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Tue Jan 22, 2013, 06:46 AM

Denial still is a river in Egypt

http://atimes.com/atimes/Middle_East/OA23Ak02.html



Denial still is a river in Egypt
By Spengler
Jan 23, 2013

Denial, it turns out, really is a river in Egypt. I refer not to the world's longest waterway, but the world's largest outpouring of pious expressions of confidence in Egypt by American and European politicians. Infusions of real cash, to be sure, could delay Egypt's deterioration into a failed state, but not by long, because the country requires more than US$20 billion a year simply to meet its basic needs, and Western governments will not provide that much money.

As Egypt's foreign exchange reserves dipped below what the central bank called a critical minimum and the country's currency began sinking, the country cut imports of essentials such as oil earlier this month. Reuters reported January 8, "State-owned Egyptian General Petroleum Corporation (EGPC) has only purchased 3 million barrels of crude oil for the first quarter of this year, half of what it was seeking in a tender, traders said. That content tender was already considered insufficient to supply Egypt's refineries, even at reduced running rates. 'Of course it's not enough, they need more - but no money,' a trader, active in the East Mediterranean oil market said."

Even before government cut back oil imports by half, 15 Egyptian power stations, representing more than a tenth of the country's installed capacity, had stopped generating power, the daily al-Ahram reported December 28.

Egypt is running out of everything, except well-wishers from the Western foreign policy establishment, for which the Arab Spring has been a humiliating proposition. After a year of attempts to reinforce the Sunni opposition in Syria, the West is left with an insurgency dominated by radical jihadists, and an Assad regime that continues to draw support from minorities who fear the Sunnis even more than they fear Assad. In Libya, the US helped overthrow Colonel Muammar Gaddafi, and for its trouble got a dead ambassador and roving bands of terrorists equipped with the best of the Libyan arsenal.

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