Egypt Turmoil Worries Israel

January 11, 2017
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by Ariel Ben Solomon
Mishpacha Magazine
November

Israel Aids Struggling Neighbor Towards Greater Stability
 Mishpacha image

A bag of sugar is a prized possession at a time of deprivation in Egypt (Photos: AFP/Imagebank)
M

ost people take for granted putting a spoonful of sugar into their morning coffee or tea, but in Egypt it has become an unaffordable luxury. The public has taken notice and is none too pleased.

The sugar shortage is just one of many economic woes facing Egypt’s government. In a country where the average person lives on $2 per day, illiteracy is at 35%, and at least 15% of the population is unemployed, the government of President Abdel Fattah al-Sisi has turned to the International Monetary Fund for a $12-billion bailout. To get the loan, however, Cairo must impose unpopular austerity measures.

Israelis closely monitoring Egypt’s instability. Jerusalem has formed a close alliance with al-Sisi, who has worked with Jerusalem to destroy Hamas smuggling tunnels into Gaza and stand up to Islamic State in Sinai. Egypt is facing a terror war in Sinai that could also threaten Israel one day.

Zvi Mazel, Israel’s sixth ambassador to Egypt and now a fellow at the Jerusalem Center for Public Affairs told Mishpacha that al-Sisi is “struggling” to implement badly-needed economic reforms in a traditionally Muslim country of 90 million people.

Mazel says the IMF conditions are painful but necessary. They include a 13% value-added tax, floating the Egyptian pound (which resulted in devaluation) and sharply cutting subsidies for energy products.
Egypt’s tottering economy has cost al-Sisi support at home. His popularity numbers dropped 14 points in October, the lowest since he came to power, but still hover at a respectable 68%.

The IMF Executive Board will meet in Egypt this month to discuss the country’s request for assistance. IMF Managing Director Christine Lagarde is expected to recommend approving Egypt’s loan request along with supportive measures that will help Egypt improve exports, boost tourism, and attract foreign investment.

Mazel said that Israel and Egypt are now trying to identify fields of cooperation where an Israeli contribution “could be significant.” The main hurdle, he said, is the hostility of the Islamic establishment and nationalist circles, remnants of former president Gamal Abdel Nasser’s rule, which requires Israel to keep its distance so it is not perceived by the anti-Israel masses as being too close to Cairo.

Still, behind the scenes, joint projects are taking shape. The two nations are working together on solar energy, electricity production, agriculture, and gas cooperation.

So, while experts agree the IMF reforms are necessary, Mazel and other observers worry that the stringent reforms could feed further strife and even lead to another uprising, toppling al-Sisi.

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