The Egyptian armed forces, who have a long and continuing history of trying to crush democracy in that country, have just removed an elected government in what was rather blatantly a military coup. The coup may have had a degree of popular support in Egypt (although to what extent isn’t yet clear), but it was a military coup all the same.
I find it hard to see these events as anything other than a set back for democracy in Egypt, given the ultimate message is that the military can and will remove an elected government if that government displeases them in some way.
It is, for me, generally bad news. Craig Murray has described it as a Western backed counter-revolution, and I can’t say I disagree.
Not everyone is as pessimistic as me though, either about events in Egypt, or life in general I suppose. And Matthew Davies, a reporter for the BBC’s business section, is looking on the bright side. Why? Well, because:
‘Analysts are optimistic that the ousting of President Morsi may presage a brighter future for Egypt’s economy . . .
. . . Some analysts said a long-stalled loan from the IMF may now be possible, although others remained sceptical . . .
. . . “The technocrats will know how to deal with institutions – they will help the country financially because they have a clear agenda,” said Sebastien Henin, portfolio manager at The National Investor, an Abu Dhabi-based investment firm. “There will be a definitive change to the business environment for international and domestic investors,” he added . . .
. . . Mr Morsi’s government did sign the much-needed IMF’s $4.8bn loan deal last November, but failed to ratify or implement it. His reluctance to sign the deal was, in part, down to the austerity measures that were conditional on it . . .
. . . As an example of the difficulties facing any authority that replaces Mr Morsi, analysts point to the issue of fuel subsidies.
Currently, the cost of keeping the price of fuel low gobbles up nearly 8% of the country’s GDP. So, any formula implemented to permanently boost and stabilise Egypt’s economy has to address this through a subsidy cut.
The trouble is, any government replacing Mr Morsi’s will be only too aware that Egyptians would be more than willing to take to the streets if their lives are made any harsher.
Nonetheless, many, like Karem Shafaei, remain optimistic.
“The hope we have is that, whatever is happening now, the turmoil and the inability to do business, will result in a better society that is able to set more healthy economic policies, have more transparency politically that will allow more investors to come in and eventually see a society that flourishes”‘.
The coup in Egypt is generally good news, then, because it could further open the country up to international investors, and allow the IMF to force through it’s austerity and subsidy slashing economic measures (even if that may cause the natives some mild annoyance).
Revolution! Revolution! Revolution!