Egypt and Middle East Financial Watch

Branching off of Aetius' original thread, I would like to suggest we pay particular attention to the financial plight of the Egyptian people, since the latest rumor is that their banks will not reopen until Feb 13.

What can average people do when they run out of food at home, and cannot go to a store to buy anything? When store owners cannot access their accounts to buy inventory?

We are watching this all play out in one of the world's major cities right now -- Cairo.

Press reports are limited -- to understate the matter.

Additionally, no one knows what will happen with the Egyptian stock exchange.

This seems as good a place as any to post this little gem;

Egypts Military Inc.

It turns out that once the peace deal with Israel was settled, Egypt's vast military found themselves to be warriors without a purpose. So, they went into the business of business. The military are employers of vast tracts of the population, and are owners, operators, and shareholders of an entire spectrum of businesses from resorts to restaurants to rental cars - and beyond.

Why don't the military open fire? Because its bad business to kill your employees and customers.

The NPR Planet Money Podcast above closes with a section about how Wikileaks laid all this bare with its last data dump, and has been a no go conversation until now. Diplomatic cables warn of conflicts between the military and private business which will chew away at Military profits.

My take away on this astonishing entrepreneurship is not so much that it happened (although I am quite astonished), but that I know Mubarak has been making a concerted effort to westernize the economy and open it up to western markets. This has been a tremendous boon for the fledgling middle class and elite business types, but of course, who would have dreamed it was at the expense of the military?

So, suddenly, another wrinkle; Military resents Mubarak for being to liberal and costing them millions, eventually their entire business base. Why wouldn't they want to topple the guy, and who better to do it than the people they make all their profit from? It's a win/win for the Officer Corps - as long as there is no violence that drags the rest of the world in.

Of course, democracy will also wipe out their businesses, so a compliant government that protects the Military's profit franchise is essential.

It just gets uglier and uglier for a happy ending in Egypt.

EDIT: A second piece now from Time Magazine;

Egypt's Military-Industrial Complex: Why the Generals Wield Such Power

This revelation starts to illucidate a lot of things that did not make any sense previously -- namely why the Egyptian military has done such an awkward kabuki dance of neutrality.

In fact, an "entrepreneurial" military is so astonishing a situation that is so far outside of the western model that it is almost impossible to wrap our heads around.

They are not just a military force beholden to whatever government is in power, but a self-sustaining commercial operation.

To look for similiar models, I do not know what to compare that to. Renaissance Italy city-state mercenary forces? Ancient Roman privately funded armies?

No particular historical model seems to fit.

Strange.

Al Jazeera English is reporting the figure of $310 million per day loss to Egypt since the beginning of the "crisis"

This is astounding. Do you have any idea how many military brass are involved? If it's in the hundreds then I an see them losing control but if it's in the thousands, then not so easy.

Financials talking about a inflationary crisis in Egypt. Also they have little surplus funds per Moodys having spent so much on buildings, schools and hospitals

Ubetcha wrote:Financials talking about a inflationary crisis in Egypt. Also they have little surplus funds per Moodys having spent so much on buildings, schools and hospitals

Not to mention Egypt is the biggest importer of wheat, and China is in the middle of one of it's worst droughts in history. Egyptians think food prices are high now, just wait, things will get much worse before they get better.