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Egypt's economic woes after the coup

February 7, 2014 at 12:09 am

Two months after the military coup that led to the ouster of the first freely elected president of Egypt, Mohamed Morsi, the information advisor to the interim Egyptian president, Ahmed Al-Maslamani, said: “Egypt is suffering an economic crisis.”

Indeed weekly British newspaper The Economist has placed Egypt last on a list of 140 countries around the world regarding standards of living for the first time.

The crisis pushed Mahmoud Badr, the spokesman of Tamarod, the campaign that led the action against Morsi, to call for the interim government to pay more attention to the economic situation and to find a swift exit to the crisis facing the country.

However the coup’s main backers in the Gulf States have retracted their financial pledges to Egypt. A senior official in the Egyptian Central Bank said that neither Saudi Arabia nor the UAE had paid the amounts they committed to in the wake of the coup. He also denied that Kuwait had fulfilled a $4 billion pledge.

Qatar has suspended the second and third phases of two $4 billion bonds, which had been planned for public offering at the beginning of August and September. It did not set a new date for the offering.

Turkish and other companies of different nationalities have withdrawn from the Egyptian markets. Egyptian Trade Minister Moineer Fakhri blamed the harshly critical mass media for shaping the Turkish position on the coup.

But a famous pro-coup journalist has even criticized the current economic situation and frankly said that the economy was far better during the reign of deposed President Morsi.

Experts expect a deficit in the general budget of around 240 billion Egyptian Pounds at the end of the financial year.

The head of the National Railway said that their incomes have decreased 60 per cent since the middle of August. The spokesman of the Ministry of Electricity said that civil disobedience is causing losses, as people have stopped paying electricity bills.

Regarding tourism, which is one of the main contributors to Egypt’s national income, Minister Hisham Zazou said that tourism was better during Morsi’s rule than it is now.

He mentioned as an example that on one day during the last week, only one tourist visited the Temple of Abu-Simble, one of Egypt’s most famous tour sites, and spent 4.5 pounds, equal to less than one US dollar.

This article was modified at 12.02pm GMT on 9 September 2013 – removed reference to the alleged interview of the Saudi Foreign Minister Saud Al-Faisal with Fox News. Please read about it here.