Grünen-Partei rutscht bei Umfrage auf 13% ab!
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Egypt Sells $1.9Bn in State Assets
Egypt's State Assets Sales:
·???On July 11, Egypt signed deals to sell $1.9 billion in stakes in state assets.?
·???Buyers included the Abu Dhabi sovereign wealth fund and the hospitality arm of Egyptian real estate group Talaat Mostafa, among others.
·???Approximately $1.65 billion of the total $1.9 billion will be paid in foreign currency.
·???The deals that Egypt has planned and executed are wide-ranging. They touch state-owned companies in sectors such as wind energy, petrochemicals, steel, and hotels.?
·???Egypt agreed to sell a minority 31% stake in Ezz Dekheila, the country’s largest steel company.?
·???Egypt also signed over an undisclosed number of shares in its massive telecommunications company, Telecom Egypt.
·???Abu Dhabi’s sovereign wealth fund ADQ bought 800 million in Egyptian Ethylene and Derivatives Co., oil firm Egyptian Drilling Co. and Egyptian Linear Alkyl Benzene.
·???Egypt had intended to hit $2 billion in share sales by the end of June but did not reach that goal.
?Motivating Factors:
·???Egypt plans to ultimately sell stakes in a total of 32 companies. Announced in January 2023, this effort is a fundamental condition of the $3 billion bailout agreement that the International Monetary Fund (IMF) granted Egypt in December 2022.?
·???A 46-month deal, the IMF stated that the deal was meant to make way “for inclusive and private-sector-led growth.” It also aims to reduce public debt and enhance macroeconomic stability.
·???Egyptian Minister of Planning and Economic Development Dr. Hala el-Said stated that these deals are meant to “promote the participation” of the private sector in the economy and tempt investors to Egypt with greater opportunity in successful state companies.?
·???Analysts mentioned that these deals are likely targeted at bolstering the Egyptian pound and increasing hard currency reserves, which have been scarce amid global macroeconomic instability and surging import prices.?
·???The Egyptian pound has lost approximately half of its value in comparison to the dollar in the past year and a half.
?Background on the Egyptian Economy:
·???Egypt is the world’s top importer of wheat. Given that Ukraine is a top exporter of the grain, Egypt has been struggling with inflation in the wake of Russia’s invasion. Wheat prices have surged, and Egypt’s supply chain is disrupted by the conflict.?
·???Inflation reached a record high of 35.7% in June. Everyday essentials, such as food, clothing, and medical expenses have surged, becoming unaffordable for many Egyptians.?
·???Foreign investors have pulled over $20 billion out of Egyptian markets since Russia’s invasion of Ukraine.
·???Before the war, Egypt’s government was taking painful steps to boost its economy, such as cutting subsidized fuel, water, and electricity and raising interest rates. Combined with the war, these moves have put over 30% of Egyptians in poverty. Egypt’s population and its need for government support is only growing.?
·???The crisis has forced the government to reverse course, increasing funding for its food subsidy program by over $1 billion from 2022 to 2023.?
·???Egypt also faces a debt crisis. It owes over $52 billion to international institutions – 44.7% of which it owes the IMF alone – a figure over triple what Egypt owed in 2013.?
·???Analysts state that Egypt’s economic woes lie in its inability to properly appropriate money or to relax the tight control the state has maintained over industry, driving away private investment.?
·???Given recent efforts to liberalize its economy by selling stakes in private companies, analysts suspect that Egypt has reached a point so economically difficult that it has decided to turn a new page in its economic strategy.
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Washington’s Indian Delusion
Tim?Willasey-Wilsey CMG
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The US believes it has secured India as a strategic ally in the Indo-Pacific region. There will certainly be mutual benefits from the deepening partnership, but India has no intention of sacrificing its ‘strategic autonomy’ to join the Western camp against China, or of abandoning its friendship with Russia.
By any standard, Prime Minister Narendra Modi’s visit to Washington in June was a?triumph for India. President Joe Biden rolled out the red carpet and heaped praise on both Modi himself and his country. After all, India is now the fifth largest global economy and the world’s most populous nation, and Modi is so dominant in Indian political life that he is certain to be re-elected to a third five-year term in 2025.
Central to the visit were several military deals. India is to acquire fighter jet engines from General Electric and drones from General Atomics. This is an urgent requirement for India, which has been incredibly slow to recognise its military vulnerability after many years of ponderous defence procurement processes and a heavy reliance on antiquated and unreliable Russian (and often Soviet) weaponry.
The performance of Russian equipment in Ukraine has been a wake-up call for New Delhi. The Russian T-72 tanks which now litter the Ukrainian countryside north of Kyiv and in Donbas are broadly the same model as India’s Ajeya main battle tank, and India’s armoured personnel carriers are based on the old Soviet BRDMs. Ukraine has shown that India (along with many other countries) is unprepared for the new nimble forms of warfare based on small units operating with drones and anti-tank missiles and dialling in precision artillery strikes using satellite and mobile phone coverage.
India’s urgent military requirements might suggest that New Delhi is ready to abandon its Russian ally. But this could not be further from the truth. A prominent Indian journalist wrote to me that ‘the only time the Indian Parliament discussed Ukraine, not a single member from any party among the 25 MPs who took part in the discussion supported Ukraine. None. Indians are absolutely thrilled that Modi got a state visit in Washington. But their heart… is with Putin’.
Russia–India ties have been further strengthened by India?importing cheap Russian oil?since Putin’s invasion of Ukraine. This has been a huge boon for the Indian economy and has been done with the tacit approval of the US, which has been unwilling to endanger its relationship with India even at the cost of providing Russia with much needed oil revenue (albeit paid for in currencies which are not always easy for Russia to use).
Since becoming prime minister, Modi has weathered several serious Chinese transgressions over the northern border, but has resisted calls by his own national security team to escalate
This contrasts markedly with the US treatment of Pakistan. Former Prime Minister Imran Khan was met with hostility in Washington after his feckless visit to Moscow on the day of Putin’s invasion of Ukraine. In the months after Biden’s inauguration, Khan did not receive a single phone call from the US president, who was likely registering his irritation at Pakistan’s role in Afghanistan both before and after the US withdrawal. This cold-shouldering of Pakistan is doubtless part of US attempts to draw India into a strategic embrace. The US has a?long history?of trying to abandon Pakistan and then finding itself sucked inexorably back into an alliance with a country which is geographically significant and whose security (not least because of its nuclear weapons) is crucial for global (and Indian) security.
The central motivation for the US’s cultivation of India has nothing to do with Russia or Pakistan, however, but is focused on the increasingly serious global stand-off with China. With India being regularly challenged on its northern border by China, this might feel like a slam-dunk for policymakers in the State Department and at the Pentagon. However, Modi’s position on China is much more nuanced than that of his hawkish national security team led by Ajit Doval or of the pro-Western officers of the Indian Navy. He has kept channels with Beijing open and has made sure that commercial relations (except in the security domain) are unaffected. In fact, India–China trade?continues to grow.
Modi is probably mystified by China’s hostility towards India. Having won a conclusive victory in the 1962 war, China voluntarily retreated to a demarcation line of its own choosing. Beijing may now worry about the proximity of northern India to its restless regions of Tibet and Xinjiang, but that threat is much greater if Beijing continues to alienate New Delhi. In Nehru’s time there was talk of?Hindi Chini bhai bhai?(Chinese-Indian brotherhood), and as late as 1996 Beijing contemplated taking a?balanced approach?between India and Pakistan.
When Modi was chief minister of Gujarat (when he could not get a US visa because of concerns about his alleged role in an anti-Muslim pogrom), he was a regular visitor to China (and Japan). Since becoming prime minister, he has?weathered several serious Chinese transgressions?over the northern border, but has resisted calls by his own national security team to escalate. This is partly because of India’s military weakness, and partly for fear of coordinated operations between China and Pakistan. But the main reason is that Modi does not want to do anything that endangers the Indian economy.
For all the talk of India becoming the?third largest global economy?by 2027, the reality is that India has?by far the lowest GDP per capita?of any of the world’s top economies. In 2021 it was ranked?159th out of 229 countries. In 2023 it will be higher, but much of urban and rural India is undeveloped, with high levels of poverty and deprivation and a lack of basic public services. Modi knows this better than anyone. His own humble roots provide him with a different perspective to that of the Indian bureaucracy and the military.
When push comes to shove, Washington will find that India will be unwilling to support it in taking tough measures before, during or after a Chinese invasion of Taiwan
The package of measures discussed during Modi’s visit to Washington was impressively ambitious. Modi will have been particularly attracted by opportunities for offset and for local manufacture in India. The potential for new employment and for the transfer of technology and skills is exactly what Modi has been advocating in his ‘Make in India’ policy. Even the idea of the US providing a?logistical hub?in India for use by US and allied navies will be seen by Modi in a similar light. But?none of these measures?will lure India into a military alliance against China. India has been a member of the Quad (with Japan, Australia and the US) for several years, but has been the least willing of the four to extend the grouping into anything approaching a military alliance.
In spite of Modi’s disdain for the Congress Party, its non-sectarianism and Nehru’s legacy since 1947, he has adopted its foreign policy of non-alignment. His foreign minister Subrahmanyam Jaishankar has renamed it ‘multi-alignment’, but it is the same thing. So, India is a member (along with China, Russia and Pakistan) of the Shanghai Cooperation Organisation, and (with Russia, China, Brazil and South Africa) of the BRICS. In fact, the Indian Ministry of External Affairs is one ministry where the Nehruvian culture has barely changed since Modi’s party came to power.
None of this need matter to the US for most of the time. US arms suppliers will sell well to India (but will worry about losing Intellectual Property) and US manufacturers will be relieved to move some of their offshored production from China to India (a process known as ‘friend-shoring’). The exchange of IT expertise will continue, with Indians retaining and extending their prominent position in the US technology sector.
But when push comes to shove, Washington will find that India will be unwilling to support it in taking tough measures before, during or after a Chinese invasion of Taiwan. Indeed, India was even?disapproving?of the AUKUS deal when the US, the UK and Australia decided to supply Australia with nuclear submarines, partly because it was seen as unduly provocative towards China.
So, Washington is going to be?disappointed by India. Biden’s big foreign policy investment (only achieved by suppressing his personal distaste for right-wing populists) is likely to face some early challenges, and not just over Taiwan or Russia. Another Indo-Pakistani crisis (and there is usually more than one in each decade) will see Washington having to engage closely again with Pakistan. Even assuming Modi rejects?suggestions of providing weapons to Russia, the scale of India’s gain from Putin’s invasion of Ukraine will still rankle in Washington. Meanwhile, India’s frustration at being denied a position at the top table of the global security architecture (permanent membership of the UN Security Council) will increase. China will continue to block its elevation, and Modi will discover that there is nothing that Washington can do to help.
The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.
About: Tim Willasey-Wilsey served for twenty-seven years as a British diplomat in Africa, Latin America, Asia, and Europe. He worked in Angola during the Cold War, South Africa in the years just before majority rule, Central America at the time of the Sandinista/Contra war and on the Middle East following the Oslo accords. Latterly he focussed on Pakistan, India and Afghanistan whilst also having responsibilities for China, Japan, and the Koreas.
Since joining the academic world Tim has been Visiting Professor at King’s College London. He lectures and writes on government handling of warfare, approaches to conflict resolution and on terrorism and insurgency. Tim has a particular interest in the Kashmir dispute, Afghanistan, and the stand-off on the Korean peninsula.
Tim has advised international banks and large companies on geopolitical risk and on how to calibrate their risk-appetites to international clients and transactions. He is interested in improving public-private dialogue in assessing overseas risk, whether from war, terrorism, natural disasters or modern hybrid threats, including cyber.
He writes extensively on geopolitics. In the UK his main outlets are RUSI,?The Daily Telegraph,?The Scotsman?and King’s College London. In the US he is a regular contributor to the global security website Cipher Brief and in India he supports the Mumbai-based Gateway House.
He was elected by the membership to two three-year terms on the Chatham House Council and reviews books for their journal,?International Affairs. As well as King’s College London, he also lectures to Indiana University, the Norwegian defence community and the Policy Centre for the New South in Rabat, Morocco.
Tim has an MA (First Class) in Modern History from St Andrews University. He was awarded the CMG in the 2007 New Year Honours List.
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