It worked for about 24 hours. All day the government addressed the issue of the planned Ethiopian dam on the Nile. It began with Prime Minister Hisham Qandil’s declaration that the Grand Ethiopian Renaissance Dam is “a matter of life and death,” and a “high level security issue” in a relatively sober address to a relatively somber Shura Council. And then, at night, President Mursi called upon all Egyptians, and obviously the organized opposition, to unite against this threat. “We will defend each drop of Nile water with our blood if necessary,” he said.
Mursi’s speech was billed by the government and the state press as the keynote address “to a national convention on the rights of Egypt to Nile River waters.” The President did invoke peaceful pieties – that dialogue with Ethiopia and the other African countries from which the Nile either rises or flows through Sudan and Egypt, was the best way to resolve the crisis. But it was his defiant phrases that drew tremendous cheers and chanting from the Cairo Convention Hall audience as well as thousands outside hearing and watching the speech on large screens. Mursi acknowledged the waves of applause by saying he was certain that all Egyptian political figures would respond favourably to his appeal for national reconciliation in the face of this threat – which Egypt says will divert the waters of the Nile. However, the Ethiopians declared that the Nile River waters would continue to flow uninterrupted.
But right there were the first of a couple contradictions. This “national convention” where Mursi appealed for national unity at a moment of grave danger with “all options on the table” (which is the polite way to threatening war) was a conference convened by 11 Islamist parties, including the Muslim Brotherhood’s own Freedom and Justice Party (FJP). Almost all of the other 10 parties - be they more moderate or more radical - were allies of FJP/MB government.
The domestic problems that face Egypt are grave and getting worse, but the nature of this conference, with its all-Islamist audience; the periodic chanting invoking Allah, and condemning the dam as some sort of Zionist conspiracy, could only alienate the very leaders Mursi seemed so certain would rally to the flag.
Austerity measures demanded by the IMF for its long overdue loan, and being implemented by the government, are devastating for the poorAbdallah Schleifer
By noon the next day, the leaders of the Rebel Campaign, and many of the opposition parties supporting the June 30th Rebel million man march calling on Mursi to resign in the face of the many millions signing the Rebel Declaration to that effect, were dismissing the speech as opportunism. They did this even though some opposition leaders had already gone on the record saying that Egypt would not tolerate the loss of one drop of Nile water.
The Ethiopians have not only stressed that Egypt would not lose one drop from temporary diversion necessary for construction, but that the purpose of the dam was to generate electricity –which means no water would be diverted for agriculture, water would simply be used to power generators at the crest of the dam. Ethiopia states only 20 percent of the river will be held back behind the walls to build up the height of the reservoir so that its flow across the top will generate electricity, There remains, however, one rarely mentioned hard fact. It is not the temporary diversion of the Nile that is a threat- and in that limited sense the emotional appeal over this event is demagogic- but the actual threat is that once the dam has been completed and the river is back on course, that diversion will take three to four years, and during those years Egypt will be denied many, many, drops of Nile water.
Mursi’s implied call to arms is a highly emotional way, as the opposition is now charging, of diverting public opinion for concerns about the still lingering near absence of security. Tourists are now being warned by the U.S. embassy to stay away from the pyramids because of gang attacks at the approaches to the site; traffic police are still a rare sight, for example. Opposition demonstrations that flared up at the end of 2011, and continued during the first months of 2012, were violent from the beginning , and that too scared off both investment and tourism. But Mursi’s speech is also a legitimate expression of concern about a looming crisis about the supply of Nile River waters, even if for just three or four years.
Egypt’s many problems
The morning of Mursi’s speech was the worse day in the on-going fuel crisis – none of the dozens of gas stations my driver or my friends checked had any diesel fuel. These gas stations had long lines of big and small trucks waiting for diesel to eventually arrive. As for the four grades of gas once available for automobiles, most of the stations had none at all, and those who did only had the highest and most expensive, that is simply beyond the means of most Egyptian car owners.
Power cuts are becoming more frequent, during daylight as well as at night, and they are becoming longer in duration as our on-going heat waves drive more and more air conditioners into operation. Factories are also disrupted both by power cuts and the erratic nature of transporting goods, given the diesel shortage that hampers both the power generating stations and the trucking industry.
In fairness, many of the problems undermining the economy were inherited by Mursi – the lack of security since the January-February 2011 uprising and the chaos that has followed discourages both investors as well as tourism, as does the declining value of the Egyptian Pound That has been going on since 1967 when Egypt broke relations with the United States in the wake of the Six Day War. And that meant the end of an American subsidy for Egypt’s very large purchases of American wheat.
Egypt had a huge gold reserve prior to the Nasserist revolution when every Egyptian Pound was guaranteed by its worth in gold. But even before the devastating Six Day War Nasser began to draw down the gold reserves, to buy off Yemeni tribes either to support the Republican side in the Yemeni civil war, or at least keep them from joining the tribes supporting the Yemini Imam who had survived the initial coup d’etat .
According to my friend Samir Miladi, the former Regional Advisor to the U.N. on nutrition, when the American subsidy ended Nasser turned to Canada which would not accept payment in Egyptian Pounds since it was not an international currency of exchange (there are many currencies that are strong in dollar value but unlike a handful of currencies, are not considered currencies of international exchange). So Egypt had to draw down its gold reserves to pay for wheat for the next few years. Over time, as the gold as well as hard currency reserves declined, the Egyptian Pound deteriorated and a black market prevailed. This went on until the last years of Sadat’s rule and Mubarak’s assumption of power when the effect of U.S. grants, combined with high levels of investment as well has hard currency remittances from the more than one million Egyptian workers in Saudi Arabia, the Gulf states and Libya, restored the economy. But that boom was increasingly squandered by corruption and crony capitalism in the last decade of Mubarak’s rule.
The Egyptian pound free falls
To slow down the renewed free fall of the Egyptian Pound the Central Bank has periodically drawn down the reserves, slowing down the descent but generating for the first time in years a renewed and growing black market. From one Egyptian Pound (EGP) worth five dollars 60 years ago, one dollar is now worth seven EGP at the official rate and more than eight EGP on the black market, driving up the costs of all imports which must be paid for in ever declining dollars. Banks are restricted more and more by the government from selling dollars to their customers, further fueling the black market in dollars.
It is now one year since Mursi was elected president however the Neo-Liberal economics of the Mubarak regime remain in place. The MB/FJP program has been characterized by critics as “extreme capitalism” set as policy by the most politically conservative wing of the MB, which is headed up by wealthy businessmen. Austerity measures demanded by the IMF for its long overdue loan, and being implemented by the government, are devastating for the poor.
The MB has been very good at providing charity to the poor which alleviates hunger. But charity does not generate either employment or the revival of public services such as state education, public health care, livable minimum wages and pensions. Nor is there any effort to revive the state’s provision of food security, and state investment which the Nasserist regime - whatever its other drawbacks - did provide for Egypt’s poor.
Instead, in interviews and policy papers the MB/FJP talk is about more privatization, which has already led to increased unemployment. In some cases factories, once purchased by the private sector, are closed and torn down so that middle class to luxury housing complexes can be built on what was once public property. Government funded infrastructure projects, which are not being implemented, would not only generate employment but also ultimately encourage both foreign and domestic private investment - precisely because they improve infrastructure.
One year in and there is no resumption of planning or a national industrial policy that characterized the Nasserist state, and all public-owned services and facilities continue to deteriorate. Mursi’s government is as opposed to independent trade unions as Mubarak’s (the once independent trade unions were effectively “nationalized” by Nasser). The official trade unions, now largely led by MB officials, still identify with the interests of the state bureaucracy as well as private capital, not with the working classes they theoretically represent.
There is great potential for expanding tourism - what could be called religious tourism, since the chronic insecurity is less likely to deter a pilgrim then ordinary pleasure-seeking tourist. But the obvious Arab, Islamic and global targets for that traffic are precisely the Iranian and Arab Shiites who would be drawn to the tomb-shrines of the Prophet’s immediate descendants – the Ahl al Bayt - (Iranian tourists can now go to the beaches in the Sinai but are banned from Cairo with its shrine tombs). Additionally, the many millions of Muslim Sufis be they Arab, Turk, Indo-Pakistani, Malay or Indonesian would flock- if encouraged with bargain-rate Egypt air travel - to both the Tomb shrines of the Prophet’s family and those of Egypt’s many Sufi Saints. And finally of course, Christian tourists who could, and in limited numbers already do, retrace the steps of the Holy Family when it fled from Palestine to Egypt. But Islamists, if Salifist, are generally very hostile to all three of these religious communities and the less-Salifist driven Islamists are still uncomfortable with Shiite, Sunni Sufis and those Christian tourists who are religiously driven; who take up the Cross to carry in the streets rather than take up bathing suits to wear on the beaches.
But it is the on-going crisis of public services that is all too reminiscent of the Egypt in the early 70s, both before and right after the 1973 War, before the peace process and the good times, before U.S. aid and foreign investment rolled in. When the telephone system was so bad that if I wanted to call my family in the suburb of Maadi I would, as bureau chief, use the NBC News bureau’s one direct dial international line to call the NBC News Desk in New York and have them place an international call to my home in Maadi and then connect me. Now, like everybody else I have a mobile phone, but calling Al Arabiya in Dubai is not going to get my air conditioning units running.
Abdallah Schleifer is Professor Emeritus of Journalism at the American University in Cairo, where he founded and served as first director of the Kamal Adham Center for Television Journalism. He also founded and served as Senior Editor of the journal Transnational Broadcasting Studies, now known as Arab Media & Society. Before joining the AUC faculty Schleifer served for nine years as NBC News Cairo bureau chief and Middle East producer- reporter; as Middle East corrrespondent for Jeune Afrique based in Beirut and as a special correspndent for the New York Times based in Amman. After retiring from teaching at AUC Schleifer served for little more than a year as Al Arabiya's Washington D.C. bureau chief. He is associated with the Middle East Institute in Washington D.C. as an Adjunct Scholar. He was executive producer of the award winning documentary "Control Room" and the 100 episode Reality- TV documentary “Sleepless in Gaza...and Jerusalem.”