World View: Morsi Could Face Treason Charge as Millions Demonstrate in Egypt

This morning's key headlines from GenerationalDynamics.com

  • Morsi facing treason charge as millions demonstrate in Egypt
  • Ousting Morsi may have saved Egypt from austerity, for a while
  • Eastern Mediterranean becomes the next Persian Gulf

Morsi facing treason charge as millions demonstrate in Egypt

Anti-Morsi demonstrators cross a bridge in Cairo on Friday (BBC)
Anti-Morsi demonstrators cross a bridge in Cairo on Friday (BBC)

Hundreds of thousands of pro-Army demonstrators filled Tahrir Square in Cairo, Egypt, on Friday, in opposition to ousted president Mohamed Morsi, responding to Wednesday's request by Army chief Abdel-Fattah El-Sisi to give the Army a "mandate" to fight "terrorism and violence," presumably referring to the Muslim Brotherhood. Pro-Morsi demonstrators filled other locations in Cairo and other cities. The protests were mostly peaceful, but pro-Morsi activists reported that some of their demonstrators had come under attack by security forces, injuring 35 people. 

The great drama of the day occurred when the government handed down an accusation that Morsi had conspired with Gaza militants Hamas to storm police stations and jails and to break a number of Muslim Brotherhood leaders, including Morsi himself, out of jail in January 2011 at the start of the revolution. Morsi has not been seen in public since he was ousted on July 3, and Friday's charges mean that he will continue to be held at an undisclosed location for at least another 15 days. Also a charge of conspiring with a foreign government (Hamas) against Egypt's government could turn into a charge of treason. Both Hamas and the Muslim Brotherhood called the conspiracy charges "ridiculous," although the jail break did occur. BBC and Al-Jazeera and Al-Ahram (Cairo)

Ousting Morsi may have saved Egypt from austerity, for a while

Since Hosni Mubarak was ousted by the Egyptian Revolution that began in January, 2011, Egypt's foreign reserves have fallen from $36 billion to $14.9 billion. During the last year when Mohamed Morsi was president, Egypt's economy continued to deteriorate. Since January, the budget deficit has been running at about $3.2 billion per month, almost half in government spending. Morsi had been desperately trying to negotiate a loan from the International Monetary Fund (IMF), but that would have meant harsh austerity measures, including big cutbacks in government spending. 

However, the economy has stabilized in recent weeks since the coup that ousted Morsi.  With Morsi's Muslim Brotherhood out of power, Egypt has been promised $12 billion in aid from Gulf Arab states that don't like or trust the Muslim Brotherhood--Saudi Arabia, United Arab Emirates (UAE), and Kuwait. Qatar, the home of al-Jazeera and the lover of the Muslim Brotherhood, had given $7 billion to Egypt in the last year but that hadn't been enough to keep Egypt's economy from deteriorating. 

But now with this $12 billion flowing in, Egypt's new leaders don't have to worry about those nasty austerity measures that have been such a problem in Greece and other European countries that received IMF aid. Egypt can go on spending as before. According to Ahmad Galal, Egypt's new finance minister: 

One of the important tools to deal with the budget deficit is stimulating the economy. Stimulating the economy means tax revenues will increase and, in turn, the deficit will decrease. 
Political agreement is the best and shortest route to revive the economy because, if there is stability and security and agreement, tourists will come back and local and foreign investors will be more keen on investing. We will seek to pump more new funds into the economy and not follow austerity measures. We do not want to increase taxes sharply, that is if we increase them at all, and we do not want to lower spending in a way that will slow a revival of the economy.

So it looks like Egypt is going to follow the same government spending policies as the U.S., Ireland, Greece, and other countries during the credit and real estate bubble of the mid-2000s decade. Egypt doesn't need funding from a big bubble, because they've got the Arab nations to fund the growth. It ought to be interesting. al-Ahram (Cairo) and Reuters

Eastern Mediterranean becomes the next Persian Gulf

For more than two decades, the United States has placed the issue of Eastern Mediterranean maritime security on the backburner. But the 2010 discovery of vast oil and gas deposits in the region's Levant Basin is eliciting competition over exclusive economic zones among countries such as Israel, Cyprus, Turkey, and Lebanon. Furthermore, the naval activities of Iranian-backed terrorist groups, Russia’s quest to expand its international influence, Turkey’s overconfident posture, and political unrest in Syria and Egypt have collectively exacerbated tensions in the Eastern Mediterranean. As conflicts loom, U.S. armed forces should be prepared to face the same kinds of tensions as in the Persian Gulf. American Enterprise Institute

KEYS: Generational Dynamics, Egypt, Mohamed Morsi, Muslim Brotherhood, Hamas, Hosni Mubarak, International Monetary Fund, Saudi Arabia, UAE, Kuwait, Qatar, Turkey, Russia 

 

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