CAIRO // Beneath the surface of Egypt's turbulent political climate just a day before elections are to begin is a vast economic uncertainty and a rising unemployment rate.
Thousands of protesters in Tahrir Square and elsewhere in the country have demanded the military cedes power to a civilian government, but polls show the real issue, aside from security, for the average Egyptians is the economy.
"If there is no real movement to realise social justice, then we will also face the 'Revolution of the Hungry'," said Ahmed Borai, Egypt's minister of manpower, in a recent interview. "Unemployment has been one of the biggest problems in the country."
In the year's third quarter, the unemployment rate rose to 11.9 per cent, up from 8.9 per cent in the same quarter of 2010, according to Egypt's Central Agency for Public Mobilization and Statistics. Even that number, which represents 3.17 million people looking for a job, probably masks the true rate, because more than half of the country's economy is driven by part-time labourers that cannot be tracked through traditional data collection.
The Supreme Council of the Armed Forces (Scaf), the 20-member body that heads the military and took charge of the country after Hosni Mubarak stepped down as president on February 11, has sought to position itself as the defender of the interests of the "silent majority" of the country who have suffered under the deteriorating economic climate.
With at least 42 people killed in fighting between central security forces and protesters since November 19, including a young man run over by a police van yesterday morning, police brutality and the military's poor stewardship of the country were also much on the public's mind.
The interior ministry expressed regret for the death, saying it was an accident.
Polls released before the latest uprising in the square appeared to confirm the belief that the vast majority of Egyptians care most about security and the economy at this point in the country's transition.
Half of the 2,400 respondents in a survey in September by the Al Ahram Centre for Political and Strategic Studies identified economic issues, including the reduction of daily living expenses, unemployment, corruption, raising incomes, and economic growth, as their top concerns for the parliamentary elections.
Speaking at a news conference on November 24, Major General Mukhtar El Malla pleaded with protesters to cease the occupation of Tahrir Square in the midst of elections, because it blocked traffic and hindered the country's democratic transition. A rival protest to the demonstrators in the square on Friday cited economic malaise as one of the reasons to allow elections to continue as planned under the leadership of the military. While activists have claimed that the Muslim Brotherhood's political arm, the Freedom and Justice Party, would suffer losses in the elections that begin tomorrow and continue Tuesday because of their lack of support for the Tahrir protests, some analysts believe they could gain from the turmoil because they have positioned themselves as a stable alternative to the increasingly chaotic situation in the country.
Despite the paucity of policy debate among the parties, the Muslim Brotherhood has a long history of supporting poor people through healthcare clinics and financial aid. In the choice between the secularist and Islamist parties that will be presented to Egyptians, the latter may come across as the only ones with a possible solution to economic woes.
Egypt's economic problems are rooted in its growing population, the largest in the Arab World. Unemployment in Egypt is a constantly rising problem as hundreds of thousands of people enter the job market annually.
Mr Borai said the Egyptian government from the 1960s to 2000 tried to tackle the problem by doling out public-sector jobs with low salaries to as many graduates as possible, even if they were not needed. But Mr Mubarak's regime ended that policy and was struggling to deal with the need for about 800,000 new jobs a year.
"The question is now what do we do," Mr Borai said. "New investments stopped after the revolution. Factories closed down."
A 1-billion Egyptian pound (Dh631 million) training fund to help Egyptians gain new qualifications is in this year's budget. The government also sought to reopen some factories, but those initiatives have had limited impacts so far.
Hisham Fahmy, the executive director of the American Chamber of Commerce in Egypt, said many foreign businesses have been scared off investing in the country because of security issues. The situation only gets worse as long as the transition to power of an elected government hangs in the balance, he said.
"This is an extreme period of economic uncertainty," Mr Fahmy said. "A lot of people are suffering.
Yesterday the head of Scaf, Field Marshal Hussein Tantawi, met separately with Mohamed ElBaradei and Amr Mussa, who have been touted by protesters as possible leaders of a new government, the official Mena agency said.
bhope@thenational.ae
* With additional reporting by the Associated Press
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
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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
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Price: From Dh330,000 (estimate)
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Terminator: Dark Fate
Director: Tim Miller
Starring: Arnold Schwarzenegger, Linda Hamilton, Mackenzie Davis
Rating: 3/5
The Perfect Couple
Starring: Nicole Kidman, Liev Schreiber, Jack Reynor
Creator: Jenna Lamia
Rating: 3/5
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Under 19 World Cup
Group A: India, Japan, New Zealand, Sri Lanka
Group B: Australia, England, Nigeria, West Indies
Group C: Bangladesh, Pakistan, Scotland, Zimbabwe
Group D: Afghanistan, Canada, South Africa, UAE
UAE fixtures
Saturday, January 18, v Canada
Wednesday, January 22, v Afghanistan
Saturday, January 25, v South Africa
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