Military council warns of economic collapse

The Supreme Council of the Armed Forces has warned of a collapse in the economy, pointing out that direct foreign investment stands at zero, and that Egypt has been classified as a “risky” market.

At a symposium on Monday, Assistant Defense Minister for Financial Affairs Mahmoud Nasr said the Egyptian government loses US$40 million a day as the result of a reduction of tourism revenues to 80 percent of their pre-revolution levels.

He also said that the foreign currency reserve dropped from US$36 billion to US$28 billion during the revolution.

“The budget deficit reached LE1290 billion,” Mahmoud added. “And the growth rate won’t exceed 1 or 2 percent.”

“The poverty rate is approaching 70 percent, and the domestic and foreign debts reached LE1080 billion, which is 90 percent of GDP,” he explained, adding that the industrial sector lost between LE10 billion and LE20 billion due to most factories closing down.

Mahmoud confirmed that those figures were taken from the Central Agency for Public Mobilization and Statistics.

“But the council is still optimistic, as the infrastructure of the economy was not destroyed,” he said. “Factories may have closed down but they were not demolished.”

“True democracy is the drive for economic development,” he said. “Also, the equal distribution of wealth and combating corruption would create an encouraging climate for investment.”

He attributed the current adverse economic situation to the spread of corruption, a lack of democracy, marginalization of political parties and the interference of businessmen in politics.

He also attributed it to a decline in social values, education and the relation between citizens and the police.

Translated from the Arabic Edition

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