Dec 10, 2013
Dispatches From Cairo: Blood, Money and Revolution
Posted on Feb 23, 2012
On subsidized-fuel distribution days, when the trucks come by with their loads of big, rusty butane canisters, the people crowd around and fights inevitably break out. Recently these scuffles have become a little more aggressive amid the fuel shortage, which may be either real or tactically created by the ruling Supreme Council of the Armed Forces. The SCAF has used techniques of this sort often in the past to distract public attention from other inconvenient focuses.
People who scrabble to get fuel but miss out because there are not enough canisters to go around may return to dirt-floor homes to watch their old television sets and be told by broadcasters that fuel was sold to Israel for a fraction of its worth because of a contract made by economic advisers of deposed President Hosni Mubarak under pressure from the U.S. and as part of the 1978 Camp David treaty … all of this information as usual bearing only a faint semblance to the truth but effectively raising the levels of suspicion and xenophobia.
When I talked with my landlady, she tsked-tsked when I mentioned the fuel shortages and our sky-rocketing electric bills. No one is unaffected by the trickle-down effect of this crisis. She agrees that it may be a government strategy to punish the people and keep them dependent on subsidies. She has seen that before. Those still demonstrating in Tahrir Square are no longer revolutionaries, she believes—they are now only vandals and other bad people, there because they have nothing else to do besides make trouble.
According to the state television, there have been thefts and break-ins at stores, which is a new development in the Egyptian “white revolution.”
And yet, this fuel shortage is so odd. In December, a joint venture was contracted between the U.K.’s Dana Petroleum and the state-owned Egyptian General Petroleum Corp., which owns 70 percent of the Egyptian Natural Gas Co., as well as at least 38 industry-related companies. The details of the Egyptian corporation’s revenues and beneficiaries are deep within the black box of the obscure economic cabal of the government. The new venture will produce oil and gas from a concession on the Gulf of Suez.
Egypt’s Petroleum Minister Abdallah Ghorab, commenting at the North Africa Technical Conference and Exhibition, which focused on managing hydrocarbon resources, said at the Feb. 20-22 Cairo gathering that international investors had pledged $8 billion in petroleum investments this year.
The petroleum risk manager for the consultant firm PFC Energy, Hanan Amin-Salem, stated that the industry’s primary concern is not in fact political instability but “economic populism.”
“Egypt faces potentially incendiary inflation if the central bank reserves fully deplete in the next several months, as expected, which could trigger further political unrest,” she added.
Addressing investors’ worries about Egypt’s political future, Amin-Salem with a pointed look asked the audience, “Who’s in charge of economic policy?”
Shell VP John Berry optimistically assured his listeners that increased global demand for oil and gas, as well as dwindling reserves, would cause the sector to continue to expand.
“Petroleum production will require both more money and more ‘gray brain cells’ per barrel,” he said, referring to the development of new extraction technologies. “Egypt’s more mature oil fields may be ready for EOR [enhanced oil recovery],” and “powerful friends” such as the United States.
Berry said further: “Egypt needs to create a climate where people who know what needs to be done will be able to do it. We need a good leader to create such a climate.”
Sherif Ismail Mohamed, managing director of Ganope (Ganoub El-Wadi Petroleum Co.), one of the five branches of the Petroleum Ministry, talked about the critical issue of fuel subsidies, citing the necessity of reducing petroleum subsidies for the poor on the grounds that they are economically unsustainable and encourage smuggling.
Meanwhile, U.S. Transportation Secretary Ray LaHood’s son and a handful of other American NGO employees—staying at the luxurious U.S. Embassy in Cairo—are awaiting trial. Workers of the U.S.-funded International Republican Institute, the National Democratic Institute, Freedom House and 14 non-U.S. organizations, most of whom are surely without ulterior motives in their humanitarian purposes, were charged in the crackdown on NGOs. The SCAF has jockeyed to simultaneously appease the escalating anti-American sentiment among Egyptians and to reassure the military’s U.S. and other collaborators of the soft outcome of trials intended to be demonstrations of Egyptian national sovereignty.
The move against the NGOs was driven by a powerful woman, Fayza Abul-Naga, the minister of planning and international cooperation, one of the last remaining high officials deeply rooted in the Mubarak regime. By brilliantly tapping into the public’s resentment and xenophobia, she has made herself a nationalist hero and untouchable politically.
The $1.5 billion in aid that America has given Egypt each year since 1987 has long been used as leverage by Washington, and currently the U.S. threat to withdraw that aid is a means to pressure Egypt to back down in the NGO case and to ensure that the Camp David treaty is respected amid Egypt’s shifting politics. However, the Egyptian people know that $1.3 billion of the U.S. aid goes directly and exclusively into the military’s armaments and coffers each year and that the starved infrastructure and welfare of the country see only $200 million. Offers to replace at least that much are coming in from the private sector as well as Islamic and external Arab sources.
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