CAIRO: The main concern of all countries around the world was to be immune from the effects of the mortgage crisis that erupted in the United States and threatened its financial accounts with bankruptcy. This required the injection of $700 billion dollars from the American taxpayers’ funds to avoid that fate.
Of course we have been preoccupied in Egypt with what can afflict our economy from the effects of this crisis, particularly as the government has been tirelessly confirming over the recent years that we are an integral part of the international economy. If gas or foodstuffs prices go up, the government’s genius economists of the government explain that the wave of price hikes is universal and that we are part of the global economy and cannot avoid it. If we complain about unemployment they remind us once again of what they had said before, which we don’t seem to be convinced with. They remind us that unemployment rates are high in all the countries that adopt market economics, which the government has been ruthlessly trying to apply for years, thereby obtaining a good conduct certificate from the World Bank.
But here is the same government, and here are the same genius economists, officially deciding after the outbreak of the global financial crisis, created by the US mortgage crisis, that we are not part of the global economy and that we will not be affected by the current crisis.
It is a wise decision that has reassured us about the government’s healthy economic policy and flexibility of its genius economists who issue binding decisions that may seem contradictory, but in the end, however, they have the public interest, represented by the government, at heart.
If the government’s interest, which represents public interest, requires increasing prices of some goods, it does it on the grounds that we are part of the global economy where prices are increasing every day. If this interest requires emphasis on the security of our economy, which is not affected by the fluctuations of the global economy, the government immediately issues decisions that we are not part of the global economy.
Because of Egyptians’ great confidence in the government and the popularity of its genius economists, we have all believed the government and all Egyptian citizens have instantly become reassured.
I’ve looked for experts’ opinions, the type of experts that don’t repeat those genius economists’ analyses. The best I have read in this respect was international law expert, Dr Taher Helmy, who scientifically explained in an interview with the Daily News Egypt newspaper that the current global crisis, even though it will not directly affect our banking system as is the case with the United States, we will certainly be affected by the consequent recession in global markets. Despite stressing the importance of applying the market economy, however, he sees that it will be a more difficult task in the next phase. This will require more government intervention than ever to curb the greed of private capital.
Dr Helmy explained that our economy will be affected by the global crisis.
All major projects, especially those related to infrastructure that need billions of dollars, will be affected because their finance rely on foreign banks. Here too the government should intervene because our economy depends heavily on infrastructure projects, he said, noting that one of the effective means of compensating the expected shortfall in foreign funding for our projects is major dependence on Arab investments.
Helmy mentioned some areas of national income that would be affected by the global crisis, for example the Suez Canal, tourism, exports and imports.
Speaking a language not spoken by the government or its genius economists, he said reliance on the theory that economic prosperity will trickle down to the lower classes of society no longer works and that the government has, now more than ever, to develop social programs and economic projects to alleviate the suffering of the poor and low-income people.
Mohamed Salmawy is President of the Arab Writers’ Union and Editor-in-Chief of Al-Ahram Hebdo.
