Too Big To Fall

Egypt, the most populous Arab nation, is currently facing a challenging and unstable situation. Fitch Agency has downgraded Egypt's credit rating from B+ to B with a negative outlook, indicating the potential risks associated with financing Cairo, particularly from foreign investors or international organisations. This classification sheds light on the uncertainties surrounding the country's ability to secure funding from abroad.

The economic situation inside Egypt is widely known to be unfavourable, characterised by a significant surge in inflation rates to approximately 33% and a corresponding depreciation of the Egyptian pound to unprecedented levels. These factors have resulted in the depletion of the savings of numerous citizens, as well as an increase in food prices, thereby exacerbating the financial burden on the middle class, which has been gradually dwindling in Egypt. It is noteworthy that roughly one-third of the population is below the poverty level.

Egypt is currently encountering a significant obstacle in attracting foreign investments to stabilise its budget. Despite several Gulf countries injecting substantial amounts of capital into Egyptian financial institutions to alleviate the crisis, these funds have proven insufficient for Cairo to undertake further measures.

The primary concern pertains to the military's intervention in the economic sector and its hegemony over the competitive landscape vis-à-vis the private sector. This factor instils apprehension not only among international investors but also within the Egyptian business community, as evidenced by their expressions of concern during televised interviews.

At the global scale, Saudi Arabia has demonstrated its stance of refraining from making further investments devoid of stipulations, thereby indicating the cessation of unconditional endowments. Similarly, the World Bank mandated that Cairo restrict the military's control over the domestic economy and implement stringent requirements.

This presents a significant obstacle to the governing power in Egypt, as its security is entirely dependent on the military. Conversely, the absence of external funding, particularly from foreign and Gulf sources, has placed the government in a disadvantageous situation.

Regarding the political dimension, it exhibits a state of instability. While there are currently no ongoing protests in Cairo, there exists a potential for the situation to evolve rapidly, particularly in light of the upcoming presidential elections and the emergence of a potential candidate who may be viewed as a strong contender, particularly from Western perspectives. This candidate is former deputy Ahmed Tantawi, who has expressed intentions to run for office and return to Egypt when conditions allow.

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Egypt, a country with 100 million people, which boasts a rich history and a longstanding civilization that has persevered through numerous conflicts and historical events spanning millennia, is currently confronting a significant crisis. Now, the global community is ill-prepared to face the consequences of the upcoming risks. Thus, it is imperative that all international communities contribute towards aiding Egypt in surmounting this crisis.?

Egypt is too big to fall!