The latest manifestation of the political crisis in Egypt has been the escalating number of strikes and industrial actions that have all but shut down the national economy. In the last month alone there have been strikes by the postal workers, bus drivers, doctors, pharmacists, teachers, steel workers and textile workers. These have been strikes that are supposedly connected to demands for higher wages also carry a strong political motivation behind these actions. The new government was sworn in this weekend, but the majority of the population sees this as no more than the continuation of the junta that has been running the country up to this point.
The economy has been in deep trouble since the start of the crisis that toppled the Mubarak regime and, later, the Morsi regime. The export sector has all but shuttered, and there is nothing left of the tourism industry that was once its second most important foreign income-earner. The billions that have arrived from the Gulf States slowed to a trickle when Morsi was ousted, and there has been no replacement for that largesse. At this point, the Europeans are not in a position to help and neither is the US.
The outlook for business in Egypt looks very bleak, as there is no natural place for the government to turn for help. The military takeover has alienated the Arab states, and there is no willingness on the part of former allies to engage. The population has become increasingly desperate and angry. The country has been borrowing to pay the bills, but that has become very expensive as it saddles the nation with future debt that may realistically never be repaid.
- Chris Kuehl, PhD, Armada Corporate Intelligence