In the streets of downtown Cairo, scores of elegant pre-Second World War buildings gradually fall apart, plaster falling from the walls. In front of the petrol stations, long queues of cars, occasionally snaking around the block, wait to fill their tanks. At the myriad foreign exchange shops, try to buy US dollars and you will be told they have none.
These are symptoms of a much greater problems that sap the economy and cost the country tens of billions of dollars a year. And they all stem from the same root.
A succession of governments, always claiming concern for the poor, decide to fix prices by decree rather than let them respond to market forces. Sometimes slowly, sometimes quickly, the prices lose touch with any sort of reality, creating a host of problems and opening the field to corruption.
Take bread, for example. Many decades ago, the government decided to fix the price of a loaf so it would remain cheap for the masses.
But it put no mechanism in place to allow prices to adjust for inflation, and as a result, the real price of bread steadily declined, causing consumption to soar and the cost the government paid for each loaf to increase. Bread became so cheap that people fed it to their rabbits and chickens.
The problem haunted the presidents Anwar Sadat and Hosni Mubarak, and it remains today.
In January 1977, the Sadat government, whose finances were weighed down by the cost of the subsidies, turned to the IMF, which persuaded it to sharply increase the price of a loaf. Overnight, riots broke out across the country, leaving scores dead and the government shaken.
The costly programme remained a problem into the 1980s, forcing Mubarak to fly to Arabian Gulf countries to implore them for finance to keep bread flowing to the citizens.
In the nine months to the end of March this year, wheat subsidies cost the government about 20 billion Egyptian pounds (Dh9.63bn), representing 4 per cent of all government spending.
In the short term it has helped the country’s poor, but in the long term it has failed miserably. Perhaps directing the cash to education might have been a better idea.
And of course, people find a way to get around the rules. Many a fortune has been made by bakery owners selling cheap state-provided flour out the back door at higher prices that more closely reflect the free market.
Another example is energy. Long ago the government committed itself to sell diesel, petrol, natural gas, fuel oil and electricity at prices below the cost of production.
The cost of this programme mushroomed to the point where in the past few years it has accounted for 20 per cent of all government spending, more than it spends on health care and education combined.
The sad fact is that it is mainly the wealthier part of society – the people who own cars – who benefit most from fuel subsidies, and not the poor.
And of course, people find a way to profit, with a substantial portion of energy products leaking on to the black market.
Then there is the Egyptian pound. The government spends perhaps $8bn a year to keep the currency pegged artificially strong against the dollar, currently at about 7.63 pounds. It says it must do this to prevent the price of imports from rising and making life expensive for the poor.
That $8bn is no small amount. Surely there are more effective ways to get it to the poor.
This is not to mention the damage currency controls do to investment and trade. Businessmen are wary of putting dollars into Egypt for fear they will not be able to get them out again and out of concern of yet another devaluation that everyone suspects is coming.
And of course, people find a way to get around the rules. When the dollar is so cheap, demand increases and supply falls. People find ingenious ways to buy the dollars at the official price – credit cards while travelling abroad, buddies working in the bank who will sign approvals for a transaction, fake invoices for goods imported from abroad or something similar.
Throughout the country, hundreds of thousands of apartments lie empty. The government years ago decided to fix the rents that landlords could charge. After decades of inflation, building owners no longer have an incentive to maintain them and make repairs. Tenants have moved to other neighbourhoods but continue to pay the tiny rents on their empty apartments, and they cannot be evicted.
One result of these artificial prices is that the government has had to come up with ever more complicated regulations to stop people from finding a way around the prices that no longer make economic sense – and an army of inspectors to enforce them.
The huge profit that can be made by ignoring the rules has also resulted in a general deterioration in respect for the law.
Patrick Werr has worked as a financial writer in Egypt for 25 years.
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
'Tell the Machine Goodnight' by Katie Williams
Penguin Randomhouse
COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
More coverage from the Future Forum
pakistan Test squad
Azhar Ali (capt), Shan Masood, Abid Ali, Imam-ul-Haq, Asad Shafiq, Babar Azam, Fawad Alam, Haris Sohail, Imran Khan, Kashif Bhatti, Mohammad Rizwan (wk), Naseem Shah, Shaheen Shah Afridi, Mohammad Abbas, Yasir Shah, Usman Shinwari
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Safety 'top priority' for rival hyperloop company
The chief operating officer of Hyperloop Transportation Technologies, Andres de Leon, said his company's hyperloop technology is “ready” and safe.
He said the company prioritised safety throughout its development and, last year, Munich Re, one of the world's largest reinsurance companies, announced it was ready to insure their technology.
“Our levitation, propulsion, and vacuum technology have all been developed [...] over several decades and have been deployed and tested at full scale,” he said in a statement to The National.
“Only once the system has been certified and approved will it move people,” he said.
HyperloopTT has begun designing and engineering processes for its Abu Dhabi projects and hopes to break ground soon.
With no delivery date yet announced, Mr de Leon said timelines had to be considered carefully, as government approval, permits, and regulations could create necessary delays.
About Housecall
Date started: July 2020
Founders: Omar and Humaid Alzaabi
Based: Abu Dhabi
Sector: HealthTech
# of staff: 10
Funding to date: Self-funded
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A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
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The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
La Mer lowdown
La Mer beach is open from 10am until midnight, daily, and is located in Jumeirah 1, well after Kite Beach. Some restaurants, like Cupagahwa, are open from 8am for breakfast; most others start at noon. At the time of writing, we noticed that signs for Vicolo, an Italian eatery, and Kaftan, a Turkish restaurant, indicated that these two restaurants will be open soon, most likely this month. Parking is available, as well as a Dh100 all-day valet option or a Dh50 valet service if you’re just stopping by for a few hours.
