  • Mabrouk describes the lack of economic reform over the decades in Egypt, despite being a regular recipient of IMF loans, and made worse following the 2013 coup.

  • We discuss the impact of COVID-19 and the Russian invasion of Ukraine, which, combined with the flight of international capital, have collectively dealt crippling blows to the Egyptian economy.

  • We identify the massive number of young people within Egypt and the struggle to create jobs to meet the needs of a labour force growing by hundreds of thousands every year.

Part 2: Top of the Pyramid (20:26)

  • Rich Outzen begins the second part of our discussion by noting the seemingly perennial political and economic issues keeping Egypt in a precarious place.

  • Outzen outlines the history of the US-Egypt relationship, noting a complicated foundation formed during the Cold War and the strain placed on that relationship during the Arab Spring.

  • We explore the dynamic between Egypt and Russia and how that relationship has been affected by the war in Ukraine, noting Egypt's manufacturing and military procurement capabilities.

  • We review Egypt's military and its limited ability to project power internationally, preventing the nation from operating too far from its territorial borders compared to other Middle Eastern powers.

  • We review relations between neighbouring nations, such as Turkey and Libya, amid energy discoveries in the Mediterranean and if these developments will influence Egyptian military structure.

  • Outzen offers an assessment about President Abdel Fattah El-Sisi's ability to navigate domestic turmoil and internal threats in the current environment.

Part 3: In Search of Former Glory (37:39)

  • David Butter outlines the factors of geography to the Egyptian economy, including the value of the Nile for agriculture and the Suez Canal.

  • We attempt to identify why the Egyptian economy is in such a difficult position, given its history of debt crises and other external economic factors in recent decades, and to what degree poor economic management by the government can be blamed.

  • The role of foreign direct investment into the energy industry, particularly into LPG infrastructure, is not a silver bullet according to Butter.

  • We discuss the prospects of Egypt taking new IMF loans and the prospect of domestic turmoil sparked by the terms and impacts of such a deal.

Part 4: Too Big to Fail? (52:28)

  • Ben Fishman kicks off our final segment noting that El-Sisi is currently stuck in a difficult position balancing the need for investment and loans from the international community, including from Saudi Arabia and the United Arab Emirates, and the military's reaction to potential reforms tied up to those funds.

  • We discuss the US' current relationship with Egypt, including the benefits Egypt provides to the security of the region, and if those benefits are no longer sufficient in guaranteeing funding and support from the US. We discuss the role of the Suez Canal in that equation, and its potential as a leverage point.

  • We pivot to Egypt's position on Libya, noting their position on elections and their previous military operation on and across the border. We also discuss the thawing of the Egypt-Turkey relationship and its potential impact on Libya.


Episode Guests:

Mirette F. Mabrouk

  • Senior Fellow and Founding Director of the Middle East Institute's Egypt Studies program

  • Previously Deputy Director and Director for Research and Programs at the Rafik Hariri Center for the Middle East at the Atlantic Council

  • Founding Publisher of The Daily Star Egypt, (now The Daily New Egypt), at the time, the country’s only independent English-language daily newspaper

Rich Outzen

  • Non-resident Senior Fellow at the Atlantic Council in Turkey

  • Colonel Outzen (Ret.) is a former US Army Foreign Area Officer, including postings working across the Middle East and combat operations in Iraq and Afghanistan.

  • Served in the US Department of State as both a military and civilian advisor, working in the Policy Planning Office and later the Office of the Special Representative for Syria

David Butter

  • Associate Fellow, Middle East and North Africa Programme at Chatham House

  • Analyst of politics, economics and business in the Middle East North Africa (MENA) region.

  • Previously he has worked as regional director for the Middle East at the Economist Intelligence Unit, and for MEED magazine, where he was editor between 2000 and 2002.

Ben Fishman

  • Senior Fellow at The Washington Institute and a member of the Program on Arab Politics

  • He served on the National Security Council from 2009 to 2013, where he held several posts, including Director for North Africa and Jordan, and Director for Libya

  • Previously he was Consulting Senior Fellow at the International Institute for Strategic Studies, where he edited North Africa in Transition: the Struggle for Democracies and Institutions


The Red Line's Egyptian Reading List:

We’ve compiled a list of further reading to better understand the geopolitics of Egypt and its place within North Africa and the Middle East.


The Struggle for Egypt: From Nasser to Tahrir Square

Steven A. Cook

Tweets from Tahrir: Egypt's Revolution as it Unfolded, in the Words of the People who Made it Nadia Idle

The Burning Shores: Inside the Battle for the New Libya Frederic Wehrey


For episode transcripts, monthly geopolitics Q&A’s, member-only videos and to support the show, check out our Patreon here:

This episode is dedicated to our Patreon member Scott Emigh, Trenton Wray, Joseph Lucido, Shane, Gord Forsyth.



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